n Stellenbosch Law Review = Stellenbosch Regstydskrif - The state of company law in South Africa
[Review of by Tshepo Mongalo (ed). Juta & Co Cape Town 2010. xxv and 479 pp. ISBN 9780702184635. Price R525 (soft cover)]




The new Companies Act 71 of 2008 (the "Companies Act", the "Act", the "2008 Act" or the "new Act") is upon us. It came into force on 1 May 2011. In several areas of South African company law this signals major advances. First, the Act has been brought into line with the Bill of Rights. One of its stated purposes is to promote compliance with the Bill of Rights (s 7(a) of the Companies Act). Every person will now be regarded as having a right to associate by incorporating a company; the incorporation of a company is no longer a privilege that must be earned (s 13 of the Companies Act). The procedures for incorporation have therefore been simplified (ss 13-14 of the Companies Act). Freedom of expression is respected by the wide choice that it gives companies when it comes to choosing a name. Secondly, outdated and obsolete phenomena such as par value, capital maintenance and the doctrine of constructive knowledge are being rooted out, for the most part (ss 35, 19(4), Ch 2 Part D, and s 4 of the Companies Act). Thirdly, the Act is shorn of much of the unnecessary formalism that characterised the previous Companies Act, for example: it will be easier to make changes to authorised share capital and to issue shares (ss 36-41 of the Companies Act), all companies will not have to be audited (s 30 of the Companies Act), many special resolutions will no longer have to be registered (s 65 of the Companies Act), meetings of shareholders and directors may be informally held (ss 60, 74 of the Companies Act) and companies often will be allowed to do take-overs without court intervention (ss 113-116 of the Companies Act). Fourthly, stricter standards for the corporate governance of public and state-owned companies have been introduced and an attempt has been made to give statutory content to the duties of directors (Ch 2 Part F of the Companies Act). Fifthly, innovative concepts such as true amalgamations and mergers (ss 114-116 of the Companies Act), appraisal rights (s 164 of the Companies Act), and business rescue (Ch 6 of the Companies Act) have been borrowed from the United States and adapted for local circumstances.


Article metrics loading...

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error