In the Goosen-case the legal proceedings centred around an urgent application by the applicant asking that Goosen Marketing CC be re-registered and reinstated by the CIPC so the close corporation can proceed with a separate trial. The CIPC is mandated to implement steps to deregister a company or close corporation due to non-compliance with annual filing requirements. As soon as an entity becomes deregistered, its assets and property are regarded as ‘bona vacantia’, meaning it shall vest in the State. The Court reiterated this point by referring to the judgment handed down in Rainbow Diamonds EDMS Bpk en Andere v Suid-Afrikaanse Nasionale Lewensassuransiemaatskappy 1984 (3) SA 1 (A).
In the Goosen-case the applicant had failed to cite any provisions of the Companies Act 71 of 2008 (“Companies Act”) in the proceedings for the reinstatement of the close corporation. The applicant argued that the proposed reinstatement request was straightforward, and he could merely communicate with the CIPC via email. The Court however confirmed the correct approach to be followed in that the application for reinstatement needed to be in line with the provisions of sections 82 and 83 of the Companies Act, read together with regulation 40 of the Companies Act Regulations and the Practice Note provided by the CIPC.
The Court indicated that the Companies Act in section 82(4) expressly explores, and the CIPC promotes, the right to apply for the reinstatement of a company (or close corporation) despite its failure to provide annual returns. However, the provisions allude to an administrative procedure which requires submitting specific data and proof that the CIPC believes is necessary to its mandate.
Companies (including close corporations) are required by law, as provided for in section 33 of the Companies Act, to file annual returns with the CIPC. Taking account also of the recent General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 and its subsequent effect on the Companies Act, companies are now in addition also required to provide additional items in their annual returns submitted to the CIPC, such as the entity’s annual financial statements, securities register, and disclosure of beneficial interest.
To summarise, submitting annual returns and fulfilling all other requirements mandated by the Companies Act is an indispensable legal requirement. To avoid having any entity deregistered and its property vesting in the State, submission of the annual returns and related items correctly on annual basis (including any holding companies that may not necessarily operate but hold shares in the company) is therefore vital.
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