If you run a business, you’ve probably heard the term “Annual Financial Statements” or AFS. But what exactly are they, why are they important, and how do you ensure they’re submitted to CIPC without any issues? Let’s break it down.
What Are Annual Financial Statements?
Annual Financial Statements are detailed reports of your company’s financial activities for the year. They show how much money came in, how much went out, and where it was spent. These documents are important for transparency, tracking your business’s financial health, and meeting legal requirements.
Who Needs to File AFS?
Not every business is required to file AFS with the CIPC. However, every company must prepare them every year. Generally, it’s mandatory to file AFS with CIPC for companies that are:
- Public companies.
- Private companies with a public interest score of more than 350.
- Companies with a public interest score between 100 and 350 (if the financials are independently reviewed).
- Non-profit companies are only required to file AFS if their PIS is 350 or more or if they are required to have their financials audited.
If your business doesn’t fall under these categories, you still need to prepare AFS for internal use or to meet other requirements, like tax filings.
Why Is Filing AFS Important?
Submitting AFS ensures your business stays compliant with the Companies Act. Compliance builds trust with stakeholders, helps you avoid penalties, and positions your business as credible in the eyes of investors, banks, and other partners.
What Do You Need to File AFS?
Before you can submit, ensure you have:
- Financial Statements
- Accounting Standards Compliance: Ensure your financials comply with IFRS or IFRS for SMEs (depending on your business type).
- Public Interest Score: Calculate this score to determine if you need an audit or independent review of your AFS
If your business requires an independent review or audit, make sure this is completed before filing.
How to File AFS with CIPC
- Prepare Your Financials: Work with a qualified accountant to prepare and finalize your AFS.
- Submit Electronically: CIPC allows online submission through their e-Services portal.
- Meet Deadlines: You must submit these AFS when filing annual returns.
Avoid the Risks of Non-Compliance
Failing to file AFS can lead to penalties, fines, or even the deregistration of your business. Don’t wait until the last minute—start preparing your financials early.
Need Help with Preparing AFS or Submitting to CIPC?
Email:inquiries@nextgee.co.za | Call or WhatsApp081 435 4234
