As attorneys, we often see suppliers left stranded when a client company deregisters at CIPC but still has their equipment — whether it’s a coffee machine, copier, vehicle, or other leased asset. To make matters worse, no suretyship was signed, and the directors disappear into the background.

It’s a frustrating situation, but the law does provide remedies.

The Legal Position

When a company deregisters in South Africa, it ceases to exist as a juristic person. Its assets (not its debts) automatically vest in the State as bona vacantia. But here’s the important part: a rental agreement does not transfer ownership.

Ownership of your machine remains with you, the supplier. Even if the company falls away, your property right does not.

Remedies Available

1. Reclaim the Machine
   You may demand the return of your equipment from whoever currently holds it. The law gives you the rei vindicatio — the owner’s action to get your property back.
2. Claim Its Value
   If the machine has been sold, lost, or destroyed, you can pursue damages equal to its replacement value.
3. Recover Lost Income
   If you were unlawfully deprived of the machine, you can claim the income you would have earned. For instance, if your machine generates R5,000 per month, that figure forms the basis of your damages claim until the asset is returned.
4. Hold Directors Accountable
   While directors are not automatically liable for company debts, they can face personal liability if they continue using or disposing of assets after deregistration. Courts can also compel them to account for the machine’s whereabouts.

Practical Next Steps

• Send a formal demand to the last known directors.
• If they fail to comply, institute proceedings: either a vindicatory claim (for the machine itself) or damages (for its value and lost income).
• If there are substantial arrears, you may apply to restore the deregistered company and pursue it directly.

Closing Thoughts

The lesson for suppliers? Always secure a personal suretyship when entering into rental or supply agreements with companies. It adds a layer of protection if the company deregisters or defaults.

That said, even without a suretyship, the law still protects you. Your ownership is not erased, and you can claim either the return of your equipment or its value — together with lost income for the period you were unlawfully deprived.

If your business rents or supplies equipment and you’ve found yourself in a similar situation, let’s talk. At Henk Scheepers Inc., we help businesses protect their assets and enforce their rights quickly and effectively.