Reddy v Absa Bank Ltd

Missouri Trading CC (Missouri) was deregistered on 29 July 2011 due to failure to submit annual returns in terms of s 82(3)(a) of the Companies Act 71 of 2008. On 2 August 2011 (after deregistration), the first respondent (Absa Bank) launched an application for provisional winding up of Missouri. A provisional winding up order was granted on 31 May 2012, and a final winding up order was made on 27 August 2012. The second and third respondents were appointed as liquidators and commenced winding up. Missouri was subsequently reinstated on 18 April 2013 in terms of s 82(4) of the Companies Act. The deregistration only came to the knowledge of the first respondent and the appellant (the sole member of Missouri) after the final winding up order. The appellant then launched an application seeking to declare the winding up void and of no force and effect on the basis that Missouri had been deregistered when the winding up orders were made.

• Whether the reinstatement of a deregistered close corporation in terms of s 82(4) of the Companies Act 71 of 2008 operates retrospectively to validate corporate activities undertaken during the period of deregistration
• Whether winding up proceedings commenced and completed during the period of a close corporation's deregistration are valid and enforceable following the corporation's reinstatement

The appeal was dismissed with costs.

The reinstatement of a deregistered close corporation in terms of s 82(4) of the Companies Act 71 of 2008 has automatic retrospective effect, validating all corporate activities undertaken during the period of deregistration, including winding up proceedings. The retrospective validation operates automatically without requiring any separate application or order, and applies to all relevant aspects of the corporate activities during the deregistration period.

The court noted that attempting to seek relief in terms of s 83(4) of the Act based on factual allegations put forward for the first time in supplementary heads of argument is 'wholly impermissible.' This observation serves as a procedural reminder that new relief cannot be sought in this manner.

This case confirms and applies the important principle established in Newlands Surgical Clinic regarding the automatic retrospective effect of reinstatement under s 82(4) of the Companies Act 71 of 2008. It clarifies that all corporate activities during the period of deregistration, including winding up proceedings, are automatically validated upon reinstatement. This provides legal certainty for creditors, liquidators, and other parties who engage in transactions or proceedings involving deregistered entities that are subsequently reinstated. The case is particularly significant for insolvency practitioners as it confirms that winding up proceedings initiated during deregistration are not invalidated by subsequent reinstatement.