Companies Act 71 of 2008: (English Text Signed by The President)
Companies Act 71 of 2008: (English Text Signed by The President)
Companies Act 71 of 2008: (English Text Signed by The President)
Definitions
Related and inter-related persons, and control
Subsidiary relationships
Solvency and liquidity test
General interpretation of Act
Anti-avoidance, exemptions and substantial compliance
Part B
Purpose and application
7.
8.
9.
10.
Purposes of Act
Categories of companies
Modified application with respect to state-owned companies
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.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
Application of Chapter
Registration of secretaries and auditors
Part B
Company secretary
86.
87.
88.
89.
90.
91.
92.
93.
Appointment of auditor
Resignation of auditors and vacancies
Rotation of auditors
Rights and restricted functions of auditors
Part D
Audit committees
94.
Audit committees
CHAPTER 4
PUBLIC OFFERINGS OF COMPANY SECURITIES
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
Part A
Business rescue proceedings
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
Qualifications of practitioners
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
Rights of employees
Participation by creditors
Participation by holders of companys securities
First meeting of creditors
First meeting of employees representatives
Functions, duties and membership of committees of affected persons
Part D
Development and approval of business rescue plan
150.
151.
152.
153.
154.
155.
CHAPTER 7
REMEDIES AND ENFORCEMENT
Part A
General principles
156.
157.
158.
159.
160.
167.
168.
Initiating complaint
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
179.
Summons
Authority to enter and search under warrant
Powers to enter and search
Conduct of entry and search
Part F
Companies Tribunal adjudication procedures
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.
Commission objectives
Functions of Commission
Reporting, research, public information and relations with other regulators
Appointment of Commissioner
Minister may direct policy and require investigation
Establishment of specialist committees
Constitution of specialist committees
Part B
Companies Tribunal
193
194.
195.
196.
197.
198.
199.
200.
201.
202.
203.
204.
Part E
Administrative provisions applicable to Agencies
205.
206.
207.
208.
209.
210.
211.
212.
CHAPTER 9
OFFENCES, MISCELLANEOUS MATTERS AND GENERAL PROVISIONS
Part A
Offences and penalties
213.
214.
215.
216.
217.
Breach of confidence
False statements, reckless conduct and non-compliance
Hindering administration of Act
Penalties
Magistrates Court jurisdiction to impose penalties
Part B
Miscellaneous matters
218.
219.
220.
221.
222.
Civil actions
Limited time for initiating complaints
Serving documents
Proof of facts
State liability
Part C
Regulations, consequential matters and commencement
223.
224.
225.
Regulations
Consequential amendments, repeal of laws and transitional arrangements
Short title and commencement
SCHEDULE 1
PROVISIONS CONCERNING NON-PROFIT COMPANIES
1.
2.
3.
4.
Fundamental transactions
Incorporators of non-profit company
Members
5.
Directors
SCHEDULE 2
CONVERSION OF CLOSE CORPORATIONS TO COMPANIES
1.
2.
A:
1.
2.
3.
4.
5.
6.
7.
8.
B:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Interpretation
Continuation of pre-existing companies
Pending matters
Memorandum of Incorporation and rules
Pre-incorporation contracts
Par value of shares, treasury shares, capital accounts and share certificates
Company finance and governance
Company names and name reservations
Continued application of previous Act to winding-up and liquidation
Preservation and continuation of court proceedings and orders
General preservation of regulations, rights, duties, notices and other instruments
Transition of regulatory agencies
Continued investigation and enforcement of previous Act
Regulations
CHAPTER 1
INTERPRETATION, PURPOSE AND APPLICATION
Part A
Interpretation
1.
Definitions
In this Act, unless the context indicates otherwiseaccounting records means information in written or electronic form concerning the
financial affairs of a company as required in terms of this Act, including but not limited
to, purchase and sales records, general and subsidiary ledgers and other documents and
books used in the preparation of financial statements;
[Definition of accounting records inserted by s. 1 of Act 3/2011]
in the case of the companys assets, more than 50% of its gross 40 assets fairly
valued, irrespective of its liabilities; or
(b)
in the case of the companys undertaking, more than 50% of the value of its entire
undertaking, fairly valued;
[Definition of all or the greater part of the assets or undertaking inserted by s. 1 of Act 3/2011]
(a)
the formation of one or more new companies, which together hold all of the
assets and liabilities that were held by any of the amalgamating or merging
companies immediately before the implementation of the agreement, and the
dissolution of each of the amalgamating or merging companies; or
(b)
(b)
and holds any part of the assets and liabilities that were held by any of the
amalgamating or merging companies immediately before the implementation of the
agreement;
amalgamating or merging company means a company that is a party to an
amalgamation or merger agreement;
annual general meeting means the meeting of a public company required by section
61(7);
audit has the meaning set out in the Auditing Profession Act, but does not include an
independent review of annual financial statements, as contemplated in section
30(2)(b)(ii)(bb);
[Definition of audit substituted by s. 1 of Act 3/2011]
Auditing Profession Act means the Auditing Profession Act, 2005 (Act No. 26 of
2005);
auditor has the meaning set out in the Auditing Act;
[Definition of auditor substituted by s. 1 of Act 3/2011]
Banks Act means the Banks Act, 1990 (Act No. 94 of 1990);
[Definition of Banks Act substituted by s. 1 of Act 3/2011]
beneficial interest, when used in relation to a companys securities, means the right
or entitlement of a person, through ownership, agreement, relationship or otherwise,
alone or together with another person to(a)
(b)
exercise or cause to be exercised, in the ordinary course, any or all of the rights
attaching to the companys securities; or
(c)
but does not include any interest held by a person in a unit trust or collective investment
scheme in terms of the Collective Investment Schemes Act, 2002 (Act No. 45 of 2002);
board means the board of directors of a company;
business days has the meaning determined in accordance with section 5(3);
Cabinet means the body of the national executive described in section 91 of the
Constitution;
central securities depository has the meaning set out in section 1 of the Securities
Services Act, 2004 (Act No. 36 of 2004);
close corporation means a juristic person incorporated under the Close Corporations
Act, 1984 (Act No. 69 of 1984);
Commission means the Companies and Intellectual Property Commission
established by section 185;
Commissioner means the person appointed to or acting in the office of that name, as
contemplated in section 189;
Companies Tribunal means the Companies Tribunal established in terms of section
193;
companies register means the register required to be established by the Commission
in terms of section 187(4);
company means a juristic person incorporated in terms of this Act, a domesticated
company, or a juristic person that, immediately before the effective date[Words preceding para. (a) substituted by s. of Act 3/2011]
(a)
(b)
(ii)
(c)
was deregistered in terms of the Companies Act, 1973 (Act No. 61 of 1973), and
has subsequently been re-registered in terms of this Act;
Competition Act, means the Competition Act, 1998 (Act No. 89 of 1998);
consideration means anything of value given and accepted in exchange for any
property, service, act, omission or forbearance or any other thing of value, including(a)
(b)
(c)
(b)
any non-voting securities issued by the company and which will become voting
securities(i)
(ii)
if the holder of those securities so elects at some time after acquiring them;
and
[Definition of convertible inserted by s. 1 of Act 3/2011 to substitute the definition of convertible securities
]
co-operative means a juristic person as defined in the Co-operatives Act, 2005 (Act
No. 14 of 2005);
Council means the Financial Reporting Standards Council established by section
203;
director means a member of the board of a company, as contemplated in section 66,
or an alternate director of a company and includes any person occupying the position of
a director or alternate director, by whatever name designated;
distribution means a direct or indirect-
(a)
transfer by a company of money or other property of the company, other than its
own shares, to or for the benefit of one or more holders of any of the shares, or to
the holder of a beneficial interest in any such shares, of that company or of
another company within the same group of companies, whether[Words preceding subpara. (1) substituted by s. 1 of Act 3/2011]
(i)
(ii)
(iii) as consideration for the acquisition[Words preceding item (aa) substituted by s. 1 of Act 3/2011]
(c)
but does not include any such action taken upon the final liquidation of the company;
domesticated company means a foreign company whose registration has been
transferred to the Republic in terms of section 13(5) to (11);
[Definition of domesticated company inserted by s. 1 of Act 3/2011]
effective date, with reference to any particular provision of this Act, means the date
on which that provision came into operation in terms of section 225;
electronic communication has the meaning set out in section 1 of the Electronic
Communications and Transactions Act;
Electronic Communications and Transactions Act means the Electronic
Communications and Transactions Act, 2002 (Act No. 25 of 2002);
employee share scheme has the meaning set out in section 95(1)(c);
exchange when used as a noun, has the meaning set out in section 1 of the Securities
Services Act, 2004 (Act No. 36 of 2004);
exercise, when used in relation to voting rights, includes voting by proxy, nominee,
trustee or other person in a similar capacity;
ex officio director means a person who holds office as a director of a particular
company solely as a consequence of that person holding some other office, title,
designation or similar status specified in the companys Memorandum of Incorporation;
external company means a foreign company that is carrying on business, or nonprofit activities, as the case may be, within the Republic, subject to section 23(2);
file, when used as a verb, means to deliver a document to the Commission in the
manner and form, if any, prescribed for that document;
financial reporting standards, with respect to any particular companys financial
statements, means the standards applicable to that company, as prescribed in terms of
section 29(4) and (5);
financial statement includes(a)
(b)
(c)
(d)
(b)
carrying on business or non-profit activities, as the case may be, within the
Republic;
general voting rights means voting rights that can be exercised generally at a
general meeting of a company;
group of companies means a holding company and all of its subsidiaries;
[Definition of group of companies substituted by s. 1 of Act 3/2011]
Human Rights Commission means the South African Human Rights Commission
established in terms of Chapter 9 of the Constitution;
incorporator, when used(a)
with respect to a company incorporated in terms of this Act, means a person who
incorporated that company, as contemplated in section 13; or
(b)
with respect to a pre-existing company, means a person who took the relevant
actions comparable to those contemplated in section 13 to bring about the
incorporation of that company;
investigator .
[Definition of investigator deleted by s. 1 of Act 3/2011]
inter-related, when used in respect of three or more persons, means persons who are
related to one another in a linked series of relationships, such that two of the persons
are related in a manner contemplated in section 2(1), and one of them is related to the
third in any such manner, and so forth in an unbroken series;
[Definition of inter-related substituted by s. 1 of Act 3/2011]
(b)
(b)
(ii)
investigated the matter to an extent that would have provided the person
with actual knowledge; or
(iii) taken other measures which, if taken, would reasonably be expected to have
provided the person with actual knowledge of the matter;
listed securities has the meaning set out in section 1 of the Securities Services Act,
2004 (Act No. 36 of 2004);
Master means the officer of the High Court, referred to in section 2 of the
Administration of Estates Act, 1965 (Act No. 66 of 1965), who has jurisdiction over a
particular matter arising in terms of this Act;
[Definition of Master substituted by s. 1 of Act 3/2011]
(b)
a close corporation, has the meaning set out in section 1 of the Close
Corporations Act, 1984 (Act No. 69 of 1984); or
(b)
a non-profit company, means a person who holds membership in, and specified
rights in respect of, that non-profit company, as contemplated in Schedule 1; or
(c)
any other entity, means a person who is a constituent part of that entity;
[Definition of member substituted by s. 1 of Act 3/2011]
Memorandum of Incorporation.
[Definition of Memorandum of Incorporation substituted by the definition of Memorandum, or
Memorandum of Incorporation by s. 1 of Act 3/2011]
the company was incorporated under this Act, as contemplated in section 13;
(b)
a pre-existing company was structured and governed before the later of the-
(c)
(i)
effective date; or
(ii)
nominee has the meaning set out in section 1 of the Securities Services Act, 2004
(Act No. 36 of 2004);
non-profit company means a company(a)
(b)
the income and property of which are not distributable to its incorporators,
members, directors, officers or persons related to any of them except to the extent
permitted by item 1(3) of Schedule 1;
at a shareholders meeting; or
(b)
organ of state has the meaning set out in section 239 of the Constitution;
Panel means the Takeover Regulation Panel, established by section 196;
participant has the meaning set out in section 1 of the Securities Services Act, 2004
(Act No. 36 of 2004);
person includes a juristic person;
personal financial interest, when used with respect to any person(a)
(b)
does not include any interest held by a person in a unit trust or collective
investment scheme in terms of the Collective Investment Schemes Act, 2002 (Act
No. 45 of 2002), unless that person has direct control over the investment
decisions of that fund or investment;
personal liability company means a profit company that satisfies the criteria in
section 8(2)(c);
[Definition of personal liability company substituted by s. 1 of Act 3/2011]
premises includes land, or any building, structure, vehicle, ship, boat, vessel, aircraft
or container;
prescribed means determined, stipulated, required, authorised, permitted or
otherwise regulated by a regulation or notice made in terms of this Act;
prescribed officer means a person who, within a company, performs any function
that has been designated by the Minister in terms of section 66(10);
[Definition of prescribed officer substituted by s. 1 of Act 3/2011]
(b)
profit company means a company incorporated for the purpose of financial gain for
its shareholders;
public company means a profit company that is not a state-owned company, a
private company or a personal liability company;
public regulation means any national, provincial or local government legislation or
subordinate legislation, or any licence, tariff, directive or similar authorisation issued
by a regulatory authority or pursuant to any statutory authority;
records, when used with respect to any information pertaining to a company, means
any information contemplated in section 24(1);
record date means the date established under section 59 on which a company
determines the identity of its shareholders and their shareholdings for the purposes of
this Act;
registered auditor has the meaning set out in the Auditing Profession Act;
registered external company means an external company that has registered its
office as required by section 23, and has been assigned a registration number in terms
of that section;
registered office means the office of a company, or of an external company, that is
registered as required by section 23;
registered trade union means a trade union registered in terms of section 96 of the
Labour Relations Act, 1995 (Act No. 66 of 1995);
registration certificate, when used with respect to a(a)
(b)
the Companies Act, 1973 (Act No. 61 of 1973), means the certificate of
incorporation or registration issued to it in terms of that Act;
(ii)
the Close Corporations Act, 1984 (Act No. 69 of 1984), and converted in
terms of Schedule 2 to this Act, means the certificate of incorporation
issued to the company in terms of that Schedule, read with section 14; or
(iii) any other law, means any document issued to the company in terms of that
law as evidence of the companys incorporation; or
(c)
(d)
a domesticated company, means the certificate issued to it upon the transfer of its
registration to the Republic in terms of section 13(5) to (11);
[Para. (d) inserted by s. 1 of Act 3/2011]
relationship includes the connection subsisting between any two or more persons
who are related or inter-related, as determined in accordance with section 2;
rules and rules of a company means any rules made by a company as
contemplated in section 15(3) to (5);
securities means any shares, debentures or other instruments, irrespective of their
form or title, issued or authorised to be issued by a profit company;
[Definition of securities substituted by s. 1 of Act 3/2011]
series of integrated transactions has the meaning set out in section 41(4)(b)
[Definition of series of integrated transactions inserted by s. 1 of Act 3/2011]
share means one of the units into which the proprietary interest in a profit company
is divided;
shareholder, subject to section 57(1), means the holder of a share issued by a
company and who is entered as such in the certificated or uncertificated securities
register, as the case may be;
shareholders meeting, with respect to any particular matter concerning a company,
means a meeting of those holders of that companys issued securities who are entitled
to exercise voting rights in relation to that matter;
solvency and liquidity test means the test set out in section 4(1);
special resolution means (a)
(b)
in the case of a company, a resolution adopted with the support of at 40 least 75%
of the voting rights exercised on the resolution, or a different percentage as
contemplated in section 65(10)(i)
at a shareholders meeting; or
(ii)
in the case of any other juristic person, a decision by the owner or owners of that
person, or by another authorised person, that requires the highest level of support
in order to be adopted, in terms of the 50 relevant law under which that juristic
person was incorporated;
[Definition of special resolution substituted by s. 1 of Act 3/2011]
(a)
(b)
the rights of any holder of the companys securities to vote in connection with
that matter, in the case of a profit company; or
(b)
the rights of a member to vote in connection with the matter, in the case of a nonprofit company;
voting securities, with respect to any particular matter, means securities that(a)
(b)
are presently convertible to securities that carry voting rights with respect to that
matter; and
2.
(ii)
(b)
(c)
(ii)
For the purpose of subsection (1), a person controls a juristic person, or its
business, if(a)
(ii)
that first person together with any related or inter-related person, is(aa) directly or indirectly able to exercise or control the exercise of a
majority of the voting rights associated with securities of that
company, whether pursuant to a shareholder agreement or
otherwise; or
(bb) has the right to appoint or elect, or control the appointment or
election of, directors of that company who control a majority of
the votes at a meeting of the board;
(b)
in the case of a juristic person that is a close corporation, that first person
owns the majority of the members interest, or controls directly, or has the
right to control, the majority of members votes in the close corporation;
(3)
(c)
in the case of a juristic person that is a trust, that first person has the ability
to control the majority of the votes of the trustees or to appoint the majority
of the trustees, or to appoint or change the majority of the beneficiaries of
the trust; or
(d)
that first person has the ability to materially influence the policy of the
juristic person in a manner comparable to a person who, in ordinary
commercial practice, would be able to exercise an element of control
referred to in paragraph (a), (b) or (c).
With respect to any particular matter arising in terms of this Act, a court, the
Companies Tribunal or the Panel may exempt any person from the application of
a provision of this Act that would apply to that person because of a relationship
contemplated in subsection (1) if the person can show that, in respect of that
particular matter, there is sufficient evidence to conclude that the person acts
independently of any related or inter-related person.
3.
Subsidiary relationships
(1)
A company is(a)
(b)
(2)
(ii)
For the purpose of determining whether a person controls all or a majority of the
general voting rights associated with issued securities of a company(a)
(ii)
when those circumstances are under the control of the person holding
the voting rights;
(3)
(b)
voting rights that are exercisable only on the instructions or with the
consent or concurrence of another person are to be treated as being held by
a nominee for that other person; and
(c)
(ii)
For the purposes of subsection (2), hold, or any derivative of it, refers to the
registered or direct or indirect beneficial holder of securities conferring a right to
vote.
4.
For any purpose of this Act, a company satisfies the solvency and liquidity test at
a particular time if, considering all reasonably foreseeable financial circumstances
of the company at that time(a)
the assets of the company, as fairly valued, equal or exceed the liabilities of
the company, as fairly valued; and
[Para. (a) substituted by s. 2 of Act 3/2011]
(b)
(2)
it appears that the company will be able to pay its debts as they become due
in the ordinary course of business for a period of(i)
(ii)
(b)
(ii)
subject to paragraph (c), the board or any other person applying the
solvency and liquidity test to a company(i)
(c)
5.
This Act must be interpreted and applied in a manner that gives effect to the
purposes set out in section 7.
(2)
To the extent appropriate, a court interpreting or applying this Act may consider
foreign company law.
(3)
When, in this Act, a particular number of business days is provided for between
the happening of one event and another, the number of days must be calculated
by-
(4)
(a)
(b)
(c)
(b)
(ii)
(ii)
the provisions of this Act prevail in any other case, except to the
extent provided otherwise in subsection (5) or section 118(4).
(5)
(6)
If there is a conflict between any provision of this Act and a provision of the
listing requirements of an exchange(a)
the provisions of both this Act and the listing requirements apply
concurrently, to the extent that it is possible to apply and comply with one
of the inconsistent provisions without contravening the second; and
(b)
to the extent that it is impossible to apply and comply with one of the
inconsistent provisions without contravening the second, the provisions of
this Act prevail, except to the extent that this Act expressly provides
otherwise.
[Subs. (6) inserted by s. 3 of Act 3/2011]
6.
(a)
(b)
(2)
(3)
(4)
(5)
(a)
(b)
(ii)
(b)
in plain language, if no form has been prescribed for that prospectus, notice,
disclosure or document.
(b)
(c)
(d)
the use of any illustrations, examples, headings or other aids to reading and
understanding in the prospectus, notice, disclosure or document.
(6)
(7)
(8)
(9)
(b)
any deviation from the design or content of the prescribed form does not
invalidate the action taken by the person preparing or completing that
document, record, statement or notice, unless the deviation(i)
(ii)
(a)
(b)
any deviation from the prescribed manner does not invalidate the action
taken by the person delivering that document, record, statement or notice,
unless the deviation(i)
(ii)
(10) If, in terms of this Act, a notice is required or permitted to be given or published
to any person, it is sufficient if the notice is transmitted electronically directly to
that person in a manner and form such that the notice can conveniently be printed
by the recipient within a reasonable time and at a reasonable cost.
(11) If, in terms of this Act, a document, record or statement, other than a notice
contemplated in subsection (10), is required(a)
(b)
(ii)
(b)
(ii)
(ii)
(ii)
(b)
(15) To the extent that the specific content, or a particular effect, of any provision of a
companys Memorandum of Incorporation(a)
(b)
Part B
Purpose and application
7.
Purposes of Act
The purposes of this Act are to(a)
promote compliance with the Bill of Rights as provided for in the Constitution, in
the application of company law;
(b)
(ii)
(d)
reaffirm the concept of the company as a means of achieving economic and social
benefits;
(e)
continue to provide for the creation and use of companies, in a manner that
enhances the economic welfare of South Africa as a partner within the global
economy;
(f)
promote the development of companies within all sectors of the economy, and
encourage active participation in economic organisation, management and
productivity;
(g)
create optimum conditions for the aggregation of capital for productive purposes,
and for the investment of that capital in enterprises and the spreading of economic
risk;
(h)
(i)
balance the rights and obligations of shareholders and directors within companies;
(j)
(k)
provide for the efficient rescue and recovery of financially distressed companies,
in a manner that balances the rights and interests of all relevant stakeholders; and
(l)
8.
Categories of companies
(1)
Two types of companies may be formed and incorporated under this Act, namely
profit companies and non-profit companies.
(2)
a state-owned company; or
(b)
(ii)
its Memorandum of Incorporation(aa) prohibits it from offering any of its securities to the public; and
(bb) restricts the transferability of its securities;
(c)
(d)
(3)
9.
(ii)
(b)
(c)
(1)
Subject to section 5(4) and (5), any provision of this Act that applies to a public
company applies also to a state-owned company, except to the extent that the
Minister has granted an exemption in terms of subsection (3).
(2)
(b)
local government matters may request the Minister to grant a total, partial
or conditional exemption from one or more provisions of this Act,
applicable to all state-owned companies owned by a municipality, any class
of such enterprises, or to one or more particular such enterprises,
10.
The Minister, by notice in the Gazette after receiving the advice of the
Commission, may grant an exemption contemplated in subsection (2)(a)
only to the extent that the relevant alternative regulatory scheme ensures the
achievement of the purposes of this Act at least as well as the provisions of
this Act; and
(b)
(2)
The following provisions of this Act, and any regulations made in respect of
any such provisions, do not apply to a non-profit company:
(a)
(b)
(c)
(d)
(i)
(ii)
(e)
(f)
(g)
(h)
(3)
(4)
(b)
With respect to a non-profit company that has voting members, a reference in this
Act to a shareholder, the holders of a companys securities, holders of
issued securities of that company or a holder of voting rights entitled to be
voted is a reference to the voting members of the non-profit company.
CHAPTER 2
(i)
(ii)
(2)
(ii)
a name registered for the use of a person, other than the company
itself or a person controlling the company, as a defensive name in
terms of section 12(9), or as a business name in terms of the Business
Names Act, 1960 (Act No. 27 of 1960), unless the registered user of
that defensive name or business name has executed the necessary
documents to transfer the registration in favour of the company;
(iii) a registered trade mark belonging to a person other than the company,
or a mark in respect of which an application has been filed in the
Republic for registration as a trade mark or a well-known trademark
as contemplated in section 35 of the Trade Marks Act, 1993 (Act No.
194 of 1993), unless the registered owner of that mark has consented
in writing to the use of the mark as the name of the company; or
(iv) a mark, word or expression the use of which is restricted or protected
in terms of the Merchandise Marks Act, 1941 (Act No. 17 of 1941),
except to the extent permitted by or in terms of that Act;
[Para. (a) substituted by s. 6 of Act 3/2011]
(b)
(ii)
(c)
(ii)
(d)
(ii)
(3)
(a)
(b)
(c)
a company name, irrespective of its form or language, must end with one of
the following expressions, as appropriate for the category of the particular
company:
(i)
(ii)
(iii) The word Limited or its abbreviation, Ltd., in the case of a public
company.
(iv) The expression SOC Ltd. in the case of a state-owned company.
(v)
(4)
(b)
12.
A person may reserve one or more names to be used at a later time, either for a
newly incorporated company, or as an amendment to the name of an existing
company, by filing an application together with the prescribed fee.
(2)
The Commission must reserve each name as applied for in the name of the
applicant, unless (a)
(b)
(3)
If, upon reserving a name in terms of subsection (2), there are reasonable grounds
for considering that the name may be inconsistent with the requirements of(a)
(b)
(i)
(ii)
(i)
the Commission may refer the application and name reservation to the
South African Human Rights Commission; and
(ii)
(4)
A name reservation continues for a period of six months from the date of the
application, and may be extended by the Commission for good cause shown, on
application by the person for whom the name is reserved together with the
prescribed fee, for a period of 60 business days at a time.
