FAQ About reinstating a close corporation or company


  • If  the  company  or  close  corporation  was  deregistered,  can  the  company  or  close corporation still be re-instated (restored)?

Yes  but  only  if  proofed  that  the  entity  was  holding  property  or  was  active  at  the  time  of deregistration.   Once  a  company  or  close  corporation  has  been  “final  deregistered”,  the company or close corporation or any  other person  may apply for re-instatement upon filing of a form  CoR40.5  and  supporting  documents.  Upon  the  processing  of  the  re-instatement application, the status will be changed to ”re-instatement process”

  • What is the fee for a re-instatement application (Form CoR40.5)

R200.00

  • What is the requirement for re-instating (restoring) a company or close corporation if it was deregistered due to non compliance with annual return?

The same requirement as per a normal deregistration is applicable. (Practice Note 6 of 2012)

  • What is the reason for the removal of the electronic re-instatement application from the CIPC website?

The electronic re-instatement facility  on the CIPC website was made available to assist entities that  were  deregistered  during  the  bulk  deregistrations  of  July  2010  and  February  2011,  by providing a simplified re-instatement process for such entities. It was never intended to be a permanent process. It has been almost two years since the last deregistration occurred and the volume of re-instatements over the past months have decreased dramatically. Therefore, CIPC have assumed that active entities that are conducting business since the aforementioned dates of  bulk  deregistration  would  have  opted  for  re-instated  by  now.    Furthermore,  CIPC  is concerned  that  some  customers  are  using  re-instatement  for  dubious  means  and  this undermines the integrity of the register.

The normal re-instatement process incorporates legal principles similar to the requirements for the  High  Court  to  grant  a  re-instatement  order,  e.g.  audi  alterim  partem  (notice  to  possible interested parties of the intention to re-instate) and bona vacantia (the state takes custodianship of property not owned by any person or entity).

For the above reasons CIPC has closed down the electronic re-instatement facility and reverted back to the normal re-instatement process. It should be noted that it is still possible to re -instate entities if there is value  in the entity (it is active) or if it has outstanding assets that must be liquidated (e.g. sold or transferred), but proof of such must be provided.

  • What is the requirement for re-instating (restoring) a company or close corporation  if it was deregistered for any other reason than annual returns?

Any person may apply for the re-instatement of a company or close corporation.

The  original  normal re-instatement application process must be followed and must consist of a duly completed form CoR40.5 and the following supporting documents:-

(1)  certified ID copy of owner of the customer code used to affect the transaction,

(2)  certified ID copy of all active directors/members,

(3)  multiple  deed  search  (of  all  10  Regions),  to  confirm  whether  entity  has  immovable property or not, (compulsory)

(4)  letter from  Treasury if immovable property,  (only required if there is immovable property registered in the name of the company or close corporation)

(5)  letter  from  Public  Works  if  immovable  property,     (only  required  if  there  is  immovable property registered in the name of the company or close corporation)

(6)  copy of notice in local newspaper giving 21 days clear notice of  intention  to restore (Full page reflecting date and name of the newspaper)

(7)  affidavit indicating the reasons for the non filing of annual returns, if deregistration was due to non compliance in relation to annual returns,

(8)  affidavit indicating the reason for the non filing of annual returns, if the company or close corporation itself applied for deregistration, and sufficient documentary proof indicating that the company or close corporation was in business  or that it had any outstanding assets or liabilities (e.g. property, intellectual property rights or other examples that may be filed or example :-

Bank Statements showing activity during the deregistered period.

A letter from the Bank confirming active Bank account, (date stamped with the stamp of the Bank).

A signed rental agreement that existed during the period of deregistration,.

A duly completed and valid invoice issued by a supplier to the entity with a date stamp that proof it falls in the deregistered period.

Any document that proofs that the entity had liabilities or contractual obligations that existed at the time of deregistration or during the period of deregistration.

(9)  ) at the time of deregistration. (Fee – R200.00)

After  the  re-instatement  application  has  been  processed  the  status  of  the  company  or  close corporation  will  be  changed  to  “re-instatement  process”  where  after  all  outstanding  annual returns must be filed by the company or close corporation in order to change the status to “in business”. The legal personality would have been re-instated upon the processing of the reinstatement application.

  • What is the reason for all the requirements on a CoR40.5?

The reasons for the requirements for a re-instatement are explained below:-

(1)  Certified ID copies of the applicant (directors / members):  to confirm who the applicant is  and that such applicant has consented to the re-instatement, particularly in instances where it is indicated that the entity itself is applying for re-instatement,

(2)  Certified  ID  copy  of  the  customer  (owner  of  the  customer  code):  to  confirm  that  the owner of the customer code is submitting the application since there is a financial impact on the customer for submitting such application,

(3)  Notice in a local newspaper:  the intention is to give notice to any possible interested party of the intention to re-instate, in order to allow them an opportunity to object to the process,

(4)  Multiple deed search:  to confirm whether there are any immovable property in the name of  the  entity  in  order  to  determine  whether  consent  for  the  re-instatement  must  be provided by National Treasury and the Department of Public Works, these must be done for all 10 Regions.

