The companies act 71 of 2008, as amended by act 3 of 2011, governs the formation of companies in south africa. Feb 19, 2019 the companies act, 71 of 2008 act gives shareholders certain substantive powers which include, among others, the power to amend the memorandum of incorporation of the company moi, the power to elect and remove directors, and the power to approve the disposal of all or the greater part of the companys assets. The regulations refers to the regulations to the companies act, no. Amended by skills development amendment act 37 of 2008 from 6 apr 2009. Feb 19, 2019 companies act, 71 of 2008 series part 1. Schedule 5 of the act sets out the transitional arrangements, which are summarised as follows.
With acts you are guaranteed the latest and most up to date resource for your legislative needs. It is administered by the companies and intellectual properties commission. This page is continuously updated to ensure that you can stay up date on the companies law of south africa. No new close corporations may be formed once that act comes into operation during 2010. Companies have considerable latitude to structure the merger trans action in a manner that best. The commission is responsible for registration of companies.
Effectively, therefore, one would say that control of the company vests in. Companies amendment act 3 of 2011 act to provide for the incorporation, registration, organisation and management of companies, the capitalisation of profit companies, and the registration of offices of. Currency and exchanges manual for authorised dealers. Companies for profit can further be subdivided into. The companies act or the act refers to the companies act, no. Act shall mean the companies act, 71 of 2008 and its regulations, as amended from time to time. The board of directors also has more power in terms of the new act. This act makes significant changes to south african law, including the capital rules. Preexisting companies on 1 may 2011 every preexisting company. For guidance, the developers looked to south african company law for the 21st. The pfma refers to public finance management act, no. This moi was adopted by special resolution passed on 30 november 2012 in substitution for the existing. Promote the development of the south african economy by.
The companies act 2008 at a glance overview you have decided to start a business and you want to incorporate a company. One of the effects of the new companies act of 2008 is the phasing out of close corporations. It considers the effects of the companies act in respect of the realisation of human rights responsibilities by companies that operate within south africa. Corporate law reform on corporate governance in south africa with. Amended by skills development amendment act 26 of 2011 from 11 may 2015. Understanding the new companies act pwc south africa. Amended by skills development levies act 9 of 1999 from 14 nov 2003. Although much of the old law was retained, many significant new concepts and changes were introduced. Act to amend the companies act, 2008, so as to effect certain legaltechnical and. Business rescue proceedings a litigation feast business rescue is a novel concept under south african law. Other companies may be either audited voluntarily or require an.
The basis of the common law tarquand rule simply put, the common law tarquand rule means that an outsider contracting with a company in good faith is entitled to assume that the internal requirements and procedures have. List of alterable provisions in the companies act, 2008 1. With over 58 million people, it is the worlds 24thmost populous nation and covers an area of 1,221,037 kilometres 758,717 mi. Whether you are seeking a business visa, or an endorsement to a visa you will have to select the right business structure. The commission as per section 186 and 187 of the act have various functions to accomplish, and further help foster a business environment that is competent and efficient and also to provide access to services to all. I have not come across a more appropriate legal firm for startups in south africa and they have really built up a broad range of knowledge in the startup space over the past few years. How to set up a company in south africa business entities and registration procedures the most common business entities in south africa are. The minister of trade and industry has, in terms of section 223 and. It is ordered in terms of s 1632fi of the companies act 71 of 2008.
The companies act of 2008 relays the appropriate types of business structures in south africa pertaining to companies. Companies ct 2008 act o 71 of 2008 2 companies act, 2008 act no. When the new companies act, no 71 of 2008 came into force on 1 may 2011, it marked the beginning of a significant era for corporate law in south africa. The companies act 2008 has introduced various changes in respect of the corporate governance structures of companies. Exemption from unalterable provisions an underutilised. The act was signed by the president on the 9th april 2009 and gazetted in gazette no. The companies act, 2008 the 2008 act provides that a companys memorandum of incorporation moi is subject to the 2008 act and must be consistent with its provisions. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. In principle, every company is required to comply with all of the unalterable provisions of the companies act 71 of 2008 the act, except to the extent that its memorandum of incorporation moi imposes on the company a higher standard, greater restriction, longer period of time or any similarly more onerous requirement, than otherwise. Setting up your company if you are considering setting up a company, the two options that are available to you are to either incorporate a new company which is registered with the correct details from inception, or you can acquire a shelf company, transfer the shares held by the incorporator to the new. Amendment of the companies act regulation, 2011 560kb pdf 20 august 20. Recently, south africa has undergone a major process of law reform, culminating in the companies act no. For companies wishing to, the act provides for the simplest possible form of incorporation by use of a standard form of moi which permits the incorporators to accept the required provisions, as well as the default provisions with or without alteration. The article focuses on companies and the companies act.