(5)
A person for whom a name has been reserved in terms of subsection (2) may
transfer that reservation to another person by filing a signed notice of the transfer
together with the prescribed fee.
(6)
requiring the person to show cause why that name should be reserved or
continue to be reserved, or why the reservation should be transferred;
(b)
(c)
(d)
(7)
If, as a result of a pattern of conduct by a person, or two or more persons who are
related or inter-related, the Commission has reasonable grounds to believe that
the person or persons have abused the name reservation system by(a)
(b)
the Commission may apply to a court for an order prohibiting the person or
persons from applying to reserve any names in terms of this section for a period
that the court considers just and reasonable in the circumstances.
(8)
(9)
(a)
(b)
(c)
(d)
Any person may on application on the prescribed form and on payment of the
prescribed fee apply to the Commission to(a)
(b)
Part B
(1)
One or more persons, or an organ of state, may incorporate a profit company, and
an organ of state, a juristic person, or three or more persons acting in concert,
may incorporate a non-profit company, by[Words preceding para. (a) substituted by s. 8 of Act 3/2011]
(a)
(b)
(2)
(ii)
filed in the prescribed manner and form, together with the prescribed fee;
and
[Para. (a) substituted by s. 8 of Act 3/2011]
(b)
(3)
(4)
The Commission(a)
(b)
the initial directors of the company, as set out in the Notice, are fewer
than required by or in terms of section 66(2); or
(ii)
(5)
Subject to subsections (6) and (7), a foreign company may apply in the prescribed
manner and form, accompanied by the prescribed application fee, to transfer its
registration to the Republic from the foreign jurisdiction in which it is registered,
and thereafter exists as a company in terms of this Act as if it had been originally
so incorporated and registered.
[Subs. (5) inserted by s. 8 of Act 3/2011]
(6)
the law of the jurisdiction in which the company is registered permits such a
transfer, and the company has complied with the requirements of that law in
relation to the transfer;
(b)
(ii)
(c)
the whole or greater part of its assets and undertaking are within the
Republic, other than the assets and undertaking of any subsidiary that is
incorporated outside the Republic;
(d)
(e)
the majority of its directors are or will be South African citizens; and
(f)
(ii)
(7)
Despite satisfying the requirements of subsection (6), a foreign company may not
transfer its registration to the Republic as contemplated in subsection (5) if(a)
(b)
(ii)
(c)
(d)
(ii)
(iii) has entered into a compromise or arrangement with a creditor, and the
compromise or arrangement is in force; or
(e)
an application has been made to a court in any jurisdiction, and not fully
disposed of (i)
(ii)
(8)
(b)
(c)
(9)
Subsections (3) and (4) and section 14, each read with the changes required by
the context, apply to an application in terms of subsections (5) to (7).
[Subs. (9) inserted by s. 8 of Act 3/2011]
(b)
(c)
prejudice the rights of any person or affect the property, rights, liabilities or
obligations of that juristic person; or
(d)
14.
Registration of company
(1)
(a)
(b)
(ii)
(b)
(i)
must take the steps set out in subsection (1)(b), using the companys
registration number, followed by Inc., (Pty) Ltd, Ltd., SOC, or
NPC, as appropriate, as the interim name of the company in the
companies register and on the registration certificate;
(ii)
If, upon registering a company in terms of subsection (1), there are reasonable
grounds for considering that the companys name may be inconsistent with the
requirements of[Words preceding para. (a) substituted by s. 9 of Act 3/2011]
(a)
(b)
(i)
(ii)
(4)
(i)
the Commission may refer the application and name reservation to the
South African Human Rights Commission; and
(ii)
all the requirements for the incorporation of the company have been
complied with; and
(b)
15.
the company is incorporated under this Act as from the date, and the time, if
any, stated in the certificate.
(b)
(2)
(ii)
(b)
(c)
(d)
not include any provision that negates, restricts, limits, qualifies, extends or
otherwise alters the substance or effect of an unalterable provision of this
Act, except to the extent contemplated in paragraph (a)(iii).
[Para. (d) inserted by s. 10 of Act 3/2011]
(3)
(b)
(4)
(b)
(ii)
(c)
(5)
is binding(i)
on an interim basis from the time it takes effect until it is put to a vote
at the next general shareholders meeting of the company; and
(ii)
If a rule that has been filed in terms of subsection (3) is subsequently (a)
(b)
(ii)
the companys board may not make a substantially similar rule within
the ensuing 12 months, unless it has been approved in advance by
ordinary resolution of the shareholders.
[Subs. (5) substituted by s. 10 of Act 3/2011]
(5A) Any failure to ratify the rules of a company does not affect the validity of
anything done in terms of those rules during the period that they had an interim
effect as provided in subsection (4)(c)(i).
[Subs. (5A) inserted by s. 10 of Act 3/2011]
(6)
(b)
(c)
(ii)
16.
The shareholders of a company may enter into any agreement with one another
concerning any matter relating to the company, but any such agreement must be
consistent with this Act and the companys Memorandum of Incorporation, and
any provision of such an agreement that is inconsistent with this Act or the
companys Memorandum of Incorporation is void to the extent of the
inconsistency.
(b)
(c)
(ii)
(2)
(3)
(b)
(4)
(5)
(b)
(b)
(ii)
(7)
the provisions of section 13(3) and (4)(a) and section 14, each read with the
changes required by the context, apply to the filing of the Notice of
Amendment; and
(b)
(ii)
(aa) the company must include a copy of the amendment with the
Notice of Amendment; and
(bb) the Commission may require the company to file a full copy of
its amended Memorandum of Incorporation within a reasonable
time.
(8)
the provisions of section 14(2) and (3), read with the changes required by
the context, apply afresh to the company; and
(b)
(ii)
(9)
in the case of an amendment that changes the name of the company, on the
date set out in the amended registration certificate issued by the
Commission in terms of subsection (8), read with section 14(1)(b)(iii); or
(b)
the date on, and time at, which the Notice of Amendment is filed; or
(ii)
(a)
(b)
(ii)
17.
The board of a company, or an individual authorised by the board, may alter the
companys rules, or its Memorandum of Incorporation, in any manner necessary
to correct a patent error in spelling, punctuation, reference, grammar or similar
defect on the face of the document, by(a)
(b)
(2)
(3)
At any time, a company that has filed its Memorandum of Incorporation may file
one or more translations of it, in any official language or languages of the
Republic.
(4)
(5)
At any time after a company has filed its Memorandum of Incorporation, and
subsequently filed one or more alterations or amendments to it-
(6)
(a)
(b)
(b)
(2)
19.
(b)
From the date and time that the incorporation of a company is registered, as stated
in its registration certificate, the company(a)
(b)
has all of the legal powers and capacity of an individual, except to the
extent that-
(c)
(i)
(ii)
(i)
(ii)
(3)
If a company is a personal liability company the directors and past directors are
jointly and severally liable, together with the company, for any debts and
liabilities of the company as are or were contracted during their respective periods
of office.
(4)
Subject to subsection (5), a person must not be regarded as having received notice
or knowledge of the contents of any document relating to a company merely
because the document-
(5)
(a)
(b)
(b)
20.
(6)
(7)
After a company has changed its name, any legal proceedings that might have
been commenced or continued by or against the company under its former name
may be commenced or continued by or against it under its new name.
(1)
(b)
(ii)
(ii)
(3)
(4)
(5)
(a)
(b)
(6)
Each shareholder of a company has a claim for damages against any person who
intentionally, fraudulently or due to gross negligence causes the company to do
anything inconsistent with[Words preceding para. (a) substituted by s. 13 of Act 3/2011]
(a)
this Act; or
(b)
(7)
A person dealing with a company in good faith, other than a director, prescribed
officer or shareholder of the company, is entitled to presume that the company, in
making any decision in the exercise of its powers, has complied with all of the
formal and procedural requirements in terms of this Act, its Memorandum of
Incorporation and any rules of the company unless, in the circumstances, the
person knew or reasonably ought to have known of any failure by the company to
comply with any such requirement.
(8)
Subsection (7) must be construed concurrently with, and not in substitution for,
any relevant common law principle relating to the presumed validity of the
actions of a company in the exercise of its powers.
(9)
(b)
make any further order the court considers appropriate to give effect to a
declaration contemplated in paragraph (a).
[Subs. (9) inserted by s. 13 of Act 3/2011]
21.
Pre-incorporation contracts
(1)
A person may enter into a written agreement in the name of, or purport to act in
the name of, or on behalf of, an entity that is contemplated to be incorporated in
terms of this Act, but does not yet exist at the time.
(2)
(b)
(3)
If, after its incorporation, a company enters into an agreement on the same terms
as, or in substitution for, an agreement contemplated in subsection (1), the
liability of a person under subsection (2) in respect of the substituted agreement is
discharged.
(4)
Within three months after the date on which a company was incorporated the
board of that company may completely, partially or conditionally ratify or reject
any pre-incorporation contract or other action purported to have been made or
done in its name or on its behalf, as contemplated in subsection (1).
(5)
If, within three months after the date on which a company was incorporated, the
board has neither ratified nor rejected a particular pre-incorporation contract, or
other action purported to have been made or done in the name of the company, or
on its behalf, as contemplated in subsection (1), the company will be regarded to
have ratified that agreement or action.
(6)
(7)
22.
after being incorporated, the company rejects any part of such an agreement
or action.
(a)
(b)
(1)
A company must not carry on its business recklessly, with gross negligence, with
intent to defraud any person or for any fraudulent purpose.
[Subs. (1) substituted by s. 14 of Act 3/2011]
(2)
(3)
If a company to whom a notice has been issued in terms of subsection (2) fails
within 20 business days to satisfy the Commission that it is not engaging in
conduct prohibited by subsection (1), or that it is able to pay its debts as they
become due and payable in the normal course of business, the Commission may
issue a compliance notice to the company requiring it to cease carrying on its
business or trading, as the case may be.
[Subs. (3 substituted by s. 14 of Act 3/2011]
Part C
Transparency, accountability and integrity of companies
23.
An external company must register with the Commission within 20 business days
after it first begins to conduct business, or non-profit activities, as the case may
be, within the Republic(a)
(b)
(2)
For the purposes of subsection (1), and the definition of external company as
set out in section 1, a foreign company must be regarded as conducting business,
or non-profit activities, as the case may be, within the Republic if that foreign
company (a)
(b)
(2A) When applying subsection (2)(b), a foreign company must not be regarded as
conducting business activities, or non-profit activities, as the case may be, within
the Republic solely on the ground that the foreign company is or has engaged in
one or more of the following activities:
(a)
(b)
(c)
(d)
(e)
(f)
[Subs. (2A) inserted by s. 15 of Act 3/2011 as part of substitution of original subs. (2)]
(3)
(b)
register the address of its office, or its principal office if it has more than
one office(i)
initially in the case of(aa) a company, by providing the required information on its Notice
of Incorporation; or
(bb) an external company, by providing the required information
when filing its registration in terms of subsection (1); and
(ii)
(4)
A change contemplated in subsection (3)(b)(ii) takes effect as from the later of[Words preceding para. (a) substituted by s. 15 of Act 3/2011]
(5)
(a)
(b)
five business days after the date on which the notice was filed.
(b)
(c)
(d)
(6)
24.
(a)
(b)
(b)
for a period of seven years, or any longer period of time specified in any
other applicable public regulation, subject to subsection (2).
(2)
(3)
(b)
(ii)
(c)
copies of all(i)
(ii)
annual financial statements required by this Act, for seven years after
the date on which each such particular statements were issued; and
(iii) accounting records required by this Act, for the current financial year
and for the previous seven completed financial years of the company;
(d)
for seven years after the date each such resolution was adopted;
[Para. (d) substituted by s. 16 of Act 3/2011]
(4)
(e)
(f)
(ii)
In addition to the requirements of subsection (3), every company must maintain (a)
(b)
the records required in terms of section 85, if that section applies to the
company.
[Subs. (4) substituted by s. 16 of Act 3/2011]
(5)
(b)
identity number or, if the person does not have an identity number, the
persons date of birth;
(c)
(d)
occupation;
(e)
(6)
25.
26.
(f)
(g)
To protect personal privacy, the Minister, by notice in the Gazette, may exempt
from the application of subsection (5)(a) categories of names as formerly used by
any person(a)
(b)
(2)
A company must file a notice, setting out the location or locations at which any
particular records referred to in section 24 are kept or from which they are
accessible if those records(a)
are not kept at or made accessible from the companys registered office, as
contemplated in subsection (1); or
(b)
(b)
(c)
(d)
the securities register of a profit company, or the members register of a nonprofit company that has members, as mentioned in section 24(4).
[Original subs. (1) substituted by subs. (1)-(5) of s. 17 of Act 3/2011]
(2)
A person not contemplated in subsection (1) has a right to inspect or copy the
securities register of a profit company, or the members register of a non-profit
company that has members, or the register of directors of a company, upon
payment of an amount not exceeding the prescribed maximum fee for any such
inspection.
[Original subs. (2) substituted by subs. (1)-(5) of s. 17 of Act 3/2011]
(3)
In addition to the information rights set out in subsections (1) and (2), the
Memorandum of Incorporation of a company may establish additional
information rights of any person, with respect to any information pertaining to the
company, but no such right may negate or diminish any mandatory protection of
any record required by or in terms of Part 3 of the Promotion of Access to
Information Act, 2000 (Act No. 2 of 2000).
[Subs. (3) inserted by s. 17 of Act 3/2011 as part of substitution of original subs. (1)-(2)]
(4)
A person may exercise the rights set out in subsection (1) or (2), or contemplated
in subsection (3)(a)
(b)
(c)
[Subs. (4) inserted by s. 17 of Act 3/2011 as part of substitution of original subs. (1)-(2)]
(5)
(6)
(7)
The rights of access to information set out in this section are in addition to, and
not in substitution for, any rights a person may have to access information in
terms of-
(a)
(b)
(c)
(8)
The Minister may make regulations respecting the exercise of the rights set out in
this section.
[Original subs. (5) renumbered as subs. (8) by s. 17 of Act 3/2011]
(9)
(b)
27.
A company must have a financial year, ending on a date set out in the companys
Notice of Incorporation, subject to any change made in terms of subsection (4).
(2)
(3)
(4)
(a)
(b)
ends on the date set out in the Notice of Incorporation, which may not be
more than 15 months after the date contemplated in paragraph (a).
(b)
The board of a company may change its financial year end at any time, by filing a
notice of that change, but(a)
(b)
the newly established financial year end must be later than the date on
which the notice is filed; and
(c)
the date as changed may not result in a financial year ending more than 15
months after the end of the preceding financial year.
(5)
Despite subsection (2)(b) or (3), the financial year of a company that has changed
the date contemplated in subsection (1) ends on the date as changed.
(6)
.
[Subs. (6) deleted by s. 18 of Act 3/2011]
(7)
28.
Accounting records
(1)
A company must keep accurate and complete accounting records in one of the
official languages of the Republic(a)
(b)
(2)
(3)
It is an offence for(a)
a company(i)
with an intention to deceive or mislead any person(aa) to fail to keep accurate or complete accounting records;
(bb) to keep records other than in the prescribed manner and form, if
any; or
(ii)
(b)
(4)
29.
Financial statements
(1)
satisfy the financial reporting standards as to form and content, if any such
standards are prescribed;
(b)
present fairly the state of affairs and business of the company, and explain
the transactions and financial position of the business of the company;
(c)
show the companys assets, liabilities and equity, as well as its income and
expenses, and any other prescribed information;
(d)
set out the date on which the statements were published, and the accounting
period to which the statements apply; and
[Para. (d) substituted by s. 19 of Act 3/2011]
(e)
whether the statements(aa) have been audited in compliance with any applicable
requirements of this Act;
(bb) if not audited, have been independently reviewed in compliance
with any applicable requirements of this Act; or
(cc) have not been audited or independently reviewed; and
(ii)
(2)
(3)
(b)
A company may provide any person with a summary of any particular financial
statements, but(a)
any such summary must comply with any prescribed requirements; and
(b)
(ii)
(5)
Subject to subsection (5), the Minister, after consulting the Council, may make
regulations prescribing(a)
(b)
(b)
(c)
(6)
(ii)
(ii)
(b)
30.
(i)
(ii)
Each year, a company must prepare annual financial statements within six months
after the end of its financial year, or such shorter period as may be appropriate to
provide the required notice of an annual general meeting in terms of section
61(7).
(2)
(b)
in the case of any other profit or non-profit company [Words preceding subpara. (i) substituted by s. 20 of Act 3/2011]
(i)
(2A) If, with respect to a particular company, every person who is a holder of, or has a
beneficial interest in, any securities issued by that company is also a director of
the company, that company is exempt from the requirements in this section to
have its annual financial statements audited or independently reviewed, but this
exemption -
(a)
does not apply to the company if it falls into a class of company that is
required to have its annual financial statement audited in terms of the
regulations contemplated in subsection (7)(a); and
(b)
does not relieve the company of any requirement to have its financial
statements audited or reviewed in terms of another law, or in terms of any
agreement to which the company is a party.
[Subs. (2A) inserted by s. 20 of Act 3/2011]
(3)
(4)
(b)
include a report by the directors with respect to the state of affairs, the
business and profit or loss of the company, or of the group of companies, if
the company is part of a group, including(i)
(ii)
(c)
(d)
be presented to the first shareholders meeting after the statements have been
approved by the board.
The annual financial statements of each company that is required in terms of this
Act to have its annual financial statements audited, must include particulars
showing(a)
(b)
(ii)
(c)
(d)
the number and class of any securities issued to a director or person holding
any prescribed office in the company, or to any person related to any of
them, and the consideration received by the company for those securities;
and
(e)
(5)
(6)
The information to be disclosed under subsection (4) must satisfy the prescribed
standards, and must show the amount of any remuneration or benefits paid to or
receivable by persons in respect of(a)
(b)
(ii)
(b)
(c)
expense allowances, to the extent that the director is not required to account
for the allowance;
(d)
(e)
(f)
(g)
(ii)
the difference in value between(aa) the interest that would reasonably be charged in comparable
circumstances at fair market rates in an arms length
transaction; and
(bb) the interest actually charged to the borrower, if less.
(7)
The Minister may make regulations, including different requirements for different
categories of companies, prescribing(a)
(b)
the manner, form and procedures for the conduct of an independent review
under subsection (2)(b)(ii)(bb), as well as the professional qualifications, if
any, and duties of persons who may conduct such reviews and the
accreditation of professions whose members may conduct such reviews.
[Para. (b) substituted by s. 20 of Act 3/2011]
(8)
31.
In addition to the rights set out in section 26, a person who holds or has a
beneficial interest in any securities issued by a company, is entitled(a)
(b)
(2)
(3)
Trade unions must, through the Commission and under conditions as determined
by the Commission, be given access to company financial statements for purposes
of initiating a business rescue process.
(4)
(a)
(b)
32.
(b)
(2)
(3)
(b)
use a form of name for any purpose if, in the circumstances, the use of that
form of name is likely to convey a false impression that the name is the
name of a company.
(4)
Every company must have its name and registration number mentioned in legible
characters in all notices and other official publications of the company, including
such notices and publications in electronic format as contemplated in the
Electronic Communications and Transactions Act, and in all bills of exchange,
promissory notes, cheques and orders for money or goods and in all letters,
delivery notes, invoices, receipts and letters of credit of the company.
(5)
(6)
.
[Subs. (6) deleted by s. 22 of Act 3/2011]
(7)
.
[Subs. (7) deleted by s. 22 of Act 3/2011]
33.
Annual return
(1)
Every company must file an annual return in the prescribed form with the
prescribed fee, and within the prescribed period after the end of the anniversary of
the date of its incorporation, including in that return(a)
(b)
34.
(2)
Every external company must file an annual return in the prescribed form with
the prescribed fee, and within the prescribed period after the anniversary of the
date on which it was registered in terms of section 23(1).
(3)
Each year, in its annual return filed in terms of subsection (1), every company
must designate a director, employee or other person who is responsible for the
companys compliance with the requirements of this Part, and Chapter 3, if it
applies to the company.
(2)
Part D
Capitalisation of profit companies
35.
(2)
A share does not have a nominal or par value, subject to item 6 of Schedule 5.
(3)
(4)
An authorised share of a company has no rights associated with it until it has been
issued.
(5)
(a)
(b)
have the same status as shares that have been authorised but not issued.
(6)
36.
Despite the repeal of the Companies Act, 1973 (Act No. 61 of 1973), a share
issued by a pre-existing company, and held by a shareholder immediately before
the effective date, continues to have all of the rights associated with it
immediately before the effective date, irrespective of whether those rights existed
in terms of the companys Memorandum of Incorporation, or in terms of that Act,
subject only to(a)
(b)
(c)
must set out the classes of shares, and the number of shares of each class,
that the company is authorised to issue;
(b)
(ii)
(c)
(d)
(ii)
for which the board of the company must determine the associated
preferences, rights, limitations or other terms; and
(iii) which must not be issued until the board of the company has
determined the associated preferences, rights, limitations or other
terms, as contemplated in subparagraph (ii).
(2)
(3)
(4)
37.
(b)
(b)
reclassify any classified shares that have been authorised but not issued;
(c)
(d)
(2)
(3)
Each issued share of a company, regardless of its class, has associated with it one
general voting right, except to the extent provided otherwise by(a)
this Act; or
(b)
(4)
(5)
(a)
(b)
(ii)
the holders of that class of shares are entitled to receive the net assets
of the company upon its liquidation.
(b)
(b)
(ii)
(d)
provide for shares of that class to have preference over any other class of
shares with respect to distributions, or rights upon the final liquidation of
the company.
(6)
(7)
(8)
(9)
(a)
(b)
(b)
A person (a)
(b)
acquires the rights associated with any particular securities of a company (i)
(ii)
(ii)
38.
Issuing shares
(1)
The board of a company may resolve to issue shares of the company at any time,
but only within the classes, and to the extent, that the shares have been authorised
by or in terms of the companys Memorandum of Incorporation, in accordance
with section 36.
(2)
(b)
(3)
39.
the share issue is a nullity to the extent that it exceeds any authorisation;
(b)
the company must return to any person the fair value of the consideration
received by the company in respect of that share issue to the extent that it is
nullified, together with interest in accordance with the Prescribed Rate of
Interest Act, 1975 (Act No. 55 of 1975), from the date on which the
consideration for the shares was received by the company, until the date on
which the company complies with this paragraph;
(c)
any certificate evidencing a share so issued and nullified, and any entry in a
securities register in respect of such an issue, is void; and
(d)
a director of the company is liable to the extent set out in section 77(3)(e)(i)
if the director(i)
was present at a meeting when the board approved the issue of any
unauthorised shares, or participated in the making of such a decision
in terms of section 74; and
(ii)
failed to vote against the issue of those shares, despite knowing that
the shares had not been authorised in accordance with section 36.
Subscription of shares
(1)
This section(a)
(b)
(ii)
(2)
(3)
(4)
(b)
40.
(2)
(b)
(c)
Before a company issues any particular shares, the board must determine the
consideration for which, and the terms on which, those shares will be issued.
(3)
(4)
Subject to subsections (5) to (7), when a company has received the consideration
approved by its board for the issuance of any shares-
(5)
(a)
(b)
the company must issue those shares and cause the name of the holder to be
entered on the companys securities register in accordance with Part E of
this Chapter.
If the consideration for any shares that are issued or to be issued is in the form of
an instrument such that the value of the consideration cannot be realised by the
company until a date after the time the shares are to be issued, or is in the form of
an agreement for future services, future benefits or future payment by the
subscribing party [Words preceding para. (5) substituted by s. 28 of Act 3/2011]
(a)
that the value of the consideration for any of those shares has been
realised by the company; or
[Subpara. (i) substituted by s. 28 of Act 3/2011]
(ii)
(b)
(6)
that the subscribing party to the agreement has fulfilled its obligations
in terms of the agreement; and
upon receiving the instrument or entering into the agreement, the company
must(i)
(ii)
voting rights, and appraisal rights set out in section 164, associated with
shares that have been issued but are held in trust may not be exercised;
(b)
any pre-emptive rights associated with shares that have been issued but are
held in trust may be exercised only to the extent that the instrument has
become negotiable by the company or the subscribing party has fulfilled its
obligations under the agreement;
(c)
(d)
any distribution with respect to shares that have been issued but are held in
trust(i)
(ii)
(ii)
(iii) must be transferred to the subscribing party when the instrument has
become negotiable by the company, or upon satisfaction of all of the
subscribing partys obligations in terms of the agreement; and
(iv) to the extent that the instrument is dishonoured after becoming
negotiable, or that the subscribing party has failed to fulfil its
obligations under the agreement, must be returned to the company
and cancelled, on demand by the company.
(7)
41.
(b)
in the case of an agreement, the subscribing party has failed to fulfil any
obligation in terms of the agreement for a period of at least 40 business
days after the date on which the obligation was due to be fulfilled.
(2)
(a)
(b)
(c)
Subsection (1) does not apply if the issue of shares, securities or rights is(a)
(b)
(c)
(d)
(e)
(3)
(4)
In subsection (3)(a)
(b)
for purposes of determining the voting power of shares issued and issuable
as a result of a transaction or series of integrated transactions, the voting
power of shares is the greater of(i)
(ii)
the voting power of the shares that would be issued after giving effect
to the conversion of convertible shares and other securities and the
exercise of rights to be issued;
(ii)
(5)
(6)
42.
