n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - A critical analysis of the regulation of distributions by a company's board
|Article Title||A critical analysis of the regulation of distributions by a company's board|
|© Publisher:||Juta Law Publishing|
|Journal||SA Mercantile Law Journal = SA Tydskrif vir Handelsreg|
|Affiliations||1 University of the Witwatersrand|
|Publication Date||Jan 2012|
|Pages||371 - 384|
Lord Halsbury LC, in The Ooregum Gold Mining Company of India Ltd v Roper, declared that '[a company's] capital is fixed and certain, and every creditor of the company is entitled to look to that capital as his security'. Although no longer premised on capital maintenance, it is this level of creditor and shareholder protection that the Companies Act 71 of 2008 (the Act) seeks to achieve in regulating the distributions made by companies. Such regulation is, as it rightly should be, highly regarded in the protection of company creditors as well as minority shareholders from the exploitation they may suffer as a result of mala fide distributions made by a company.
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