Companies Act, 1973

Act 61 of 1973

Repealed

This Act was repealed on 2011-05-01 by Companies Act, 2008.

Companies Act, 1973

This is the version of this Act as it was when it was repealed.

Citation

Act 61 of 1973

Date

Language

English

Publication

Download PDF (114.8 MB)

Collections

Legislation subject areas
- Business, Trade and Industry
- Finance and Money

Ask AI

Ask questions and understand this document faster using AI.

Skip to document content

South Africa

Companies Act, 1973

Act 61 of 1973

Published in Government Gazette 3972 on 13 July 1973
Assented to on 19 June 1973
Commenced on 1 January 1974
Note: date of commencement of sections 337-426 (Chapter XIV)
[This is the version of this document as it was from 25 June 1980 to 31 August 1980.]

[Amended by Companies Amendment Act, 1976 (Act 111 of 1976) on 1 January 1974]
[Amended by Companies Amendment Act, 1977 (Act 64 of 1977) on 1 January 1974]
[Amended by Companies Amendment Act, 1980 (Act 84 of 1980) on 1 January 1974]
[Amended by Companies Amendment Act, 1984 (Act 70 of 1984) on 1 January 1974]
[Amended by Companies Amendment Act, 1976 (Act 111 of 1976) on 1 July 1975]
[Amended by Companies Amendment Act, 1977 (Act 64 of 1977) on 1 March 1976]
[Amended by Companies Amendment Act, 1976 (Act 111 of 1976) on 23 July 1976]
[Amended by Companies Amendment Act, 1977 (Act 64 of 1977) on 23 July 1976]
[Amended by Companies Amendment Act, 1976 (Act 111 of 1976) on 6 May 1977]
[Amended by Companies Amendment Act, 1977 (Act 64 of 1977) on 26 May 1977]
[Amended by Companies Amendment Act, 1978 (Act 59 of 1978) on 7 October 1977]
[Amended by Companies Amendment Act, 1978 (Act 59 of 1978) on 17 May 1978]
[Amended by Companies Amendment Act, 1980 (Act 84 of 1980) on 25 June 1980]
[Repealed on 1 May 2011 by Companies Act, 2008 (Act 71 of 2008)]

To consolidate and amend the law relating to companies, and to provide for matters incidental thereto

BE IT ENACTED by the State President, the Senate and the House of Assembly of the Republic of South Africa, as follows —

1. Definitions

(1)In this Act, unless the context otherwise indicates—"accounting records", in relation to a company, includes accounts, deeds, writings and other documents;"articles", in relation to a company, means the articles of association of that company for the time being in force, and includes any provision, in so far as it applies in respect of that company, set out in Table A or Table B in Schedule 1;"books or papers" and "books and papers" include accounts, deeds, writings and other documents;"certified" means certified in the manner prescribed by the Minister to be a true copy or a correct translation;"company" means a company incorporated under Chapter IV of this Act and includes any body winch immediately prior to the commencement of this Act was a company in terms of any law repealed by this Act;"controlled company" means a company in respect of which another company directly or indirectly has power to exercise control in the manner contemplated in the definition of "controlling company";"controlling company" means a company which directly or indirectly has power enabling it to control another company, in particular and without prejudice to the generality of the term "controlling company" a company shall be deemed to be a controlling company—(a)if it holds more than fifty per cent of the issued equity shares of that other company, or(b)if it is entitled to exercise more than half of the voting rights in respect of the issued shares of that other company, or(c)if it is entitled or has the power to determine the composition of the majority of the board of directors of that other company, including—(i)the power, without the consent or concurrence of any other person, to appoint or remove all or the majority of such directors,(ii)the power to prevent any person from being appointed a director unless with its consent, and if a person’s appointment as director follows necessarily from his appointment as director of the first-mentioned company, it shall be deemed to be a power of the first-mentioned company for the purposes of this provision."Court", in relation to any company or other body corporate, means the Court which has jurisdiction under this Act in respect of that company or other body corporate, and, in relation to any offence under this Act, includes a magistrate’s court having jurisdiction in respect of that offence;"debenture" includes debenture stock, debenture bonds and any other securities of a company, whether constituting a charge on the assets of the company or not;"deregistration", in relation to a company, means the cancellation by the Registrar of the registration of the memorandum and articles of the company and, in relation to an external company, the cancellation by the Registrar of the registration of the memorandum of the external company, and "deregister" has a corresponding meaning;"director" includes any person occupying the position of director or alternate director of a company by whatever name he may be designated;"equity share capital" and "equity shares", in relation to a company, mean its issued share capital and shares, excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;"existing company" means any body which immediately poor to the commencement of this Act was a company in terms of any law repealed by this Act;"external company" means a company or other association of persons, incorporated outside the Republic, the memorandum of which was lodged with the Registrar under the repealed Act, or which, since the commencement of this Act, has established a place of business in the Republic;"foreign country" means any state, country, colony or territory other than the Republic or the territory of South West Africa;"holding company" means a company which holds in its own name, together with those held in the name of a nominee and a controlled company or its nominee, if any, not less than thirty per cent of the issued shares of another company, and in determining the shares so held, the following shall be disregarded(a)Any shares held in a fiduciary capacity,(b)any shares held by virtue of the provisions of any debentures or trust deed in respect of debentures of such other company for securing the issue of such debentures,(c)any shares held as security only for the purposes of a transaction entered into in the ordinary course of business where the business of the company includes the lending of money,"judicial manager" means the final judicial manager referred to in section 432;"liquidator", in relation to a company, means the person appointed under Chapter XIV as liquidator of such company, and includes any co-liquidator and any provisional liquidator so appointed;"manager", in relation to a company, means any person who is a principal executive officer of the company for the tune being, by whatever name he may be designated and whether or not he is a director;"Master" means the Master of the Supreme Court, and in relation to—(a)a company in respect of which application is made to a Court for a winding-up or judicial management order, the Master having jurisdiction in the area of jurisdiction of the Court where application is made;(b)a company being wound up by the Court or under judicial management, the Master having jurisdiction in the area of jurisdiction of the Court which issued the winding-up or judicial management order;(c)a company other than a company referred to in paragraph (a) or (b), the Master having jurisdiction in the area in which the registered office of that company is situated;(d)any other body corporate, the Master having jurisdiction in the area where the main place of business of that body corporate is situated;[definition of "master" substituted by section 1 of Act 84 of 1980]"memorandum", in relation to a company, means the memorandum of association of that company for the time being in force, and in relation to an external company, means the charter, statutes, memorandum of association and articles, or other instrument constituting or defining the constitution of the company;"Minister", in relation to any matter to be dealt with in the office of a Master in connection with the winding-up or judicial management of companies, means the Minister of Justice and, in relation to any other matter, means the Minister of Economic Affairs;"officer", in relation to a company, includes any managing director, manager or secretary thereof but excludes a secretary which is a body corporate;"place of business" means any place where the company transacts or holds itself out as transacting business and includes a share transfer or share registration office;"prescribed" means prescribed by or under this Act;"prospectus" means any prospectus, notice, circular, advertisement or other invitation offering any shares of a company to the public;"provisional judicial manager" means a provisional judicial manager appointed by the Master under section 429;"Registrar" means the Registrar of Companies appointed under section 7;"regulations" means the regulations made or in force under this Act;"Republic" includes the territory;"secretary" includes any official of a company by whatever name he may be designated, including a body corporate, who or which is performing the duties normally performed by a secretary of a company;"share", in relation to a company, means a share in the share capital of that company and includes stock; and in relation to an offer of shares for subscription or sale, includes a share and a debenture of a company, whether a company within the meaning of this Act or not, and any rights or interests (by whatever name called) in a company or in or to any such share or debenture;[definition of "share" substituted by section 1 of Act 64 of 1977]"special resolution", in relation to a company, means a resolution passed at a general meeting of that company in the manner provided for by section 199;"subsidiary company" means a company of which at least thirty per cent of its issued shares is held directly or indirectly by a holding company;"territory" means the territory of South West Africa;"the repealed Act" means the Companies Act, 1926 (Act No 46 of 1926);"this Act" includes the regulations;"wholly owned subsidiary" means a company all the issued shares of which are held by another company or by another company and its nominee;"winding-up order" means any order of court whereby a company is wound up and includes any order of court whereby a company is placed under provisional winding-up for so long as such order is in force;

(2)A person shall not be deemed to be, within the meaning of any provision of this Act, a person in accordance with whose directions or instructions the directors of a company are accustomed to act by reason only that the directors of the company act on advice given by him in a professional capacity

Chapter I
Application of Act

2. General application of Act and preservation of rights of existing companies

(1)This Act shall apply also in the territory, including the Eastern Caprivi Zipfel.

(2)This Act shall apply to every company incorporated under this Act, every external company and, save as is otherwise provided herein, to every existing company.

(3)Any reference in this Act, express or implied, to the date of incorporation of an existing company, shall be construed as a reference to the date on which such company was originally incorporated.

(4)Nothing in this Act contained shall affect any right or privilege acquired or liability incurred by any existing company or external company, whether by agreement or otherwise, before the commencement of this Act, or affect the validity of the memorandum and articles of any such existing company or the memorandum of an external company in force, or deemed to be in force, at such commencement and not in conflict with the provisions of this Act.

(5)Those provisions of the articles of any existing company which should have been contained in a memorandum of association if the company had been formed under this Act, shall, for the purposes of this Act, be deemed to be or to be included in the memorandum of the company, and shall be subject in all respects to the provisions of this Act relating to a memorandum of association.

3. Restricted application of Act in case of banking and insurance companies and certain other associations

(1)The provisions of this Act shall not apply—

(a)with reference to any company the formation, registration and management whereof are governed by the provisions of any law relating to building societies, friendly societies, including pension funds within the meaning of the Pension Funds Act, 1956 (Act No 24 of 1956), trade unions and employers’ organizations, or co-operative societies or companies, save in so far as may be otherwise provided in any such law, or

(b)with reference to any company or external company or society which is subject to the provisions of any law relating to banks or insurance companies or societies in so far as those provisions are inconsistent with the provisions of this Act, or

(c)except in so far as section 21 is concerned, with reference to any association or society registered under the Societies and Associations Incorporation Ordinance, 1903 (Ordinance No 56 of 1903), of the Transvaal.

(2)Notwithstanding the repeal by the Companies Act, 1909 (Act No 31 of 1909), of the Transvaal, of the said Societies and Associations Incorporations Ordinance, 1903, the provisions of that Ordinance shall, subject to the provisions of subsection (1) (c) of this section, continue to apply with reference to any association or society registered under the said Ordinance.

4. Transitional provisions as to unlimited companies and partly paid-up shares

(1)Any existing company which is an unlimited company with the meaning of the repealed Act and which is not converted into a type of company under this Act, shall remain on the register of companies as an unlimited company and the provisions of the repealed Act shall, save as is otherwise provided in this Act, continue to apply to such company as if that Act had not been repealed.

(2)Any existing company which has issued any shares which are at the commencement of this Act not fully paid-up, shall remain subject to the provisions of the repealed Act in respect of such shares only as if this Act had not been passed.

Chapter II
Administration of Act

Office for registration of companies and Registrar

5. Companies Registration Office and register

(1)The Companies Registration Office established in Pretoria under section 3 of the repealed Act shall, notwithstanding its repeal, continue to exist and shall be the Companies Registration Office for the purposes of this Act

(2)The register of companies kept by the Registrar under the repealed Act shall be deemed to be and to form part of the register of companies to be kept in the Companies Registration Office.

6. Seal of the Companies Registration Office

There shall be a seal of the Companies Registration Office, and the impression of such seal shall be judicially noticed in evidence.

7. The Registrar of companies, his appointment and delegation of power

(1)The Minister shall, subject to the laws governing the public service, appoint a Registrar of Companies, who shall exercise the powers and perform the duties assigned to the Registrar by this Act, and shall, under the directions of the Minister, be responsible for the administration of the Companies Registration Office.

(1A)The Minister may likewise appoint an acting Registrar when the office of Registrar is vacant or the Registrar is absent or unable to perform his functions.[subsection (1A) inserted by section 2(1) of Act 64 of 1977]

(2)The person holding office as Registrar of Companies under the repealed Act at the commencement of this Act, shall be deemed to have been appointed as the Registrar of Companies under this Act.

(3)The Registrar may delegate in writing any of the powers and entrust any of the duties assigned to him by this Act, to any officer or employee in the public service.[subsection (3) substituted by section 1(1)(b) of Act 70 of 1984]

8. Exemptions from liability

(1)No act or omission whatever by the Registrar or any officer or other person in the employment of the State, having duties to perform under this Act, shall subject the State, or the Registrar, or any such officer or person to any liability for any loss or damage sustained by any person in consequence of any such act or omission unless such act or omission was mala fide or was due to want of reasonable care or diligence.

(2)No action shall be instituted against auditor, liquidator, judicial manager or provisional judicial manager in respect of any opinion expressed or certificate given or report or statement made or statement, account or document certified by him in good faith in the ordinary course of his duties under this Act, unless it is proved that such opinion was expressed or such certificate was given or such report or statement was made or such statement, account or document was certified maliciously or negligently.

9. Inspection and copies of documents in companies registration office, and by foreign governments and universities

(1)Subject to the provisions of subsection (4), any person may, on payment of the prescribed fee (including an additional fee if any document is not uplifted personally at the Companies Registration Office)—

(a)inspect the documents kept under this Act by the Registrar in respect of any company, or

(b)obtain a certificate from the Registrar as to the contents or part of the contents of any document kept by him under this Act in respect of any company and which is open to inspection, or

(c)obtain a copy of or extract from any such document.

[subsection (1) amended by section 1(a) of Act 59 of 1978]

(2)If the Registrar is satisfied—

(a)that an inspection, certificate, copy or extract is required on behalf of a foreign government accredited to the government of the Republic, and

(b)that no fees are payable in the foreign country concerned in respect of such inspection, certificate, copy or extract required on behalf of the government of the Republic,no fee referred to in subsection (1) shall be payable.

(3)If the Registrar is satisfied that any inspection is required for purposes of research by or under the control of an institution for higher education, he may permit such inspection without payment of such fees.

(4)No person may inspect a document referred to in subsection (1) or obtain a certificate as to the contents or part of the contents thereof or obtain a copy thereof or an extract therefrom, if the Registrar is satisfied that such document contains particular information or a particular fact concerning the affairs or business of a company, or of any of its subsidiaries, which information or fact the company has been prohibited under section 15A (1) from disclosing or from stating on or in any document, or which information or fact the company has been exempted under that section from any obligation so to disclose or state: Provided that the provisions of this subsection shall not apply to such portions of such document as do not contain or refer to or give any indication of the particular information or particular fact, which the company has been prohibited or exempted from disclosing or stating as aforesaid.[subsection (4) added by section 1(b) of Act 59 of 1978]

10. Manner of payment of fess to companies registration office

(1)The payment of all fees, additional fees, annual duty or other moneys payable to the Registrar, as laid down by this Act shall be effected—

(a)by affixing revenue stamps to any document concerned which stamps may be cancelled by a Receiver of Revenue or the Registrar, or

(b)by impressing a stamp on any document concerned by means of a die approved by the Secretary for Inland Revenue, or

(c)in such other manner as the Registrar may direct

(2)No document, form, return or notice in respect of which any fee or payment is laid down under this Act, shall be complete unless proof of payment of the prescribed fee, additional fees (if any) or other moneys has been delivered to the Registrar

(3)Any fees, additional fees, annual duty and any other moneys payable under this Act to the Registrar shall be debts due to the State recoverable by the Minister in any competent court

11. Annual report by Registrar

The Registrar shall in every calendar year submit to the Minister a report containing such information concerning the registration of companies of each type, their authorized capitals or numbers of shares, increases in and reductions of capital, prospectuses, windings-up, judicial managements, deregistration’s and dissolutions of companies, additional fees collected, prosecutions and convictions under this Act, matters dealt with by the standing advisory committee appointed under this Act and other matters as the Minister may direct, and the Minister shall table the report in the Senate and in the House of Assembly Court Jurisdiction, Powers and Procedure

12. Jurisdiction of Court under this Act and review of decisions of Registrar

(1)The Court which has jurisdiction under this Act in respect of any company or other body corporate, shall be any provincial or local division of the Supreme Court of South Africa within the area of the jurisdiction whereof the registered office of the company or other body corporate or the mam place of business of the company or other body corporate is situate.

(2)Any person, including any company or other body corporate, aggrieved by any decision, ruling or order of the Registrar may bring the same under review by the provincial or local division of the Supreme Court of South Africa within the area of the jurisdiction whereof such person is ordinarily resident, or such company or other body corporate has its registered office or main place of business.

13. Security for costs in legal proceedings by companies and bodies corporate

Where a company or other body corporate is plaintiff or applicant in any legal proceedings, the Court may at any stage, if it appears by credible testimony that there is reason to believe that the company or body corporate or, if it is being wound up, the liquidator thereof, will be unable to pay the costs of the defendant or respondent if successful in his defence, require sufficient security to be given for those costs and may stay all proceedings till the security is given.

14. Copies of Court orders to be transmitted to Registrar and Master

Where any Court makes any order under this Act in relation to any company, the Registrar of the Court shall without delay transmit a copy of the order to the Registrar and if such order relates to the winding-up or judicial management of any company, also a copy thereof to the Master.

Regulations by the Minister and proclamations by the State President

15. Regulations

(1)The Minister may make regulations—

(a)providing for the conduct and administration of the Companies Registration Office and prescribing the practice and procedure to be observed therein,

(b)prescribing the practice and procedure to be observed in the office of the Master in connection with the winding-up and judicial management of companies,

(bA)providing for the reproduction of any records in the Companies Registration office or the office of the Master by microfilm, microcard, miniature photographic process or any other process deemed suitable by the Minister,[paragraph (bA) inserted by section 1(1)(a) of Act 111 of 1976]

(bB)providing for the use for official purposes and the admissibility in evidence in any proceedings, whether in a court of law or otherwise, of any reproduction contemplated in paragraph (bA),[paragraph (bB) inserted by section 1(1)(a) of Act 111 of 1976]

(c)providing for the keeping and preservation of any records, or any reproduction thereof contemplated in paragraph (bA), in the Companies Registration Office or the office of the Master, the removal from such offices and preservation in any other place of such records or reproductions and prescribing the circumstances under which any such records or reproductions may be destroyed,[paragraph (c) substituted by section 1(1)(b) of Act 111 of 1976]

(cA)prescribing how records required under this Act to be kept by a company may be kept, and prescribing the circumstances under which any such records may be destroyed;[paragraph (cA) inserted by section 2(1) of Act 59 of 1978]

(d)prescribing the procedure to be followed with respect to any matter in connection with the winding-up and judicial management of companies,

(e)prescribing the form and the contents of any return, notice or form provided for by this Act,

(f)prescribing when an additional copy or copies of documents to be lodged under the Act shall require to be lodged and whether such additional copy or copies shall be in the form of a copy or copies certified in the manner prescribed or shall be in duplicate original form,

(g)in consultation with the Minister of Finance, prescribing the matters in respect of which fees shall be payable and the tariff of such fees,

(h)providing for a table of fees, subject to taxation by the Master, which shall be payable to a liquidator as remuneration,

(i)prescribing a tariff of remuneration payable to any person performing on behalf of a liquidator any act relating to the winding-up of a company, and prohibiting the charging or recovery of remuneration at a higher tariff than the tariff so prescribed,

(j)in consultation with the Minister of Finance, prescribing the remuneration and allowances of members of the standing advisory committee and its standing sub-committees and the conditions upon which such members are appointed,

(k)as to any matter required or permitted by this Act to be prescribed by regulation, and

(l)generally, as to any matter which he considers it necessary or expedient to prescribe in order that the purposes of this Act may be achieved.

(2)Any regulations made under subsection (1) may prescribe penalties for any contravention thereof or failure to comply therewith not exceeding a fine of one hundred rand or imprisonment for a period of six months or both such fine and such imprisonment.

15A. Prohibition of disclosure of, and exemption from obligation to disclose, certain information

(1)The Minister or, if authorized thereto by the Minister, the Registrar, may—

(a)by notice in writing prohibit any company from disclosing, or from stating on or in any document of the company;

(b)on the written application of a company to the Registrar, exempt it, subject to such conditions or restrictions as the Minister or the Registrar may deem fit, from the obligation to disclose, or to state on or in any of its documents, particular information or a particular fact concerning the affairs or business of the company, or that of any of its subsidiaries, which the company would otherwise be required under this Act to disclose or to state on or in any document.

(2)Notwithstanding the provisions of subsection (1) any company shall, if the Registrar in a particular case in writing requires the company to do so, submit to the Registrar information which the company would otherwise have been required to submit to the Registrar in terms of the provisions of this Act.

(3)The Minister or the Registrar, as the case may, be, shall, when considering whether to impose a prohibition or grant an exemption under subsection (1), have regard to the right of the members of the company and of other persons to be informed of the state of the affairs and the business and of the profit or loss of the company or of the company and its subsidiaries.

(4)Any company which contravenes a prohibition imposed under subsection (1) (a) and any director or officer of a company who contravenes such prohibition, shall be guilty of an offence.

(5)For the purposes of this section a company shall include an external company.

[section 15A inserted by section 3 of Act 59 of 1978]

16. Regulations and proclamations to remain in force

(1)Any regulations or rules made under section 220 of the repealed Act shall be deemed to have been made under section 15 of this Act and shall remain in force until repealed by regulation

(2)The Third and the Fourth Schedules to the repealed Act shall, notwithstanding the repeal of that Act, remain in force and shall be deemed to be regulations made under section 15 of this Act until repealed by regulation

(3)Any proclamation issued under any law repealed by this Act and in force at the commencement of this Act shall remain in force until repealed by regulation.

17. Proclamations

(1)The State President may by proclamation in the Gazette from time to time amend or add to the provisions of the Schedules to this Act.

(2)Any such proclamation may prescribe different provisions in respect of different types of companies.

(3)The provisions of any such proclamation amending or adding to—

(a)Table A or B contained in Schedule 1 shall not apply in relation to any company in respect of which the provisions of the Table in question applied immediately before the date on which the proclamation took effect,

(b)Schedule 4 shall not apply in respect of any financial year of any company which ended prior to the said date

Standing advisory committee

18. Standing advisory committee

(1)

(a)The Minister shall appoint a standing advisory committee on company law consisting of a judge or a senior advocate of the Supreme Court of South Africa as chairman, and such ex officio and other members as he may from time to time determine.

(b)A member of the standing advisory committee shall hold office for such period as the Minister may direct and shall be eligible for reappointment upon the expiration of the period of his office.

(2)The standing advisory committee shall as to witnesses and their evidence have the powers of a commission duly appointed under the Commissions Act, 1947 (Act No 8 of 1947).

(3)The standing advisory committee may from time to time make recommendations to the Minister in regard to any amendments to this Act which may appear to it to be advisable and shall advise the Minister on any matter referred to it by the Minister.

(4)

(a)The standing advisory committee shall constitute and maintain at all times—

(i)a standing sub-committee for the purpose of considering and advising on such matters of company law affecting stock exchanges and the practice and law relating to stock exchanges, as may be referred to it by the standing advisory committee, and

(ii)such further standing sub-committees on accounting, legal and other practices as the Minister may from time to time determine.

(b)The standing advisory committee shall appoint as members of the standing sub-committees such of its members and such other persons and for such periods of office, as it may from time to time determine.

(5)The standing advisory committee may call to its assistance such person or persons as it may deem necessary to assist it or to investigate matters relating to company law.

(6)The Registrar shall be responsible for the administration of the standing advisory committee and the standing subcommittees.

Chapter III
Types and forms of companies, conversions and limitations on partnerships and associations

19. Types of companies

(1)Two types of companies may be formed and incorporated under this Act, namely—

(a)a company having a share capital, or

(b)a company not having a share capital and having the liability of its members limited by the memorandum of association (in this Act termed “a company limited by guarantee”)

(2)A company having a share capital may be either a public company or a private company having shares of par value or shares of no par value.

(3)All companies limited by guarantee, including such existing companies, shall be deemed to be public companies for the purposes of this Act.

20. Meaning of "private company" and cessation of its privileges

(1)In this Act the expression “private company” means a company having a share capital and which by its articles—

(a)restricts the right to transfer its shares, and

(b)limits the number of its members (exclusive of persons who are in the employment of the company and of persons who having been formerly in the employment of the company were, while in such employment, and have continued after the termination of such employment to be, members of the company) to fifty, and

(c)prohibits any offer to the public for the subscription of any shares or debentures of the company.

(2)Where two or more persons hold one or more shares of a company jointly they shall for the purposes of this section, be treated as a single member.

(3)No private company shall alter its articles in such manner that they no longer include all of the provisions referred to in subsection (1) unless it is at the same time converted into a public company.

(4)If a private company fails to comply with the provisions of its articles referred to in subsection (1), while they are included in the articles, it shall forthwith become subject to the provisions of sections 302 (4), 303 and 304 (1) as if it were a public company Provided that the Court, on being satisfied that the failure to comply with the provisions was unintentional or due to some other sufficient cause or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on such terms and conditions as seem to the Court just and expedient, order that the company may be relieved of such consequences as aforesaid.

21. Incorporation of associations not for gain

(1)Any association—

(a)formed or to be formed for any lawful purpose,

(b)having the mam object of promoting religion, arts, sciences, education, charity, recreation, or any other cultural or social activity or communal or group interests,

(c)which intends to apply its profits (if any) or other income in promoting its said main object,

(d)which prohibits the payment of any dividend to its members, and

(e)which complies with the requirements of this section in respect to its formation and registration,

may be incorporated as a company limited by guarantee.

(2)The memorandum of such association shall comply with the requirements of this Act and shall, in addition, contain the following provisions—

(a)The income and property of the association whencesoever derived shall be applied solely towards the promotion of its main object, and no portion thereof shall be paid or transferred, directly or indirectly, by way of dividend, bonus, or otherwise howsoever, to the members of the association or to its holding company or subsidiary:[paragraph (a) substituted by section 4 of Act 59 of 1978]

(b)Upon its winding-up, deregistration or dissolution the assets of the association remaining after the satisfaction of all its liabilities shall be given or transferred to some other association or institution or associations or institutions having objects similar to its main object, to be determined by the members of the association at or before the time of its dissolution or, fading such determination, by the Court.

(3)The provisions of sections 49(1)(c) and 174 of this Act shall not apply to any such association.

(4)Existing associations incorporated under section 21 of the repealed Act shall be deemed to have been formed and incorporated under this section.

Conversion of one type or form of company into another type or form of company

22. Conversion of a public company having a share capital into a private company and vice versa

(1)With the sanction of a special resolution and upon compliance with the requirements of sections 20 and 26 and with the other requirements of this Act in respect of private companies, a public company having a share capital may convert itself into a private company having a share capital.

(2)With the sanction of a special resolution and upon compliance with the other requirements of this Act in respect of public companies, a private company having a share capital may convert itself into a public company having a share capital.

23. Conversion of a company into an incorporated association not for gain, or into a company limited by guarantee

With the sanction of a special resolution and upon compliance with the requirements of section 26 and the other requirements of this Act in respect of associations not for gain and companies limited by guarantee, any company may convert itself into an association not for gain under section 21 of this Act or into a company limited by guarantee Provided that a company having a share capital may only so convert itself if its share capital is cancelled.

24. Conversion of a company limited by guarantee into a company having a share capital

With the sanction of a special resolution and upon compliance with the requirements of section 26 and the other requirements of this Act in respect of companies having a share capital, a company limited by guarantee (excluding an association not for gam under section 21, but including an existing company limited by guarantee having a share capital), may convert itself into a company having a share capital.

25. Conversion of unlimited company

(1)An unlimited company within the meaning of the repealed Act, in existence at the commencement of this Act, may with the sanction of a special resolution and upon compliance with the requirements of section 26 and the other requirements of this Act, convert itself into any type or form of company provided for by this Act, but such conversion shall not affect the liability of its members in respect of any debts, liabilities or obligations incurred or contracts entered into by, with or on behalf of the company before the conversion.

(2)Until such conversion has taken place the provisions of the repealed Act shall continue to apply to such unlimited company as if that Act had not been repealed.

(3)If after one year from the date of commencement of this section any such unlimited company which is a private company, has not converted itself as provided for in this section, it shall be obliged thereafter to comply with the provisions of section 302 (4) as to the lodging of its annual financial statements with the Registrar, as if it were a public company having shares of par value or shares of no par value, as the case may be.

26. Notice of intended conversion of company

(1)Any company intending to convert itself into another type or form of company shall not less than three weeks before the date of the meeting convened for the purpose of passing the required special resolution, give notice in the Gazette of such intention, specifying the particulars of the proposed conversion and the date and place of the meeting Provided that this subsection shall not apply to any private company having a share capital intending to convert itself into a public company having a share capital.

(2)If any company intending to convert itself into another type or form of company is a public company having a share capital, it shall, in addition, send the notice referred to in subsection (1) to every creditor of the company by registered post not less than three weeks before the date of the meeting.

27. Contents and form of articles on conversion

When the articles of any company are to be altered for the purpose of converting the company into another type or form of company under section 22,24 or 25, the provisions of sections 59 (2) and 60 (1) as to the contents and form of articles shall apply mutatis mutandis to the articles of the said company.

28. Amendment of certificate of incorporation of converted company and when conversion effective

(1)The Registrar shall, on the registration of the special resolution concerned, upon payment of the prescribed fee and upon being satisfied that the requirements of this Act have been complied with, register any conversion in the register of companies and shall issue an amended certificate of incorporation, stating the date of the first registration of the company, its former name, the name as altered and the nature of the conversion.

(2)Any such conversion shall take effect as from the date of the amended certificate of incorporation issued under subsection (1).

(3)The Registrar shall give notice in the Gazette of the conversion of a company into another type or form of company.

29. Effect of conversion and alteration of other registers

(1)The conversion of a company into another type or form of company under this Act shall not affect the corporate existence of the company as from the date of its first registration, nor any of its rights, debts, liabilities, obligations incurred or contracts entered into by, with, or on its behalf at any time nor render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against it prior to the conversion, may, notwithstanding such conversion, be continued or commenced against the company as converted.

(2)If as a result of the conversion of a company into another type or form of company, any alteration in its name pursuant to the requirements of this Act is necessary, the alteration shall not be deemed to be a change of name for the purposes of section 44(1).

(3)Upon the production by a company of an amended certificate of incorporation or a certified copy thereof to any registrar or other officer charged with the maintenance of a register under any Act, and on compliance with the requirements of such registrar or officer as to the form of application, if any, and the payment of any prescribed fee, such registrar or other officer shall make in his register all such alterations as are necessary by reason of the conversion of the company into another type or form of company

Limitations on partnerships and associations for gain

30. Prohibition of associations or partnerships exceeding twenty members, and exemption

(1)No company, association, syndicate or partnership consisting of more than twenty persons shall be permitted or formed in the Republic for the purpose of carrying on any business that has for its object the acquisition of gain by the company, association, syndicate or partnership, or by the individual members thereof, unless it is registered as a company under this Act or is formed in pursuance of some other law or was before the thirty-first day of May, 1962, formed in pursuance of Letters Patent or Royal Charter.

(2)The provisions of subsection (1) shall not apply with reference to the formation by persons qualified to carry on any organized professions which are designated by the Minister by notice in the Gazette, of any association, syndicate or partnership for the purpose of carrying on such professions and/or any combinations of such professions

31. Unregistered associations carrying on business for gain not to be corporate bodies

No association of persons formed after the thirty-first day of December, 1939, for the purpose of carrying on any business that has for its object the acquisition of gain by the association or by the individual members thereof, shall be a body corporate, unless it is registered as a company under this Act or is formed in pursuance of some other law or was before the thirty-first day of May, 1962, formed in pursuance of Letters Patent or Royal Charter.

Chapter IV
Formation, objects, capacity, powers, names, registration and incorporation of companies, matters incidental thereto and deregistration

Formation, objects and powers

32. Mode of forming company

Any seven or more persons or, where the company to be formed is a private company, any two or more persons associated for any lawful purpose or, where the company to be formed is to be a private company with a single member, any one person for any lawful purpose, may form a company having a share capital or a company limited by guarantee and secure its incorporation by complying with the requirements of this Act in respect of the registration of the memorandum and articles

33. Capacity main object and ancillary object of company

(1)Any company formed in pursuance of section 32 shall have the capacity determined by the main object stated in its memorandum and there shall be included in its capacity unlimited objects ancillary to the said main object except such specific ancillary objects as are expressly excluded in its memorandum.

(2)If the main business actually carried on at any time by a company referred to in subsection (1) falls within the capacity of the company by virtue only of an object ancillary to the main object stated in its memorandum, such main business shall be deemed to be the main object of that company for the purposes of the said subsection.

(3)Notwithstanding anything contained in the memorandum of any existing company, the main business which it actually carries on at the commencement of this section, shall be deemed to be its main object.

34. Powers of company

Subject to any limitations imposed by this Act, every company shall have plenary powers, including the common powers stated in Schedule 2 to this Act, to enable it to realize its mam and ancillary objects, except such specific powers as are expressly excluded or qualified in its memorandum.

35. Power as to pre-incorporation contracts

Any contract made in wilting by a person professing to act as agent or trustee for a company not yet incorporated shall be capable of being ratified or adopted by or otherwise made binding upon and enforceable by such company after it has been duly incorporated as if it had been duly incorporated at the time when the contract was made and such contract had been made without its authority Provided that the memorandum on its registration contains as an object of such company the ratification or adoption of or the acquisition of rights and obligations in respect of such contract, and that two copies of such contract, one of which shall be certified by a notary public, have been lodged with the Registrar together with the lodgment for registration of the memorandum and articles of the company.

36. Acts ultra vires the company not void

No act of a company shall be void by reason only of the fact that the company was without capacity or power so to act or because the debtors had no authority to perform that act on behalf of the company by reason only of the said fact and, except as between the company and its members or directors, or as between its members and its directors, neither the company nor any other person may in any legal proceedings assert or rely upon any such lack of capacity or power or authority.

37. Loans made and security provided by a subsidiary

(1)

(a)If—

(i)any funds of a company were employed directly or indirectly (whether through the instrumentality of its subsidiary or otherwise) in a loan to any company which is its holding company or which is a subsidiary of that holding company but not a subsidiary of itself; or

(ii)a company directly or indirectly (whether through the instrumentality of its subsidiary or otherwise) provided any security to another person in connection with an obligation of any company which is its holding company or which is a subsidiary of that holding company but not a subsidiary of itself,

particulars of that loan or security, as the case may be, shall be stated in the annual financial statements of the company for every year during which such loan or security was in operation.

(b)The provisions of paragraph (a) shall not apply in respect of loans made or security provided bona fide in the ordinary course of the business of a company actually and regularly carrying on a business a substantial part of which is the making of loans or the provision of security, as the case may be.

(2)

(a)Any director or officer of a company who fails to take all reasonable steps to secure compliance with the provisions of subsection (1) shall be guilty of an offence.

(b)In any prosecution against any director or officer of a company under paragraph (a), the defence referred to in section 284(4) (b) shall, mutatis mutandis, be available to him.

(3)

(a)Any director or officer of a company who authorizes or permits or is a party to the making of any loan or the provision of any security contemplated in subsection (1)(a), shall be liable to the company for any damage directly arising from the making of such loan or the provision of such security on terms or conditions which, at the time of the making of such loan or the provision of such security, were not fair to the company or failed to provide reasonable protection for its business interests: Provided that a director or officer who has paid any amount as damages by virtue of the provisions of this paragraph may recover such part of that amount as the Court considers equitable, from any other director or officer who is in terms of this paragraph also liable to the company for the same damage.

(b)For the purposes of paragraph (a), 'director or officer' of a company shall include any director or officer of a holding company of such company, and for the purposes of recovery of such damages as are contemplated in the said paragraph (a) the provisions of sections 266, 267 and 268 shall mutatis mutandis apply as if a director or officer or past director or officer of such holding company was a director or officer or past director or officer of such company, respectively.

(c)In enquiring, for the purposes of paragraph (a), whether or not any terms or conditions were fair to the company or failed to provide reasonable protection for its business interests, regard shall be had, without prejudice to the generality of the enquiry, to—

(i)whether, in view of the financial position of the parties, the loan should have been made or the security should have been provided at all;

(ii)in the case of a loan, whether security has been or should in the circumstances have been provided therefor, and whether any security provided therefor is adequate;

(iii)the consideration for the loan or security, including any interest or other benefit received therefor;

(iv)the term of the loan or security; and

(v)the manner of repayment of the loan or discharge of the security.

(d)The provisions of this subsection shall not derogate from any other rule of law relating to the liability of a director or officer of a company.

(4)For the purposes of this section—

(a)'funds' includes money, shares, debentures or any other property;

(b)'loan' includes any credit extended by a company, if the debt concerned is not payable or being paid in accordance with the normal business practice of the company in respect of the payment to it of other debts of the same kind;

(c)'security' includes a guarantee.

(5)The provisions of this section shall not apply to anything done by a company with the consent of all its members.

[section 37 substituted by section 3 of Act 64 of 1977]

38. No financial assistance to purchase shares of company or holding company

(1)No company shall give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares of the company, or where the company is a subsidiary company, of its holding company.

(2)The provisions of subsection (1) shall not be construed as prohibiting—

(a)the lending of money in the ordinary course of its business by a company whose mam business is the lending of money, or

(b)the provision by a company, in accordance with any scheme for the time being in force, of money for the subscription for or purchase of shares of the company or its holding company by trustees to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company, or

(c)the making by a company of Ioans to persons, other than directors, bana fide in the employment of the company with a view to enabling those persons to purchase or subscribe for shares of the company or its holding company to be held by themselves as owners.

(3)

(a)Any company which contravenes the provisions of this section, and every director or officer of such company, shall be guilty of an offence.

(b)For the purpose of this subsection “director”, in relation to a company, includes any person who at the time of the alleged contravention was a director of the company.

(c)It shall be a defence in any proceedings under this section against any director or officer of a company if it is proved that the accused was not a party to the contravention.

39. Company not to be member of its holding company

(1)Save as is provided in this section, no company shall be a member of a company which is its holding company, and any allotment, issue or transfer of shares of a company to its subsidiary shall be void

(2)The provisions of subsection (1) shall not apply in relation to a subsidiary acting in a representative capacity or as a trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

(3)Nothing in this section shall be construed as preventing—

(a)a subsidiary which is, at the commencement of this section, lawfully a member of its holding company, from continuing to be a member, but no such subsidiary shall have the right to vote at meetings of the holding company or any class of members thereof, or

(b)the allotment or issue of capitalization shares by the holding company to its subsidiary.

(4)Subsections (1) and (3) shall, subject to subsection (2), apply to a nominee of a company which is a subsidiary as if references in the said subsections to such a company included references to such a nominee.

(5)In relation to a company limited by guarantee which is a holding company, the reference in this section to shares of a company shall be construed as including a reference to the interest of its members as such, whatever the form of that interest.

40. No division into interest rights to profits or shares in guarantee companies

(1)In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void.

