Despite of all the formalities and changes, the new act offers south african companies so much more than the previous companies act of 1973. Effectively, therefore, one would say that control of the company vests in. Updated guidance and frequently asked questions on section 90 2 of the companies act, 2008. Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms. The shareholders of a solvent company may decide, for any number of reasons, that despite its solvency the company should be wound up. Concerns were also expressed about the familiarity of the drafters with south african conditions. Understanding the new companies act pwc south africa. Companies amendment act 3 of 2011 act to provide for the incorporation, registration, organisation and management of companies, the capitalisation of profit companies, and the registration of offices of. The new companies act master builders kwazulunatal. Apr 21, 2009 21 april 2009 south africas new companies act aims to provide some recourse for companies in distress, reduce the cost of doing business in the country, promote corporate governance and transparency and empower shareholders. Rights that are promoted in the companies act overview the companies act, 2008 act no.
This entry also covers rules by which partnerships and trusts are governed in south africa, together with albeit in less detail cooperatives and sole proprietorships. When is a company subject to the takeover regulations. You will find below the key extracts from the south africa companies act along with the full act. Trade and industry, conference on south african company law for the 21st century, pretoria,19 march 2007 at page 3 3 extracts from section 38 of the companies act 61 of 1973 4 section 40 of the companies bill of 2007 at page 9697. Companies act regulations 2011 under companies regulations 2011. The companies amendment act,2014 sierra leone legal. Laws of south africa legislation lesotho law leslii liberian law liberlii malawian law malawilii namibian law namiblii nigerian law nigerialii sierra leone law sierralii south african law saflii seychelles law seylii swaziland law swazilii. The companies act 2008 has introduced various changes in respect of the corporate governance structures of companies.
The winding up of solvent companies is provided for in the new companies act 71 of 2008. The cipc can issue guidance to the public by issuing explanatory notices outlining its procedures or publishing nonbinding opinions on the interpretation of any provisions of the act in terms of section 1882b of the companies act, 2008. Also, the act exempts nonprofit companies from certain provisions of the act. Companies act no 71 of 2008 western cape government. Reference to the act shall, if the act is replaced by any other statute, be construed as a reference to the statute or statutes from time to time in force relating to companies. It was commented that this act was drafted without taking note of other legislation and processes germane to south africas economy. Schedule 5 of the act sets out the transitional arrangements, which are summarised as follows. The memorandum of association which was the founding document of a company. Apr 29, 2016 the companies act 2008 has introduced various changes in respect of the corporate governance structures of companies. As such, it is intended to provide the reader or hisher entity with general information of interest. Section 4 of the new companies act require a special. It is hereby notified that the president has assented to the following act which is hereby published for general information.
The companies act 61 of 1973 the previous act was repealed on 1 may 2011. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. South africas new companies act aims to provide some recourse for companies in distress, reduce the cost of doing business in the country, promote corporate governance and transparency and empower shareholders. New company laws in south africa present a number of opportunities and challenges for the finance industry.
This act introduced some novel provisions into our. South africa companies act 2008 south africa company law. The companies act audit requirement and other matters. South africa company law is a set of rules and regulation formed under the south africa companies act 2008. Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms of the previous. It is understood that the changes introduced into the companies act were intended to afford. The act was signed by the president on the 9th april 2009 and gazetted in gazette no. The impact of the new companies act on debt capital market issuances. Section 4 of the new companies act require a special resolution if the board wants to issue shares totaling 30% or answered by a verified lawyer. How does the new companies act impact small and medium.
The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. The winding up of insolvent companies remains regulated by the old companies act 61 of 1973. The next major south african legislation in this area was the companies act of 1973, which remained in force until 31 april 2011. Companies act of 2008 edit the 1973 act had over the years been amended on numerous occasions to bring it up to date. Act shall mean the companies act, 71 of 2008 and its regulations, as amended from time to time. Of the south african companies act, 2008 by eric levenstein director, shayne krige director, gregory nott director, lauren barnett senior associate and rita chen associate background a new companies act act 71 of 2008 as amended act became operative in our law on 1 may 2011. A company that is not a state owned company, and its memorandum. With regard to profit companies, the act distinguishes. What you need to know about the companies act of 2008. A company is a business organisation which earns income by the production or sale of goods or services. This article looks at the south african companies act 71 of 2008 hereafter the companies act. This guide includes information on matters that are practical and relevant to saica members and other individuals in business who engage with company law.
