Introduction
1. In our 15 July 2019 and 9 January 2020 alerts we set out the process for digital re-registration of companies, foreign companies and business names with the final dates for re-registration being (at that time):
- 15 July 2020 for companies (including foreign companies), and
- 15 October 2020 for business names.
Extension
2. An extension of the final re-registration dates was gazetted on 7 July 2020 – a week before the deadline. The new deadline is now 31 December 2020. If application is not made before 31 December 2020, the law deems the entity to be de-registered.
3. Companies are encouraged to use this time wisely. The lessons learned so far is that the re-registration process can be protracted (although why that should be is not obvious to us).
Consequences of de-registration
Foreign company
4. Foreign companies who fail to apply for re-registration by 31 December 2020 will be deemed “de-registered on 1 January 2021”. A de-registered foreign company continuing to carry on business in Fiji will likely be in breach of the Companies Act and subject to financial penalties[1]. However, it seems to us that upon de-registration a foreign company could simply apply for a new registration.
Fiji companies
5. Fiji companies that do not apply for re-registration by 31 December 2020 are deemed de-registered on 1 January 2021. The consequences for a Fiji company are severe. It will “cease to exist” and its assets (including if subject to any liabilities) become the property of the Registrar of Companies[2].
6. The Registrar will then have all the powers of an “owner” over the de-registered company’s property, but subject to any security interests (for example, mortgages) or claims (for example, caveats) existing at deregistration. The Registrar can dispose of or deal with property, apply any money received to cover expenses, etc. Separate special rules apply to the Government for any property the company held in trust.
7. A deregistered company cannot sue or be sued; it would drop out of any court cases in which it is involved. However, the officers of a deregistered company continue to be liable for anything done prior to deregistration.
Reinstatement
8. A deregistered company can be reinstated to the Companies Register by:
- the Registrar – if within 10 years of deregistration and the Registrar is satisfied that the company should not have been deregistered or
- the High Court – a “person aggrieved by the de-registration” can apply to the Court (this might be a creditor or some party with an interest in the company’s assets such as a hire purchase provider) for reinstatement
9. The Court is likely to consider the circumstances, the extent that someone is likely to be prejudiced by the reinstatement and the public interest. Once reinstated, the company is taken to have continued to exist as if it had not been deregistered. Directors before deregistration again become directors from reinstatement. Any company property still vested in the Registrar or Government re-vests in the company and any debts owed before deregistration are revived.
Conclusion
10. If you have not yet focused on re-registration, you now have a little reprieve. Use this remaining time wisely and re-register your companies if you have not already done so.
11. Please contact Glenis Yee, Janice Fong or Divyasha Patel for further information on this Alert.
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[1] Penalty of up to $500 and $2,500 for companies (S.626-627 of Companies Act).
[2] Except for property held on trust, which goes to the Government.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.