Abstract
In terms of section 82 of the Companies Act 71 of 2008 (hereinafter “the Act”) a company or a close corporation may be deregistered by the Companies and Intellectual Property Commission (hereinafter “the Commission”) if it failed to timeously lodge its annual returns with the Commission or if it has been inactive for a number of years. An important issue in terms of the Act is with regard to the consequences of re-registering a deregistered company or close corporation. When a company or close corporation is deregistered, it ceases to exist as a separate juristic person and its assets and rights vest automatically in the State as bona vacantia. Sections 82 and 83 of the Act provide the ways in which re-registration may occur, that is by application to the Commission or to the High Court. The previous Companies Act 61 of 1973 and the Close Corporations Act 69 of 1984 contained provisions that expressly provided that the reinstatement of companies and close corporations were fully retrospective, and the effect was as if the entity was not deregistered in the first place. The new Act, however, does not contain a similar express provision, whether this was simply an oversight by the legislature or intentional is debatable. In Missouri Trading CC v ABSA Bank Ltd (2014 (4) SA 55 (KZD)) the court discussed the conflicting views with regard to whether section 82 of the Act has retrospective application.
Highlights
The previous Companies Act 61 of 1973 and the Close Corporations Act 69 of 1984 contained provisions that expressly provided that the reinstatement of companies and close corporations were fully retrospective, and the effect was as if the entity was not deregistered in the first place
If there were uncertainties that remained these would relate to bona fide acts, such as actions instituted by or against the corporation and orders being granted in the inter regnum period between deregistration and reregistration or reinstatement, such as the liquidation orders granted against Missouri Trading CC. It is evident from the discussion above that there are anomalies that inevitably arise as an incident of the purpose of section 82(4)
Perhaps the legislature should provide further clarity by seeking to amend the relevant section to expressly include a clause that provides for retrospective restoration, if this had been the objective of section 82(4)
Summary
The central issue that was to be determined in Missouri Trading CC v ABSA (supra) was whether in terms of section 82(4) of the Act the reinstatement of the registration of a formerly deregistered close corporation, operates prospectively from the date it is reinstated, or retrospectively from the date of its deregistration (par 1). The court held that Missouri Trading CC was administratively deregistered for failing to file its returns and according to the court, if a factual basis existed for deregistration it would be difficult to argue that such a dissolution had been void or unlawful The application made by applicants was dismissed with costs (par [43,44])
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