Companies facing deregistration not contributing to economy

The Business and Intellectual Property Authority (Bipa) says the 137 000 businesses facing deregistration have been dormant and are not contributing to economic activities.

During a press briefing yesterday, Bipa acting chief executive Ainna Kaundu announced that mass deregistration will begin today with the first 1 000 companies to be removed from the registry.

“The time of communicating, engaging and creating awareness has now come to an end. We are now in the phase of managing consequences. This is the start of mass deregistration,” said Kaundu.

However, she said the authority has done due diligence and the companies facing deregistration have not been contributing to economic activities such as paying taxes.

According to Kaundu, the authority consulted banks and the Namibia Revenue Agency to see if there were any transactions happening with the entities.

“This means these entities were dormant in as far as the economic activities we can pick up are concerned. So we would not want to be irresponsible to deregister an entity that is contributing to our national revenue,” said Kaundu.

Kaundu said the businesses were given enough time to comply with the regulations, and prior to being deregistered, companies were placed on an inactive list and were given a six-month grace period to comply, but Bipa extended this period to allow for further awareness campaigns.

“We understood that we needed to create awareness, we needed to engage further. But according to the law, six months from the date of being placed on that inactive list it is required of us to deregister you,” said Kaundu.

Following the directive, entities that failed to file beneficial ownership were placed on the inactive list from March 2024.

Speaking of the consequences, Kaundu said first these businesses will lose their legal status, meaning they can no longer enter into contracts, own property or participate in legal proceedings.

Additionally, there are asset risks, as any assets held by the deregistered entity will be transferred to the state.

The deregistration will also affect contractual arrangements, potentially making contracts void and barring the entities from public procurement opportunities.

Additional consequences include banking restrictions, with business accounts potentially being frozen or closed.

According to Bipa finance executive Jones Lubinda, the majority of businesses facing deregistration are from the Khomas region, followed by the Erongo region.

“About 50% of the businesses are in the Khomas region, 30% are in the Erongo region and the rest are spread across all the other regions,” says Lubinda.

Businesses that have been deregistered can go to Bipa and register their companies again after compliance.

Beneficial ownership is one of the reasons Namibia was placed on the grey list last year.

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