The whole or greater part of its assets and undertaking are in south africa, other than the assets and undertaking of any subsidiary that is incorporated outside south africa. The minister of trade and industry has, in terms of section 223 and item 14 of schedule 5 of the companies act, published the companies regulations. Da 2010 db openuct dp university of cape town j1 acta juridica lk pb university of cape town py 2010 sm 006546 t1 an overview of company law reform in south africa. Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms of the previous. Amendment of the companies act regulation, 2011 5 february 2014. In addition, the south african companies act is based largely upon the canadian one. The application of section 90 of the companies act, 2008. Audit and accounting requirements of the new companies act. Amendment of section 1 of act 102 of 1996, as amended by section 1 of act 26 of 2003 1. The draft regulations are released for further stakeholder engagement, and in preparing this draft regulations the dti took into account the companies act, 2008 and companies amendment bill as published. The memorandum of incorporation of a homeowners association. The companies act 71 of 2008 the act has been the catalyst for a number of changes undertaken by companies since the acts inception. The companies act was introduced in parliament during 2008 and published for general.
With the implementation of the new companies act, many questions have been raised regarding the new audit requirements that were mandatory in the 1973 companies act. Memorandum on the objects of the companies act no 71 of 2008. A foreign company is, by virtue of the provisions of the companies act, regarded as conducting business in south africa if either it is a party to at least one employment contract in south africa, or if it is conducting such activities for a 6month period as would lead a person to reasonably conclude that the company intended to continually. Here are some of the questions raised regarding the new companies act as well as answers to these questions. Short title these regulations may be cited as the companies regulations, 2011. The new companies act master builders kwazulunatal. Amendment of the companies act regulation, 2011 20 august 20companies act no 71 of 2008 maatskappywet no 71 van 2008 companies amendment act, no 3 of 2011 companies regulations, 2011 pages 1 107 companies regulations, 2011 pages 108 212 companies. Companies act institute of directors in southern africa. Preexisting companies on 1 may 2011 every preexisting company. Concerns were also expressed about the familiarity of the drafters with south african conditions. Deloitte namibia changes to the 2004 companies act made in 2011. With acts you are guaranteed the latest and most up to date resource for your legislative needs.
Most notably, it enhances the rights of persons who have, to date, had limited or no protection under company law. The new act and regulations became effective on 1 may. For guidance, the developers looked to south african company law for the 21st century. The article begins by setting out the underlying fundamental objectives which drove the process of reforming company law in south africa. Chapter 6 of the south african companies act 71 of 2008. As such, it is intended to provide the reader or hisher entity with general information of interest. This is the act which we refer to as the new act, though the gloss of newness is long gone.
Directors have certain fiduciary duties that they owe to the companies of which they are directors. This act makes significant changes to south african law, including the capital rules. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. Impact of the new companies act on the close corporations act part 1 of our new series contrary to what many people believe, the new companies act has not repealed the provisions of the close corporations act and amended certain others. The companies act 2008 act 71 of 2008 the new act was promulgated on 9 april 2009 and will come into force on a date to be gazetted by the president, which date cannot be earlier than 9 april 2010. Proclamation of companies act effective date 89kb pdf request for comments. This act may be cited as the companies act, 2011, and shall come into operation on such a date as the minister may, by notice published in the gazette, appoint. Recently, video and podcast material has been added to the site, including indepth video interviews with some of south africa s leading opinion makers. The reader is advised to consult a professional adviser for further assistance and. Please refer to schedule 5 of the new companies act, no. First, companies were challenged by the idea of a new regulatory environment, with its own new requirements and principles, such as alterable and nonalterable provisions. Small and medium enterprises would do well to take note of this new act. Sabinet an overview of company law reform in south africa.
This note has been prepared on the basis of the new companies act, as amended by the latest version of the companies amendment bill and as read with the final companies regulations. Rescue mechanisms in south africa have existed for almost a century through the companies act provisions relating to judicial management ss 427 to 440. From the guidelines to the companies act 2008 ti an overview of company law reform in south africa. The impact of the new companies act on debt capital market.
