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South
Africa
NATIONAL LEGISLATION OVERVIEWS
NATIONAL LEGISLATION OVERVIEWS
Companies
Act,
No. 71 of 2008
NOTE: Assented to and published in English, with alternative copy in _, except iro notice of assent date and title/text/engrossments in the following sections: s_ (_/_/_)
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
Legislation Text Access Point
NOTE: Assented to and published in English, with alternative copy in _, except iro notice of assent date and title/text/engrossments in the following sections: s_ (_/_/_)
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 [... Title amended by Act
2011_003_008(a)_20130201 ...
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 and beneficial ownership of company [... Title amended bt Act 2022_022A_058(a)_20221229 - was entitled "Beneficial interest in securities"] |
| Part F. Governance of companies | |
| 57. | Interpretation
and application of Part [... Title amended by Act
2011_003_037(a)_20130201...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. [... Title amended by Act 2011_003_080_20130201...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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