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13 Stellenbosch L. Rev. 230 (2002)
Brief Note on the Deregistration of a Company on the Ground That It Is Not in Operation or Carrying on Business

handle is hein.journals/stelblr13 and id is 244 raw text is: BRIEF NOTE ON THE DEREGISTRATION OF A COMPANY ON THE GROUND THAT IT IS NOT IN OPERATION OR CARRYING ON BUSINESS David M Matlala LLB LLM H Dip Tax Law Senior Lecturer in Law, University of Venda for Science and Technology 1 Introduction Section 73 of the Companies Act' (the Act), as amended, makes provision for the deregistration of a company on the ground that it is not carrying on business or is not in operation. The section also provides for the procedure to be followed in effecting such deregistration and further accommodates the restoration of registration in certain specified circumstances. These provisions find their counterpart, albeit in an abridged form, in section 26 of the Close Corporations Act.2 Interestingly though, neither the Companies Act nor the Close Corporations Act defines or at least indicates the circumstances in which a company or close corporation, as the case may be, can be considered not to be carrying on business or in operation. It is left to the courts to grabble with the issues involved. 2 Not being in operation It is difficult to understand the meaning of the phrase not in operation and more so since in a way it appears to overlap with the other ground, namely not carrying on business. Nevertheless, so it is said, these two grounds are independent and are not the same both in meaning and application.3 Moreover, a company may be in operation although not carrying on business. In a wider sense, being in operation seems to mean no more than being in existence. This was alluded to by Quenet J in Ex parte Autos Transport Ltd5 where his lordship, in the process of explaining in operation said that the company although in abeyance was alive. The wider meaning of the phrase would, however, be a contradiction in terms since until there is dissolution or deregistration, every registered company is in existence as a legal entity and would accordingly be in ' 61 of 1973. 2 69 of 1984. 3 Ex parte Ventersdorp Muslim Trust (Pty) Ltd 1964 3 SA 469 (T) 470H. 4 Ex parte Venersdorp Muslim Trust (Pty) Ltd supra 47 1D. 5 1965 1 PH E5 (SR).

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