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South Africa
NATIONAL LEGISLATION OVERVIEWS
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Companies Act, No. 71 of 2008 

Long title


To provide for the incorporation, registration, organisation and management of companies, the capitalisation of profit companies, and the registration of offices of foreign companies carrying on business within the Republic; to define the relationships between companies and their respective shareholders or members and directors; to provide for equitable and efficient amalgamations, mergers and takeovers of companies; to establish a Companies and Intellectual Property Commission and a Takeover Regulation Panel to administer the requirements of the Act with respect to companies, to establish a Companies Tribunal to facilitate alternative dispute resolution and to review decisions of the Commission; to establish a Financial Reporting Standards Council to advise on requirements for financial record-keeping and reporting by companies; to repeal the Companies Act, 1973 (Act No. 61 of 1973), and to make amendments to the Close Corporations Act, 1984 (Act No. 69 of 1984), as necessary to provide for a consistent and harmonious regime of business incorporation and regulation; and to provide for matters connected therewith.

Table of contents

SECTION TITLE

ARRANGEMENT OF SECTIONS
CHAPTER 1. INTERPRETATION, PURPOSE AND APPLICATION
Part A. Interpretation
1. Definitions
2. Related and inter-related persons, and control
3. Subsidiary relationships
4. Solvency and liquidity test
5. General interpretation of Act
6. Anti-avoidance, exemptions and substantial compliance
Part B. Purpose and application
7. Purposes of Act
8. Categories of companies
9. Modified application with respect to state-owned companies
10. Modified application with respect to non-profit companies
CHAPTER 2. FORMATION, ADMINISTRATION AND DISSOLUTION OF COMPANIES
Part A. Reservation and registration of company names
11. Criteria for names of companies
12. Reservation of name and defensive names
Part B. Incorporation and legal status of companies
13. Right to incorporate company or transfer registration of foreign company [... was entitled "Right to incorporate company"]
14. Registration of company
15. Memorandum of Incorporation, shareholder agreements and rules of company
16. Amending Memorandum of Incorporation
17. Alterations, translations and consolidations of Memorandum of Incorporation
18. Authenticity of versions of memorandum of incorporation
19. Legal status of companies
20. Validity of company actions
21. Pre-incorporation contracts
22. Reckless trading prohibited
Part C. Transparency, accountability and integrity of companies
23. Registration of external companies and registered office
24. Form and standards for company records
25. Location of company records
26. Access to company records
27. Financial year of company
28. Accounting records
29. Financial statements
30. Annual financial statements
31. Access to financial statements or related information
32. Use of company name and registration number
33. Annual return
34. Additional accountability requirements for certain companies
Part D. Capitalisation of profit companies
35. Legal nature of company shares and requirement to have shareholders
36. Authorisation for shares
37. Preferences, rights, limitations and other share terms
38. Issuing shares
39. Subscription of shares
40. Consideration for shares
41. Shareholder approval for issuing shares in certain cases
42. Options for subscription of securities
43. Securities other than shares
44. Financial assistance for subscription of securities
45. Loans or other financial assistance to directors
46. Distributions must be authorised by board
47. Capitalisation shares
48. Company or subsidiary acquiring company’s shares
Part E. Securities registration and transfer
49. Securities to be evidenced by certificates or uncertificated
50. Securities register and numbering
51. Registration and transfer of certificated securities
52. Registration of uncertificated securities
53. Transfer of uncertificated securities
54. Substitution of certificated or uncertificated securities
55. Liability relating to uncertificated securities
56. Beneficial interest in securities
Part F. Governance of companies
57. Interpretation and application of Part [...was entitled "Interpretation and restricted application of Part"]
58. Shareholder right to be represented by proxy
59. Record date for determining shareholder rights
60. Shareholders acting other than at meeting
61. Shareholders meetings
62. Notice of meetings
63. Conduct of meetings
64. Meeting quorum and adjournment
65. Shareholder resolutions
66. Board, directors and prescribed officers
67. First director or directors
68. Election of directors of profit companies [... was entitled "Election of directors"]
69. Ineligibility and disqualification of persons to be director or prescribed officer
70. Vacancies on board
71. Removal of directors
72. Board committees
73. Board meetings
74. Directors acting other than at meeting
75. Director’s personal financial interests
76. Standards of directors conduct
77. Liability of directors and prescribed officers
78. Indemnification and directors’ insurance
Part G. Winding-up of solvent companies and deregistering companies
79. Winding-up of solvent companies
80. Voluntary winding-up of solvent company
81. Winding-up of solvent companies by court order
82. Dissolution of companies and removal from register
83. Effect of removal of company from register
CHAPTER 3. ENHANCED ACCOUNTABILITY AND TRANSPARENCY
Part A. Application and general requirements of Chapter
84. Application of Chapter
85. Registration of company secretary and auditor
Part B. Company secretary
86. Mandatory appointment of company secretary
87. Juristic person or partnership may be appointed company secretary
88. Duties of company secretary
89. Resignation or removal of company secretary
Part C. Auditors
90. Appointment of auditor
91. Resignation of auditors and vacancies
92. Rotation of auditors
93. Rights and restricted functions of auditors
Part D. Audit committees
94. Audit committees
CHAPTER 4. PUBLIC OFFERINGS OF COMPANY SECURITIES
95. Application and interpretation of Chapter
96. Offers that are not offers to public
97. Standards for qualifying employee share schemes
98. Advertisements relating to offers
99. General restrictions on offers to public
100. Requirements concerning prospectus