The companies act the social and ethics committee and the management of the ethics performance of the company social responsibility in business and ethics in the workplace is lead by the social and ethics committee, which must clearly understand that it is the social conscience of the business and is responsible to ensure that the company. It considers the effects of the companies act in respect of the realisation of human rights responsibilities by companies that operate within south africa. The impact of the new companies act on debt capital market. The saica guide to the companies act 71 of 2008 has been released. This act makes significant changes to south african law, including the capital rules. Companies amendment act 3 of 2011 southern african. The changes include inter alia provision for financial assistance for subscription of securities and acquisition of own. While the new act does allow a two year transitional period transitional period from the date on which the new act becomes effective effective date in order to. Companies act 71 of 2008 english text signed by the president assented to. The simplicity and flexibility reflected in the act will contribute significantly to promote. Subject to the preceding article, any words or expressions defined in the act the sectional title act, 1991 or the deeds registries act, 1937 shall, unless the context otherwise requires, bear the same. Companies amendment act 111 of 1976 companies amendment act 64 of 1977 revenue laws amendment act 114 of 1977 companies amendment act 59 of 1978 registration and incorporation of companies in south west africa proclamation 234 of 1978 as it is applicable in the republic companies amendment act 115 of 1979 companies amendment act 84 of 1980. Directors schedule 2 conversion of close corporations to companies 1.
The article focuses on companies and the companies act. This note has been prepared on the basis of the new companies act, as amended by the latest version of the companies amendment bill and as read with the final companies regulations. South african revenue service act office of the president no. Effectively, therefore, one would say that control of. Sarss objective is the eficient and effective collection. Promote compliance with the bill of rights as provided for in the constitution in the application of company law.
Effect of conversion on legal status schedule 3 amendment of laws a. The companies act 2008 at a glance overview you have decided to start a business and you want to incorporate a company. The namibian companies act, act 28 of 2004 the act contains a number of provisions that will directly impact all companies, directors and officers. In this memorandum of incorporation unless the context otherwise requires. Institutions investment of funds act, 1984 act no 39 of 1984. The memorandum of incorporation was introduced in 2008 and has replaced previous legislation that was under the companies act, no 61 of 1973 the old act. Companies act no 71 of 2008 maatskappywet no 71 van 2008 companies amendment act, no 3 of 2011 2mb pdf companies regulations, 2011 pages 1 107 3,1mb pdf. It is fair to say that the south african companies act that has been in existence since 1973 is outdated. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. The companies act the social and ethics committee and the. M gwanyanya the south african companies act and the. Companies amendment act 3 of 2011 southern african legal. African law africanlii botswana elaws ethiopian law. Introduction during consultation with directors of companies that have a single shareholder or a dominant majority shareholder, one often finds that the effective control of the company mostly vests in the shareholder of the company and that the directors are mainly appointed to act out the wishes of the shareholder.
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Reservation of name for later use part b incorporation and legal status of companies. There are some essential things you would need to know before you decide to incorporate a company in south africa. Most of the amendments made, however, relate to a modernisation of the act with wording amendments, from south west africa to namibia, to remove gender bias, to include namibian legislation. Companies act 2008 summary of transitional arrangement. The companies act 71 of 2008 new companies act will commence on 1 may 2011. With acts you are guaranteed the latest and most up to date resource for your legislative needs. The companies act 71 of 2008 the act was signed into law on 8 april 2011 and its commencement date was 1 may 2011.
South african company law is that body of rules which regulates corporations formed under the companies act. The current act contains very little on corporate governance, transparency, accountability, modern merger methods and minority shareholder protection. As is the case under the companies act, 1973, the high court remains the primary medium for the resolution of disputes and the interpretation and enforcement of the proposed companies act. All these issues are addressed in the new companies bill that is intended to replace the companies act, and as such the reform should be. The government made the right choice when they decided to change the companies act.
Amendment of the companies act regulation, 2011 5 february 2014. I need help regarding the interpretaion of section 221 of the south african companies act regarding an increase in a company,s share capital. The new act will have an impact on almost all financing. Amendment of the companies act regulation, 2011 20 august 20companies act no 71 of 2008 maatskappywet no 71 van 2008 companies amendment act, no 3 of 2011 companies regulations, 2011 pages 1 107 companies regulations, 2011 pages 108 212 companies regulations, 2011 pages 2 320. Companies amendment act 3 of 2011 south african government. Promote the development of the south african economy by.
South african companies need to implement a number of immediate steps to comply fully with the new companies act and, accordingly, managers should familiarise themselves with the provisions of the. Thirdly, it might forge ahead heedless of evidence and warnings about its consequences. The south african revenue service is hereby established as an organ of state within the public administration. The minister of trade and industry has, in terms of section 223 and item 14 of schedule 5 of the companies act, published the companies regulations. Be it enacted by the parliament of the republic of south africa, as follows. The south african companies act and the realisation of corporate human rights responsibilities m gwanyanya summary the companies act 71 of 2008 the companies act was promulgated in april 2009 and came into effect on 1 april. Board shall mean the board of directors for the time being of the company elected in terms of articles 19 and 21. This information should be considered in conjunction with the act itself. The companies act, 2008 provides for two categories of companies, namely nonprofit and profit companies. It has been announced that the new companies act no. Therefore, the act provides for the indefinite continued existence of the close corporations act. The purpose of this act is, among other things, to.
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