1887

n Business Tax and Company Law Quarterly - Company law in transition : from the familiar to the unknown

Volume 1, Issue 2
  • ISSN : 2219-1585

Abstract

The new Companies Act 71 of 2008, which extensively reforms and overhauls our company law, is not yet in force, but is expected to come into operation in the near future. When it does so, it will repeal the existing Companies Act61 of 1973. Section 224(1) of the new Act, however, provides that the repeal of the 1973 Act does not affect the transitional arrangements set out in Schedule 5 to the new Act. This article is intended to provide a guide to the transitional provisions in Schedule 5. It discusses their scope and effect and assesses their impact on pre-existing companies incorporated or recognized under the 1973 Act.The transitional provisions dealt with include the following subjects : () the continuation of pre-existing companies under the new Act; () provisions relating to the Memorandum of Incorporation and the rules which respectively replace the traditional Memorandum and Articles of Association of the 1973 Act; () the retention for a 2-year period of a pre-existing company's Memorandum and Articles (under their new names, during which their provisions prevail in the event of a conflict with the Act); () the continuation of par-value shares issued by a pre-existing company until such time as the Minister makes regulations providing for their conversion, subject to the rights of shareholders; () the proposed draft regulations published for comment pertaining to the conversion of par-value shares; () continuity of the board of directors and financing of pre-existing companies; () the application to pre-existing companies of the stricter standards of directors' conduct and duties and the takeover provisions in the new Act; () the continued application of the winding-up and liquidation provisions of the 1973 Act until a date determined by the Minister; () the preservation of rights, duties and notices under a provision of the 1973 Act, where there is a corresponding provision under the new Act; () the transition of regulatory agencies and their officers and staff from Companies and Intellectual Property Registration Office (CIPRO) to the newly established Companies and Intellectual Property Commission and from the SRP to the new Takeover Regulation Panel.

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/content/btclq/1/2/EJC174678
2010-06-01
2019-12-09

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