101. Secondary offers to public
102. Consent to use of name in prospectus
103. Variation of agreement mentioned in prospectus
104. Liability for untrue statements in prospectus
105. Liability of experts and others
106. Responsibility for untrue statements in prospectus
107. Time limit for allotment or acceptance
108. Restrictions on allotment
109. Voidable allotment
110. Minimum interval before allotment or acceptance
111. Conditional allotment if prospectus states securities to be listed
CHAPTER 5. FUNDAMENTAL TRANSACTIONS, TAKEOVERS AND OFFERS
Part A. Approval for certain fundamental transactions
112. Proposals to dispose of all or greater part of assets or undertaking
113. Proposals for amalgamation or merger
114. Proposals for scheme of arrangement
115. Required approval for transactions contemplated in Part
116. Implementation of amalgamation or merger
Part B. Authority of Panel and Takeover Regulations
117. Definitions applicable to this Part, Part C and Takeover Regulations
118. Application of this Part, Part C and Takeover Regulations
119. Panel regulation of affected transactions
120. Takeover regulations
Part C. Regulation of affected transactions and offers
121. General requirement concerning transactions and offers
122. Required disclosure concerning certain share transactions
123. Mandatory offers
124. Compulsory acquisitions and squeeze out
125. Comparable and partial offers
126. Restrictions on frustrating action
127. Prohibited dealings before and during an offer
CHAPTER 6. BUSINESS RESCUE AND COMPROMISE WITH CREDITORS
Part A.  [...was entitled "Part. Business rescue proceedings]
128. Application and definitions applicable to Chapter
129. Company resolution to begin business rescue proceedings
130. Objections to company resolution
131. Court order to begin business rescue proceedings
132. Duration of business rescue proceedings
133. General moratorium on legal proceedings against company
134. Protection of property interests
135. Post-commencement finance
136. Effect of business rescue on employees and contracts
137. Effect on shareholders and directors
Part B. Practitioner’s functions and terms of appointment
138. Qualifications of practitioners
139. Removal and replacement of practitioner
140. General powers and duties of practitioners
141. Investigation of affairs of company
142. Directors of company to co-operate with and assist practitioner
143. Remuneration of practitioner
Part C. Rights of affected persons during business rescue proceedings
144. Rights of employees
145. Participation by creditors
146. Participation by holders of company’s securities
147. First meeting of creditors
148. First meeting of employees’ representatives
149. Functions, duties and membership of committees of affected persons
Part D. Development and approval of business rescue plan
150. Proposal of business rescue plan
151. Meeting to determine future of company
152. Consideration of business rescue plan
153. Failure to adopt business rescue plan
154. Discharge of debts and claims
Part E. Compromise with creditors
155. Compromise between company and creditors
CHAPTER 7. REMEDIES AND ENFORCEMENT
Part A. General principles
156. Alternative procedures for addressing complaints or securing rights
157. Extended standing to apply for remedies
158. Remedies to promote purpose of Act
159. Protection for whistle-blowers
Part B. Rights to seek specific remedies
160. Disputes concerning reservation or registration of company names
161. Application to protect rights of securities holders
