MCL5903
Assignment 2
Unique No: 802868
Due 5 September 2025
, Assignment 02
Due Date 05 September 2025
Unique No: 802868
Title: The Legal Status of Contracts Entered Into During Deregistration of a
Company: A Critical Analysis of Sand-Ton Computer Systems (Pty) Ltd v
Department of Education
1. Introduction
The deregistration of companies has long raised complex legal questions, particularly
concerning the validity of actions taken or contracts concluded while a company is not
officially recognised as a juristic person. In the present case, the Companies and
Intellectual Property Commission (CIPC) deregistered Sand-Ton Computer Systems
(Pty) Ltd ("Sand-Ton") for failure to file annual returns in terms of section 33 of the
Companies Act 71 of 2008. Sand-Ton subsequently entered into a government contract
while deregistered, but was reinstated before finalising the contract. The Department of
Education now refuses payment, arguing that Sand-Ton lacked legal capacity at the
time of the contract. This paper examines whether such contracts retain validity upon
reinstatement under the Companies Act, with reference to section 83(4), relevant case
law, and academic critique.
2. Legal Framework
2.1 Section 33 and Failure to File Returns
Section 33(1) of the Companies Act requires companies to file annual returns within the
prescribed period. In terms of section 82(3)(a)(i), the CIPC may deregister a company if
it has failed to file annual returns for two or more consecutive years and fails to respond
to a compliance notice. This administrative deregistration effectively terminates the
company's legal existence.
2.2 Section 82 and Consequences of Deregistration
Assignment 2
Unique No: 802868
Due 5 September 2025
, Assignment 02
Due Date 05 September 2025
Unique No: 802868
Title: The Legal Status of Contracts Entered Into During Deregistration of a
Company: A Critical Analysis of Sand-Ton Computer Systems (Pty) Ltd v
Department of Education
1. Introduction
The deregistration of companies has long raised complex legal questions, particularly
concerning the validity of actions taken or contracts concluded while a company is not
officially recognised as a juristic person. In the present case, the Companies and
Intellectual Property Commission (CIPC) deregistered Sand-Ton Computer Systems
(Pty) Ltd ("Sand-Ton") for failure to file annual returns in terms of section 33 of the
Companies Act 71 of 2008. Sand-Ton subsequently entered into a government contract
while deregistered, but was reinstated before finalising the contract. The Department of
Education now refuses payment, arguing that Sand-Ton lacked legal capacity at the
time of the contract. This paper examines whether such contracts retain validity upon
reinstatement under the Companies Act, with reference to section 83(4), relevant case
law, and academic critique.
2. Legal Framework
2.1 Section 33 and Failure to File Returns
Section 33(1) of the Companies Act requires companies to file annual returns within the
prescribed period. In terms of section 82(3)(a)(i), the CIPC may deregister a company if
it has failed to file annual returns for two or more consecutive years and fails to respond
to a compliance notice. This administrative deregistration effectively terminates the
company's legal existence.
2.2 Section 82 and Consequences of Deregistration
