In a recent property transaction both purchaser and seller where met by unforseen circumstances.
Companies and CC's owning property which they wish to dispose off should be aware of the possibility that their company might have been deregistered by CIPC (Companies & Intellectual Property Commission).
The most general reason for the deregistration of Companies & CC's is the non-filing of annual returns with CIPC.
Once a company or CC has been deregistered, the property owned by that entity cannot be transferred until re-registration with CIPC has taken place.
The following comes into effect:
- the assets of the Comanpy or CC passes to the State as a "bona vacantia". This translates to the property belonging to the State as the owner technically ceased to exist
- a debt that is due to a creditor of the Company or CC is unenforcable. This can affect a Home Owners Association which cannot recover outstanding levies on the property as the Company or CC owning the property no longer exists.
- summons cannot be issued against a deregistered Company or CC
In order to reregister a Company or CC the following steps need to be taken.
- affidavit by the directors/ members as to why the company was originally deregistered
- necessary deeds search providing that the Company/ CC owns property
- permission for reinstatement to be obtained from Department of Treasury and the Department of Public Works (response time approx 6 weeks)
- an advertisment in both local paper and the government gazette has to be placed that company has applied to be reinstated (2 weeks after receiving confirmation from both state departments)
- a period of 21 business days has to pass after advertisement before electronic lodgement with CIPC can take place
- once lodged, reinstatement process will be between 6-8 weeks,
- all outstanding annual returns since incorporation of the company will have to be submitted
- penalties and reregistration fees will have to be paid
Only now will the company or CC be able to transfer any property owned!