(2)Any provision in the memorandum or articles or in any resolution of a company limited by guarantee, purporting to divide the undertaking of the company into shares or interests shall be void.

Names of companies

41. Names of companies not to be undesirable

No memorandum containing a name for a company to be incorporated shall be registered if in the opinion of the Registrar the name is undesirable

42. Reservation of name

(1)The Registrar may, on written application on the prescribed form and on payment of the prescribed fee, reserve a name (approved by him) or a literal translation into die other official language of the Republic of a name of a company or a shortened form of the name of a company, pending the registration of a memorandum or a change of name by a company or registration of another form of the name.

(2)Such reservation shall be for a period not exceeding two months or such extended period, not exceeding in all three months, as the Registrar, upon payment of the prescribed fee, may in the special circumstances of any case allow.

43. Registration of translation and shortened form of name or defensive name

(1)The memorandum of any company to be incorporated may contain a literal translation into the other official language of the Republic and one shortened form of the name of the company, and any company may, on the prescribed form and on payment of the prescribed fee, apply to the Registrar for the registration of such translation and shortened form of its name, if in each case the translation and shortened form of the name concerned is not in the opinion of the Registrar undesirable.

(2)Any person may on application on the prescribed form and on payment of the prescribed fee apply to the Registrar—

(a)to register any name as a defensive name; or

(b)to renew the registration of a name as a defensive name,

which is not in the opinion of the Registrar undesirable and in respect of which he has furnished proof, to the satisfaction of the Registrar, that he has a direct and material interest.[subsection (2) substituted by section 2 of Act 84 of 1980]

(2A)If the Registrar grants any application referred to in subsection (2) he shall register the name in question as a defensive name for a period not exceeding one year or renew the registration of the name in question as a defensive name for a period not exceeding one year, as the case may be.[subsection (2A) inserted by section 2 of Act 84 of 1980]

(3)The Registrar shall register such literal translation or shortened form of the name of the company concerned or such defensive name and, where registration is effected pursuant to an application under subsection (1) or (2), the Registrar shall give notice thereof in the Gazette.

44. Change of name and effect therefore

(1)

(a)Any company may by special resolution change its name to a name which is not, in the opinion of the Registrar, undesirable

(b)Where a company changes its name, it shall at the same time, if the translation or shortened form of the name of the company has been registered under section 43(1), and such translation or shortened form is no longer applicable to the name of the company as changed, apply on the prescribed form and on payment of the prescribed fee—

(i)to change such translation or shortened form of the name to a new translation or shortened form of the name approved by the Registrar, or

(ii)to deregister such former translation or shortened form of the name of the company.

(2)Where the name, translation or shortened form of the name of a company is changed, the Registrar shall enter the new name, translation or shortened form of the name in the register in place of the former name, translation or shortened form of the name, issue a certificate of incorporation altered to meet the circumstances of the case or a certificate that the new name, translation or shortened form of the name, has been entered in the register in place of the former name, translation or shortened form of the name and give notice of the change of name, translation or shortened form of the name, in the Gazette.

(3)A change of name of a company shall not affect any rights, debts, liabilities or obligations of the company, nor render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against it prior to such change of name, may, notwithstanding such change of name, be continued or commenced by or against the company under its new name.

(4)Upon the production by a company of an amended certificate of incorporation or a certificate of the change of the name of such company or a certified copy thereof to any registrar or other officer charged with the maintenance of a register under any Act, and on compliance with the requirements of such registrar or officer as to the form of application, if any, and the payment of any prescribed fee, such registrar or other officer shall make in his register all such alterations as are necessary by reason of the change of the name of the company.

(5)[subsection (5) deleted by section 3 of Act 111 of 1976]

45. Order to change name

(1)If within a period of one year after the registration of any memorandum, translation or shortened form of a name of a company or after the registration or the renewal of the registration of a name referred to in section 43(2) or after the date of an amended certificate of incorporation or a certificate of change of name, translation or shortened form of a name referred to in section 44(2), it appears that the name contained in the memorandum or the translation or shortened form of such name or the name referred to in section 43(2) or the name or the translation or shortened form of a name to which a company has changed its name or the translation or shortened form thereof is in the opinion of the Registrar undesirable, he shall within such period order the company concerned or the person referred to in section 43(2) to change the name, translation or shortened form of the name concerned.[subsection (1) substituted by section 3(1)(a) of Act 84 of 1980]

(2)If within a period of one year after the registration of any memorandum, translation or shortened form of a name of a company or a name referred to in section 43(2) or after the date of an amended certificate of incorporation or a certificate of change of name, translation or shortened form of a name referred to in section 44(2), any person lodges an objection in writing with the Registrar against the name contained in the memorandum or the translation or shortened form of such name or the name referred to in section 43(2) or the name or the translation or shortened form of a name to which a company has changed its name or the translation or shortened form thereof, on the grounds that such name, translation or shortened form of a name is calculated to cause damage to the objector, the Registrar may, if he is satisfied that the objection is sound, order the company concerned or the person referred to in section 43(2) to change the said name, translation or shortened form of a name.[subsection (2) substituted by section 3(1)(b) of Act 84 of 1980]

(3)If, at any time, the Registrar is of the opinion that the name of a company, or the translation or shortened form of a name of a company, gives so misleading an indication of the nature of its activities as to be calculated to deceive the public, he may order the company concerned to change its name, or the translation or shortened form of its name, as the case maybe.

46. Provisions as to order to change name

(1)An order under section 45 for the change of a name of a company or a translation or a shortened form of a name of a company or a name referred to in section 43(2) shall be issued by the Registrar in writing and sent by registered post to the company at its registered office, or to the person referred to in section 43(2) at his last-known address and shall require such company or such person to comply with the order within two months from the date of its issue.

(2)The Registrar may, on good cause shown, extend the said period of two months for any further period not exceeding two months.

(3)If such company or such person, as the case may be, fails to comply with any order issued by the Registrar under subsection (1) within the pend or extended period referred to in the said subsection or subsection (2), or if such company or such person has applied to Court for relief under section 48 and the Court has upheld the Registrar’s order and such company or such person fails to comply with that order within two months from the date of the final decision by the Court, such company or such person shall be guilty of an offence.

47. Registrar may call for affidavits and shall give reasons for decisions as to names

(1)The Registrar may for purposes of any decision as to any name, translation or shortened form of a name referred to in section 41, 42, 43, 44 or 45 call for such evidence on affidavit or otherwise, as he may deem fit.

(2)The Registrar shall, upon the request in writing of any person aggravated by any decision or order of the Registrar under any section referred to in subsection (1) and on payment of the prescribed fee, furnish written reasons for any such decision or order.

48. Recourse to court in matters as to names

Any company or person aggrieved by any decision of the Registrar under section 41, 42, 43 or 44, or by any order made by the Registrar under section 45 may, within one month after the date of such decision or order, apply to the Court for relief, and the Court shall have power to consider the merits of any such matter, to receive further evidence and to make any order it deems fit.

49. Formal requirements as to names of companies

(1)Subject to the provisions of this section—

(a)the name of a public company having a share capital shall include, as its last word, the word “Limited”,

(b)the name of a private company having a share capital shall include as its last two words, the words “(Proprietary) Limited”,

(c)the name of a company limited by guarantee shall include—

(i)the word “Limited” as its last word, and

(ii)the statement “(Limited by Guarantee)” subjoined to the said name

(2)There shall be included in the name of any external company, the memorandum of which has been registered under this Act, the statement “Incorporated in (stating the name of the foreign country concerned)” subjoined to the said name.

(3)The name of an association not for gain incorporated under this Act shall not include the word and statement referred to in subsection 1(c) but the statement 'Association incorporated under section 21' shall be included in and be subjoined to the said name: Provided that an association not for gain incorporated under this Act before the commencement of the Companies Amendment Act, 1980, may instead of the said statement include in and subjoin to its name the statement 'Incorporated association not for gain'.[subsection (3) substituted by section 4 of Act 84 of 1980]

(4)The name of a private company having a share capital and the memorandum of which contains the provision referred to in section 53(b), shall not include the words referred to in subsection (1)(b), but shall include the word “Incorporated”, as its last word, in the said name.

(5)If a company is being wound up by the Court or voluntarily or is under judicial management, the statement “In Liquidation”, “In Voluntary Liquidation” or “Under Judicial Management”, as the case may be, shall be included in and be subjoined to the name of the company concerned and if the winding-up order or judicial management order is discharged, or the voluntary winding-up ceases, the said statement shall be omitted from the name of such company.

(6)The addition to or omission from the name of any company of the words or statements prescribed by this section as a result of—

(a)the conversion of a company into another type or form of company, or

(b)the insertion or deletion from the memorandum of a private company of the provision referred to in section 53(b), or

(c)the discharge of a winding-up order or judicial management order or the cessation of voluntary winding-up, shall not be deemed to be a change of name for the purposes of section 44(1) Provided that subsections (2), (3) and (4) of that section shall apply in the case of such addition or omission as if it were a change of name.

(7)Where under subsection (5) a statement is to be added to or is to be omitted from the name of a company, the liquidator or judicial manager, as the case may be, shall within seven days after his appointment or his discharge, as the case may be, apply to the Registrar on the prescribed form and on payment of the prescribed fee for such statement to be added to or to be omitted from the name of the company, and the Registrar shall issue a certificate of change of name.

(8)If any company fails to comply with any provision of subsection (1), (2), (3), (4), (5) or (6) or in any way uses a name in contravention of any such provision, it shall be guilty of an offence.

(9)If a liquidator or judicial manager fails to comply with the provisions of subsection (7), he shall be guilty of an offence.

50. Use and publication of name by company

(1)Every company—

(a)shall display its name on the outside of its registered office and every office or place in which its business is carried on, in a conspicuous position and in characters easily legible,

(b)shall have its name engraved in legible characters on its seal (if any),

(c)shall have its name mentioned in legible characters in all notices and other official publications of the company and in ail bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company and mail letters, delivery notes, invoices, receipts, and letters of credit of the companyProvided that for the purposes of this subsection—

(i)the abbreviations “Ltd” or “Bpk”, “Pty” or “Edms”, “Inc” or "Ing”, “Co” or “Mpy”, and may be used for the words “Limited” or “Be-perk”, “Proprietary” or “Eiendoms”,“Incorporated” or “Ingelyf” “Company” or “Maatskappy” and “and” or “en”, respectively, in a company’s name, and

(ii)no company shall use the shortened form of its name unless it is used in conjunction with its name.

(2)If a translation of the name of a company has been registered, the use of such registered name, and if the name of a company consists of or contains words in one of the official languages of the Republic, the use of a name consisting of or containing a literal translation of such words into the other official language, shall be deemed to be sufficient compliance with the requirements of this section.

(3)If any director or officer of a company or any person on its behalf—

(a)uses or authorizes the use of any seal purporting to be a seal of the company whereon its name is not so engraved as aforesaid, or

(b)issues or authorizes the issue of any notice or other official publication of the company, or signs or authorizes to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods, wherein its name is not mentioned in manner aforesaid, or

(c)issues or authorizes the issue of any letter, delivery note, invoice, receipt or letter of credit of the company wherein its name is not mentioned in manner aforesaid,

he shall be guilty of an offence and shall further be liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount thereof unless it is duly paid by the company.

(4)If any company fails to comply with the requirements of subsection (1), it shall be guilty of an offence.

51. Improper use of word “Limited” or “Incorporated” an offence

Any person or persons trading or carrying on business under a name or title of which the word “Limited” or “Incorporated” is the last word, shall, unless duly incorporated under this Act or any other law, be guilty of an offence.

Memorandum of association

52. Requirements for memorandum of association

(1)The memorandum of a company shall state the purpose, referred to in section 32, for which it is to be formed and incorporated, describing the main business which the company is to carry on or, in the case of an association not for gain, the main object it is to promote, and in addition thereto—

(a)the name of the company,

(b)the main object of the company, referred to in section 33(1), stating the general nature of the main business which it is contemplated the company will be entitled to carry on or the main object which an association not for gain will be entitled to promote,

(c)

(i)the specific ancillary objects, referred to in section 33 (1), if any, which are excluded from the unlimited ancillary objects of the company, and

(ii)the specific powers or part of any powers of the company, referred to in section 34, if any, which are excluded from the plenary powers or the powers set out in Schedule 2.

(2)If the company is to have a share capital, the memorandum shall state—

(a)

(i)the amount of the share capital with which it is proposed to be registered and the division thereof into shares of a fixed amount, or

(ii)the number of shares if the company is to have shares of no par value,

(b)the number of shares which each subscriber undertakes to take up, stated in words opposite his name Provided that no subscriber may take less than one share.

(3)If the company is to be a company limited by guarantee, the memorandum shall state—

(a)that the liability of the members is limited to the amount referred to in subparagraph (b), and

(b)that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of the winding-up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount but not less than one rand.

53. Memorandum may contain special conditions and may provide for unlimited liability of directors

The memorandum of a company may, in addition to the requirements of section 52,—

(a)contain any special conditions which shall apply to the company, and the requirements, if any, additional to those prescribed in this Act for the alteration of such conditions,

(b)in the case of a private company, provide that the directors and past directors shall be liable jointly and severally, together with the company, for such debts and liabilities of the company as are or were contracted during their periods of office, in which case the said directors and past directors shall be so liable.

54. Form and signing of memorandum

(1)The memorandum shall be and be completed in the form prescribed.

(2)The memorandum of a public company shall be signed by not less than seven subscribers and of a private company by one or more subscribers, stating their full names, occupations and residential, business and postal addresses, and each subscriber shall sign the memorandum in the presence of at least one witness who shall attest the signature and state his residential, business and postal address.

Alteration of Memorandum

55. Alteration of memorandum to objects and powers

(1)Subject to the provisions of section 53(a), a company may by special resolution make additions to or alter the provisions of its memorandum with respect to the objects and powers of the company.[subsection (1) substituted by section 4 of Act 111 of 1976]

(2)An existing company may by special resolution alter its memorandum with respect to the objects and powers of the company so as to bring it into conformity with the provisions of this Act.

56. Alteration of memorandum as to special conditions and other provisions

(1)Subject to the provisions of subsection (3) and unless prohibited by the condition itself, a special condition contained in the memorandum may be altered by special resolution or in the manner prescribed in any such special condition

(2)Any private company may at any time by special resolution and with the written consent of each person being then a director of the company, incorporate in its memorandum the provision referred to in section 53(b)

(3)A private company may by special resolution alter or remove the provision referred to in section 53(b) and contained in its memorandum provided the alteration or removal is confirmed by the Court if it is satisfied that such alteration or removal would be just and equitable.

(4)Any other provision of the memorandum of a company may be altered by special resolution.

(5)Nothing in this section shall authorize any alteration of a memorandum constituting a variation or abrogation of the special rights of any class of members, save and except that such rights may be altered or abrogated in the manner pre-scribed in the memorandum for such variation or abrogation.

57. Substitution of memorandum in other language

A company may, by special resolution, substitute for its existing memorandum in either of the official languages of the Republic, a translation thereof in the other official language Provided that the memorandum in the original language shall be decisive in the construction of the memorandum so substituted therefor.

58. Lodgment of altered memorandum

(1)The Registrar may in writing request any company which has lodged with him a special resolution altering its memorandum, to lodge with him, with fourteen days after the date of the request, a copy of the memorandum as so altered.

(2)Any company which fails to comply with any request under subsection (1), shall be guilty of an offence.

Articles of ssociation

59. Companies to have articles of association

(1)There shall be registered with the memorandum of a company, articles of association, prescribing articles for the company.

(2)The articles of a company having a share capital—

(a)if a public company, may consist of the articles contained in Table A of Schedule 1, and

(b)if a private company may consist of the articles contained in Table B of Schedule 1,

subject to such additions, omissions and modifications as are stated in the articles, and the articles contained in the said Schedule shall, so fair as applicable and not excluded or modified, apply to that company Provided that after the commencement of this Act any condition contained in the articles of a company for compulsory loans to be made by members of the company to the company shall be of no force or effect.

60. Contents and form of articles of associations

(1)The articles shall be and be completed in the form prescribed.

(2)The articles shall be signed by each subscriber of the memorandum stating his full name, occupation and residential, business and postal address, in the presence of at least one witness who shall attest the signature and state his residential, business and postal address.

61. Consolidation of articles

A company may at any time after the registration of its articles, submit to the Registrar a document in the prescribed form, containing a consolidated and full statement of all the articles applying to the company together with a certificate by a notary public to the effect that the articles of the company have been truly stated and, on payment of the prescribed fee, the Registrar shall endorse on that document a certificate to the effect that the articles stated therein constitute the articles of the company as at the date of the certificate.

62. Alteration of articles

(1)Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles, and any alteration or addition so made shall be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution

(2)The provisions of section 58 relating to the lodgment of an altered memorandum shall apply mutatis mutandis to the lodgment of altered articles

Registration and incorporation

63. Registration of memorandum and articles

(1)If a memorandum and articles complying with the requirements of this Act together with two copies thereof certified by a notary public as true copies are lodged with the Registrar in the manner prescribed, he shall upon payment of the prescribed fee, register such memorandum and articles, impress his seal on one copy thereof, and endorse thereon the date of registration and the certificate provided for in section 64.

(2)The fee for the registration of a company shall be a basic amount of twenty-five rand and an additional fee calculated at the rate of—

(a)in the case of a company having a nominal share capital with shares having a par value, two rand and fifty cents for each thousand rand or part thereof,

(b)in the case of a company having shares of no par value, two rand and fifty cents for each thousand shares or part thereof,

(c)in the case of a company having both shares of par value and shares of no par value, the aggregate of the amounts calculated on the basis laid down in paragraphs (a) and (b) of this subsectionProvided that the said additional fee shall not be payable—

(i)where the nominal share capital is four thousand rand or less, or

(ii)where, in the case of shares of no par value, the number of shares does not exceed four thousand

(3)Any such memorandum and articles submitted for registration shall be delivered and uplifted at the Companies Registration Office personally by a subscriber thereto or by a duly authorized attorney or his clerk or by a person who was prior to the first day of January, 1953, engaged in the business of delivering and uplifting such documents.

64. Certificate incorporation and it’s value as evidence

(1)Upon the registration of the memorandum and articles of a company the Registrar shall endorse thereon a certificate under his hand and seal that the company is incorporated

(2)A certificate of incorporation given by the Registrar in respect of any company shall upon its mere production, in the absence of proof of fraud, be conclusive evidence that all the requirements of this Act respect of registration and of matters precedent and incidental thereto, have been complied with, and that the company is a company duly incorporated under this Act

65. Effect of incorporation on company and members

(1)From the date of incorporation stated in the certificate of incorporation, the subscribers of the memorandum together with such other persons as may from time to time become members of the company, shall be a body corporate with the name stated in the memorandum, capable of exercising all the functions of an incorporated company, and having perpetual succession, but with such liability (if any) on the part of the members to contribute to the assets of the company in the event of its being wound up as provided by this Act.

(2)The memorandum and articles shall bind the company and the members thereof to the same extent as if they respectively had been signed by each member, to observe all the provisions of the memorandum and of the articles, subject to the provisions of this Act.

66. Members may become liable where membership reduced below minimum

If any public company other than a wholly owned subsidiary carries on business for more than six months while it has less than seven members, every person who is a member of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is so carrying on business, shall be liable for the payment of the whole of the debts of the company contracted during that time and may be sued for the same without any other member being joined in the action.

67. Members’ rights to copies of memorandum and articles

(1)A company shall send to every member at his request and on payment of an amount of fifty cents or such lesser amount as the company may determine, a copy of its memorandum and of its articles, or shall, if so requested, afford to a member or his duly authorized agent adequate facilities for making a copy of such memorandum and articles

(2)Any company which fails to comply with any request under subsection (1), shall be guilty of an offence

Incidental matters

68. Issued copies of memorandum or articles to embody alterations

(1)Every copy of the memorandum or articles of a company issued after the date on which any alteration has been made thereto, shall include the alteration.

(2)A company which, at any time after the date of any such alteration issues a copy of its memorandum or articles which does not include the alteration, shall be guilty of an offence.

69. Contracts by companies

(1)Contracts on behalf of a company may be made as follows

(a)Any contract which if made between individual persons would by law be required to be in writing signed by the parties to be charged therewith may be made on behalf of the company in writing signed by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged,

(b)any contract which if made between individual persons would by law be valid though made orally only and not reduced to writing, may be made orally on behalf of the company by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged

(2)All contracts made in accordance with this section shall be effectual in law and shall bind the company and its successors and all other parties thereto

70. Promissory notes and bills of exchange

A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of or by or on behalf or on account of, the company by any person acting under its authority.

71. Service of documents upon companies

Any notice, order or other document which by this Act may be or is required to be served upon any company, including any external company, may be served by delivering it at or sending it by registered post to the registered office or postal address of the company.

72. Arbitration between companies and others

(1)A company may agree to refer and may refer to arbitration of any existing or future difference between itself and any other company or person

(2)Companies which are parties to the arbitration may delegate to the arbitrator power to settle or determine any matter capable of being lawfully settled or determined by the companies themselves or by their directors or other managing body

Deregistration

73. Cancellation of registration of memorandum and articles

(1)If a company has failed, for a period of more than two years, to lodge with the Registrar an annual return in compliance with the provisions of section 173 or when the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he shall, in accordance with subsection (7), send to the company by certified post a letter enquiring whether it is carrying on business or is in operation.[subsection (1) substituted by section 5(a) of Act 59 of 1978]

(2)[subsection (2) deleted by section 5(b) of Act 59 of 1978]

(3)If the Registrar does not within one month after sending the letter receive any answer thereto or receives an answer to the effect that the company is not carrying on business or is not in operation, he may publish in the Gazette and send to the company by certified post a notice that at the expiration of two months from the date of that notice the company mentioned therein will, unless good cause is shown to the contrary, be deregistered.[subsection (3) substituted by section 5(c) of Act 59 of 1978]

(4)[subsection (4) deleted by section 5(d) of Act 59 of 1978]

(5)At the expiration of the period mentioned in any notice referred to in subsection (3) or upon receipt from any company of a written statement signed by every director thereof to the effect that the company has ceased to carry on business and has no assets or liabilities, the Registrar may, unless good cause to the contrary has been shown by the company, deregister the company concerned, and shall give notice to that effect in the Gazette and the date of the publication of such notice in the Gazette shall be deemed to be the date of deregistration: Provided that the liability (if any) of every director, officer and member of the company shall continue and may be enforced as if the company had not been deregistered.[subsection (5) substituted by section 5(e) of Act 59 of 1978]

(6)

(a)The Court may, on application by any interested person or the Registrar, if it is satisfied that a company was at the time of its deregistration carrying on business or was in operation, or otherwise that it is just that the registration of the company be restored, make an order that the said registration be restored accordingly, and thereupon the company shall be deemed to have continued in existence as if it had not been deregistered.

(b)Any such order may contain such directions and make such provision as to the Court seems just for placing the company and all other persons in the position, as nearly as may be, as if the company had not been deregistered.

[section (6) substituted by section 5(f) of Act 59 of 1978]

(7)A letter or notice under this section shall be addressed to the company at its registered office, its postal address and to the care of the directors or officers and the auditor of the company or may, if there is no director, officer or auditor of the company whose name and address is known to the Registrar, be sent to each of the persons who signed the memorandum of the company, at the address mentioned in the memorandum.

Chapter V
Share capital, reduction of capital, shares, allotment and issue of shares, members and register of members, debentures, transfers, and restrictions on offering shares for sale

Share capital

74. Share capital may be divided into par value shares or may be constituted by shares of no par value

The share capital of a company may be divided into shares having a par value or may be constituted by shares having no par value Provided that all the ordinary shares or all the preference shares shall consist of either the one or the other.

75. Company may alter share capital and shares

(1)Subject to the provisions of sections 56 and 102 a company having a share capital, if so authorized by its articles, may by special resolution—

(a)increase its share capital by new shares of such amount, or increase the number of its shares having no par value, as it thinks expedient,

(b)increase its share capital constituted by shares of no par value by transferring reserves or profits to the stated capital, with or without a distribution of shares,

(c)consolidate and divide all or any part of its share capital into shares of larger amount than its existing shares or consolidate and reduce the number of the issued no par value shares,

(d)increase the number of its issued no par value shares without an increase of its stated capital,

(e)subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum,

(f)convert all of its ordinary or preference share capital consisting of shares having a par value into stated capital constituted by shares of no par value, subject to the provisions of this Act Provided that an existing company may not so convert any share capital which is not fully paid up,

(g)convert its stated capital constituted either by ordinary or preference shares of no par value into share capital consisting of shares having a par value, subject to the provisions of this Act,

(h)cancel shares which at the time of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person and diminish the amount of its authorized share capital by the amount of the shares so cancelled or may cancel shares of no par value which have not so been taken or agreed to be taken.

(i)convert any of its shares, whether issued or not, into shares of another class.[paragraph (i) added by section 5(1)(b) of Act 111 of 1976]

[subsection (1) amended by section 5(1)(a) of Act 111 of 1976]

(2)A cancellation of shares under subsection (1)(A) shall not be deemed to be a reduction of capital within the meaning of this Act.

(3)Where under subsection (1) a company—

(a)increases its share capital by shares of a fixed amount, it shall pay to the Registrar an amount of two rand and fifty cents for each one thousand rand, or part thereof, by which the share capital is increased,

(b)increases the number of its shares of no par value it shall—

(i)lodge with the Registrar, in the prescribed manner, a certificate given by the auditor of the company showing the value of each issued share arrived at by dividing the number of issued shares into the stated capital, and

(ii)pay to the Registrar an amount of two rand and fifty cents for each thousand rand or part thereof calculated by multiplying the number by which the number of the shares has been increased by the value of each share as certified under subparagraph (i).

76. Premiums received on issues of shares to be share capital, and limitation on application thereof

(1)Where a company which is not a banking institution in terms of the Banks Act, 1965 (Act No 23 of 1965), issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account to be called the “share premium account”, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid-up share capital of the company.

(2)Where assets are acquired by the issue of shares of a company and no consideration is recorded, the assets so acquired shall be valued and if the value of the assets is more than the par value of such shares, the difference between the par value of the shares and the value of the assets so acquired shall be transferred to the share premium account.

(3)The share premium account may, notwithstanding anything contained in subsection (1), be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid capitalization shares or in writing off—

(a)the preliminary expenses of the company, or

(b)the expenses of, or the commission paid or discount allowed on, the creation or issue of any shares or debentures of the company,

or in providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the company.

(4)This section shall as from six months after the date of its commencement apply to any company in respect of any balance of share premiums as at the said commencement date which arose from the issue of shares at a premium before the first day of January, 1953.

77. Proceeds of issue of shares of no par value to be stated capital

(1)The whole of the proceeds of an issue of shares having no par value shall be paid-up share capital of a company and shall be transferred to an account to be called the “stated capital account”.

(2)If shares having no par value are issued by a company for a consideration other than cash, a sum equal to the value of the consideration as determined by the directors shall be transferred to the stated capital account.

(3)The stated capital account may, notwithstanding anything contained in subsection (1) or (2), be applied by a company in writing off—

(a)the preliminary expenses of the company, or

(b)the expenses of, or the commission paid on, the creation or issue of any such shares.

78. Effect of conversion of par value share capital into no par value share capital and vice versa

(1)Where a company converts all its ordinary or preference shares having a par value, or both such ordinary and such preference shares, into shares without par value, there shall be transferred to the stated capital account of the company—

(a)the whole of the ordinary or preference share capital, as the case may be, and

(b)the whole of the share premium account or that part thereof contributed to it by the shares so converted.

(2)Where a company converts all its ordinary or preference shares of no par value or both such ordinary and such preference shares into shares having a par value, there shall be transferred to the share capital account of the company the whole of the stated capital account or that part thereof contributed to it by the shares so converted.

(3)Fractions, fractional surpluses or amounts arising in respect of the nominal share capital or the stated capital may be rounded off but material reductions shall be placed to non-distributable receives.

79. Payment of interest out of capital in certain cases

(1)Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of works or buildings or for the provision of plant, which cannot be made profitable for a lengthy period, the company may pay interest on the share capital for the period and subject to the conditions and restrictions in this section mentioned, and may charge the same to capital as part of the cost of construction of the works or buildings or the provision of plant.

(2)

(a)No such payment shall be made under subsection (1) unless it is authorized by the articles or by special resolution of the company, and the approval of the Minister has first been had and obtained

(b)The Minister may, before approving any such payment, at the expense of the company, appoint a person to enquire into and report to him on the circumstances of the case, and may before making the appointment require the company to give sufficient security for the payment of the costs of the enquiry

(c)Any such payment shall be made only for such period as may be determined by the Minister and such period shall in no case extend beyond the close of the half-year next after the half-year during which the works or buildings have been actually completed or the plant provided

(d)The rate of interest shall in no case exceed six per cent per annum or such lower rate as may for the time being be determined by the Minister

(e)The payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid

(3)For the purposes of subsection (2) (c) the expression “half-year” in relation to a company, means the period of six months commencing on the first or ending on the last day of the financial year of that company.

80. Restriction of power to pay commission and discounts return to Registrar

(1)A company may pay commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or of his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company if—

(a)the payment of the commission is authorized by the articles, and

(b)the commission paid or agreed to be paid does not exceed ten per cent of the price at which shares are issued or any lesser rate fixed by the articles, and

(c)the amount or rate per cent of the commission paid or agreed to be paid is—

(i)in the case of shares offered to the public, disclosed in the prospectus, or

(ii)in the case of shares not offered to the public, disclosed in a statement in the prescribed form and where any circular or notice, not being a prospectus, inviting subscription for shares is issued, also disclosed in that circular or notice, and

(d)the number of shares for which persons have agreed, for a commission, to subscribe absolutely, is disclosed in the manner aforesaid.

(2)The statement referred to in subsection (1)(c)(n) shall be lodged with the Registrar for registration before the payment of the commission to which the statement relates.

(3)Save as aforesaid and subject to the provisions of section 81, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or of his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company, whether the shares or money be so applied by being added to the purchase price of any property acquired by the company or to the contract price of any work to be executed for the company or the money be paid out of the nominal purchase price or contract price, or otherwise.

(4)Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay.

(5)A vendor to, promoter of, or other person who receives payment in money or shares from, a company, shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been lawful under this section.

(6)If default is made in complying with the requirements of subsection (2) relating to the lodging of the statement referred to therein with the Registrar, the company, and every director and officer of the company who knowingly is a party to the default, shall be guilty of an offence.

81. Issues of shares of par value at a discount

(1)A company may issue at a discount shares of the company of a class already issued if the following conditions have been complied with—

(a)Such issue must be authorized by special resolution of the company specifying the maximum rate of discount at which the shares are to be issued, and

(b)not less than one year must at the date of issue have elapsed since the date on which the company became entitled to commence business or the date of the first issue of the class of shares, and

(c)such issue must be sanctioned by the Court, and

(d)the shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the Court or within such extended time as the Court may allow.

(2)The Court may on application for an order sanctioning any such issue, having regard to all the circumstances of the case, make an older on such terms and conditions as it thinks fit.

(3)Every prospectus relating to the issue of shares by the company after the issue of the shares at a discount under this section shall contain particulars of the discount allowed on the issue of those shares or of so much of that discount as has not been written off at the date of the issue of the prospectus.

(4)If default is made in complying with the requirements of subsection (3), the company, and every director and officer of the company who knowingly is a party to the default, shall be guilty of an offence.

82. Issue price of shares of no par value requiring special resolution

(1)No company shall issue shares having no par value of a class already issued at a price lower than an amount arrived at by dividing that part of the stated capital contributed by already issued shares of that class, by the number of issued shares of that class, unless the issue price of such shares is authorized by a special resolution of the company.

(2)The notice convening the meeting for the purpose of passing the special resolution referred to in subsection (1) shall be accompanied by a report by the directors setting out the reasons for the proposed lower issue price.

(3)A special resolution under subsection (1) shall not be capable of being registered in the Companies Registration Office unless the copy thereof lodged with the Registrar is accompanied by a copy of the report by the directors referred to in subsection (2).

(4)This section shall not apply where the issue of shares is in pursuance of an offer for subscription to all existing members in proportion to their share holdings, whether with or without the right to renounce in favour of other persons.

Reduction of capital

83. Reduction of capital by special resolution

(1)A company having a share capital may, if—

(a)so authorized by its articles, and

(b)it has no creditors, or all its creditors have consented to the reduction of capital, and

(c)the reduction of capital affects all its shares or any class of shares proportionally,

by special resolution reduce its share capital in any way other than by paying off capital in instalments or in future payments.

(2)An affidavit, in the form prescribed and accompanied by the prescribed fee, by a director or officer of the company to the effect that the company as at the date of the special resolution has no creditors or that all the creditors have consented to the proposed reduction of capital and that all its shares or all the shares of the class concerned are affected proportionally by it, shall be annexed to the copy of the special resolution lodged with the Registrar for registration together with the written consents of creditors, if any.

(3)In this section “creditor”, in relation to a company, means every creditor of the company who at the date of the special resolution referred to in subsection (1) is entitled to any claim which, if that date were the commencement of the winding-up of the company, would be admissible in proof against the company.

84. Reduction of capital confirmed by court

(1)Where for any reason a reduction of share capital of a company having a share capital cannot be effected under section 83, the company may, if so authorized by its articles, by special resolution and subject to confirmation by the Court, reduce its share capital in any way, and in particular (without prejudice to the generality of the power hereby conferred) may—

(a)cancel any paid-up share capital which is lost or not represented by available assets, or

(b)pay off any paid-up share capital which is in excess of the wants of the company.

(2)Where a company has passed a special resolution for reducing share capital, it shall within sixty days apply to the Court for an order under this section confirming the reduction.

85. Creditors and objections to reduction of capital

(1)Where the proposed reduction of share capital under section 84 involves the payment to any shareholder of any paid-up share capital, and in any other case if the Court so ducts, every creditor of the company who at the date fixed by the Court is entitled to any claim which, if that date were the commencement of the winding-up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction.

(2)The Court shall settle a list of creditors so entitled to object and for that pin pose shall ascertain as far as possible, without requiring an application from any creditor, the names of those creditors and the nature and amount of their claims and may order the publication of a notice fixing a period or periods within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction.

(3)Where a creditor entered on the list and whose claim is not discharged or determined, does not consent to the reduction, the Court may, if it thinks fit, dispense with the consent of that creditor on the company securing the payment of his claim by appropriating, as the Court may debt, an amount therefore as follows—

(a)If the company admits the full amount of his claim, or though not admitting it, is willing to provide for it, then the full amount of the claim, or

(b)if the company does not admit or is not willing to pi ovide for the full amount of the claim, or if the liability is contingent or the amount not ascertained, then an amount fixed by the Court aftei a like enquiry and adjudication as if the company were being wound up by the Court.

86. Powers of court as to order confirming reduction of capital

(1)On an application under section 84 the Court may make an older, on such terms and conditions as it thinks fit, confirming the reduction or may grant a rule nisi calling on all persons concerned to show cause why such an older shall not be granted, and where the proposed reduction of share capital involves the payment to any shareholder of any paid-up share capital, the Court shall grant such a rule nisi.

(2)The Court shall not make an order confirming the reduction or confirming a rule nisi referred to in subsection (1) unless it is satisfied that every creditor of the company who under section 85 is entitled to object to the reduction, has consented to the reduction or that his debt or claim has been discharged or has determined or has been secured.

(3)The Court making any order confirming a reduction of capital by a company may make an order requiring the company to publish as the Court directs the reasons for reduction or such other information in regard thereto as the Court may think expedient with a view to giving proper information to the public and, if the Court thinks fit, the causes which led to the reduction.

(4)The Court making an order confirming a reduction of capital by a company involving the payment to any shareholder of any paid-up share capital in instalments or future payments may make an order to the effect that—

(a)no proposed instalment or future payment shall be paid out unless it has been authorized by the Registrar in writing,

(b)the Registrar shall issue such written authority only after the company has lodged with him an affidavit in the form prescribed and accompanied by the prescribed fee by a director or officer of the company to the effect that as at the date of the affidavit the company has no creditors or that all the creditors have consented to the payment of the proposed instalment or future payment, the written consents of creditors, if any, to be annexed to the said affidavit, and

(c)if the company is not able to furnish the said affidavit, it may apply to the Court for an order sanctioning the payment of the proposed instalment or future payment.

(5)In an application for an order under subsection (4)(c), the Court may grant an order on such terms and conditions as it thinks fit and may exercise all the powers provided by this section as if it were an application for confirmation of a reduction of capital

87. Special provisions as to special resolutions for the reduction of capital

(1)Every special resolution for the reduction of the share capital of a company shall be in the prescribed form and shall set out the then existing share capital, the particulars of the proposed reduction of capital and the resultant state of the share capital of the company.

(2)Every such special resolution shall be taken to be a special resolution for the alteration of the memorandum of a company.

(3)Notwithstanding the provisions of section 202, the Registrar shall register, on payment of the prescribed fee, any special resolution for the reduction of the share capital of a company under section 84 upon the lodging with him of the order of the Court confirming the reduction of capital or a certified copy of such order.

88. When reduction of capital effective

No company shall act upon any special resolution for the reduction of capital before the date on which it is registered by the Registrar but such resolution may specify a date, not earlier than the date of its passing, as from which the reduction of capital will have retrospective effect.

89. Publication of reduction of capital

The Registrar shall publish in the Gazette a notice of reduction of capital in respect of every special resolution for the reduction of capital registered by him, within one month after the date of such registration.

90. Offences as to reduction of capital

If any director or officer of a company—

(a)wilfully conceals the name of any creditor entitled to object to a proposed reduction of capital, or

(b)wilfully misrepresents the nature or amount of the debt or claim of any creditor, or

(c)aids, abets or is privy to any such concealment or misrepresentation as aforesaid, he shall be guilty of an offence

91. Nature of shares

The shares or other interest which any member has in a company shall be movable property, transferable in the manner provided by this Act and the articles of the company

Allotment and issue of shares

92. Shares not to be allotted or issued unless fully paid up

(1)No company shall allot or issue any shares unless the full issue price of or other consideration for such shares has been paid to and received by the company.

(2)Notwithstanding the provisions of subsection (1), a company may allot or agree to allot shares not fully paid-up for the purpose of their being offered for sale to the public as fully paid-up shares Provided that—

(a)if such offer is not made within one month from the date of such allotment or agreement, such allotment or agreement shall be void, or

(b)if such offer to the public is made but not accepted in full within two months from the date of such allotment or agreement to allot, the allotment of, or the agreement to allot, such shares in respect of which the full issue price is not paid within the said period, shall be void.

93. Register and return as to allotments

(1)Every company having a share capital shall keep at its registered office or at die office where it is made up, a register of allotments of shares.

(2)Every company shall forthwith after the allotment of any shares enter in the register of allotments the names and addresses of the allottees, the number of shares allotted to each of them, the amount paid for such shares and in the case of shares allotted as fully paid-up otherwise than for cash, full particulars of the consideration in respect of which the allotment was made and of the transaction or contract concerned.

