Close Corporations: deregistration and restoration

When a Close Corporation (“CC”) is deregistered and then some time later is restored, it is deemed as if it was never deregistered and any acts performed between deregistration and restoration are retroactively valid. This was held in the 2013 Supreme Court of Appeal case of Kadoma Trading (Pty) Ltd and Noble Crest CC. 

Whilst a CC has the status of being deregistered, it ceases to exist and any agreements concluded during this state are entirely void. The Kadoma case however discusses the legal status of a CC that concluded agreements and was thereafter restored. It is common that CC’s are, unbeknown to their members, deregistered by CIPC (Companies and Intellectual Property Commission) for reasons that the corporation failed to lodge an annual return.

One should check every year that all fees are up to date and annual returns filed, and that same have been recorded by CIPC.

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