A director of a company is liable to the extent set out in section 77(3)(e)(ii) if the
director(a)
was present at a meeting when the board approved the issue of any
securities as contemplated in this section, or participated in the making of
such a decision in terms of section 74; and
(b)
failed to vote against the issue of those securities, despite knowing that the
issue of those securities was inconsistent with this section.
In this section, future director or future prescribed officer does not include a
person who becomes a director or prescribed officer of the company more than
six months after acquiring a particular option or right.
(2)
The board of a company must determine the consideration or other benefit for
which, and the terms upon which-
(3)
(4)
(a)
(b)
any options, constitutes also the decision of the board to issue any
authorised shares or other securities for which the options may be
exercised; or
(b)
any securities convertible into shares of any class, constitutes also the
decision of the board to issue the authorised shares into which the securities
may be converted.
A director of a company is liable to the extent set out in section 77(3)(e)(iii) if the
director-
(a)
was present at a meeting when the board approved the granting of an option
or a right as contemplated in this section, or participated in the making of
such a decision in terms of section 74; and
(b)
failed to vote against the granting of the option or right, despite knowing
that any shares(i)
(ii)
In this section(a)
(b)
(2)
debt instrument(i)
(ii)
(b)
(3)
(b)
Every security document must clearly indicate, on its first page, whether the
relevant debt instrument is secured or unsecured.
(5)
A company may appoint any person, including a juristic person, as trustee for the
holders of the companys debt instruments, if(a)
(b)
(6)
the person(i)
(ii)
does not have any interest in, or relationship with, the company that
might conflict with the duties of a trustee; and
the board is satisfied that the person has the requisite knowledge and
experience to carry out the duties of a trustee.
Any new trustee appointed for the purpose of this section must(a)
(b)
(7)
Any provision contained in a trust deed for securing any debt instruments, or in
any agreement with the holders of any debt instruments secured by a trust deed, is
void to the extent that it would exempt a trustee from, or indemnify a trustee
against, liability for breach of trust, or failure to exercise the degree of care and
diligence required of the prudent and careful person, having regard to the
provisions of the trust deed respecting the powers, authorities or discretions of the
trustee.
(8)
(b)
(ii)
44.
In this section, financial assistance does not include lending money in the
ordinary course of business by a company whose primary business is the lending
of money.
(2)
(3)
(b)
(ii)
(ii)
(4)
In addition to satisfying the requirements of subsection (3), the board must ensure
that any conditions or restrictions respecting the granting of financial assistance
set out in the companys Memorandum of Incorporation have been satisfied.
(5)
this section; or
(b)
(6)
45.
(a)
was present at the meeting when the board approved the resolution or
agreement, or participated in the making of such a decision in terms of
section 74; and
(b)
failed to vote against the resolution or agreement, despite knowing that the
provision of financial assistance was inconsistent with this section or a
prohibition, condition or requirement contemplated in subsection (4).
(b)
(ii)
an accountable advance to meet(aa) legal expenses in relation to a matter concerning the company;
or
(bb) anticipated expenses to be incurred by the person on behalf of
the company; or
(3)
(b)
(i)
(ii)
(ii)
(4)
In addition to satisfying the requirements of subsection (3), the board must ensure
that any conditions or restrictions respecting the granting of financial assistance
set out in the companys Memorandum of Incorporation have been satisfied.
(5)
(6)
(7)
(a)
within 10 business days after the board adopts the resolution, if the total
value of all loans, debts, obligations or assistance contemplated in that
resolution, together with any previous such resolution during the financial
year, exceeds one-tenth of 1 percent of the companys net worth at the time
of the resolution; or
(b)
within 30 business days after the end of the financial year, in any other
case.
this section; or
(b)
46.
(a)
was present at the meeting when the board approved the resolution or
agreement, or participated in the making of such a decision in terms of
section 74; and
(b)
failed to vote against the resolution or agreement, despite knowing that the
provision of financial assistance was inconsistent with this section or a
prohibition, condition or requirement contemplated in subsection (4).
the distribution(i)
(ii)
(b)
it reasonably appears that the company will satisfy the solvency and
liquidity test immediately after completing the proposed distribution; and
(c)
(2)
(3)
(4)
(a)
the board must reconsider the solvency and liquidity test with respect to the
remaining distribution to be made pursuant to the original resolution, order
or obligation; and
(b)
despite any law, order or agreement to the contrary, the company must not
proceed with or continue with any such distribution unless the board adopts
a further resolution as contemplated in subsection (1)(c).
(5)
(6)
47.
(a)
apply at the time that the board resolves that the company may incur that
debt or obligation; and
(b)
If, after considering the solvency and liquidity test as required by this section, it
appears to the company that the section prohibits its immediate compliance with a
court order contemplated in subsection (1)(a)(i)(a)
the company may apply to a court for an order varying the original order;
and
(b)
(ii)
A director of a company is liable to the extent set out in section 77(3)(e)(vi) if the
director(a)
(b)
failed to vote against the distribution, despite knowing that the distribution
was contrary to this section.
Capitalisation shares
(1)
the board of that company, by resolution, may approve the issuing of any
authorised shares of the company, as capitalisation shares, on a pro rata
basis to the shareholders of one or more classes of shares;
(b)
(c)
(2)
48.
The board of a company may not resolve to offer a cash payment in lieu of
awarding a capitalisation share, as contemplated in subsection (1)(c), unless the
board(a)
has considered the solvency and liquidity test, as required by section 46, on
the assumption that every such shareholder would elect to receive cash; and
(b)
is satisfied that the company would satisfy the solvency and liquidity test
immediately upon the completion of the distribution.
(2)
Subject to subsections (3) and (8), and if the decision to do so satisfies the
requirements of section 46 [Words preceding para. (a) substituted by s. 32 of Act 3/2011]
(a)
the board of a company may determine that the company will acquire a
number of its own shares; and
[Para. (a) substituted by s. 32 of Act 3/2011]
(b)
the board of a subsidiary company may determine that it will acquire shares
of its holding company, but [Para. (b) substituted by s. 32 of Act 3/2011]
(3)
(4)
(b)
(5)
(6)
the company must apply to a court for an order in terms of paragraph (c);
(b)
the company has the burden of proving that fulfilment of its obligations
would put it in breach of subsections (2) or (3); and
(c)
if the court is satisfied that the company is prevented from fulfilling its
obligations pursuant to the agreement, the court may make an order that(i)
(ii)
If a company acquires any shares contrary to section 46, or this section, the
company must, not more than two years after the acquisition, apply to a court for
an order reversing the acquisition, and the court may order [Words preceding para. (a) substituted by s. 32 of Act 3/2011]
(7)
(8)
(a)
the person from whom the shares were acquired to return the amount paid
by the company; and
(b)
(b)
failed to vote against the acquisition of shares, despite knowing that the
acquisition was contrary to this section or section 46.
(b)
is subject to the requirements of sections 114 and 115 if, considered alone,
or together with other transactions in an integrated series of transactions, it
Part E
Securities registration and transfer
49.
(2)
(3)
(4)
(a)
evidenced by certificates; or
(b)
the rights and obligations of security holders are not different solely on the
basis of their respective securities being certificated or uncertificated; and
(b)
Sections 52 to 55(a)
(b)
prevail in the case of a conflict between any provision of those sections and
any other provision of this Act, any other law, the common law, the
companys Memorandum of Incorporation or any agreement.
(5)
(6)
In the manner set out in section 54, any uncertificated securities may be
withdrawn from the uncertificated securities register, and certificates issued
evidencing those securities, in which case from the date on which they became
certificated(a)
(b)
(7)
50.
The Minister may make regulations regarding matters that are supplementary and
ancillary to the provisions of this Part.
(2)
(b)
As soon as practicable after issuing any securities a company must enter or cause
to be entered in its securities register, in respect of every class of securities that it
has issued(a)
the total number of those securities that are held in uncertificated form; and
(b)
the names and addresses of the persons to whom the securities were
issued;
(ii)
(iii) the number of, and prescribed circumstances relating to, any
securities(aa) that have been placed in trust as contemplated in section
40(6)(d);or
(bb) whose transfer has been restricted;
(iv) in the case of securities contemplated in section 43(aa) the number of those securities issued and outstanding; and
[Item (aa) substituted by s. 34 of Act 3/2011]
(bb) the names and addresses of the registered owner of the security
and any holders of a beneficial interest in the security; and
(v)
(3)
51.
(b)
(ii)
(4)
(5)
Unless all the shares of a company rank equally for all purposes, the companys
shares, or each class of shares, and any other securities, must be distinguished by
an appropriate numbering system.
(ii)
(iii) the number and class of shares and the designation of the series, if
any, evidenced by that certificate; and
(iv) any restriction on the transfer of the securities evidenced by that
certificate,
subject to item 6(4) of Schedule 5;
(2)
(b)
(c)
is proof that the named security holder owns the securities, in the absence
of evidence to the contrary.
(3)
A certificate remains valid despite the subsequent departure from office of any
person who signed it.
(4)
If, as contemplated in section 50(5), all of a companys shares rank equally for all
purposes, and are therefore not distinguished by a numbering system-
(5)
(6)
52.
(a)
(b)
if the share has been transferred, the certificate must be endorsed with a
reference number or similar device that will enable each preceding holder
of the share in succession to be identified.
Subject to subsection (6), a company must enter in its securities register every
transfer of any certificated securities, including in the entry(a)
(b)
(c)
(d)
(b)
(2)
(b)
(3)
Within five business days after the date of a request for inspection, a company
must produce a record of the uncertificated securities register, which record must
reflect at least the details referred to in section 50(3)(b) at the close of business on
the day on which the request for inspection was made.
(4)
(5)
53.
(a)
(b)
must not impose a charge for a statement on the person entitled to the
statement; and
(c)
may impose a charge or service fee for such a statement on the relevant
company in accordance with the regulations.
The regulations contemplated in section 49(7) may provide for a charge or service
fee for statements contemplated in subsection (4)(c).
(b)
on receipt of-
(c)
(2)
(i)
(ii)
in accordance with this section and the rules of the central securities
depository.
debiting the account in the uncertificated securities register from which the
transfer is effected; and
(b)
(3)
The requirements of section 51(5), read with the changes required by the context,
apply with respect to a transfer of uncertificated securities.
(4)
A transfer of ownership in accordance with this section occurs despite any fraud,
illegality or insolvency that may(a)
(b)
but a transferee who was a party to or had knowledge of the fraud or illegality, or
had knowledge of the insolvency, as the case may be, may not rely on this
subsection.
(5)
A court may not order the name of a transferee contemplated in this section to be
removed from an uncertificated securities register, unless that person was a party
to or had knowledge of a fraud or illegality as contemplated in subsection (4).
[Subs. (5) substituted by s. 35 of Act 3/2011]
(6)
54.
(2)
A person who wishes to withdraw all or part of the uncertificated securities held
by that person in an uncertificated securities register, and obtain a certificate in
respect of those withdrawn securities, may so notify the relevant participant or
central securities depository, as determined in accordance with the rules of the
central securities depository, which must within five business days(a)
(b)
immediately enter the relevant persons name and details of that persons
holding of securities in the companys securities register and indicate on the
register that the securities so withdrawn are no longer held in uncertificated
form; and
(b)
(ii)
(3)
55.
notify the central securities depository that the securities are no longer
held in uncertificated form.
A company may charge a holder of its securities a reasonable fee to cover the
actual costs of issuing a certificate, as contemplated in this section.
A person who takes any unlawful action in consequence of which any of the
following events occur in a securities register or uncertificated securities register,
namely(a)
the name of any person remains in, is entered in, or is removed or omitted;
(b)
(c)
is liable to any person who has suffered any direct loss or damage arising out of
that action.
(2)
(3)
(b)
a company against any claim made upon it and against any direct loss or
damage suffered by it arising out of a transfer of any uncertificated
securities; and
(b)
any other person against any direct loss or damage arising out of a transfer
of any uncertificated securities,
56.
(2)
(3)
(a)
(b)
is the parent of a minor child who has a beneficial interest in that security;
(c)
(d)
(e)
(f)
the identity of the person on whose behalf that security is held; and
(b)
(4)
be disclosed in writing to the company within five business days after the
end of every month during which a change has occurred in the information
contemplated in subsection (3), or more promptly or frequently to the extent
so provided by the requirements of a central securities depository; and
[Para. (a) substituted by s. 36 of Act 3/2011]
(b)
(5)
A company that knows or has reasonable cause to believe that any of its securities
are held by one person for the beneficial interest of another, by notice in writing,
may require either of those persons to(a)
(b)
provide particulars of the extent of the beneficial interest held during the
three years preceding the date of the notice; and
(c)
(6)
The information required in terms of subsection (5) must be provided not later
than 10 business days after receipt of the notice.
(7)
A company that falls within the meaning of regulated company as set out in
section 117(1)(i) must-
(8)
(a)
(b)
Subsections (9) to (11) do not apply in respect of securities that are subject to the
rules of a central securities depository.
[Subs. (8) inserted by s. 36 of Act 3/2011]
(9)
A person who holds a beneficial interest in any securities may vote in a matter at
a meeting of shareholders, only to the extent that (a)
the beneficial interest includes the right to vote on the matter; and
(b)
(10) The registered holder of any securities in which any person has a beneficial
interest must deliver to each such person (a)
(b)
(11) A person who has a beneficial interest in any securities that are entitled to be
voted on at a meeting of a companys shareholders, may demand a proxy
appointment from the registered holder of those securities, to the extent of that
persons beneficial interest, by delivering such a demand to the registered holder,
in writing, or as required by the applicable requirements of a central securities
depository.
[Subs. (11) inserted by s. 36 of Act 3/2011]
Part F
Governance of companies
57.
(1)
In this Part, shareholder has the meaning set out in section 1, but also includes
a person who is entitled to exercise any voting rights in relation to a company,
irrespective of the form, title or nature of the securities to which those voting
rights are attached.
[Subs. (1) substituted by s. 37 of Act 3/2011]
(2)
(3)
(4)
If a profit company, other than a state-owned company, has only one shareholder(a)
that shareholder may exercise any or all of the voting rights pertaining to
that company on any matter, at any time, without notice or compliance with
any other internal formalities, except to the extent that the companys
Memorandum of Incorporation provides otherwise; and
(b)
If a profit company, other than a state-owned company, has only one director(a)
that director may exercise any power or perform any function of the board
at any time, without notice or compliance with any other internal
formalities, except to the extent that the companys Memorandum of
Incorporation provides otherwise; and
(b)
every such person was present at the board meeting when the matter
was referred to them in their capacity as shareholders;
(ii)
when acting in their capacity as shareholders, those persons are not subject
to the provisions of section 73 to 78 relating to the duties, obligations,
liabilities and indemnification of directors.
(5)
The board of a company that holds any securities of a second company may
authorise any person to act as its representative at any shareholders meeting of
that second company.
(6)
(7)
For greater certainty, this section applies to the exercise of authority within a
company in respect of any matter arising in terms of this Act or a companys
Memorandum of Incorporation, irrespective of whether any such particular matter
is expressly addressed in this Part.
[Subs. (7) inserted by s. 37 of Act 3/2011]
58.
participate in, and speak and vote at, a shareholders meeting on behalf of
the shareholder; or
(b)
(2)
A proxy appointment(a)
(b)
(i)
(ii)
(4)
(5)
(b)
(c)
the appointment is suspended at any time and to the extent that the
shareholder chooses to act directly and in person in the exercise of any
rights as a shareholder;
(b)
(c)
(ii)
(b)
(6)
the shareholder; or
(b)
(ii)
paid any reasonable fee charged by the company for doing so.
(7)
A proxy is entitled to exercise, or abstain from exercising, any voting right of the
shareholder without direction, except to the extent that the Memorandum of
Incorporation, or the instrument appointing the proxy, provides otherwise.
(8)
(b)
(ii)
(iii) provide adequate space for the shareholder to indicate whether the
appointed proxy is to vote in favour of or against any resolution or
resolutions to be put at the meeting, or is to abstain from voting;
(9)
59.
(c)
the company must not require that the proxy appointment be made
irrevocable; and
(d)
the proxy appointment remains valid only until the end of the meeting at
which it was intended to be used, subject to subsection (5).
Subsection (8)(b) and (d) do not apply if the company merely supplies a generally
available standard form of proxy appointment on request by a shareholder.
(1)
(2)
The board of a company may set a record date for the purpose of determining
which shareholders are entitled to(a)
(b)
(c)
(d)
(e)
receive a distribution; or
(f)
(b)
(3)
(ii)
more than 10 business days before the date on which the event or
action, for which the record date is being set, is scheduled to occur;
and
If the board does not determine a record date for any action or event, the record
date is(a)
in the case of a meeting, the latest date by which the company is required to
give shareholders notice of that meeting; or
(b)
(b)
(2)
61.
(b)
(3)
(4)
(5)
For greater certainty, any business of a company that is required by this Act or the
companys Memorandum of Incorporation to be conducted at an annual general
meeting of the company, may not be conducted in the manner contemplated in
this section.
Shareholders meetings
(1)
(2)
(3)
(a)
at any time that the board is required by this Act or the Memorandum of
Incorporation to refer a matter to shareholders for decision;
(b)
(c)
(ii)
Subject to subsection (5) and (6), the board of a company, or any other person
specified in the companys Memorandum of Incorporation or rules, must call a
shareholders meeting if one or more written and signed demands for such a
meeting are delivered to the company, and-
(a)
each such demand describes the specific purpose for which the meeting is
proposed; and
(b)
in aggregate, demands for substantially the same purpose are made and
signed by the holders, as of the earliest time specified in any of those
demands, of at least 10% of the voting rights entitled to be exercised in
relation to the matter proposed to be considered at the meeting.
[Para. (b) substituted by s. 39 of Act 3/2011]
(4)
(5)
A company, or any shareholder of the company, may apply to a court for an order
setting aside a demand made in terms of subsection (3) on the grounds that the
demand is frivolous, calls for a meeting for no other purpose than to reconsider a
matter that has already been decided by the shareholders, or is otherwise
vexatious.
(6)
(7)
(8)
(a)
a shareholder who submitted a demand for that meeting may withdraw that
demand; and
(b)
the company must cancel the meeting if, as a result of one or more demands
being withdrawn, the voting rights of any remaining shareholders
continuing to demand the meeting, in aggregate, fall below the minimum
percentage of voting rights required to call a meeting.
(b)
thereafter, once in every calendar year, but no more than 15 months after
the date of the previous annual general meeting, or within an extended time
allowed by the Companies Tribunal, on good cause shown.
Presentation of(i)
(ii)
(b)
(c)
appointment of-
(d)
(9)
(i)
(ii)
the board of the company may determine the location for any shareholders
meeting of the company; and
(b)
(b)
(12) If a company fails to convene a meeting for any reason other than as
contemplated in subsection (11)(a)
(b)
(c)
a shareholder may apply to a court for an order requiring the company to convene
a meeting on a date, and subject to any terms, that the court considers appropriate
in the circumstances.
(13) The company must compensate a shareholder who applies to the Companies
Tribunal in terms of subsection (11), or to a court in terms of subsection (12),
respectively, for the costs of those proceedings.
(14) Any failure to hold a meeting as required by this section does not affect the
existence of a company, or the validity of any action by the company.
62.
Notice of meetings
(1)
(2)
(b)
(2A) A company may call a meeting with less notice than required by subsection (1) or
by its Memorandum of Incorporation, but such a meeting may proceed only if
every person who is entitled to exercise voting rights in respect of any item on the
meeting agenda (a)
(b)
(3)
the date, time and place for the meeting, and the record date for the
meeting;
(b)
the general purpose of the meeting, and any specific purpose contemplated
in section 61(3)(a), if applicable;
(c)
(d)
(i)
(ii)
(e)
(ii)
(5)
any such matter may be severed from the agenda, and the notice remains
valid with respect to any remaining matters on the agenda; and
(b)
(6)
(7)
(b)
has a right to -
(c)
(i)
(ii)
except to the extent set out in paragraph (b), is regarded as having waived
any right based on an actual or alleged defect in the notice of the meeting.
[Subs. (7) substituted by s. 40 of Act 3/2011]
63.
Conduct of meetings
(1)
(2)
(b)
the person presiding at the meeting must be reasonably satisfied that the
right of that person to participate and vote, either as a shareholder, or as a
proxy for a shareholder, has been reasonably verified.
(b)
(3)
(4)
(b)
(5)
If voting is by show of hands, any person who is present at the meeting, whether
as a shareholder or as proxy for a shareholder and entitled to exercise voting
rights has one vote, irrespective of the number of voting rights that person would
otherwise be entitled to exercise.
[Subs. (5) substituted by s. 41 of Act 3/2011]
(6)
(7)
at least five persons having the right to vote on that matter, either as a
shareholder or a proxy representing a shareholder; or
(b)
64.
a shareholders meeting may not begin until sufficient persons are present at
the meeting to exercise, in aggregate, at least 25 percent of all of the voting
rights that are entitled to be exercised in respect of at least one matter to be
decided at the meeting; and
(b)
(2)
(3)
Despite the percentage figures set out in subsection (1), or in any applicable
provisions of a companys Memorandum of Incorporation, if a company has more
than two shareholders, a meeting may not begin, or a matter begin to be debated,
unless(a)
(b)
(4)
(5)
(6)
(7)
(8)
If, within one hour after the appointed time for a meeting to begin, the
requirements of subsections (1), or (3) if applicable,
(a)
for that meeting to begin have not been satisfied, the meeting is postponed
without motion, vote or further notice, for one week;
(b)
(ii)
The person intended to preside at a meeting that cannot begin due to the operation
of subsection (1)(a), or (3) if applicable, may extend the one-hour limit allowed in
subsection (4) for a reasonable period on the grounds that(a)
(b)
(b)
(b)
If, at the time appointed in terms of this section for a postponed meeting to begin,
or for an adjourned meeting to resume, the requirements of subsection (1), or (3)
if applicable, have not been satisfied, the shareholders, or in the case of a nonprofit company, the members of the company present in person or by proxy will
be deemed to constitute a quorum.
[Subs. 8 substituted by s. 42 of Act 3/2011]
(9)
(10) A shareholders meeting, or the consideration of any matter being debated at the
meeting, may be adjourned from time to time without further notice, subject to
subsection (11), on a motion supported by persons entitled to exercise, in
aggregate, a majority of the voting rights(a)
held by all of the persons who are present at the meeting at the time; and
(b)
may be either(i)
(ii)
(b)
(12) Subject to subsection (13), a meeting may not be adjourned beyond the earlier of(a)
the date that is 120 business days after the record date determined in
accordance with section 59; or
(b)
the date that is 60 business days after the date on which the adjournment
occurred.
Shareholder resolutions
(1)
(2)
The board may propose any resolution to be considered by shareholders, and may
determine whether that resolution will be considered at a meeting, or by vote or
written consent in terms of section 60.
(3)
(b)
(ii)
A proposed resolution is not subject to the requirements of section 6(4), but must
be (a)
(b)
(5) At any time before the start of the meeting at which a resolution will be
considered, a shareholder or director who believes that the form of the resolution
does not satisfy the requirements of subsection (4) may seek leave to apply to a
court for an order(a)
restraining the company from putting the proposed resolution to a vote until
the requirements of subsection (4) are satisfied; and
(b)
(ii)
(6)
(7)
(8)
Except for an ordinary resolution for the removal of a director under section 71, a
companys Memorandum of Incorporation may require(a)
(b)
provided that there must at all times be a margin of at least 10 percentage points
between the highest established requirement for approval of an ordinary
resolution on any matter, and the lowest established requirement for approval of a
special resolution on any matter.
[Words following para. (b) substituted by s. 43 of Act 3/2011]
(9)
(b)
provided that there must at all times be a margin of at least 10 percentage points
between the highest established requirement for approval of an ordinary
resolution on any matter, and the lowest established requirement for approval of a
special resolution on any matter.
[Words following para. (b) substituted by s. 43 of Act 3/2011]
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
The business and affairs of a company must be managed by or under the direction
of its board, which has the authority to exercise all of the powers and perform any
of the functions of the company, except to the extent that this Act or the
companys Memorandum of Incorporation provides otherwise.
(2)
(b)
in addition to the minimum number of directors that the company must have to
satisfy any requirement, whether in terms of this Act or its Memorandum of
Incorporation, to appoint an audit committee, or a social and ethics committee as
contemplated in section 72(4).
[Words following para. (b) inserted as part of the substitution of para. (b) by s. 44 of Act 3/2011]
(3)
(4)
(ii)
(5)
(b)
(ii)
(6)
(7)
A person becomes entitled to serve as a director of a company when that person [Words preceding para. (a) substituted by s. 44 of Act 3/2011]
(a)
(b)
(8)
(9)
(10) The Minister may make regulations designating any specific function or functions
within a company to constitute a prescribed office for the purposes of this Act.
(11) Any failure by a company at any time to have the minimum number of directors
required by this Act or the companys Memorandum of Incorporation, does not
limit or negate the authority of the board, or invalidate anything done by the
board or the company.