(3)Whenever a company makes any allotment of its shares, the company shall within one month thereafter lodge with the Registrar—

(a)a return in the form prescribed stating full particulars of the nominal and previously issued share capital or stated capital and the number and description of the shares comprised in the allotment,

(b)in the case of shares allotted otherwise than for cash, a copy of the contract in writing constituting the title of the allottee to the allotment, together with any contract of sale, or for service or other consideration in respect of which that allotment was made (or if such contract is not in writing, a memorandum containing full particulars of such contract), and a return in the prescribed form stating the number and description of the shares so allotted, the name and address of such allottee and the consideration for which they have been allotted.

(4)If any allotment of shares becomes void as a result of any provision of this Act, the company shall within one month after the date on which such allotment becomes void lodge a notice in the prescribed form to that effect with the Registrar.

(5)If default is made in complying with any of the requirements of this section, the company, and every director or officer of the company who knowingly is a party to the default, shall be guilty of an offence.

(6)The provisions of section 113 shall mutatis mutandis apply to the inspection of and the furnishing of copies of or extracts from such register of allotments.

94. Certificate of shares or stock

(1)A certificate signed by two directors of a company or by one director and one officer duly authorized thereto by the directors, specifying any shares or stock of that Company held by any member, shall be pruna facie evidence of the title of the member to such shares or stock.

(2)Any such signatures may be affixed to the certificate by autographic or mechanical means.

95. Numbering of shares and share certificates

(1)

(a)The shares of a company having a share capital shall, except in the case of shares or any particular class of shares which rank equally for all purposes, be distinguished by appropriate numbers.

(b)No provision in the articles of a company registered before the thirtieth day of June, 5950, requiring shares of that company to be numbered, shall apply in respect of shares which in terms of paragraph (a) of this subsection are not required to have distinguishing numbers.

(2)Where shares are not distinguished by appropriate numbers, the certificates of such shares shall be so distinguished, and upon the registration of transfer of any such shares the certificate relating thereto shall, in addition to the distinguishing number, bear on its face such an endorsement, in the form of a reference number or otherwise, as will enable the immediately preceding holder of the shares to be identified.

96. Limitations of time for issue of share certificates

(1)Every company shall within two months or within such extended time, not exceeding one month, as the Registrar on good grounds shown and on payment of the prescribed fee, may grant, after the allotment of any of its shares, debentures or debenture stock, complete and have ready for delivery the certificates of all shares, the debentures or the certificates of all debenture stock allotted.

(2)If default is made in complying with the requirements of subsection (1), any person entitled to the certificates of shares, the debentures or the certificates of debenture stock in question may by notice in writing call upon the company to make good the default, and if the company fails to comply with the notice within ten days after service thereof, the Court may on the application of such person make an order directing the company to make good the default within such time as may be specified in the order, and if it thinks fit direct that any costs of or incidental to the application shall be borne by the company or by any director or officer of the company responsible for the default.

(3)If default is made in complying with the requirements of subsection (1), the company, and every director or officer thereof who knowingly is a party to the default, shall be guilty of an offence.

97. Validation of irregular creation, allotment or issue of shares

(1)Where a company has purported to create, allot or issue shares and the creation, allotment or issue of such shares was invalid by virtue of any provision of this Act or any other law or of the memorandum or articles of the company or otherwise, or the terms of the creation, allotment or issue were inconsistent with or not authorized by any such provision, the Court may upon application made by the company or by any interested person and upon being satisfied that in all the circumstances it is just and equitable to do so, make an order validating the creation, allotment or issue of such shares or confirming the terms of the creation, allotment or issue thereof, subject to such conditions as the Court may impose.

(2)The Court shall, when making an order under subsection (1), direct that a copy thereof be lodged with the Registrar.

(3)Upon the registration of the copy of the said order by the Registrar and after the payment of all prescribed fees, the said shares shall be deemed to have been validly created, allotted or issued upon the terms of the creation, allotment or issue thereof and subject to the conditions imposed by the Court.

98. Redeemable preferences shares

(1)Subject to the provisions of this section, a company having a share capital, if so, authorized by its articles, may issue preference shares which are, or at the option of the company are liable, to be redeemed Provided that—

(a)no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividends or out of the proceeds of a fresh issue of shares made for the purposes of the redemption,

(b)where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividends, be transferred to a reserve fund, to be called the "capital redemption reserve fund", a sum equal to the nominal amount of the shares redeemed, or if shares of no par value, to the book value of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were share capital of the company,

(c)no such shares shall be redeemed unless and until the premium, if any, payable on redemption, has been provided for out of the profits of the company or out of the company’s share premium account,

(d)the redemption of such shares shall be effected on such terms and in such manner as shall be provided by the articles of the company.

(2)Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares (including, if the company so decides by special resolution, shares other than redeemable preference shares) up to the nominal amount of the shares redeemed or to be redeemed or in the case of preference shares of no par value, up to the book value of the shares redeemed or to be redeemed, as if those shares had never been issued, and the share capital of the company or the number of shares of no par value shall not for the purposes of section 75 (3) be deemed to be increased by the issue of shares in pursuance of this subsection Provided that, where new shares are issued before the redemption of the old shares, the new shares shall not for the purposes of any law relating to stamp duty, be deemed to have been issued in pursuance of this subsection, unless the old shares are redeemed within thirty days after the issue of the new shares.

(3)The redemption of redeemable preference shares shall not be deemed to constitute a reduction of a company’s authorized share capital.

(4)The capital redemption reserve fund may, notwithstanding anything in this section contained, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid-up capitalization shares.

(5)

(a)If a company has redeemed any redeemable preference shares, it shall within one month thereafter give notice thereof in the prescribed form to the Registrar specifying the shares so redeemed

(b)If default is made in complying with the provisions of paragraph (a), the company shall be guilty of an offence.

(6)For the purposes of subsections (1) and (2) “book value” in respect of preference shares of no-par value, means that part of the stated capital contributed by the preference shares redeemed or to be redeemed.

(7)This section shall also apply in respect of any balance of any capital redemption reserve fund created by a company prior to 1 January 1974.[subsection (7) added by section 4 of Act 64 of 1977]

99. Conversion of shares into certain preference shares

If a company has converted any of it's shares into preference shares which are, or at the option of the company are liable, to be redeemed, the provisions of section 98 shall apply to such preference shares.[section 99 substituted by section 6 of Act 111 of 1976]

100. Conversion of shares into stock

(1)A company having a share capital, if so, authorized by its articles, may by special resolution convert all or any of its paid-up shares into stock and reconvert such stock into any number of paid-up shares.

(2)Where a company has converted any of its shares into stock, the provisions of this Act which in terms apply exclusively in respect of shares, shall cease to apply to so much of the share capital as has been so converted.

101. Share warrants to bearers

(1)A public company having a share capital, if so authorized by its articles, may, with respect to any paid-up shares, or to stock, issue a warrant (in this Act termed a share warrant) stating that the bearer of the warrant is entitled to the shares or stock therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares or stock included in the warrant

(2)A share warrant shall entitle the bearer thereof to the shares or stock therein specified, and such shares or stock may be transferred by the delivery of the share warrant.

102. Variation of rights in respect of shares

(1)If in the case of a company the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorizing the variation of the rights attached to any class of shares of the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and if in pursuance of the said provision the rights attached to any such class of shares are at any time varied, the holder of a share of that class, being a person who did not consent to or vote in favour of the resolution for the variation, may apply to the Court for an order under section 252.

(2)The expression “variation” in this section includes abrogation and the expression “varied” shall be construed accordingly.

(3)The company shall within one month from the date of the consent or resolution referred to in subsection (1) lodge with the Registrar in the prescribed form the particulars of such consent or resolution, and if default is made in complying with this provision, the company, and every director and officer thereof who knowingly is a party to the default, shall be guilty of an offence.

Members and register of members

103. Who are members of a company

(1)The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company upon its incorporation, and shall forthwith be entered as members in its register of members.

(2)Every other person who agrees to become a member of a company and whose name is entered in its register of members, shall be a member of the company.

(3)A company shall, subject to the provisions of its articles, enter in the register as a member, nomine officii, of the company, the name of any person who submits proof of his appointment as the executor, administrator, trustee, curator or guardian in respect of the estate of a deceased member of the company or of a member whose estate has been sequestrated or of a member who is otherwise under disability or as the liquidator of anybody corporate in the course of being wound up which is a member of the company, and any person whose name has been so entered in the register shall for the purposes of this Act be deemed to be a member of the company.

(4)Subject to the provisions of section 213(1)(b), the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either for all purposes or for such purposes as may be specified in the articles.

104. Trust in respect of shares

A company shall not be bound to see to the execution of any trust, whether express, implied or constructive, in respect of any share.

105. Register of members

(1)Every company shall keep in one of the official languages of the Republic a register of its members, and shall forthwith enter therein—

(a)the names and addresses of the members and, in the case of a company having a share capital, a statement of the shares issued to each member, distinguishing each share by its number, if any, and by its class or kind, and of the amount paid or agreed to be considered as paid on the shares of each member, and

(b)in respect of each member—

(i)the date on which his name was entered in the register as a member, and

(ii)the date on which he ceased to be a member.

(2)Where a company has converted any of its shares into stock, the register shall show the amount of stock held by each member instead of the number of shares and the particulars relating to shares specified in subsection (1).

(3)Where a company has issued share warrants—

(a)it shall, on the issue of a share warrant, strike out of its register of members the name of the member then entered therein as holding the shares or stock specified in the warrant as if he had ceased to be a member and shall enter the register—

(i)the fact of the issue of the warrant,

(ii)a statement of the shares or stock included in the warrant, distinguishing each share by its number so long as the share has a number, and

(iii)the date of the issue of the warrant.

(b)Until the warrant is surrendered, the said particulars shall be deemed to be the particulars required by this Act to be entered in the register of members, and on the surrender of the warrant, the date of the surrender shall be entered as if it were the date on which a person ceased to be a member.

(c)The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering it for cancellation, to have his name entered as a member in the register of members, and the company shall be liable for any loss incurred by any person by reason of the company entering in its register the name of a bearer of a share wan ant in respect of the shares or stock therein specified without the share warrant being surrendered and cancelled.

(4)The register of members may be kept either by making entries in bound books or by recording the particulars required in any other manner and, in the case of a person who has ceased to be a member, also by microfilm or microcard or by miniature photographic or other process which accurately reproduces and forms a durable medium for recording and reproducing such particulars Provided that where the register is not kept by making entries in bound books, adequate precautions shall be taken for guarding against falsification and facilitating its discovery.

106. Index to register of members

(1)Every company having more than fifty members shall, unless the register of members is in such form as to constitute in itself an index, keep an index of the names of the members of the company, and shall, within fourteen days after the date on which any alteration is made in the register of members, make any necessary alteration in the index.

(2)The index, which may be in the form of a card index, and shall be deemed to be a part of the register of members, shall, in respect of each member, contain a sufficient indication to enable the account of that member in the register to be readily found.

107. Branch registers in foreign countries

(1)A company having a share capital may, if so authorized by its articles, cause to be kept in any foreign country to have a register of members resident in any foreign country (in this Act called a branch register).

(2)The company shall give to the Registrar notice on the prescribed form of the situation of the office where any branch register is kept, and of any change in that situation, and of the discontinuance of the office in the event of its being discontinued.

108. Provisions as to branch register

(1)A branch register shall be deemed to be part of the company’s register of members (in this Act called the principal register).

(2)A branch register shall be kept in the same manner in winch the principal register is by this Act required to be kept except that the notice referred to in section 114, shall, for a reasonable time before the closing of the branch register, also be inserted in some newspaper circulating the district wherein the branch register is kept.

(3)The company shall transmit to its registered office a copy of every entry in its branch register as soon as may be after the entry is made and shall cause to be kept at its registered office, duly entered up from time to time, a duplicate of its branch register, and the duplicate shall for the purposes of this Act be deemed to be part of the principal register.

(4)The company may discontinue to keep any branch register, and shall thereupon transfer all entries in that register to some other branch register kept by the company or to the principal register.

(5)Subject to the provisions of this Act and of any law relating to stamp duty or estate duty, any company may by its articles make such provisions as it may think fit respecting the keeping of branch registers.

109. Register of members to be evidence

The register of members of a company shall be prima facie evidence of any matters directed or authorized to be entered therein by this Act.

110. Where register of members to be kept

(1)Subject to the provisions of this section, the register of members of a company shall be kept at its registered office.

(2)A company’s register of members may be kept at any office of the company in the Republic where the work of making it up is done, instead of at the company’s registered office, and where a company arranges with some other person (in this section referred to as “the agent”) for the making up of its register of members to be undertaken on behalf of the company by the agent, the register may be kept at the office of the agent in the Republic at which the work is done instead of at an office of the company.

(3)Any index of the names of the members of a company required to be kept in terms of section 106 shall at all times be kept at the same place where the register of members is kept, and where the company keeps a branch register under section 107 the duplicate of the branch register required by subsection (3) of section 108 to be kept at the company’s registered office shall, notwithstanding anything in the said subsection contained, at all times be kept at the same place where the company’s principal register is kept.

(4)Any company the register of members of which is not kept at its registered office shall notify the Registrar in the prescribed form of the place where such register is kept and of any change in that place.

(5)The provisions of this section relating to the register of members of a company and the provisions of this Act relating to the inspection or production of any such register or to the furnishing of copies of any such register or any part thereof, shall apply to any agent by whom any such register is kept on behalf of a company in the same manner as they apply to the company.

111. Disposal of closed accounts in register

The parts of the register of members of a company pertaining to persons who have ceased to be members, in whatever manner kept under section 105, may be disposed of after the expiration of a period of fifteen years after such persons have ceased to be members.

112. Offences in respect of register of members

Any company which or an agent referred to im section 110 who fails to comply with any provision of section 105, 106, 107, 108 or 110, shall be guilty of an offence.

113. Inspection of register of members

(1)The register of members of a company shall, except when closed under the provisions of this Act, during business hours (subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day be allowed for inspection) be open to inspection by any member or his duly authorized agent free of charge and by any other person upon payment for each inspection of an amount of twenty-five cents or such lesser amount as the company may determine.

(2)Any person may apply to a company for a copy of or extract from the register of members and the company shall either furnish such copy or extract on payment by the applicant of an amount of twenty-five cents or such lesser amount as the company may determine for every page of the required copy or extract, or afford such person adequate facilities for making such copy or extract.[subsection (2) substituted by section 6 of Act 59 of 1978]

(3)If access to the register of members for the purpose of making any such inspection or any such copy or extract or facilities for making any such copy or extract be refused or not granted or furnished within fourteen days after a written request to that effect has been delivered to the company, the company, and every director or officer of the company who knowingly is a party to the refusal or default, shall be guilty of an offence.

(4)In the case of any such refusal or default the Court may, on application, by order compel an immediate inspection of the register and index or direct that the copy extract required shall be sent to the applicant requiring it and may direct that any costs of or incidental to the application shall be borne by the company or by any director or officer of the company responsible for the refusal or default.

(5)The provisions of this section shall mutatis mutandis apply also, in respect of any register of transfers kept by a company.

114. Powers to close register of members

A public company may, after giving notice of its intention to do so in the Gazette and in a newspaper circulating in the district in which its registered office is situate, close its register of members, or any part thereof relating to holders of any class of shares, for a period or periods not exceeding in the aggregate sixty days in any year.

115. Rectraction of register of members

(1)If—

(a)the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company, or

(b)default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member,

the person concerned or the company or any member of the company, may apply to the Court for rectification of the register

(2)The application may be made in accordance with the rules of Court or in such other manner as the Court may direct, and the Court may either refuse it or may order rectification of the register and payment by the company, or by any director or officer of the company, of any damages sustained by any person concerned.

(3)On any application under this section the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register whether the question arises between members or alleged members or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for the rectification of the register.

Debentures

116. Creation and issue of debentures

A company, if so, authorized by its memorandum or by its articles, may create and issue secured or unsecured debentures

117. Security for debentures

(1)The binding of movable property as security for any debenture or debentures may be effected by—

(a)a deed of pledge and the delivery of the movable property concerned to one or more debenture-holders or to a trustee for debenture-holders, or

(b)a notarial bond, collateral notarial bond or notarial surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders, or

(c)the pledging of incorporeal rights by means of cession of such rights, whether present or future, in due and proper form

(2)The binding of a ship may be effected by a deed of mortgage in the form prescribed by the Merchant Shipping Act, 1951 (Act No 57 of 1951), recorded in the register by the proper officer at the ship’s port of registry.

(3)The binding as aforesaid of immovable property may be effected by a mortgage bond, collateral mortgage bond or surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders.

(4)A wholly owned subsidiary shall be deemed to have and always to have had the power to mortgage any of its property as collateral security for the issue of debentures by its holding company.

118. Bonds to be registered in deeds registry, copies of documents to be annexed to bonds and deed of pledge

(1)Any mortgage bond or notarial bond in pursuance of the provisions of section 117 and subsequent transactions relating thereto shall, subject to the laws governing the registration of mortgage bonds and notarial bonds, be registered in a deed’s registry

(2)If any such bond is in favour of one or more debenture holders, a certified copy of the debenture concerned shall be annexed to the said bond

(3)If any such bond is in favour of a trustee for debenture holders, certified copies of the debenture concerned and of the trust deed by which the trustee is appointed and in which his rights and duties are defined, shall be annexed to the said bond

(4)Certified copies of the debenture concerned and of any such trust deed, if any, shall be annexed to any deed of pledge where the debentures are secured by a pledge of movable property

119. Debentures itself may be registered

If any debenture is executed before a notary public, it may, subject to the provisions of section 118(1), be registered in a deeds registry in like manner as if it were a notarial bond

120. Issue of debentures at different dates and ranking of preference

In any bond or deed of pledge executed in favour of a trustee for debenture-holders generally, provision may be made that the debentures thereby secured or to be secured may be issued from time to time and at different dates, as the company may determine, but all such debentures, whenever issued, shall rank in preference concurrently with one another as from the date on which the pledge was constituted or the bond was registered

121. Rights of debenture-holders

(1)Every holder of a debenture secured by a pledge or a bond executed in favour of a trustee for debenture-holders generally shall, unless it is otherwise provided by the deed of pledge, bond or trust deed and copy of the debenture annexed thereto, be entitled to enforce his rights under such debenture as soon as it has been issued to him in the same manner as if he were himself the pledgee or the holder of such bond

(2)No notice of the cession of any such debenture shall be necessary in order to confer upon any cessionary thereof the rights of the cedent

122. Director or officer not to be trustee for debenture-holders

No director or officer of a company shall be capable of being a trustee for the holders of debentures of that company

123. Liability of trustee for debenture-holders

(1)Subject to the provisions of this section, any provision contained in a trust deed for securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, shall be void in so far as it would have the effect of exempting a trustee thereof from or indemnifying him against liability for breach of trust where he fails to show the degree of care and diligence required of him as trustee, having regard to the provisions of the just deed conferring on him any powers, authorities or discretions.

(2)The provisions of subsection (1) shall not have the effect of—

(a)invalidating any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release or any provision enabling such a release to be given—

(i)with the consent of a majority of not less than three-fourths in value of the debenture-holders present and voting in person or by proxy at a meeting summoned for the purpose, and

(ii)with respect to specific acts or omissions or on the trustee dying or ceasing to act, or

(b)invalidating any provision in force on the first day of January 1953, so long as any person then entitled to the benefit of that provision or who is afterwards given the benefit thereof under subsection (3) remains a trustee under the relevant deed, or

(c)depriving any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any provision referred to in paragraph (b) was in force

(3)So long as any trustee under a trust deed remains entitled to the benefit of a provision saved by subsection (2) (b) or (c) the benefit of that provision may be given either—

(a)to all trustees under the deed, present and future, or

(b)to any named trustee or proposed trustee thereunder,

by a resolution passed by a majority of not less than three-fourths in value of the debenture-holders present in person or by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, at a meeting summoned for the purpose in any manner approved by the Court.

124. Power to re-issue redeemed debentures in certain cases

(1)Where a company has redeemed any debentures previously issued, not being debentures convertible into shares of the company, it shall, unless its articles or the conditions of issue of such debentures expressly otherwise provide or the debentures have been redeemed in pursuance of any obligation on the part of the company to redeem them (not being an obligation enforceable only by the person to whom the redeemed debentures were issued or his successors in title) have and be deemed at all times to have had power to keep the debentures have for the purpose of tissue, and, where a company has purported to exercise such a power, it shall have and be deemed at all times to have had power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place, and upon such a re-issue the person entitled to the debentures shall have and shall be deemed at all times to have had the same rights and priorities as if the debentures had not previously been issued.

(2)Where with the object of keeping debentures alive for the purpose of re-issue, they have been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

(3)Where a company deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

(4)Nothing in this section shall prejudice any power reserved to a company by its debentures or the securities therefore, to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished.

125. Debentures to be described as secured or unsecured

No debenture, debenture certificate or prospectus relating to debentures shall be issued by a company unless the term “debenture” or such other term denoting a debenture used therein is qualified by the word “secured” or “unsecured”, as the case may be

126. Form of debentures or debentures certificates

(1)No debenture or debenture certificate shall be issued by a company unless the conditions of the debenture concerned are stated on the debenture or on the debenture certificate

(2)Any debenture or debenture certificate shall be signed by one director of the company and an officer of the company duly authorized thereto by the directors and shall specify the debentures of that company held by the person therein named

(3)Any signature referred to in subsection (2) may be affixed to a debenture or debenture certificate by autographic or mechanical means

(4)Any debenture or debenture certificate issued in terms of this section shall be prima facie evidence of the title of the person named therein to such debenture or debenture certificate

127. Register of pledges and bonds

Subject to the provisions of section 129, every company shall keep at its registered office a register of pledges, notarial bonds and mortgage bonds, and notarial debentures and enter therein all pledges, notarial bonds, mortgage bonds and notarial debentures affecting property of the company, giving in each case a short description of the property pledged or bound, the amount of the pledge or bond and the names and addresses of the persons in whose favour any pledge, bond or debenture was executed or to whom any pledge has been delivered

128. Register of debentures-holders

Subject to the provisions of section 129, every company shall keep at its registered office a register of debenture-holders showing the number of debentures issued and outstanding and specifying the names and addresses of the holders thereof.

129. Registers may be kept where made up

The provisions of section 110(2) and (4) relating to the register of members shall apply mutatis mutandis to the registers required to be kept under sections 127 and 128.

130. Inspection of registers and copies and extracts

(1)The provisions of section 113 relating to the inspection of the register of members shall apply mutatis mutandis to the registers to be kept under sections 127 and 128 and the provisions of section 113 (3) shall apply mutatis mutandis to the furnishing of a copy of a trust deed referred to in subsection (2) of this section.

(2)A copy of any trust deed for securing any issue of debentures shall be transmitted to every holder of any such debentures at his request on payment, in the case of a printed trust deed, of an amount of twenty-five cents or such lesser amount as may be determined by the company, or where the trust deed has not been printed, on payment of an amount of twenty-five cents or such lesser amount as may be determined by the company for every page of the required copy.[subsection (2) substituted by section 7 of Act 59 of 1978]

131. Default in keeping of registers

Any company which or any agent referred to in section 110 (2), as applied by section 129, who fads to comply with any provision of section 127,128 or 129, shall be guilty of an offence.

Forgery of certificates as to shares, debentures and other securities

132. Forgery, impersonation and unlawful engravings

Any person shall be guilty of an offence if he—

(a)with intent to defraud, forges, alters, offers, utters or disposes of, knowing it to be forged or altered, any certificate as to shares, debentures or other securities within the meaning of that term as defined in section 134 (c), any broker’s transfer form, certified broker’s form, share warrant or coupon issued in pursuance of this Act (or any document purporting to be such share warrant or coupon), or

(b)by means of any forged or altered certificate, form, share warrant, coupon or document, which he knows to be forged or altered, obtains or receives or endeavour to obtain or to receive any interest in any company or obtains or receives or endeavour to obtain or to receive any benefit, dividend or money payable in respect thereof, or

(c)by impersonating any owner of any interest in any company, including any share warrant or coupon issued in pursuance of this Act, obtains or endeavour to obtain any such interest or share warrant or coupon or receives or endeavour to receive any benefit or money due to any such owner, as if he were the true and lawful owner, or

(d)without lawful authority or excuse (the proof whereof shall he upon him)

(i)engraves or makes upon any plate, wood, stone or other material any certificate as to any interest in a company or any share warrant or coupon or document purporting to be such interest, share warrant or coupon issued or made by any particular company in pursuance of this Act or to be a blank certificate, share warrant or coupon so issued or made or to be a part of such a certificate, share warrant or coupon, or

(ii)uses any such plate, wood, stone or other material for the making or printing of any such certificate, share warrant or coupon or document or of any such blank certificate, share warrant or coupon or any part thereof, or

(iii)knowingly has in his custody or possession any such plate, wood, stone or other material.

Transfer of shares and debentures

133. Registration of transfer of shares or interests

(1)Any transfer of shares of or interest in a company shall be registered by the company by entering in its register of members the name and address of the transferee, the description of the shares or interest transferred and the date of the registration of such transfer and, if it is a transfer of partly paid-up shares of or interest in an existing company, the amount outstanding on each share or interest, shall be entered in the said register

(2)Notwithstanding anything in the articles of a company, it shall not be lawful for the company to register a transfer of shares of or interest in the company unless a proper instrument of transfer has been delivered to the company Provided that nothing in this section shall prejudice any power of the company to register as a member any person to whom the right to any share of the company has been transmitted by operation of law

(3)On the application of the transferor of any share of or interest in a company, the company shall enter in its register of members the matter prescribed by subsection (1) in the same manner and subject to the same conditions as if the application for the entry were made by the transferee

(4)The registration of any transfer of shares of or interest in a company shall be subject to the law relating to stamp duty and estate duty

134. Definitions for purpose of transfer of listed shares or interests

For the purposes of sections 135, 136, 137, 138 and 140, unless the context otherwise indicates—

(a)“broker’s transfer form” means the form prescribed and any substantially similar form which is recognized by the law of the country in which the relevant transfer is registered,

(b)“company” includes any issuer of a security,

(c)“security” means any fully paid-up share, stock, debenture, debenture stock, loan stock, unit in a unit portfolio or other security, other than a bearer security, which is included in the list of securities referred to in section 9 of the Stock Exchanges Control Act, 1947 (Act No 7 of 1947), that may be dealt in on a stock exchange licensed under that Act, and includes any right of option to acquire such a security, whether fully paid-up or not, included in said list,

(d)“securities transfer form” means the form prescribed and any substantially similar form which is recognized by the law of the country in which the relevant transfer is registered,

(e)“stock exchange transaction” means a transaction for the purchase and sale of any security in which each party thereto is either—

(i)a stockbroker as defined in section 1 of the Stock Exchanges Control Act, 1947, or a person in a foreign country whose ordinary business or part of whose ordinary business in such country is the buying and selling of securities as defined in section 9 of the said Act, or

(ii)a person acting through the agency of such a stockbroker or person.

135. Manner in which securities may be transferred

(1)Notwithstanding the provisions of any law to the contrary or of the memorandum or articles of any company or of any contract relating to the transfer of any security—

(a)a security may be transferred by means of a securities transfer form, or

(b)a security may, for the purposes of a stock exchange transaction, be transfer ed by means of a securities transfer form and a broker’s transfer form Provided that the securities transfer form need not be completed with reference to the particulars relating to the transferee and the consideration passing Provided further that a separate broker’s transfer form may be used in respect of each transferee concerned in the transaction

(2)The execution of a securities transfer form or a broker’s transfer form need not be attested

(3)Nothing in this section contained shall be construed as—

(a)preventing the transfer of a security by means of any form in use immediately prior to the commencement of this section or any form prescribed at any time under this Act,

(b)entitling the issuer of any security to refuse the registration of any person as the holder of that security on the ground that the transfer purports to be effected by means of a securities transfer form or a broker’s transfer form,

(c)affecting the provisions of any law or of any memorandum or articles of any company or other body corporate or of any contract which deals with the manner in which any document shall be signed or sealed by or on behalf of any company or other body corporate, or

(d)affecting the liability for the payment of any duty payable in respect of the registration of the transfer of any security

136. Certification by company that security has been lodged for transfer

(1)

(a)If a company under the signature of any person duly authorized to certify transfers of securities on behalf of the company, or of any officer or servant of a body corporate so authorized, endorses on any instrument of transfer referred to in section 135 and executed by or on behalf of the transferor, that the certificate relating to the security in question has been lodged with the company, the company shall, for the purposes of this section, be deemed to have certified that instrument

(b)A certification shall for the purposes of this section be deemed to be signed if it purports to be authenticated by the signature or limitation of any person whether by autographic or mechanical means, unless it is shown that the signature or initial is not that of a person authorized to certify transfers of securities on behalf of the company

(2)

(a)The certification by a company in terms of subsection (1) shall be taken as a representation by the company to any person acting on the faith of the certification that there have been lodged with the company the necessary documents relating to the securities mentioned in the instrument of transfer and that it appears from the said documents that the title to the said securities is held by the transferor named in the said instrument of transfer

(b)The representation referred to in paragraph (a) shall not be taken as a representation that the transferor named in the instrument of transfer in question has in fact any title to the security in question

(c)Where any person acts on the faith of an incorrect certification negligently made by a company, such person shall be in the same position with reference to the company as if the certification had been fraudulently made

(3)Subject to the provisions of subsection (2), the delivery to any person of any instrument of transfer certified in terms of subsection (1) shall confer on that person the same rights as that person would have acquired before the commencement of this section upon the delivery to him of a certificate for the securities in question and an instrument of transfer signed by the transferor in blank

(4)The certificates of any securities in respect of which a company has certified any instrument of transfer as provided in this section, shall upon certification be cancelled by the company

137. Duty of company with reference to person under contractual disability

When a company records in its registers the transfer of any security, it shall not be under any duty to satisfy itself that such transfer is within the contractual power of the transferor or transferee or that any legal requisite which obtains with reference to the ability of the transferor or transferee to transfer or to take transfer has been complied with or that any person signing any document relevant to the transfer on behalf of any person or company has been duly authorized to sign that document Provided that the provisions of this section shall not absolve any company from liability arising from any fraudulent act to which it is knowingly a party.

138. Warranty and indemnity by person lodging document of transfer

Any person who, for the purposes of the transfer of any security of any company, as principal or agent, lodges with that company any document relating to that transfer, shall be deemed thereby to warrant that such document is genuine and that he, or when he is acting as agent, his principal jointly and severally with him, indemnifies the said company against any claim made upon it and against any loss or damage suffered by it arising out of a transfer registered by the company of the security referred to in such document.

139. Notice of refusal to register transfer

(1)If a company refuses to register a transfer of any shares or debentures, it shall, within thirty days after the date on which the instrument of transfer was lodged with it, send to the transferor and the transferee notice of the refusal

(2)Any company which fails to comply with the requirements of this section shall be guilty of an offence.

140. Limitation of time for issue of certificates on transfers

(1)Unless it is entitled for any reason to refuse to register a transfer and does not register it, every company shall, within six weeks after the date on which an instrument of transfer of any shares, debentures, debenture stock or securities is lodged with it, complete and have ready for delivery the certificates in respect of the shares, debentures, debenture stock or securities of which the transfer is to be registered

(2)If default is made in complying with the requirements of subsection (1), the provisions of section 96 (2) and (3) shall apply mutatis mutandis

Restriction on offering shares for sale

141. No offer of shares for sale to public without statement

(1)No person shall either orally or in writing (including any newspaper advertisement) make an offer of shares for sale to the public or issue, distribute or publish any material which in its form and context is calculated to be understood as an offer as aforesaid unless it is accompanied by a written statement containing the particulars required by this section to be included therein.

(2)The provisions of subsection (1) shall not apply—

(a)if the shares to which the offer or material relates are shares which are listed by, or in respect of which permission to deal therein has been granted by, any stock exchange in the Republic recognized by the Minister by notice in the Gazette for the purposes of this section, and the person making the offer or publishing the material so states in writing, specifying the stock exchange, or

(b)if the offer is made or the material is published only to people—

(i)whose ordinary business or part of whose ordinary business it is to deal in shares, whether as principals or agents, or

(ii)who are at the time of the offer the holders of shares of the same company, or

(c)in the case of an offer in his capacity as such, by an executor or administrator of a deceased estate or a trustee of an insolvent estate or a liquidator or trustee referred to in the Agricultural Credit Act, 1966 (Act No 28 of 1966), or

(d)if the offer is made or the material is published for the purpose of a sale in execution or by public auction or by public tender, or

(e)if the said offer is accompanied by a prospectus registered under Chapter VI of this Act

(3)The said written statement shall be dated and signed by the person or persons making the offer or issuing, distributing or publishing the said material, and if such person is a company, by every direction thereof

(4)The written statement aforesaid shall not contain any matter other than the particulars required by this section to be included therein, and shall not be in characters less large or less legible than any characters used in the offer (if in writing) or in any document accompanying such statement

(5)The said written statement shall contain particulars with respect to the following matters—

(a)Whether the person making the offer is acting as principal or agent and, if as agent, the name of his principal and an address in the Republic where that principal can be served with process, and the nature and extent of the remuneration received or receivable by the agent for business,

(b)the date on which and the country in which the company was incorporated and the address of its registered office in the Republic or, if there is no such address, the address of its principal office abroad,

(c)the share capital of the company and the number of shares which have been issued, the classes into which it is divided and the rights of each class of shareholders in respect of capital, dividends and voting and the number and amount of shares issued for cash and the number and amount thereof issued for a consideration other than cash, and the dates on winch and the prices at which or the consideration for which such shares were issued,

(d)the dividends, if there are any, paid by the company on each class of shares during each of the five financial years immediately preceding the offer, and if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect,

(e)the total amount of any debenture issued by the company and outstanding at the date of the statement, together with the rate of interest payable thereon,

(f)the names and addresses of the directors of the company,

(g)whether or not the shares are listed or permission to deal therein has been granted by any stock exchange other than that referred to in subsection (2)(a), and, if so, which, and, if not, a statement that they are not so listed or that no such permission has been granted,

(h)if the offer relates to units, particulars of the names and addresses of the persons in whom the shares represented by the units are vested, the date of and the parties to any document defining the terms on which those shares are held, and an address in the Republic where that document or a copy thereof can be inspected,

(i)the dates on which and the prices at which the shares offered were originally issued by the company, and were acquired by the person making the offer or by his principal, giving the reasons for any difference between such prices and the prices at which the shares are being offered,

(j)if the shares were issued as partly paid-up shares under the repealed Act, to what extent they are paid-up

(k)the date of registration of the written statement by the Registrar

In this subsection the expression “company” means the company by which the shares to which the statement relates were issued

(6)There shall be annexed to the said statement a copy of the last annual financial statements of the company and subsequent interim report and provisional annual financial statements, if any

(7)Where the offer referred to in subsection (1) is in respect of shares of a public company, a copy of the written statement shall be lodged with the Registrar for registration before it is issued, distributed or published, and no such statement shall be issued, distributed or published more than three months after the date of such registration

(8)If any person acts in contravention of any provision of this section, he shall be guilty of an offence, and if such person is a body corporate, every director and officer of that body corporate shall be guilty of the like offence unless he proves that the act constituting the offence took place without his knowledge or consent

(9)If any person is convicted of having made an offer in contravention of any of the provisions of this section, the Court by which he is convicted, may order that any contract made as a result of the offer shall be void, and where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares

(10)In this section, unless the context otherwise indicates, the expression “offer” includes an invitation to make an offer to purchase, the expression “shares” means the shares of a company, whether a company within the meaning of this Act or not, and includes debentures and units, and the expression “unit” means any right or interest (by whatever name called) in a share, and for the purposes of this section a person shall not, in relation to a company, be regarded as not being a member of the public by reason only that he is a holder of shares of the company or a purchaser of goods from the company

Chapter VI
Offering of shares and prospectus

Interpretation

142. Definitions

In this Chapter, unless the context otherwise indicates—"company" includes an external company;[definition of "company" inserted by section 7(a) of Act 111 of 1976]“expert” means a geologist, engineer, architect, quantity surveyor, valuer, accountant, auditor, or any person holding himself out to be such and any other person who professes to have extensive knowledge or experience or to exercise special skill which gives or implies authority to a statement made by him,"issued generally"[definition of "issued generally" deleted by section 5(a) of Act 64 of 1977],"letter of allocation" means any document conferring a right to subscribe for shares in terms of a rights offer;[definition of "letter of allocation" inserted by section 7(b) of Act 111 of 1976]“offer”, in relation to shares, means an offer made in any way, including by provisional allotment or allocation, for the subscription for or sale of any shares, and includes an invitation to subscribe for or purchase any shares;[definition of "offer" substituted by section 5(b) of Act 64 of 1977]“Offer to the public” and any reference to offering shares to the public mean any offer to the public and include an offer of shares to any section of the public, whether selected as members or debenture-holders of the company concerned or as clients of the person issuing the prospectus concerned or in any other manner,“promoter” in relation to civil and criminal liability in respect of an untrue statement in a prospectus, means a person who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement but does not include any person by reason of his acting in a professional capacity for poisons engaged in procuring the formation of the company or preparing the said prospectus,"rights offer" means an offer for subscription, with a right to renounce in favour of other persons to the members or debenture holders of a company, for any shares (as defined in relation to an offer of shares for subscription or sale in section 1(1)) of that company or any other company, where a stock exchange within the Republic or a stock exchange recognized by the Minister for the purposes of this definition by notice in the Gazette has granted or has agreed to grant a listing for the shares which are the subject of the offer;[definition of "rights offer" substituted by section 7(c) of Act 111 of 1976 and by section 5(c) of Act 64 of 1977]“Untrue statement” in relation to a prospectus or portion thereof, includes—(u)a statement which is misleading in the form and context in which it is included therein and a statement shall be deemed to be included in a prospectus if it is contained in any report or memorandum which appears on the face of the prospectus or which is by reference incorporated therein or is attached to or accompanies the prospectus on registration, and(b)an omission from a prospectus of any matter, whether such matter is required to be included therein by this Act or not, where such omission is calculated to mislead, and such prospectus shall be deemed in respect of such omission to be a prospectus in which an untrue statement is included

Offers to the public

143. Restrictions as to offers to the public

(1)No person shall offer any shares to the public otherwise than in accordance with the provisions of this Act

(2)No person shall offer to the public any shares of any company or body corporate which is not a company or external company within the meaning of this Act or which has not been exempted from the provisions of this subsection by the Registrar by notice in the Gazette.[subsection (2) substituted by section 6 of Act 64 of 1977]

(3)Any person who contravenes the provisions of subsection (2), and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence

144. Offers not being offers to the public

An offer of shares shall not be construed as an offer to the public—

(a)if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the shares becoming available to persons other than those to whom the offer was made, or

(b)if it is an offer for subscription to the members or debenture-holders of the company without the right to renounce any right to take up such shares in favour of other persons, or.

