n Acta Juridica - Financial assistance to directors - the Companies Act 71 of 2008 : corporate formation and corporate finance : part I

Volume 2010, Issue 1
  • ISSN : 0065-1346
  • E-ISSN: 1996-2088



Transactions between a company and its directors, which benefit the company at the company's actual or potential expense, are to an extent regulated by ss 37, 226 and 297 of the current Companies Act 61 of 1973. These provisions are flawed and this article examines the corresponding (but by no means equivalent) provisions of the new Companies Act 71 of 2008, which is expected to be brought into force in 2010. The article seeks to show that the new provisions are also unsatisfactory. It reveals that the provisions are in certain respects too far-ranging and that, in others, treat directors too leniently. The article also exposes problems of interpretation which impact significantly on the effectiveness of the new provisions. The article demonstrates that the provisions need legislative attention.

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