Companies
Share Incorporeal moveable property that is measure of shareholder’s
financial & non- interest in co. Share entitles shareholder to certain interest in
co., it’s A & div. (for distribution).
Securities incl. any shares, debentures, or other instruments, irrespective of
form/title, issued/authorised to be issued by profit co.
Shareholder person who holds >=1 shares issued by co. & whose name is
entered as shareholder in securities register of co.
Member member of non-profit co.
Board of directors organ of co. that is responsible for managing busi. &
affairs of co.
Director member of board of co.
Memorandum of Incorporation sole founding/governing document of co.,
setting out rights, duties, & responsibilities of shareholders, directors, and
others w/in & in relation to co., together w/ various other matters.
MOI: Legal status of company – from date & time of incorporation of co. is
registered, as stated in registration certificate, the co. = (a) juristic person, exist
continuously until name removed from co. register in accordance w/ Act
(b) has all legal powers & capacity of individual, except to extent that (i) juristic
person incapable exercising power/having capacity, OR (ii) co. MOI provides
otherwise.
(c) constituted in accordance w/ (i) unalterable provisions of Act, (ii) alterable
provisions of Act, subject to any negotiation, restriction, limitation, qualification,
extension or other alteration that is contemplated in alterable provision, & noted in
co.’s MOI, and (iii) any further provisions of co. MOI
– Person NOT, solely by reason of being incorporator, shareholder/director to co.,
liable for any liabilities/obligation of co., EXCEPT to extent Act/co. MOI provides
otherwise.
– If Personal Liability co. = directors & past directors jointly and severally liable,
together w/ co., for any debts & liabilities of co. as are/were contracted during
respective periods of office.
Co. created & ended by following steps set out in legislation. Inc. is thus VERY
important. Governed by Co Act of 2008 (contains mandatory & default positions,
meaning some provisions APPLY, others only apply if default position is not
CHANGED in co. constituting documents), its MOI, other documents and other laws
including the common law.
, MOI creates juristic person from effective date on registration certificate.
can be standard MOI, unique MOI (you draft), RF MOI.
Creation to operation = purpose + need for co., formation of MOI, incorporators to
directors (profit + non-profit).
Formal process – role of CIPC.
Registered office – intangible being + access to info. (who & where).
*Incorporators become 1st directors
Role MOI = governing document: powers of co. directors shareholders
amendment + rules securities.
Amendments MOI shareholders vote + Notice of Amendment BUT if clear
error = alteration.
Alteration MOI NO special resolutions + Notice of Alteration, this NOT
amendment of MOI, just process to fix clear an obvious error.
Content MOI:
Legislation: alterable/un- anti-avoidance generally to change = special
resolution (need special provision to change name co. + give notice of
amendment + amendment registration certificate).
Unique content: limitations on directors RF co. = restrictions
Effect: binding relationships constructive knowledge.
*Careful to NOT change type co.*
Co Act s15:
(1) Each provision of co. MOI (a) must be consistent w/ Act, AND
(b) void to extent that contravenes/inconsistent w/ this Act, subject to s6(15).
(2) MOI of any co. may
(a) incl. any provision (i) dealing w/ matter that Act not address; (ii) altering
effect of any alterable provision of Act; OR (iii) imposing on co. higher
standard, greater restriction, longer period of time or any similarly more
onerous requirement, than otherwise apply to co. in terms unalterable
provision of Act.
*s6(15): if specific content required by particular public legislation/listing requirement
of an exchange, w/ respect to unalterable provision being limited = should not see
provision as being contrary to s 1(a)*
(6) MOI & any rules of co. are binding: (a) between co. & each shareholder,
(b) between/among shareholders of co.,
(c) between co. and (i) each director/prescribed officer of co. OR (ii) any other
person serving co. as member of committee of board, in the exercise of
respective functions w/in co.
*Capacity: Elev v Positive Government Security
