Schedule 3: Amendment of laws

A: Close Corporations Act, 1984

• (1) Amendments to definitions of Close Corporations Act, 1984 (Act No. 69 of 1984)
• (1) Amendment of section 1 of Act 69 of 1984, as amended by section 1 of Act 38 of 1986, section 1 of Act 26 of 1997, section 1 of Act 22 of 2001 and section 57 of Act 24 of 2006. Section 1 of the Close Corporations Act is hereby amended by:
• (a) the insertion before the definition of "Companies Act" of the following definition: " 'Commission' means the Companies and Intellectual Property Commission, established by section 185 of the Companies Act;";
• ()
• (b) the substitution for the definition of "Companies Act" of the following definition: " 'Companies Act' means the Companies Act, [1973 (Act No. 61 of 1973)] 2008;";
• (c) the substitution for the definition of 'company' of the following definition: " 'company' [means a company as defined in] has the meaning set out in section 1 of the Companies Act;";
• (d) he substitution for the definition of "director" of the following definition: " 'director', in relation to a company, [means a director as defined] has the meaning set out in section 1 [(1)] of the Companies Act;";
• (e) the substitution for the definition of "holding company" of the following definition: " 'holding company', in relation to a company, [means a holding company as defined] has the meaning set out in section 1 [(1)] of the Companies Act;";
• (f) the substitution for paragraph (b) of the definition of "officer" of the following paragraph: "(b) a company, means [an] a prescribed officer as defined in section 1 [(1)] of the Companies Act;";
• (g) the substitution for the definition of 'Registrar' of the following definition: " 'Registrar' means the [Registrar of Close Corporations referred to in section 4] Commissioner, appointed in terms of section 189 of the Companies Act;";
• (h) the substitution for the definition of 'Registration Office' of the following definition: " 'Registration Office' means the [Close Corporations Registration Office referred to in section 3] office of the Commission;";
• (i) the substitution for the definition of 'subsidiary' of the following definition: " 'subsidiary', in relation to a company, [means a subsidiary as defined in section 1(1)] has the meaning determined in accordance with section 3 of the Companies Act."; and
• (j) the substitution for the definition of "this Act" of the following definition: " 'this Act' includes the regulations, and any regulations made in terms of the Companies Act, to the extent that they apply to this Act.".
• (2) Limitation of period to incorporate close corporations or convert companies
• (1) Section 2 of the Close Corporations Act is hereby amended by the substitution for subsection (1) of the following subsection: "(1) [Any] At any time before section 13 of the Companies Act comes into operation, any one or more persons, not exceeding ten, who qualify for membership of a close corporation in terms of this Act, may form a close corporation and secure its incorporation by complying with the requirements of this Act in respect of the registration of its founding statement referred to in section 12."
• (2) Section 13 of the Close Corporations Act is hereby substituted for the following section: "Registration of founding statement 13. If a founding statement referred to in section 12 complying with the requirements of this Act is lodged with the Registrar in the manner prescribed at any time before section 13 of the Companies Act comes into operation, and if the business to be carried on by the corporation is lawful, the Registrar shall upon payment of the prescribed fee register such statement in his or her registers and shall give notice of the registration in the prescribed manner.".
• (3) Section 27 of the Close Corporations Act is hereby repealed with effect from the date on which Schedule 2 of the Companies Act comes into operation.
• (3) Legal status of close corporations
• (1) Section 2 of the Close Corporations Act is hereby amended by the substitution for subsection (2) of the following subsection: "(2) A corporation formed in accordance with the provisions of this Act is on registration in terms of those provisions a juristic person and continues, subject to the provisions of this Act, to exist as a juristic person notwithstanding changes in its membership, or its conversion to a company in terms of Schedule 2 of the Companies Act, until it is [in terms of this Act] deregistered or dissolved— (a) in terms of this Act; or (b) in terms of the Companies Act, in the case of a juristic person that has been converted to a company.".
• (4) Names of corporations
• (1) Section 19 of the Close Corporations Act, as substituted by section 5 of Act 26 of 1997 is hereby amended by the substitution of the following section: "Undesirable names and reservation of names 19. (1) [No founding statement containing a name for a corporation to be incorporated and no amended founding statement containing a new name for a corporation shall be registered if the name is in the opinion of the Registrar undesirable] Part A of Chapter 2 of the Companies Act, read with the changes required by the context, applies to a corporation and to an applicant for name reservation in terms of subsection (2), but— (a) a reference in any of those provisions to a company must be regarded as a reference to a corporation for the purposes of this Act; and (b) the application of section 11(3) of the Companies Act to a corporation is subject to the provisions of section 22(1) of this Act. (2) Any person who intends to form a corporation or any corporation which intends to change its name [shall] may apply to the Registrar for the reservation of a name, on the prescribed form and on payment of the prescribed fee [, apply to the Registrar for the reservation of a name: Provided that a company being converted into a corporation in terms of this Act shall not be required to so reserve its name if the name remains identical]."
