n Tydskrif vir die Suid-Afrikaanse Reg - The solvency and liquidity approach in the Companies Act 2008
|Article Title||The solvency and liquidity approach in the Companies Act 2008|
|© Publisher:||Juta Law Publishing|
|Journal||Tydskrif vir die Suid-Afrikaanse Reg|
|Author||Kathleen Van der Linde|
|Publication Date||Jan 2009|
|Pages||224 - 240|
ISI Social Science
One of the objectives of the company law reform in South Africa was the replacement of par value shares and nominal capital with a "capital maintenance regime based on solvency and liquidity". This formulation is somewhat inaccurate if the "capital" in capital maintenance is understood in its traditional sense of nominal share capital. The new solvency and liquidity regime will not qualify as a capital maintenance regime in this sense but as a completely alternative system of regulating distributions by a company to its shareholders. However, if "capital" bears its economic meaning of total invested funds or equity, the description in the explanatory memorandum cannot be faulted.
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