(12) Save as otherwise provided elsewhere in this Act or in the companys
Memorandum of Incorporation, any particular director may be appointed to more
than one committee of the company, and when calculating the minimum number
of directors required for a company in terms of subsections (2) and (3), any such
director who has been appointed to more than one committee must be counted
only once.
[Subs. (12) inserted by s. 44 of Act 3/2011]
67.
(2)
68.
(b)
(1)
Subject to subsection (3), each director of a profit company, other than the first
director or a director contemplated in section 66(4)(a)(i) or (ii), must be elected
by the persons entitled to exercise voting rights in such an election, to serve for an
indefinite term, or for a term as set out in the Memorandum of Incorporation.
[Subs. (1) substituted by s. 45 of Act 3/2011]
(2)
(3)
(a)
(b)
(ii)
69.
a prescribed officer; or
(b)
(3)
A person who is ineligible or disqualified, as set out in this section, must not(a)
(b)
(4)
(5)
A person who has been placed under probation by a court in terms of section 162,
or in terms of section 47 of the Close Corporations Act, 1984 (Act No. 69 of
1984), must not serve as a director except to the extent permitted by the order of
probation.
(6)
(7)
(8)
(a)
(b)
is a juristic person;
(b)
(c)
does not satisfy any qualification set out in the companys Memorandum of
Incorporation.
(b)
is an unrehabilitated insolvent;
(ii)
five years after the date of removal from office, or the completion of the
sentence imposed for the relevant offence, as the case may be; or
(b)
(10) At any time before the expiry of a persons disqualification in terms of subsection
(8)(b)(iii) or (iv)(a)
(b)
the court may extend the disqualification for no more than five years at a
time, if the court is satisfied that an extension is necessary to protect the
public, having regard to the conduct of the disqualified person up to the
time of the application.
(11) A court may exempt a person from the application of any provision of subsection
(8)(b).
(11A) The Registrar of the Court must, upon (a)
(b)
the issue of an order for the removal of a person from any office of trust on
the grounds of misconduct involving dishonesty; or
(c)
send a copy of the relevant order or particulars of the conviction, as the case may
be, to the Commission.
[Subs. (11A) inserted by s. 46 of Act 3/2011]
(11B)The Commission must notify each company which has as a director to whom the
order or conviction relates, of the order or conviction.
[Subs. (11B) inserted by s. 46 of Act 3/2011]
(12) .
(13) The Commission must establish and maintain in the prescribed manner a public
register of persons who are disqualified from serving as a director, or who are
subject to an order of probation as a director, in terms of an order of a court
pursuant to this Act or any other law.
70.
Vacancies on board
(1)
(b)
resigns or dies;
(ii)
If, in terms of section 71(3), the board of a company has removed a director, a
vacancy on the board does not arise until the later of(a)
the expiry of the time for filing an application for review in terms of section
71(5); or
(b)
(b)
(ii)
in any other case, within six months after the vacancy arose(aa) at a shareholders meeting called for the purpose of electing the
director; or
(bb) by a poll of the persons entitled to exercise voting rights in an
election of the director, as contemplated in section 60(3).
71.
(4)
(5)
A person contemplated in subsection (4) may apply to a court for relief, and the
court may grant a supervisory order relating to a meeting convened in terms of
that paragraph if the court is satisfied that such an order is required to prevent the
oppression, or preserve the rights, of any shareholder.
(6)
Every company must file a notice within 10 business days after a person becomes
or ceases to be a director of the company.
Removal of directors
(1)
(2)
the director concerned must be given notice of the meeting and the
resolution, at least equivalent to that which a shareholder is entitled to
receive, irrespective of whether or not the director is a shareholder of the
company; and
(b)
(3)
If a company has more than two directors, and a shareholder or director has
alleged that a director of the company(a)
(b)
has become(i)
(ii)
the board, other than the director concerned, must determine the matter by
resolution, and may remove a director whom it has determined to be ineligible or
disqualified, incapacitated, or negligent or derelict, as the case may be.
(4)
(b)
(5)
If, in terms of subsection (3), the board of a company has determined that a
director is ineligible or disqualified, incapacitated, or has been negligent or
derelict, as the case may be, the director concerned, or a person who appointed
that director as contemplated in section 66(4)(a)(i), if applicable, may apply
within 20 business days to a court to review the determination of the board.
(6)
If, in terms of subsection (3), the board of a company has determined that a
director is not ineligible or disqualified, incapacitated, or has not been negligent
or derelict, as the case may be(a)
any director who voted otherwise on the resolution, or any holder of voting
rights entitled to be exercised in the election of that director, may apply to a
court to review the determination of the board; and
(b)
(i)
(ii)
remove the director from office, if the court is satisfied that the
director is ineligible or disqualified, incapacitated, or has been
negligent or derelict.
(7)
An applicant in terms of subsection (6) must compensate the company, and any
other party, for costs incurred in relation to the application, unless the court
reverses the decision of the board.
(8)
(9)
(a)
(b)
(c)
subsections (4), (5) and (6), each read with the changes required by the
context, apply to the determination of the matter by the Companies
Tribunal.
(b)
(10) This section is in addition to the right of a person, in terms of section 162, to
apply to a court for an order declaring a director delinquent, or placing a director
on probation.
72.
Board committees
(1)
(2)
(b)
may include persons who are not directors of the company, but(i)
(ii)
(b)
(c)
has the full authority of the board in respect of a matter referred to it.
(3)
(4)
a category of companies that must each have a social and ethics committee,
if it is desirable in the public interest, having regard to (i)
annual turnover;
(ii)
workforce size; or
(c)
(5)
A company that falls within a category of companies that are required in terms of
this section and the regulations to appoint a social and ethics committee may
apply to the Tribunal in the prescribed manner and form for an exemption from
that requirement, and the Tribunal may grant such an exemption if it is satisfied
that (a)
the company is required in terms of other legislation to have, and does have,
some form of formal mechanism within its structures that substantially
performs the function that would otherwise be performed by the social and
ethics committee in terms of this section and the regulations; or
(b)
(6)
An exemption granted in terms of subsection (5) is valid for five years, or such
shorter period as the Tribunal may determine at the time of granting the
exemption, unless set aside by the Tribunal in terms of subsection (7).
[Subs. (6) inserted by s. 47 of Act 3/2011]
(7)
(8)
(b)
(c)
(d)
(e)
(9)
A company must pay all the expenses reasonably incurred by its social and ethics
committee, including, if the social and ethics committee considers it appropriate,
the costs or the fees of any consultant or specialist engaged by the social and
ethics committee in the performance of its functions.
[Subs. (9) inserted by s. 47 of Act 3/2011]
(10) Section 84(6) and (7), read with the changes required by the context, apply with
respect to a company that fails to appoint a social and ethics committee, as
required by this section and the regulations.
[Subs. (10) inserted by s. 47 of Act 3/2011]
73.
Board meetings
(1)
(2)
(b)
(ii)
(3)
(b)
(5)
The board of a company may determine the form and time for giving notice of its
meetings, but(a)
such a determination must comply with any requirements set out in the
Memorandum of Incorporation, or rules, of the company; and
(b)
(ii)
(c)
(d)
(e)
the chair may cast a deciding vote, if the chair did not initially have or
cast a vote; or
(ii)
(6)
(7)
(8)
74.
75.
A company must keep minutes of the meetings of the board, and any of its
committees, and include in the minutes(a)
(b)
(b)
are effective as of the date of the resolution, unless the resolution states
otherwise.
(2)
A decision made in the manner contemplated in this section is of the same effect
as if it had been approved by voting at a meeting.
an alternate director;
(ii)
(2)
to a director of a company(i)
in respect of a decision that may generally affect(aa) all of the directors of the company in their capacity as directors;
or
(bb) a class of persons, despite the fact that the director is one
member of that class of persons, unless the only members of the
class are the director or persons related or inter-related to the
director; or
(ii)
(b)
(ii)
(3)
holds all of the beneficial interests of all of the issued securities of the
company; and
is the only director of that company.
If a person is the only director of a company, but does not hold all of the
beneficial interests of all of the issued securities of the company, that person may
not(a)
approve or enter into any agreement in which the person or a related person
has a personal financial interest; or
(b)
At any time, a director may disclose any personal financial interest in advance, by
delivering to the board, or shareholders in the case of a company contemplated in
subsection (3), a notice in writing setting out the nature and extent of that interest,
to be used generally for the purposes of this section until changed or withdrawn
by further written notice from that director.
(5)
(a)
must disclose the interest and its general nature before the matter is
considered at the meeting;
(b)
must disclose to the meeting any material information relating to the matter,
and known to the director;
(c)
(d)
if present at the meeting, must leave the meeting immediately after making
any disclosure contemplated in paragraph (b) or (c);
(e)
must not take part in the consideration of the matter, except to the extent
contemplated in paragraphs (b) and (c);
(f)
(g)
(i)
(ii)
must not execute any document on behalf of the company in relation to the
matter unless specifically requested or directed to do so by the board.
(6)
(7)
(b)
(ii)
(8)
76.
a prescribed officer; or
(b)
(b)
not use the position of director, or any information obtained while acting in
the capacity of a director(i)
to gain an advantage for the director, or for another person other than
the company or a wholly-owned subsidiary of the company; or
(ii)
(ii)
(3)
Subject to subsections (4) and (5), a director of a company, when acting in that
capacity, must exercise the powers and perform the functions of director(a)
(4)
(b)
(c)
with the degree of care, skill and diligence that may reasonably be expected
of a person(i)
(ii)
In respect of any particular matter arising in the exercise of the powers or the
performance of the functions of director, a particular director of a company(a)
will have satisfied the obligations of subsection (3)(b) and (c) if(i)
(ii)
(ii)
(5)
(a)
(b)
(c)
77.
(i)
(ii)
a committee of the board of which the director is not a member, unless the
director has reason to believe that the actions of the committee do not merit
confidence.
a prescribed officer; or
(b)
(b)
in accordance with the principles of the common law relating to delict for
any loss, damages or costs sustained by the company as a consequence of
any breach by the director of(i)
(ii)
A director of a company is liable for any loss, damages or costs sustained by the
company as a direct or indirect consequence of the director having(a)
(c)
been a party to an act or omission by the company despite knowing that the
act or omission was calculated to defraud a creditor, employee or
shareholder of the company, or had another fraudulent purpose;
(d)
(ii)
(e)
(ii)
the issuing of any authorised securities, despite knowing that the issue
of those securities was inconsistent with section 41;
(v)
(4)
(b)
(5)
(ii)
(ii)
If the board of a company has made a decision in a manner that contravened this
Act, as contemplated in subsection (3)(e)(a)
the company, or any director who has been or may be held liable in terms of
subsection (3)(e), may apply to a court for an order setting aside the
decision of the board; and
(b)
(ii)
(6)
The liability of a person in terms of this section is joint and several with any other
person who is or may be held liable for the same act.
(7)
Proceedings to recover any loss, damages or costs for which a person is or may be
held liable in terms of this section may not be commenced more than three years
after the act or omission that gave rise to that liability.
(8)
In addition to the liability set out elsewhere in this section, any person who would
be so liable is jointly and severally liable with all other such persons-
(9)
(a)
(b)
In any proceedings against a director, other than for wilful misconduct or wilful
breach of trust, the court may relieve the director, either wholly or partly, from
any liability set out in this section, on any terms the court considers just if it
appears to the court that(a)
the director is or may be liable, but has acted honestly and reasonably; or
(b)
(10) A director who has reason to apprehend that a claim may be made alleging that
the director is liable, other than for wilful misconduct or wilful breach of trust,
may apply to a court for relief, and the court may grant relief to the director on
the same grounds as if the matter had come before the court in terms of
subsection (9).
78.
a prescribed officer; or
(b)
(b)
(3)
(ii)
Subject to subsection (3A), a company may not directly or indirectly pay any fine
that may be imposed on a director of the company, or on a director of a related
company, as a consequence of that director having been convicted of an offence,
unless the conviction was based on strict liability.
[Subs. (3) substituted by s. 50 of Act 3/2011]
(3A) Subsection (3) does not apply to a private or personal liability company if (a)
a single individual is the sole shareholder and sole director of that company;
or
(b)
two or more related individuals are the only shareholders of that company,
and there are no directors of the company other than one or more of those
individuals.
[Subs. (3A) inserted by s. 50 of Act 3/2011]
(4)
(a)
(b)
(ii)
arise in respect of any liability for which the company may indemnify
the director, in terms of subsections (5) and (6).
(5)
(6)
(ii)
(b)
(7)
(b)
the company against any contingency including, but not limited to [Words preceding subpara. (i) substituted by s. 50 of Act 3/2011]
(i)
(ii)
(8)
79.
by the company; or
(ii)
80.
(2)
(3)
If, at any time after a company has adopted a resolution contemplated in section
80, or after an application has been made to a court as contemplated in section 81,
it is determined that the company to be wound up is or may be insolvent, a court,
on application by any interested person, may order that the company be wound up
as an insolvent company in terms of the laws referred to or contemplated in item
9 of Schedule 5.
(2)
(3)
arrange for security, satisfactory to the Master, for the payment of the
companys debts within no more than 12 months after the start of the
winding-up of the company; or
(b)
obtain the consent of the Master to dispense with security, which the Master
may do only if the company has submitted to the Master(i)
(ii)
(4)
Any costs incurred in furnishing the security referred to in subsection (3) may be
paid by the company.
(5)
(b)
(ii)
(6)
(7)
When a resolution has been filed in terms of subsection (2), the Commission must
promptly deliver a copy of it to the Master.
(8)
the company remains a juristic person and retains all of its powers as such
while it is being wound up voluntarily; but
(b)
it must stop carrying on its business except to the extent required for
the beneficial winding-up of the company; and
(ii)
(ii)
(b)
(c)
one or more of the companys creditors have applied to the court for an
order to wind up the company on the grounds that-
(d)
(i)
(ii)
(ii)
the shareholders are deadlocked in voting power, and have failed for a
period that includes at least two consecutive annual general meeting
dates, to elect successors to directors whose terms have expired; or
(iii) it is otherwise just and equitable for the company to be wound up;
(e)
a shareholder has applied, with leave of the court, for an order to wind up
the company on the grounds that-
(f)
(2)
(i)
(ii)
the Commission or Panel has applied to the court for an order to wind up
the company on the grounds that(i)
(ii)
(b)
(ii)
A court may not make an order applied for in terms of subsection (1)(e) or (f) if,
before the conclusion of the court proceedings(a)
(b)
(4)
82.
(b)
the court has made an order applied for in terms of subsection (1)(c), (d),
(e) or (f).
(2)
(3)
(b)
(i)
(ii)
on demand by the Commission, has failed to(aa) give satisfactory reasons for the failure to file the required
annual returns; or
(bb) show satisfactory cause for the company to remain registered;
or
(b)
the Commission(i)
(ii)
has received a request in the prescribed manner and form and has
determined that the company(aa) has ceased to carry on business; and
(bb) has no assets or, because of the inadequacy of its assets, there is
no reasonable probability of the company being liquidated.
(4)
(5)
(b)
the company has satisfied the prescribed requirements for doing so.
[Subs. (5) inserted by s. 51 of Act 3/2011]
(6)
The Minister may prescribe criteria and procedural requirements that must be
satisfied by a company before it may be de-registered in terms of subsection (5).
[Subs. (6) inserted by s. 51 of Act 3/2011]
83.
A company is dissolved as of the date its name is removed from the companies
register unless the reason for the removal is that the companys registration has
been transferred to a foreign jurisdiction, as contemplated in section 82(5).
[Subs. (1) substituted by s. 52 of Act 3/2011]
(2)
The removal of a companys name from the companies register does not affect
the liability of any former director or shareholder of the company or any other
person in respect of any act or omission that took place before the company was
removed from the register.
(3)
(4)
(b)
if the court declares the dissolution to have been void, any proceedings may
be taken against the company as might have been taken if the company had
not been dissolved.
CHAPTER 3
Part A
Application and general requirements of Chapter
84.
Application of Chapter
(1)
(b)
(c)
except to the extent that the company has been exempted from the
application of this Chapter, in terms of section 9; and
(ii)
(ii)
(2)
.
[Subs. (2) deleted by s. 53 of Act 3/2011]
(3)
(4)
(b)
(c)
(5)
(6)
(a)
a person to serve as company secretary, in the manner and for the purposes
set out in Part B;
(b)
a person to serve as auditor, in the manner and for the purposes set out in
Part C; and
(c)
an audit committee, in the manner and for the purposes set out in Part D.
(b)
If the board of a company fails to make an appointment as required by this Part [Words preceding para. (a) substituted by s. 53 of Act 3/2011]
(7)
85.
(a)
the Commission may issue a notice to that company to show cause why the
Commission should not proceed to convene a shareholders meeting for the
purpose of making that appointment; and
(b)
(ii)
(a)
(b)
(c)
(2)
the name, including any former name, of each such person; and
(ii)
(ii)
any changes in the particulars referred to in paragraphs (a) and (b), as they
occur, with the date and nature of each such change.
To protect personal privacy, the Minister, by notice in the Gazette, may exempt
from the application of subsection (1)(a) categories of names as formerly used by
any person(a)
(b)
(3)
(4)
86.
(2)
(a)
have the requisite knowledge of, or experience in, relevant laws; and
(b)
(3)
(b)
(ii)
(3A) The first company secretary of a company that is required only in terms of its
Memorandum of Incorporation to appoint a company secretary as contemplated
in sections 34(2) and 84(1)(c)(ii), must be appointed (a)
(b)
within 40 business days after the date on which the requirement first applies
to the company, by either (i)
(ii)
(4)
87.
Within 60 business days after a vacancy arises in the office of company secretary,
the board must fill the vacancy by appointing a person whom the directors
consider to have the requisite knowledge and experience.
(b)
88.
(2)
(3)
(b)
(c)
(2)
(b)
making the directors aware of any law relevant to or affecting the company;
(c)
reporting to the companys board any failure on the part of the company or
a director to comply with the Memorandum of Incorporation or rules of the
company or this Act;
(d)
ensuring that minutes of all shareholders meetings, board meetings and the
meetings of any committees of the directors, or of the companys audit
committee, are properly recorded in accordance with this Act;
(e)
(f)
(g)
89.
(b)
less than one month written notice, with the approval of the board.
(2)
If the company secretary is removed from office by the board, the company
secretary may require the company to include a statement in its annual financial
statements relating to that financial year, not exceeding a reasonable length,
setting out the company secretarys contention as to the circumstances that
resulted in the removal.
(3)
(4)
90.
Appointment of auditor
(1)
Upon its incorporation, and each year at its annual general meeting, a public
company or state-owned company must appoint an auditor.
(b)
at the annual general meeting at which the requirement first applies to the
company, and each annual general meeting thereafter.
[Subs. (1A) inserted by s. 55 of Act 3/2011]
(2)
(b)
(ii)
a person who, at any time during the five financial years immediately
preceding the date of appointment, was a person contemplated in any
of subparagraphs (i) to (iv); or
(3)
(4)
(5)
The first auditor of a company holds office until the conclusion of the first annual
general meeting of the company.
(6)
(ii)
(7)
91.
(b)
(c)
(2)
(3)
(a)
must appoint a new auditor within 40 business days, if there was only one
incumbent auditor of the company; and
(b)
may appoint a new auditor at any time, if there was more than one
incumbent, but while any such vacancy continues, the surviving or
continuing auditor may act as auditor of the company.
(b)
(4)
If a company appoints a firm as its auditor, any change in the composition of the
members of that firm does not by itself create a vacancy in the office of auditor
for that year, subject to subsection (5).
(5)
If, by comparison with the membership of a firm at the time of its latest
appointment, less than one half of the members remain after a change
contemplated in subsection (4), that change constitutes the resignation of the firm
as auditor of the company, giving rise to a vacancy.
(6)
Section 89, read with the changes required by the context, applies with respect to
an auditor of a company, hut a reference in that section to company secretary
must be regarded as referring to the companys auditor.
92.
93.
Rotation of auditors
(1)
The same individual may not serve as the auditor or designated auditor of a
company for more than five consecutive financial years.
(2)
(3)
If a company has appointed two or more persons as joint auditors, the company
must manage the rotation required by this section in such a manner that all of the
joint auditors do not relinquish office in the same year.
has the right of access at all times to the accounting records and all books
and documents of the company, and is entitled to require from the directors
or prescribed officers of the company any information and explanations
necessary for the performance of the auditors duties;
(b)
in the case of the auditor of a holding company, has the right of access to all
current and former financial statements of any subsidiary of that holding
company and is entitled to require from the directors or officers of the
holding company or subsidiary any information and explanations in
connection with any such statements and in connection with the accounting
records, books and documents of the subsidiary as necessary for the
performance of the auditors duties; and
(c)
is entitled to(i)
(ii)
An auditor may apply to a court for an appropriate order to enforce the rights set
out in subsection (1)(a) or (b), and a court may-
(3)
(a)
make any order that is just and reasonable to prevent frustration of the
auditors duties by the company or any of its directors, prescribed officers
or employees; and
(b)
An auditor appointed by a company may not perform any services for that
company(a)
(b)
94.
Audit committees
(1)
(2)
This section(a)
applies concurrently with section 64 of the Banks Act, to any company that
is subject to that section of that Act, but subsections (2), (3) and (4) of this
section do not apply to the appointment of an audit committee by any such
company; and
(b)
does not apply to a company that has been granted an exemption in terms of
section 64(4) of the Banks Act.
(3)
(a)
(b)
the audit committee of that other company will perform the functions
required under this section on behalf of that subsidiary company.
(b)
(4)
(b)
not be(i)
(ii)
not be related to any person who falls within any of the criteria set out in
paragraph (b).
(5)
(6)
(7)
(b)
to determine the fees to be paid to the auditor and the auditors terms of
engagement;
(c)
to ensure that the appointment of the auditor complies with the provisions
of this Act and any other legislation relating to the appointment of auditors;
(d)
to determine, subject to the provisions of this Chapter, the nature and extent
of any non-audit services that the auditor may provide to the company, or
that the auditor must not provide to the company, or a related company;
(e)
to pre-approve any proposed agreement with the auditor for the provision of
non-audit services to the company;
(f)
(ii)
stating whether the audit committee is satisfied that the auditor was
independent of the company; and
(ii)
(i)
(8)
ascertain that the auditor does not receive any direct or indirect
remuneration or other benefit from the company, except(i)
as auditor; or
(ii)
(b)
(ii)
(c)
(10) Neither the appointment nor the duties of an audit committee reduce the functions
and duties of the board or the directors of the company, except with respect to the
appointment, fees and terms of engagement of the auditor.
(11) A company must pay all expenses reasonably incurred by its audit committee,
including, if the audit committee considers it appropriate, the fees of any
consultant or specialist engaged by the audit committee to assist it in the
performance of its functions.
CHAPTER 4
PUBLIC OFFERINGS OF COMPANY SECURITIES
95.
(b)
(c)
(i)
(ii)
(d)
expert means(i)
(ii)
(e)
(ii)
all of the securities of that company that had previously been the
subject of an offer to the public have subsequently been re-acquired
by the company;
(f)
(g)
(h)
(ii)
(i)
(ii)
(j)
(k)
(l)
(ii)
(ii)
(m) secondary offering means an offer for sale to the public of any securities
of a company or its subsidiary, made by or on behalf of a person other than
that company or its subsidiary;
(2)
(n)
(o)
(p)
(3)
(b)
(4)
(5)
(b)
(6)
Nothing in this Chapter limits any liability that a person may incur under this Act
apart from this Chapter, or under any other public regulation, or under the
common law.
(7)
(b)
(c)
96.
(ii)
if the total contemplated acquisition cost of the securities, for any single
addressee acting as principal, is equal to or greater than the amount
prescribed in terms of subsection (2)(a);
(c)
(d)
(i)
(ii)
(ii)
(e)
(f)
(g)
(i)
(ii)
the issue of securities under any one offer in the series is finalised
within six months after the date that the offer was first made;
(2)
97.
a value of not less than R100 000, to be the minimum value for the
purposes of subsection (1)(b) and the maximum value for the purposes of
subsection (1)(g)(iv); and
(b)
a minimum period for the purposes of subsection (1)(g)(v), which must not
be less than six months.
(a)
(b)
(2)
(ii)
(b)
(ii)
(iii) full particulars of any material changes that occur in respect of any
information provided in terms of subparagraph (i) or (ii);
(c)
(d)
must file a certificate within 60 business days after the end of each financial
year, certifying that the compliance officer has complied with the
obligations in terms of this section during the past financial year.
[Para. (d) substituted by s. 59 of Act 3/2011]
98.
(2)
(b)
(b)
(ii)
indicating where and how a person may obtain a copy of the full
registered prospectus relating to that offer;
must not contain any untrue statement or, by express statement, omission or
reasonable implication, be such as would reasonably mislead a person
reading the advertisement(i)
(ii)
(c)
(3)
is subject to sections 102 to 111, read with the changes required by the
context.
that satisfies the requirements of subsection (2)(a) and (b) is not required to
be filed, or registered with an exchange; or
[Para. (a) substituted by s. 60 of Act 3/2011]
(b)
that does not satisfy all of the requirements set out in subsection (2)(a) and
(b) will, despite any statement to the contrary contained in the
advertisement, be regarded as having been intended to be a prospectus
issued by the person responsible for publishing or disseminating the
advertisement, and is subject to every provision of this Act relating to such
a prospectus.
