However, if a company is deregistered for any of the reasons set out in section 82(3), section 82(4) provides that any interested person may apply in the prescribed manner and form to the CIPC, to reinstate the registration of the company. After discovery of the deregistration, a typically frantic effort is then made to file all outstanding annual returns and pay the relevant fees in what is, fortunately, a relatively uncomplicated process of reinstatement (or “re-registration”).

If a company is deregistered and continues with its corporate activities, what is the status of these corporate activities if the registration of such a company is reinstated? There was a statutory ‘magic wand’ in section 73(6A) of the old Companies Act 61 of 1973 which expressly provided that the reinstatement had the effect of the company always being registered, i.e. as if the deregistration never happened in the first place. A similar, express provision did not find its way into the new Companies Act, resulting in debates around whether this was deliberate and whether reinstatement was not retroactive anymore under the new regime.

The Supreme Court of Appeal’s findings

This question was decisively dealt with on appeal in Newlands Surgical Clinic v Peninsula Eye Clinic (086/2014) [2015] ZASCA 25 (20 March 2015), a case which offers a good demonstration of the oft-quoted assurance that the “well-oiled machinery of the courts” will find a solution for difficult matters of interpretation or lacunae in legislation.

In this regard, the Supreme Court of Appeal (SCA) dealt with two issues in respect of the reinstatement of a company – does the reinstatement of a company (i) have the effect of retrospectively revesting the company with title to its property, and (ii) validate the company’s corporate activities conducted during the period of deregistration?

As for the former, the court was in agreement with the court a quo in that reinstatement of a company does have the effect of retrospectively revesting the company with title to its property, as the property of the company, in many cases, is the reason for its existence. Without its property, a company would be no more than a name on the register.

In respect of the latter, the court a quo found that reinstatement of a company does not validate the company’s corporate activities conducted during the period of deregistration due to the potential prejudicial effect on third parties.

The SCA did not agree with this finding. The SCA found that if an argument of prejudice to third parties is made then a similar argument can be made for the former issue i.e. revesting the company with its property can have a detrimental effect on third parties who have, during the period of the company’s deregistration, acquired rights to that property. Furthermore, the court found that just as the validation of a company’s corporate activities conducted during deregistration can have a prejudicial effect on third parties, refusal to validate the corporate activities of a company conducted during deregistration can be equally devastating to the interests of bona fide third parties who were unaware of the deregistration.

The SCA further found that once ‘reinstatement’ in section 82(4) is construed as indicating retrospective operation, there is no justification for construing it to mean that retrospective operation must stop halfway, in the sense that it pertains to revestment of the company’s property only. The wording of section 82(4) leaves no room for such an interpretation.

The question of retrospective operation was brought up again in the recent case of Charalambos Commercial Properties CC v Transkei Furnishers (Pty) Ltd and Others (2521/2022) [2025] ZAECMKHC 46 (29 April 2025). In this case, the validity of a board resolution signed during a company’s period of deregistration was questioned. The court arrived at the same decision as in the Newlands case and quoted the following from the Newlands case:

“The only meaning available on that wording, as I see it, is that s 82(4) has automatic retrospective effect, not only in revesting the company with its property but also in validating its corporate activities during the period of its deregistration.”

Conclusion

As an aside, it would seem that the magic wand of reinstatement is available even if the parties knew at the time that the company was deregistered and proceeded nevertheless in the comfort that reinstatement would be completed soon and was just a formality. But the magic wand is not all-powerful. As indicated in Newlands, it remains a possibility for prejudiced third parties to apply to court for a just and equitable order disapplying the general retroactivity rule. Thus, when entering into any transaction, it is important to confirm early on if all entities involved in the transaction are registered by doing a CIPC search – this should in fact be a habit for transacting parties and their advisors. Such confirmations will avoid any unnecessary problems in the future.