Rsm south africa is a member of the rsm network and trades as rsm. Notes on the guide to companies act no 71 of 2008 this guide is intended as an easy reference, pocketsized guide for directors, shareholders, company officers and any other stakeholder who has an interest in corporate law reform. This guide includes information on matters that are practical and relevant to saica members and other individuals in business who engage with company law. The companies act 2008 was finally, after much debate and controversy, made law on 1 may 2011. Restructuring of companies in financial distress is on the increase globally. Companies regulations, 2011 7 companies regulations, 2011 chapter 1 general provisions part a interpretation 1. Companies act, if the law of the jurisdiction in which the company is registered does not require such shareholder approval. Companies amendment act, 76 of 1974 companies amendment act, 111 of 1976 companies amendment act, 64 of 1977 revenue laws amendment act, 114 of 1977 registration and incorporation of companies in south west africa proclamation 234 of 1978 companies amendment act 59 of 1978 companies amendment act 3 of 1989 general note. In this memorandum of incorporation unless the context otherwise requires. Breakers share block proprietary limited registration no of company 198500148007 the company this memorandum of incorporation was adopted in accordance with a proposal by the board and adopted by a special resolution taken by the voting members. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. The companies and intellectual property commission cipc the commission is a juristic person, and mandated by the companies act, 2008act 71 of 2008. Arrangement of sections chapter 1 interpretation, purpose and application part a.
Most of the amendments made, however, relate to a modernisation of the act with wording amendments, from south west africa to namibia, to remove gender bias, to include namibian legislation. Polity offers free access to south african legislation, policy documents and daily political news. Constitution means the constitution of the republic of south africa, 1996. Offshore companies and doing business in south africa a. The namibian companies act 28 of 2004, amended 2011, contains a numberof provisions that will directly impact all companies, directors and officers. Reference to the act shall, if the act is replaced by any other statute, be construed as a reference to the statute or statutes from time to time in force relating to companies. Section 115 of the south african companies act sets forth the shareholder. Be it enacted by the parliament of the republic of south africa, as follows. Jun 24, 2011 the impact of the new companies act on debt capital market issuances 24 june 2011 nathisha maharaj, director, finance, projects and banking practice, cliffe dekker hofmeyr new company laws in south africa present a number of opportunities and challenges for the finance industry.
Effect of conversion on legal status schedule 3 amendment of laws a. In this case the nonexecutive chairman, six other nonexecutive directors and the chief financial officer of the centro property group. Companies act 71 of 2008 english text signed by the president assented to. In november 2010 the new companies act came into effect. Apr 21, 2009 21 april 2009 south africas new companies act aims to provide some recourse for companies in distress, reduce the cost of doing business in the country, promote corporate governance and transparency and empower shareholders. In terms of the new act, companies are classified as either profit companies or nonprofit companies. Call for comments to the draft summary financial statements, comments due to regulator by 16. Promote the development of the south african economy by. The act introduces a multitude of requirements for companies in the areas of auditing and accounting. The test is whether the company could surmount its difficulties and become a successful concern. Companies act 2008 and the companies amendment bill 2010 published in gazette no 33695 of 27 october 2010.
In terms of section 223, and item 14 of schedule 5, of the companies act, 2008 act. Companies act no 71 of 2008 western cape government. Nonprofit companies, which are the successors to the current section 21 companies, have to comply with a set of principles set out in schedule 1 of the act. To provide for the incorporation, management and liquidation of companies. Companies act 1963 act 179 section 1commencement spent. Such conflict is, however, inevitable from time to time and section 75 of the companies act, no. It is not true that npcs or any companies have to adopt a new moi, and it is also not true that it has to be done by 30 april.
The contribution does not attempt to discuss substantive provisions of the companies act 71 of 2008. It was commented that this act was drafted without taking note of other legislation and processes germane to south africas economy. The companies act 71 of 2008 new companies act will commence on 1 may 2011. Directors schedule 2 conversion of close corporations to companies 1. The current framework of south african company law is built on foundations, which were put in place in victorian england in the middle of the nineteenth century. This act may be cited as the companies act, 2011, and shall come into operation on. The third king report on governance for south africa 2009 is referred to as the king report. South african company law for the 21st century guidelines. Recently, south africa has undergone a major process of law reform, culminating in the companies act no. This includes the duty to act in the best interests of that company which in turn includes the duty to prevent a conflict of interest between the director and the company. The new act and regulations became effective on 1 may 2011. In this code, unless the context otherwise requires, the expressions defined in the first schedule hereto shall have the meanings assigned to them in that schedule. In terms of the new act, the companies act 1973 act.
