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MRL2601 - ENTREPRENEURIAL LAW (MRL2601)

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University Of South Africa

MRL2601 - ENTREPRENEURIAL LAW BOOK. The Department of Trade and Industry (dti) published a policy paper named ‘South African Company law for the 21st century – Guidelines for Corporate Law Reform’1 which envisaged the development of a ‘clear, facilitating, predictable and consistently enf...

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mrl2601 entrepreneurial law book

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MRL2601 - ENTREPRENEURIAL LAW (MRL2601)

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MRL2601 -
ENTREPRENEURIAL
LAW BOOK

, Contents

Page
Preface ....................................................................................................... v
Abbreviations .............................................................................................. ix

PART A: COMPANIES
Chapter 1 Introduction and background ................................................... 1
Chapter 2 Legal personality and registration of companies ......................... 11
Chapter 3 Corporate finance ................................................................... 43
Chapter 4 Corporate capital .................................................................... 81
Chapter 5 Capacity and representation ..................................................... 97
Chapter 6 Corporate governance: shareholders ......................................... 109
Chapter 7 Corporate governance: directors ............................................... 123
Chapter 8 Groups of companies .............................................................. 163
Chapter 9 Accounting records, financial statements and audit ..................... 171
Chapter 10 Fundamental transactions and take-over regulation .................... 191
Chapter 11 Business rescue and compromise ............................................. 217
Chapter 12 Remedies and enforcement...................................................... 241
Chapter 13 Winding-up, deregistration and dissolution ................................ 271

PART B: TRUSTS
Chapter 14 Trusts ................................................................................... 283

PART C: PARTNERSHIPS
Chapter 15 Partnerships ........................................................................... 299

PART D: CLOSE CORPORATIONS
Chapter 16 Close corporations .................................................................. 343
Appendix A: Standard forms ......................................................................... 377
Appendix B: Alterable provisions.................................................................... 421
Bibliography ................................................................................................ 443
Table of cases ............................................................................................. 445
Table of statutes ......................................................................................... 455
Index ......................................................................................................... 473

vii

, Abbreviations

1973 Act/1973 Companies Act Companies Act 61 of 1973
2011 CAA Companies Amendment Act 3 of 2011
AC Audit committee
ADR Alternative Dispute Resolution
AFS Annual financial statements
AGM Annual general meeting
CC Close Corporation
CIPC Companies and Intellectual Property
Commission
CC Act Close Corporations Act 69 of 1984
CoR Company forms
dti Department of Trade and Industry
FRSC Financial Reporting Standards Council
IFRS International Financial Reporting Standards
Insolvency Act Insolvency Act 24 of 1936
IPO Initial public offering
IRBA Independent Regulatory Board for Auditors
MOI Memorandum of Incorporation
NOI Notice of Incorporation
NPC Non-profit company
PIS Public Interest Score
Regulations R351 in Government Gazette
34239 of
26 April 2011
SEC Social and ethics committee
SOC State-owned company
the Act/2008 Act/2008 Companies Act Companies Act 71 of 2008
TRP Takeover Regulation Panel

ix

, Chapter
1 Introduction and background

1 Introduction ................................................................ 1
2 Purpose of the Companies Act ....................................... 4
3 Application and interpretation ....................................... 6
4 New concepts .............................................................. 6
5 New entities ................................................................ 10

1 Introduction
The Department of Trade and Industry (dti) published a policy paper named
‘South African Company law for the 21st century – Guidelines for Corporate
Law Reform’ 1 which envisaged the development of a ‘clear, facilitating, predict-
able and consistently enforced law’ to provide ‘a protective and fertile environ-
ment for economic activity’. Bill 61D of 2008 was assented to by the National
Assembly on 19 November 2008 and the Companies Act 2 was signed by the
President on 8 April 2009. Implementation, however, would be by proclamation
as determined in section 225. The Act contained numerous mistakes and on
22 December 2009, a so-called ‘rectification’ notice was published,3 listing
the mistakes to be addressed. The proposed regulations were also published 4
and comments were invited. A proposed Companies Amendment Bill was
published (electronically only, on the then Companies and Intellectual Property
Registration Office (CIPRO) and dti websites) on 27 July 2010, correcting
297 mistakes. The Companies Amendment Bill 40 of 2010 was published
in Government Gazette33695 of 27 October 2010 and Bill 40B of 2010 was
______________

1 Government Gazette 26493 of 23 June 2004.
2 Act 71 of 2008 (the Act/2008 Act).
3 N 1663 Government Gazette 32832 of 22 December 2009.
4 N 1664 Government Gazette 32832 of 22 December 2009.

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