• (2) Section 20 of the Close Corporations Act, as inserted by section 3 of Act 81 of 1992 and substituted by section 8 of Act 22 of 2001 is hereby amended by the substitution of the following subsection: "[Order to change name] Objections to names 20. Sections 14(2) and (3), 16(8), and 160 of the Companies Act, each read with the changes required by the context, apply to a corporation or with respect to a reserved name, or an application to reserve a name in terms of section 19(2), but a reference in any of those provisions to a company must be regarded as a reference to a corporation for the purposes of this Act.".
• (3) Section 22(2) and (4) of the Close Corporations Act, as amended by section 6 of Act 26 of 1997 is hereby repealed.
• (4) The Close Corporations Act is hereby amended by the substitution for section 23 of Act 69 of 1984, as amended by section 5 of Act 81 of 1992, section 8 of Act 26 of 1997 and section 9 of Act 22 of 2001, of the following section: "Use and publication of names 23. Section 32 of the Companies Act, read with the changes required by the context, applies to a corporation, but a reference in that section to a company must be regarded as a reference to a corporation for the purposes of this Act.".
• (5) Section 41 of the Close Corporations Act 69 of 1984 is hereby repealed.
• (5) Transparency and accountability of close corporations
• (1) Section 10 of the Close Corporations Act 69 of 1984, as amended by section 2 of Act 38 of 1986 and section 4 of Act 22 of 2001 and substituted by section 20 of Act 16 of 2003 is hereby amended by the insertion of the following subsection after subsection (2): "(3) Regulations made by the Minister in terms of section 29(4) and (5), and 30(7) of the Companies Act apply to a corporation as if those regulations had been made in terms of this Act, but any reference in those regulations to a company must be read as a reference to a corporation.".
• (2) Section 47 of the Close Corporations Act 69 of 1984, as amended by section 11 of Act 26 of 1997, section 13 of Act 22 of 2001 and substituted by section 36 of Act 12 of 2004 is amended by: (a) the repeal of subparagraphs (ii) and (iii) of paragraph (b) of subsection(1); (b) the substitution for paragraph (c) of subsection (1) the following paragraph: "(c) any person who is [subject to any order of a court under] disqualified from being a director of a company in terms of section 69(8) to (11) of the Companies Act, subject to subsection (1B) [disqualifying him or her from being a director of a company]."; and (c) the insertion of the following subsections after subsection (a): "(1A) A person who has been placed under probation by a court in terms of section 162 of the Companies Act or subsection (1C), must not participate in the management of the business of a corporation, except to the extent permitted in the order of probation. (1B) Despite being disqualified in terms of section 69(8)(b) of the Companies Act, read with subsection (1)(c), a person may participate in the management of a corporation if 100% of the members' interest in the corporation is held by— (a) that person; or (b) that person and other persons, all of whom are related to that disqualified person, and each such person has consented in writing to that disqualified person participating in the management of the corporation. (1C) Section 162 of the Companies Act, read with the changes required by the context, applies to a corporation, but a reference in that section to— (a) a company must be regarded as referring to a company or a corporation; or (b) a director, must be regarded as referring to a director of a company, or a member participating in the management of a corporation.".
• (3) Section 55 of the Close Corporations Act 69 of 1984 is hereby repealed.
• (4) Section 58 of the Close Corporations Act 69 of 1984, as substituted by section 12 of Act 38 of 1986 and amended by section 4 of Act 64 of 1988 is hereby amended by: (a) the substitution for subsection (1) of the following subsection: "(1) The members of a corporation shall within [nine] six months after the end of every financial year of the corporation cause annual financial statements in respect of that financial year to be made out in one of the official languages of the Republic. (b) the insertion, of the following subsection after subsection (2), "(2A) Section 30(2)(b), and (3) to (6) of the Companies Act, read with the changes required by the context, apply to a corporation that is required by the regulations made in terms of section 30(7) of the Companies Act, to have its annual financial statements audited.
