Added Legal Value Newsletter Volume 2 Number 2

August 2009

Don't fear the new companies' act

Your company registered in terms of the Companies Act 61, 1973 may continue to operate in terms of the Companies Act, 2008.  ‹This act was signed into law on 9 April 2009 and will come into operation on a date to be determined after 9 April 2010.› 

The new act allows old companies to continue under it.  The old act referred to the founding documents as the Memorandum and Articles of Association. In the new act, these have been replaced by the Memorandum of Incorporation ‹MOI›.  An existing company may file an MOI to bring it in line with the new act.  This may be done free of charge if done within 2 years of the effective date of the new act.

A Section 21 company ‹eg. a charity company› under the old act is deemed to have amended its founding documents to expressly state that it is a company “not for profit”. ‹Its name is also deemed to have been changed to comply with the new act›.

Mortgage is not a disposal according to Cape high court

This question has for many years been the subject of a debate.  This matter was extensively argued by Ettienne Barnard in the matter of

The court held that passing a mortgage loan bond in favour of a credit provider ‹bank› is not a disposal which requires a shareholders resolution in terms of section 228 of the Companies Act 61,1973.  As the new Companies Act contains similar provisions, this matter will serve as a useful precedent under the new act as well.  For more details or a copy of the judgment, you are welcome to contact us at eb@tiscali.co.za.

Tax information

While it is extremely important that one obtains professional tax advice from a registered tax provider, much tax information is available from http://www.sars.gov.za/. There is a useful pocket guide containing tax directives at http://www.sars.gov.za/home.asp?pid=4 . One can also follow the links there to important tax judgments in the Constitutional Court, Supreme Court of Appeal, the High Courts and ‹Special› Tax Court.

South-Africa, a consumer protection society

The Consumer Protection Act will drastically change the face of many contracts in South Africa.  Make sure you review your old precedents before concluding agreements in future.  More on this in later issues and web pages. 

This act indicates the Department of Trade and Industry resolve to protect consumers and follows a long line of consumer legislation passed over many years.  Other consumer legislation includes

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