(c)if such offer can properly be regarded, in all the circumstances, as being a domestic concern of the persons making and receiving it; or[paragraph (c) amended by section 8 of Act 111 of 1976]

(d)if it is a rights offer.[paragraph (d) added by section 8 of Act 111 of 1976]

145. No offer for subscription to public without prospectus

(1)No person shall make any offer to the public for the subscription for shares unless it is accommodated by a prospectus complying with the requirements of this Act and registered in the Companies Registration Office, and no person shall issue such a prospectus which has not been so registered.

(2)Any person who contravenes any provision of subsection (1) and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence.

145A. Approval by stock exchange a requirement for letters of allocation

(1)No person shall issue, distribute or deliver or cause to be issued, distributed or delivered a letter of allocation unless it is accompanied by such documents as are required and have been approved by the stock exchange concerned.

[section 145A inserted by section 9 of Act 111 of 1976]

146. No offer sale to the public without prospectus

(1)No person shall make any offer to the public for the sale of any shares—

(a)which have been, or have been agreed to be, allotted by the company concerned with a view to all or any of them being offered to the public, or

(b)in respect of which it has been made known in any way at or about the time of, and in connection with, such offer, that the company concerned has applied or intends to apply for their listing by a stock exchange in the Republic or elsewhere,

unless it is accompanied by a prospectus complying with the requirements of this Act and registered in the Companies Registration Office, and no person shall issue such a prospectus which has not been so registered

(2)For the purposes of subsection (1)(a) it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, shares was made with a view to the shares being offered for sale to the public if it is shown that an offer for sale to the public in respect of such shares or any of them was made within six months after the allotment or the agreement to allot

(3)Any person who contravenes any provision of subsection (1) and, if such a person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence.

146A. Rights offers

(1)A company desiring to issue a letter of allocation shall lodge with the Registrar for registration a copy thereof together with the prescribed fee and a copy of every document referred to in section 145A and every such copy shall be certified, by not less than two directors of the company, as a true copy of the original approved by the stock exchange concerned.

(2)Every copy mentioned in subsection (1) shall be accompanied by a copy of any contract referred to therein and, if such contract is not in an official language, by a translation thereof into one of the official languages.

(3)As soon as the Registrar has registered the documents referred to in subsection (1), he shall give notice of the registration to the company concerned or the person who lodged them with him on behalf of such company.

(4)Every letter of allocation which is issued shall—

(a)state on the face of it that a copy thereof together with copies of all other documents referred to in subsections (1) and (2) have been registered as required by this section; and

(b)be accompanied by a copy of every document lodged therewith in terms of subsection (1):Provided that the provisions of this paragraph shall not apply to any letter of allocation issued in connection with a renunciation of part of the rights to subscribe in terms of the rights offer.

(5)The provisions of sections 151, 153(1) and (4), 154 (1), (4) and (5), 158, 160, 161, 162 and 163 shall apply mutatis mutandis to a rights offer and all documents issued in connection therewith.[subsection (5) substituted by section 8(b) of Act 64 of 1977]

(6)Any person who contravenes any provision of this section, and if such person is a company, any director and officer of such company who knowingly is a party to such contravention, shall be guilty of an offence.

[section 146A inserted by section 10 of Act 111 of 1976]

147. Application form for shares to be attached to prospectus

(1)No person shall issue, distribute or deliver or cause to be issued, distributed or delivered, any form of application in respect of shares of a company, unless the form—

(a)is attached to a prospectus a copy of which has been registered in the Companies Registration Office, and

(b)bears on the face of it the date of registration of the prospectus,[paragraph (b) amended by section 9(a) of Act 64 of 1977]

(c)[paragraph (c) deleted by section 9(b) of Act 64 of 1977]

Provided that this subsection shall not apply if it is shown that the form of application was issued either—

(i)in connection with a bona fide invitation to enter into an underwriting agreement with respect to the shares, or

(ii)in relation to shares which were not offered to the public

(2)If any person—

(a)contravenes subsection (1)(a); or

(b)contravenes subsection (1)(b),

he shall be guilty of an offence.[subsection (2) substituted by section 9(c) of Act 64 of 1977]

Prospectus

148. Matters to be stated in prospectus

(1)

(a)Every prospectus issued in terms of this Act shall contain a fair presentation of the state of the affairs of the company, the shares of which are being offered and shall state at least the matters specified in, and set out the reports referred to in, Part I and Part II of Schedule 3.[paragraph (a) substituted by section 10 of Act 64 of 1977]

(b)Where the intended offer relates to shares which are or are to be in all respects uniform with existing shares previously issued and a stock exchange within the Republic has not in respect of such first-mentioned shares granted or agreed to grant a listing, and such offer is made only to existing members or debenture holders of a company with the right to renounce in favour of other persons, the prospectus may state, instead of the matters referred to in paragraph (a), at least the matters specified in Part III of Schedule 3.[paragraph (b) substituted by section 11 of Act 111 of 1976]

(2)The information referred to in subsection (1) shall be set out in print or type and shall not be less conspicuous than that in which the additional matter of the prospectus is printed or typed, shall be set out in separate paragraphs under the headings provided in Schedule 3 and in accordance with the instructions contained in Part IV of that Schedule.

(3)Every prospectus in respect of an offer for the sale of shares under section 146(1)(a) shall state, in addition to the matters specified in subsection (1)—

(a)the net amount of the consideration received or to be received by the company in respect of the shares to which the offer relates, and

(b)the place and time at which a contract under which the said shares have been or are to be allotted to the issuer of the prospectus may be inspected.

(4)Any person who knowingly is a party to the issue of a prospectus in contravention of any provision of this section, shall be guilty of an offence.

149. Statement on face of issued prospectus

(1)Every prospectus issued shall state on the face of it that a copy thereof has been registered as required by this Act and shall specify or refer to statements included therein specifying any documents required by sections 151 and 152 to be endorsed on or attached to or to accompany a prospectus when lodged for registration.

(2)Any person who knowingly is a party to the issue of a prospectus in contravention of subsection (1), shall be guilty of an offence.

150. Consent of person named as director

No person shall be named as a director or Proposed director of a company in any prospectus relating to shares of that company unless, at any time prior to the registration of such prospectus—

(a)his written consent, in the prescribed form, to act as such director has been lodged with the company; and

(b)the return referred to in section 216(2) reflecting the relevant particulars in regard to such person, has been lodged with the Registrar.

[section 150 substituted by section 8 of Act 59 of 1978]

151. Consent experts and others

(1)No prospectus which includes any statement or reference to any statement purporting to be made by an expert, shall be registered by the Registrar unless—

(a)the expert has given, and has not before the lodging of a copy of the prospectus for registration in the Companies Registration Office, withdrawn his written consent to the issue thereof with the statement or reference included in the form and context in which it is included,

(b)a statement that the expert has given and has not so withdrawn his consent appears in the prospectus, and

(c)such written consent is endorsed on or attached to the copy of the prospectus lodged for registration in the Companies Registration Office.

(2)The Registrar shall not register any prospectus which names any person as the auditor, attorney, banker or broker of a company unless it is accompanied by the consent in writing of the person so named to act in the capacity stated and to his name being stated in the prospectus.

152. Contracts and translations thereof to be attached to prospectus

(1)No prospectus shall be registered unless there is attached to it a copy of any material contract required by Schedule 3 to be stated in a prospectus or, in the case of such a contract not reduced to writing, a memorandum giving full particulars thereof.[subsection (1) substituted by section 11 of Act 64 of 1977]

(2)There shall be attached to any such contract as is mentioned in subsection (1)

(a)if it is a foreign language, a certified translation thereof into one of the official languages of the Republic, or

(b)if it is partly in a foreign language, a copy thereof embodying such a certified translation of so much thereof as is in a foreign language.

153. Where the issue is underwritten

(1)No prospectus containing a statement to the effect that the whole or any portion of the issue of the shares offered to the public, has been or is being underwritten shall be registered until there is lodged with the Registrar a copy of the underwriting contract and a sworn declaration by the person named as underwriter or, if such person is a company, by each of two directors of such company, or if such company has only one director, by that director, that to the best of the deponent's knowledge and belief the underwriter is and will be in a position to carry out his obligations even if no shares are applied for.

(2)If an offer of shares is made in respect of which no prospectus is required by this Act, the copy of the contract and sworn declaration refined to in subsection (1) shall be lodged with the Registrar not later than the date of the proposed offer of shares.

(3)If default is made in complying with the provisions of subsection (2), the company, and any person (including a body corporate) and every director or officer of the said company (or body corporate) who knowingly is a party to the contravention, shall be guilty of an offence.

(4)In the event of any underwriter being unable, when duly called upon, to carry out his obligations under the underwriting contract, any person who has in connection with that contract made a sworn declaration as required by subsection (1) shall, unless he proves that when he made the declaration he believed and had reasonable grounds for believing that the underwriter was or would be able to carry out such obligations, be guilty of an offence.

154. Signing, dates and date of issue of prospectus

(1)A prospectus in respect of an offer for the subscription of shares of a company shall be signed by every person named therein as a director of the company or by his agent authorized by him in writing to sign on his behalf.

(2)A prospectus in respect of any other offer of shares shall be signed by every person making such offer or by his agent authorized by him in writing to sign on his behalf or if the person making the offer is a company or firm, by two directors of such company, or if such company has only one director, by that director, or by not less than one-half of the partners in such firm or by an agent authorized by any such director or partner in writing to sign on his behalf.

(3)Where a prospectus has been signed by or on behalf of directors of a company or partners in a firm as provided in subsection (2), every director of such company or partner in such firm shall be deemed to have authorized the issue of such prospectus notwithstanding that he has not signed it, unless he proves that it was issued without his knowledge, authority or consent.

(4)Every signature to a prospectus shall be dated and the latest of such dates shall be deemed to be the date of the prospectus.

(5)The date of registration of any prospectus in the Companies Registration Office shall, unless the contrary is proved, be taken as the date of the issue of the prospectus.

155. Registration of prospectus

(1)No prospectus shall be registered by the Registrar unless the requirements of this Chapter have been complied with and it is lodged with the Registrar for registration, together with such documents as are prescribed in this Chapter, within fourteen days of the date of such prospectus.

(2)As soon as the Registrar has registered the prospectus, he shall send notice of the registration to the person lodging the same or to the company.

156. Time limit for issue of prospectus

(1)No prospectus shall be issued more than three months after the date of the registration thereof, and if a prospectus is issued, it shall be deemed to be a prospectus which has not been registered.

(2)Any person who knowingly is a party to the issue of a prospectus in contravention of subsection (1), shall be guilty of an offence.

157. Advertisement as to prospectus

(1)Every newspaper or other advertisement whatsoever offering or calling attention to an offer or intended offer of shares of a company to the public shall be deemed to be a prospectus issued by the person responsible for publishing or disseminating the advertisement (and all enactments and rules of law as to the contents of prospectuses and as to the liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses shall apply and have effect accordingly), unless it contains no more information than the following—

(a)The number and description of the shares concerned,

(b)the name and date of registration of the company,

(c)the general nature of the mam business or proposed main business actually earned on or to be carried on by the company,

(d)the names and addresses of the directors,

(e)the places at and times during which copies of the prospectuses may be obtained.

(f)where all the shares which are the subject of an offer are intended to be offered only to the members of a company or debenture holders, as the case may be, with or without the right to renounce in favour of other persons—

(i)the issue price of such shares;

(ii)the ratio in which such shares will be offered to the members or debenture holders entitled to accept the offer; and

(iii)the last day on which members or debenture holders must register as such in order to be entitled to receive the offer;

[paragraph (f) substituted by section 12(a) of Act 111 of 1976]

(g)the last day for subscribing.[paragraph (g) added by section 12(b) of Act 111 of 1976]

(2)No statement that, or to the effect that, they said advertisement is not a prospectus shall prevent the operation of this section.

158. Waiver of requirements of the Chapter void

Any condition requiring any applicant for shares to waive compliance with any requirements of this Chapter or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.

159. Variation of contract mentioned in prospectus

No company shall within one year after the date of registration of a prospectus vary or agree to the variation of the terms of a contract referred to in such prospectus unless the variation in specific terms is authorized or ratified by a general meeting of members of the company of which notice has been given on a date not earlier than six months after the date of registration of the prospectus.

160. Liability for untrue statements in prospectus

(1)Where shares are offered to the public for subscription in pursuance of a prospectus, every person—

(a)who is, at the time of the issue of the prospectus, a director of the company,

(b)who becomes a director at any time between the issue of the prospectus and the holding of the first general meeting of the company at which directors are elected or appointed,

(c)who with his authority is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time,

(d)who is a promoter of the company, or

(e)who has authorized the issue of the prospectus,

shall be liable to pay compensation to all persons who have acquired any shares on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof or issued therewith, or by reference incorporated therein.

(2)Where shares are offered to the public for sale in pursuance of a prospectus, every person—

(a)who has made the said offer,

(b)who under section 154(3) is deemed to have authorized the issue of such prospectus, or

(c)who is in relation to the company the shares of which are so offered, a person referred to in subsection (1)(a), (b), (c), (d) or (e),

(3)The liability provided for in subsection (1) or (2) shall not attach to any person if it is proved—

(a)with respect to every such untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that he had reasonable ground to believe, and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, behave that the statement was true, and

(b)with respect to every such untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from the report or valuation of an expert, that it fairly represented the statement or was a correct and fair copy of or extract from the report or valuation and that the defendant had reasonable ground to behave and did up to the time of the issue of the prospectus behave that the person making the statement was competent to make it, and that the said person had given the consent required by this Act to the issue of the prospectus or the making of the offer and had not withdrawn that consent before lodgment of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment thereunder or before the acceptance of the offer, and

(c)with respect to every such untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, that it was a correct and fair representation of the statement or copy of or extract from the document,

or if it is proved—

(i)that having consented to become a director of the company, he withdrew his consent before the issue of the prospectus and that it was issued without his authority or consent, or

(ii)that the prospectus was issued without his knowledge or consent and that on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent, or

(iii)that after the issue of the prospectus and before allotment or acceptance thereunder he, on becoming aware of any untrue statement therein, withdrew his consent thereto and gave reasonable public notice of the withdrawal and of the reason therefor

(4)Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus and has not authorized or consented to the issue thereof, the directors of the company (except any without whose knowledge or consent the prospectus was issued) and any other person who issued it or authorized the issue thereof, shall be liable to indemnify the person named as aforesaid, against all damages, costs and expenses for which he may be liable by reason of his name having been so stated in the prospectus or in defending himself against any action or legal proceedings brought against him in respect thereof.

(5)Every person who by reason of his being a director or having been named as a director, or having agreed to become a director, or of his having authorized the issue of the prospectus or of his having become a director between the issue of the prospectus and the holding of the first general meeting of the company at which directors are elected or appointed, has satisfied any liability to make payment under this section, may recover a contribution, as in cases of contract, from any other person, who, if sued separately, would have been liable to make the same payment, unless the person who has satisfied such liability was, and that other person was not, guilty of fraudulent misrepresentation.

161. Liability of experts and others

(1)Where the consent of any person is required under section 151 and he has given that consent—

(a)he shall not, by reason of has having given it, be liable as a person who has authorized the issue of the prospectus either—

(i)under section 160 (1) or (2) to compensate persons subscribing or purchasing on the faith of the prospectus, except in respect of any untrue statement purporting to be made by him as an expert, or

(ii)under section 160 (4) to indemnify any person against liability under the said section 160 (1) or (2), but

(b)he shall, in respect of any untrue statement purporting to be made by him as an expert, be liable under the said section 160 (1) or (2), unless one of the following things (which shall in his case be in hell of the grounds of defence available to others by virtue of section 160 (3)), is proved, namely—

(i)that having given his consent as aforesaid he withdrew it in writing before lodgment of a copy of the prospectus for registration, or

(ii)that after lodgment of a copy of the prospectus for registration and before allotment thereunder, or before acceptance thereunder by, the person complaining, he, on becoming aware of the untrue statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason therefore,

(iii)that he was competent to make the statement and that he had reasonable ground to believe and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, believe that the statement was true.

(2)Where under section 151 the consent of any person is required to the issue of a prospectus, and he either has not given that consent or has withdrawn it before the issue of the prospectus, he shall be entitled to indemnity under section 160 as if he had without his consent been named in the prospectus as a director of the company.

162. Offences in respect of untrue statements in prospectus

(1)Where a prospectus contains a statement which is untrue, every person referred to in section 160 (1) or (2) shall, subject to the provisions of subsections (3) and (4) of this section, be guilty of an offence.

(2)Where there is published with or as part of a prospectus a report of any expert or an extract from such report and such report or extract contains a statement which is untrue, the expert shall, provided he has given his consent to the inclusion of such statement in the prospectus in the form and context in which it appears, and subject to the provisions of subsections (3) and (4), be guilty of an offence.

(3)In any prosecution under this section it shall be a defence if it is proved either that the untrue statement was immaterial or—

(a)with respect to every such untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that the person charged had, after reasonable investigation, reasonable ground to believe and did up to the time of the allotment of the shares or acceptance of the offer (as the case may be) believe that the statement was true, and that there was no omission to state any material fact necessary to make the statement as set out not misleading, and

(b)with respect to every untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that the person charged had reasonable ground to believe and did believe that the person making the report or valuation was competent to make it, and

(c)with respect to every such untrue statement purporting to be a statement made by an official person or contained in what pm ports to be a copy of or extract from a public official document, that it was a connect and fair representation of the statement or copy of or extract from the document.

(4)In any prosecution under this section of any person it shall be a defence if it is proved—

(a)that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent, or

(b)that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent, or

(c)that after the issue of the prospectus and before allotment or acceptance thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto and gave reasonable public notice of the withdrawal, and of the reason therefor.

163. No diminution of liability under any other law or the common law

Nothing in this Chapter contained shall limit or dimmish any liability which any person may incur under this Act apart from this Chapter, or under any other law, or under the common law.

Allotment and acceptance after offer to the public

164. Time limit as to allotment or acceptance

(1)No company shall allot any shares offered to the public for subscription and no offeror shall accept any offer to purchase any shares offered for sale to the public unless the application concerned is received by the company or the offeror, as the case may be, before the expiration of a period of four months after the date of registration of the prospectus.

(2)Any director or officer of a company or any offeror or, if the offeror is a company, any director or officer of that company who knowingly contravenes or permits the contravention of subsection (1) with respect to allotment or acceptance of an offer, shall be guilty of an offence.

165. No allotment unless minimum subscription is received

(1)No shares shall be allotted on any application made in pursuance of a prospectus for subscription unless the amount stated in that prospectus as the minimum amount which in the opinion of the directors of the company concerned must be raised by the issue of share capital in order to provide for the matters specified in paragraph 21 of Schedule 3 to this Act has been subscribed and the amount so stated has been paid to and received by the company.

(2)For the purposes of subsection (1)—

(a)an amount stated in any cheque received by the company shall not be deemed to have been paid to and received by it until the amount of the cheque has been unconditionally credited to its account with its bankers, and

(b)any amount paid to and received by the company shall be reduced by the amount of any money, bill, promissory note or cheque which it has at any time delivered to the payer otherwise than in discharge of a debt bona fide due to him by the company.

(3)The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as "the minimum subscription”.

(4)The amount paid on application shall be set apart by the directors as a separate fund in a separate account with a banking institution registered under the Banks Act, 1965 (Act No 23 of 1965), and shall not be available for the purposes of the company or for the satisfaction of its debts until the minimum subscription has been made up.

(5)

(a)If the requirements prescribed in subsection (1) have not been complied with on the expiration of sixty days after the issue of the prospectus, all moneys received from applicants for shares shall forthwith be repaid to them without interest, and, if any such money is not so repaid within a period of eighty days after the issue of the prospectus, the directors and officers of the company shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum reckoned from the expiration of the said period of eighty days.

(b)It shall be a defence to any claim under paragraph (a), or any charge under subsection (6), to prove that the default which is the subject of the claim or charge, was not due to any misconduct or negligence on the part of the defendant or the accused.

(6)Any direction or officer of the company who knowingly contravenes or permits the contravention of any provision of this section, shall, in addition to any other liability incurred under subsection (5)(a), be guilty of an offence.

166. No allotment or acceptance if application form is not attached to prospectus

(1)No company shall allot any shares offered to the public for subscription and no offeror shall accept any offer to purchase any shares offered for sale to the public unless the subscription or offer has been made on an application form which has been attached to or accompanied by a prospectus as required by section 147 or unless it is shown that the applicant, at the time of his application, was in fact in possession of a copy of the prospectus or was aware of its contents.

(2)Any director or officer of a company or any offeror (or if the offeror is a company, any director or officer of that company) who knowingly contravenes or permits the contravention of subsection (1), shall be guilty of an offence.

167. Voidable allotments where section 164, 165 or 166 contravened

(1)

(a)An allotment made by a company to an applicant, or the acceptance of an offer made by an applicant, in contravention of any provision of section 164, 165 or 166 shall be voidable at the instance of the applicant concerned within thirty days after the date of allotment or acceptance, and not later

(b)The provisions of paragraph (a) shall apply notwithstanding that the company concerned may be in the course of being wound up.

(2)

(a)When an allotment or an acceptance is declared void under subsection (1), every director and every officer of the company concerned or the offeror, and if the offeror is a company, every director and every officer thereof, shall be liable to compensate the company concerned and the applicant for any loss, damages or costs which such company or the applicant may have sustained or incurred thereby

(b)No proceedings to recover any such loss, damages or costs shall be commenced after the expiration of two years from the date of the relevant allotment or acceptance.

168. Minimum interval before allotment or acceptance

(1)

(a)No allotment of shares or acceptance of an offer in respect of shares of a company shall be made in pursuance of a prospectus, and no proceedings shall be taken on applications made in pursuance of a prospectus, until the beginning of the third day after that on which the prospectus is first issued or such later time (if any) as may be specified in the prospectus.[paragraph (a) substituted by section 12(a) of Act 64 of 1977]

(b)The beginning of the said third day or the said later time is in this Chapter referred to as “the time of the opening of the subscription lists or offer”

(2)For the purposes of subsection (1), the reference therein to the day on which the prospectus is first issued shall be construed as a reference to the day on which it is first issued as a newspaper advertisement, or, if it is not issued as a newspaper advertisement before the third day after that on which it is first issued in any other manner, as a reference to the day on which it is first issued in such other manner.[subsection (2) substituted by section 12(b) of Act 64 of 1977]

(3)The validity of an allotment or acceptance shall not be affected by any contravention of the provisions of subsection (1), but, in the event of any such contravention, the company concerned, and every director and every officer of the company and the offeror, and, if the offer or is a company, every director and every officer thereof who knowingly is a party to the contravention, shall be guilty of an offence.

(4)An application for shares of a company which is made in pursuance of a prospectus shall not be revocable before the expiration of the third day after the time of the opening of the subscription lists or offer or the giving before the expiration of the said third day, of a public notice under section 160 having the effect of excluding or limiting the liability under that section of the person giving such notice.[subsection (4) substituted by section 12(c) of Act 64 of 1977]

(5)In reckoning any number of days for the purposes of this section, Saturdays, Sundays and public holidays shall not be taken into account.

169. Conditional allotment if prospectus states shares to be listed by stock exchange

(1)No prospectus containing a statement to the effect that application has been or will be made for permission for the shares offered thereby to be dealt in on a stock exchange shall be issued unless such an application has been made in accordance with the requirements of the stock exchange concerned on or before the date of issue of such prospectus and it names the particular stock exchange to which such application has been made.

(2)Any allotment of shares in pursuance of a prospectus referred to in subsection (1) shall be subject to the condition that the application for permission for the said shares to be dealt in on the stock exchange concerned, is granted or that an appeal against a refusal of such application, is upheld.

(3)

(a)Any money received in respect of applications for shares in pursuance of a prospectus referred to in subsection (1) shall be set apart by the directors of the company as a separate fund in a separate account with a banking institution registered under the Banks Act, 1965 (Act No 23 of 1965), and shall not be available for the purposes of the company or for the satisfaction of its debts so long as the company may in terms of subsection (4) become liable for the repayment thereof

(b)If any issue of shares in pursuance of such a prospectus is over subscribed, the directors of the company shall forthwith repay the amounts over subscribed to the applicants.

(4)

(a)Where the application for permission to deal in the shares on a stock exchange has been refused and no appeal has been noted or when an appeal against the refusal of an application has been dismissed or an appeal against the granting of an application has been upheld, the company shall forthwith repay all moneys received in respect of applications made in pursuance of the prospectus together with any interest earned thereon, if any, and

(b)if any such money is not repaid within fourteen days after the company becomes liable to repay it, the directors and officers of the company, together with the company, shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiration of the fourteenth day.

(5)

(a)If any provision of subsection (1), (3) or (4) is contravened or not complied with, the company, and every director or officer thereof who knowingly is a party to such contravention or non compliance, shall be guilty of an offence

(b)It shall be a defence to any claim under subsection (4)(b) or any charge under paragraph (a) of this subsection to prove that the default which is the subject of the claim or the contravention or non-compliance was not due to misconduct or negligence on the part of the defendant or the accused.

(6)The provisions of this section shall—

(a)in relation to any shares agreed to be taken by a person underwriting an offer of the shares by a prospectus, have effect as if he had applied therefor in pursuance of the prospectus,

(b)in the case of a prospectus offering shares for sale, be construed, except in so far as the context otherwise indicates—

(i)as if any reference therein to the allotment of shares were a reference to the acceptance of the offer in respect thereof,

(ii)subject to the provisions of subparagraph (iii), as if any reference therein to a company by which a prospectus has been issued, or a director or officer thereof, were a reference to the person by whom the shares have been offered, and

(iii)where the person by whom the shares have been offered is a company, as if the reference therein to a director or officer of a company by which a prospectus has been issued, were a reference to a director or officer of the company by which the shares have been offered for sale.

(7)In reckoning any number of days for the purposes of this section, Saturdays, Sundays and public holidays shall not be taken into account.

Chapter VII
Administration of companies

General

170. Postal address and registered office of company

(1)Every company including every external company shall have in the Republic—

(a)a postal address to which all communications and notices may be addressed, and

(b)a registered office to which all communications and notices may be addressed and at which all processes may be served.

(2)Upon the incorporation of a company, notice of the situation of the registered office and of the postal address shall be given to the Registrar and notice of any change in the situation of the registered office or the postal address shall be given to the Registrar before such change is made the Registrar shall record any notice so given.

(3)Any notice referred to in subsection (2) shall be in the prescribed form and shall be accompanied by the prescribed fee.

(4)A company which fails to comply with any requirement of this section, shall be guilty of an offence.

171. Names of directors to be stated in trade catalogues, trade circulars and business letters of company

(1)A company shall not issue or send to any person in the Republic any trade catalogue, trade circular or business letter bearing the company’s name unless there is stated thereon in respect of every director—

(a)Ins present forenames, or the initials thereof, and present surname,

(b)any former forenames and surnames not being those referred to in section 215 (3),

(c)his nationality, if not South African

(2)Any company which fails to comply with any provision of subsection (1), shall be guilty of an offence

172. Certificate to commence business

(1)No company having a share capital shall commence business or exercise any borrowing powers unless and until the Registrar has under the provisions of tins section issued under his hand and seal a certificate entitling the company to commence business.

(2)In the case of a public company which has issued a prospectus for the subscription for shares before a certificate to commence business has been issued, such certificate to commence business shall be issued upon the application of the company in the prescribed manner accompanied by an affidavit by a director or secretary of the company to the effect—

(a)that every director has paid the company for each of the shares (if any) taken or contracted to be taken by him, and for which he is liable to pay in cash, the full subscription price,

(b)that shares paid for in cash have been allotted to a total amount of not less than the minimum subscription stated in the prospectus, and

(c)that no money is or may become repayable to applicants for any shares which have been offered to the public by reason of the refusal of an application for permission for the shares to be dealt in on a stock exchange or the dismissal of an appeal against such refusal, and accompanied by the return prescribed by section 216 (2) and proof of payment of the annual duty referred to in section 174.

(3)In the case of every company having a share capital, a certificate to commence business shall be issued upon the application of the company in the prescribed manner accompanied by—

(a)a statement of the opinion of each director to the effect that the capital of the company is adequate for the purposes of the company and its business or, if he is of the opinion that it is inadequate, the reasons therefor and the manner in which and the sources from which the company is to be financed and the extent thereof,

(b)the return prescribed by section 216 (2),

(c)proof of payment of the annual duty referred to in section 174,

(d)[paragraph (d) deleted by section 9(1) of Act 59 of 1978]

(e)the consent to act as auditor, if not already lodged.

(4)Any such certificate issued by the Registrar shall be conclusive evidence that the company is entitled to commence business.

(5)

(a)Any contract made by a company before the date on which it is entitled to commence business shall be provisional only and shall become binding on the company on that date and not earlier

(b)Until a certificate entitling a company to commence business is issued, the directors and the subscribers of the memorandum of the company shall be jointly and severally liable for all the debts and liabilities arising from any business conducted by the company in contravention of subsection (1).

(6)Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures of the company or the receipt of any money payable on application for debentures.

(7)If a company contravenes subsection (1), every person who is responsible for or knowingly is a party to the contravention shall, in addition to any other liability incurred, be guilty of an offence.

173. Annual return

(1)Every company having a share capital shall not later than one month after the end of its financial year, and, where any financial year is changed, also not later than one month after the end of that financial year, lodge with the Registrar a return, referred to as the annual return, in the prescribed form, specifying the particulars, prescribed by the Minister by regulation, in regard to the company as at the date of the end of its financial year.[subsection (1) substituted by section 13(1)(a) of Act 64 of 1977]

(2)Every company limited by guarantee shall not later than one month after the end of its financial year lodge with the Registrar a return in the prescribed form, specifying the particulars, prescribed by the Minister by regulation, in regard to the company, as at the date of the end of its financial year.[subsection (2) substituted by section 13(1)(b) of Act 64 of 1977]

(3)The said return shall be signed by one of the directors and the secretary (if any) of the company and a copy thereof shall be kept in the registered office of the company.

(4)A private company shall annex to any return required to be lodged by it in terms of this section a certificate in the prescribed form, signed by a director or the secretary (if any) of the company to the effect that the company has during the period covered by the return complied with the requirements of section 20 (1)(b) and (c) of this Act.

(5)Every return under this section shall be accompanied by proof of payment of the annual duty referred to in section 174.

(6)Any company which fails to comply with any requirement of this section, shall be guilty of an offence.

(7)The provisions of section 113 relating to the inspection of the register of members of a company and the furnishing of copies thereof or extracts therefrom shall apply mutatis mutandis to the annual return by a company.

(8)[subsection (8) deleted by section 13(1) of Act 111 of 1976]

174. Annual duty

(1)Subject to the provisions of section 175, every company other than an association not for gain incorporated under section 21, shall—

(a)before a certificate to commence business is issued to it, or

(b)in the case of a company limited by guarantee, on its incorporation, and

(c)thereafter not later than one month after the end of every financial year,

pay an annual duty for the benefit of the Consolidated Revenue Fund Provided that a company whose financial year ends on the thirty-first day of December, 1973, shall in respect of its financial year commencing on the first day of January, 1974, pay such annual duty not later than the thirty-first day of January, 1974.[paragraph (c) substituted by section 10(a) of Act 59 of 1978][subsection (1) amended by section 10(b) of Act 59 of 1978]

(2)The rate of the annual duty shall be a basic amount of fifty rand for every company and in addition thereto—

(a)in the case of a company having a nominal share capital, two rand and fifty cents per each ten thousand rand or part thereof of its issued share capital plus the amount of its share premium account,

(b)in the case of a company having shares of no par value, two rand and fifty cents per each ten thousand rand or part thereof of the amount of its stated capital account,

(c)in the case of a company having both shares of par value and shares of no par value, the aggregate of the amounts calculated on the bases laid down in paragraphs (a) and (b) of this subsection, and

(d)in the case of the payment of annual duty on the commencement of business of a company, the additional rate shall be calculated on the basis of two rand and fifty cents per each ten thousand rand or part thereof of the amount of the issued shares or stated capital in the case of shares of no par value of the company as at the date of the issue of the certificate to commence business

Provided that the said additional rate shall not be payable where the issued share capital plus share premium account or the stated capital or the aggregate referred to in paragraph (c), or the amount referred to in paragraph (d) of this subsection, does not exceed two hundred thousand rand.

(3)The provisions of subsection (1) shall apply to every company in respect of which no winding-up order has been granted or which has not been deregistered under section 73 Provided that—

(a)if any winding-up order is discharged or declared void, the company concerned shall within thirty days thereafter pay the annual duty provided for in subsection (1), or such part thereof as the Court may direct, or

(b)if a company is deregistered under section 73(5) it shall cease to be liable for payment of any annual duty provided for in subsection (1) which was owing by it on the date of its deregistration but if any deregistered company is restored to the register of companies, the company concerned shall within thirty days thereafter pay the annual duty provided for in subsection (1) or such part thereof as the Court may direct.[paragraph (b) substituted by section 10(c) of Act 59 of 1978]

(4)When a company commences business within its financial year, and there is an intervening period of six months or less between the date of commencement of business and the end of the financial year, the amount of the annual duty shall be half the amount of the annual duty payable for a full financial year.

(5)If a company changes its financial year, and there is an intervening period of six months or less between the date of the end of its last financial year and the end of its financial year as changed, the amount of the annual duty shall be half of the annual duty payable for a full financial year.

(6)A company which fails to pay the annual duty within the prescribed period or pays an amount less than that prescribed by this section shall pay additional fees under section 178 Provided that such additional fees to be paid by a company in respect of any financial year, shall not exceed an amount of one thousand rand.

175. Annual duty payable by external company

(1)Every external company shall pay for the benefit of the Consolidated Revenue Fund an annual duty calculated in accordance with section 174(2): Provided that where any external company has established and maintains a place of business in the Republic solely for the purpose of maintaining a share registration office or a share transfer office therein, the annual duty payable by such company shall be a fixed amount of fifty rand: Provided further that this section shall not apply to an external company which is operating a scheduled international air transport service as the designated carrier of another State in terms of a bilateral agreement between the Government of the Republic and that State.[subsection (1) substituted by section 14(1) of Act 111 of 1976]

(2)Such annual duty shall be payable—

(a)upon lodgement of the memorandum of the external company for registration under section 322, and

(b)thereafter not later than one month after the end of every financial year.[paragraph (b) substituted by section 11 of Act 59 of 1978]

(3)The provisions of section 174 (3), (4), (5) and (6) shall mutatis mutandis apply in respect of the annual duty payable by an external company.

176. Enforcement of duty of company to make returns to Registrar

(1)If a company, having made default in complying with any provision of this Act which requires it to lodge with, deliver or send to the Registrar any return, annual financial statements or other document, or to give notice to him of any matter, fails to make good the default within fourteen days after the service of a notice on the company requiring it to do so, the Court may, on an application by any member or creditor of the company or by the Registrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order.

(2)Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default.

(3)Nothing in this section shall be taken to prejudice the operation of any provision of this Act, imposing penalties on a company or its officers in respect of any such default as aforesaid.

177. Extension of time

When in terms of this Act anything is to be performed within a specified period of time, the Registrar may in any case, on application to him before or after the expiry of that period, and on payment of the prescribed fee, or generally, and on his own motion, extend the said period as he may deem fit subject to the provisions of this Act, and where any period has been so extended, any reference in section 178 to such period shall be construed as a reference to such period as so extended.[section 177 substituted by section 14(1) of Act 64 of 1977]

178. Additional fees in respect of late submission of documents or notices or late payment of annual duty

(1)Without derogation from any other provision of this Act, a company which has failed within the time prescribed in the relevant provision to lodge any document, or give any notice or to pay any annual duty required under section 93 (3), 170 (2), 173, 174, 175, 200 (1), 211 (3), 216 (2) and 276, may thereafter lodge such document or give such notice or pay such annual duty subject to the payment of additional fees, based on the prescribed fee payable to the Registrar in respect of the recording of that document or notice, or on the annual duty payable for the benefit of the Consolidated Revenue Fund according to the following scale

If the document or notice is lodged or given or the annual duty is paid within the under-mentioned periods after the last date on which it was required to be lodged or given or paid		Additional fee
(a)	One month	Half the prescribed fee or annual duty unpaid
(b)	Two months	The prescribed fee or annual duty unpaid
(c)	Three months	Twice the prescribed fee or annual duty unpaid
(d)	Four months	Three times the prescribed fee or annual duty unpaid
(e)	Exceeding four months	Five times the prescribed fee or annual duty unpaid

[subsection (1) amended by section 15 of Act 64 of 1977]

(2)For the purpose of subsection (1) the decision of the Registrar as to the time within which a document or notice or annual duty referred to in that subsection was required to be lodged or given or paid, shall be final.

Meetings of the company

179. Annual general meeting

(1)

(a)Every company, at such times as are in this subsection prescribed, shall hold general meetings to be known and described in the notices calling such meetings as annual general meetings of that company

(b)Such meetings shall be held—

(i)in the case of the first such meeting, within a period of eighteen months after the date of the incorporation of the company concerned, and

(ii)thereafter within not more than six months after the end of every ensuing financial year of that company, and

(iii)within not more than fifteen months after the date of the last preceding such meeting of that company

(2)The annual general meeting of a company shall deal with and dispose of the matters prescribed by this Act and may deal with and dispose of such further matters as are provided for in the articles of the company and, subject to the provisions of this Act, any matters capable of being dealt with by any general meeting of the company.

(3)The Registrar may, on application to him before or, for the purposes of subsection (6), also after the expiration of the period within which an annual general meeting of a company must be held and on good cause shown, and on payment of the prescribed fee, extend the period within which an annual general meeting of the company concerned must be held by a period not exceeding six months but, notwithstanding any such extension, the date for the holding of the first annual general meeting following the meeting in respect of which the extension is granted, shall be determined as if such meeting had been held on the last day on which it should have been held if the extension had not been granted.[subsection (3) substituted by section 16(a) of Act 64 of 1977]

(4)

(a)If for any reason an annual general meeting of a company is not or cannot be held as provided in this section or any matter required by this Act to be dealt with and disposed of at such meeting is not dealt with thereat, the Registrar may, on application by the company or any member or its or his legal representative and on payment of the prescribed fee, call or direct the calling of a general meeting of the company which shall be deemed to be an annual general meeting, and may give such ancillary or consequential directions as he may them expedient, including directions modifying or supplementing, in relation to the calling, holding and conduct of the meeting, the operation of the company’s articles, and directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy, to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with any such direction shall for all purposes be deemed to be an annual general meeting of the company duly called, held and conducted

(b)For the purpose of determining the date for the holding of the next succeeding annual general meeting of a company, after a meeting held in pursuance of paragraph (a) of this subsection, the provisions of subsection (3) shall mutatis mutandis apply.

(5)Any company which fails to comply with any provision of subsection (1) or with any direction given by the Registrar under subsection (4), and every director or officer of the company who knowingly is a party to the failure, shall be guilty of an offence.