• (5) Section 62 of the Close Corporations Act 69 of 1984, as amended by section 13 of Act 38 of 1986 and section 4 of Act 17 of 1990 is hereby amended by the insertion of the following section after section 62: "Application of accountability provisions of Companies Act 62A. (1) Section 34(2) of the Companies Act, read with the changes required by the context, apply to a corporation. (2) Chapter 3 of the Companies Act, read with the changes required by the context— (a) applies to a corporation that has voluntarily determined to take any action contemplated in section 34(2) of the Companies Act; and (b) prevails over any conflicting provision of this Act, with respect to a corporation contemplated in paragraph (a).".
• (6) Rescue of financially distressed close corporations
• (1) Section 66 of the Close Corporations Act 69 of 1984, as substituted by section 16 of Act 26 of 1997 is hereby amended by the insertion of the following subsection after subsection (1): "(1A) The provisions of Chapter 6 of the Companies Act, read with the changes required by the context, apply to a corporation, but any reference in that Chapter to— (a) a company must be regarded as a reference to a corporation; or (b) a shareholder of a company, or the holder of securities issued by a company, must be read as a reference to a member of a corporation.".
• (7) Dissolution of corporations
• (1) Section 66 of the Close Corporations Act 69 of 1984, as substituted by section 16 of Act 26 of 1997 is hereby amended by the substitution for subsection (1) of the following subsection: "(1) The [provisions] laws mentioned or contemplated in item 9 of Schedule 5 of the Companies Act, [which relate to the winding-up of a company, including the regulations made thereunder, (except sections 311, 312, 313, 337, 338, 344, 345, 346(2), 347(3), 349, 364, 365(2), 367 to 370, inclusive, 377, 387, 389, 390, 395 to 399, inclusive, 400(1)(b), 401, 402, 417, 418, 419(4), 421, 423 and 424),] read with the changes required by the context, [shall] apply [mutatis mutandis and in so far as they can be applied] to the liquidation of a corporation in respect of any matter not specifically provided for in this Part or in any other provision of this Act.".
• (2) Section 67 of the Close Corporations Act 69 of 1984 is hereby substituted for the following section: "Dissolution of corporations 67. (1) Part G of Chapter 2 of the Companies Act, read with the changes required by the context, applies to a solvent corporation. (2) This Part of this Act must be administered in accordance with the laws mentioned or contemplated in item 9 of Schedule 5 of the Companies Act.".
• (3) Section 68 of the Close Corporations Act 69 of 1984 is hereby repealed.
• (8) Deregistration of corporations
• (1) Section 26 of the Close Corporations Act 69 of 1984, as amended by section 6 of Act 38 of 1986, section 14 of Act of 22 of 2001, section 9 of Act 39 of 2002 and section 62 of Act 24 of 2001 is hereby, substituted for the following section: "Deregistration 26. Sections 81(1)(f), 81(3), 82(3) to (4), and 83 of the Companies Act, each read with the changes required by the context, apply with respect to the deregistration of a corporation, but a reference in any of those provisions to a company must be regarded as a reference to a corporation for the purposes of this Act.".
• (2) Section 3(1) of the Close Corporations Act 69 of 1984 is hereby repealed.
• (3) Section 4 of the Close Corporations Act 69 of 1984 is hereby amended by: (a) the substitution for subsection (1) of the following subsection: "(1) [The Minister shall, subject to the laws governing the public service, appoint a Registrar of Close Corporations, who shall] The Commission— (a) may exercise the powers and must perform the duties assigned to the Registrar by this Act; and (b) [subject to the directions of the Minister, be] is responsible for the administration of the Registration Office."; (b) the repeal of subsection (2); and (c) the substitution for subsection (3) of the following subsection: "(3) The [Registrar] Commission may delegate any of the powers and entrust any of the duties [assigned to him or her by this Act] of the Registrar to any officer or employee in the [public service] Commission.".
• (4) Sections 11 and 16(3) of the Close Corporations Act 69 of 1984 are hereby repealed.
• (5) Sections 47(2), 49(5) and 58(4) of the Close Corporations Act 69 of 1984 are hereby repealed.
• (6) Section 64 of the Close Corporations Act 69 of 1984 is hereby amended by the substitution for subsection (2) of the following subsection: "(2) [Without prejudice to any other criminal liability incurred where] If any business of a corporation is carried on in any manner contemplated in subsection (1), every person who is knowingly a party to the carrying on of the business in any such manner, shall be guilty of an offence.".
• (7) Section 82 of the Close Corporations Act 69 of 1984 is hereby substituted for the following section: "Application of Companies Act to enforcement of Act 82. Parts D, E, and F of Chapter 7, and Part A of Chapter 9 of the Companies Act, read with the changes required by the context, apply with respect to any alleged contravention of this Act or contravention of any provision of the Companies Act to the extent the provision applies to a corporation or its members.".

Related Sections

No related sections.

Related Regulations

No related regulations.

Related Notes

No related note.

Related Forms

No related forms.