n Business Tax and Company Law Quarterly - Editorial

Volume 4, Issue 1
  • ISSN : 2219-1585


This quarter's issue of the journal addresses two interesting aspects of the new Companies Act, namely the provision of financial assistance by a company for the acquisition of its own shares (section 44) and financial assistance granted to related parties (section 45). As is so ably demonstrated in the article by Milton Seligson SC, the changes effected by the Companies Act to the provisions dealing with financial assistance granted by a company require specific consideration. The article points out that, though the new provisions are aimed at regulating different types of financial assistance, they may overlap one another in certain situations. The tricky issues of application and interpretation that arise in consequence of this overlap are illustrated by way of an example dealing with financial assistance granted by a South African holding company to its foreign subsidiary. Seligson concludes that, whereas section 44 is limited in its application to domestic South African companies, section 45 also applies to a foreign subsidiary, which, for the purposes of the Companies Act, does not qualify as a company, but does constitute a corporation.

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