(6)A company which has failed to hold its annual general meeting within the time or extended time prescribed by subsection (1) or (3), or as directed by the Registrar under subsection (4), shall further be liable to pay to the Registrar additional fees of one rand for every day during which the default continues but not exceeding a maximum of twenty rand, and the decision of the Registrar as to the number of days during which the company is in default shall be final.

(7)A company need not hold any particular annual general meeting if all members entitled to attend that meeting agree thereto in writing, and in such event a resolution in writing dealing with and disposing of—

(a)the matters required by this Act to be dealt with and disposed of at an annual general meeting of a company; and

(b)such other matters, if any, as may, in terms of subsection (2), be dealt with at such a meeting,

and signed by all members entitled to vote at that meeting, before the expiration of the period within which that meeting is to be held, shall be deemed to be a resolution passed at an annual general meeting of the company held in terms of this section on the date on which the last signature to such resolution is affixed.[subsection (7) added by section 16(b) of Act 64 of 1977]

180. General meetings

(1)General meetings of a company may, subject to the provisions of its articles, be held from time to time.

(2)Any such meeting may, save in so far as is otherwise provided in the articles of a company and without derogation from any other provisions of this Act, be called by two or more members holding not less than one-tenth of its issued share capital or, in the case of a company not having a share capital, by not less than five per cent in number of the members of the company.

181. Calling if general meetings on requisition by members

(1)The directors of a company shall, notwithstanding anything in its articles, on the requisition of—

(a)one hundred members of the company or of members holding at the date of the lodging of the requisition not less than one-twentieth of such of the capital of the company as at the date of the lodgment carries the right of voting at general meetings of the company, or

(b)in the case of a company not having a share capital, one hundred members of the company or of members representing not less than one-twentieth of the total voting rights of all the members having at the said date a night to vote at general meetings of the company,

within fourteen days of the lodging of the requisition issue a notice to members convening a general meeting of the company for a date not less than twenty-one and not more than thirty-five days from the date of the notice.

(2)The requisition shall state the objects of the meeting and shall be signed by the requisitions and lodged at the registered office of the company, and may consist of several documents in like form, each signed by one or more acquisitions.

(3)If the directors do not within fourteen days from the date of the lodging of the requisition issue a notice as required by subsection (1), the requisitions or any of them numbering more than fifty or representing more than one-half of the total voting rights of all of them, may themselves on twenty-one days’ notice convene a meeting, stating the objects thereof, but no meeting so convened shall be held after the expiration of three months from the said date.

(4)Any meeting convened under this section by the requisitions shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by the directors of the company concerned.

(5)Any reasonable expense incurred by the requisitions by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitions by the company, and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were knowingly party to the default.

(6)Any director or officer of a company who knowingly is a party to a failure to convene a meeting as required by subsection (1), shall be guilty of an offence.

182. Convening of general meetings by Registrar

Where all the directors of a company have become incapacitated or have ceased to be directors, the Registrar may, unless the articles of a company make other provision in that behalf, on the application of any member of the company or his legal representative, and on payment of the prescribed fee, call or direct the calling of a general meeting of the company and may give such ancillary or consequential directions as he may think expedient, including directions modifying or supplementing, in relation to the calling, holding and conduct of the meeting, the operation of the company’s articles, and directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with any such direction, shall for all purposes be deemed to be a general meeting of the company duly called, held and conducted.

183. General meetings on order of court

If for any reason it is impracticable to call an annual general meeting or other general meeting of a company in any manner in which meetings of that company may be called, or to conduct any such meeting in the manner prescribed by the articles of a company or this Act, or if for any other reason the Court thinks fit to do so, it may, either of its own motion or on the application of the Registrar or any director of the company or of any member of the company or his legal representative, order a meeting of the company to be called, held and conducted in such manner as it may direct and may in making any such order give such ancillary or consequential directions as it thinks expedient, including directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with any such order, shall for all purposes be deemed to be an annual general meeting or a general meeting, as the case may be, of the company duly called, held and conducted.

184. Meetings of company with one member

In the case of a company having only one member, such member present in person or by proxy shall be deemed to constitute a meeting.

185. Duty of company to circulate notice of resolutions and statements by members

(1)Subject to the provisions of this section, a company shall, on the requisition in writing of such number of members as is referred to in subsection (2), and (unless the company otherwise determines) at the expense of the requisitions—

(a)give to members of the company entitled to receive notice of the next annual general meeting, notice of any resolution which may properly be moved and is intended to be moved at that meeting, and

(b)circulate to members entitled to have notice of any general meeting sent to them, any statement of not more than one thousand words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting.

(2)The number of members necessary for a requisition under subsection (1) shall be—

(a)any number of members representing not less than one twentieth of the total voting rights of all the members having at the date of the requisition a right to vote at the meeting to which the requisition relates, or

(b)not less than one hundred members.

(3)

(a)Notice of any such resolution shall be given and any such statement shall be circulated to members of the company entitled to have notice of the meeting sent to them, by serving a copy of the resolution or statement on each such member in any manner permitted for the service of notice of the meeting, and notice of any such resolution shall be given to any other member of the company by giving notice of the general effect of the resolution in any manner permitted for giving him notice of meetings of the company

(b)A copy of any such resolution or statement shall be served and notice of any such resolution shall be given in the same manner and, so far as practicable, at the same time as the notice of the meeting in question, or if it is not practicable to do so, as soon as practicable thereafter.

(4)A company shall not be bound under this section to give notice of any resolution or to circulate any statement unless—

(a)there is lodged at the registered office of the company a copy of the requisition signed by the requisitions or two or more copies thereof which between them contain the signatures of all the requisitions—

(i)in the case of a requisition requiring notice of a resolution, not less than six weeks before the meeting, and

(ii)in the case of any other requisition, not less than two weeks before the meeting, and

(b)there is lodged or tendered with the requisition a sum reasonably sufficient to meet the company’s expenses in giving effect thereto

Provided that if, after a copy of a requisition requiring notice of a resolution has been lodged at the registered office of the company, an annual general meeting is called for a date six weeks or less after the copy has been lodged, the copy, though not lodged within the time required by this subsection, shall be deemed to have been properly lodged.

(5)

(a)The Court may absolve any company from the obligation to circulate any resolution or statement in terms of this section if, on the application either of the company or of any other interested person, the Court is satisfied that the rights thereby conferred are being abused to secure needless publicity for defamatory matter

(b)An order under this subsection may include an order for the payment by the requisitions of the costs or any portion of the costs incurred in connection with the relevant application, whether or not they are parties to the application

(c)The decision of the Court on any such application shall be final.

(6)Notwithstanding anything contained in the articles of a company, the business which may be dealt with at an annual general meeting thereof, shall include any resolution of which notice has been given in accordance with this section, and for the purpose of this subsection notice shall be deemed to have been so given notwithstanding the accidental omission to give such notice to one or more members.

(7)In the event of any failure to comply with any provision of subsection (1), every director or officer of the company who authorizes or knowingly permits or is party to the failure, shall be guilty of an offence.

186. Notice of meetings and resolutions

(1)

(a)Unless the articles of a company provide for a longer period of notice, the annual general meeting or a general meeting called for the purpose of passing a special resolution may be called by not less than twenty-one clear days’ notice in writing and any other general meeting may be called by not less than fourteen clear days’ notice in writing

(b)Any provision in the articles of a company providing for a shorter period of notice, not being of an adjourned meeting, shall be void.

(2)Notwithstanding the provisions of subsection (1), a meeting of a company which is called on a shorter period of notice than is prescribed in that subsection or provided form the company’s articles, shall be deemed to have been duly called if it is so agreed by a majority in number of the members having a right to attend and vote at the meeting who hold not less than ninety-five per cent of the total voting rights of all the members.

(3)No resolution of which special notice is required to be given in terms of any provision of this Act shall have effect unless notice of the intention to move it has been given to the company not less than twenty-eight days before the meeting at which it is moved, and the company shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of such meeting, or, if that is not practicable, either by advertisement in a newspaper having an appropriate circulation or in any other manner allowed by the articles of the company, not less than twenty-one days before the meeting Provided that if a meeting of the company is called for a date twenty-eight days or less after notice of the intention to move such a resolution has been given to the company, the notice, though not given within the time required by this subsection, shall be deemed to have been properly given for the purposes thereof.

(4)Any company which fails to give notice to its members as required by subsection (3), shall be guilty of an offence.

187. Manner of giving notice

Unless the articles of a company otherwise provide, notice of a meeting of a company shall be served on every member of the company in the manner in which notices are required to be served in terms of Table A or Table B of Schedule 1, whichever is applicable to the company.

188. Representation of company or other body corporate at meetings of companies and meetings of creditors

(1)A company or other body corporate may, by resolution of its directors or other governing body, authorize any person to act as its representative at any meeting of any company of which it is a member or at any meeting of any class of members of that company.

(2)The provisions of subsection (1) shall mutatis mutandis apply with reference to meetings of debenture-holders and creditors of a company.

(3)A person authorized as aforesaid shall be entitled to exercise on behalf of the company or other body corporate which he represents, the same powers as that company or body corporate could have exercised if it were an individual share holder, debenture-holder or creditor of the company in relation to which such person has been authorized to act.

189. Representation of members at meetings by proxies

(1)Any member of a company entitled to attend and vote at a meeting of the company, or where the articles of a company limited by guarantee so provide, any member of such company, shall be entitled to appoint another person (whether a member or not) as his proxy to attend, speak, and vote in his stead at any meeting of the company: Provided that, unless the articles otherwise provide, a proxy shall not be entitled to vote except on a poll and a member of a private company shall not be entitled to appoint more than one proxy.[subsection (1) substituted by section 15(a) of Act 111 of 1976]

(2)

(a)In every notice calling a meeting of a company having a share capital and on the face of every proxy form issued at the company's expense there shall appear with reasonable prominence a statement that a member entitled to attend and vote at the meeting is entitled to appoint a proxy or, where it is allowed, one or more proxies, to attend and speak and vote thereat in his stead, and that a proxy need not also be a member of the company.[paragraph (a) substituted by section 15(b) of Act 111 of 1976]

(b)In the event of any failure to comply with the requirements of this subsection in respect of any meeting, every director and every officer of the company who authorizes, knowingly permits or is party to the failure, shall be guilty of an offence

(3)

(a)Any provision contained in a company’s articles shall be void in so far as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy, to be received by the company at its registered office or by any other person more than forty-eight hours before a meeting in order that the appointment may be effective thereat

(b)In determining any period for the purposes of this subsection Saturdays, Sundays and public holidays shall not be taken into account

(4)

(a)If for the purposes of any meeting of a company invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations are issued at the company’s expense to some only of the members entitled to notice of the meeting and to be represented thereat by proxy, every director or officer of the company who authorizes or knowingly permits or is a party to such issue, shall be guilty of an offence

(b)The provisions of paragraph (a) shall not apply in respect of the issue to a member of a company at his request in writing of a form of appointment naming a proxy or of a list of persons willing to act as proxy, if the form or fist is available on request in writing to every member entitled to be represented at the meeting in question by proxy

(5)If for the purposes of any meeting of a company invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations or the instruments appointing a proxy, are issued at the company’s expense, any such invitation or instrument appointing a proxy shall—

(a)contain adequate blank space immediately preceding the name or names of the person or persons specified therein to enable a member to write in the name and, if so desired, an alternative name of a proxy of his own choice,

(b)provide for the member to indicate whether his proxy is to vote in favour of or against any resolution or resolutions to be put at the meeting or is to abstain from voting.

(6)

(a)The person present at a meeting of the company, whose name appears first in the list of names which have not been deleted in any instrument appointing a proxy shall be the validly appointed proxy of the member concerned

(b)If a member does not indicate on the instrument appointing a proxy that bis proxy is to vote in favour of or against any resolution or resolutions or to abstain from voting, the proxy shall be entitled to vote as he thinks fit.

(7)In the event of a failure to comply with any requirement of subsection (5), every director or officer of the company who authorizes, knowingly permits or is party to the failure, shall be guilty of an offence.

(8)The provisions of this section shall apply in relation to meetings of any class of members of a company as they apply in relation to general meetings of the company.

190. Quorum for meetings

Unless the articles of a company provide for a greater number of members entitled to vote to constitute a quorum at meetings of a company, the quorum for such meetings shall be—

(a)in the case of a public company, three members entitled to vote, personally present, or if a member is a body corporate, represented,

(b)in the case of a private company, not being a private company having one member, two members entitled to vote, personally present or, if a member is a body corporate, represented, and

(c)in the case of a wholly-owned subsidiary company, the representative of the holding company.

191. Chairman of meetings

Unless the articles of a company otherwise provide, any meeting of the company may elect any member to be the chairman of the meeting.

192. Compulsory adjournment of meetings

(1)If at any meeting of a company any member of the company who is present or represented and entitled to vote at the meeting demands an adjournment of the meeting upon any ground stated by him, the chairman shall put the demand to the vote of the meeting, and if a majority of the members present or represented and entitled to vote at the meeting or members present or represented and entitled to vote representing either personally or by proxy more than half of the share capital of the company represented at the meeting, vote in favour of an adjournment, the chairman shall adjourn the meeting to a day not earlier than seven days and not later than twenty-one days after the date of the meeting.

(2)When a meeting has been adjourned as aforesaid the company shall, upon a date not later than three days after the adjournment, publish in a newspaper circulating in the province where the registered office of the company is situated a notice stating—

(a)the time, date and place to which the meeting has been adjourned,

(b)the matter before the meeting at the time when it was adjourned, and

(c)the ground for the adjournment

Provided that a private company may, instead of publishing the said notice in a newspaper, send it by registered post to the members not later than three days after the adjournment.

(3)Any person acting as chairman of a meeting of a company who fails to comply with any requirement of subsection (1) and any company which fails to comply with any requirement of subsection (2) and any director or officer of such a company who knowingly is a party to the failure, shall be guilty of an offence.

Voting rights and voting

193. Voting rights of shareholders

(1)Subject to the provisions of sections 194 and 195 and to the exceptions stated in section 196, every member of a company having a share capital shall have a right to vote at meetings of that company in respect of each share held by him.

(2)Every member of a company limited by guarantee shall, unless the articles otherwise provide, have the right to vote at meetings of that company and shall have one vote.

194. Voting rights of preference shareholders

(1)Notwithstanding the provisions of section 193(1), the articles of a company may provide that preference shares shall not confer the right to vote at meetings of the company except—

(a)during any period determined as provided in subsection (2) during which any dividend or any part of any dividend on such shares or any redemption payment thereon remains in arrear and unpaid; or

(b)in regard to any resolution proposed which directly affects any of the rights attached to such shares or the interests of the holders thereof, including a resolution for the winding up of the company or for the reduction of its capital.

[subsection (1) substituted by section 16 of Act 111 of 1976]

(2)The period referred to in subsection (1)(a) shall be a period commencing on a day specified in the articles of the company concerned, not being more than six months after the due date of the dividend or redemption payment in question, or, where no due date is specified, after the end of the financial year of the company in respect of which such dividend accrued or such redemption payment became due.[subsection (2) substituted by section 16 of Act 111 of 1976]

195. Determination of voting rights

(1)A member of a public company having a share capital shall—

(a)if the share capital is divided into shares of par value, be entitled to that proportion of the total votes in the company which the aggregate amount of the nominal value of the shares held by him bears to the aggregate amount of the nominal value of all the shares issued by the company,

(b)if the share capital is divided into shares of no par value, be entitled to one vote in respect of each share he holds.

(2)The voting rights of a member of a private company shall, subject to the provisions of section 193(1), be determined by the articles of the company.

(3)When any shares of a company are converted into stock, or have been so converted after the first day of January, 1953, all the provisions of this section shall apply mutatis mutandis as if such stock consisted—

(a)in the case of shares of par value, of as many units of equivalent number and value as the number and nominal value of the shares so converted, or

(b)in the case of shares of no par value, of as many units as the number of shares so converted.

(4)Notwithstanding the provisions of this section, the articles of a company may provide—

(a)for the chairman of any meeting to have a casting vote, and

(b)for the votes to which any member is entitled above a stated number to increase, not in direct proportion to the number of shares held, but in some lower proportion specified in such articles and may in such event further provide that no member shall be entitled to a number of votes exceeding the number so specified or that the number of votes to which any member is entitled be limited to a specified number.

196. Exceptions as regards voting rights in existing companies

(1)The provisions of section 193 (1) shall not apply in respect of shares of a company which at the date of the commencement of this Act had already been issued without voting rights, or in respect of issued shares (other than preference shares) in respect of which at that date there existed different voting rights or in respect of shares subsequently issued in respect of which there existed at that date a contractual right or obligation to issue any such shares.

(2)If any such company issues new shares, all the provisions of this Act as to voting rights shall, save as provided in subsection (1), apply in respect of such new shares, and, for the purpose of determining the voting rights attached to such new shares as provided in section 195 all its shares shall be deemed to have been issued with voting rights in accordance with the provisions of this Act.

197. Exercise of voting rights

(1)Any person present and entitled to vote, on a show of hands, as a member or as a proxy or as a representative of a body corporate at any meeting of the company shall on a show of hands have only one vote, irrespective of the number of shares he holds or represents.[subsection (1) substituted by section 17 of Act 111 of 1976]

(2)On a poll at any meeting of a company, any member (including a body corporate) or his proxy shall be entitled to exercise all his voting rights as determined in accordance with the provisions of this Act, but shall not be obliged to use all his votes of cast all the votes he uses in the same way.

198. Right to demand a poll

(1)Any provision contained in a company’s articles shall be void in so far as it would have the effect—

(a)of excluding the right to demand a poll at a general meeting on any question other than the election of the chairman of the meeting or the adjournment of the meeting, or

(b)rendering ineffective a demand for a poll made—

(i)by not less than five members having the right to vote at such a meeting, or

(ii)by a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting, or

(iii)by a member or members entitled to vote at the meeting and holding in the aggregate not less than one-tenth of the issued share capital of the company

(2)The instrument appointing a proxy to vote at a meeting of a company shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of subsection (1), a demand by a person as proxy for a member shall be the same as a demand by the member.

Special resolutions

199. Requirements for special resolution

(1)A resolution by a company shall be a special resolution if at a general meeting of which not less than twenty-one clear days' notice has been given specifying the intention to propose the resolution as a special resolution, the terms and effect of the resolution and the reasons for it and at which—

(a)members holding in the aggregate not less than one-fourth of the total votes of all the members entitled to vote thereat, are present in person or by proxy; or

(b)in the case of a company limited by guarantee, not less than one-fourth of the members entitled to vote thereat are present in person or by proxy,

the resolution has been passed, on a show of hands, by not less than three-fourths of the number of members of the company entitled to vote on a show of hands at the meeting who are present in person or by proxy or, where a poll has been demanded, by not less than three-fourths of the total votes to which the members present in person or by proxy are entitled.[subsection (1) substituted by section 18 of Act 111 of 1976]

(2)

(a)If less than one-fourth of the total votes of all the members entitled to attend the meeting and to vote thereat or, in the case of a company limited by guarantee, less than one-fourth of the members of such company, are present or represented at a meeting called for the purpose of passing a special resolution, the meeting shall stand adjourned to a day not earlier than seven days and not later than twenty-one days after the date of the meeting and the provisions of section 192(2) shall apply in inspect of such adjournment

(b)At the adjourned meeting the members who are present in person or by proxy and are entitled to vote may deal with the business for which the original meeting was convened and a resolution passed by not less than three-fourths of such members shall be deemed to be a special resolution even if less than one-fourth of the total votes are represented at such adjourned meeting

(3)With the consent of a majority in number of the members of a company having the right to attend and vote at such meeting and holding in the aggregate not less than ninety-five per cent of the total votes of all such members, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one clear days’ notice has been given a copy of such consent, on the prescribed form, shall be lodged with the Registrar together with the copy of the special resolution.

(4)At any meeting at which a special resolution is submitted to be passed, a declaration by the chairman that the resolution is carried shall, unless a poll is demanded, be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

(5)When a poll is demanded regard shall be had, in computing the majority on the poll, to the number of votes cast for and against the resolution

(6)For the purposes of this section notice of a meeting shall, subject to the provisions of this Act, be deemed to have been duly given and the meeting shall be deemed to be duly held when the notice is given and the meeting is held in the manner provided by the articles of the company concerned.

200. Representation of special resolutions

(1)Within one month from the passing of a special resolution a copy of such resolution together with a copy of the notice convening the meeting concerned shall be lodged with the Registrar, who shall, subject to the provisions of subsection (2), and upon payment of the prescribed fee, register such resolution.

(2)The Registrar may refuse to register any special resolution so lodged with him, except upon an order of the Court, if such resolution appears to him to be contrary to the provisions of this Act or of the memorandum or articles of the company concerned.

(3)A copy of every special resolution for the time being in force shall be embodied in or annexed to every copy of the articles issued after the registration of the resolution.

(4)A copy of every special resolution shall be transmitted by the company concerned to any member thereof at his request, and on payment of an amount of twenty-five cents or such lesser amount as the company may determine.

(5)Any company which fails to comply with any requirement of subsection (3) or (4) and every director or officer thereof who knowingly permits or is a party to the failure, shall be guilty of an offence.

(6)If a company makes default in lodging with the Registrar a copy of any special resolution and notice as required by subsection (1), the company, and every director or officer who knowingly permits or is a party to the default, shall be guilty of an offence.

201. Special resolutions for altering memorandum or articles and matters in pursuance thereof may be passed at same meeting

Where this Act permits any company to do anything by special resolution subject to the condition that its memorandum or articles authorizes it and its memorandum or articles do not provide for such authority, but do not prohibit it, the company concerned may convene a single meeting for the purpose of—

(a)passing a special resolution for the creation of the said authority in the memorandum or articles, and

(b)passing the intended special resolution.

202. Special resolutions to lapse unless registered

Any special resolution of which a copy is not lodged with the Registrar and registered by him within six months from the date of the passing of that resolution shall, unless the Court otherwise directs, lapse and be void.

203. Dates on which resolutions take effect

(1)A special resolution shall not take effect until it has been registered by the Registrar under section 200

(2)Any other resolution passed by a meeting of a company or of the holders of any class of shares of a company shall have effect as from the date on which it is passed

Minutes, minute books and reports of meetings

204. Keeping of minutes of meetings of companies

(1)

(a)Every company shall cause minutes of the proceedings at any meeting of the company to be entered, in one of the official languages of the Republic, in one or more minute books kept for the purpose, within one month after the date on which the meeting was held

(b)Any such minute book shall be kept at the registered office of the company or at the office where such minute book is made up

(2)For the purpose of this section loose leaves of paper shall not be deemed to constitute a minute book unless they are bound together permanently, without means provided for the withdrawal or insertion of leaves and the pages are consecutively numbered.

(3)The minutes of any meeting purporting to be signed by the chairman of that meeting or by the chairman of the next succeeding meeting shall be evidence of the proceedings.

(4)Any company which fails to comply with any requirement of subsection (1) or (2), and every direction or officer thereof who knowingly permits or is a party to the failure, shall be guilty of an offence.

205. Validity of proceedings

Where minutes have been made of the proceedings at any general meeting of a company, in accordance with the provisions of section 204, the meeting shall be deemed to have been duly held and convened and all proceedings had thereat to have been duly had and all appointments of directors, managers, liquidators, auditors and officers shall be deemed to be valid, until the contrary is proved.

206. Rights of members to inspect minute books

(1)Any minute book of a company kept under section 204 shall be open for inspection during business hours by any member of the company, without charge, at the registered office of the company or the office where 1t is made up, subject to such restrictions as may be provided for in the articles or imposed by the company in general meeting, but so that not less than two hours in each day shall be allowed for inspection

(2)Any member of a company shall be entitled to be furnished within seven days after he has made a written request therefor to the company with a copy of the minutes of the proceedings at any general meeting of the company, certified by the secretary or a director of the company as correct, at a charge not exceeding an amount of twenty-five cents for every page of the copy required.[subsection (2) substituted by section 12 of Act 59 of 1978]

(3)If any inspection required under this section is refused. or if any copy required under this section is not furnished within the proper time—

(a)the Court may on application order that the minutes in question be made available for inspection or that the copy required be furnished immediately o1 within such period as the Court may direct and may order the costs of the application to be paid by any director or officer of the company who is responsible for the default, and

(b)the company, and every director or officer thereof who knowingly a party to the default is, shall be guilty of an offence.

207. Publication of reports of meetings

(1)No report purporting to be a report of the pro-reports of proceedings at any meeting of a company shall be circulated or advertised at the expense of the company unless it contains a fair summary of all material questions and comments, relevant to any matter before the meeting, which have been asked or made by members taking part in the proceedings Provided that there shall not be required in any such report the inclusion of any matter which can reasonably be regarded as defamatory of any person or as detrimental to the interests of the company,

(2)Any director or officer of a company who authorizes or knowingly permits or is a party to the circulation or advertising of a report contrary to the provisions of subsection (1), shall be guilty of an offence, and if in any prosecution under this subsection the defence is raised that matter omitted from a report was unmaterial or could reasonably be regarded as defamatory of some person or as detrimental to the interests of the company, the burden of proving this shall be on the person raising the defence.

Chapter VIII
Directors

Number and appointment

208. Number of directors

(1)Every public company shall have at least two directors’ tours and every private company shall have at least one director.

(2)Until directors are appointed, every subscriber to the memorandum of a company shall be deemed for all purposes to be a director of the company.

209. Determination of number of directors and appointment of first director

Subject to the provisions of the articles of any company, number or d the number of directors of the company may be determined and appointments of the first directors may be appointed in writing by a majority of first directors the subscribers to its memorandum

210. Appointment of directors to be voted on individually

(1)At a general meeting of a company a motion for the appointment of two or more persons as directors of the company by a single resolution shall not be moved, unless a resolution that it shall be so moved has first been agreed to by the meeting without any vote being given against it.

(2)Subject to the provisions of section 214, a resolution moved in contravention of this section shall be void, whether or not its being so moved was objected to at the time, but if a resolution so moved is passed, no provision for the automatic reappointment of a retiring director in default of another appointment shall apply.

(3)For the purposes of this section, a motion for approving a person’s appointment or for nominating a person for appointment shall be treated as a motion for his appointment.

(4)This section shall not apply to a resolution altering the company’s articles.

211. Consent to act as director or officer

(1)Any person who, before the issue of a certificate to commence business, is appointed as a director or officer of a company having a share capital, shall—

(a)before such certificate is issued, sign and lodge with the company his written consent to act as such a director or such an officer, on a duly completed prescribed form containing the particulars prescribed by the Minister by regulation; and

(b)in the case of a director, either in the memorandum of the company subscribe for a number of shares not less than the number, if any, required to be held by a director thereof as qualification shares, or sign and lodge with the Registrar a contract in the prescribed form in writing to subscribe for or otherwise acquire such shares.

(2)For the purposes of this section 'qualification shares' means the qualification shares required to be heid on appointment to the office of director or within a period determined by reference to the time of appointment.

(3)Any person who is appointed as a director or officer of a company at any time after it has become entitled to commence business, shall within twenty-eight days after the date of such appointment or within such further period as the Registrar, on good cause shown and on payment of the prescribed fee, may allow, lodge with the company his written consent to such appointment on the prescribed form referred to in subsection (1)(a), duly completed and signed by him: Provided that the provisions of this subsection shall not apply to the reappointment of a retiring director.

(4)Failure to comply with the provisions of subsection (1) or (3) shall not affect the validity of an appointment.

(5)This section shall not apply in respect of any person deemed to be a director under section 208 (2).

(6)Any person appointed as a director or officer of a company in the circumstances referred to in subsection (1) or (3), who fails to comply with the applicable provisions of those subsections, shall be guilty of an offence.

(7)Any company which publishes, and every director or officer of the company who knowingly is a party to the publication of, the name of any person as a director of the company when such person is not a director or has not validly been appointed as director of the company, shall be guilty of an offence.

[section 211 amended by section 17 of Act 64 of 1977 and substituted by section 13 of Act 59 of 1978]

212. Filling of vacancy where director disqualified or removed

(1)If the-articles of a company provide for the filling of casual vacancies in respect of directors, any such vacancy created by the disqualification of any person from being a director of the company or by the removal of a director under this Act, may, subject to the provisions of such articles, and if in the case of any such removal, the vacancy is not filled at the meeting at which he is removed, be filled as a casual vacancy.

(2)A person appointed as a director under subsection (1) in the place of a director removed or disqualified under this Act shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.

213. Qualification shares of directors

(1)

(a)Without prejudice to the restrictions imposed by section 211, any director of a company who is by its articles required to hold a specified number of qualification shares, and who does not hold such qualification shares shall vacate his office if he does not obtain such qualification shares within two months, or such shorter period as may be provided in the articles of the company, from the date of his appointment, and shall not be capable of being reappointed until he has obtained such qualification shares

(b)For the purposes of any provision in the articles of a company requiring a director to hold a specified number of shares as qualification shares, the bearer of a share warrant shall not be deemed to be the holder of the shares specified in the warrant.

(2)Any person who accepts an appointment or acts as a director of a company contrary to any provision of subsection (1), shall be guilty of an offence

214. Defect in appointment of director and validity of acts

The acts of a director of a company shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.

Register of directors and officers

215. Register of directors and officers

(1)Every company shall keep in one of the official languages of the Republic, a register of directors and officers of the company and cause to be entered therein in respect of every director or officer—

(a)his full forenames and surname and any former forenames and surname, his identity number or, if he has no such number, his date of birth, and if any officer is a corporate body, the address of its registered office;[paragraph (a) substituted by section 14(1)(a) of Act 59 of 1978]

(aA)his nationality if not South African, his occupation, his residential, business and postal addresses and the date of appointment;[paragraph (aA) inserted by section 14(1)(b) of Act 59 of 1978]

(b)the name and the registered office of every other company of which such director is a director, and

(c)any changes occurring from time to time in the particulars referred to in paragraphs (a), (aA) and (b) and the dates and nature of such changes.[paragraph (c) substituted by section 14(1)(c) of Act 59 of 1978]

(2)There shall in addition be entered in the said register the name and date of appointment of the auditor of the company and the date and particulars of any change of such name and date of appointment.

(3)For the purposes of subsection (1)(a) “former forenames and surname” does not include—

(a)in the case of a person adopted as a child, any forename and surname borne by him before his adoption, or

(b)any forename or surname previously borne by any person which was changed or disused before he attained the age of eighteen years or has been changed or disused for a period of not less than ten years, or

(c)in the case of a married or divorced woman or a widow, any forename or surname borne by her before her marriage.

(4)The provisions of section 110 as to the place where the register of members of a company shall be kept and notice thereof to the Registrar and of section 113 as to the inspection of and copies of or extracts from that register, shall apply mutatis mutandis to the register to be kept under this section.

(5)Any company which fails to comply with any provision of subsection (1), (2) or (4), shall be guilty of an offence.

216. Duties of directors and others and of company in regard to register

(1)Any person in respect of whom the particulars referred to in section 215 are in terms of that section to be entered in the register mentioned in that section, shall furnish such particulars in writing to the company concerned—

(a)in the case of a person appointed as a director or officer of the company, within twenty-eight days after the date of his appointment; and

(b)in the case of any change in such particulars, including any change contemplated in section 215 (2), but excluding a change by way of the vacation of his office by the person concerned, within fourteen days after the date of the occurrence of the change,

and such particulars or any change therein shall upon receipt thereof, and if any director, officer or auditor has vacated his office, a statement that such vacation of office has occurred shall forthwith, be entered in such register by the company.

(2)A company shall within fourteen days after receipt of any particulars referred to in section 215(1)(a) and (aA) or of notice of any change in the particulars referred to in section 215(1)(a) or after any director, officer or auditor has vacated his office, lodge a return with the Registrar in the prescribed form reflecting the contents of such register after such particulars or such change therein or a statement that such vacation of office has occurred, have been entered in the register: Provided that any entry of such a vacation of office previously advised to the Registrar, shall not be reflected in such return.

(3)In respect of any of the matters referred to in section 211(1) the return referred to in subsection (2) shall contain a statement, signed by a director or officer of the company, that—

(a)the consent, referred to in section 211, of the director or officer in respect of whom particulars are reflected in such return, has been obtained on a duly completed and signed prescribed form;

(b)any person appointed as director or officer of the company, is not disqualified under section 218 or 219; and

(c)the written consent under section 218(1)(b) of the husband of any woman appointed as a director of the company has been obtained on the prescribed form.

(4)Any written consent referred to in section 211 shall be retained by the company and the Registrar may from time to time by notice in writing require a company to transmit to him within fourteen days after the date of the receipt of such notice, a certified copy of the consent of any director or officer of the company to act as such.

(5)Any person who or company or external company which fails to comply with any provision of this section shall be guilty of an offence.

[section 216 amended by section 18 of Act 64 of 1977 and substituted by section 15(1) of Act 59 of 1978]

217. ***

[section 217 repealed by section 16(1) of Act 59 of 1978]

Disqualifications of directors

218. Disqualifications of directors

(1)Any of the following persons shall be disqualified from being appointed or acting as a director of a company

(a)A body corporate,

(b)a minor or any other person under legal disability, save a married woman subject to the marital power of her husband whose written consent to her appointment as a director has, on the form referred to in section 211(1)(a), been lodged with the company;[paragraph (b) substituted by section 17(1) of Act 59 of 1978]

(c)any person who is the subject of any older under this Act or the repealed Act disqualifying him from being a director,

(d)save under authority of the Court—

(i)an overagitated insolvent,

(ii)any person removed from an office of trust on account of misconduct,

(iii)any person who has at any time been convicted (whether in the Republic or elsewhere) of theft, fraud, forgery or uttering a forged document, perjury, an offence under the Prevention of Corruption Act, 1958 (Act No 6 of 1958), or any offence involving dishonesty or in connection with the promotion, formation or management of a company, and has been sentenced therefor to imprisonment without the option of a fine or to a fine exceeding one hundred rand.

(2)Any person disqualified from being appointed or acting as a director of a company and who purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company, shall be guilty of an offence.

(3)Nothing in this section shall be construed as preventing a company from providing in its articles for any further disqualifications for the appointment of or the retention of office by any person as a director of such company.

219. Disqualification of directors, officers and others by the court

(1)The Court may make an order directing that, for such period as may be specified in the Older, a person, director or officer shall not without the leave of the Court be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of any company when—

(a)such person, director or officer, has been convicted of an offence in connection with the promotion, formation or management of a company, or

(b)the Court has made an order for the winding-up of a company and the Master has made a report under this Act stating that in his opinion fraud has been committed—

(i)by such person in connection with the promotion or formation of the company, or

(ii)by any director or officer of the company in relation to the company since its formation, or

(c)in the course of the winding-up or judicial management of a company it appears that any such person—

(i)has been guilty of an offence referred to in section 424, whether or not he has been convicted of that offence, or

(ii)has otherwise been guilty while an office of the company of any fraud in relation to the company or of any breach of his duty to the company, or

(d)a declaration has been made in respect of any person under section 424(1).

(2)

(a)An order under subsection (1) may be made—

(i)by the Court having jurisdiction to wind up the company affected by the act or omission in respect of which the order is sought, on application by the Master or, in the case of a company being wound up or under judicial management, by the Attorney-General in terms of section 401, or by the liquidator or the judicial manager or by any person who is a creditor or is or has been a member of such company, or

(ii)in the case of an order in the circumstances set out in paragraph (a) of that subsection, also summarily by the Court convicting the person concerned,

and any leave required under that subsection may be granted by the Court having jurisdiction to wind up the company in relation to which such leave is sought

(b)The applicant for any such order shall give not less than ten days’ notice of his intention to apply for the order, to the person against whom the order is sought and such person may attend the hearing of the application and give evidence and call witnesses to give evidence on his behalf.

(3)Where an order under subsection (1) has been made, the person to whom the order relates shall give not less than ten days’ notice to the Master, the Attorney-General, the liquidator or the person who was the judicial manager of the company concerned, of any application he intends making for leave of the Court referred to in subsection (1), who shall draw the attention of the Court to any matter which may appear to them to be relevant, may give evidence and call witnesses.

(4)

(a)For the purposes of subsection (1)(b)(ii) the reference therein to an officer of a company shall be construed as including a reference to any person in accordance with whose directions or instructions the directors of the company have been accustomed to act

(b)An order may be made under the sard subsection (1)(b)(ii) whether or not criminal proceedings have been instituted in respect of any matter on which the order is based

(5)Any person who contravenes any order made under subsection (1), shall be guilty of an offence.

220. Removal of directors and procedures in regard thereto

(1)

(a)A company may, notwithstanding anything in its memorandum or articles or in any agreement between it and any director, by resolution remove a director before the expiration of his period of office

(b)The provisions of paragraph (a) shall not be construed as authorizing the removal of a director of a private company who was holding office for life on the thirteenth day of June, 1949

(2)Special notice shall be lodged with the company of any proposed resolution to remove a director under this section or to appoint any person in the stead of a director so removed at the meeting at which he is removed, and, on receipt of notice of such a proposed resolution, the company shall forthwith deliver a copy thereof to the director concerned who shall, whether or not he is a member of the company, be entitled to be heard on the proposed resolution at the meeting.

(3)Where notice is given of a proposed resolution to remove a director under this section, and the director concerned makes representations with respect thereto not exceeding a reasonable length in writing to the company and requests their notification to members of the company, the company shall, unless the representations are received by too late for it to do so—

(a)in any notice of the resolution given to members of the company, state that such representations have been made, and

(b)send a copy of the representatives to every member of the company to whom notice of the meeting is sent, whether such notice is sent before or after receipt of the representations by the company

(4)If a copy of such representations is not sent as aforesaid because it was received too late or because of the company’s default, the director concerned may (without prejudice to his right to be heard orally) require that the representations be read at the meeting.

(5)No copy of such representations shall be sent out and the representations need not be read out at any meeting if, on the application of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred oy this section are being abused to secure needless publicity for defamatory matters.

(6)The Court may order the company’s or the said other person’s costs on an application under subsection (5) to be paid in whole or in part by the director concerned, notwithstanding that he is not a party to the application.

(7)Nothing in this section shall be construed as depriving a person removed thereunder of compensation or damages which may be payable to him in respect of the termination of his appointment as director or of any' appointment terminating with that of director or as derogating from any power to remove a director which may exist apart from this section.

Restrictions on directors, their powers and certain acts

221. Restriction of power of directors to issue share capital

(1)Notwithstanding anything contained in its memorandum or articles, the directors of a company shall not have the power to allot or issue shares of the company without the approval of the company in general meeting.

(2)Any such approval may be in the form of a general authority to the directors, whether conditional or unconditional, to allot or issue any shares in their discretion, or in the form of a specific authority in respect of any particular allotment or issue of shares.

(3)If any such approval is given in the form of a general authority to the directors, it shall be valid only until the next annual general meeting of the company, but it may be varied or revoked by any general meeting of the company prior to such annual general meeting.

(4)Any director of a company who knowingly takes part in the allotment or issue of any shares in contravention of subsection (1), shall be liable to compensate the company for any loss, damages or costs which the company may have sustained or incurred thereby, but no proceedings to recover any such loss, damages or costs shall be commenced after the expiration of two years from the date of the allotment or issue.