162. Application to declare director delinquent or under probation
163. Relief from oppressive or prejudicial conduct or from abuse of separate juristic personality of company
164. Dissenting shareholders appraisal rights
165. Derivative actions
Part C. Voluntary resolution of disputes
166. Alternative dispute resolution
167. Dispute resolution may result in consent order
Part D. Complaints to Commission or Panel
168. Initiating a complaint
169. Investigation by Commission or Panel
170. Outcome of investigation
171. Issuance of compliance notices
172. Objection to notices
173. Consent orders
174. Referral of complaints to court
175. Administrative fines
Part E. Powers to support investigations and inspections
176. Summons
177. Authority to enter and search under warrant
178. Powers to enter and search
179. Conduct of entry and search
Part F. Companies Tribunal adjudication procedures
180. Adjudication hearings before Tribunal
181. Right to participate in hearing
182. Powers of Tribunal adjudication hearing
183. Rules of procedure
184. Witnesses
CHAPTER 8. REGULATORY AGENCIES AND ADMINISTRATION OF ACT
Part A. Companies and Intellectual Property Commission
185. Establishment of Companies and Intellectual Property Commission
186. Commission objectives
187. Functions of Commission
188. Reporting, research, public information and relations with other regulators
189. Appointment of Commissioner
190. Minister may direct policy and require investigation
191. Establishment of specialist committees
192. Constitution of specialist committees
Part B. Companies Tribunal
193. Establishment of Companies Tribunal
194. Appointment of Companies Tribunal
195. Functions of Companies Tribunal
Part C. Takeover Regulation Panel
196. Establishment of Takeover Regulation Panel
197. Composition of Panel
198. Chairperson and deputy chairpersons
199. Meetings of Panel
200. Executive of Panel
201 Functions of Panel
202 The Takeover Special Committee
Part D. Financial Reporting Standards Council
203 Establishment and composition of Council
204 Functions of Financial Reporting Standards Council
Part E. Administrative provisions applicable to agencies
205 Qualifications for membership
206 Conflicting interests of agency members
207 Resignation, removal from office and vacancies
208 onflicting interests of employees
209 Appointment of inspectors
210 Finances
211 Reviews and reports to Minister
212 Confidential information
CHAPTER 9. OFFENCES, MISCELLANEOUS MATTERS AND GENERAL PROVISIONS
Part A. Offences and penalties
213 Breach of confidence
214 False statements, reckless conduct and non-compliance
215 Hindering administration of Act
216 Penalties
217 Magistrate’s Court jurisdiction to impose penalties
Part B. Miscellaneous matters
218 Civil actions
219 Limited time for initiating complaints
220 Serving documents
221 Proof of facts
222 State liability
Part C. Regulations, consequential matters and commencement
223 Regulations
224 Consequential amendments, repeal of laws and transitional arrangements
225 Short title and commencement
Sch. 1. SCHEDULE 1. PROVISIONS CONCERNING NON-PROFIT COMPANIES [s1; s10]
Sch. 2. SCHEDULE 2. CONVERSION OF CLOSE CORPORATIONS TO COMPANIES [s1]
Sch. 3. SCHEDULE 3. AMENDMENT OF LAWS [s224]
Sch. 4. SCHEDULE 4. LEGISLATION TO BE ENFORCED BY COMMISSION [s6; s159; s186; s187; s190; s195; s206; Sch3]
Sch. 5. SCHEDULE 5. TRANSITIONAL ARRANGEMENTS [s35; s51; s79; s80; s155; s224; Sch3]

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