[Para. (b) substituted by s. 60 of Act 3/2011]
99.
A person must not offer to the public any securities of any person unless that
second person(a)
is a company; and
(b)
(2)
A person must not make an initial public offering unless that offer is
accompanied by a registered prospectus.
(3)
Except with respect to securities that are the subject of a companys initial public
offering, a person must not make a(a)
(b)
(ii)
(4)
(5)
(b)
Subject to subsection (6), a person must not issue, distribute or deliver or cause to
be issued, distributed or delivered, any form of application in respect of securities
of a company, unless the form(a)
(b)
(6)
(7)
(i)
(ii)
bears on the face of it the date on which the prospectus in respect of those
securities was filed.
Subsection (5) does not apply if the form of application was issued either(a)
(b)
(b)
(8)
is accompanied by-
(ii)
(9)
A prospectus may not be registered unless the requirements of this Act have been
complied with and it has been filed for registration, together with any prescribed
documents, within 10 business days after the date of that prospectus.
(10) As soon as the Commission has registered a prospectus, it must send notice of the
registration to the person who filed the prospectus for registration.
(11) A prospectus may not be issued more than three months after the date of its
registration, and if a prospectus is so issued, it is regarded to be unregistered.
100.
This section does not apply in respect of listed securities, except listed securities
that are the subject of an initial public offering.
(2)
(a)
(b)
the assets and liabilities, financial position, profits and losses, cash
flow and prospects of the company in which a right or interest is to be
acquired; and
(ii)
(3)
The date of registration of a prospectus is the date of the issue of the prospectus
unless the contrary is proven.
(4)
(b)
(5)
(6)
A prospectus containing a statement to the effect that the whole or any portion of
the issue of the securities offered to the public has been or is being underwritten
may not be registered until a copy of the underwriting agreement has been filed,
together with a sworn declaration stating that to the best of the deponents
knowledge and belief the underwriter is and will be in a position to carry out the
obligations contemplated in the agreement even if no shares are being applied for.
(7)
(8)
(9)
(b)
(10) An application under subsection (9) must be in writing and accompanied by the
prescribed fee.
(11) As long as an initial public offering or other primary offering to the public of
unlisted securities remains open, any person responsible for information in the
prospectus must, when that person becomes aware of it(a)
(b)
(c)
any person who subscribed for the issue of shares as a result of the offer,
before the date of that publication, may withdraw the subscription by
written notice within 20 business days after the date of publication;
(b)
the offeror, upon receipt of a notice in terms of paragraph (a), may either-
(c)
(i)
(ii)
101.
(i)
(ii)
(2)
(3)
listed on an exchange; or
(b)
(b)
(4)
(ii)
(b)
(5)
(6)
not issue, distribute or publish the statement more than three months after
the date on which it is registered.
The written statement referred to in subsection (3) must be dated and signed by(a)
(b)
not contain any matter other than the particulars required by this section;
(b)
not be in characters smaller or less legible than any characters used in(i)
(ii)
(c)
(d)
(ii)
the date on which and the country in which the company was
incorporated and the address of its registered office in the Republic
or, if there is no such address, the address of its principal office
outside the Republic;
(iii) the classes and number of securities in each class that have been
authorised, and with respect to each class of securities(aa) the preferences, rights, limitations and other terms associated
with the class, with respect to capital, dividends and voting;
(bb) the number of securities that have been issued for cash, and the
total cash consideration received by the company for those
issued securities of that class; and
(cc) the number of securities that have been issued for consideration
other than cash, and the value of the consideration received by
the company for those issued securities of that class;
(iv) the dividends, if any, paid by the company on each class of securities
during each of the five financial years immediately preceding the
offer, and if no dividend has been paid in respect of securities of any
particular class during any of those years, a statement to that effect;
(v)
the total amount of any securities other than shares issued by the
company and outstanding at the date of the statement, together with
the rate of interest payable thereon;
(viii) if the offer relates to units, particulars of the names and addresses of
the persons in whom the securities represented by the units are vested,
the date and the parties to any document defining the terms on which
those securities are held, and an address in the Republic where that
document or a copy of it can be inspected;
(ix) the dates on which and the prices at which the securities offered were
originally issued by the company, and were acquired by the person
making the offer or by that persons principal, giving the reasons for
any difference between those prices and the prices at which the
securities are being offered;
(x)
In subsection (6), the expression company refers to the company that issued the
relevant securities.
102.
In any prospectus relating to securities of a company, a person must not [Words preceding para. (a) substituted by s. 64 of Act 3/2011]
(a)
(ii)
(b)
the expert consented in writing to the use of that statement before the
prospectus was filed, and has not withdrawn the consent;
(ii)
(iii) the prospectus includes a statement that the expert has consented to
the use of the statement and has not withdrawn that consent.
(2)
A prospectus must not name any person as the auditor, attorney, banker or broker
of a company, unless it is accompanied by the written consent of the named
person, agreeing to(a)
(b)
103.
Subject to subsection (2), within one year after the date of filing a prospectus, a
company must not vary or agree to vary any material terms of an agreement
referred to in the prospectus, other than in the ordinary course of business.
(2)
(b)
104.
person who becomes a director between the issuing of the prospectus and
the holding of the first general shareholders meeting at which directors are
elected or appointed;
(b)
(c)
(d)
authorised the issue of the prospectus or, under this Act, is regarded
as having authorised the issue of the prospectus; or
(ii)
is liable to compensate any person who acquired securities on the faith of the
prospectus for any loss or damage the person may have sustained as a result of
any untrue statement in the prospectus, or in any report or memorandum
appearing on the face of, issued with, or incorporated by reference in, the
prospectus.
[Subs. (1) substituted by s. 65 of Act 3/2011]
(2)
(3)
(b)
(ii)
the person had reasonable grounds to believe and did up to the time of
the issue of the prospectus believe that the expert who made the
(d)
(4)
(5)
(e)
the prospectus was issued without the knowledge or consent of that person
and, on becoming aware of its issue, that person forthwith gave reasonable
public notice that it was issued without the knowledge or consent of that
person; or
(f)
(b)
any other person who issued the prospectus or authorised the issue of it, is
liable, together with the directors, to indemnify any person incorrectly
named as a director against any damage, cost or expense arising as a result
of that person having been so named in the prospectus, or incurred in
defending against any action or legal proceedings brought in respect of
having been so named in the prospectus.
Subsection (4), read with the changes required by the context, applies equally in
respect of any other person whose consent is required in terms of this Act in
connection with any thing contained in a prospectus, and who has either(a)
(b)
(6)
(b)
(c)
(d)
having become a director between the issue of the prospectus and the
holding of the first general shareholders meeting at which directors are
elected or appointed,
has satisfied any liability under this section by making a payment to another
person, may recover a contribution, as in cases of contract, from any other person,
who, if sued separately, would have been liable to make the same payment, unless
the person who has satisfied such liability was, and that other person was not,
guilty of fraudulent misrepresentation.
105.
(2)
If a person has consented to the use of their name, or the inclusion of any material
in a prospectus, as contemplated in this Chapter, that consent does not make the
person liable as one who has authorised the issue of the prospectus under section
104(1)(d), either (a)
(b)
the expert person withdrew that consent in writing before the prospectus
was filed for registration;
(b)
between the filing of the prospectus for registration and any allotment in
terms of it to a complainant, that expert person became aware of the untrue
statement, withdrew the consent in writing and gave reasonable public
notice of the withdrawal and of the reason for it; or
(c)
(ii)
(3)
106.
The defences available to a person in this subsection are in lieu of any applicable
defence available in terms of section 104(3).
(2)
If(a)
(b)
(c)
the expert has consented to the inclusion of the statement in the prospectus
in the form and context in which it appears,
the expert person is solely responsible for that statement, subject to the provisions
of subsection (3).
(3)
107.
(b)
liability for the untrue statement does not attach to that person for any
reason set out in section 104(3).
108.
Restrictions on allotment
(1)
A company that has offered securities to the public must not allot any of those
securities or accept any subscription for any of those securities unless(a)
the subscription has been made on an application form that has been
attached to or accompanied by a prospectus; or
(b)
it is shown that the applicant, at the time of the application, was in fact in
possession of a copy of the prospectus or was aware of its contents.
(2)
A company that has offered securities to the public must not allot any of those
securities unless the amount stated in that prospectus as the minimum amount
which in the opinion of the directors of the company concerned must be raised by
the issue of securities in order to provide for the matters prescribed to be covered
by minimum subscription and the amount so stated has been paid to and received
by the company.
(3)
(b)
any amount paid to and received by the company must be reduced by the
amount of any money, bill, promissory note or cheque that it has at any
time delivered to the payer otherwise than in discharge of a debt bona fide
due by the company.
(4)
(5)
Until the minimum amount contemplated in subsection (2) has been made up, any
amount paid on an application contemplated in this section must(a)
(b)
not be used or made available for the purposes of the company or for the
satisfaction of its debts.
(6)
If the circumstances contemplated in subsection (2) have not been realised within
40 business days after the issue of the prospectus, all amounts received from
applicants must be repaid to them promptly without interest.
(7)
109.
Voidable allotment
(1)
(b)
(2)
110.
(a)
(b)
(2)
The reference in subsection (1) to the day on which a prospectus was first issued-
(3)
111.
(a)
(b)
if it is not issued as a newspaper advertisement before the third day after the
day on which it is first issued in any other manner, is a reference to the day
on which it is first issued in that other manner.
A prospectus containing a statement to the effect that application has been or will
be made for permission for the securities offered thereby to be listed on an
exchange must not be issued unless-
(2)
(a)
(b)
the prospectus names the particular exchange to which the application has
been made.
(b)
(2)
This section and section 115 do not apply to a proposal to dispose of all or the
greater part of the assets or undertaking of a company, if that disposal would
constitute a transaction(a)
(b)
(c)
between or among(i)
(ii)
A company may not dispose of all or the greater part of its assets or undertaking
unless(a)
(b)
the company has satisfied all other requirements set out in section 115, to
the extent those requirements are applicable to such a disposal by that
company.
(3)
(b)
(ii)
(5)
113.
Two or more profit companies, including holding and subsidiary companies, may
amalgamate or merge if, upon implementation of the amalgamation or merger,
each amalgamated or merged company will satisfy the solvency and liquidity test.
(2)
(b)
the name and identity number of each proposed director of any proposed
amalgamated or merged company;
(c)
(d)
(f)
(g)
(h)
(3)
(4)
(5)
(a)
(b)
(b)
the provisions of sections 115 and 164 in a manner that satisfies prescribed
standards.
(6)
114.
The requirements of subsections (4) and (5) do not apply to a company engaged
in business rescue proceedings, in respect of any transaction that is pursuant to or
contemplated in the companys business rescue plan that has been adopted in
accordance with Chapter 6.
(2)
(a)
(b)
(c)
(d)
(e)
(f)
The company must retain an independent expert, who meets the following
requirements, to compile a report as required by subsection (3):
[Words preceding para. (a) substituted by s. 70 of Act 3/2011]
(a)
qualified, and have the competence and experience necessary to(aa) understand the type of arrangement proposed;
(bb) evaluate the consequences of the arrangement; and
(cc) assess the effect of the arrangement on the value of securities
and on the rights and interests of a holder of any securities, or a
creditor of the company; and
(ii)
(b)
(ii)
The person retained in terms of subsection (2) must prepare a report to the board,
and cause it to be distributed to all holders of the companys securities,
concerning the proposed arrangement, which must, at a minimum(a)
(b)
identify every type and class of holders of the companys securities affected
by the proposed arrangement;
(c)
describe the material effects that the proposed arrangement will have on the
rights and interests of the persons mentioned in paragraph (b);
(d)
(e)
(i)
(ii)
state any material interest of any director of the company or trustee for
security holders;
[Para. (e) substituted by s. 70 of Act 3/2001]
(4)
(f)
state the effect of the proposed arrangement on the interest and person
contemplated in paragraph (e); and
(g)
115.
(a)
(b)
(ii)
to the extent that Parts B and C of this Chapter, and the Takeover
Regulations, apply to a company that proposes to (i)
(ii)
(2)
(b)
(ii)
(c)
(3)
the resolution was opposed by at least 15% of the voting rights that were
exercised on that resolution and, within five business days after the vote,
any person who voted against the resolution requires the company to seek
court approval; or
[Para. (a) substituted by s. 71 of Act 3/2011]
(b)
the court, on an application within 10 business days after the vote by any
person who voted against the resolution, grants that person leave, in terms
of subsection (6), to apply to a court for a review of the transaction in
accordance with subsection (7).
[Para. (b) substituted by s. 71 of Act 3/2011]
(4)
For the purposes of subsections (2) and (3), any voting rights controlled by an
acquiring party, a person related to an acquiring party, or a person acting in
concert with either of them, must not be included in calculating the percentage of
voting rights (a) required to be present, or actually present, in determining whether the
applicable quorum requirements are satisfied; or
(b) required to be voted in support of a resolution, or actually voted in support of
the resolution.
[Subs. (4) substituted by s. 71 of Act 3/2011]
(4A) In subsection (4), act in concert has the meaning set out in section 117(1)(b).
[Subs. (4A) inserted by s. 71 of Act 3/2011]
(5)
within 10 business days after the vote, apply to the court for approval, and
bear the costs of that application; or
[Para. (a) substituted by s. 71 of Act 3/2011]
(b)
(6)
(b)
(c)
(7)
(8)
(9)
116.
(b)
The holder of any voting rights in a company is entitled to seek relief in terms of
section 164 if that person(a)
(b)
was present at the meeting and voted against that special resolution.
If a transaction contemplated in this Part has been approved, any person to whom
assets are, or an undertaking is, to be transferred, may apply to a court for an
order to effect(a)
the transfer of the whole or any part of the undertaking, assets and liabilities
of a company contemplated in that transaction;
(b)
(c)
(d)
(e)
(f)
any other relief that may be necessary or appropriate to give effect to, and
properly implement, the amalgamation or merger.
(a)
(b)
(c)
(ii)
(3)
(4)
(a)
(b)
(ii)
(ii)
(iii) has been granted the consent of the Minister of Finance in terms of
section 54 of the Banks Act, if so required by that Act; and
(iv) is not subject to(aa) further approval by any regulatory authority; or
(5)
(6)
issue a registration certificate for each company, if any, that has been newly
incorporated in terms of the amalgamation or merger agreement; and
(b)
An amalgamation or merger(a)
takes effect in accordance with, and subject to any conditions set out in the
amalgamation or merger agreement;
(b)
(ii)
(7)
(b)
(8)
(9)
117.
(b)
(c)
(ii)
(2)
118.
(d)
(e)
(f)
(g)
offer period means the period from the time when an announcement is
made or ought to have been made, of a proposed or possible offer until the
first closing date or, if later, the date when the offer becomes or is declared
unconditional as to acceptances or lapses;
(h)
partial offer means an offer that, if fully accepted, would result in the
offeror, alone or together with a related or inter-related person, or a person
acting in concert with any of them, holding less than 100 percent of the
voting securities of the company whose securities are the subject of the
offer;
(i)
regulated company means a company to which this Part, Part C and the
Takeover Regulations apply, as determined in accordance with section
118(1) and (2); and
(j)
securities has the meaning referred to in section 1, but does not include
any instrument issued by a regulated company unless that instrument(i)
(ii)
For the purposes of this Part, Part C and the Takeover Regulations, two or more
related or inter-related persons are regarded to have acted in concert, unless there
is satisfactory evidence that they acted independently in any particular matter.
Subject to subsections (2) to (4), this Part, Part C and the Takeover Regulations
apply with respect to an affected transaction or offer involving a profit company
or its securities if the company is(a)
a public company;
(b)
a state-owned company, except to the extent that any such company has
been exempted in terms of section 9; or
(c)
the percentage of the issued securities of that company that have been
transferred, other than by transfer between or among related or interrelated persons, within the period of 24 months immediately before
the date of a particular affected transaction or offer exceeds the
percentage prescribed in terms of subsection (2); or
[Subpara. (i) substituted by s. 73 of Act 3/2011]
(ii)
(2)
The Minister, after consulting the Panel, may prescribe a minimum percentage,
being not less than 10 percent, of the issued securities of a private company
which, if transferred within a 24-month period as contemplated in subsection
(1)(c)(i), would bring that company and its securities within the application of
this Part, Part C, and the Takeover Regulations in terms of that subsection.
(3)
Despite the definition of affected transaction set out in section 117(1)(c), this
Part, Part C and the Takeover Regulations do not apply to(a)
(b)
(c)
If there is a conflict between any provision of this Part, Part C, or the Takeover
Regulations, and any provision of another public regulation(a)
(b)
119.
(5)
(6)
The Panel must regulate any affected transaction or offer in accordance with this
Part, Part C and the Takeover Regulations, but without regard to the commercial
advantages or disadvantages of any transaction or proposed transaction, in order
to(a)
ensure the integrity of the marketplace and fairness to the holders of the
securities of regulated companies;
(b)
(c)
(2)
(i)
(ii)
Subject to subsection (6), the Panel must regulate any affected transaction or
offer, and the conduct of the parties in respect of any such transaction or offer, in
a manner that promotes the objects set out in subsection (1) and, without limiting
the generality of that subsection, ensures(a)
that no person may enter into an affected transaction unless that person is
ready, able and willing to implement that transaction;
(b)
(ii)
(c)
(d)
(3)
(i)
(ii)
(b)
require the filing, for approval or otherwise, of any document with respect
to an affected transaction or offer, if the document is required to be
prepared in terms of this Part, Part C and the Takeover Regulations;
(b)
(c)
(5)
To the extent necessary to ensure compliance with this Part, Part C and the
Takeover Regulations, and to fulfil the purposes contemplated in subsection (1), a
compliance notice contemplated in subsection (4)(c) may, among other things [Words preceding para. (a) substituted by s. 74 of Act 3/2011]
(6)
(a)
(b)
(ii)
The Panel may wholly or partially, and with or without conditions, exempt an
offeror to an affected transaction or an offer from the application of any provision
of this Part, Part C or the Takeover Regulations if-
120.
(a)
(b)
(c)
Takeover regulations
The Minister, in consultation with the Panel, must prescribe regulations, to be known as
the Takeover Regulations, to give effect to the purposes of this Part and Part C
including, among other things, regulations to provide for(a)
compliance with and enforcement of the provisions of this Part and Part C
respecting affected transactions and offers;
(b)
(c)
(d)
any other matters relating to the powers and functions of the Panel.
Part C
Regulation of affected transactions and offers
121.
comply with all reporting or approval requirements, whether set out in this Part or
in the Takeover Regulations, except to the extent that the Panel has granted the
person an exemption from any such requirement; and
(b)
(ii)
122.
A person must notify a regulated company in the prescribed manner and form
within three business days after that person [Words preceding para. (a) substituted by s. 76 of Act 3/2011]
(2)
(a)
(b)
(a)
(b)
(3)
(4)
directly or indirectly; or
(ii)
(ii)
A regulated company that has received a notice in terms of this section must(a)
(b)
(b)
a person or persons contemplated in subsection (1)(aa) to the extent that the person has the entire, or a partial or shared,
beneficial interest in any securities, those interests must be
123.
any other person, any securities that may be acquired by that other
person if they exercised any options, conversion privileges or similar
rights, are to be excluded.
Mandatory offers
(1)
(2)
either(i)
(ii)
(3)
(b)
(c)
(a)
(b)
124.
(4)
Within one month after giving notice in terms of subsection (3), the person or
persons contemplated in subsection (2) must deliver a written offer, in
compliance with the Takeover Regulations, to the holders of the remaining
securities of that company, to acquire those securities on the terms contemplated
in subsection (3)(b).
(5)
For the purposes contemplated in this section, the Minister, on the advice of the
Panel, may prescribe a percentage of not more than 35 percent of the voting
securities of a company.
If, within four months after the date of an offer for the acquisition of any class of
securities of a regulated company, that offer has been accepted by the holders of
at least 90 percent of that class of securities, other than any such securities held
before the offer by the offeror, a related or inter-related person, or persons acting
in concert, or a nominee or subsidiary of any such person or persons(a)
(b)
(2)
(3)
within two further months, the offeror may notify the holders of the
remaining securities of the class, in the prescribed manner and form(i)
(ii)
that the offeror desires to acquire all remaining securities of that class;
and
subject to subsection (2), after giving notice in terms of paragraph (a), the
offeror is entitled, and bound, to acquire the securities concerned on the
same terms that applied to securities whose holders accepted the original
offer.
that the offeror is not entitled to acquire the applicants securities of that
class; or
(b)
If an offer to acquire the securities of a particular class has not been accepted to
the extent contemplated in subsection (1)(a)
the offeror may apply to a court for an order authorising the offeror to give
a notice contemplated in subsection (1)(a); and
(b)
(i)
after making reasonable enquiries, the offeror has been unable to trace
one or more of the persons holding securities to which the offer
relates;
(ii)
(5)
the offeror must notify the holders of the remaining securities of the class
that the offer has been accepted to that extent;
(b)
(c)
If an offeror has given notice in terms of subsection (1), and no order has been
made in terms of subsection (3), or if the offeror has received a demand in terms
of subsection (4)(b)(a)
six weeks after the date on which the notice was given or, if an application
to a court is then pending, after the application has been disposed of, or
after the date on which the demand was received, as the case may be, the
offeror must(i)
(ii)
(b)
(6)
(7)
125.
A regulated company must deposit any consideration received under this section
into a separate interest bearing bank account with a banking institution registered
under the Banks Act and, subject to subsection (8), those deposits must be(a)
held in trust by the company for the person entitled to the securities in
respect of which the consideration was received; and
(b)
(8)
If a person contemplated in subsection (7)(a) fails for more than three years to
demand payment of an amount held in terms of that paragraph, the amount,
together with any accumulated interest, must be paid to the benefit of the
Guardians Fund of the Master of the High Court, to be held and dealt with in
accordance with the rules of that Fund.
(9)
In this section any reference to a holder of securities who has not accepted the
offer includes any holder who has failed or refused to transfer their securities to
the offeror in accordance with the offer.
In this section(a)
(b)
(2)
(ii)
If (a)
a regulated company that has more than one class of issued securities reacquires any of its voting securities of a particular class or one or more
particular classes, as contemplated in section 48 or in terms of a scheme of
arrangement contemplated in section 114 and, as a result, a person or a
number of related persons hold securities of the company entitling the
person or persons to exercise more than the prescribed percentage of the
general voting rights associated with all the issued securities of the
company; or
(b)
that person or those persons acting in concert must make a comparable offer to
acquire securities of each class of issued securities of that company.
[Subs. (2) substituted by s. 79 of Act 3/2011]
(3)
A person making a partial offer for any class of issued securities of a company
must(a)
(b)
if the offer could result in the person, together with any related or interrelated person or person acting in concert with any of them, holding
securities of the company entitling the person or persons to exercise more
than the prescribed percentage of the general voting rights of all issued
securities of the company, make the offer conditional on(i)
(ii)
(c)
state in the offer the precise number of shares offered for, if the offer could
result in the person, together with any related or inter-related person or
person acting in concert with any of them, holding securities of the
company entitling the persons or persons to exercise more than the
prescribed percentage, but less than 50 percent, of the general voting rights
of all issued securities of the company; and
(d)
if the offer could result in the person, together with any related or interrelated person or person acting in concert with any of them, holding
securities of the company entitling the person or persons to exercise more
than the prescribed percentage of the general voting rights of all issued
securities of the company, include a specific and prominent notice that the
offer could result in such circumstances [Para. (d) substituted by s. 79 of Act 3/2011]
126.
(4)
(5)
any holder of those securities is entitled to accept the offer in full for
the relevant percentage of that persons holding; and
(b)
If the board of a regulated company believes that a bona fide offer might be
imminent, or has received such an offer, the board must not(a)
take any action in relation to the affairs of the company that could
effectively result in(i)
(ii)
(b)
(c)
(d)
(e)
(f)
(g)
without the prior written approval of the Panel, and the approval of the holders of
relevant securities, or in terms of a pre-existing obligation or agreement entered
into before the time contemplated in this subsection.
(2)
127.
(1)
(b)
deal in, or enter into arrangements to deal in, securities of the offeree
regulated company; or
(c)
if there are favourable conditions attached that are not being extended to all
holders of the relevant securities.
(2)
During an offer period, an offeror or a person acting in concert with that offeror
must not(a)
(ii)
the person selling those securities has given at least 24 hours notice to
the public that sales of that type might be made, in the manner and
form required by the Takeover Regulations; and
(iii) the sale is on the same terms and conditions as the offer; or
(b)
(3)
acquire any securities in the offeree company after giving the notice
contemplated in paragraph (a)(ii).
If an offer has been announced or posted, but has not become or been declared
unconditional, and has, as a result, subsequently been withdrawn or lapsed, then
for a period of 12 months after the date on which the offer was withdrawn or
lapsed, the offeror, any person who acted in concert with the offeror in the course
of the original offer, or any person who is subsequently acting in concert with any
of them, must not(a)
(b)
(4)
Subsection (3) applies equally to a partial offer whether or not the offer has
become or been declared unconditional, but the period of 12 months runs from
that date on which that offer became or was declared to be unconditional, or is
withdrawn or lapsed, as the case may be.
