MAKE GOOD ON YOUR RETURNS
purportedly taken on behalf of the company or CC is invalid and has no legal effect at the time. Thus, the transaction is void. However, should the company or CC be reinstated, it could be valid ex post facto. Therefore, should a deregistered company or CC, for example, assign a trademark, such assignment will be null and void while it remains deregistered.
Fortunately, the act makes provision for two possible avenues to restore or reinstate a deregistered company or CC, namely:
1. An application to the High Court “for an order declaring the dissolution to have been void, or any order that is just and equitable in the circumstances” in terms of Section 83(4) of the act; or
2. An application to the commission for the “reinstatement of the registration” of the company or CC in terms of Section 82(4) of the act.
On the successful processing of the reinstatement application, the status of the company or CC will be changed to “Re-instatement process”. Only once all outstanding annual returns have been filed, will the status change to “In business” and the process will be complete. Once the process is complete, the company or CC will be reinstated to its former legal status and may then enforce trademark rights or assign such rights.
This process may seem unreasonable to creditors of deregistered companies or CCs, seeing that these documents are not readily available to them and the former directors of the company or members of the CC may not wish to co-operate in view of potential personal liability in terms of the act. However, this route is available to trademark proprietors wishing to reinstate a deregistered company or CC to assign rights to third parties or to take action based on trademark infringement.
The restoration-reinstatement of a company or CC has complete retrospective effect, in terms of which former assets revert in the company or CC and, equally important, full validation of its corporate activities conducted on behalf of the company or CC during its period of deregistration follows. This principle was confirmed in the recent Supreme Court of Appeal’s ruling of Newlands Surgical Clinic v Peninsula Eye Clinic.
Therefore, in principle, should a director or member of a deregistered company or CC assign a trademark during the deregistration period, the transaction will become valid ex post facto once the company or CC has been restored-reinstated.
While the Registrar of Trade Marks may accept a “statement of case” and affidavit in support of the “transfer” of trademarks from a deregistered company (dealing with the alleged “intention” to transfer rights to another entity before its deregistration), such an application may be invalid, should it not be supported by a written agreement between the deregistered company or CC and the “new owner”. It is essential to apply for the reinstatement of the deregistered company before it can enforce or transfer rights.
Considering the severe consequences of deregistration of a company or CC, there is an important duty on members and directors of corporate entities and their attorneysauditors to ensure that they remain registered at all times, especially when engaging in commercial transactions. The officers and agents have an obligation to confirm the status of the corporate entity on the commission database before taking any legal action or attempting to acquire or transfer property, including intellectual property. However, should it be discovered that the corporate entity has been deregistered, Sections 82(4) and 83(4) of the act provide for the restoration-reinstatement of the entity to its former legal status.
This process may seem unreasonable to creditors of deregistered companies or CCs, seeing that these documents are not available to them