Reddy v Absa Bank Ltd and Others

Missouri Trading CC was deregistered on 29 July 2011 for failure to submit annual returns in terms of s 82(3)(a) of the Companies Act 71 of 2008, which applies to close corporations via s 26 of the Close Corporations Act 69 of 1984. During the period of deregistration, Absa Bank launched an application for Missouri’s winding up. A provisional winding-up order was granted on 31 May 2012 and a final order on 27 August 2012, with liquidators appointed. Only thereafter did the parties become aware that Missouri had been deregistered at the time of the winding-up proceedings. Missouri was reinstated on 18 April 2013 in terms of s 82(4) of the Companies Act. The appellant, the sole member of Missouri, sought an order declaring the winding up void on the basis that Missouri lacked legal existence when the winding-up orders were granted.

The appeal was dismissed with costs, and the winding up of Missouri Trading CC was held to be valid and of full force and effect.

The case confirms and applies the principle that reinstatement under s 82(4) of the Companies Act operates automatically and retrospectively to validate all corporate activities undertaken during deregistration. It provides certainty in insolvency and company law by protecting third parties and liquidators who act in good faith while a company or close corporation is deregistered.