Owing to various legislative requirements, documents of close corporations and companies must be retained for a certain number of years. Where different legislation refers to the retention of the same records/information, a business must rather adhere to the most stringent of the legislative requirements.
For example, the Value Added Tax Act states that invoices should be kept for 5 years from the submission of the return and the Companies Act would require the financial records to be kept for a minimum of 7 years. The company should adhere to the most stringent requirement of 7 years.
In certain instances, legislation requires that records be kept for an “indefinite” period. The term “indefinite” is not defined in the legislation, but clearly requires that documents be retained for as long as the relevant entity exists.
Close Corporations: (Close Corporations Act, No 69 of 1984 (the CC Act)
The Administrative Regulations of the CC Act stipulates the various periods that documents relating to a Close Corporation must be retained.
Indefinite retention period:
- Amended Founding statement (forms CK 2 and CK 2A)
- Founding statement (Form CK 1)
- Minutes books as well as resolution passed at meetings
15-year retention period:
- Accounting records, including supporting schedules to accounting records and ancillary accounting records
- Annual financial statements, including annual accounts and the report of the accounting officer
Companies: (Companies Act, No 71 of 2008 (the CO Act)
The Act expressly provides that records must be kept “in written form, or other form or manner that allows that information to be converted into written form within a reasonable time.”
Indefinite retention period:
- Notice of Incorporation (Registration certificate)
- Certificate of change of name (if any)
- Memorandum of Incorporation and alterations or amendments.
- Register of company secretary and auditors
- Regulated companies (companies to which chapter 5, part B, C and Takeover Regulations apply) = register of disclosures of person who holds beneficial interest equal to or in excess of 5% of the securities of that class issued
- Security register and uncertificated securities register
7 Year retention period:
- Notice and minutes of all shareholders meeting including:
- Resolutions adopted
- Documents made available to holders of securities
- Copies of reports presented at the annual general meeting of the company
- Copies of annual financial statements required by the Act
- Copies of accounting records as required by the Act
- Record of directors and past directors, after the director has retired from the company
- Written communication to holders of securities
- Minutes and resolutions of directors’ meetings, audit committee and directors’ committees
Close Corporations and Companies:
Documents in electronic form – The SARS Commissioner published Notice 787 which should be consulted and which provide taxpayers with a more detailed guide regarding the retention of documents in electronic form.
For any enquiries, please contact Petri Westraadt at firstname.lastname@example.org.
Records kept at FHBC:
We will inform our clients when the applicable periods have lapsed for the clients to come and collect their documents kept at FHBC.