Company or Close Corporation With the advent of the new Company Law no new Close Corporations can be formed and registered from 1 May 2011. However a Close Corporation that existed at 30 April 2011 has two options: convert to a Company in terms of Schedule of 2 of the new Companies Act with an [...]
New Association Agreement for Close Corporations
Protect the Close Corporation, its Members, and the Accounting Officer by using our NEW Association Agreement In terms of the new Companies Act, 2008 no new Close Corporations may be registered, and existing Close Corporations may convert to a Company at no conversion fee up to 30 April 2014. There is no legal obligation to [...]
Public Benefit Organisations and the Requirements of the Income Tax Act
Would your Non-Profit Company's Memorandum of Incorporation meet the Requirements of Section 30(3) of the Income Tax Act Should the Company Register as a Public Benefit Organisation? All non-profit organisations in South Africa are governed by the Non-Profit Organisations Act, No 71 of 1997 (the Act), which came into effect on 1 September 1998. In [...]
Share Block Companies: A Viable Option
A Private Company is now a Viable Option for Share Block Companies A Share Block is a form of property ownership and is applied in cases where the land is leasehold and not freehold property since the property is either registered in the name of, or leased by a Share Block Company. The Share Block [...]
Why Convert Your Close Corporation to a Private Company
Close Corporations can no longer be registered With the advent of the new Companies Act, 2008 from 1 May 2011, it brought to an end the right to register new Close Corporations. Concomitantly, the opportunity to convert existing Close Corporations to private companies has been granted by the new Act. In terms of Schedule 3 [...]
The Future of Close Corporations
New concepts in Company Law Company Law has a significant impact on commercial activity. With the implementation of the Companies Act, 2008 (Act No 71 of 2008), new corporate law concepts have been introduced, such as solvency and liquidity, new standards of accountability, disclosure and transparency, shareholder appraisal rights and corporate rescue. However, the Close [...]
Lodgement Fees for Memorandums of Incorporation
What are the new CIPC lodgement fees for Memorandums of Incorporation now that the transitional period for companies is over? The rumour mill has been hard at work. Now that the CIPC transitional period for companies (Schedule 5) has ended there is talk of penalties being imposed on those companies lodging their Memorandums of Incorporation [...]
Shareholders’ Agreement Launched
Shareholders' Agreement to be consistent with the Companies Act and a company's Memorandum of Incorporation A Shareholders' Agreement is a private document that deals with all the issues relating to the shareholders of a company. Section 15(7) of the Companies Act, Act 71 of 2008, as amended, states that: Shareholders may enter into any matter [...]
How Transferable are Private Company Shares?
Transferability of shares, pre-emptive rights and s39 The general rule is that shareholders have the right to deal freely with their shares. In terms of section 8(2)(b), a private company's MOI must prohibit the company from offering any of its securities to the public and restricts the transferability of its securities. In other words, in [...]
Recent Articles
- Why your Company needs a new customised Shareholders’ Agreement to protect the Company and its Shareholders
- The Future of Close Corporations : Update
- New Association Agreement for Close Corporations
- Public Benefit Organisations and the Requirements of the Income Tax Act
- Share Block Companies: A Viable Option
Why your Company needs a new customised Shareholders’ Agreement to protect the Company and its Shareholders
A Company's Shareholders' Agreement that is not drafted in line with its own Memorandum of Incorporation and the Companies Act, No 71 of 2008 is void to the extent of the inconsistency. Such a Shareholders' Agreement is unenforceable between the Company and the Shareholders, and between the Shareholders themselves. Section 15(7) of the Companies Act, [...]