The appointment of a proxy at any time in terms of section. The test is whether the company could surmount its difficulties and become a successful concern. Adoption, alteration and revocation of constitution 44. The new companies act also requires that it be interpreted and applied in a. Department of mercantile law, university of south africa. This act makes significant changes to south african law, including the capital rules. The new companies act changes existing south african company law in a number of ways. At the same time, it conferred increased powers on the board of directors of a company. Companies act to be amended news that connects south. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. Directors have certain fiduciary duties that they owe to the companies of which they are directors. Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014.
The reader is advised to consult a professional adviser for further assistance and. Most notably, it enhances the rights of persons who have, to date, had limited or no protection under company law. Effect of act on company not having constitution 40. Companies act 1963 act 179 section 1commencement spent. Recently, video and podcast material has been added to the site, including indepth video interviews with some of south africa s leading opinion makers. Nonprofit companies, which are the successors to the current section 21 companies, have to comply with a set of principles set out in schedule 1 of the act.
Hopefully this will shed some light on what is now required. Employees and the trade unions which represent them are among them. Restructuring of companies in financial distress is on the increase globally. Windingup of solvent companies and deregistering companies 79. South african close corporation, in australia, new zealand or the united king dom. Section 3application of act 1 except where otherwise provided, the provisions of this code shall apply to all companies formed in ghana, whether before or after the commencement of this code, under the provisions of the companies ordinance, cap.
South african law developed through the enactment of the amendment act act 37 of 1999 which was intended to relax the capital maintenance principle and adopted a us approach on. The saica guide to the companies act 71 of 2008 has been released. The protection of shareholders rights versus flexibility. Companies act 28 of 2004 gg 3362 brought into force on. Be it enacted by the parliament of the republic of south africa, as follows. In line with this trend, chapter 6 of the new companies act, no. Here are some of the questions raised regarding the new companies act as well as answers to these questions. Legal nature and rights and powers attaching to shares 46. This includes the duty to act in the best interests of that company which in turn includes the duty to prevent a conflict of interest between the director and the company. Nonprofit law in south africa council on foundations. Companies act 71 of 2008 english text signed by the president assented to. The act therefore provides for transitional arrangements that will retain part of the current regime for the interim until any new uniform insolvency law is introduced.
Transparency and accountability of close corporations 6. The companies act audit requirement and other matters. As such, it is intended to provide the reader or hisher entity with general information of interest. Limitation of period to incorporate close corporations or convert companies 3. Polity offers free access to south african legislation, policy documents and daily political news. Rescue mechanisms in south africa have existed for almost a century through the companies act provisions relating to judicial management ss 427 to 440. The companies act the act provides for a new classification of companies.
Understanding the new companies act pwc south africa. Chapter 6 of the south african companies act 71 of 2008. Recently, south africa has undergone a major process of law reform, culminating in the companies act no. To provide for the incorporation, management and liquidation of companies. Amendment of the companies act regulation, 2011 560kb pdf 20 august 20. In terms of the new act, companies are classified as either profit companies or nonprofit companies. Netshitenzhe said that the act encourages economic stability through good governance that will enhance investor confidence and international and domestic competitiveness in the south african economy. Arrangement of sections chapter 1 interpretation, purpose and application part a. For guidance, the developers looked to south african company law for the 21st. The nonprofit company can be established with or without members, but it must have at least three directors companies act section 3 1. For guidance, the developers looked to south african company law for the 21st century. 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 previous companies act, no 61 of 1973 the 1973 act followed the english. The act was signed by the president on the 9th april 2009 and gazetted in gazette no. The act contains new structural arrangements, with the introduction of new. Procedurally, the judicial manager was appointed by the master of the high court. How does the new companies act impact small and medium. A not for profit business previously known as a section 21b company. The board of directors and committees pwc south africa. As part of this goal, and by the use of the concept of alterable and unalterable provisions, the new act unravelled some shareholder protective mechanisms provided for under the old companies act 61 of 1973. With the implementation of the new companies act, many questions have been raised regarding the new audit requirements that were mandatory in the 1973 companies act. Any reference to the act in this guide refers to the companies act, no 71 of 2008, and any reference to the commission refers to the companies and intellectual property commission. Application and nonapplication of act part ii registration and incorporation of companies 4. South african companies that are financially distressed in south africa. More recently, a proposed set of amendments to the labour relations act and. The current framework of south african company law is built on foundations, which were put in place in victorian england in the middle of the nineteenth century.
Effect of removal of company from register 6 5 10 15 20 25 30 35 40 45. Section 75 of the companies act personal financial interest. If brought to use, this legislation would overlap and may conflict with the regime set out in the current companies act, 1973 for dealing with and winding up insolvent companies. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. A company that is owned by the south african government and listed in the pfma, or owned by a municipality and is of a similar kind to a government owned company. South african company law for the 21st century guidelines.
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