222. Restriction on issue of shares and debentures to directors

(1)No provision in any memorandum or articles or in any resolution of a company authorizing the directors to allot or issue any shares or debentures convertible into shares of the company at the discretion of the directors, shall authorize the allotment or issue of any such shares or debentures to any director of the company or his nominee, or to any body corporate which is or the directors of which are accustomed to act in accordance with the directions or instructions of such director or nominee, or at a general meeting of which such director or his nominee is entitled to exercise or control the exercise of one-fifth or more of the voting power, or to any subsidiary of such body corporate unless—

(a)the particular allotment or issue has prior to the allotment or issue been specifically approved by the company in general meeting, or

(b)such shares or debentures are allotted or issued under a contract underwriting such shares or debentures, or

(c)such shares or debentures are allotted or issued in proportion to existing holdings, on the same terms and conditions as have been offered to all the members or debenture-holders of the company or to all the holders of the shares or such debentures of the class or classes being allotted or issued, oi

(d)such shares or debentures are allotted or issued on the same terms and conditions as have been offered to members of the public

[subsection (1) amended by section 19 of Act 64 of 1977]

(2)

(a)Any director of a company who contravenes or permits the contravention of this section, shall be guilty of an offence and shall be further liable to compensate the company for any loss, damages or costs which the company may have sustained or incurred thereby

(b)No proceedings to recover any such loss, damage or costs shall be commenced after the expiration of two years from the date of the allotment or issue

223. Share option plans where director interested

After the commencement of this Act no option or right given directly or indirectly to any director or future director of a company in terms of any scheme or plan, to subscribe for any shares of that company or to take up any debentures convertible into shares of that company on any basis other than that laid down in section 222 (1) (c), shall be valid unless authorized in terms of a special resolution of that company Provided that—

(a)the term “future director” shall not include a person who becomes a director of the company after the lapse of six months from the date upon which such option or right is acquired by such person, and

(b)no such option or right shall be invalid in terms of this section if such director or future director of the company holds salaried employment or office in the company and is given such option or right in his capacity as an employee

224. Directors not to deal in options in respect of listed shares and debentures

(1)A director of a company who purchases a right

(a)to call for delivery at a specified price, within a specified time of a specified number of shares or a specified amount of debentures which are listed by a stock exchange, or

(b)to make delivery at a specified price, within a specified time of a specified number of shares or a specified amount of debentures which are listed as aforesaid, or

(c)(as he may elect) to call for delivery at a specified price within a specified time or to make delivery at a specified price within a specified time of a specified number of shares or a specified amount of debentures which are listed as aforesaid,

shall be guilty of an offence

(2)Nothing in this section shall be taken to penalize a person who buys a right to subscribe for shares or debentures of a body corporate or buys debentures of a body corporate that confer upon the holder thereof a right to subscribe for, or to convert the debentures (in whole or in part) into, shares of that body corporate

(3)In subsection (1)—

(a)"shares" and "debentures" in relation to a director of a company, mean shares or debentures of that company or its subsidiary or holding company or a subsidiary of its holding company; and[paragraph (a) substituted by section 20 of Act 64 of 1977]

(b)“director” includes a person in accordance with whose directions or instructions the directors of a company are accustomed to act, and such person shall be deemed to be a director of the company

225. Prohibition of tax free payments to directors

(1)No company shall pay to any of its directors (whether in his capacity as a director or otherwise) any remuneration free of any taxation in respect of his income, or otherwise calculated by reference to or varying with the amount of such taxation, or with the rate of taxation on incomes, except under a contract which was in force on the thirteenth day of June, 1949, and which provides expressly, and not merely by reference to the articles of the company, for payment of remuneration as aforesaid

(2)Any provision contained in the articles of a company, or in any contract other than such a contract as aforesaid, or in any resolution of a company or of its directors, providing for the payment to a director by way of remuneration of any amount to be determined in a manner prohibited by subsection (1), shall be construed as if it provided for the payment of that amount without reference to such manner of determination thereof.

226. Prohibition of loan to or security in connection with transactions by, directors and managers

(1)No company shall directly or indirectly make a loan to—

(a)any director or manager of—

(i)the company; or

(ii)its holding company; or

(iii)any other company which is a subsidiary of its holding company; or

(b)any other company or other body corporate controlled by one or more directors or managers of the company or of its holding company or of any company which is a subsidiary of its holding company;

or provide any security to any person in connection with an obligation of such director, manager, company or other body corporate.

(1A)For the purpose of subsection (1)—

(a)"loan" includes—

(i)a loan of money, shares, debentures or any other property; and

(ii)any credit extended by a company, where the debt concerned is not payable or being paid in accordance with normal business practice in respect of the payment of debts of the same kind; and

(b)one or more directors or managers of a company contemplated in subsection (1) (b) shall be deemed to control another company or body corporate only if—

(i)such director or manager or his nominee is a member or such directors or managers or their nominees are members of such other company or body corporate and the composition of its board of directors is controlled by such director, manager or nominee or such directors, managers or nominees, and such composition shall be deemed to be so controlled if such director or manager or his nominee or such directors or managers or their nominees may, by the exercise of some power and without the consent or concurrence of any other person, appoint or remove the majority of the directors concerned, and such director, manager or nominee or such directors, managers or nominees shall be deemed to have power to appoint a director where a person cannot be appointed as a director without his or their consent or concurrence; or

(ii)more than one-half of the equity share capital of that other company or body corporate is held by such director, manager or nominee or such directors, managers or nominees; and

[paragraph (b) amended by section 21(1)(a) of Act 64 of 1977]

(c)"security" includes a guarantee.

(1B)The provisions of subsection (1) and of paragraph (b) of subsection (1A) shall not be construed as prohibiting a company from making a loan to, or providing security to any person in connection with an obligation of, its holding company or subsidiary or a subsidiary of such holding company.[subsection (1B) inserted by section 21(1)(b) of Act 64 of 1977]

(2)The provisions of subsection (1) shall not apply—

(a)in respect of—

(i)the making of a loan by a company to its own director or manager;[subparagraph (i) amended by section 21(1)(c) of Act 64 of 1977]

(ii)the provision of security by a company in connection with an obligation of its own director or manager,

(iii)the making of a loan by a company to any other company or other body corporate controlled by one or more of the directors or managers of the first-mentioned company; or[subparagraph (iii) added by section 21(1)(c) of Act 64 of 1977]

(iv)the provision of security by a company in connection with an obligation of any other company or other body corporate controlled by one or more of the directors or managers of the first-mentioned company,[subparagraph (iv) added by section 21(1)(c) of Act 64 of 1977]

with the consent of all the members of the company or in terms of a special resolution relating to a specific transaction; or

(b)subject to the provisions of subsection (3), in respect of anything done to provide any director or manager with funds to meet expenditure incurred or to be incurred by him for the purposes of the company concerned or for the purpose of enabling him properly to perfonn his duties as director or manager of that company; or

(c)in respect of anything done bona fide in the ordinary course of the business of a company actually and regularly carrying on the business of the making of loans or the provision of security; or

(d)to the provision of money or making of loans by a company for the purposes contemplated in section 38 (2) (b) and (c); or

(e)to the making of a loan or the provision of security with the approval of the company in general meeting for housing for its director or manager; or

(f)in respect of—

(i)the making of a loan by a company to a director or manager of its subsidiary; or

(ii)the provision of security by a company to another person in connection with an obligation of a director or manager of its subsidiary.

provided such director or manager is not also a director or manager of such company itself.[paragraph (f) amended by section 21(1)(d) of Act 64 of 1977]

(3)No loan shall be made or security provided by virtue of the provisions of subsection (2)(b), except—

(a)with the prior approval of the company given at a general meeting at which the amount of the loan or the extent of the security and the purposes thereof are disclosed; or

(b)on condition that, if the approval of the company is not given as aforesaid at or before the next annual general meeting of the company, the loan shall be repaid or the liability under the security shall be discharged, within six months from the conclusion of that annual general meeting.

(4)Any director or officer of a company who authorizes, permits or is a party to the making of any loan or the provision of any security contrary to the provisions of this section, shall—

(a)be liable to indemnify the company and any other person who had no actual knowledge of the contravention, against any loss directly resulting from the invalidity of such loan or security; and

(b)be guilty of an offence.

(5)For the purposes of subsection (4) "director or officer of a company" includes, where the company is a subsidiary, any director or officer of its holding company.

[section 226 substituted by section 19 of Act 111 of 1976]

227. Payments to directors for loss of office or in connection with arrangements and takeover schemes

(1)No company shall make any payment or grant any benefit or advantage to any director or past director of the company or of its controlled or controlling company or of any company controlled by its controlling company—

(a)by way of compensation for loss of office or as consideration for or in connection with his retirement from office,

(b)by way of compensation, consideration or for any other reason, for loss or retention of office or otherwise, in connection with any scheme referred to in section 313, or

(c)by way of such compensation, consideration or other reason in connection with any take-over scheme referred to in section 314,

unless full particulars with respect to the proposed payment (including the amount thereof), benefit or advantage have been disclosed to the members of the company and the making of the payment, or the grant of the benefit or advantage has been approved by special resolution of the company.

(2)Any payment made, or benefit or advantage granted contrary to the provisions of subsection (1) shall—

(a)in the case of paragraphs (a) and (b) of that subsection, be deemed to have been received by the director or past director concerned in trust for the company, and

(b)in the case of paragraph (c) of that subsection, be deemed to have been received by the director or past director concerned in trust for any persons who have sold their shares as a result of the take-over offer concerned

(3)If in connection with any take-over scheme the price to be paid to a director or past director for any shares of the company held by him is in excess of the price offered to other holders of such shares in terms of the take-over scheme or any benefit or advantage is granted to such director or past director, the excess or the money value of the benefit or advantage, as the case may be, shall for the purposes of this section, be deemed to have been a payment made contrary to the provisions of subsection (1)(c)

(4)A director s expenses of distributing any sum among persons entitled thereto by virtue of subsection (2)(b) shall be borne by him and shall not be retained out of that sum

(5)Where in proceedings for the recovery of any payment, benefit or advantage deemed to have been received in trust, it is shown that—

(a)the payment was made or the benefit or advantage was granted in pursuance of any arrangement entered into as part of an agreement in respect of any scheme or take-over scheme, or within one year before or two years after that agreement or the take-over offer, and

(b)the company, or the transferee company under any scheme or the offeror in respect of any taue-over scheme was envy to that arrangement,

the payment, benefit or advantage shall be deemed, except in so far as the contrary is shown, to be one to which this section applies

(6)The provisions of this section shall not apply with reference to any bona fide payment made or benefit or advantage granted by way of damages for breach of contract or by way of a pension, including any superannuation allowance, gratuity or similar payment in respect of past services.

(7)Nothing in this section shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments, benefits or advantages as are mentioned in this section or with respect to any other payments, benefits or advantages made or granted or to be made or granted to the directors or past directors of a company.

228. Disposal of undertakings or greater part of assets of company

(1)Notwithstanding anything contained in its memorandum or articles, the directors of a company shall not have the power, save with the approval of a general meeting of the company, to dispose of—

(a)the whole or substantially the whole of the undertaking of the company, or

(b)the whole or the greater part of the assets of the company

(2)No resolution of the company approving any such disposal shall have effect unless it authorizes or ratifies in terms the specific transaction

Interests of and dealings by directors and others in shares of company

229. Definitions for purposes of sections 230, 231, 232 and 233

For the purposes of sections 230, 231, 232 and 233—“interest” includes, without derogating from the generality of the word, any option in respect of, any right to subscribe for or any right in or to any shares or debentures,“officer” in relation to a company, includes any employee who would be in possession of any information consequent upon his immediate relationship with the directors of the company immediately before a public announcement is to be made under section 233,“past director” means a person who has ceased to be a director of the company concerned for a period not exceeding six months,“person” means a person in accordance with whose directions or instructions any of the directors of a company is accustomed to act,"shares and debentures of the company" means the shares and debentures of the company and of its subsidiary.[definition of "shares and debentures of the company" substituted by section 22 of Act 64 of 1977]

230. Register of interest if directors and others in shares and debentures of company

(1)Every public company having a share capital shall keep a register of the material interests of its directors, past directors, officers and persons in the shares and debentures of the company and shall within seven days (disregarding Saturdays, Sundays and public holidays) after receipt of any written notice referred to in section 232 cause to be entered therein in respect of each director, past director, officer or person—

(a)a description of and the number or amount of shares or debentures held by each of them,

(b)the nature and extent of any material interest whatever, direct or indirect, held by each of them, directly or indirectly, in respect of such shares or debentures,

(c)in chronological order any change, including any contract for any change in the holding of or in the metasets of each of them in any shares or debentures, specifying the consideration, if any, given or received or to be given or received, and

(d)the date on which each entry in the said register is made

(2)The provisions of section 110 as to the place where the register of members of a company shall be kept and notice thereof to the Registrar and of section 113 as to the inspection of and copies of or extracts from that register, shall apply mutatis mutandis to the register of interests to be kept under this section

(3)The Registrar may at any time by notice in writing require a company to transmit to him within fourteen days after the date of such notice particulars of the entries made in the register for such period as may be specified in the notice

(4)Any company which fails to comply with any provision of this section or with any requirement of the Registrar under this section and every director and officer of such company who knowingly is a party to such failure, shall be guilty of an offence

231. Directors to determine officers for purposes of register

(1)When the directors of a company have knowledge of any information concerning a transaction or proposed transaction of the company or of the affairs of the company, winch, if it becomes publicly known, may be expected materially to affect the price of the shares or debentures of the company and that information lias not been publicly announced, they shall forthwith by resolution determine which officers of the company, whose names have not already been entered in the register under section 230, are to be taken to be possessed or to become possessed of that information in the course of their respective duties and shall cause the names of such officers to be entered in the said register

(2)Every director of a company who fails to comply with the requirements of subsection (1), shall be guilty of an offence

232. Duty of directors and other as to register of interests

(1)There shall be lodged with a company by—

(a)every director, past director, officer and person of the company within one month after the date on which this section comes into operation,

(b)every director within one month after his appointment as a director of the company,

(c)every person within one month after he becomes entitled to direct or instruct any director of the company, and

(d)every officer who has been determined by the directors in terms of section 231, forthwith,

a written notice, dated and signed by him or hits agent authorized thereto, containing the particulars referred to in section 230 (1) (a) and (b)

(2)Every such director, past director, officer and person shall within fourteen days (disregarding Saturdays, Sundays and public holidays) after the occurrence of any change referred to in section 230 (1) (c) lodge with the company a written notice, dated and signed by him or his agent authorized thereto containing toe particulars thereof Provided that the obligation imposed by this subsection on any officer shall cease in respect of any change occurring after the time of the public announcement referred to in section 233

(3)Any director, past director, officer or person who contravenes any provision of this section or who makes any statement in any notice under this section knowing it to be false or recklessly makes any such statement which is false, shall be guilty of an offence

233. Offence to deal in shares with inside information before public announcement

Every director, past director, officer or person who has knowledge of any information concerning a transaction or proposed transaction of the company or of the affairs of the company which, if it becomes publicly known, may be expected materially to affect the price of the shares or debentures of the company and who deals in any way to his advantage, directly or indirectly, in such shares or debentures while such information has not been publicly announced on a stock exchange or in a newspaper or through the medium of the radio or television, shall be guilty of an offence

Interests of directors and officers in contracts

234. Manner of and time for declaration of interest

(1)A director of a company who is in any way, whether directly or indirectly, materially interested in a contract or proposed contract referred to in subsection (2), which has been or is to be entered into by the company or who so becomes interested in any such contract after it has been entered into, shall declare his interest and full particulars thereof as provided in this Act

(2)The provisions of subsection (1) shall apply to any contract or proposed contract which is of significance in relation to a company’s business, and which is entered into or to be entered into—

(a)in pursuance of a resolution taken or to be taken at a meeting of directors of a company, or

(b)by a director or officer of the company who either alone or together with others has been authorized by the directors of the company to enter into such contract or any contract of a similar nature

(3)

(a)For the purposes of subsection (1) a general notice in writing given to the directors of a company by a director thereof to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may after the date of the notice and before the date of its expiry be made with that company or firm, shall be deemed to be a sufficient declaration of interest in relation to any contract or proposed contract so made or to be made, if—

(i)the nature and extent of the interest of the said director in such company or firm is indicated in the said notice, and

(ii)at the time the question of confirming or entering into the contract in question is first considered or at the time such director becomes interested in a contract after it has been entered into, the extent of his interest in such company or firm is not greater than is stated in the notice

(b)A general notice under paragraph (n) may from time to time be amended and shall not be effective beyond the end of the financial year of the company but may from time to time be renewed

(4)Any director or officer of a company who fails to comply with any provision of this section, shall be guilty of an offence

(5)Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company

235. Manner of and time for declaration of interest

(1)No declaration of interest by a director under section 234 shall be of any effect unless it is made at or before the meeting of directors at which the question of confirming or entering into the contract is first taken into consideration and, if in writing, is read out to the meeting or each director present states in writing that he has read such declaration

(2)If for any reason it is not possible for a director to make any such declaration at or before a particular meeting of directors, he may make it at the first meeting of directors held thereafter at which it is possible for him to do so and shall in that event state the reason why it was not possible to make it at such particular meeting

236. Written resolutions where director interested

Subject to the provisions of section 36 and notwithstanding any provision in the articles of a company permitting the taking of a resolution by way of a written resolution signed by directors, no such resolution which concerns contracts or proposed contracts referred to in section 234 shall be valid unless the provisions of that section and section 235 are complied with

237. Disclosure by interested director or officer acting for company

(1)A director or officer referred to in section 234 (2) (b) who is in any way, whether directly or indirectly, materially interested in any proposed contract to be entered into by him on behalf of the company, shall, before entering into such contract, declare his interest and the full particulars thereof at a meeting of directors as prescribed by section 235, and shall not enter into such contract unless and until a resolution has been passed by the directors approving thereof

(2)Any such officer who becomes materially interested in any contract entered into by him on behalf of the company after it was entered into, shall forthwith declare his interest and the full particulars thereof by a written notice given to the directors

(3)A notice referred to in subsection (2) may be delivered to the secretary of the company, if the company has a secretary, and the secretary shall forthwith transmit it to the directors for whom it is intended

(4)Nothing in this section shall be taken to prejudice the operation of any rule of law restricting an officer of a company from having an interest in contracts with the company

(5)Any director or officer of a company who fails to comply with any provision of this section, shall be guilty of an offence

238. When particulars of interest to be stated in notice of meeting

(1)If a director of a company is in any way, whether directly or indirectly, materially interested in a contract or proposed contract which is placed before the company at any meeting thereof for confirmation or authorization, the notice convening any such meeting shall state the full particulars of the interest in such contract of the director concerned

(2)A company which fails to comply with the provisions of subsection (1) and any director who is a party to such failure, shall be guilty of an offence

239. Minuting of declarations of interest

(1)Every declaration of interest made under section 234, 235 or 237 (1) shall be recorded in the minutes of the meeting of directors at which the declaration is made, and any declaration of interest by an officer under section 237 (2) shall be recorded in the minutes of the first meeting of directors held after the date of that declaration

(2)Where any such declaration is made in writing, the company shall, unless copies of the minutes are circulated to the directors, cause the minute recording the declaration to be read out at the first meeting of directors held after the meeting in the minutes of which the declaration was recorded

(3)Any company which fails to comply with any provision of this section, shall be guilty of an offence

240. Register of interest in contracts of directors and officers and inspection thereof

(1)Every company shall keep at its registered office or at the office where it is made up a register of interests in contracts in one of the official languages of the Republic, and shall enter therein the particulars of any declarations of interest made under section 234, 235 or 237, including any amendments under section 234 (3) (b)

(2)The provisions of section 110 as to the place where the register of members of a company shall be kept and of section 113 as to the inspection of and copies of or extracts from that register, shall apply mutatis mutandis to the register to be kept under this section

241. Duty of auditor as to register of interests in contracts

The auditor of any company shall satisfy himself that the register of interests in contracts has been kept as required by section 240 and that every declaration of interest recorded therein has been minute as required by section 239

Proceedings at meetings of directors

242. Keeping of minutes of directors and managers meetings

(1)The directors of a company shall cause minutes in one of the official languages of the Republic of all proceedings of meetings of directors or managers to be entered in one or more books to be kept for that purpose at the registered office of the company or at the office where such minutes are made up

(2)Any resolution of directors or managers of a company in the form of a written resolution signed by the directors or managers shall be deemed to be a minute of a meeting and shall be entered in the book or books provided for in subsection (1) and be noted by the next following meeting of directors or managers

(3)For the purposes of this section loose leaves of paper shall not be deemed to constitute a minute book unless they are bound together permanently without means provided for the withdrawal or insertion of leaves, and the pages or leaves are consecutively numbered

(4)The minutes of any meeting of the directors or managers of a company purporting to be signed by the chairman of that meeting or by the chairman of the next succeeding meeting shall be evidence of the proceedings at that meeting

(5)If default is made in complying with any requirement of subsection (1), (2) or (3), the company, and any director, manager or officer of the company who knowingly is a party to the default, shall be guilty of an offence

243. Validity of proceedings at meetings of directors or managers

Where minutes have been kept in accordance with the provisions of section 242 of the proceedings at any meeting of directors or managers of a company, the meeting shall be deemed to have been duly held and convened and all proceedings had thereat to have been duly had, and all appointments of directors, managers, officers or auditors of the company shall be deemed to be valid, until the contrary is proved

244. When resolution at adjourned directors or managers meeting effective

Any resolution passed at an adjourned meeting of directors or managers of a company shall for all purposes be treated as having been passed on the date on which it was in fact passed

245. Directors' and managers' meetings attendance register

(1)Every director of a company present at any meeting of directors, and every manager thereof present at any meeting of managers, shall at the meeting sign his name under the date of the meeting in a book complying with the provisions of section 242 (3) to be kept for that purpose

(2)Such book shall be kept at the registered office of the company or at the office where it is made up and shall during business hours be open to inspection by any member of the company without charge

(3)Any company, director or manager who fails to comply with any provision of this section, shall be guilty of an offence

246. Duty of auditor as to minute books and attendance register

The auditor of a company shall satisfy himself that a minute book or books and an attendance register are kept by the company in the form prescribed by sections 242 and 245

Indemnity and relief of and offences by directors and others

247. Exemption from or indemnity against liability of directors, officers or auditors of a company

(1)Subject to the provisions of subsection (2), any provision, whether contained in the articles of a company or in any contract with a company, and whether expressed or implied, which purports to exempt any director or officer or the auditor of the company from any liability which by law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company or to indemnify him against any such liability, shall be void

(2)The provisions of subsection (1) shall not be construed as prohibiting a company from indemnifying any director, officer or auditor in respect of any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in favour or in which he is acquitted or in respect of any such proceedings which are abandoned or in connection with any application under section 248 in which relief is granted to him by the Court

248. Relief of directors and others by court in certain cases

(1)If in any proceedings for negligence, default, breach of duty or breach of trust against any director, officer or auditor of a company it appears to the Court that the person concerned is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that he has acted honestly and reasonably, and that, having discard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, the Court may rebelieve him, either wholly or partly, from his liability on such terms as the Court may think fit

(2)Any such director, officer or auditor who has reason to apprehend that any claim will be made against him in respect of any negligence, default, breach of duty or breach of trust, may apply to the Court for relief, and the Court shall on any such application have the same powers to grant relief as are by subsection (1) conferred upon it with reference to proceedings ^referred to in that subsection

249. False statements and evidence

(1)Any person who in any statement, return, report, certificate, financial statement or other document required by or for the purposes of any provision of this Act makes a statement which is false in any material particular, knowing it to be false shall be guilty of an offence

(2)Any person who on examination on oath or affirmation in terms of this Act or in any affidavit or deposition in or about any matter arising under this Act wilfully gives false evidence, shall be guilty of an offence and liable on conviction to the penalties prescribed by law for perjury

250. Falsification of books and records

(1)Any director or officer of a company or any other person who conceals, destroys, mutilates, falsifies or makes any false entry in or, with intent to defraud or deceive, makes any erasure in any book (including any minute book), register, document, financial record or financial statement of any company shall, subject to the provisions of subsection (2), be guilty of an offence

(2)It shall be a defence to any charge under subsection (1) of concealing, mutilating, falsifying or making a false entry or erasure in any book, register, document, financial record or financial statement to prove that the accused had no intention either to defraud or to conceal any offence or any conduct which he believed might constitute an offence or render any person liable to any penalty or civil obligation

251. False statements by directors and others

(1)Every director or officer of a company or accountant employed by or auditor of a company or any other person employed generally or engaged for any special work or service by the company who makes, circulates or publishes or concurs in making, circulating or publishing any certificate, written statement, report or financial statement in i elation to any property or affairs of the company which is false in any material particular, shall, subject to the provisions of subsection (2), be guilty of an offence

(2)In any prosecution under subsection (1) it shall be a defence to prove that the person charged had, after reasonable investigation, reasonable grounds to believe and did believe that the certificate, written statement, report or financial statement was true, and that there was no omission to state any material fact necessary to make the statement as drafted not misleading

Chapter IX
Remedies of members

Relief from oppression

252. Member's remedy in case of oppressive or unfairly prejudicial conduct

(1)Any member of a company who complains that any particular act or omission of a company is unfairly prejudicial, unjust or inequitable, or that affairs of the company are being conducted in a manner unfairly prejudicial, unjust or inequitable to him or to some part of the members of the company, may, subject to the provisions of subsection (2), make an application to the Court for an order under this section

(2)Where the act complained of relates to—

(a)any alteration of the memorandum of the company under section 55 or 56,

(b)any reduction of the capital of the company under section 83,

(c)any variation of rights in respect of shares of a company under section 102, or

(d)a conversion of a private company into a public company or of a public company into a private company under section 22,

an application to the Court under subsection (1) shall be made within six weeks after the date of the passing of the relevant special resolution required in connection with the particular act concerned

(3)If on any such application it appears to the Court that the particular act or omission is unfairly prejudicial, unjust or inequitable, or that the company’s affairs are being conducted as aforesaid and if the Court considers it just and equitable, the Court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit, whether for regulating the future conduct of the company’s affairs or for the purchase of the shares of any members of the company by other members thereof or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company’s capital, or otherwise

(4)Where an order under this section makes any alteration or addition to the memorandum or articles of a company—

(a)the alteration or addition shall, subject to the provisions of paragraph (b), have effect as if it had been duly made by special resolution of the company, and

(b)the company shall, notwithstanding anything contained in this Act, have no power, save as otherwise provided in the order, to make any alteration in or addition to its memorandum or articles which is inconsistent with the order, except with the leave of the Court

(5)

(a)A copy of any order made under this section which alters or adds to or grants leave to alter or add to the memorandum or articles of a company shall, within one month after the making thereof, be lodged by the company in the form prescribed with the Registrar for registration

(b)Any company which fails to comply with the provisions of paragraph (a), shall be guilty of an offence

Inqury into membership and ownership of shares and control of company

253. Power of Registrar to call for information concerning shares and members

(1)The Registrar may from time to time by notice in writing require a company or external company to transmit to him within fourteen days after the date of such notice particulars of the transfer of any share or shares and a list of persons for the time being members of the company and of all persons who ceased to be members as from a particular date

(2)Any company or external company which fails to comply with any requirement of the Registrar under subsection (1) and every director or officer of such company who knowingly is a party to the failure, shall be guilty of an offence

254. Appointment and powers of inspectors to investigate financial interest in and control of company

(1)The Minister may—

(a)when it appears to him that there is good reason to do so, appoint one or more inspectors to investigate and report to him on the membership of any company and otherwise with respect to such company for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company,

(b)on an application complying with the requirements prescribed in section 257 in respect of an application under that section, for an investigation with respect to particular shares or debentures of a company, appoint an inspector to carry out such investigation

(2)Any appointment of such an inspector shall define the scope of the investigation to be earned out by him, whether in respect of the matters to be investigated or the period in respect of which the investigation is to be undertaken or otherwise, and may provide for an investigation to be confined to particular shares or debentures

(3)No application under subsection (1) (b) shall be refused unless the Minister is satisfied that the application is vexatious, nor shall there be excluded from the scope of the investigation by an inspector appointed in pursuance of such an application any matter which the applicant seeks to have included therein, except in so far as in the opinion of the Minister it would be unreasonable for that matter to be investigated

(4)The powers of an inspector shall, subject to the terms of his appointment, extend to the investigation of any circumstances suggesting the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to any matter to be investigated

(5)The provisions of sections 259, 260 and 261 shall mutatis mutandis apply with reference to any investigation under this section Provided that the Minister shall not be bound to furnish the company concerned or any other person with a copy of any report (or part thereof) by an inspector appointed under this section if there are substantial grounds in the public interest for not divulging the contents of the report or of parts thereof

255. Power to require information as to persons interested in shares or debentures

(1)When it appears to the Minister that there is good reason to investigate the ownership of any shares or debentures of a company and that it is unnecessary to appoint an inspector for the purpose, he may require any person whom he has reason to believe—

(a)to be or to have been interested in those shares or debentures, or

(b)to be acting or to have acted in relation to those shares or debentures as the attorney or agent or nominee of someone interested therein,

to give the Minister any information which he has or can reasonably be expected to obtain as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who are acting or have acted on their behalf in relation to the shares or debentures

(2)For the purposes of this section, a person shall be deemed to have an interest in a share or debenture if he has any right to acquire or dispose of the share or debenture or any interest therein or to vote in respect thereof, or if his consent is necessary for the exercise of any of the rights of other persons interested therein or if other persons interested therein can be required or are accustomed to exercise their rights in accordance with his instructions

(3)Any person who fails to give any information required of him under this section and which he is able to give or can reasonably obtain, or who in giving any such information knowingly or recklessly makes any statement which is false in any material particular, shall be guilty of an offence

256. Power to impose restrictions on shares or debentures

(1)

(a)Where in connection with an investigation under section 254 or 255 it appears to the Minister that there is difficulty in finding out the relevant facts about any shares of a company (whether issued or to be issued), and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to assist in the investigation, the Minister may by notice published in the Gazette and served by post upon the company at its registered office declare that the shares shall as from the date of publication of the notice in the Gazette be subject to the restrictions imposed by this section

(b)The Munster may in like manner withdraw or amend such notice

(2)As long as any such notice is in force—

(a)any transfer of the shares to which it relates or, in the case of unissued shares, any transfer of the right to be issued therewith or any issue thereof, shall be void,

(b)no voting rights shall be exercisable in respect of such shares,

(c)no further shares shall be issued in pursuance of any right attached to such shares or in pursuance of any offer made to the holder thereof, and

(d)except in a winding-up, no payment shall be made of any sums due from the company in respect of such shares, whether in respect of capital or otherwise

(3)Where the Munster has by any such notice declared that shares shall be subject to the said restrictions, or refuses to withdraw or amend any such notice, any person aggrieved thereby may apply to the Court, and the Court may, if it sees fit, direct that the shares shall cease to be subject to the said restrictions or to any one or more of them

(4)Any notice of the Minister or order of the Court directing that shares shall cease to be subject to any of the restrictions referred to in subsection (2), which is expressed to be made with a view to permitting a transfer of those shares, may continue the restrictions referred to in paragraphs (c) and (d) of that subsection, either in whole or in part, in so far as they relate to any right acquired or offer made before the transfer

(5)Any person who—

(a)exercises or purports to exercise any right to dispose of any shares which to his knowledge are subject to the restrictions mentioned in subsection (2) or of any right to be issued with any such shares, or

(b)votes in respect of any such shares, whether as holder or proxy, or appoints a proxy to vote in respect thereof, or

(c)being the holder of any such shares, fails to give notice of their being subject to the said restrictions to any person whom he does not know to be aware of that fact, but does know to be entitled, apart from the said restrictions, to vote in respect of those shares, whether as holder or proxy,

shall be guilty of an offence

(6)Where shares of any company are issued in contravention of the said restrictions, the company, and every director or officer who knowingly takes part in the contravention, shall be guilty of an offence

(7)This section shall apply in relation to debentures as it applies in relation to shares

Investigation into affairs of company

257. Inspection of company’s affairs on application of members

(1)The Minister may appoint one or more inspectors to investigate the affairs of a company and to report thereon in such manner as he may direct—

(a)in the case of a company having a share capital, on the application of not less than one hundred members or of members holding not less than one-twentieth of the shares issued, and

(b)in the case of a company not having share capital, on the application of not less than one-tenth of the number of persons on the register of members

(2)The application shall be supported by such evidence as the Minister may require showing that the applicants have good reason for desiring an investigation, and the Minister may, before appointing an inspector on any such application, require the applicants to give security to hits satisfaction in an amount not exceeding two hundred rand towards the cost of the investigation

(3)Before appointing an inspector under subsection (1), the Munster shall, unless he is of opinion that to do so would defeat the objects of this section, furnish in writing to the company concerned a statement setting out the substance of the complaint made and afford it a reasonable opportunity of replying thereto

258. Investigations of company effects in other cases

(1)When a company by special resolution resolves or the Court by order deciares that the affairs of a company ought to be investigated, the Minister shall appoint one or more inspectors to investigate the affairs of such company and to report thereon, in such manner as he may direct

(2)The Minister may appoint one or more inspectors to investigate the affairs of a company and to report thereon in such manner as he may direct, if it appears to him that there are circumstances suggesting—

(a)that the business of the company is being conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or an unlawful purpose or in a manner oppressive or unfairly prejudicial or unjust or inequitable to any part of its members or that it was formed for any fraudulent or unlawful purpose, or

(b)that persons concerned with its formation or the management of its affairs have in connection therewith been guilty of any fraud, debut or other misconduct towards it or towards its members, or

(c)that its members have not been given all the information with respect to its affairs they might reasonably expect

(3)The provisions of section 257 (3) shall apply mutatis mutandis in respect of an investigation under this section

259. Power of inspector to conduct investigation into affairs of related companies

An inspector appointed to investigate the affairs of a company may, if he considers it necessary for the purpose, with the approval of the Minister, also investigate the affairs of any other company or other body corporate which is or has at any relevant time been the first-mentioned company’s subsidiary or holding company or a subsidiary of its holding company and shall in that event report on the affairs of such other company or other body corporate so far as the results of his investigation thereof are in his opinion relevant to the investigation of the affairs of the first-mentioned company.[section 259 substituted by section 23 of Act 64 of 1977]

260. Production of documents and evidence on investigation

(1)Any director, officer or agent of a company or other body corporate whose affairs are being investigated by an inspector under this Act, shall at the request of such inspector produce to him all books and documents of or relating to the company or other body corporate, in his custody or under his control, and afford the inspector such assistance within his power in connection with the investigation as the inspector may require

(2)An inspector may for the purpose of any investigation conducted by him—

(a)summon any director, officer, employee, member or agent of the company or other body corporate to appear before him at a time and place specified in the summons, to be interrogated or to produce any book or document so specified,

(b)administer an oath to or accept an affirmation from any person appearing before him in pursuance of a summons, and interrogate such person and require him to produce any such book or document,

(c)retain for examination any book or document produced to him in pursuance of a summons for a period not exceeding two months or for such further period or periods as the Registrar may on good cause shown, permit

(3)A summons for the attendance of any person before an inspector or for the production to him of any book or document may be in such form as the inspector may determine, shall be signed by the inspector, and shall be served in the same manner as a subpoena in a criminal case issued by a magistrate’s court

(4)Any person duly summoned to appear before an inspector who without sufficient cause—

(a)fails to attend at the time and place specified in the summons or to remain in attendance until excused by the inspector from further attendance, or

(b)refuses upon being required to do so by the inspector, to take an oath or to affirm as a witness or refuses or fails to produce any book or document which he has been required to produce or to answer fully and satisfactorily to the best of his knowledge and belief all questions put to him by the inspector concerning the affairs of the company or other body corporate whose affairs are being investigated, whether or not the answer is likely to incriminate him,

shall be guilty of an offence Provided that, save as otherwise provided in this subsection, in connection with the interrogation of any such person, or the production of any such book or document, the law relating to privilege, as applicable to a witness subpoenaed to give evidence or to produce any book or document before a court of law, shall apply

(5)

(a)If an inspector considers it necessary for the purposes of his investigation that a person whom he has no power to examine on oath should be so examined, he may apply to the Court for an older calling upon such person to appear before it for examination and the Court may thereupon if it thinks fit order that person to attend before it to be examined on oath on any matter relevant to the investigation, and on any such examination—

(i)the inspector may take part therein either personally or by attorney or counsel,

(ii)the Court may put such questions to the person examined as the Court thinks fit,

(iii)the person examined shall answer all such questions as the Court may put or allow to be put to him

(b)Notes of the examination shall be taken down in writing and shall be read over to or by and signed by the person examined, and may thereafter be used in evidence against him

(c)The Court may allow the person examined such costs as in its discretion it may think fit, and any costs so allowed shall be paid as part of the costs of the investigation

(6)In this section—

(a)any reference to a director, officer, employee, member or agent of a company or other body corporate, includes a reference to a past director, officer, employee, member or agent of such company or other body corporate, and

(b)any reference to an agent of a company or other body corporate, includes a reference to the bankers, attorneys and auditor of the company or other body corporate

(7)Any person examined under this section may at his own cost employ an attorney with or without counsel, who shall be at liberty to put to him such questions as the inspector or the Court may deem just for the purpose of enabling him to explain or qualify any answers given by him

261. Inspectors report

(1)

(a)An inspector may make interim reports to the Minister in regard to any investigation conducted by him, shall make such reports if the Minister so directs, and shall at the conclusion of the investigation make a final report to the Minister

(b)Any such report shall be written or printed as the Minister may direct

(2)The Minister shall direct the Registrar—

(a)to send a copy of any report made by an inspector to the registered office of the company or other body corporate concerned,

(b)to furnish a copy of such report on request and on payment of any fee that may be prescribed, to any person who is a member of the company or of any other body corporate dealt with in the report or whose interests as a creditor of the company or any such other body corporate appear to the Minister to be affected,

(c)where the inspector is appointed under section 257, to furnish a copy of the report to the applicants concerned at their request, and

(d)where the inspector is appointed under section 258 in pursuance of an order of the Court, to furnish a copy of the report to the Court,

and may direct the Registrar to cause any such report to be printed and published

262. Proceedings on inspectors report

(1)If in the case of any company or other body corporate liable to be wound up under this Act, it appears to the Minister from any such report that it is expedient so to do by reason of any circumstance referred to in section 258 (2) (a) or (b), the Minister may, unless the company or other body corporate is already being wound up by the Court, make application for it to be so wound up if the Court thinks it just and equitable that it be wound up, or an application for an order such as is referred to in section 252 or both an application for an order that it be so wound up and an application for an order such as is referred to in the said section, and the Court may in that event make such order as it may consider appropriate

(2)

(a)If from any such report it appears to the Minister that proceedings ought in the public interest to be brought by any company or other body corporate dealt with by the report for the recovery of damages in respect of any fraud, delict or other misconduct in connection with the promotion or formation of that company or other body corporate or the management of its affairs, or for the recovery of any property of the company or other body corporate which has been misapplied or wrongfully retained, the Minister may bring proceedings for that purpose in the name of the company or other body corporate