(5)  Letters from National Treasury and the Department of Public Works:  the intention is to confirm that such national departments, who take custodianship of property not owned by any person or entity in terms of the common law doctrine  of  bona vacantia, do not have an objection to the re-instatement,

(6)  Affidavit  confirming  the  reason  for  deregistration,  in  instances  where  the  entity  itself applied for re-instatement:  the purpose is to align the original request from the entity to deregister, with the application for re-instatement since the entity itself initially indicated that it was inactive and did not have any assets, or due to the inadequacy of its assets , there is no foreseeable possibility of it being liquidated,

(7)  Affidavit confirming why the annual returns were not filed:  the purpose is to confirm the reasons why there was no compliance in respect of filing of annual returns, which had resulted in the entity being deregistered,

(8)  Documentary  proof  that  the  entity  was  in  business  at  the  time  of  deregistration:  the purpose is to ensure that proper grounds exist for the re-instatement since deregistration creates the assumption that the entity was inactive, and to ensure that only entities that were active at the time before or during deregistration are re-instated.

  • What should the company or close corporation do if it cannot proof that it had property or that it was active at the time of deregistration?

If the company or close corporation cannot proof that it had property or  was active at the time of deregistration, then CIPC will not process the CoR40.5.

If entities were inactive for the period before and after deregistration, it is advised that a new company must be registered. The benefits of registering a new company are:-(1)  Cost benefit since re-instatement requires the payment for the filing of the re-instatement application (R200.00) and filing of all overdue annual returns (based on entity category and  payment  scale)  while  a  new  company  registration  requires  only  a  payment  of R175.00,

(2)  After the filing of the overdue annual returns, the records of the entity must be updated by the filing of the required statutory amendment forms (e.g CoR39, CoR 21.1, CK2) and even possible amendments to a company’s MoI,

(3)  CIPC no longer administratively protect names of entities that were deregistered during the bulk deregistrations of July 2010 and February 2011 and therefore, if the name has not been reserved by another customer, it will be available for reservation.

  • How do I conduct a deed search?

A deed search may be obtained from the Deeds Office or any search engine where you may search for property. E.g WinDeed or LexisNexis.

By conducting a Google search with the words “deed search” you will be provided a list of other websites where a deed search may be conducted.

Alternatively you may use: –  http://www.windeedsearch.co.za. – Go then to the Property Search option and click on (Deeds Office Property Report), Or; by going to

http://www.windeed.co.za/spider/

  • What are the contact details of National Treasury and the Department of Public Works?

The National Treasury

Web Address for Information on Registration or Restoration of Deregistered Companies

http://www.treasury.gov.za

Click on link:  Registration or Restoration of Deregistered Companies

E-mail:  restorations@treasury.gov.za

Tel number: (012) 315-5015

Fax:    (012) 315-5522

Department of Public Works

Contact person:   Mr. Andrè Meyering

E-mail:    andre.meyering@dpw.gov.za

Tel number:    (012) 337-2147

Fax:    (012) 328-3776

  • What should be the wording of the advertisement in the local newspaper?

The below wording is suggested although any wording of similar meaning and content may be provided.

“It should be noted that (name of member or person applying for re-instatement) intends making application  to  the  Commissioner  of  CIPC,  for  the  re-instatement  of  (name  and  registration number of company or close corporation).

It  should  further  be  noted  that  any  objection  to  the  application  must  be  filed  with  the Commissioner of CIPC within twenty one (21) days of the date of publication hereof.”

  • What is meant by “local newspaper”?

The  advertisement  should  be  placed  in  any  newspaper  in  circulation  in  the  area  that  the company or close corporation was doing business or where the immovable property is situated.

  • What will happen if the company or close corporation fails to file the annual returns after

filing of the CoR40.5?

 

If the company or close corporation fails to file annual returns within 30 business days from date of the re-instatement, the company or close corporation will be finally deregistered, without any further notification.

  • Can a creditor or the company or close corporation approach the High Court for an order to re-instate?

CIPC will process court orders as and when they are received based on the content of such. It is recommended that the Notice of Motion is either served on    CIPC (if CIPC is cited as a party to the application), or a copy of the duly served Notice of Motion is filed with   CIPC before the court date.

Once the High Court  has issued an order, an original or certified copy of the court order and copy of the Notice of Motion, if not provided before, must be submitted to CIPC for processing.

With  the  court  order,  the  person  lodging  the  court  order  for  processing,  must  indicate  the customer code under which such document must be processed.

If the application was made by the company or close corporation, or any of its directors or share holders  (if  a  company),  or  members  (if  a  close  corporation)  itself,  the  court  order  as  well  as other statutory forms (except annual returns) as stated in the court order must be submitted with the court order. If the order requires that annual returns must be lodged,  it  may only be lodged electronically  after  the  court  order  and  other  statutory  documents  have  been  processed  by CIPC. If the court order did not require the lodging of any other statutory documents, CIPC will require the company or close corporation to provide CIPC with updated information on its latest directors, registered addressed and auditors’ information after the processing of the court order.

Failure in respect of the above would result in a Compliance Notice being issued.

In instances where a creditor of the company or close corporation applied to the High Court for the re-instatement, the original or certified copy of such court order must be submitted. It is recommended  that  the  creditor  advise  CIPC  of  all  contact  details  of  the  company  or  close corporations and its directors or members, in order for CIPC to issue a Compliance Notice to the company or close corporation.

Compiled by C Klokow; Courtesy CIPC

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