Pdf the companies act 71 of 2008 the companies act was promulgated in april 2009 and came into effect on 1 april. In south africa, company resolutions are governed by the companies act 71 of 2008. The companies act financial assistance background the companies act 71 of 2008 the act came into effect on 1 may 2011. The provisions of the act set the bar for competent directors at much higher levels than we have seen in the past.
Registration and incorporation of companies in south west africa. Nonprofit law in south africa council on foundations. Inevitably, in terms of the creditor friendly approach the prospect of corporate rescue thinking does not exist and the emphasis is on liquidation and protection of the rights of creditors. The 2008 act was aimed at keeping pace with developments in company law internationally.
Sep, 2011 purpose the south african companies act of 2008 saca2008 seeks to reaffirm the company as a means of promoting the economic welfare and development of south africa by encouraging efficient, transparent value. The test is whether the company could surmount its difficulties and become a successful concern. The purpose of this paper is to present the important role of the cost of capital for financial valuati. Please refer to schedule 5 of the new companies act, no. Recently, video and podcast material has been added to the site, including indepth video interviews with some of south africa s leading opinion makers. Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014. The act rewrites south african company law completely and will have far reaching effects. Types of companies you can register in south africa. Companies act 2008 and the companies amendment bill 2010 published in gazette no 33695 of 27 october 2010.
Understanding the new companies act pwc south africa. Esser, irenemarie and delport, piet, shareholder protection in terms of the companies act 71 of 2008 february 6, 2016. Dec 09, 2014 the confusion which has arisen as to when a company may be wound up in terms of the companies act 2008 or in terms of the companies act 1973 is thus eliminated. The companies act 71 of 2008 the 2008 act replaced the companies act no. Dec 18, 2014 the companies act 71 of 2008, as amended by act 3 of 2011, governs the formation of companies in south africa. 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. Procedurally, the judicial manager was appointed by the master of the high court. Be it enacted by the parliament of the republic of south africa, as follows. For guidance, the developers looked to south african company law for the 21st. This paper critiques the corporate governance approach under the companies act 71 of 2008. The companies act financial assistance deloitte us. It is not intended to entirely replace the wellestablished principles and has largely retained the preexisting south african company law.
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. A discussion on the duty of care, skill and diligence to be. They also have the authority to pass resolutions from the companys memorandum of incorporation moi the rules of the company in terms of the companies act. The south african companies act of 2008 saca2008, and the. President zuma signed into law the companies amendment act, 2011 and approved the proclamation and presidents minute that put into legal force the companies act 2008 on 1 may 2011.
South african law has been based on a creditor friendly approach. Download the new companies act caseware south africa. Recent case law decided under the 2008 act has confirmed that the act contains only a partial, and not a full, codification of all. Audit and accounting requirements of the new companies act. Updated guidance and frequently asked questions on section 902 of the companies act, 2008. Sars administers a wide range of legislation in terms of part 1 and schedule 1 to the south african revenue service act, 1997. Modern company law for a competitive south african economy, xiiixxv. Companies act 71 of 2008 english text signed by the president assented to. Shareholder protection in terms of the companies act 71 of 2008. The most basic categorization is the division between companies for profit and nonprofit companies. As a result of the early adoption of the standard in south africa.
University of pretoria, continuing education, 2011, 9. Trevor manuel the then minister of finance raised concern regarding intragroup company loans without. The next major south african legislation in this area was the companies act of 1973, which remained in force until 31 april 2011. In essence this rule is there as a means to protect directors, as a result of having both objective and subjective elements mentioned above. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. The purpose of this writeup is to let you know what the essential compliance and preincorporation matters arising from the companies act, 71 of 2008, are before you embark on your entrepreneur journey. Dec 05, 2012 this approach is however, increasingly being questioned. The act was signed by the president on the 9th april 2009 and gazetted in gazette no. Corporate governance under the south african companies act. Download a company resolution template formfactory. The following acts are examples of the primary legislation sars administers. Effect of conversion on legal status schedule 3 amendment of laws a. Modern company law for a competitive south african economy, xiii. Rescue mechanisms in south africa have existed for almost a century through the companies act provisions relating to judicial management ss 427 to 440.
Board members are appointed to manage the funds of the company. The south african companies act of 2008, which came into force on may 1, 2011, provides for the incorporation of a nonprofit company, which is recognized as a separate category of company. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. Guidelines for corporate law reform may 2004, a policy document developed by. Pdf the south african companies act and the realisation of. The act introduces a multitude of requirements for companies in the areas of auditing and accounting.
The nonprofit company can be established with or without members, but it must have at least three directors companies act section 31. For guidance, the developers looked to south african company law for the 21st century. We are the leading resource for freely available legislation in south africa and are used daily by thousands of professionals and industry leaders. A significant change from the previous act of 1973 arises in section 45 relating to financial assistance. Companies act of 2008 edit the 1973 act had over the years been amended on numerous occasions to bring it up to date.
Polity offers free access to south african legislation, policy documents and daily political news. Chapter 6 of the south african companies act 71 of 2008. South african national space agency act updated to 26 april 2014 act 36 of 2008 notice 85, g. Guidelines for corporate law reform may 2004, a policy document. The business judgement rule is a recent addition to the south african corporate law regime, and is seen with its codification in the companys act 20081. Corporate social responsibility issues enjoy more prominence in the companies act 2008 than in any previous company legislation in south africa. With the surge of interest in the recognition of not only shareholder interests, but also the interests of other stakeholders, the corporate governance approach in south africa merits a deeper analysis. 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 for profit can further be subdivided into.
Limitation of period to incorporate close corporations or convert companies 3. South africa adopted the exposure draft on the ifrs for smes standard for use by local companies when it was issued by the iasb in 2007, with the intention of providing immediate relief for limited interest companies under the then pending corporate laws amendment act of 2007. Companies amendment act 3 of 2011 act to provide for the incorporation, registration, organisation and management of. This booklet provides insight into how creditors may.
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