The act contains new structural arrangements, with the introduction of new. This case is relevant to directors of south african companies, because the new act indicates that a court, when interpreting or applying the provisions of the act, may consider foreign company law. What laws or rules apply to a homeowners association in south africa. The commission as per section 186 and 187 of the act have various functions to accomplish, and further help foster a business environment that is competent and efficient and also to. Understanding the new companies act pwc south africa. In the canadian business corporation act it states that affairs. In line with this trend, chapter 6 of the new companies act, no. The commission is a juristic person, and as mandated by the companies act, 2008, has jurisdiction throughout the republic, is independent, and subject only to the constitution and the law and any policy statement, directive or request issued to it by the minister of trade and industry in terms of this act. The namibian companies act, act 28 of 2004 the act contains a number of provisions that will directly impact all companies, directors and officers. Any reference to the act in this guide refers to the companies act, no 71 of 2008, and any reference to the commission refers to the companies and intellectual property commission. Instead, the author explains the process followed in the drafting of this groundbreaking piece of legislation. Subject to these amendments, the close corporations act continues to exist and will now be administered. The minister of trade and industry, dr rob davies, signed and approved the companies regulations, 2011. The saica guide to the companies act 71 of 2008 has been released.
The companies act 2008 at a glance overview you have decided to start a business and you want to incorporate a company. Promote compliance with the bill of rights as provided for in the constitution in the application of company law. Companies amendment act 3 of 2011 southern african. Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014. There are some essential things you would need to know before you decide to incorporate a company in south africa. Procedurally, the judicial manager was appointed by the master of the high court. Protection of minority shareholders from oppressive or prejudicial conduct under s 163 of the companies act.
South african law developed through the enactment of the amendment act act 37 of 1999 which was intended to relax the capital maintenance principle and adopted a us approach on. You will find below the key extracts from the south africa companies act along with the full act. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Registration and incorporation of companies in south west africa proclamation. The companies act 61 of 1973 the previous act was repealed on 1 may 2011. Section 1 of the national small business act, 1996 hereinafter referred to as the principal act, is hereby amended. The new companies act changes existing south african company law in a number of ways. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Amendment of the companies act regulation, 2011 20 august 20companies act no 71 of 2008 maatskappywet no 71 van 2008 companies amendment act, no 3 of 2011 companies regulations, 2011 pages 1 107 companies regulations, 2011 pages 108 212 companies regulations, 2011 pages 2 320. Registration and incorporation of companies in south west africa proclamation 234 of 1978. The regulations, deal with the functions of the companies commission, takeover regulation panel and companies tribunal, and other matters relating to the regulation of. How does the new companies act impact small and medium enterprises. Companies act 28 of 2004 gg 3362 brought into force on.
Thirdly, it might forge ahead heedless of evidence and warnings about its consequences. The companies act 71 of 2008 the act was signed into law on 8 april 2011 and its commencement date was 1 may 2011. A record of the companys noncurrent assets, showing for each such asset or, in the case of a group of relatively minor assets, each such. The information contained herein is a summary of some of the key aspects of. National credit act 34 of 2005 south african government. South african companies that are financially distressed in south africa. Many homeowners associations were registered as section 21 companies. South africa company law is a set of rules and regulation formed under the south africa companies act 2008. Most of the amendments made, however, relate to a modernisation of the act with wording amendments. Limitation of period to incorporate close corporations or convert companies 3. Like south africa, canada has a supreme constitution and it is a. Republic of south africa companies act, 2008 memorandum of incorporation name of company.
Definitions in section 1 of the act apply equally to the regulations. South africa companies act 2008 south africa company law. How does the new companies act impact small and medium. The companies act audit requirement and other matters. Pdf the south african companies act and the realisation of. The ultimate goal in repealing the companies act, no. For guidance, the developers looked to south african company law for the 21st.
935 1101 430 1393 240 1475 452 1338 844 940 1103 1167 519 887 402 7 1512 365 790 1045 77 837 27 1249 970 808 434 149 699 1239 330 282 788 329 909 546 452 757 216 1185 1001 1006