(5)
For a period of six months immediately following the later of the closing date of
an offer, or the date on which the offer became unconditional-
(a)
the offeror;
(b)
(c)
must not make a second offer to any holder of securities of the target company, or
acquire any interest in any such securities, on more favourable terms than those
made under the original offer.
CHAPTER 6
BUSINESS RESCUE AND COMPROMISE WITH CREDITORS
Part A
[Heading of Part renamed to Part A by s. 80 of Act 3/2011]
In this Chapter(a)
(ii)
(ii)
(d)
(e)
(ii)
either(aa) a designated judge of the High Court that has jurisdiction over
the matter, if the Judge President has designated any judges in
terms of subsection (3); or
(bb) a judge of the High Court that has jurisdiction over the matter,
as assigned by the Judge President to hear the particular matter,
if the Judge President has not designated any judges in terms of
subsection (3);
(f)
(ii)
(g)
(ii)
(h)
rescuing the company means achieving the goals set out in the
definition of business rescue in paragraph (b);
(i)
(j)
(2)
(3)
129.
For the purposes contemplated in subsection (1)(e) or in any other law, the Judge
President of a High Court may designate any judge of that court generally as a
specialist to determine issues relating to commercial matters, commercial
insolvencies and business rescue.
(2)
(3)
(4)
Subject to subsection (2)(a), the board of a company may resolve that the
company voluntarily begin business rescue proceedings and place the company
under supervision, if the board has reasonable grounds to believe that(a)
(b)
(b)
Within five business days after a company has adopted and filed a resolution, as
contemplated in subsection (1), or such longer time as the Commission, on
application by the company, may allow, the company must(a)
publish a notice of the resolution, and its effective date, in the prescribed
manner to every affected person, including with the notice a sworn
statement of the facts relevant to the grounds on which the board resolution
was founded; and
(b)
(b)
(5)
its resolution to begin business rescue proceedings and place the company
under supervision lapses and is a nullity; and
(b)
(6)
A company that has adopted a resolution contemplated in this section may not
adopt a resolution to begin liquidation proceedings, unless the resolution has
lapsed in terms of subsection (5), or until the business rescue proceedings have
ended as determined in accordance with section 132(2).
(7)
If the board of a company has reasonable grounds to believe that the company is
financially distressed, but the board has not adopted a resolution contemplated in
this section, the board must deliver a written notice to each affected person,
setting out the criteria referred to in section 128(1)(f) that are applicable to the
company, and its reasons for not adopting a resolution contemplated in this
section.
[Subs. (7) substituted by s. 82 of Act 3/2011]
130.
Subject to subsection (2), at any time after the adoption of a resolution in terms of
section 129, until the adoption of a business rescue plan in terms of section 152,
an affected person may apply to a court for an order(a)
(ii)
(iii) the company has failed to satisfy the procedural requirements set out
in section 129;
(b)
setting aside the appointment of the practitioner, on the grounds that the
practitioner(i)
(ii)
(c)
(2)
(b)
unless that person satisfies the court that the person, in supporting the resolution,
acted in good faith on the basis of information that has subsequently been found
to be false or misleading.
(3)
serve a copy of the application on the company and the Commission; and
(b)
(4)
(5)
(b)
(ii)
if, having regard to all of the evidence, the court considers that it is
otherwise just and equitable to do so;
(ii)
and after receiving a report from the practitioner, may set aside the
companys resolution if the court concludes that the company is not
financially distressed, or there is no reasonable prospect of rescuing the
company; and
(c)
if it makes an order under paragraph (a) or (b) setting aside the companys
resolution, may make any further necessary and appropriate order,
including-
(6)
131.
(i)
(ii)
if the court has found that there were no reasonable grounds for
believing that the company would be unlikely to pay all of its debts as
they became due and payable, an order of costs against any director
who voted in favour of the resolution to commence business rescue
proceedings, unless the court is satisfied that the director acted in
good faith and on the basis of information that the director was
entitled to rely upon in terms of section 76(4) and (5).
If, after considering an application in terms of subsection (1)(b), the court makes
an order setting aside the appointment of a practitioner(a)
(b)
(2)
serve a copy of the application on the company and the Commission; and
(b)
(3)
(4)
(ii)
(b)
132.
(5)
If the court makes an order in terms of subsection (4)(a), the court may make a
further order appointing as interim practitioner a person who satisfies the
requirements of section 138, and who has been nominated by the affected person
who applied in terms of subsection (1), subject to ratification by the holders of a
majority of the independent creditors voting interests at the first meeting of
creditors, as contemplated in section 147.
(6)
(b)
the business rescue proceedings end, if the court makes the order applied
for.
(7)
(8)
A company that has been placed under supervision in terms of this section(a)
may not adopt a resolution placing itself in liquidation until the business
rescue proceedings have ended as determined in accordance with section
132(2); and
(b)
must notify each affected person of the order within five business days after
the date of the order.
(b)
the company(i)
(ii)
an affected person applies to the court for an order placing the company
under supervision in terms of section 131(1); or
[Para. (b) substituted by s. 83 of Act 3/2011]
(c)
(2)
(3)
133.
the court(i)
(ii)
(b)
the practitioner has filed with the Commission a notice of the termination of
business rescue proceedings; or
(c)
(ii)
If a companys business rescue proceedings have not ended within three months
after the start of those proceedings, or such longer time as the court, on
application by the practitioner, may allow, the practitioner must(a)
(b)
deliver the report and each update in the prescribed manner to each affected
person, and to the(i)
(ii)
(b)
with the leave of the court and in accordance with any terms the court
considers suitable;
(c)
(d)
(e)
(f)
134.
(2)
(3)
(ii)
(c)
(2)
(3)
135.
(b)
(c)
the nature of the property, and the rights claimed in respect of it.
obtain the prior consent of that other person, unless the proceeds of the
disposal would be sufficient to fully discharge the indebtedness protected
by that persons security or title interest; and
(b)
promptly(i)
pay to that other person the sale proceeds attributable to that property
up to the amount of the companys indebtedness to that other person;
or
(ii)
Post-commencement finance
(1)
(2)
To the extent that any remuneration, reimbursement for expenses or other amount
of money relating to employment becomes due and payable by a company to an
employee during the companys business rescue proceedings, but is not paid to
the employee(a)
(b)
During its business rescue proceedings, the company may obtain financing other
than as contemplated is subsection (1), and any such financing(a)
may be secured to the lender by utilising any asset of the company to the
extent that it is not otherwise encumbered; and
(b)
(3)
(a)
in subsection (1) will be treated equally, but will have preference over(i)
(ii)
(b)
(4)
136.
in subsection (2) will have preference in the order in which they were
incurred over all unsecured claims against the company.
(b)
(2)
(i)
(ii)
(ii)
(b)
(b)
(c)
an employment contract; or
(ii)
(ii)
137.
(3)
Any party to an agreement that has been suspended or cancelled, or any provision
which has been suspended or cancelled, in terms of subsection (2), may assert a
claim against the company only for damages.
(4)
(2)
(b)
(a)
(b)
has a duty to the company to exercise any management function within the
company in accordance with the express instructions or direction of the
practitioner, to the extent that it is reasonable to do so;
(c)
(d)
to the extent that the director acts in accordance with paragraphs (b) and (c),
is relieved from the duties of a director as set out in section 76, and the
liabilities set out in section 77, other than section 77(3)(a), (b) and (c).
(3)
(4)
If, during a companys business rescue proceedings, the board, or one or more
directors of the company, purports to take any action on behalf of the company
that requires the approval of the practitioner, that action is void unless approved
by the practitioner.
(5)
At any time during the business rescue proceedings, the practitioner may apply to
a court for an order removing a director from office on the grounds that the
director has(a)
(b)
(ii)
138.
Qualifications of practitioners
(1)
(b)
(c)
(d)
(e)
does not have any other relationship with the company such as would lead a
reasonable and informed third party to conclude that the integrity,
impartiality or objectivity of that person is compromised by that
relationship; and
(f)
(2)
For the purposes of subsection (1)(a)(ii), the Commission may license any
qualified person to practice in terms of this Chapter and may suspend or withdraw
any such licence in the prescribed manner.
(3)
(b)
139.
(2)
(b)
Upon request of an affected person, or on its own motion, the court may remove a
practitioner from office on any of the following grounds:
(a)
(3)
140.
(b)
(c)
(d)
(e)
(f)
The company, or the creditor who nominated the practitioner, as the case may be,
must appoint a new practitioner if a practitioner dies, resigns or is removed from
office, subject to the right of an affected person to bring a fresh application in
terms of section 130(1)(b) to set aside that new appointment.
has full management control of the company in substitution for its board
and pre-existing management;
(b)
may delegate any power or function of the practitioner to a person who was
part of the board or pre-existing management of the company;
(c)
may-
(d)
(i)
remove from office any person who forms part of the pre-existing
management of the company; or
(ii)
is responsible to(i)
(ii)
(1A) The practitioner must, as soon as practicable after appointment, inform all
relevant regulatory authorities having authority in respect of the activities of the
company, of the fact that the company has been placed under business rescue
proceedings and of his or her appointment.
[Subs. (1A) inserted by s. 90 of Act 3/2011]
(2)
(3)
(4)
141.
has any other relationship with the company such as would lead a
reasonable and informed third party to conclude that the integrity,
impartiality or objectivity of that person is compromised by that
relationship; or
(b)
is an officer of the court, and must report to the court in accordance with
any applicable rules of, or orders made by, the court;
(b)
(c)
is not liable for any act or omission in good faith in the course of the
exercise of the powers and performance of the functions of
practitioner; but
(ii)
may be held liable in accordance with any relevant law for the
consequences of any act or omission amounting to gross negligence
in the exercise of the powers and performance of the functions of
practitioner.
If the business rescue process concludes with an order placing the company in
liquidation, any person who has acted as practitioner during the business rescue
process may not be appointed as liquidator of the company.
(2)
If, at any time during business rescue proceedings, the practitioner concludes
that(a)
so inform the court, the company, and all affected persons in the
prescribed manner; and
(ii)
(b)
(c)
(ii)
there is evidence, in the dealings of the company before the business rescue
proceedings began, of(i)
(ii)
(3)
142.
(2)
Any director of a company who knows where other books and records relating to
the company are being kept, must inform the practitioner as to the whereabouts of
those books and records.
(3)
Within five business days after business rescue proceedings begin, or such longer
period as the practitioner allows, the directors of a company must provide the
practitioner with a statement of affairs containing, at a minimum, particulars of
the following:
(a)
(b)
(4)
(c)
the assets and liabilities of the company, and its income and disbursements
within the immediately preceding 12 months;
(d)
(e)
(f)
143.
Remuneration of practitioner
(1)
(2)
The practitioner may propose an agreement with the company providing for
further remuneration, additional to that contemplated in subsection (1), to be
calculated on the basis of a contingency related to-
(3)
(a)
(b)
(4)
(a)
(b)
the holders of a majority of the voting rights attached to any shares of the
company that entitle the shareholder to a portion of the residual value of the
company on winding-up, present and voting at a meeting called for the
purpose of considering the proposed agreement.
(b)
(5)
To the extent that the practitioners remuneration and expenses are not fully paid,
the practitioners claim for those amounts will rank in priority before the claims
of all other secured and unsecured creditors.
(6)
The Minister may make regulations prescribing a tariff of fees and expenses for
the purpose of subsection (1).
Part C
Rights of affected persons during business rescue proceedings
144.
Rights of employees
(1)
(b)
(2)
represented by a registered trade union may exercise any rights set out in
this Chapter(i)
(ii)
not represented by a registered trade union may elect to exercise any rights
set out in this Chapter either directly, or by proxy through an employee
organisation or representative.
To the extent that any remuneration, reimbursement for expenses or other amount
of money relating to employment became due and payable by a company to an
employee at any time before the beginning of the companys business rescue
proceedings, and had not been paid to that employee immediately before the
(b)
(c)
(d)
(e)
(f)
(g)
(4)
(ii)
any amount that was due and payable by the company to the trustees of the
scheme at any time before the beginning of the companys business rescue
proceedings, and that had not been paid immediately before the beginning
of those proceedings; and
(b)
(5)
145.
in the case of a defined benefit pension scheme, the present value at the
commencement of the business rescue proceedings of any unfunded
liability under that scheme.
The rights set out in this section are in addition to any other rights arising or
accruing in terms of any law, contract, collective agreement, shareholding,
security or court order.
Participation by creditors
(1)
(2)
(b)
(c)
(d)
In addition to the rights set out in subsection (1), each creditor has(a)
(b)
(ii)
(3)
(4)
In respect of any decision contemplated in this Chapter that requires the support
of the holders of creditors voting interests(a)
(b)
request of the practitioner, equal to the amount, if any, that the creditor
could reasonably expect to receive in such a liquidation of the company.
(5)
(6)
146.
(b)
(c)
(b)
(b)
(c)
(d)
(e)
(ii)
present an offer to acquire the interests of any or all of the creditors or other
holders of the companys securities in the manner contemplated in section
153.
147.
Within 10 business days after being appointed, the practitioner must convene, and
preside over, a first meeting of creditors, at which(a)
(b)
(2)
(3)
148.
the practitioner(i)
must inform the creditors whether the practitioner believes that there
is a reasonable prospect of rescuing the company; and
(ii)
The practitioner must give notice of the first meeting of creditors to every creditor
of the company whose name and address is known to, or can reasonably be
obtained by, the practitioner, setting out the(a)
(b)
At any meeting of creditors, other than the meeting contemplated in section 151,
a decision supported by the holders of a simple majority of the independent
creditors voting interests voted on a matter, is the decision of the meeting on that
matter.
(2)
Within 10 business days after being appointed, the practitioner must convene, and
preside over, a first meeting of employees representatives, at which(a)
(b)
The practitioner must give notice of the meeting to every registered trade union
representing employees of the company and, if there are any employees who are
not represented by such a registered trade union, to those employees, or their
representatives, setting out the(a)
(b)
149.
(2)
may consult with the practitioner about any matter relating to the business
rescue proceedings, but may not direct or instruct the practitioner;
(b)
(c)
(b)
(c)
150.
The practitioner, after consulting the creditors, other affected persons, and the
management of the company, must prepare a business rescue plan for
consideration and possible adoption at a meeting held in terms of section 151.
(2)
The business rescue plan must contain all the information reasonably required to
facilitate affected persons in deciding whether or not to accept or reject the plan,
and must be divided into three Parts, as follows:
(a)
(ii)
the nature and duration of any moratorium for which the business
rescue plan makes provision;
(ii)
(iii) the ongoing role of the company, and the treatment of any existing
agreements;
(iv) the property of the company that is to be available to pay creditors
claims in terms of the business rescue plan;
(v)
(vi) the benefits of adopting the business rescue plan as opposed to the
benefits that would be received by creditors if the company were to be
placed in liquidation; and
(vii) the effect that the business rescue plan will have on the holders of
each class of the companys issued securities.
(c)
(ii)
the effect, if any, that the business rescue plan contemplates on the
number of employees, and their terms and conditions of employment;
(iii) the circumstances in which the business rescue plan will end; and
(iv) a projected(aa) balance sheet for the company; and
(bb) statement of income and expenses for the ensuing three years,
prepared on the assumption that the proposed business plan is
adopted.
(3)
(4)
(5)
151.
(b)
(b)
projections provided are estimates made in good faith on the basis of factual
information and assumptions as set out in the statement.
The business rescue plan must be published by the company within 25 business
days after the date on which the practitioner was appointed, or such longer time
as may be allowed by(a)
(b)
(2)
At least five business days before the meeting contemplated in subsection (1), the
practitioner must deliver a notice of the meeting to all affected persons, setting
out(a)
(3)
152.
(b)
(c)
The meeting contemplated in this section may be adjourned from time to time, as
necessary or expedient, until a decision regarding the companys future has been
taken in accordance with sections 152 and 153.
(b)
inform the meeting whether the practitioner continues to believe that there
is a reasonable prospect of the company being rescued;
(c)
(d)
invite discussion, and entertain and conduct a vote, on any motions to-
(e)
(2)
(3)
(i)
(ii)
call for a vote for preliminary approval of the proposed plan, as amended if
applicable, unless the meeting has first been adjourned in accordance with
paragraph (d)(ii).
In a vote called in terms of subsection (1)(e), the proposed business rescue plan
will be approved on a preliminary basis if(a)
(b)
the votes in support of the proposed plan included at least 50 percent of the
independent creditors voting interests, if any, that were voted.
(a)
(b)
does not alter the rights of the holders of any class of the companys
securities, approval of that plan on a preliminary basis in terms of
subsection (2) constitutes also the final adoption of that plan, subject to
satisfaction of any conditions on which that plan is contingent; or
(c)
does alter the rights of any class of holders of the companys securities(i)
(ii)
(4)
(5)
(6)
A business rescue plan that has been adopted is binding on the company, and on
each of the creditors of the company and every holder of the companys
securities, whether or not such a person(a)
(b)
(c)
in the case of creditors, had proven their claims against the company.
The company, under the direction of the practitioner, must take all necessary
steps to(a)
(b)
(b)
153.
(7)
Except to the extent that an approved business rescue plan provides otherwise, a
pre-emptive right of any shareholder of the company, as contemplated in section
39, does not apply with respect to an issue of shares by the company in terms of
the business rescue plan.
(8)
When the business rescue plan has been substantially implemented, the
practitioner must file a notice of the substantial implementation of the business
rescue plan.
(b)
(ii)
advise the meeting that the company will apply to a court to set aside
the result of the vote by the holders of voting interests or
shareholders, as the case may be, on the grounds that it was
inappropriate.
If the practitioner does not take any action contemplated in paragraph (a)(i)
any affected person present at the meeting may(aa) call for a vote of approval from the holders of voting interests
requiring the practitioner to prepare and publish a revised plan;
or
(bb) apply to the court to set aside the result of the vote by the
holders of voting interests or shareholders, as the case may be,
on the grounds that it was inappropriate; or
(ii)
(2)
(3)
for five business days, unless the contemplated application is made to the
court during that time; or
(b)
(b)
(4)
(ii)
the provisions of this Part apply afresh to the publishing and consideration
of that new or revised plan.
adjourn the meeting for no more than five business days, as necessary to
afford the practitioner an opportunity to make any necessary revisions to the
business rescue plan to appropriately reflect the results of the offer; and
(b)
set a date for resumption of the meeting, without further notice, at which the
provisions of section 152 and this section will apply afresh.
(5)
If no person takes any action contemplated in subsection (1), the practitioner must
promptly file a notice of the termination of the business rescue proceedings.
(6)
(7)
the interests represented by the person or persons who voted against the
proposed business rescue plan;
(b)
the provision, if any, made in the proposed business rescue plan with
respect to the interests of that person or those persons; and
(c)
a fair and reasonable estimate of the return to that person, or those persons,
if the company were to be liquidated.
[Subs. (7) inserted by s. 97 of Act 3/2011]
154.
(2)
If a business rescue plan has been approved and implemented in accordance with
this Chapter, a creditor is not entitled to enforce any debt owed by the company
immediately before the beginning of the business rescue process, except to the
extent provided for in the business rescue plan.
Part E
Compromise with creditors
155.
(2)
(3)
(a)
(b)
the Commission.
(i)
(ii)
(b)
(ii)
(vi) the benefits of adopting the proposal as opposed to the benefits that
would be received by creditors if the company were to be placed in
liquidation.
(c)
(ii)
(5)
(b)
(b)
projections provided are estimates made in good faith on the basis of factual
information and assumptions as set out in the statement.
(6)
A proposal contemplated in this section will have been adopted by the creditors
of the company, or the members of a relevant class of creditors, if it is supported
by a majority in number, representing at least 75 percent in value of the creditors
or class, as the case may be, present and voting in person or by proxy, at a
meeting called for that purpose.
(7)
the company may apply to the court for an order approving the proposal;
and
(b)
(ii)
(8)
(9)
(b)
(c)
156.
(b)
applying to the Companies Tribunal for adjudication in respect of any matter for
which such an application is permitted in terms of this Act;
(c)
applying for appropriate relief to the division of the High Court that has
jurisdiction over the matter; or
(d)
filing a complaint in accordance with Part D of this Chapter within the time
permitted by section 219 with(i)
(ii)
(1)
(2)
(3)
158.
When, in terms of this Act, an application can be made to, or a matter can be
brought before, a court, the Companies Tribunal, the Panel or the Commission,
the right to make the application or bring the matter may be exercised by a
person(a)
(b)
(c)
(d)
The Commission or the Panel, acting in either case on its own motion and in its
absolute discretion, may(a)
(b)
apply for leave to intervene in any court proceedings arising in terms of this
Act, in order to represent any interest that would not otherwise be
adequately represented in those proceedings.
For greater certainty, nothing in this section creates a right of any person to
commence any legal proceedings contemplated in section 165(1), other than(a)
(b)
a court must develop the common law as necessary to improve the realisation and
enjoyment of rights established by this Act; and
(b)
must promote the spirit, purpose and objects of this Act; and
(ii)
if any provision of this Act, or other document in terms of this Act, read in
its context, can be reasonably construed to have more than one meaning,
must prefer the meaning that best promotes the spirit and purpose of this
Act, and will best improve the realisation and enjoyment of rights.
159.
To the extent that this section creates any right of, or establishes any protection
for, an employee, as defined in the Protected Disclosures Act, 2000 (Act No. 26
of 2000)(a)
that right or protection is in addition to, and not in substitution for, any right
or protection established by that Act; and
(b)
(2)
(3)
(b)
the person making the disclosure reasonably believed at the time of the
disclosure that the information showed or tended to show that a company or
external company, or a director or prescribed officer of a company acting in
that capacity, had [Words preceding subpara. (i) substituted by s. 98 of Act 3/2011]
(i)
(ii)
(4)
(5)
(b)
engages in conduct with the intent to cause detriment to the first person, and
the conduct causes such detriment; or
(b)
intends the first person to fear that the threat will be carried out; or
(ii)
is reckless as to causing the first person to fear that the threat will be
carried out,
irrespective of whether the first person actually fears or feared that the
threat will or would be carried out.
[Para. (b) substituted by s. 98 of Act 3/2011]
(6)
(7)
A public company or a state-owned company must directly or indirectly [Words preceding para. (a) substituted by s. 98 of Act 3/2011]
(a)
(b)
160.
(2)
(3)
(b)
on good cause shown at any time after the date of the reservation or
registration of the name that is the subject of the application, in any other
case.
(b)
(ii)
(4)
161.
an order determining any rights of that securities holder in terms of this Act,
the companys Memorandum of Incorporation, any rules of the company, or
any applicable debt instrument; or
(b)
(ii)
rectify any harm done to the securities holder by(aa) the company as a consequence of an act or omission that
contravened this Act or the companys Memorandum of
Incorporation, rules or applicable debt instrument, or violated
any right contemplated in paragraph (a);or
(bb) any of its directors to the extent that they are or may be held
liable in terms of section 77.
(2)
The right to apply to a court in terms of this section is in addition to any other
remedy available to a holder of a companys securities [Words preceding para. (a) substituted by s. 100 of Act 3/2011]
162.
(a)
(b)
(1)
(2)
(b)
(c)
(3)
(4)
(a)
(b)
(ii)
The Commission or the Panel may apply to a court for an order declaring a
person delinquent or under probation if(a)
(b)
(ii)
Any organ of state responsible for the administration of any legislation may apply
to a court for an order declaring a person delinquent if(a)
(b)
(5)
(ii)
(b)
(c)
while a director(i)
(ii)
(e)
(f)
(6)
(7)
(i)
(ii)
subsection (5)(a) or (b) is unconditional, and subsists for the lifetime of the
person declared delinquent; or
(b)
(ii)
subsists for seven years from the date of the order, or such longer
period as determined by the court at the time of making the
declaration, subject to subsections (11) and (12);
(ii)
(iii) acted in, or supported a decision of the company to act in, a manner
contemplated in section 163(1); or
(b)
(ii)
during the time that the person was a director of each such company
or managing member of each such close corporation, two or more of
(9)
(b)
(ii)
(b)
subsists for a period not exceeding five years, as determined by the court at
the time it makes the declaration, subject to subsections (11) and (12).
(10) Without limiting the powers of the court, a court may order, as conditions
applicable or ancillary to a declaration of delinquency or probation, that the
person concerned(a)
(b)
(c)
(d)
(ii)
(11) A person who has been declared delinquent, other than as contemplated in
subsection (6)(a), or is subject to an order of probation, may apply to a court(a)
(b)
delinquency at any time more than two years after it was suspended as
contemplated in paragraph (a);or
(ii)
of probation, at any time more than two years after it was made.
not grant the order applied for unless the applicant has satisfied any
conditions that were attached to the original order, or imposed in terms of
subsection (11)(a); and
(b)
grant an order if, having regard to the circumstances leading to the original
order, and the conduct of the applicant in the ensuing period, the court is
satisfied that(i)
(ii)
(13) An applicant in terms of subsection (4) must serve the Commission with a copy
of the application.
