Last week I shared some of my correspondence with CIPC. This week, the post, apart from demonstrating Job like patience, gives an insight into the difference between a deregistration in the ordinary course and a deregistration pursuant to a statutory merger. (Please note that initials of the CIPC correspondents have been changed.)
Thanks Mr M***
I’m not sure why the requested documents are required. Neither the Act, nor the Regulations require filing of the merger agreements, certified ID Copies or a letter of deregistration with a Notice of Merger. The Merger Notice is attached.
The deregistration is pursuant to the merger, and is not an application for deregistration in terms of section 82 or regulation 40(3) or regulation 40(4). Given that this is not an application to deregister the company, the practice note that you purport to rely upon (presumably 7 of 2012) is not functional on the CIPC website. The Company that shall be deregistered (the merging company) lives on (for lack of a better expression) in the merged company. All of the rights duties and obligations are transferred to the merged company. All of the employees, creditors and shareholders have been notified in accordance with the Act.
The purpose of the practice note (presumably) is to protect stakeholders of a deregistration for reasons other than a merger, where the stakeholders may not have been given notice. Nevertheless, the Act is clear in relation to the Commissioner’s statutory obligation, namely … after receiving a notice of … merger, the Commission must … deregister any of the amalgamating or merging companies that did not survive the amalgamation or merger.
Please proceed as a matter of urgency. This process has been unduly prolonged.
We are fully aware of the Companies Act requirements. In order to process the application the required documentation must be lodged. The Commission has a mandate to require any supporting information in order to effect a registration.
The request for a de-registration document is required in order to facilitate the process of ensuring that the specific company currently active on our database is changed to inactive, irrespective of the fact that it “lives on” as you put it as part of the merged entity.
If the requested documents are not filed, we cannot effective proceed with the necessary in order to have the merger registered.
Thanks Ms C***
What should the letter of deregistration say?
Pike Law, again:
Dear Ms C** and Mr M***
I have collected the documents that you have asked for. The letter of deregistration is outstanding. What should this letter say, who should compose it and to whom should it be addressed?
Kindly be informed that the letter should be composed by the current directors authorising (signed and dated) the deregistration of the company and their certified ID Copies attached.
Dear Mr M**
Thanks for the email.
Could you please direct me to the sections / regulations which set out the requirements for this letter – I want to ensure that the letter complies with all aspects to the legal provisions applicable to it?
I do have a merger agreement which explicitly provides for the deregistration of the company, which agreement was approved by the shareholders in general meeting by way of a special resolution… will that suffice?
Alternatively, does the letter have to be signed by all of the directors? This may be difficult, inasmuch as the directors reside all over the country. Can the CEO of the company sign the letter? He has the authority by way of a board resolution to do all things, sign all documents etc to give effect to the merger, which includes the deregistration – as set out in the agreement.
Pike Law, again:
Dear Mr M***
Please reply to the email below.
I have to get this company de-registered, and these delays are not helping me.
Please forward the merger agreement documents from both merging companies and If the agreement contains the information authorising the deregistration, that will suffice. Please do not forget the certified ID Copies and that COR 89 form.
Dear Mr M***
Please find attached an executed version of the Merger Agreement. Please refer to clause 7 of the Agreement in which it is contemplated by the Parties that the merged party, that is "Party 1" as per clause 2.1.20 of the definitions, shall be deregistered.
As you know, the Merger Agreement was approved by special resolution by both of the Parties in general meeting. It follows that the directors of each of the companies had the requisite authority to implement the Merger in accordance with the terms of the Agreement, which obviously includes clause 7. Therefore, the directors and members of SATI were and are aware that SATI will be deregistered.
Thanks so much for your assistance.