Research Articles (Mercantile Law)

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Browsing Research Articles (Mercantile Law) by Author "De Lange, S."

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    Deregistrasie sonder likwidasie van maatskappye en beslote korporasies ingevolge die 2008 Maatskappywet
    (Juta Law Publishing, 2014-01) De Lange, S.; Sutherland, P. J.
    It is practically desirable that inactive companies are removed from the companies register. This should also be the main reason for the deregistration of companies that have not gone through winding-up. However, procedures should be in place to ensure that active companies are not subject to this form of deregistration. The legislation provides that companies (and close corporations) can be deregistered as a result of a failure to submit annual returns and pay annual prescribed fees. This leads to the deregistration of numerous active companies. The consequence is that third parties and specifically creditors are prejudiced. This authority to deregister companies should therefore be carefully limited to situations where the non-submission of returns is an indication that they are not active. Moreover, it is imperative that the law should provide for effective remedies to place deregistered companies, which are still active, back on the register. The Companies Act 71 of 2008 ("2008 Act") provides for the reinstatement of the registration of a company by the Companies and Intellectual Property Commission ("Commission"). However this remedy is practically speaking not available to creditors as the Regulations to the Companies Act only allow for reinstatement of registration if the outstanding annual returns are submitted and the annual fees are paid. Creditors are just not in the position to submit such documents. The question therefore arises as to whether creditors can make use of section 83(4)(a) of the 2008 Act, which provides that the dissolution of a company can be declared void, in order to obtain a restoration of the company on the register. The courts have reached conflicting decisions in this regard. The view that section 83(4)(a) is available in these circumstances is preferred as it offers protection to creditors and other third parties. However, this view does not give effect to the central role which the 2008 Act ascribes to the Commission as the custodian of the register of companies. It would in addition entail that an aggrieved creditor will have to incur the substantial cost of approaching the court for restoration. It seems impossible to find solutions to these problems in the existing legislation. It is therefore proposed that the Regulations should be amended to provide that creditors and other third parties can apply to the Commission for the reinstatement of the registration of a company, without submitting the outstanding returns or paying the outstanding fees. Finally, the question whether restoration of registration is retrospective, is considered. In order to protect creditors and other third parties sufficiently, it is preferable that restoration operates retrospectively, but to make it subject to judicial supervision. Again it is explained that the 2008 Act is incapable of achieving these objectives and that amendments to the legislation are required.