(b)The Minister shall indemnify the company or other body corporate against any costs or expenses incurred by it in or in connection with any proceedings brought by virtue of paragraph (a)

263. Matters incidental to investigations

(1)The Minister shall in the first instance defray the expenses of and incidental to an investigation under section 257 or 258, but the following persons shall, to the extent stated, be liable to repay the Minister

(a)Any person convicted of an offence disclosed by the investigation or ordered to pay damages or to restore any property in proceedings instituted under section 262 (2) (a), shall be liable for such amount, if any, as may be determined by the Court when convicting such person or ordering the payment of such damages or the restoration of such property,

(b)in any case where no proceedings are instituted in respect of any such offence and no order for the payment of any such damages or the restoration of any such property is made—

(i)any body corporate whose affairs were the subject of the investigation, and

(ii)in the case of an investigation under section 257, the applicants concerned,

shall be liable for such an amount as the Minister may in each case determine, and

(c)any body corporate in whose name proceedings are instituted under section 262 (2) (a), shall be liable for the balance, if any, of such expenditure not recovered under paragraph (a), but not for an amount exceeding the amount or value of any property recovered in any such proceedings

(2)The amount determined under subsection (1) (a) may be the full amount of the expenditure in question or such lesser amount or proportion thereof as the Court considers just

(3)The provisions of subsection (1) (b) (i) shall not apply in any case where it appears from the relevant report that there was no substance in the allegations which gave to the investigation to which the report relates

(4)Any amount for which a body corporate may be liable by virtue of the provisions of subsection (1) shall be a first charge on the amount or value of any property recovered in proceedings referred to in subsection (1) (c)

(5)An inspector may, if he deems fit, and shall, if the Minister so directs, include in his report on any' investigation a recommendation as to the amount, if any, which in his opinion should under subsection (1) (b) be ordered to be paid by any body corporate or the applicants referred to therein

(6)For the purposes of this section any costs or expenses incurred by the Minister in or in connection with proceedings instituted by him under section 262 (2) (a), including any amount which may become payable by him in terms of paragraph (b) of that subsection, shall be regarded as part of the expenditure incurred by him in respect of the investigation giving to such proceedings

264. Savings in respect of attorneys and bankers

Nothing in this Act shall be construed as requiring the disclosure to the Minister or to an inspector—

(a)by an attorney of any privileged communication made to him in his capacity as such, except as respects the name and address of his client, or

(b)by a banker of any information as to the affairs of any of his customers except—

(i)a company or its nominee and any other body corporate whose affairs are being investigated, and

(ii)any person having an interest in shares held in the name of the banker’s nominee

265. Report of inspectors to be evidence

A copy of the report of any inspector appointed under this Act shall be admissible in any legal proceedings as evidence of the opinion of the inspector in relation to any matter contained in the report

Proceedings on behalf of companies

266. Initiation of proceedings on behalf of company by a member

(1)Where a company has suffered damages or loss or has been deprived of any benefit as a result of any wrong, breach of trust or breach of faith committed by any director or officer of that company or by any past director or officer while he was a director or officer of that company and the company has not instituted proceedings for the recovery of such damages, loss or benefit, any member of the company may initiate proceedings on behalf of the company against such director or officer or past director or officer in the manner prescribed by this section notwithstanding that the company has in any way ratified or condoned any such wrong, breach of trust or breach of faith or any act or omission relating thereto

(2)

(a)Any such member shall serve a written notice on the company calling on the company to institute such proceedings within one month from the date of service of the notice and stating that if the company fails to do so, an application to the Court under paragraph (b) will be made

(b)If the company fails to institute such proceedings within the said period of one month, the member may make application to the Court for an order appointing a curator ad litem for the company for the purpose of instituting and conducting proceedings on behalf of the company against such director or officer or past director or officer

(3)The Court on such application, if it is satisfied—

(a)that the company has not instituted such proceedings,

(b)that there arepnma facie grounds for such proceedings, and

(c)that an investigation into such grounds and into the desirability of the institution of such proceedings is justified,

may appoint a provisional curator ad litem, and direct him to conduct such investigation and to report to the Court on the return day of the provisional order

(4)The Court may on the return day discharge the provisional order referred to in subsection (3) or confirm the appointment of the curator ad litem for the company and issue such directions as to the institution of proceedings in the name of the company and the conduct of such proceedings on behalf of the company by the cuiator ad litem, as it may think necessary and may order that any resolution ratifying or condoning the wrong, breach of trust or breach of faith or any act or omission in relation thereto shall not be of any force or effect

267. Power of curator ad litem

(1)A provisional curator ad litem appointed by the Court under section 266 (3) and a curator ad litem whose appointment is confirmed by the Court under section 266 (4) shall, in addition to the powers expressly granted by the Court in connection with the investigation, proceedings and enforcement of a judgment, have the same powers as an inspector under section 260, and the provisions of that section shall, subject to the provisions of subsection (2) of this section, apply mutatis mutandis to the provisional cuiator ad litem and to the curator ad litem and to the directors, officers, employees, members and agents of the company concerned

(2)if the disclosure of any information about the affairs of a company to a provisional cuiator ad litem or a curator ad litem would in the opinion of the company be harmful to the interests of the company, the Court may on an application for relief by that company, if it is satisfied that the said information is not relevant to the investigation, grant such relief

268. Security for costs by applicant for appointment of curator ad litem

The Court may, if it appears that there is reason to believe that the applicant in respect of an application under section 266 (2) will be unable to pay the costs of the respondent company if successful in its opposition, require sufficient security to be given for those costs and costs of the provisional curator ad litem before a provisional order is made

Chapter X
Auditors

Appointment

269. First appointment of auditor of company

(1)When the memorandum and articles of a company to be incorporated are lodged with the Registrar for registration, a written consent by a person to his appointment as auditor of the company to be formed may be lodged simultaneously, and such auditor shall be deemed to have been appointed as such by the company

(2)If no appointment of auditor of a company is made under subsection (1), the directors of the company shall appoint the first auditor of the company within twenty-one days after the date of incorporation of the company

(3)The auditor of a company appointed under subsection (1) or (2) shall hold office until the conclusion of the first annual general meeting of the company

(4)If the directors of a company fail to appoint an auditor of the company as provided in subsection (2), the Registrar may appoint such first auditor

(5)If the directors of a company fail to appoint the first auditor of the company as required by subsection (2), every director shall be guilty of an offence

270. Annual appointment of auditor

(1)A company shall at every annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting of the company

(2)A retiring auditor shall be deemed to be reappointed at any annual general meeting without any resolution being passed, unless—

(a)he is not qualified for reappointment, or

(b)a resolution has been passed under section 278, or

(c)he has given the company and the Registrar notice in writing of his unwillingness to be reappointed at the next annual general meeting.[paragraph (c) substituted by section 20 of Act 111 of 1976]

(3)The provisions of subsection (2) shall not apply where notice of an intended resolution to appoint some person or persons in place of a retiring auditor has been duly given under section 279 but cannot be proceeded with by reason of the death, incapacity or disqualification of that person or of all those persons

271. Where meeting fails to appoint auditor, and notice to Registrar

(1)Where at an annual general meeting of a company no auditor is appointed or reappointed, the directors shall, within thirty days as from the date of the meeting, appoint a person or persons to fill the vacancy, and if they fail to do so, the Registrar may at any time do so

(2)The company shall and any director may, if the directors fail to appoint an auditor as provided in subsection (1), within seven days after the expiration of the period mentioned in the said subsection, lodge with the Registrar a notice in the prescribed form to that effect

(3)Any company which fails, and any director or officer of such company who knowingly fails, to comply with the provisions of subsection (2), shall be guilty of an offence

272. Minister may appoint joint auditor

The Minister may at any time, in the case of a company having a share capital, on the application of one hundred members or of members holding not less than one-twentieth of the issued share capital, and, in the case of a company not having a share capital, on the application of not less than one-tenth of the members, appoint, for such period and at such remuneration (payable by the company) as he may determine, an auditor to act jointly with any other auditor of the company

273. Filling of casual vacancies

Subject to the provisions of section 280, a casual vacancy in the office of auditor of a company—

(a)shall, if such auditor be the only incumbent, be filled by the directors within thirty days, and the provisions of section 271 shall mutatis mutandis apply in regard to the filling of such vacancy and the duty of the company, or

(b)may, if there be more than one incumbent, be filled by the directors, but while any such vacancy continues, the surviving or continuing auditor shall act as auditor of the company

274. Firm may be appointed auditor

(1)A firm of auditors may be appointed to hold the office of auditor of a company

(2)A change in the composition of the members of a firm of auditors while holding office as auditor of a company shall not constitute a casual vacancy in the office of auditor but if less than one-half of the members of such firm remain after any one such change, it shall be taken as a resignation of the auditor and a casual vacancy shall have been constituted

275. Disqualification for appointment as auditor

(1)No person shall be qualified for appointments as auditor of a company if he is—

(a)a director, officer or employee of the company;[paragraph (a) substituted by section 18(a) of Act 59 of 1978]

(b)a director, officer or employee of any company performing secretarial work for the company;[paragraph (b) substituted by section 18(b) of Act 59 of 1978]

(c)a partner or employer or employee of a director or an officer of the company,

(d)a person who by himself or his partner or employee habitually or regularly performs the duties of secretary or bookkeeper of the company,

(e)a body corporate,

(f)a person who at any time during the financial year was a director or officer of the company, or

(g)not qualified to act as such under the Public Accountants’ and Auditors’ Act, 1951 (Act No 51 of 1951)

(2)Any person who in terms of subsection (1) is disqualified for appointment as the auditor of a company shall likewise be disqualified for appointment as the auditor of any other body corporate which is a subsidiary or holding company of that company or is a subsidiary of such holding company, or would be so disqualified if such body corporate were a company.[subsection (2) substituted by section 24 of Act 64 of 1977]

(3)The provisions of subsection (1) shall not be construed as prohibiting the appointment as auditor of a private company, no shares of which are held by a public company, of a person who by himself or his partner or employee habitually or regularly performs the duties of secretary or bookkeeper of such private company if he is registered under the Public Accountants’ and Auditors’ Act, 1951, and all the shareholders of such private company agree in writing to his appointment and the relevant circumstances are set out in the auditor’s report on the affairs and annual financial statements of such private company

(4)Any person who acts as the auditor of a company or other body corporate while disqualified as aforesaid, shall be guilty of an offence

(5)For the purposes of this section “secretarial work” does not include share transfer secretarial work

276. entry of name and address of auditor in register of directors and officers and return to Registrar

Every company shall comply with the provisions of sections 215 (2) and 216 (2) as to the entry in the register of directors and officers of the particulars of the auditor of a company, any changes therein and the returns to be rendered to the Registrar in connection therewith

Removal and resignation of auditor

277. Removal of auditor appointed by directors or Registrar and filling of vacancy

Subject to the provisions of section 279, a company may at a general meeting by resolution remove any auditor appointed by directors or the Registrar under section 269 or 271 or by the Registrar, directors under section 273 before the expiration of his term of office and at the same meeting appoint another person as auditor in his place: Provided that where an auditor has reason to believe that in the conduct of the affairs of the company a material irregularity has taken place or is taking place which has caused or is likely to cause financial loss to the company or to any of its members or creditors, and he has made a report thereon in writing to the directors of the company, he may not be removed from office until the provisions of section 26(3)(b) of the Public Accountants' and Auditors' Act, 1951 (Act No. 51 of 1951), have been complied with.[section 277 substituted by section 21 of Act 111 of 1976]

278. Removal of auditor and appointment of new auditor

Any company may subject to the provisions of section 279 at an annual general meeting by resolution passed by not less than three-fourths of such members entitled to vote as are present in person or by proxy, determine that any person then holding office as its auditor shall not be reappointed or that some other person shall be appointed as the auditor of the company.[section 278 substituted by section 22 of Act 111 of 1976]

279. Special notice for removal of auditor

(1)Special notice to the company shall be required for a resolution to be proposed at a general meeting under section 277 or at an annual general meeting under section 278 and upon receipt of notice of such a proposed resolution the company shall forthwith deliver a copy thereof to the auditor concerned

(2)

(a)Where any such notice is given and the auditor concerned makes in respect of the proposed resolution representations (not exceeding a reasonable length) in writing to the company and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so—

(i)in any notice of the proposed resolution given to members of the company, state that such representations have been made, and

(ii)send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether such notice is sent before or after receipt of the representations by the company)

(b)If a copy of such representations is not sent as aforesaid because of their being received too late or because of the company’s default, the auditor may (without prejudice to his right to tie heard orally) require that the representations shall be read out at the meeting

(c)No copy of such representations shall be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matters

(d)The Court may on an application under paragraph (c) order the company’s or the said person’s costs to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application

280. Resignation of auditor

(1)The auditor of a company may at any time during the period of his office resign as such provided the requirements of this section are complied with

(2)An auditor intending to resign shall deliver to the company and to the Registrar a written notification in the prescribed form to the effect that he has no reason to believe that in the conduct of the affairs of the company a material irregularity has taken place or is taking place which has caused or is likely to cause financial loss to the company or to any of its members or creditors other than an irregularity (if any) which has been reported to the Public Accountants' and Auditors' Board in terms of the Public Accountants' and Auditors' Act, 1951 (Act No. 51 of 1951), and it shall not be necessary that such an auditor shall have carried out, for the purposes of such notification, a special audit subsequent to the date up to which the last annual financial statements on which he has already reported, were made up.[subsection (2) substituted by section 23(1) of Act 111 of 1976]

(3)The directors of the company shall forthwith upon receipt of the said written notification appoint an auditor to fill the vacancy and shall lodge the said notification together with the return required under section 276 with the Registrar, who shall forthwith notify the auditor whose resignation has been tendered, of the receipt of the said notification and return.[subsection (3) substituted by section 23(1) of Act 111 of 1976]

(4)The resignation of an auditor shall become effective upon the receipt by him of the said notification by the Registrar, but shall for purposes of the said return be deemed to have taken place on the date of appointment under subsection (3) of an auditor to fill the vacancy caused by the resignation

Rights, duties and remuneration

281. Auditor’s right of access to books and to be heard general meetings

An auditor of a company shall—

(a)have the right of access at all times to the accounting records and all books and documents of the company, and be entitled to require from the directors or officers of the company such information and explanations as he thinks necessary for the performance of his duties as auditor,

(b)in the case of an auditor of a holding company, have the right of access to all current and former financial statements of any subsidiary of such holding company and be entitled to require from the directors or officers of such holding company or subsidiary all such information and explanations in connection with any such statements and in connection with the accounting records, books and documents of the subsidiary as he may consider necessary; and[paragraph (b) substituted by section 25 of Act 64 of 1977]

(c)be entitled to attend any general meetings of the company and to receive all notices of and other communications relating to any general meeting which any member of the company is entitled to receive and to be heard at any general meeting which he attends on any part of the business of the meeting which concerns him as auditor

282. Duties of auditor

The auditor of a company shall report to its members in such manner and on such matters as are prescribed by this Act and carry out all other duties imposed on him by this Act or any other law

283. Remuneration of auditor

(1)Save as is otherwise provided in this Act, the remuneration of the auditor of a company shall be determined by agreement with the company

(2)All payments made or to be made by a company to its auditor, specifying the remuneration for the audit, the remuneration for other specified services, the auditor’s expenses and payments in respect of the audit and any other matter, shall be included under a separate heading in the income statement in respect of the accounting period concerned

Chapter XI
Accounting and disclosure

Accounting records

284. Duty of company to keep accounting records

(1)Every company shall keep in one of the official languages of the Republic such accounting records as are necessary fairly to present the state of affairs and business of the company and to explain the transactions and financial position of the trade or business of the company, including—

(a)records showing the assets and liabilities of the company,

(b)a register of fixed assets showing the respective dates of acquisition and the cost thereof, depreciation, if any, the respective dates of any disposals and the consideration received in respect thereof Provided that in respect of fixed assets acquired before the commencement of this Act, a company may, as at the end of its first financial year after the said commencement, take an inventory of all fixed assets and make a realistic allocation of the total value of fixed assets as shown in the financial statements as at that date over the inventory of assets,

(c)records containing entries from day to day in sufficient detail of all cash received and paid out and of the matters in respect of which receipts and payments take place,

(d)where the trade or business of the company has involved dealings in goods, records of all goods sold and purchased and (except in the case of ordinary retail trade) records showing the goods and the buyers and the sellers thereof in sufficient detail to enable the nature of those goods and those buyers and sellers to be identified, and

(e)statements of the annual stocktaking

(2)The accounting records referred to in subsection (1) may be kept either by making entries in bound books or by recording the matters in question in any other manner, and where such records are not kept by making entries in bound books, adequate precautions shall be taken for guarding against falsification and facilitating its discovery

(3)The accounting records shall be kept at the registered office of the company or at such other place as the directors think fit and shall at all times be open to inspection by the directors and if such records are kept at a place outside die Republic, there shall be sent to and kept at a place in the Republic, and be at all times open to inspection by the directors, such financial statements and returns with respect to the business dealt with in those records as will disclose with reasonable accuracy the financial position of that business at intervals not exceeding twelve months, subject to section 285, and will enable the company’s annual financial statements to be prepared in accordance with this Act

(4)

(a)Any company which fails to comply with any provision of this section and every director or officer thereof who is a party to such failure or who fails to take all reasonable steps to secure compliance by the company with any such provision, shall be guilty of an offence

(b)In any proceedings against any director or officer of a company in respect of an offence consisting of a failure to take reasonable steps to secure compliance by a company with the requirements of this section, it shall be a defence to prove that the accused had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of seeing that those requirements were complied with and was in a position to discharge that duty and that the accused had no reason to believe that the said person had failed in any way to discharge that duty

(5)For the purposes of subsection (1), the expression “fixed assets” shall not include any assets acquired or used solely for the purposes of carrying on mining operations

285. Determination of financial year of company

(1)The financial year of a company shall, subject to the provisions of this section and any other law, be its annual accounting period, the commencing date of which and the date on which it ends in the next succeeding calendar year, shall be determined upon the incorporation of the company Provided that the first financial year of a company shall, where the commencing date so determined—

(a)is a date more than three months after such incorporation, be the period commencing on such incorporation and ending on the date immediately preceding the commencing date so determined, or

(b)is a date not more than three months after such incorporation, be the period commencing on such incorporation and ending on the date so determined as the end of the financial year in the next calendar year

(2)A company may at any time—

(a)on payment of the prescribed fee and on lodgement with the Registrar of the prescribed form advance the date of commencement of its financial year by not more than six months in which event the first ensuing financial year of the company shall be the period commencing on the date immediately succeeding the end of its last preceding financial year to the date of the end of its financial year so advanced, or

(b)with the approval of the Registrar given on good cause shown and upon payment of the prescribed fee and the annual duty referred to in section 174 (5), advance such date by more than six months in which event the first ensuing financial year of the company shall be the period commencing on the date immediately succeeding the end of its last preceding financial year to the date immediately preceding the commencement of its financial year so advanced

(3)Any reference in this Act to the financial year of a company shall be construed as including a reference to any period which in terms of this section is stated to be a financial year of that company

286. Duty to make out annual financial statements and to lay them before annual general meeting

(1)The directors of a company shall in respect of every financial year of the company cause to be made out in one of the official languages of the Republic annual financial statements and shall lay them before the annual general meeting of the company required to be held in terms of section 179 in respect of that financial year

(2)The annual financial statements required to be made out under subsection (1) shall consist of—

(a)a balance sheet, including any notes thereon or document annexed thereto providing information required by this Act,

(b)an income statement, including any similar financial statement where such form is appropriate and including any notes thereon or document annexed thereto providing information required by this Act,

(c)a directors’ report complying with the requirements of this Act, and

(d)an auditor’s report as required by section 301

(3)The annual financial statements of a company shall, in conformity with generally accepted accounting practice, fairly present the state of affairs of the company and its business as at the end of the financial year concerned and the profit or loss of the company for that financial year and shall for that purpose be in accordance with and include at least the matters prescribed by Schedule 4, in so far as they are applicable, and comply with any other requirements of this Act

(4)

(a)Any director or officer of a company who fails to take all reasonable steps to comply or to secure compliance with the provisions of this section or with any other requirements of this Act as to matters to be stated in annual financial statements, shall be guilty of an offence

(b)In any proceedings against any director or officer of a company under paragraph (a), the defence referred to in section 284 (4) (b) shall be available to him

287. Offence to issue incomplete financial statement and circulars

If any financial statements or circulars of a company which are incomplete in any material particular or otherwise do not comply with the requirements of this Act, are issued, circulated or published, the company and every director or officer thereof who is a party to such issue, circulation or publication, shall be guilty of an offence

Accounting by holding companies

288. Obligation to lay group statements or group reports before annual general meeting

(1)Where at the end of its financial year a company, which is not a wholly owned subsidiary of another company incorporated in the Republic (including an external company which is controlled by a company incorporated in the Republic), has subsidiaries, group annual financial statements or group reports shall be made out and shall be laid before the annual general meeting of the company before which its own annual financial statements are so laid under section 286 (1)

(2)Subject to the provisions of section 291 such group annual financial statements shall together with the company's own annual financial statements in conformity with generally accepted accounting practice fairly present the state of affairs and business of the company and all its subsidiaries at the end of the financial year concerned and the profit or loss of the company and all its subsidiaries for that financial year, as a whole so far as concerns the members of the company and shall for that purpose include at least the matters prescribed by Schedule 4, in so far as they are applicable and comply with any other requirements of this Act.[subsection (2) substituted by section 24 of Act 111 of 1976]

(3)

(a)Any director or officer of a company who fails to take all reasonable steps to comply or to secure compliance with the provisions of this section or with any other requirements of this Act as to matters to be stated in group annual financial statements or group reports, shall be guilty of an offence

(b)In any proceedings against any director or officer of a company under paragraph (a), the defence referred to in section 284 (4) (b) shall be available to him

289. Group annual financial statement

(1)

(a)Subject to section 290, group annual financial statements may consist of consolidated annual financial statements in accordance with section 286 (2) (a) and (6) and being—

(i)a consolidated balance sheet dealing with the state of affairs of the company and all the subsidiaries to be dealt with in group annual financial statements, and

(ii)a consolidated income statement dealing with the profit or loss of the company and those subsidiaries

(b)Where consolidated annual financial statements under paragraph (a) are not made out, group annual financial statements may consist of—(i)more than one set of consolidated annual financial statements, that is to say, one set dealing with the company and one group of subsidiaries and one or more sets dealing with other groups of subsidiaries, or(ii)separate annual financial statements dealing with each of the subsidiaries, or(iii)statements annexed to the company’s own annual financial statements expanding the information therein contained about the subsidiariesor of any combination of these forms

(2)Group annual financial statements may be wholly or partly incorporated in the company’s own annual financial statements

290. Where annual financial statements are to be or may be consolidated

Consolidated annual financial statements—

(a)shall be made out where the company at the end of the financial year concerned held not less than seventy-five per cent of the issued equity share capital in a subsidiary unless the directors of the company are of the opinion that the required information about the state of affairs, business and profit or loss of the group of companies would be presented more effectively and meaningfully in another manner,

(b)may be made out where the company at the end of the financial year concerned held not less than fifty per cent but less than seventy-five per cent of the issued equity share capital in a subsidiary if the directors of the company are of the opinion that consolidated annual financial statements are better for the purpose of presenting the required information and for its ready appreciation by members of the company,

(c)shall not be made out where the company at the end of the financial year concerned held less than fifty per cent of the issued equity share capital in a subsidiary, and

(d)shall not be made out where the dates of the end of the respective financial years of the company and a subsidiary are not the same

291. Where group annual financial statement need not deal with subsidiary

(1)Group annual financial statements need not deal with a subsidiary if the directors of the company are of the opinion that it is impracticable or would be of no real value to members of the company, in view of the insignificant amounts involved, or would entail expense or delay out of proportion to the value to members of the company and, if the directors are of such opinion about each of the company’s subsidiaries, group annual financial statements shall not be required

(2)If the directors of a company are of the opinion that—

(a)if a subsidiary were to be dealt with in group annual financial statements, the result would be misleading or harmful to the business of the company or any of its subsidiaries, or

(b)the business of the company and that of a subsidiary are so different that they cannot reasonably be treated as a single undertaking or are of such opinion about each of the company’s subsidiaries,

annual financial statements need not deal with that subsidiary, or, as the case may be, no group annual financial statements shall be required, if the Registrar approves

(3)

(a)A company shall apply to the Registrar for his approval under subsection (2) on the prescribed form and the application shall be accompanied by a report by the auditor of the company on the opinion and decision of the directors

(b)Any such approval by the Registrar shall expire after two years but may be renewed on application by the company

(4)Any director or officer of a company who fails to comply with the provisions of subsection (3), shall be guilty of an offence

292. Group report where subsidiary not dealt with in group annual financial statements

Where group annual financial statements in respect of a company which is not a wholly owned subsidiary of another company incorporated in the Republic and all its subsidiaries are not made out or where no group annual financial statements are made out, there shall be annexed to the company’s own annual financial statements a group report complying mutatis mutandis with section 288 (2)

293. Where accounting periods of company and subsidiary are not the same

(1)The directors of any subsidiary which is controlled by a holding company shall, notwithstanding anything to the contrary in this Act or in its articles, cause annual financial statements as required by section 286 to be made out so as to cover the same accounting period as that covered by the annual financial statements of the holding company

(2)Where the financial year of any subsidiary did not end with that of its holding company, the information contained in the last annual financial statements of such subsidiary may be used in the group annual financial statements or group report Provided that a statement shall be annexed to such group annual financial statements or group report showing—

(a)the reasons why the subsidiary’s financial year did not end with that of the holding company, and

(b)the date on which the financial year of the subsidiary ended last before that of the holding company

294. Duty of auditor to report on decisions of directors on consolidated and group annual financial statements

In every case where the directors of a holding company have decided not to make out consolidated annual financial statements under section 290 (a) or not to deal with any subsidiary in group annual financial statements under section 291 (1), the auditor of the holding company shall report on such decision of the directors

Disclosure of certain matters in financial statements

295. Annual financial statements to disclose loans to and security for benefit of directors and managers

(1)The annual financial statements of a company shall state—

(a)the amount and particulars of every loan referred to in section 226(1) which has during the financial year concerned been made by virtue of the provisions of section 226(2)(a), (b) or (e), including every such loan Which has during the said financial year been repaid;

(b)the particulars of every security (and of the transaction to which it relates) referred to in section 226(1), which has during the financial year concerned been provided by virtue of the provisions of section 226(2)(a), (b) or (e), including every such security which has during the said financial year been cancelled;

(c)the balance outstanding of every loan described in paragraph (a), made at any time before the said financial year and outstanding at the end thereof; and

(d)the particulars of every security (and of the transaction to which it relates) described in paragraph (b), provided at any time before the said financial year and still in existence at the end thereof (including, if applicable, the balance outstanding on the said transaction to which it relates).

(2)If a company which has made a loan or provided any security referred to in subsection (1) is a subsidiary and its holding company is by this Act required to make out group annual financial statements or otherwise to furnish particulars of such subsidiary, there shall be included therein the information provided for in subsection (1).

(3)Where a loan is a loan of shares, debentures or other property, or where any security is provided in respect of a loan of shares, debentures or other property, the requirements of this section may be complied with by stating the particulars in the directors' report or by way of a note to the annual financial statements.

(4)If the provisions of this section are not complied with in respect of the annual financial statements of a company, the auditor of the company shall in his report relating to such annual financial statements include a statement containing such information in regard to the matter as he is reasonably able to furnish.

(5)

(a)Any director or manager or past director or manager of a company or of its holding company (if any) or of any other subsidiary of that holding company shall at the written request of the first-mentioned company or its auditor in writing give such information, including particulars relating to his control of a company or body corporate contemplated in section 226(1)(b), as the company or its auditor may require for compliance with the provisions of this section.

(b)Any director or manager or past director or manager referred to in paragraph (a) who fails to comply with such request with one mouth from the date thereof, shall be guilty of an offence.

[section 295 substituted by section 25 of Act 111 of 1976]

296. Annual financial statements to disclose loans made to and security provided for benefit of directors or managers before their appointment

(1)The annual financial statements of a company shall state—

(a)the amount and particulars of every loan which has at any time been made by the company to any person before his appointment as director or manager of the company, if—

(i)the loan was still in existence at the date of such appointment; and

(ii)such appointment was made at any time during the financial year concerned; and

(b)the particulars of every security (and of the transaction to which it relates) which has at any time been provided by the company for the benefit of any person before his appointment as director or manager of the company, if—

(i)the security was still in existence at the date of such appointment; and

(ii)such appointment was made at any time during the financial year concerned.

(2)

(a)"loan" includes—

(i)a loan of money, shares, debentures or any other property; and

(ii)any credit extended by a company where the debt concerned is not payable or being paid in accordance with normal business practice in respect of payment of debts of the same kind; and

(b)"security" includes a guarantee.

(3)The provisions of section 295(2), (3) and (4) shall mutatis mutandis apply with reference to loans and securities contemplated in this section.

(4)This section shall not apply in respect of a loan made or security provided bona fide in the ordinary course of the business of a company actually and regularly carrying on the business of the making of loans or the provision of security.

[section 296 substituted by section 26 of Act 111 of 1976]

297. Annual financial statement to disclose directors emoluments and pensions

(1)The annual financial statements of a company shall in so far as the information necessary for the purpose is contained in the records of the company or is otherwise available to it, contain particulars showing—

(a)the aggregate amount of the directors’ emoluments,

(b)the aggregate amount of directors’ or past directors’ pensions, and

(c)the aggregate amount of any compensation to directors or past directors in respect of loss of office

(2)The amount to be shown under subsection (1) (a)-

(a)shall include any emoluments paid to or receivable by any person in respect of his services as a director of the company or any of its subsidiaries or in respect of services rendered in any other capacity while director of the company or of any subsidiary or otherwise in connection with the carrying on of the affairs of the company or any such subsidiary,

(b)shall distinguish between emoluments in respect of services as a director, whether of the company or of its subsidiary, and other emoluments,

and for the purposes of this section "emoluments”, in relation to a director, includes fees and percentages, salaries, any sums pard by way of expenses allowance, any contribution paid under any pension scheme and the estimated money value of any other material benefits received

(3)The amount to be shown under subsection (1) (b)—

(a)shall include any pension paid or receivable in respect of any such services of a director er past director of the company referred to in subsection (2) whether to or by him or on his nomination or, by virtue of dependence on or other connection with him, to or by any other person but shall not include any pension paid or receivable under a pension scheme, if the contributions payable thereunder are substantially adequate for the maintenance thereof, and

(b)shall distinguish between pensions in respect of services as a director or otherwise, whether of the company or its subsidiary, and other pensions,

and for the purposes of this section, the expression “pension” includes any superannuation allowance, superannuation gratuity or similar payment, the expression “pension scheme” means a scheme for the provision of pensions in respect of services as a director or otherwise which is maintained in whole or in part by means of contributions, and the expression “contribution”, in relation to a pension scheme, means any payment (including any insurance premium) paid for the purposes of the scheme by or in respect of persons rendering services in respect of which pensions will or may become payable under the scheme, but does not include any payment in respect of two or more persons if the amount paid in respect of each of them is not ascertainable

(4)The amount to be shown under subsection (1) (c)—

(a)shall include any sums paid to or receivable by a director or past director by way of compensation for the loss of office as a director of the company or for loss, while a director of the company or on or in connection with his ceasing to be a director of the company, of any other office in connection with the carrying on of the company’s affairs or of any office as director or otherwise in connection with the management of the affairs of any subsidiary thereof, and

(b)shall distinguish between compensation in respect of the office of director, whether of the company or its subsidiary, and compensation in respect of other offices,

and for the purposes of this section compensation for loss of office shall include sums paid as consideration for or in connection with a person’s retirement from office

(5)The amounts to be shown under each paragraph of subsection (1)—

(a)shall include all relevant sums paid by or receivable from—

(i)the company, and

(ii)the company’s subsidiaries, and

(iii)any other person,

except sums to be accounted for to the company or any of its subsidiaries, or, by virtue of section 227 to past or present members of the company or any of its subsidiaries or any class of those members, and

(b)shall distinguish, in the case of the amount to be shown under subsection (1) (c), between the sums respectively paid by or receivable from the company, the company’s subsidiaries and other persons

(6)The amounts to be shown under this section for any financial year shall be the sums receivable in respect of that year, whenever paid, or, in the case of sums not receivable in respect of a period, the sums paid during that year, so however, that where any sums are not shown in the annual financial statements for the relevant financial year on the ground that the person receiving them is liable to account therefor as mentioned in subsection (5) (a), but the liability is thereafter wholly or partly released or is not enforced within a period of two years, those sums shall, to the extent to which the liability is released or not enforced, be shown in the first annual financial statements in which it is practicable to show them and shall be distinguished from the amounts to be shown therein apart from this provision

(7)For the purpose of enabling them to show separately the respective amounts received under different headings as required by this section, the directors of a company may apportion any payments received or receivable in such manner as they consider appropriate

(8)In this section any reference to a company’s subsidiary shall for the purpose of subsections (2) and (3) include a reference to a company which was a subsidiary of the first-mentioned company at the time the services contemplated in the said subsections were rendered, and, for the purposes of subsection (4), include a reference to a company which was such a subsidiary immediately before the loss of office as director of the company concemed.[subsection (8) substituted by section 26 of Act 64 of 1977]

(9)Every director or past director of a company shall at the written request of the company or its auditor give notice in writing to the company or the auditor, within twenty-one days from the date of such request, of such matters relating to himself as may be necessary for the purposes of this section, and shall if he fails to comply with any such request, be guilty of an offence

(10)If in respect of any annual financial statements the requirements of fins section are not complied with, the auditor of the company by whom the annual financial statements are examined, shall include in his report thereon, so far as he is reasonably able to do so, a statement giving the required particulars

Further requirements as to financial tatements

298. Approval and signing financial statements

(1)The annual financial statements of a company shall be approved by its directors and signed on their behalf by two of the directors or if there is only one director, by that director, and group annual financial statements and group reports shall similarly be approved and signed by the directors of the holding company

(2)If a copy of any annual financial statements, or group annual financial statements or group reports which have not been approved and signed as required by subsection (1), is issued, circulated or published, every director or officer of the company concerned who is a party to such issue, circulation or publication thereof, shall be guilty of an offence

Directors' report

299. Directors report

(1)Except in the case of a company which is a wholly-owned subsidiary of any other company incorporated in the Republic, every company shall, as part of its annual financial statements, lay before the annual general meeting a report by the directors with respect to the state of affairs, the business and the profit or loss of the company or of the company and its subsidiaries, if any

(2)The directors’ report shall deal with every matter which is material for the appreciation by the members of the company of the state of affairs, the business and the profit or loss of the company or of the company and its subsidiaries, if any, and shall for that purpose be in accordance with and include at least the matters prescribed by Schedule 4, in so far as these are applicable, and comply with any other requirements of this Act

(3)Any director of a company who fads to take all reasonable steps to ensure compliance with the provisions of this section, shall be guilty of an offence

Auditor's duties as to annual financial statements

300. Auditors duties as to annual financial statements and other matters

It shall be the duty of the auditor of a company—

(a)to examine the annual financial statements, group annual financial statements or group reports to be laid before its annual general meeting,

(b)to satisfy himself that proper accounting records as required by this Act have been kept by the company and that proper returns adequate for the purposes of his audit have been received from branches not visited by him,

(c)to satisfy himself that the minute books and attendance registers in respect of meetings of the company and of directors and managers have been kept in proper form as required by this Act,

(d)to satisfy himself that a register of interests in contracts as required by section 240 has been kept and that the entries therein are in accord with the minutes of directors’ meetings,

(e)to examine or satisfy himself as to the existence of any securities of the company,

(f)to obtain all the information and explanations which to the best of his knowledge and belief are necessary for the purposes of carrying out his duties,

(g)to satisfy himself that the company’s annual financial statements are in agreement with its accounting records and returns,

(h)to examine and satisfy himself that group annual financial statements and group reports comply with the requirements of this Act,

(i)to examine such of the accounting records of the company and carry out such tests in respect of such records and such other auditing procedures as he considers necessary in order to satisfy himself that the annual financial statements or group annual financial statements or group reports fairly present the financial position of the company or of the company and its subsidiaries and the results of its operations and that of its subsidiaries, in conformity with generally accepted accounting practice applied on a basis consistent with that of the preceding year,

(j)to satisfy himself that statements made by the directors in their report do not conflict with a fair interpretation or distort the meaning of the annual financial statements and accompanying notes,

(k)to comply with any other duty imposed on him by this Act, and

(l)to comply with any applicable requirements of the Public Accountants’ and Auditors’ Act, 1951 (Act No 51 of 1951)

301. Auditors report

(1)When the auditor of a company has complied with the requirements of, and has satisfied himself as to the matters stated m, section 300, and has earned out his audit free from any restrictions whatsoever, he shall make a report to the members of the company to the effect that he has examined the annual financial statements, group annual financial statements and group reports and that in his opinion they fairly present the financial position of the company and its subsidiaries and the results of its operations and that of its subsidiaries in the manner required by this Act

(2)In the event of the auditor being unable to make such a report or to make it without qualification, he shall include in his report a statement to that effect and set forth the facts or circumstances which prevent him from so making his report or from making it without qualification

(3)The auditor’s report under subsection (1) shall, unless all the members present agree to the contrary, be read out at the annual general meeting

Issue of copies of annual financial statements

302. Duty of company to send annual financial statements to members and Registrar

(1)A copy of the annual financial statements of a company and the group annual financial statements, if any, shall not less than twenty-one days before the date of the annual general meeting of the company be sent to every member of the company and every holder of debentures of the company (whether or not such member or holder of debentures is entitled to receive notices of general meetings of the company) and to all persons other than members or holders of debentures of the company who are entitled to receive such notices

(2)The provisions of subsection (1) shall not be construed as requiring a copy of the said statements to be sent—

(a)in the case of a company not having a share capital, to any member or holder of debentures of the company who is not entitled to receive notices of general meetings of the company,

(b)to any member or holder of debentures of a company who is entitled to receive such notices and whose address is not known to the company,

(c)to more than one of the joint holders of any shares or debentures of a company none of whom is entitled to receive such notices,

(d)in the case of joint holders of any such shares or debentures of whom some are and others are not entitled to receive such notices, to any such joint holder who is not so entitled

(3)Any such copy not sent to members and debenture holders and other persons referred to in subsection (1) at least twenty-one days before the date of the relevant meeting shall be deemed to have been so sent if it is so agreed by all the members entitled to attend and vote at the meeting

(4)A public company shall on the day on which it sends such copies to its members as provided in subsection (1), send to the Registrar under cover of the prescribed form a copy, certified to be a true copy by a director and the secretary of the company—

(a)of the annual financial statements, group annual financial statements and group reports, if any, and

