This Practice Note does not express any opinion on the judgment but acknowledges the fact that the other High Courts may support and follow this judgment and, therefore, deems it in the general public interest to bring the implications thereof to the attention of all companies and advisors of companies, whether existing or still to be formed. The implications could be summarised as follows:
the transitional provisions in Schedule 5 of the Companies Act, 2008, do not deal with the registered office of a pre-existing company and accordingly section 23(3) applies equally to pre-existing companies and companies incorporated under the Act;
companies should no longer use an address chosen for convenience as its registered office (e.g. the address of its auditors);
companies should ensure that CIPC's records reflect the registered office at the address where the administrative business of the company is conducted or, should they have more than one office, their principal office;
A measure of uncertainty exists and different opinions are doing the rounds about the continued validity of the memoranda and articles of incorporation of companies that were incorporated or deemed to be incorporated under the repealed Companies Act (pre-existing companies).
The correct position is as follows:
In terms of the definition of Memorandum" or "Memorandum of Incorporation" (Mol) in section 1 of the Companies Act, 2008, the memorandum and articles of incorporation of a pre-existing company is deemed to be its Mol for purposes of the said Act. No action is thus required by any pre-existing company to change its existing incorporation documents into a Mol.
Do you know that your company or close corporation may have been deregistered after failing to file annual returns? Many owners of Companies and Close Corporations are unaware of the requirement to lodge annual returns on the anniversary of their registration with Cipro the predecessor of the Companies and Intellectual Property Commission (CIPC), there is a possibility that your company may have been deregistered.
The effect on the affected Companies and Close Corporations is that their bank accounts could be frozen, while their registered names became available after two months after deregistration, this means that a company could permanently lose its trading name.