Mar 28, 20 c companies act 71 of 2008 companies act 71 of 2008 1contents glossaryglossary 1 1973 companies act companies act 61 of 1973introduction 2overview 3 act companies act 71 of 2008 1 categories of companies 4 commission companies and intellectual property commission, which 2 the future of close corporations 5 replaced cipro and is known. 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. Understanding the new companies act pwc south africa. Removing a director under the companies act 71 of 2008. Companies act no 71 of 2008 872kb pdf maatskappywet no 71 van 2008 685kb pdf.
Companies act 71 of 2008 and the turquand rule by piet. The simplicity and flexibility reflected in the act will contribute significantly to promote. The new companies act introduced fundamental changes to south african company law. This information should be considered in conjunction with the act itself. 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. Act to amend the companies act, 2008, so as to effect certain legaltechnical and. The companies act 61 of 1973 the previous act was repealed on 1 may 2011. While the companies act 71 of 2008 the act has increased the powers of company directors, it has, at the same time, increased their liabilities. A guide to business rescue prepared by werksmans attorneys. Companies act institute of directors in southern africa. Companies act 71 of 2008 english text signed by the president assented to. 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. Interestingly enough, it has enjoyed less attention than its cousin the consumer protection act, which became operational on 1 april 2011.
For guidance, the developers looked to south african company law for the 21st century. A guide to business rescue prepared by werksmans attorneys the long anticipated new companies act no. In such circumstances it is important to understand the conditions under which a director of a company may be removed in terms of the provisions of the companies act 71 of 2008 the act or in terms of the companies memorandum of incorporation moi. Section 3 of the companies act 71 of 2008 and interruption. The companies act 71 of 2008, as amended by the companies amendment act 3 of. After much anticipation, the 1 may 2011 saw the companies act 71 of 2008 come into operation. Corporate in a calabash introduction running a business in south africa may be done using one of three options. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders.
Section 3 of the companies act 71 of 2008 and interruption of execution. Jul 24, 2012 companies act no 71 of 2008 by ira epstein. The companies act 71 of 2008 the act was signed into law on 8 april 2011 and its commencement date was 1 may 2011. Corporate governanceking iii and companies act 71 of 2008. Companies act institute of directors in southern africa iodsa. Appointment of directors and functions of the board of directors. The new modus operandi of a company has to comply with the companies act 712008, the companies. Nothing in this document should be construed as professional advice. Download a copy of the companies act, 2008 ammended companies act. 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 article seeks to show that the new provisions are also unsatisfactory. This act makes significant changes to south african law, including the capital rules. 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. The saica guide to the companies act 71 of 2008 has been released.
It has been modernised and brought into line with international best practices. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. The information contained herein is a summary of some of the key aspects of. With acts you are guaranteed the latest and most up to date resource for your legislative needs. Piercing the veil under section 209 of the companies act. 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. Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms of the. The simplicity and flexibility reflected in the act will contribute significantly to promote efficiency and transparency. Amendment of the companies act regulation, 2011 560kb pdf 20 august 20. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. It is hereby notified that the president has assented to the following act, which is hereby published for general information. The enactment of s724 and s5 of the companies act, no. Promote the development of the south african economy by.
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. 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. The new companies act is now operative schoemanlaw inc. New act precludes creation of new authorised par value share. The minister of trade and industry has, in terms of section 223 and item 14 of schedule 5 of the companies act. Furthermore please feel free to contact us should you have any queries pertaining to the companies act, 2008.
The act replaces the companies act, 61 of 1973 and came into effect on 1 may 2011. 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. Operating the business under ones own name as a sole proprietorship. 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. This guide is intended as an easy reference, pocketsized guide for directors, shareholders. The changes include inter alia provision for financial assistance for subscription of securities and acquisition of own. 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 act fundamentally rewrites south african company law and accordingly will have far reaching effects. Henochsberg on the companies act 71 of 2008 request pdf. Using the url or doi link below will ensure access to this page indefinitely.
Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms of the previous. A significant innovation under the act is that it provides for a court application to declare a director delinquent or to have him placed under an order of probation. The bill proposed the amendment of the companies act, no 71 of 2008 to correct errors, legaltechnical and grammatical issues. For guidance, the developers looked to south african company law for the 21st.
A creditor had instituted litigation proceedings against company x and obtained a default judgment against it. To provide for the incorporation, registration, organization and management of companies, the capitalization of profit companies, and the registration of offices of foreign companies carrying. 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. 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. Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014. Companies act, 71 of 2008 series dommisse attorneys inc. Feb 19, 2019 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. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. This act is called the companies act, 2008, and comes into operation on a date. What are the objectives of the companies act, 2008. The companies amendment bill was approved by the portfolio committee on trade and industry on 10 march 2011. Mar 07, 2012 delport, piet, companies act 71 of 2008 and the turquand rule february 6, 2011. It reveals that the provisions are in certainrespectstoofarrangingandthat,inothers,treatdirectorstooleniently.
Companies act 2008 summary of transitional arrangement. Consider the following commonly encountered scenario. This information booklet serves as an explanatory guide to, and general reference tool about the stipulations of the. Promote compliance with the bill of rights as provided for in the constitution in the application of company law. Chapter 6 of the south african companies act 71 of 2008. Relief under section 163 of the companies act 71 of 2008. Companies act no 71 of 2008 by ira epstein fluxmans inc.