Ciaran Ryan
3 minute read
14 Dec 2020
12:34 pm

You can’t dodge a debt, court rules

Ciaran Ryan

Finding of a ‘singularity of identity’ between the CC and company, despite their several incarnations.

The Supreme Court of Appeal, Bloemfontein. Photo: Ben Bezuidenhout via Wikimedia

Converting a close corporation (CC) to a company might seem like a clever way of dodging a suretyship, but it won’t work. That was the finding of the Supreme Court of Appeal (SCA), which last month ruled against Masibuyisane Services (Pty) Ltd, which in 2006 had converted from a CC and in doing so argued that a suretyship signed in the name of the CC was not enforceable. Masibuyisane could never quite make up its mind whether it wanted to be a company or CC. In 2009, it re-converted to a CC and then in 2013 went back to being a company....