163. Relief from oppressive or prejudicial conduct or from abuse of separate juristic
personality of company
(1)
any act or omission of the company, or a related person, has had a result
that is oppressive or unfairly prejudicial to, or that unfairly disregards the
interests of, the applicant;
(2)
(b)
(c)
Upon considering an application in terms of subsection (1), the court may make
any interim or final order it considers fit, including(a)
(b)
(c)
(d)
(e)
(f)
an order(i)
(ii)
(g)
(h)
(i)
(j)
(3)
(4)
(k)
(l)
If an order made under this section directs the amendment of the companys
Memorandum of Incorporation(a)
the directors must promptly file a notice of amendment to give effect to that
order, in accordance with section 16(4); and
(b)
.
[Subs. (4) deleted by s. 102 of Act 3/2011]
164.
(2)
(b)
that notice must include a statement informing shareholders of their rights under
this section.
(3)
(4)
(b)
has neither-
(5)
(i)
(ii)
A shareholder may demand that the company pay the shareholder the fair value
for all of the shares of the company held by that person if(a)
the shareholder(i)
(ii)
(b)
the company has adopted the resolution contemplated in subsection (2); and
(c)
the shareholder(i)
(ii)
(6)
The requirement of subsection (5)(a)(i) does not apply if the company failed to
give notice of the meeting, or failed to include in that notice a statement of the
shareholders rights under this section.
(7)
(8)
(a)
(b)
if the shareholder does not receive a notice under subsection (4), within 20
business days after learning that the resolution has been adopted.
(9)
(a)
(b)
the number and class of shares in respect of which the shareholder seeks
payment; and
(c)
A shareholder who has sent a demand in terms of subsections (5) to (8) has no
further rights in respect of those shares, other than to be paid their fair value,
unless-
(a)
the shareholder withdraws that demand before the company makes an offer
under subsection (11), or allows an offer made by the company to lapse, as
contemplated in subsection (12)(b);
(b)
the company fails to make an offer in accordance with subsection (11) and
the shareholder withdraws the demand; or
(c)
(10) If any of the events contemplated in subsection (9) occur, all of the shareholders
rights in respect of the shares are reinstated without interruption.
(11) Within five business days after the later of(a)
(b)
the last day for the receipt of demands in terms of subsection (7)(a);or
(c)
in respect of shares of the same class or series must be on the same terms;
and
(b)
lapses if it has not been accepted within 30 business days after it was made.
(b)
(ii)
the company must pay that shareholder the agreed amount within 10
business days after the shareholder accepted the offer and(i)
(ii)
(14) A shareholder who has made a demand in terms of subsections (5) to (8) may
apply to a court to determine a fair value in respect of the shares that were the
subject of that demand, and an order requiring the company to pay the
shareholder the fair value so determined, if the company has(a)
(b)
made an offer that the shareholder considers to be inadequate, and that offer
has not lapsed.
all dissenting shareholders who have not accepted an offer from the
company as at the date of the application must be joined as parties and are
bound by the decision of the court;
(b)
the company must notify each affected dissenting shareholder of the date,
place and consequences of the application and of their right to participate in
the court proceedings; and
(c)
the court(i)
(ii)
(iii) in its discretion may(aa) appoint one or more appraisers to assist it in determining the
fair value in respect of the shares; or
(bb) allow a reasonable rate of interest on the amount payable to
each dissenting shareholder from the date the action approved
by the resolution is effective, until the date of payment;
(iv) may make an appropriate order of costs, having regard to any offer
made by the company, and the final determination of the fair value by
the court; and
(v)
must make an order requiring(aa) the dissenting shareholders to either withdraw their respective
demands or to comply with subsection (13)(a); and
[Item (aa) substituted by s. 103 of Act 3/2011]
(bb) the company to pay the fair value in respect of their shares to
each dissenting shareholder who complies with subsection
(13)(a), subject to any conditions the court considers necessary
to ensure that the company fulfils its obligations under this
section.
(15A)
At any time before the court has made an order contemplated in subsection
(15)(c)(v), a dissenting shareholder may accept the offer made by the company
in terms of subsection (11), in which case -
(a)
(b)
(16) The fair value in respect of any shares must be determined as at the date on
which, and time immediately before, the company adopted the resolution that
gave rise to a shareholders rights under this section.
(17) If there are reasonable grounds to believe that compliance by a company with
subsection (13)(b), or with a court order in terms of subsection (15)(c)(v)(bb),
would result in the company being unable to pays its debts as they fall due and
payable for the ensuing 12 months(a)
the company may apply to a court for an order varying the companys
obligations in terms of the relevant subsection; and
(b)
(ii)
ensures that the person to whom the company owes money in terms
of this section is paid at the earliest possible date compatible with the
company satisfying its other financial obligations as they fall due and
payable.
(18) If the resolution that gave rise to a shareholders rights under this section
authorised the company to amalgamate or merge with one or more other
companies, such that the company whose shares are the subject of a demand in
terms of this section has ceased to exist, the obligations of that company under
this section are obligations of the successor to that company resulting from the
amalgamation or merger.
(19) For greater certainty, the making of a demand, tendering of shares and payment
by a company to a shareholder in terms of this section do not constitute a
distribution by the company, or an acquisition of its shares by the company within
the meaning of section 48, and therefore are not subject to-
(a)
(b)
the application by the company of the solvency and liquidity test set out in
section 4.
(b)
165.
Derivative actions
(1)
Any right at common law of a person other than a company to bring or prosecute
any legal proceedings on behalf of that company is abolished, and the rights in
this section are in substitution for any such abolished right.
(2)
(b)
(c)
(d)
has been granted leave of the court to do so, which may be granted only if
the court is satisfied that it is necessary or expedient to do so to protect a
legal right of that other person.
(3)
A company that has been served with a demand in terms of subsection (2) may
apply within 15 business days to a court to set aside the demand only on the
grounds that it is frivolous, vexatious or without merit.
(4)
the probable costs that would be incurred if the company pursued any
such cause of action or continued any such proceedings; and
(5)
within 60 business days after being served with the demand, or within a
longer time as a court, on application by the company, may allow, either(i)
(ii)
A person who has made a demand in terms of subsection (2) may apply to a court
for leave to bring or continue proceedings in the name and on behalf of the
company, and the court may grant leave only if(a)
the company(i)
(ii)
(b)
(ii)
(iii) it is in the best interests of the company that the applicant be granted
leave to commence the proposed proceedings or continue the
proceedings, as the case may be.
(6)
(7)
the delay required for the procedures contemplated in subsections (3) to (5)
to be completed may result in(i)
(ii)
(b)
there is a reasonable probability that the company may not act to prevent
that harm or prejudice, or act to protect the companys interests that the
applicant seeks to protect; and
(c)
A rebuttable presumption that granting leave is not in the best interests of the
company arises if it is established that(a)
(b)
(ii)
(ii)
(ii)
did not have a personal financial interest in the decision, and were not
related to a person who had a personal financial interest in the
decision;
(iii) informed themselves about the subject matter of the decision to the
extent they reasonably believed to be appropriate; and
(iv) reasonably believed that the decision was in the best interests of the
company.
(8)
a person is a third party if the company and that person are not related or
inter-related; and
[Para. (a) substituted by s. 104 of Act 3/2011]
(b)
(9)
the court must also make an order stating who is liable for the remuneration
and expenses of the person appointed;
(b)
(c)
the persons who may be made liable under the order, or the order as varied,
are(i)
(ii)
the company;
(d)
if the order, or the order as varied, makes two or more persons liable, the
order may also determine the nature and extent of the liability of each of
those persons; and
(e)
the person to whom leave has been granted is entitled, on giving reasonable
notice to the company, to inspect any books of the company for any
purpose connected with the legal proceedings.
(10) At any time, a court may make any order it considers appropriate about the costs
of the following persons in relation to proceedings brought or intervened in with
leave under this section, or in respect of an application for leave under this
section:
(a)
(b)
the company; or
(c)
(11) An order under this section may require security for costs.
(12) At any time after a court has granted leave in terms of this section, a person
contemplated in subsection (2) may apply to a court for an order that they be
substituted for the person to whom leave was originally granted, and the court
may make the order applied for if it is satisfied that(a)
(b)
(13) An order substituting one person for another has the effect that(a)
the grant of leave is taken to have been made in favour of the substituting
person; and
(b)
if the person originally granted leave has already brought the proceedings,
the substituting person is taken to have brought those proceedings or to
have made that intervention.
(14) If the shareholders of a company have ratified or approved any particular conduct
of the company(a)
(b)
does not prevent a person from making a demand, applying for leave,
or bringing or intervening in proceedings with leave under this
section; and
(ii)
the court may take that ratification or approval into account in making any
judgment or order.
[Para. (b) substituted by s. 104 of Act 3/2011]
(15) Proceedings brought or intervened in with leave under this section must not be
discontinued, compromised or settled without the leave of the court.
(16) For greater certainty, the right of a person in terms of this section to serve a
demand on a company, or apply to a court for leave, may be exercised by that
person directly, or by the Commission or Panel, or another person on behalf of
that first person, in the manner permitted by section 157.
Part C
Voluntary resolution of disputes
166.
(1)
(b)
(c)
(2)
(3)
(4)
(a)
(b)
(ii)
(ii)
(c)
(5)
167.
may(i)
(ii)
(b)
(2)
(3)
(4)
(b)
(b)
indicate any changes that must be made to the draft order before it will be
made an order of the court; or
(c)
(b)
does not preclude a person applying for an award of civil damages, unless
the consent order includes an award of damages to that person.
Part D
Complaints to Commission or Panel
168.
Initiating a complaint
(1)
(b)
with the Commission in respect of any provision of this Act not referred to
in paragraph (a),
alleging that a person has acted in a manner inconsistent with this Act, or that the
complainants rights under this Act, or under a companys Memorandum of
Incorporation or rules, have been infringed.
[Subs. (1) substituted by s. 106 of Act 3/2011]
169.
(2)
(3)
(b)
except in the case of a direction from the Minister, issue a notice to the
complainant in the prescribed form indicating that it will not investigate the
complaint, if the complaint appears to be frivolous or vexatious, or does not
allege any facts that, if proven, would constitute grounds for remedy under
this Act;
(b)
(c)
(2)
At any time during an investigation, the Commission or Panel, as the case may
be, may(a)
(b)
(ii)
apply to a court for an order appointing an independent investigator(aa) at the expense of the company; and
(bb) to report to both the Commission or Panel, as the case may be,
and the company.
(3)
170.
(b)
Outcome of investigation
(1)
(b)
(2)
(c)
(d)
in the case of the Commission, propose that the complainant and any
affected person meet with the Commission or with the Companies Tribunal,
with a view to resolving the matter by consent order;
(e)
(ii)
has consented to the Commission or Panel, as the case may be, doing
so;
(f)
(g)
(ii)
the Panel, refer the matter to the Executive Director, who may, among
other things, issue a compliance notice in terms of section 171.
(b)
(ii)
(1)
Subject to subsection (3), the Commission, or the Executive Director of the Panel,
may issue a compliance notice in the prescribed form to any person whom the
Commission or Executive Director, as the case may be, on reasonable grounds
believes (a)
(b)
unless the alleged contravention could otherwise be addressed in terms of this Act
by an application to a court or to the Companies Tribunal.
[Subs. (1) substituted by s. 108 of Act 3/2011]
(2)
(b)
(c)
(d)
(e)
take any other steps reasonably related to the contravention and designed to
rectify its effect.
(3)
(4)
(b)
(c)
(d)
any steps that are required to be taken and the period within which those
steps must be taken; and
(e)
any penalty that may be imposed in terms of this Act if those steps are not
taken.
[Subs. (4) substituted by s. 108 of Act 3/2011]
(5)
A compliance notice issued in terms of this section, or any part of it, remains in
force until(a)
(b)
(ii)
(6)
(7)
If a person to whom a compliance notice has been issued fails to comply with the
notice, the Commission or the Executive Director, as the case may be, may either
(a)
(b)
172.
Objection to notices
(1)
Any person issued with a compliance notice in terms of this Act may apply to the
Companies Tribunal in the case of a notice issued by the Commission, or to the
Takeover Special Committee in the case of a notice issued by the Executive
Director, or to a court in either case, to review the notice within [Words preceding para. (a) substituted by s. 109 of Act 3/2011]
(a)
(b)
(2)
After considering any representations by the applicant and any other relevant
information, the Companies Tribunal, the Takeover Special Committee, or a court
may confirm, modify or cancel all or part of a compliance notice.
(3)
(4)
173.
Consent orders
(1)
(2)
174.
175.
If a matter has been investigated in terms of this Part, and the Commission and
the respondent have agreed a resolution of the complaint, the Commission may(a)
(b)
if the person who is the subject of the complaint consents to that order,
apply to the High Court to have it confirmed as a consent order, in terms of
its rules.
Section 167(2) to (4), read with the changes required by the context, applies to an
application contemplated in subsection (1).
If the Commission or Panel, as the case may be, issues a notice of non-referral in
response to a complaint, the complainant concerned may apply to a court for
leave to refer the matter directly to the court, but no such complaint may be
referred directly to a court in respect of a person who has been excused as a
respondent, as contemplated in section 170(1)(a).
(2)
A court(a)
may grant leave contemplated in subsection (1) only if it appears that the
applicant has no other remedy available in terms of this Act; and
(b)
(ii)
make any other order contemplated in this Act that is just and
reasonable in the circumstances.
Administrative fines
(1)
(b)
(2)
(ii)
(b)
(c)
(d)
(e)
(f)
the degree to which the respondent has co-operated with the Commission or
Panel, as the case may be, and the court; and
[Para. (f) substituted by s. 110 of Act 3/2011]
(g)
(3)
For the purpose of this section, the annual turnover of any person, is the amount
determined in the prescribed manner.
(4)
A fine payable in terms of this section must be paid into the National Revenue
Fund referred to in section 213 of the Constitution.
(5)
176.
Summons
(1)
(2)
(3)
(4)
(5)
177.
(a)
(b)
(b)
(b)
retain any such book, document or other object for examination, for a
period not exceeding two months, or such longer period as the court, on
good cause shown, may allow.
a person is not obliged to answer any question if the answer is selfincriminating; and
(b)
the person asking the questions must inform that person of the right set out
in paragraph (a).
A judge of the High Court or a magistrate, may issue a warrant to enter and
search any premises that are within the jurisdiction of that judge or magistrate, if,
(2)
(3)
(a)
(b)
A warrant to enter and search may be issued at any time and must specifically(a)
(b)
A warrant to enter and search is valid until one of the following events occurs:
(a)
(b)
the warrant is cancelled by the person who issued it or, in that persons
absence, by a person with similar authority;
(c)
(d)
(4)
A warrant to enter and search may be executed only during the day, unless the
judge or magistrate who issued it authorises that it may be executed at night at a
time that is reasonable in the circumstances.
(5)
A person authorised by a warrant issued in terms of subsection (2) may enter and
search premises named in that warrant.
(6)
(b)
178.
(ii)
hand a copy of the warrant to that person or to the person named in it;
or
(1)
(2)
(3)
179.
A person who is authorised under section 177 to enter and search premises may(a)
(b)
(c)
search any person on those premises if there are reasonable grounds for
believing that the person has personal possession of an article or document
that has a bearing on the investigation;
(d)
(e)
request information about any article or document from the owner of, or
person in control of, the premises or from any person who has control of the
article or document, or from any other person who may have the
information;
(f)
take extracts from, or make copies of, any book or document that is on or in
the premises that has a bearing on the investigation;
(g)
(ii)
(h)
seize any output from that computer for examination and copying; and
(i)
attach, and, if necessary, remove from the premises for examination and
safekeeping, anything that has a bearing on the investigation.
(b)
A person who enters and searches any premises under section 178 must conduct
the entry and search with strict regard for decency and order, and with regard for
each persons right to dignity, freedom, security and privacy.
(2)
During any search under section 178(1)(c), only a female inspector or police
officer may search a female person, and only a male inspector or police officer
may search a male person.
(3)
A person who enters and searches premises under section 178, before questioning
anyone-
(4)
(a)
must advise that person of the right to be assisted at the time by an advocate
or attorney; and
(b)
issue a receipt for it to the owner of, or person in control of, the premises;
and
(b)
return it as soon as practicable after achieving the purpose for which it was
removed.
(5)
(6)
(7)
A police officer who is authorised to enter and search premises under section 177,
or who is assisting an inspector who is authorised to enter and search premises
under section 178 may overcome resistance to the entry and search by using as
much force as is reasonably required, including breaking a door or window of the
premises.
(8)
Before using force in terms of subsection (7), a police officer must audibly
demand admission and must announce the purpose of the entry, unless it is
reasonable to believe that doing so may induce someone to destroy or dispose of
an article or document that is the object of the search.
(9)
180.
(2)
(3)
181.
(b)
If adjudication proceedings before the Tribunal are open to the public, the
Tribunal may exclude members of the public, or specific persons or categories of
persons, from attending the proceedings(a)
(b)
(c)
for any other reason that would be justifiable in civil proceedings in a High
Court.
182.
(a)
The Commission;
(b)
(c)
any other person who has a material interest in the hearing, unless that interest is
adequately represented by another participant.
direct or summon any person to appear at any specified time and place;
(b)
(c)
to produce any book, document or item necessary for the purposes of the
hearing; or
(ii)
(d)
183.
Rules of procedure
Subject to the requirements of the applicable sections of this Act, the Companies
Tribunal may determine any matter of procedure for an adjudication hearing, with due
regard to the circumstances of the case.
184.
Witnesses
(1)
(2)
(3)
(4)
Section 176(4) and (5) apply to any person questioned, or any evidence given,
before the Companies Tribunal in terms of this section.
CHAPTER 8
REGULATORY AGENCIES AND ADMINISTRATION OF ACT
Part A
Companies and Intellectual Property Commission
185.
(2)
The Commission(a)
(b)
(ii)
(c)
(d)
must exercise the functions assigned to it in terms of this Act or any other
law, or by the Minister, in(i)
(ii)
(3)
Each organ of state must assist the Commission to maintain its independence and
impartiality, and to exercise its authority and perform its functions effectively.
(4)
the Commissioner; or
(b)
Commission objectives
(1)
(ii)
(c)
(2)
187.
(d)
the promotion of compliance with this Act, and any other applicable
legislation; and
(e)
the efficient, effective and widest possible enforcement of this Act, and any
other legislation listed in Schedule 4.
(b)
Functions of Commission
(1)
In this section, this Act has the meaning set out in section 1, but also includes
any legislation listed in Schedule 4.
(2)
Other than with respect to matters within the jurisdiction of the Takeover
Regulation Panel, the Commission must enforce this Act, by, among other
things,(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(3)
(4)
The Commission must promote the reliability of financial statements by, among
other things(a)
(b)
(5)
(ii)
(b)
(c)
(d)
(e)
Subject to the provisions of subsections (6) and (7), any person, on payment of
the prescribed fee, may(a)
(b)
has been filed under this Act in respect of any company; and
(ii)
is open to inspection; or
(c)
(d)
(ii)
(6)
Subsection (5) does not apply to any part of a filed document if that part has been
determined to be confidential, or contain confidential information, in accordance
with section 212.
(7)
The Commission(a)
(b)
188.
(i)
must waive any prescribed registry fee contemplated in subsection (5) if the
Commission is satisfied(i)
(ii)
may waive any such fee if satisfied that any inspection, certificate, copy or
extract is required for the purposes of research by or under the control of an
institution for higher education.
(2)
In addition to any other advice or reporting requirements set out in this Part, the
Commission is responsible to(a)
(b)
report to the Minister annually on the volume and nature of registration and
enforcement activities in terms of this Act and on any other matter as
prescribed by the Minister; and
(c)
enquire into and report to the Minister on any matter concerning the
purposes of this Act, and advise the Minister in respect of any matter
referred to it by the Minister.
(3)
(a)
(b)
issuing explanatory notices outlining its procedures, or its nonbinding opinion on the interpretation of any provision of this Act; or
(ii)
(c)
conducting research relating to its mandate and activities and, from time to
time, publishing the results of that research; and
(d)
over time, reviewing legislation and public regulations, and reporting to the
Minister concerning matters relating to company and intellectual property
law.
(b)
(ii)
(ii)
(c)
(d)
(4)
The Commission may liaise with any foreign or international authorities having
any objects similar to the functions and powers of the Commission.
(5)
189.
(b)
(c)
(d)
Appointment of Commissioner
(1)
The Minister must appoint a suitably qualified and experienced person to be(a)
(b)
holds office for an agreed term not exceeding five years; and
(ii)
holds office for an agreed term not exceeding five years; and
(ii)
may perform any function of the Commissioner when the office of the
Commissioner is vacant, or when the Commissioner is absent or is for
any reason unable to perform the functions of that office.
(2)
(3)
(b)
(c)
(d)
(e)
all assets, and the discharge of all liabilities, of the Commission; and
(f)
(4)
190.
191.
(b)
In this section, this Act has the meaning set out in section 1, but also includes
any legislation listed in Schedule 4.
(2)
The Minister(a)
(b)
(ii)
The Minister may appoint one or more specialist committees to advise the(a)
(b)
(2)
(3)
192.
(a)
(b)
(2)
(3)
(4)
(5)
perform its functions impartially and without fear, favour or prejudice; and
(b)
consist of(i)
not more than eight persons who are independent from the
Commission and are appointed by the Minister to serve for a period
of not more than five years, as determined by the Minister when the
person is appointed; and
(ii)
(b)
(c)
(b)
(b)
(c)
withdraw from the proceedings of the specialist committee when that matter is
discussed.
(6)
(b)
193.
(a)
(b)
(c)
(d)
(2)
Each organ of state must assist the Companies Tribunal to maintain its
independence and impartiality, and to perform its functions effectively.
(3)
(4)
194.
(a)
(b)
The Companies Tribunal consists of a chairperson and not less than 10 other
women or men appointed by the Minister, on a full or part-time basis.
(b)
(2)
(3)
(b)
(b)
(4)
(5)
(b)
the chairperson is for any other reason temporarily unable to perform those
functions.
(6)
Sections 206 and 207 apply to the chairperson and other members of the Tribunal.
(7)
The chairperson and each other member of the Tribunal serves for a term of five
years and may, subject to subsection (2)(b), be reappointed for a second term.
[Subs. (7) inserted by s. 112 of Act 3/2011]
195.
(b)
(c)
(2)
(3)
(4)
a member of the Tribunal, to the extent that this Act provides for a matter to
be considered by a single member of the Tribunal; or
(b)
a panel composed of any three members of the Tribunal, in any other case.
ensure that at least one member of the panel is a person who has suitable
legal qualifications and experience; and
(b)
direct that the hearing of that matter proceed before the remaining members
of the panel, subject to the requirements of subsection (3)(a);or
(b)
terminate the proceedings before that panel and constitute another panel,
which may include any member of the original panel, and direct that panel
to conduct a new hearing.
(5)
(6)
(7)
(8)
An order of the Companies Tribunal may be filed in the High Court as an order of
the court, in accordance with its rules.
(9)
A member of the Tribunal may not represent any person before the Tribunal.
(10) If, on the expiry of the term of office of a member of the Companies Tribunal,
that member is still considering a matter before the Tribunal, that member may
continue to act as a member in respect of that matter only.
Part C
197.
(2)
The Panel(a)
(b)
(ii)
(c)
(d)
must exercise the functions assigned to it in terms of this Act or any other
law, or by the Minister, in(i)
(ii)
(3)
Each organ of state must assist the Panel to maintain its independence and
impartiality, and to exercise its authority and perform its functions effectively.
(4)
(b)
Composition of Panel
(1)
(b)
(c)
three persons designated by each exchange named for the purpose by the
Minister by notice in the Gazette; and
(d)
(2)
At any time, the Panel may co-opt additional members for a particular purpose
and a limited period.
(3)
(4)
(5)
198.
(a)
must have the qualifications, and satisfy the further requirements set out in
section 205; and
(b)
(b)
(c)
appointed in terms of subsection (1)(d), serve for a term not exceeding five
years, as determined by the Minister at the time the person is appointed; or
(d)
(2)
199.
not more than a number, being 15 minus the total number of persons
designated in terms of paragraph (c), of other persons appointed by the
Minister on the basis of their knowledge and experience in the regulation of
securities and takeovers.
one of the members of the Panel to be the chairperson of the Panel; and
(b)
Either deputy chairperson may exercise and perform the powers and duties of the
chairperson whenever the chairperson is unable to do so or while the office of
chairperson is vacant.
Meetings of Panel
(1)
200.
(a)
may determine the date, time and place for meetings of the Panel; and
(b)
(2)
(3)
The Takeover Regulations must determine the quorum for a meeting of the Panel.
(4)
The member presiding at a meeting of the Panel may determine the procedure at
the meeting.
(5)
The decision of a majority of the members of the Panel present at any meeting at
which there is a quorum is the decision of the Panel.
(6)
the member presiding at the meeting may cast a deciding vote, if that
presiding member did not initially have or cast a vote; or
(b)
(7)
Proceedings of the Panel are valid despite any vacancy that existed on the Panel
at the time, or the absence of any member during any part of those proceedings.
