A company or close corporation (for ease of reading we only refer to a company hereafter as the deregistration and reinstatement is the same, other than costs of filing and reinstatement which differ as set out below) may be deregistered voluntarily, or by any other third party, provided that the company has ceased to carry on business and has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company or close corporation being liquidated.
Deregistration will also be triggered by the Companies and Intellectual Property Commission (“CIPC”) when two or more successive annual returns (required to be filed and paid in terms of section 33 of the Companies Act 71 of 2008 (the “Act”)) are outstanding, and the company has failed to give satisfactory reasons for the failure to file the required annual returns, or to show satisfactory cause for the company to remain registered. CIPC may also trigger deregistration if the company appears to have been inactive for at least seven years and no person has demonstrated a reasonable interest in or reason for its continued existence. For the remainder of this Newsflash we will deal with the consequences of deregistration by CIPC and how to pursue reinstatement of a company which is in the process of or has been deregistered by CIPC as a result of non-compliance of annual returns.
The effect of deregistration of a corporation is that its existence as a legal person ceases and that upon such deregistration all its property, movable and immovable, corporeal and incorporeal, passes automatically (without any necessity for delivery or any order of court) into the ownership of the State. “Deregistration puts an end to the existence of the company. Its corporate personality ends in the same way that a natural person ceases to exist on death.” (Miller and Others v Nafcoc Investment Holdings Co Ltd and Others 2010 (6) SA 390 (SCA) at para 11).
The abovementioned consequences are obviously very serious for creditors and interested persons particularly if a company still has any assets (particularly immovable property, which is important from a conveyancing perspective). However, in addition to being able to approach a court, in terms of section 82(4) of the Act interested persons may apply to CIPC in the prescribed manner and form to reinstate the registration of a deregistered company (Practice Note 6 of 2012) which includes:
Download the pdf document to read the full article.