This booklet provides insight into how creditors may. Both the companies act 61 of 1973 hereinafter the companies act 1973 and the companies act 71 of 2008 hereinafter the companies act 2008 provide for the financial standards. Act requires that companies falling within specific categories. 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. Companies act no 71 of 2008 by ira epstein fluxmans inc. On 1 may 2011, the companies act 71 of 2008 came into effect, replacing the companies act 1973 and amending the close corporations act of 1984. Understanding the new companies act pwc south africa.
Schedule 5 of the act sets out the transitional arrangements, which are summarised as follows. For guidance, the developers looked to south african company law for the 21st century. The enactment of s724 and s5 of the companies act, no. If an offer falls outside this meaning, chapter iv and its onerous provisions. Companies act 2008 summary of transitional arrangement. Companies act 71 of 2008 and the turquand rule by piet. Introduction with the demise of capital maintenance a new regime has come to company law, this is the time of solvency and liquidity. Companies act 2008 notes on the guide to companies act no 71 of 2008 2 1. The minister of trade and industry has, in terms of section 223 and item 14 of schedule 5 of the companies act. Par value shares old act allowed par value and no par value share new act precludes creation of new authorised par value share existing par value shares remain may issue unissued par value shares from authorised capital as at 1 may 2011 if at least one such share issued new company cannot create or issue. The following dissertation focuses particularly section 48 of act 71 of 20081.
Promote compliance with the bill of rights as provided for in the constitution in the application of company law. The article seeks to show that the new provisions are also unsatisfactory. Companies act 71 of 2008 english text signed by the president assented to. All businesses that are financially distressed and want to take a decision to start rescue proceedings can file a notice to. Companies act no 71 of 2008 872kb pdf maatskappywet no 71 van 2008 685kb pdf. The new companies act 71 of 2008 chapter 6 being called business rescue and compromise with creditors was signed by the state president in april 2008 and is expected but nobody is sure to come into effect in november 2010. A significant change from the previous act of 1973 arises in section 45 relating to financial assistance. The saica guide to the companies act 71 of 2008 has been released. Relief under section 163 of the companies act 71 of 2008 unscrambling the omelette omar v inhouse venue technical management pty ltd journal of contemporary romandutch law, vol.
Corporate governanceking iii and companies act 71 of 2008. It reveals that the provisions are in certainrespectstoofarrangingandthat,inothers,treatdirectorstooleniently. The companies act 61 of 1973 the previous act was repealed on 1 may 2011. The companies act 71 of 2008 has introduced into our company law a statutory provision permitting courts to pierce the corporate veil, contained in s 209. The simplicity and flexibility reflected in the act will contribute significantly to promote. Companies act, 2008 no 71 of 2008 register companies, business rescue practitioners and corporate names, maintain data, regulate governance of and disclosure by companies, accredit dispute resolution agents. Chapter 6 of the companies act 2008 act 71 of 2008 provides for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders. Section 3 of the companies act 71 of 2008 and interruption of execution pursuant to the judgment the creditor issued a writ of execution, but is now faced with the situation where an affected person has brought an application in terms of section 11 of the companies act 71 of 2008 the act to place company x under supervision and to. While this provision is to be welcomed, it does however raise many questions, difficulties and uncertainties, some of which have been addressed by the court in the recent case of ex parte. Previously regulated by voluntary standards and norms, the. This information should be considered in conjunction with the act itself. Companies act no 71 of 2008 western cape government. Operating the business under a close corporation, as long as this close corporation was registered and in operation before 1 may 2010.
The companies act financial assistance background the companies act 71 of 2008 the act came into effect on 1 may 2011. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. The companies act, 71 of 2008 act gives shareholders certain substantive powers which include, among others, the power to amend the memorandum of incorporation of the company moi, the power to elect and remove directors, and the power to approve the disposal of all or the greater part of the companys assets. Amendment of the companies act regulation, 2011 560kb pdf 20 august 20. Fundamental transactions and their regulation by the. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. Nothing in this document should be construed as professional advice. Piercing the veil under section 209 of the companies act. Accounting records, financial statements, financial reporting. Relief under section 163 of the companies act 71 of 2008. This guide includes information on matters that are practical and relevant to saica members and other individuals in business who engage with company law.
Trevor manuel the then minister of finance raised concern regarding intragroup company loans without. Appointment of directors and functions of the board of directors the companies act, 71 of 2008 as amended the companies act provides that the business and affairs of a company must be managed by or under the direction of its board of directors the board. Guidelines for corporate law reform may 2004, a policy document developed by the department of. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. Operating the business under ones own name as a sole proprietorship. The act replacesd the companies act, 61 of 1973 and came into effect on 1 may 2011. The meaning of offer to the public forms the basis of chapter iv, as it did under the 1973 act. The provisions of the act set the bar for competent directors at much higher levels than we have seen in the past. Companies act, 71 of 2008 series dommisse attorneys inc. Henochsberg on the companies act 71 of 2008 request pdf. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. Companies act 2008 and the companies amendment bill 2010 published in gazette no 33695 of 27 october 2010.
To provide for the incorporation, registration, organisation and management of companies, the capitalisation of profit companies, and the registration of offices of foreign companies carrying on business within the republic. Preexisting companies on 1 may 2011 every preexisting company. Promote the development of the south african economy by. Companies amendment act 3 of 2011 act to provide for the incorporation, registration, organisation and management of companies, the capitalisation of profit companies, and the registration of offices of. Corporate in a calabash introduction running a business in south africa may be done using one of three options.
This information booklet serves as an explanatory guide to, and general reference tool about the stipulations of the. Delport, piet, companies act 71 of 2008 and the turquand rule february 6, 2011. Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014. The companies act 71 of 2008, as amended by the companies amendment act 3 of. Companies act 71 of 2008 final linkedin slideshare. The new companies act introduced fundamental changes to. A discussion on the duty of care, skill and diligence to. As can be seen from the above title, that the area under examination is corporate law, and more specifically, the duty of care, skill and diligence to be exercised by a director in. Chapter 6 of the south african companies act 71 of 2008.
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