Deregistration of close corporations and companies is a common occurrence, often resulting from the failure to render annual returns. Last year CIPC reported that it planned to undertake the bulk deregistration of some 345 000 non-compliant entities in the foreseeable future to clean up its database.

One of the most important consequences of deregistration is that the entity ceases to exist as a legal personality and therefore cannot enter into transactions, such as selling or buying property or registering a mortgage bond.

The Companies Act does make provision for the reinstatement of entities in certain circumstances, including instances where the deregistration followed on non-submission of annual returns. This relief is, however, not without a sting in its tail as these applications are lengthy; in the case of entities owning immovable property, it takes some months! Any transaction that the entity seeks to register in the deeds office is necessarily delayed as a result.

It is therefore strongly recommended that if you plan to sell a property that you own in an entity, you verify its status with CIPC as soon as possible. In the event that it is deregistered, appoint your conveyancers upfront to commence the re-registration process. You will thereby avoid some of the unpleasant hold-ups that are occasioned by the restoration of the selling entity.

Contact Martin Sheard at or visit us on for assistance in all aspects of your property transaction.

021 673 4700

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