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THE
COMPANIES ACT, 2008 (ACT 71 OF
2008)
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THE PRESENTATION WILL COVER
•COMPANY FORMATION
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Categories of Companies
The Act provides for 2 categories of companies:
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CATEGORIES OF COMPANIES
(Cont--)
Non-profit companies, which are the successor to the
current section 21 companies, and which are subject
to—
(i) a varied application of the Act, as set out in section
10; and
(ii) a special set of fundamental rules, set out in
Schedule 1, retaining the current principles concerning
the objects of such companies, and restricting the
distribution of any residual assets on dissolution, in
addition to other matters unique to non-profit
companies.
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CATEGORIES OF COMPANIES
(Cont--)
For profit companies, which are recognized as being one of the
following types:
(i) Private companies - which are comparable to companies of the
same status under the Companies Act, 1973;
(ii) Personal liability companies, which are comparable to
companies contemplated in section 53(b) of the Companies Act,
1973;
(iii) Public companies- which are comparable to companies of the
same status under the Companies Act, 1973; and
(iv) State-owned companies, which were often incorporated or
registered under the Companies Act, 1973, but were not recognized
in that Act as requiring separate legislative treatment in respect to
certain matters to avoid conflict or overlap with other legislation
specifically applicable to them, and not to companies in general.
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CATEGORIES OF COMPANIES
(Cont--)
Simplicity & Flexibility
In a further effort to create a flexible regime and to promote
simplicity, a number provisions of the Act make exceptions
for companies that operate under the exceptional
circumstances. These are where —
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CATEGORIES OF COMPANIES
(Cont--)
The transitional provisions set out in Schedule 5
provide for—
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CHARACTERISTICS OF THE DIFFERENT
COMPANIES
PUBLIC COMPANIES
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CHARACTERISTICS OF THE DIFFERENT
COMPANIES (Continued)
PRIVATE COMPANIES
Incorporators – 1 person
Name – (Proprietary) Limited or (Pty) Ltd
1 director (public or a non-profit company – 3 directors)
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CHARACTERISTICS OF THE DIFFERENT
COMPANIES (Continued)
NON-PROFIT COMPANIES
- Name: ―NPC‖
- Incorporators – 3 persons
- Apply all of its assets and income, to advance its stated objects, as set out
in its MOI
- 3 directors
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NON-PROFIT COMPANIES (Continued)
NPC are subject to all the provisions of the Act subject to the exclusions
mentioned in section 10 and the provisions of Schedule 1
This would exclude capitalisation through shares and all the provisions
relating to share capital and related provisions except where an NPC
has voting shares in which case the provisions on voting rights would
apply
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COMPANY FORMATION
Underlying principle
The Act gives effect to the essential core principle that formation
of a company is an action by persons in the exercise of their
constitutional right to freedom of association combined with
their common law right to freedom of contract.
That being the case, the Act reflects, in both its language and its
substance, the principle that incorporation of a company is a
right, rather than a privilege bestowed by the State.
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COMPANY FORMATION
(Continued)
For companies wishing to, the Act provides for the simplest
possible form of incorporation by use of a standard form of
Memorandum of Incorporation, which permit the incorporators to
accept all required provisions including the default provisions.
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COMPANY NAMES
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COMPANY NAMES
The Act restricts a company name only as far as necessary to-
• Protect the society as a whole from names that would fall within the
ambit of expression that does not enjoy constitutional protection
because of its hateful or other negative nature.
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WINDING UP AND DEREGISTRATION
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WINDING UP AND DEREGISTRATION
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