n Without Prejudice - Could negative control trigger financial assistance? : company law
|Article Title||Could negative control trigger financial assistance? : company law|
|© Publisher:||JetBlue Publishers (Pty) Ltd|
|Author||Thokozile Zambane and Katrijn Thys|
|Publication Date||May 2015|
|Pages||14 - 15|
Sections 44 and 45 of the Companies Act, 2008 provide that a company may not give any financial assistance (which includes lending money, providing guarantees or securing any debt or obligation) to a "related or inter-related" company. The exception is if it is pursuant to an employee share scheme or approved by a special resolution adopted by the shareholders of the company within the previous two years. This article focuses on the requisite shareholder approval and what types of inter-company relationships (related or inter-related) and shareholding would trigger s44 and s45.
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