n South African Law Journal - Must a section 21 non-profit company be concerned only with charitable, benevolent or philanthropic activities? A closer look at the SCA judgment in Cuninghame v First Ready Development 249 : notes
|Article Title||Must a section 21 non-profit company be concerned only with charitable, benevolent or philanthropic activities? A closer look at the SCA judgment in Cuninghame v First Ready Development 249 : notes|
|© Publisher:||Juta Law Publishing|
|Journal||South African Law Journal|
|Author||Tshepo H. Mongalo|
|Publication Date||Jan 2010|
|Pages||195 - 207|
|Keyword(s)||University of Cape Town|
On 28 September 2009, the Supreme Court of Appeal in South Africa ('the SCA') delivered a judgment in Cuninghame v First Ready Development 249  1 All SA 473 (SCA) regarding a section 21 company, the principal business of which was the management of a commercial hotel. The judgment, it is submitted, will have far reaching practical consequences for a substantial number of registered section 21 companies which undertake commercial objects for 'group or communal interests' as provided for under s 21(1)(b) of the Companies Act 61 of 1973 ('the 1973 Companies Act').
The purpose of this case note is to analyse the judgment critically, with particular reference to whether a non-profit company, in the form of a section 21 company, can lawfully undertake a business with a view to advance a 'group or communal interest' unrelated to the promotion of religion, arts, sciences, education, charity, recreation or any other cultural or social interests (ie 'public benefit / charitable purposes').
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