(8)
The Panel may delegate the exercise of any of its powers or performance of any
of its functions to the chairperson, any member of the Executive as contemplated
in terms of section 200, any committee that the Panel may establish, or any
member of the Panel.
Executive of Panel
(1)
(b)
(2)
(ii)
(b)
appoint other officers and employees as are required for the proper
performance of functions of the Panel.
(3)
A deputy Executive Director may perform any function of the Executive Director
when the office of the Executive Director is vacant, or when the Executive
Director is absent or is for any reason unable to perform the functions of that
office.
(4)
(b)
(c)
201.
Functions of Panel
(1)
(2)
regulate affected transactions and offers to the extent provided for, and in
accordance with, Parts B and C of Chapter 5 and the Takeover Regulations;
(b)
(c)
(d)
consult with any person at the request of any interested party with a view to
advising on the application of a provision of Parts B and C of Chapter 5, or
the Takeover Regulations;
(b)
(c)
receive and deal with representations relating to any matter with which it
may deal in terms of this Act; and
(d)
(3)
202.
In exercising its powers and performing its functions the Panel must not express
any view or opinion on the commercial advantages or disadvantages of any
transaction or proposed transaction.
(2)
(b)
each of whom must be designated from time to time by the Panel from among
those of its members appointed by the Minister in terms of section 197(1)(d).
[Subs. (2) substituted by s. 115 of Act 3/2011]
(3)
(b)
(ii)
(4)
Subject to this Act and the Takeover Regulations, the chairperson of the Takeover
Special Committee may determine the procedure relating to any hearing of any
matter referred to the Takeover Special Committee.
(5)
(6)
the member presiding at the meeting may cast a deciding vote, if that
presiding member did not initially have or cast a vote; or
(b)
(b)
(c)
(d)
(e)
(f)
(g)
one person nominated by the Governor of the South African Reserve Bank,
or any successor body to it; and
(h)
each of whom must be appointed by the Minister, to serve for a term of three
years.
[Subs. (1) substituted by s. 116 of Act 3/2011]
(2)
(3)
(b)
(b)
204.
(4)
(5)
receive and consider any relevant information relating to the reliability of, and
compliance with, financial reporting standards and adapt international reporting
standards for local circumstances and consider information from the Commission
as contemplated in section 187(3)(b);
(b)
(c)
205.
(2)
(b)
have submitted to the Minister a written declaration stating that the person
is not disqualified in terms of subsection (2).
(b)
(c)
(d)
206.
A member of the Companies Tribunal, the Panel or the Council, must promptly
inform the Minister in writing after that person or a related persons acquires a
personal financial interest that is, or is likely to become, an interest contemplated
in section 205(2)(b).
(2)
A member of the Companies Tribunal, the Panel or the Council, must not(a)
engage in any activity that may undermine the integrity of the Companies
Tribunal, the Panel or the Council, as the case may be;
(b)
(ii)
(c)
vote at any meeting of the Tribunal, Panel or Council, as the case may be,
in connection with a matter contemplated in paragraph (b);
(d)
make private use of, or profit from, any confidential information obtained
as a result of performing that persons functions as a member of the
Companies Tribunal, the Panel or the Council; or
(e)
(i)
(ii)
(3)
207.
immediately and fully disclose the nature of that interest to the meeting; and
(b)
withdraw from the meeting to allow the remaining members to discuss the
matter and determine whether the member should be prohibited from
participating in any further proceedings concerning that matter.
(4)
The disclosure by a person in terms of subsection (3)(a), and the decision by the
Companies Tribunal, the Panel, or the Council in terms of subsection (3)(b), must
be expressly recorded in the minutes of the meeting in question.
(5)
Proceedings of the Companies Tribunal, the Panel, or the Council, and any
decisions taken by a majority of the members present and entitled to participate in
those decisions, are valid despite the fact that(a)
(b)
A member of the Companies Tribunal or the Council may resign by giving to the
Minister(a)
(b)
less than one month written notice, with the approval of the Minister.
(2)
A member of the Panel may resign by giving written notice jointly to the Minister
and the relevant entity responsible for the designation of that member, if any.
(3)
The Minister, after taking the steps required by subsection (4), may remove a
member of the Companies Tribunal, Panel or Council only if that member has(a)
(b)
(c)
(d)
(4)
208.
Before removing a person from office in terms of subsection (3), the Minister
must afford the person an opportunity to state a case in defence of their position.
209.
(a)
engage in any activity that may undermine the integrity of the Commission or
Panel, as the case may be;
(b)
(c)
make private use of, or profit from, any confidential information obtained as a
result of performing that persons official functions in the Commission or panel;
or
(d)
divulge any information referred to in paragraph (c) to any third party, except as
required as part of that persons official functions within the Commission or
panel.
Appointment of inspectors
(1)
(2)
may each appoint any suitable employee of the Commission or Panel, as the
case may be, or any other suitable person employed by the State, as an
inspector; and
(b)
must issue each inspector with a certificate in the prescribed form stating
that the person has been appointed as an inspector in terms of this Act.
When an inspector performs any function of an inspector in terms of this Act, the
inspector(a)
(b)
(c)
(i)
(ii)
(ii)
210.
(3)
The Commissioner and Executive Director may each appoint or contract with any
suitably qualified person to assist the Commission, or the Panel, as the case may
be, in carrying out its functions, including, but not limited to, conducting
research, audits, inquiries or other investigations on behalf of the Commission or
Panel, as the case may be, but a person appointed in terms of this subsection is
not an inspector within the meaning of this Act.
(4)
The Minister, with the concurrence of the Minister of Finance, may determine the
remuneration to be paid to a person appointed in terms of this section, if that
person is not in the full-time service of the Commission or Panel, as the case may
be.
Finances
(1)
(2)
(3)
211.
The Commission, the Companies Tribunal and the Panel, are each financed from(a)
(b)
(c)
(d)
The financial year of each of the Commission, the Companies Tribunal, and the
Panel is the period of 12 months beginning 1 April each year, and ending on the
following 31 March, except that, in each case, the first financial year(a)
begins on the date that the section of this Act establishing that entity came
into operation; and
(b)
At least once every five years, the Minister must conduct an audit review of the
exercise of the functions and powers of the Commission, the Companies
Tribunal, the Panel and the Council.
212.
(2)
In addition to any other reporting requirement set out in this Act, the
Commission, Tribunal, Council and Panel must each report to the Minister at
least once every year on its activities, as required by the Public Finance
Management Act, 1999 (Act No. 1 of 1999).
(3)
Confidential information
(1)
(2)
(3)
(b)
(4)
Section 172, read with the changes required by the context, applies to a decision
in terms of subsection (3).
(5)
When making any ruling, decision or order in terms of this Act, the Commission,
the Panel, the Companies Tribunal or the Council may take confidential
information into account.
(6)
If any reasons for a decision in terms of this Act would reveal any confidential
information, the Commission, the Panel, the Companies Tribunal or the Council,
as the case may be, must provide a copy of the proposed reasons to the party
claiming confidentiality at least 10 business days before publishing those reasons.
[Subs. (6) substituted by s. 118 of Act 3/2011]
(7)
Within five business days after receiving a copy of proposed reasons in terms of
subsection (6), a party may apply to a court for an appropriate order to protect the
confidentiality of the relevant information.
CHAPTER 9
Breach of confidence
(1)
(2)
214.
(b)
(b)
(c)
(d)
(e)
(b)
(c)
(d)
(2)
For the purposes of subsection (1)(d) and section 29(6), a person is a party to the
preparation of a document contemplated in that subsection if [Words preceding para. (a) substituted by s. 119 of Act 3/2011]
(a)
(b)
the scheme, structure or form of words is of such a nature that the person
knew, or ought reasonably to have known, that its inclusion or other use in
connection with the preparation of the document would cause it to be false
or misleading.
(3)
(4)
A person who contravenes section 99(1), (2), (3), (4), (5), (8) or (9) and, if that
person is a company, every director or prescribed officer of the company who
knowingly was a party to the contravention, is (a)
(b)
liable to any other person for any losses sustained as a consequence of that
contravention.
[Subs. (4) inserted by s. 119 of Act 3/2011]
215.
(2)
(ii)
(b)
(c)
(d)
216.
(e)
(f)
(g)
(h)
(ii)
Penalties
Any person convicted of an offence in terms of this Act, is liable-
217.
(a)
(b)
218.
Civil actions
(1)
(2)
Any person who contravenes any provision of this Act is liable to any other
person for any loss or damage suffered by that person as a result of that
contravention.
(3)
219.
(2)
220.
The provisions of this section do not affect the right to any remedy that a person
may otherwise have.
A complaint in terms of this Act may not be initiated by, or made to, the
Commission or the Panel, more than three years after(a)
(b)
in the case of a course of conduct or continuing practice, the date that the
conduct or practice ceased.
A complaint may not be prosecuted in terms of this Act against any person that is,
or has been, a respondent in proceedings under another section of this Act relating
substantially to the same conduct.
Serving documents
Unless otherwise provided in this Act, a notice, order or other document that, in terms
of this Act, must be served on a person, will have been properly served when it has
been either-
221.
222.
(a)
(b)
Proof of facts
(1)
In any proceedings in terms of this Act, if it is proved that a false statement, entry
or record or false information appears in or on a book, document, plan, drawing
or computer storage medium, the person who kept that item must be presumed to
have made the statement, entry, record or information, unless the contrary is
proved.
(2)
State liability
The State, the Commission, the Commissioner, the Companies Tribunal, the Panel, an
inspector, or any state employee or similar person having duties to perform under this
Act, is not liable for any loss sustained by or damage caused to any person as a result of
any bona fide act or omission relating to the performance of any duty under this Act,
unless gross negligence is proved.
Part C
Regulations
(1)
The Minister(a)
(b)
forms;
(ii)
time periods;
filing fees;
(d)
(2)
(ii)
any forms required to be used for the purposes of this Act; and
(ii)
Before making any regulations in terms of this Act, the Minister must publish the
proposed regulations for public comment, subject to subsection (3).
224.
225.
(3)
(4)
The Companies Act, 1973 (Act No. 61 of 1973), is hereby repealed, subject to
subsection (3).
(2)
The laws referred to in Schedule 3 are hereby amended in the manner set out in
that Schedule.
(3)
The repeal of the Companies Act, 1973 (Act No. 61 of 1973), does not affect the
transitional arrangements, which are set out in Schedule 5.
This Act is called the Companies Act, 2008, and, subject to subsection (2), comes
into operation on a date fixed by the President by proclamation in the Gazette.
(2)
Section 11(1)(a)(ii) and (iii) shall come into operation three years from the date of
commencement of this Act.
[S. 225 substituted by s. 121 of Act 3/2011]
SCHEDULE 1
Provisions concerning non-profit companies
1.
(b)
set out at least one object of the company, and each such object must be
either(i)
(ii)
(2)
A non-profit company(a)
must apply all of its assets and income, however derived, to advance its
stated objects, as set out in its Memorandum of Incorporation; and
(b)
(3)
(i)
(ii)
A non-profit company must not, directly or indirectly, pay any portion of its
income or transfer any of its assets, regardless how the income or asset was
derived, to any person who is or was an incorporator of the company, or who is a
member or director, or person appointing a director, of the company, except [Words preceding para. (a) substituted by s. 122 of Act 3/2011]
(a)
(4)
as reasonable(i)
(ii)
(b)
(c)
as a payment in respect of any rights of that person, to the extent that such
rights are administered by the company in order to advance a stated object
of the company; or
(d)
Despite any provision in any law or agreement to the contrary, upon the windingup or dissolution of a non-profit company(a)
(b)
the entire net value of the company must be distributed to one or more nonprofit companies, registered external non-profit companies carrying on
activities within the Republic, voluntary associations or non-profit trusts[Words preceding subpara. (i) amended by s. 122 of Act 3/2011]
(i)
(ii)
The Commission may apply to the court, on behalf of a non-profit company, for a
determination contemplated in sub-item (4)(b)(ii)(cc) if the non-profit company
has[Words preceding para. (a) amended by s. 122 of Act 3/2011]
(a)
(b)
failed to(i)
(ii)
(6)
(7)
(8)
The vote of each member of a non-profit company is of equal value to the vote of
each other voting member on any matter to be determined by vote of the
members, except to the extent that the companys Memorandum of Incorporation
provides otherwise.
(9)
2.
Fundamental transactions
(1)
(2)
(b)
(b)
Sections 115 and 116, read with the changes required by the context, apply with
respect to the approval of a proposal contemplated in sub-item (2).
[Sub-item (3) amended by s. 122 of Act 3/2011]
3.
(b)
4.
Members
(1)
(2)
must not restrict or regulate, or provide for any restriction or regulation of,
that membership in any manner that amounts to unfair discrimination in
terms of section 9 of the Constitution;
(b)
for service to the company or to the public benefit objects set out in
the companys Memorandum of Incorporation; and
(ii)
(c)
(d)
may provide for no more than two classes of members, that is voting and
non-voting members, respectively; and
(e)
(ii)
Directors
(1)
set out the basis on which the members choose the directors of the
company; and
(b)
if any directors are to be elected by the voting members, provide for the
election each year of at least one-third of those elected directors.
(2)
(3)
A non-profit company must not provide a loan to, secure a debt or obligation of,
or otherwise provide direct or indirect financial assistance to, a director of the
company or of a related or inter-related company, or to a person related to any
such director.
(4)
Sub-item (3) does not prohibit a transaction if it[Words preceding para. (a) amended by s. 122 of Act 3/2011]
(a)
is in the ordinary course of the companys business and for fair value;
(b)
(ii)
(c)
(d)
(1)
A close corporation may file a notice of conversion in the prescribed manner and
form, at any time.
(2)
(b)
(c)
(3)
Section 14, read with the changes required by the context, applies with respect to
the filing of a notice of conversion, as if it were a Notice of Incorporation in
terms of this Act.
(4)
(b)
(c)
enable the Registrar of Deeds to effect the necessary changes resulting from
conversions and name changes.
2.
(2)
the juristic person that existed as a close corporation before the conversion
continues to exist as a juristic person, but in the form of a company;
(b)
all the assets, liabilities, rights and obligations of the close corporation vest
in the company;
(c)
any enforcement measures that could have been commenced with respect to
the close corporation in terms of the Close Corporations Act, 1984 (Act No.
69 of 1984), for conduct occurring before the date of registration, may be
brought against the company on the same basis, as if the conversion had not
occurred; and
(e)
any liability of a member of the corporation for the corporations debts, that
had arisen in terms of the Close Corporations Act, 1984 (Act No. 69 of
1984), and existed immediately before the date of registration, survives the
conversion and continues as a liability of that person, as if the conversion
had not occurred.
SCHEDULE 3
AMENDMENT OF LAWS
SCHEDULE 3
AMENDMENT OF LAWS
A: Close Corporations Act, 1984
Short title
Registration of
Copyright in
Cinematograph films
Act, 1977
repealed.
Amendment of section 3 of Act 62 of 1977
3. Section 3 of the Registration of Copyright in
Cinematograph Films Act, 1977, is hereby
amended by the substitution for subsections (1)
and (2) of the following subsections:
(1) The Commission may exercise the powers
and must perform the duties assigned to the
registrar by this Act and is responsible for the
administration of the registration office.
Act No. 57 of
1978
Act No. 98 of
1978
Act No. 59 of
1980
Act No. 14 of
2005
Co-operatives Act,
2005
SCHEDULE 5
TRANSITIONAL ARRANGEMENTS
1.
Interpretation
(1)
(2)
In this Schedule(a)
general effective date means the date on which section 1 of this Act
came into operation; and
(b)
previous Act means the Companies Act, 1973 (Act No. 61 of 1973).
(b)
(3)
(ii)
(a)
the Minister, by notice in the Gazette, may determine a date on which the
Commission may assume the exercise of any particular function or power
assigned to it in terms of this Act; and
(b)
2.
(i)
(ii)
the Minister has the authority to, and bears the responsibility of,
exercising any such function or performing any such power assigned
by this Act to the Commission.
(b)
(2)
(b)
(3)
Despite the repeal of the previous Act, section 49(5) to (7) of the previous Act
continues to apply to a pre-existing company that was, immediately before the
effective date, engaged in any circumstances contemplated in those provisions.
[Sub-item (3) inserted by s. 126 of Act 3/2011]
(4)
Despite the repeal of the previous Act, a pre-existing company retains all of the
powers set out in that Act in respect of its shares that were issued and outstanding
immediately before the effective date, to the extent necessary to give full effect to
-
(a)
(b)
(5)
If, as a consequence of the coming into effect of the Act and the repeal of the
previous Act, a conflict, dispute or doubt arises within two years after the
effective date concerning the particular manner or form in which, or time by
which, a pre-existing company is required to (a)
(b)
(c)
take any other particular action required in terms of this Act or the
companys Memorandum of Incorporation,
the company may apply to the Tribunal for directions, and a member of the
Tribunal may make an administrative order that is appropriate and reasonable in
the circumstances.
[Sub-item (5) inserted by s. 126 of Act 3/2011]
(6)
An external company that, immediately before the effective date, was registered
as such in terms of the previous Act must be regarded as having registered on the
effective date as an external company in terms of this Act.
[Sub-item (6) inserted by s. 126 of Act 3/2011]
(7)
the provisions of the previous Act continue to apply with respect to the
publishing, audit and approval of those statements; and
(b)
the provisions of this Act will apply to each subsequent financial year end
and annual financial statements of that company.
[Sub-item (7) inserted by s. 126 of Act 3/2011]
3.
Pending matters
[Heading of item 3 substituted by s. 126 of Act 3/2011]
(1)
Any matter pending before the Registrar under the previous Act, or a provision of
the Close Corporations Act, (Act No. 69 of 1984), amended by this Act, before
the effective date and not fully addressed at that time, must be concluded by the
Registrar in terms of such Act, despite its repeal or amendment.
[Sub-item (1) substituted by s. 126 of Act 3/2011]
(2)
(3)
(b)
4.
(b)
(c)
registered in terms of the previous Act, and falling within the definition of a
state-owned company in terms of this Act, is deemed to have amended its
Memorandum of Incorporation as of the general effective date to have
changed its name in so far as required to comply with section 11(3);or
[Para. (c) amended by s. 126 of Act 3/2011]
(d)
may file a notice within 20 business days after the general effective
date electing to become a profit company, as from the general
effective date, and to change its name in so far as required to comply
with section 11(3);or
(ii)
(2)
At any time within two years immediately following the general effective date, a
pre-existing company may file, without charge-
(3)
(a)
(b)
If, before the general effective date, a pre-existing company had adopted any
binding provisions, under whatever style or title, comparable in purpose and
effect to the rules of a company contemplated in section 15(3), those provisions
continue to have the same force and effect(a)
as of the general effective date, for a period of two years, or until changed
by the company; and
(b)
after the two year period, to the extent that they are consistent with this Act.
(3A) If, before the general effective date, the shareholders of a pre-existing company
had adopted any agreement between or among themselves, under whatever style
or title, comparable in purpose and effect to an agreement contemplated in section
15(7), any such agreement continues to have the same force and effect (a)
as of the general effective date, for a period of two years, despite section
15(7), or until changed by the shareholders who arc parties to the
agreement; and
(b)
after the two-year period contemplated in paragraph (a), to the extent that
the agreement is consistent with this Act and the company's Memorandum
of Incorporation.
[Sub-item (3A) inserted by s. 126 of Act 3/2011]
(4)
During the period of two years immediately following the general effective date (a)
(ii)
(b)
(ii)
5.
Pre-incorporation contracts
Section 21 does not apply with respect to a pre-existing company.
6.
certificates
(1)
Section 35(2) does not apply to a bank, as defined in the Banks Act, 1993 (Act
No. 124 of 1993), until a date declared by the Minister, after consulting the
member of the Cabinet responsible for national financial matters.
(2)
Despite section 35(2) any shares of a pre-existing company that have been issued
with a nominal or par value, and are held by a shareholder immediately before the
effective date, continue to have the nominal or par value assigned to them when
issued, subject to any regulations made in terms of subitem (3).
(3)
The Minister, in consultation with the member of Cabinet responsible for national
financial matters, must make regulations, to take effect as of the general effective
date, providing for the optional conversion and transitional status of any nominal
or par value shares, and capital accounts of a pre-existing company, but any such
regulations must preserve the rights of shareholders associated with such shares,
as at the effective date, to the extent doing so is compatible with the purposes of
this item.
[Sub-item (3) substituted by s. 126 of Act 3/2011]
(4)
(5)
(b)
Section 164 does not apply with respect to the conversion by a company of par
value or nominal value shares of a pre-existing company in terms of this item,
and in accordance with the regulations.
[Sub-item (5) inserted by s. 126 of Act 3/2011]
7.
continues to hold that office as from the effective date, subject to the companys
Memorandum of Incorporation, and this Act.
[Sub-item (1) amended by s. 126 of Act 3/2011]
(2)
(3)
(b)
(4)
(5)
the duties, conduct and liability of directors apply to every director of a preexisting company as from the effective date;
(b)
(c)
(d)
(6)
(7)
A right of any person to seek a remedy in terms of this Act applies with respect to
conduct pertaining to a pre-existing company and occurring before the effective
date, unless the person had commenced proceedings in a court in respect of the
same conduct before the effective date.
(8)
(b)
(9)
maintain any record for the duration required by section 24(1), if(i)
the company disposed of that record before the effective date; and
(ii)
at the time the company disposed of the record it was not required, by
or in terms of any public regulation, to continue to maintain that
record; or
8.
(2)
(3)
(a)
the Commission must notify the person for whose use the name was
reserved, inviting the person to request the reservation of a substitute name
that does satisfy the requirements of this Act; and
(b)
(a)
(b)
9.
10.
11.
Despite the repeal of the previous Act, until the date determined in terms of
subitem (4), Chapter 14 of that Act continues to apply with respect to the
winding- up and liquidation of companies under this Act, as if that Act had not
been repealed subject to subitems (2) and (3).
(2)
Despite subitem (1), sections 343, 344, 346, and 348 to 353 do not apply to the
winding-up of a solvent company, except to the extent necessary to give full
effect to the provisions of Part G of Chapter 2.
(3)
(4)
determine a date on which this item ceases to have effect, but no such
notice may be given until the Minister is satisfied that alternative legislation
has been brought into force adequately providing for the winding-up and
liquidation of insolvent companies; and
(b)
Any proceedings in any court in terms of the previous Act immediately before the
effective date are continued in terms of that Act, as if it had not been repealed.
(2)
Any order of a court in terms of the previous Act, and in force immediately
before the effective date, continues to have the same force and effect as if that Act
had not been repealed, subject to any further order of the court.
(1)
Any right or entitlement enjoyed by, or obligation imposed on, any person in
terms of any provision of the previous Act, that had not been spent or fulfilled
immediately before the effective date is a valid right or entitlement of, or
obligation imposed on, that person in terms of any comparable provision of this
Act, as from the date that the right, entitlement or obligation first arose, subject to
the provisions of this Act.
(2)
A notice given by any person to another person in terms of any provision of the
previous Act must be considered as notice given in terms of any comparable
provision of this Act, as from the date that the notice was given under the
previous Act.
(3)
A document that, before the effective date, had been served or filed in accordance
with the previous Act must be regarded as having been satisfactorily served or
filed for any comparable purpose of this Act.
[Sub-item (3) substituted by s. 126 of Act 3/2011]
(4)
12.
An order given by an inspector, in terms of any provision of the previous Act, and
in effect immediately before the effective date, continues in effect, subject to the
provisions of this Act.
The person who occupied the post of chief executive officer of the Companies
and Intellectual Property Registration Office immediately before the general
effective date, must be regarded as having been appointed on the general effective
date as the Commissioner in terms of section 189, for a term to be determined by
the Minister.
(2)
(3)
(4)
(a)
section 197 of the Labour Relations Act, 1995 (Act No. 66 of 1995); and
(b)
any collective agreement reached between the State and the trade union
parties of the Departmental Chamber of the Public Service Bargaining
Council before the effective date.
A person referred to in sub-items (1) and (2) remains subject to any decisions,
proceedings, rulings and directions applicable to that person immediately before
the effective date, and any proceedings against such a person, that were pending
immediately before the effective date, must be disposed of as if this Act had not
been enacted.
[Sub-item (4) amended by s. 126 of Act 3/2011]
(5)
(b)
(6)
(7)
all movable assets of the state which were used by or which were at the
disposal of the Companies and Intellectual Property Registration Office and
the Office of Company and Intellectual Property Enforcement in the
Department immediately before the effective date, except those assets
excluded by the Minister, become the property of the Commission;
(b)
(c)
(d)
(b)
(c)
(d)
(8)
(9)
13.
If, after the general effective date, a person referred to in subitem (7)(c) or (d)(a)
resigns from an office in, or terminates that persons employment by, the
Panel; and
(b)
(b)
(c)
(ii)
a court may make any order that could have been made in the
circumstances by a court under that Act.
(2)
14.
Regulations
On the effective date, and for a period of 60 business days after the effective date, the
Minister may make any regulation contemplated in this Act without meeting the
procedural requirements set out in section 223 or elsewhere in this Act, provided the
Minister has published those proposed regulations in the Gazette for comment for at
least 30 business days.