Sections 1 and 116 of the companies act 2008 the south african experience or. To the extent that a provision of the moi contravenes or is inconsistent with the 2008 act, it is void section 151. South africas new companies act, 71 of 2008, which is expected to come into operation on 1 july 2010, brings changes which will affect every existing company, its directors, 1 that is until the new act, act 71 of 2008, is incorporated 2 for example, the. Acts online provides legislation, including amendments and regulations, in an intuitive, online format. It is meant to provide a temporary measure to rehabilitate financially distressed. Reference to the act shall, if the act is replaced by any other statute, be construed as a reference to the statute or statutes from time to time in force relating to companies.
Preexisting companies on 1 may 2011 every preexisting company, that was formed in terms of the previous. Brand south africa south africa has a welldeveloped and formally regulated company law regime. Companies without names it will become possible to form a company that is known only by its registration number. Promote compliance with the bill of rights as provided for in the constitution in the application of company law. Amended by higher education laws amendment act 26 of 2010 from 7 dec 2010.
South africa, officially the republic of south africa rsa, is the southernmost country in africa. Effect of conversion on legal status schedule 3 amendment of laws a. The provisions of the act set the bar for competent directors at much higher levels than we have seen in the past. All south african businesses are governed by the companies act no 71 of 2008. Guidelines for corporate law reform may 2004, a policy document developed by. Companies act no 71 of 2008 western cape government. The companies act, no 71 of 2008 companies act came into force on 1 may 2011 and regulates companies. Although scheme of arrangements, which can be used to achieve a takeover of a company, are a common occurrence, the act provides no definition of such schemes. How does the new companies act impact small and medium.
Companies act 71 of 2008 english text signed by the president assented to. In other words, a company cannot fundamentally contract out of the companies act, 2008. The companies act 61 of 1973 the previous act was repealed on 1 may 2011. How to set up a company in south africa business entities. Introduction during consultation with directors of companies that have a single shareholder or a dominant majority shareholder, one often finds that the effective control of the company mostly vests in the shareholder of the company and that the directors are mainly appointed to act out the wishes of the shareholder. The new companies act 71 of 2008 the new act makes no distinction between directors, and in the new act, the concept has been broadened extensively to include executive and nonexecutive directors, prescribed officers and directors ex officio. This booklet provides insight into how creditors may. Effectively, therefore, one would say that control of. The companies act 71 of 2008 new companies act will commence on 1 may 2011. The cipc released the following additional information to assist in the application and implementation of the companies act. Republic of south africa companies act, 2008 memorandum of.
Amendment of the companies act regulation, 2011 102kb pdf 5 february 2014. It was brought into our statute books by the companies act, no. The new companies act of 2008 what about close corporations. The act was signed by the president on 8 april 2009, but implementation was deferred to accommodate necessary amendments. Apr 29, 2016 the companies act 2008 has introduced various changes in respect of the corporate governance structures of companies. A scheme of arrangement involving a regulated company and its shareholders is defined as an affected transaction in the companies act 71 of 2008. Companies act, 71 of 2008 series dommisse attorneys inc. The most basic categorization is the division between companies for profit and nonprofit companies. Board shall mean the board of directors for the time being of the company elected in terms of articles 19 and 21. Dec 18, 2014 the companies act 71 of 2008, as amended by act 3 of 2011, governs the formation of companies in south africa.
The annual financial statements of public companies will continue to require an audit. The government made the right choice when they decided to change the companies act. The companies act 71 of 2008 the act was signed into law on 8 april 2011 and its commencement date was 1 may 2011. For guidance, the developers looked to south african company law for the 21st century. Guidelines for corporate law reform may 2004, a policy document developed by the department of. This article looks at the south african companies act 71 of 2008 hereafter the companies act. South africa shares borders with namibia, botswana. The new companies act master builders kwazulunatal. Limitation of period to incorporate close corporations or convert companies 3.
South africa companies act 2008 south africa company law. The cipc can issue guidance to the public by issuing explanatory notices outlining its procedures or publishing nonbinding opinions on the interpretation of any provisions of the act in terms of section 1882b of the companies act, 2008. Types of companies you can register in south africa. To the extent that a provision of the moi contravenes or is inconsistent with the 2008 act, it is void section. From 1 may 2011 company law in south africa was dramatically altered. Guidelines for corporate law reform may 2004, a policy document. Publicinvestmentcorporationintegratedannualreport2018.
Despite of all the formalities and changes, the new act offers south african companies so much more than the previous companies act of 1973. S311 of 1973 companies act s 114 arrangements and 155. South africa company law is a set of rules and regulation formed under the south africa companies act 2008. Some comments on the scheme of arrangement as an affected. Recently many changes in the laws for south african companies have occurred.