Chapter 1: Interpretation, Purpose and Application
Part B: Purpose and application

s7: Purpose of the Act

  • (1) The purposes of this Act are to:
    • (a) promote compliance with the Bill of Rights as provided for in the Constitution, in the application of company law;
      • (b) promote the development of the South African economy by;
        • (i) encouraging entrepreneurship and enterprise efficiency;
          • (ii) creating flexibility and simplicity in the formation and maintenance of companies; and
            • (iii) encouraging transparency and high standards of corporate governance as appropriate, given the significant role of enterprises within the social and economic life of the nation;
            • (c) promote innovation and investment in the South African markets;
              • (d) reaffirm the concept of the company as a means of achieving economic and social benefits;
                • (e) continue to provide for the creation and use of companies, in a manner that enhances the economic welfare of South Africa as a partner within the global economy;
                  • (f) promote the development of companies within all sectors of the economy, and encourage active participation in economic organisation, management and productivity;
                    • (g) create optimum conditions for the aggregation of capital for productive purposes, and for the investment of that capital in enterprises and the spreading of economic risk;
                      • (h) provide for the formation, operation and accountability of non-profit companies in a manner designed to promote, support and enhance the capacity of such companies to perform their functions;
                        • (i) balance the rights and obligations of shareholders and directors within companies;
                          • (j) encourage the efficient and responsible management of companies;
                            • (k) provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders; and
                              • (l) provide a predictable and effective environment for the efficient regulation of companies.

                              Related Sections

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                              Related Regulations

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                              Related Notes

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