(b)of the annual financial statements of every controlled private company of that public company

(5)If default is made in complying with the provisions of subsection (1) or (4), the company concerned, and every director who knowingly is a party to the default, shall be guilty of an offence

Interim accounting

303. Half-yearly interim reports

Every public company having a share capital shall not later than three months after the expiration of the first period of six months of its financial year send to every member and holder of debentures of the company an interim report fairly presenting the business and operations of the company or of the company and its subsidiaries, if any, during the said period of six months, and the results thereof Provided that—

(a)the first interim report to be sent to members and holders of debentures of a company after its incorporation shall—

(i)in any case where proviso (a) to section 285 (1) applies and where the period of the first financial year of the company exceeds nine months, be in respect of a period of six months commencing on the date of incorporation of the company, and

(ii)in any case where proviso (b) to section 285 (1) applies, be in respect of a period commencing on the date of incorporation of the company and ending six months before the end of its first financial year,

(b)where a company has advanced the date of commencement of its financial year under section 285 (2) (a), the next interim report shall be for the period commencing immediately after the end of its previous financial year and ending on the expiry of six months after the commencement of the first ensuing financial year referred to in the said section,

(c)where a company has advanced the date of commencement of its financial year under section 285 (2) (b) by nine months or more, the next interim report shall be for the period of the first six months of the first ensuing financial year referred to in the said section

304. Provisional annual financial statements

(1)Every public company having a share capital which does not within three months after the end of its financial year issue copies of its annual financial statements in terms of section 302 (1) shall not later than the date on which the said period of three months expires send to every member and holder of debentures of the company a copy of the provisional annual financial statements of the company fairly presenting the state of affairs, business and profit or loss of the company, and of the provisional group annual financial statements or group reports, if any, fairly presenting the state of affairs, business and profit or loss of the company and its subsidiaries, as at the end of that financial year and the operations of the company or the company and its subsidiaries during that accounting period

(2)If a private company has not issued its annual financial statements in terms of section 302 (1) within six months after the end of its financial year, the Registrar may, on application to him in the prescribed manner, by any member of that company, and on good cause shown, require that company by written notice to lodge with him provisional annual financial statements as referred to in subsection (1) of this section within a period of six weeks from the date of such notice and thereupon the said company shall, unless it issues its annual financial statements within the said period, lodge provisional annual financial statements with the Registrar within the said period

305. Form and contents of interim report and provisional annual financial statements

(1)For the purposes of sections 303 and 304 interim reports, provisional annual financial statements, provisional group annual financial statements or group reports shall respectively be in accordance with and include at least the matters prescribed by Schedule 4 in so far as they are applicable and shall comply with the other requirements of this Act

(2)Provisional annual financial statements, provisional group annual financial statements or group reports shall not be required to be audited

(3)Every interim report and all provisional annual financial statements (including provisional annual group financial statements and group reports) of a company shall be approved by the directors and signed on their behalf by two of the directors

306. Copies of interim report and provisional annual financial statements to be lodged with Registrar

Every company which issues an interim report or provisional annual financial statements (including provisional annual group financial statements and group reports) shall, within seven days from the date of issue, lodge a copy of such interim report or provisional annual financial statements under cover of the prescribed form with the Registrar

307. Registrar may grant exemptions and extensions of time

(1)If the Registrar approves, no half-yearly interim reports shall be required under section 303 if the directors of the company are of the opinion that such reports—

(a)would be misleading to the members of the company or harmful to the business of the company, or

(b)would entail unnecessary expense or for any other reason would serve no useful purpose

(2)The provisions of section 291 (3) shall apply mutatis mutandis with reference to any application of the company for the Registrar’s approval under subsection (1) of this section and to the period of any exemption

(3)The Registrar may on application by any company made to him before the expiry of the periods in which an interim report under section 303 or provisional annual financial statements, provisional group annual financial statements or group reports under section 304 are required to be issued, on good cause shown and on payment of the prescribed fee, extend the said periods respectively by not more than one month

308. Offences under sections 303 to 306 inclusive

Any company which fails to comply with any requirement of section 303, 304, 305 or 306 and any director of a company who fails to take all reasonable steps to secure compliance with any such requirement, shall be guilty of an offence

Right of members and others to copies of annual financial statements and interim reports

309. Right of members and others to copies of annual financial statements and interim reports

(1)Any member or holder of debentures of a company shall be entitled to be furnished on demand without charge with a copy of the last annual financial statements (including annual group financial statements or group reports), provisional annual financial statements (including provisional annual group financial statements or group reports) and of the last interim report of the company

(2)A judgment creditor of a private company shall, where it appears from the return of the person whose duty it is to execute the judgment in question that he has not found sufficient disposable property to satisfy that judgment, be entitled to be furnished on demand without charge with a copy of the last annual financial statements of the company

(3)

(a)Any company which fails to comply with a demand under this section within seven days after the making thereof, and any director of die company who knowingly is a party to the default, shall be guilty of an offence

(b)It shall be a defence to a charge under paragraph (a) to prove that the person concerned had previously demanded a copy of the document to which the charge relates and that such copy had been supplied

Power of Minister to exempt from or prohibit disclosure of particular information

310. ***

[section 310 amended by section 27 of Act 64 of 1977 and repealed by section 19 of Act 59 of 1978]

Chapter XII
Compromise, amalgamation, arrangement and take-overs

311. Compromise and arrangement between company, its members and creditors

(1)Where any compromise or arrangement is proposed between a company and its creditors or any class of them or between a company and its members or any class of them, the Court may, on the application of the company or any creditor or member of the company or, in the case of a company being wound up, of the liquidator, or if the company is subject to a judicial management order, of the judicial manager, order a meeting of the creditors or class of creditors, or of the members of the company or class of members (as the case may be), to be summoned in such manner as the Court may direct

(2)If the compromise or arrangement is agreed to by—

(a)a majority in number representing three-fourths in value of the creditors or class of creditors, or

(b)a majority representing three-fourths of the votes exercising by the members or class of members,

(as the case may be) present and voting either in person or by proxy at the meeting, such compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors or the class of creditors, or on the members or class of members (as the case may be) and also on the company or on the liquidator rf the company is being wound up or on the judicial manager if the company is subject to a judicial management order

(3)No such compromise or arrangement shall affect the liability of any person who is a surety for the company

(4)If the compromise or arrangement is in respect of a company being wound up and provides for the discharge of the winding-up order or for the dissolution of the company without winding up, the liquidator of the company shall lodge with the Master a report in terms of section 400 (2) and a report as to whether or not any director or officer or past director or officer of the company is or appears to be personally liable for damages or compensation to the company or for any debts or liabilities of the company under any provision of this Act, and the Master shall report thereon to the Court

(5)The Court, in determining whether the compromise or arrangement should be sanctioned or not, shall have regard to the number of members or members of a class present or represented at the meeting referred to in subsection (2) voting in favour of the compromise or arrangement and to the report of the Master referred to in subsection (4)

(6)

(a)An order by the Court sanctioning a compromise or arrangement shall have no effect until a certified copy thereof has been lodged with the Registrar under cover of the prescribed form and registered by him

(b)A copy of such order of court shall be annexed to every copy of the memorandum of the company issued after the date of the order

(7)If a company fails to comply with the provisions of subsection (6) (b), the company and every director and officer of the company who is a party to the failure, shall be guilty of an offence

(8)In this section “company” means any company liable to be wound up under this Act and the expression “arrangement ’ includes a reorganization of the share capital of the company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both these methods

312. Information as to compromises and arrangements

(1)Where a meeting of creditors or any class of creditors or of members or any class of members is summoned under section 311 for the purpose of agreeing to a compromise or arrangement, there shall—

(a)with every notice summoning the meeting which is sent to a creditor or member, be sent also a statement—

(i)explaining the effect of the compromise or arrangement,

(ii)stating all relevant information material to the value of the shares and debentures concerned in any arrangement, and

(iii)in particular stating any material interests of the directors of the company, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons, and

(b)in every notice summoning the meeting which is given by advertisement, be included either such a statement as aforesaid or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement

(2)Where the compromise or arrangement affects the rights of debenture-holders of the company, the said statement shall give the like explanation and statement as respects the trustee of any deed for securing the issue of the debentures as it is required to give as respects the company’s directors

(3)Where a notice given by advertisement includes a notification that copies of the said statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement

(4)Where a company makes default in complying with any requirement of this section, the company and every director or officer of the company who is a party to the default, shall be guilty of an offence, and for the purpose of this subsection any liquidator of the company and any trustee of a deed for securing the issue of debentures of the company shall be deemed to be an officer of the company Provided that a person shall not be liable under this subsection if he shows that the default was due to the refusal of any other person, being a director or trustee for debenture-holders, to supply the necessary particulars as to his interests and that fact has been stated in the statement

(5)It shall be the duty of every director of a company and of every trustee for debenture-holders to give notice to the company of such matters relating to himself as may be necessary for the purposes of this section, and if he makes default in complying with such duty, he shall be guilty of an offence

313. Provisions facilitating reconstruction or amalgamation

(1)If an application is made to the Court under section 311 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are referred to in that section, and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as the “transferor company”) is to be transferred to another company (in this section referred to as the “transferee company”) the Court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters

(a)The transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company,

(b)the allotment or appropriation by the transferee company of any shares, debentures or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person,

(c)the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company,

(d)the dissolution, without winding up, of any transferor company,

(e)the provision to be made for any persons who, within such time and in such manner as the Court may direct, dissent from the compromise or arrangement,

(f)such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out

Provided that no order for the dissolution, without winding up, of any transferor company shall be made under this subsection prior to the transfer in due form of all the property and liabilities of the said company

(2)Where an order under this section provides for the transfer of property or liabilities, that property shall by virtue of the order vest in, subject to transfer in due form, and those liabilities snail become the liabilities of, the transferee company

(3)If an order is made under this section, every company in relation to which the order is made shall, within thirtv days after the making of the order, cause a copy thereof to be lodged with the Registrar, under cover of the prescribed form, for registration, and if default is made in complying with this subsection, the company shall be guilty of an offence

(4)In this section the expression “property” includes property, rights and powers of every description, and the expression “liabilities” includes duties

(5)Notwithstanding the provisions of section 311 (8) the expression “company” in this section does not include any company other than a company within the meaning of this Act

314. Take over offers

(1)For the purposes of this section and sections 315 to 321, inclusive—"Offeree company,” in relation to a take-over scheme or a take-over offer, means the company the shares of which are to be acquired under the scheme or offer,“offeror”, in relation to a take-over scheme or a takeover offer, means the person by whom, or the company, external company or any other body corporate by which, any take-over offer under a take-over scheme or the take-over offer, is made, and if such take-over offer is made jointly by more than one offeror, the provisions of the said sections relating to an offeror shall be construed mutatis mutandis to include joint offerors,“take-over offer” means an offer for the acquisition of shares under a take-over scheme, and“take-over scheme” means a scheme involving the making of an offer by the offeror for acquiring shares of the offeree company which together with any shares of that company already held by the offeror at the time of the making of the offer, will have the effect of—

(a)vesting the control of the offeree company directly or indirectly in the offeror, or

(b)the offeror acquiring all the shares or all the shares of a particular class of the offeree company,

but does not include any offer made in the course of or in connection with any individual negotiation with any shareholder for the acquisition of any such shares

(2)No take-over offer shall be made unless—

(a)it is made in the same terms to all the shareholders of the shares or of a particular class of shares of the offeree company,

(b)there is annexed to it a take-over statement by the offeror,

(c)a copy thereof, together with its annexures, is lodged with the offeree company,

(d)a copy thereof, together with its annexures, is lodged with the Registrar under cover of the prescribed form not later than the day on which it is intended to issue the take-over offer

(3)Subject to paragraph (c) of this subsection, no take-over offer shall be valid and capable of acceptance after the expiry of four months from the date of its issue and no take-over offer shall be withdrawn within the said period unless—

(a)it is superseded by a fresh take-over offer by the offeror,

(b)a take-over offer is made by some other offeror, or

(c)the take-over offer is within the said period of four months declared by the offeror to be unconditional Provided that if it is so declared the take-over offer shall not be withdrawn within two weeks after such declaration and shah during the said two weeks remain available for acceptance

(4)If an offer or, while his or its take-over offer is open and available for acceptance, improves the terms of such take-over offer, it shall be deemed that all acceptances of the offer previously made by any shareholder concerned have been made on such improved terms, and such improved offer shall not be construed as a fresh take-over offer

315. Contents of take over statement by offeror

(1)Any take-over statement by the offeror shall contain at least the following information

(a)If the offeror is a company, the name of the company, a list of its directors and the name of its controlling company, if any, and if not acting as a principal, the same information in respect of its principal,

(b)if the offeror is a person, his full names, occupation and address and if not acting as a principal, the same information in respect of his principal, and if his principal is a company, the particulars required under paragraph (a),

(c)the full terms of the take-over offer,

(d)ail material information relevant to the take-over offer and to the change of control of the offeree company, if any,

(e)if the consideration offered is wholly or partly other than cash, a valuation of such consideration by the offeror and the grounds on which such valuation is based,

(f)full disclosure of any payment or other benefit, from whatever source, made or granted or promised to any director or shareholder of the offeree company in connection with the take-over scheme

(2)Any take-over statement shall on the face of it bear the date of its issue to the shareholders of the offeree company by the offeror

316. Duty of directors of offeree company to furnish take–over statement

(1)The directors of any offeree company shall within two weeks after delivery to the offeree company by the offeror of a take-over offer and take-over statement by the offeror, which is intended to be issued or has been issued to shareholders of the offeree company, or within such extended period as may be agreed to by the offeror, deliver to the offeror a take-over statement by the directors of the offeree company

(2)If any director of the offeree company does not agree with the take-over statement by the directors of the offeree company or any part thereof, he shall make out a separate statement under his hand containing the full reasons for his disagreement, which statement shall be incorporated in the take-over statement by the directors of the offeree company and form part thereof

(3)The offeror shall, within one week after receipt of the take-over statement by the directors of the offeree company, send a copy thereof to—

(a)the shareholders referred to in section 314 (2) (al, and

(b)the Registrar, under cover of the prescribed form

317. Contents of take-over statement by directors of offeree company

Any takeover statement by the directors of the offeree company shall contain at least the following information

(a)The opinion of the directors of the offeree company as to the fairness of the take-over offer stating all relevant information material to the assessment of the value of the shares of the offeree company,

(b)whether or not there has been any material change in the financial position, state of affairs or business of the offeree company since the end of the financial year dealt with by its last annual financial statements,

(c)the number of shares of the offeree company held, directly or indirectly, by each of the directors and the intention of each of the directors in relation to the take-over offer and his own shareholding,

(d)whether any of the directors of the offeree company is a director or shareholder of, or has any other interest in, the offeror or any company controlled by the offeror or by the controlling company of the offeror and if so, full disclosure of such interest, and

(e)particulars of any interest of any director of the offeree company in the take-over scheme concerned and any payment, benefit or advantage or proposed payment, benefit or advantage from whatever source in connection with such take-over scheme, including those referred to in section 227 (3)

318. Statement by the directors of offered company in case of counter bid

Notwithstanding the provisions of section 314 (2) (b) a take-over offer may be made without there being annexed to it a take-over statement by the directors of the offeree company, if it is made while another take-over offer made by another offeror is open and available for acceptance Provided that the directors of the offeree company shall within fourteen days of the making of such offer deliver to the offeror a take-over statement in terms of section 317 and the offeror shall forthwith issue copies of such take-over statement to the shareholders of the offeree company and lodge a copy thereof with the Registrar under cover of the prescribed form

319. Requirements for takeover offer may be waived

If all the shareholders of shares of an offeree company involved in a take-over scheme consent thereto in writing the requirements of this Act in regard to take-over offers may be waived

320. Liability and offences in regard to take-over offers

(1)If any person or company fails to comply with any requirement of section 314 (2) or (3), 315, 316, 317 or 318, such person or company and every director or officer of such company shall be guilty of an offence, and if any director of the offeree company conceals, or fails to take reasonable steps to have included in the take-over statement by the directors of the offeree company, any information required by section 317 (a) and (e), he shall be guilty of an offence

(2)Where a take-over statement by the offeror contains a statement which is untrue, the offeror and every director and officer of an offeror which is a company, and where a take-over statement by the directors of the offeree company contains a statement which is untrue, every director of the offeree company, shall be guilty of an offence Provided that the Defences referred to in section 162 (3) and (4) shall mutatis mutandis be available to any person charged under this subsection

(3)Where a take-over statement by the offeror or the takeover statement by the directors of the offeree company contains a statement which is untrue, the offeror and every director and officer of an offeror which is a company, and every director of the offeree company respectively, shall be liable to pay compensation to all persons who have accepted the take-over offer concerned for the loss or damage they may have sustained by reason of such untrue statement, and the provisions of section 160 as to the liability for untrue statements in a prospectus shall mutatis mutandis apply to any liability provided for in this subsection, the reference therein to a prospectus to be taken as a reference to a take-over statement by the offeror or the take-over statement by the directors of the offeree company, the reference therein to persons who have acquired, subscribed for or purchased shares, to be taken as a reference to persons who have accepted the take-over offer, and the reference therein to the allotment or sale of shares, to be taken as a reference to the acceptance of the take-over offer

(4)The expression “statement which is untrue” or “untrue statement” in subsections (2) and (3) shall for the purposes of those subsections have the meaning ascribed to the expression “untrue statement” in section 142

321. Power to acquire shares of minority in a take-over scheme

(1)If a take-over offer under a scheme or contract involving the transfer of shares or any class of shares of a company to an offeror, has within four months after the making of the offer in that behalf by the offeror been accepted by the holders of not less than nine-tenths of the shares or any class of shares whose transfer is involved (other than shares already held at the date on which the offer is issued by, or by a nominee for, the offeror or its subsidiary), the offeror may at any time within two months after such acceptance give notice in the prescribed manner to any shareholder who has not accepted the said offer, that he or it desires to acquire his shares, and where such notice is given, the offeror shall, unless on an application made by such shareholder within six weeks from the date on which the notice was given, the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the shareholders who have accepted the offer, are to be transferred to the offeror

(2)Where a notice has been given by the offeror under this section and the Court, on an application made by a shareholder who has not accepted the offer, has not ordered to the contrary, the offeror shall, on the expiration of six weeks from the date on which the notice was given, or, if an application to the Court by such shareholder is then pending, after the application has been disposed of, transmit a copy of the notice to the offeree company together with an instrument of transfer executed on behalf of such shareholder by any person appointed by the offeror and pay or transfer to the offeree company the amount or other consideration representing the price payable by the offeror for the shares which by virtue of this section he or it is entitled to acquire, and, subject to the payment of the stamp duties ordinarily payable, the offeree company shall thereupon register the offeror as the holder of those shares Provided that an instrument of transfer shall not be required for any share for winch a share warrant is for the time being outstanding

(3)Where, in pursuance of any such scheme or contract, shares of an offeree company are transferred to a person or another company or its nominee, and those shares together with any other shares of the said offeree company held by, or by a nominee for, the offeree or its subsidiary at the date of the transfer, comprise or include nine-tenths of the shares in the first-mentioned company or of any class of those shares, then—

(a)the offeror shall within a month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or contract it has already complied with this requirement) give notice of that fact in the described manner to the holders of the remaining shares or of the remaining shares of that class, as the case may be, who have not accepted the offer under the scheme or contract, and

(b)any such holder may within three months from the giving of the notice to him require the offeror to acquire the shares in question,

and where a shareholder gives notice under paragraph (b) with respect to any shares, the offeror shall be entitled and bound to acquire those shares on the terms on which under the scheme or contact the shares of the shareholders who have accepted the offer were transferred to him or it, or on such other terms as may be agreed or as the Court on the application of either the offeror or the shareholders may think fit to order

(4)Any sum received by the offeree company under this section shall be paid into a separate bank account with a banking institution registered under the Banks Act, 1965 (Act No 23 of 1965), and any such sums and any other consideration so received shall be held by the offeree company for the several persons entitled to the shares in respect of which the said sums or other consideration was received

(5)In this section the expression “shareholder who has not accepted the offer” includes any shareholder who has failed or refused to transfer his shares to the offeror in accordance with the scheme or contract

(6)In relation to an offer made by an offeror before the commencement of this Act the law to be applied shall be the law as it existed immediately before that commencement

Chapter XIII
External companies

Registration

322. Registration of memorandum of external company

(1)Every external company shall within twenty-one days after the establishment of a place of business in the Republic lodge with the Registrar, in the prescribed manner—

(a)a certified copy of the memorandum of the company, and if the said memorandum is not in one of the official languages of the Republic, a certified translation thereof in one of those languages.

(b)a notice under section 170 in the prescribed form of the registered office and postal address of the company,

(c)the consent of and the name and address of the auditor of the company in the Republic,

(d)a notice of the financial year of the company under section 285,

(e)the prescribed form containing particulars—

(i)in respect of each director, his full forenames and surname and any former forenames and surname, his nationality, his occupation, his residential, business and postal addresses and the date of appointment (distinguishing between directors resident in the Republic and non-resident directors) Provided that the provisions of section 215 (3) shall apply mutatis mutandis to a former forename and surname of a director,

(ii)in respect of the local manager and in respect of the secretary, his full forenames and surname, the nationality, his occupation, his residential, business and postal addresses, the date of appointment, and in the case of any local manager or secretary being a corporate body, its registered office,

(iii)the name and address of the auditor of the company in the Republic,

(f)[paragraph (f) deleted by section 20(1) of Act 59 of 1978]

(g)a notice in the prescribed form of the name and address of the person authorized by the company to accept service on behalf of the company under section 326, and

(h)proof of payment of annual duty under section 175

(2)The Registrar, upon payment of the prescribed fee, shall register the said memorandum in the register kept by him under section 5, distinguishing the registration from the registrations in respect of companies incorporated in the Republic, and shall issue a certificate of registration under his hand and seal to the company

323. Effect of registration of memorandum of external company

(1)Upon the registration of the memorandum of an external company the external company shall be a body corporate in the Republic subject to the applicable provisions of this Act

(2)A certificate of registration given by the Registrar in respect of any external company shall upon its mere production, in the absence of proof of fraud, be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with

324. Power of external company to own immovable property in Republic

(1)Save as may be expressly provided in any other law, an external company of which the memorandum has been registered under section 322 shall have the same power to own immovable property in the Republic as if it were a company incorporated in the Republic

(2)As from a date three months after the commencement of this Act, no external company shall be capable of acquiring the ownership of immovable property in the Republic unless its memorandum has been or is deemed to be registered under section 322

Administrative and other duties of external companies

325. External company to have an auditor

(1)Every external company shall appoint and shall at all times have an auditor within the meaning of this Act and shall not later than fourteen days after such appointment or any change in the office of auditor, lodge with the Registrar in the prescribed form a notice stating the name and address of such auditor or the change in such office

(2)The auditor of any external company may at any time resign as such and the provisions of section 280 shall mutatis mutandis apply with reference to such resignation

(3)If an external company fails to appoint an auditor as provided in subsection (1), the Registrar shall appoint such auditor

(4)The provisions of subsection (1) shall not apply where the sole purpose of the external company in establishing a place of business in the Republic is to establish a share registration office or a share transfer office

326. External company to have person authorized to accept service

(1)Every external company shall appoint and shall at all times have one or more persons resident in the Republic authorized by the company to accept on its behalf service of process and any notices required to be served on the company, notwithstanding the provisions of section 71

(2)Any person authorized as aforesaid shall be entitled to withdraw from such authorization after having given one month’s written notice of such withdrawal to the company and shall at the same time lodge two copies of such notice with the Registrar under cover of the prescribed form

(3)Every external company shall within twenty-one days after receipt of the notice referred to in subsection (2) or after the termination of such authorization in any other manner, lodge with the Registrar a notice in the prescribed form stating the alteration and the name and address of the new authorized person appointed by the company

327. Register of directors and managers and secretaries, changes therein and power of Registrar to call for particulars

(1)The provisions of sections 211, 215 and 216 shall mutatis mutandis apply to a director, local manager and local secretary of an external company: Provided that where a director is not resident in the Republic—

(i)the entries referred to in section 216(1) shall be made in the register not later than the end of the financial year of the company and the return referred to in section 216(2) shall be lodged together with the annual return referred to in section 330; and

(ii)the form of consent prescribed under section 211 may be signed by the director or his duly authorized agent on his behalf.

[subsection (1) substituted by section 21(1) of Act 59 of 1978]

(2)Every external company shall, within twenty-one days after the date of a written request by the Registrar to that effect, lodge with the Registrar complete particulars of the present residential, business and postal addresses of every director not resident in the Republic, together with a complete list containing the names and registered offices of companies incorporated in the Republic and other external companies of which such director is also a director

328. Changes in memorandum of external company

If any alteration is made in the memorandum of an external company, the company shall within three months of such alteration lodge with the Registrar under cover of the prescribed form for registration, a certified copy of the instrument showing the alteration, and if such instrument is in a foreign language, a certified translation thereof in one of the official languages of the Republic

329. External company to keep accounting records and lodge annual financial statements and interim reports

(1)Every external company shall keep in one of the official languages of the Republic such accounting records, including the matters referred to in section 284 (1) (a) to (e) inclusive, as are necessary fairly to present the state of affairs and business of the company in the Republic and to explain the transactions concerning its trade and business and its financial position in the Republic

(2)The provisions of section 285 in respect of the financial year of a company and section 303 in respect of interim reports shall apply mutatis mutandis to every external company

(3)Every external company shall within six months after the end of every financial year lodge with the Registrar, under cover of the prescribed form, a copy of its annual financial statements together with the report of the auditor of the company, in respect of its financial position, trade and business in the Republic

(4)The provisions of sections 281, 282 and 283 in regard to the rights, duties and remuneration of auditors and of Chapter XI in regard to the financial statements of companies shall apply mutatis mutandis to the financial statements and report required by subsection (3) of this section in respect of every external company

(5)Every external company shall within six months after the end of its financial year, lodge with the Registrar a certified copy of its latest complete annual financial statements as prepared under the requirements of the foreign jurisdiction in which it was incorporated and, if such statements are in a foreign language, a certified translation thereof in one of the official languages of the Republic

(6)The Minister, when he considers it to be in the public interest, may exempt an external company from all or any of the obligations imposed by this section and may also do so on application by such external company on the ground that the required disclosure of information or of any particular information will be harmful to the company or will be impracticable or will be of no real benefit to the members of the company in the Republic in view of the insignificant amounts involved Provided that such application shall be renewed every two years

330. External companies to lodge annual return

(1)Every external company shall not later than one month after the end of its financial year lodge with the Registrar a return in the prescribed form, specifying the particulars prescribed by the Minister by regulation, in regard to the company, as at the date of the end of its financial year.[subsection (1) substituted by section 23(1) of Act 59 of 1978]

(2)The said annual return shall be signed by one of the resident directors or local managers

331. Further administrative duties of external company

(1)Every external company shall—

(a)conspicuously exhibit outside all its places of business in the Republic the name of the company and the foreign country in which the company is incorporated, and

(b)have the name of the company and of the foreign country in which the company is incorporated, mentioned in legible characters in all billheads, and letterheads, and in all notices, advertisements, and other official publications of the company, and for the purposes of this subsection the provisions of section 50 shall mutatis mutandis apply

(2)An external company shall not issue or send to any person in the Republic any trade catalogue, trade circular or business letter bearing the company’s name unless the names of its directors, their nationality, if not South African, the names of its local managers and its local secretary are stated therein.[subsection (2) substituted by section 24(2) of Act 59 of 1978]

332. Deregistration of external company

(1)If any external company ceases to have a place of business in the Republic, it shall forthwith give notice of that fact to the Registrar

(2)If the Registrar has reasonable cause to believe that an external company has ceased to have a place of business in the Republic, he shall send by certified post to the company at its postal address and at the address of its registered office, to the person authorized to accept service on its behalf and to its auditor, letters requiring details of its said place of business, if any.[subsection (2) substituted by section 25(a) of Act 59 of 1978]

(3)If the Registrar does not within one month of sending the letters receive any answer thereto or if he receives an answer to the effect that the company has ceased to have a place of business in the Republic, he may publish in the Gazette and may by certified post send to the company at its postal address and at the address of its registered office, to the person authorized to accept service on its behalf and to its auditor, a notice to the effect that at the expiration of a period of two months from the date of that notice the said company will, unless good cause is shown to the contrary, be deregistered.[subsection (3) substituted by section 25(b) of Act 59 of 1978]

(4)At the expiration of the period of two months mentioned in any notice referred to in subsection (3) or upon receipt from any external company of a notice contemplated in subsection (1), the Registrar may, unless good cause to the contrary has been shown by the company, deregister the company and shall, if he so deregisters the company, give notice to that effect in the Gazette and the date of the publication of such notice in the Gazette shall be deemed to be the date of deregistration: Provided that the liability (if any) of every director, officer and member of the company shall continue and may be enforced as if the company had not been deregistered.[subsection (4) added by section 25(c) of Act 59 of 1978]

333. Offence in respect of external companies

(1)Any company incorporated outside the Republic which establishes a place of business in the Republic without complying with the requirements of section 322 (1), and every director, officer or agent of that company, shall be guilty of an offence

(2)Every external company which and every director and officer of such company who fails to comply with any requirement of section 325, 326, 327, 328, 329, 330 or 331, shall be guilty “of an offence

334. Transfer of undertaking of external company and exemption from transfer duty under a scheme

(1)Notwithstanding anything to the contrary contained in any law, whenever an external company satisfies the Court that it carries on its principal business within the Republic and that—

(a)it is being or is about to be wound up voluntarily or dissolved for the purpose of transferring the whole of its business and all its rights, obligations and property, wherever situate, to a company which has been or will be incorporated under this Act (in this section referred to as the new company) for the purpose of taking over and acquiring sue business, rights, obligations and property, or

(b)all the issued shares of that external company have been, are being or are about to be acquired by such new company under a scheme in terms of which such transfer to the said new company is to take place, and

(c)the sole consideration for such transfer or acquisition is the issue to the members of the external company of shares of the new company in proportion to their shareholdings in the external company, and

(d)no shares in the new company will be available for issue to any persons other than the members of the external company,

the Court may order that, on the certificate of the Registrar that the external company is being or is about to be wound up voluntarily or dissolved or that all the shares of the external company have been or are about to be acquired for the said purpose, that the said new company has been incorporated and is entitled to commence business and that the shares of the new company have been issued in the said proportion to the members of the external company—

(i)as from a date specified by it, the whole of the business and all rights, obligations and property of the external company, wherever situate, shall be transferred (subject to transfer in due form) to, shall vest in and shall be binding upon the new company,

(ii)no transfer or stamp duty shall be payable in respect of the transfer of any property from the external company to the new company, and

(iii)any licence, exemption, permit, certificate or authority held in terms of any law by the external company in respect of its business or property, shall, with effect from the date specified under paragraph (i), be deemed for the purposes of such law to be held by the new company in respect of the business or property so transferred

(2)In subsection (1) the expression “the Court” means any provincial or local division of the Supreme Court of South Africa within whose jurisdiction the registered office of the external company concerned is situate, and such Court shall have the power to issue such order in respect of any property wherever situate in the Republic

335. Registration of external companies as companies in the Republic

(1)Any external company having a share capital which has a place of business in the Republic and which has complied with the provisions of section 322 of this Act may, subject to the provisions of this section, make application for registration under Chapter IV of tins Act

(2)If any such external company making such an application satisfies the Minister that—

(a)it conducts the whole or the major portion of its business in the Republic and that the greater part of its assets (other than interests in subsidiary companies incorporated outside the Republic) is situated in the Republic,

(b)the majority of its directors are or will be South African citizens,

(c)the majority of its shareholders are resident in the Republic and that the company has resolved to make an application under this section,

(d)its registration and incorporation in the foreign country concerned will, upon registration in the Republic under Chapter IV of this Act, be terminated in accordance with the laws of such foreign country,

(e)it has lodged with the Registrar such documents necessary for registration under Chapter IV of this Act as the Registrar may require, and that it has paid all fees and duties payable under this Act or any other Act, and

(f)it has compiled with such other requirements as the Registrar may deem necessary,

the State President may by proclamation in the Gazette declare that such external company shall, subject to compliance with the provisions of subsection (3), be deemed, with effect from the date of termination of its registration and incorporation in the foreign country concerned, to be a company incorporated under Chapter IV of this Act

(3)The Registrar shall, with effect from the date of termination of its registration and incorporation in the foreign country, effect the necessary registration in respect of such company in the manner and form prescribed by and subject to the applicable provisions of Chapter IV of this Act and shall simultaneously cancel the registration in respect of the external company under section 322

(4)Upon such registration in respect of an external company the Registrar shall issue to such company under his and seal a certificate to the effect that such registration has taken place and that it is deemed that the company has been incorporated under the Act

(5)If at the date of such registration any action, arbitration or proceeding or any cause of action, arbitration or proceeding shall be pending or existing by or against or in favour of the external company the same shall not abate or be discontinued or be in any way prejudicially affected by reason of such registration but may be continued, prosecuted and enforced by, against or in favor of the external company as if such registration had not taken place but not further or otherwise

(6)All contracts, agreements, conveyances, deeds, leases, and other instruments affecting the external company and in force at the date of such registration shall as from that date be as binding and of as full force against or in favour of the company and may be enforced by, against or in favour of the company as fully and effectually as ff the external company had at all material times been incorporated under this Act

(7)All books, registers and documents which if such registration had not taken place would have been evidence in respect of any matter for or against the external company shall on and after the date of such registration be admitted in evidence in respect of the same or a like matter for or against the company

336. Application of this hapter to foreign companies under repealed Act

As from the commencement of this Act the provisions of this Chapter, excluding the legislation required under section 322, shall apply to external companies which pour to the said commencement complied with section 201 of the repealed Act, and such companies shall be deemed to have complied with section 322 of thia Act and their memorandums shall be deemed to have been registered under the last-mentioned section

Chapter XIV
Winding-up of companies

General

337. Definitions

In this Chapter, unless the context otherwise indicates—“company” includes a company, external company and any other body corporate,“contributory”, in relation to a company limited by guarantee, means any person who has undertaken to contribute to the assets of the company in terms of section 52 (3) (6) in the event of its being wound up and, in relation to any company which is unable to pay its debts and is being wound up by the Court or by a creditors’ voluntary winding-up, includes any person who is liable to contribute to the costs, charges and expenses of the winding-up of the company

338. Application of repealed Act where winding-up has already commenced

(1)The provisions of this Act relating to the winding-up of a company shall not apply to any company if its winding-up was commenced before the commencement of this Act, and the winding-up of any such company shall be continued as if this Act had not been passed

(2)When a company having shares which are not fully paid-up, is wound up under this Act, the provisions of the repealed Act in respect of such shares and the contentions in relation thereto shall continue to apply in respect of such a company, notwithstanding the repeal of that Act

339. Law of insolvency to be applied to mutatis mutandis

In the winding-up of a company unable to pay its debts the provisions of the law relating to insolvency shall, in so far as they are applicable, be applied mutatis mutandis in respect of any matter not specially provided for by this Act

340. Voidable and undue preferences

(1)Every disposition by a company of its property which, if made by an individual, could, for any reason, be set aside in the event of his insolvency, may, if made by a company, be set aside in the event of the company being wound up and unable to pay all its debts, and the provisions of the law relating to insolvency shall mutatis mutandis be applied to any such disposition

(2)For the purpose of this section the event which shall be deemed to correspond with the sequestration order in the case of an individual shall be—

(a)in the case of a winding-up by the Court, the presentation of the application, unless that winding-up has superseded a voluntary winding-up, when it shall be the passing of the resolution to wind up the company,

(b)in the case of a voluntary winding-up, the passing of the resolution to wind up,

(c)in the case of a winding-up of any company unable to pay its debts by the Court superseding a judicial management order, the presentation of the application to the Court in terms of section 433 (/) or 440

(3)Any cession or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void

341. Dispositions and share transfers after winding-up void

(1)Every transfer of shares of a company being wound up or alteration in the status of its members effected after the commencement of the winding-up without the sanction of the liquidator, shall be void

(2)Every disposition of its property (including rights of action) by any company being wound-up and unable to pay its debts made after the commencement of the winding-up, shall be void unless the Court otherwise orders

342. Application of assets and costs of winding-up

(1)In every winding-up of a company the assets shall be applied in payment of the costs, charges and expenses incurred in the winding-up and, subject to the provisions of section 435 (1) (b), the claims of creditors as nearly as possible as they would be applied in payment of the costs of sequestration and the claims of creditors under the law relating to insolvency and, unless the memorandum or articles otherwise provide, shall be distributed among the members according to their rights and interests in the company

(2)The provisions of the law relating to insolvency in respect of contributions by creditors towards any costs shall apply to every winding-up of a company

343. Modes of winding-up

(1)A company may be wound up—

(a)by the Court, or

(b)voluntarily

(2)A voluntary winding-up of a company may be—

(a)a creditors’ voluntary winding-up, or

(b)a members’ voluntary winding-up

Winding-up by the Court

344. Circumstances in which company may be wound up by court

A company may be wound up by the Court if—

(a)the company has by special resolution resolved that it be wound up by the Court,

(b)the company commenced business before the Registrar certified that it was entitled to commence business,

(c)the company has not commenced its business within a year from its incorporation, or has suspended its business for a whole year,

(d)in the case of a public company, the number of members has been reduced below seven,

(e)seventy-five per cent of the issued share capital of the company has been lost or has become useless for the business of the company,

(f)the company as unable to pay its debts as descended in section 345,

(g)in the case of an external company, that company is dissolved in the country in which it has been incorporated, or has ceased to carry on business or is chairing on business only for the purpose of winding up its affairs,

(h)it appears to the Court chart it is just and equitable that the company should be wound up

345. When company deemed unable to pay its debts

(1)A company or corporation shall be deemed to be unable for pay its debts if—

(a)a creditor, by cession or otherwise, to whom the company is indebted in a sum not less than one hundred rand then due—

(i)has served the company, by leaving the same at its registered office, a demand requiring the company to pay the sum so due, or

(ii)in the case of anybody corporate not incorporated under this Act, has served such demand by leaving it at its mam office or delivering it to the secretary or some dnectoi, manager or principal officer of such body corporate or in such other manner as the Court may direct,

and the company or body corporate has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the ci editor, or

(b)any process issued on a judgment decree or order of any court in favour of a creditor of the company is returned by the sheriff or the messenger with an endorsement that he has not found sufficient disposable property to satisfy the judgment, decree or order or that any disposable property found did not upon sale satisfy such process; or[paragraph (b) substituted by section 26(b) of Act 59 of 1978]

(c)it is proved to the satisfaction of the Court that the company is unable to pay its debts

(2)In determining for the purpose of subsection (1) whether a company is unable to pay its debts, the Court shall also take into account the contingent and prospective liabilities of the company

346. Application for winding-up of company

(1)An application to the Court for the winding-up of a company may, subject to the provisions of this section, be made—

(a)by the company,

(b)by one or more of its creditors (including contingent or prospective creditors),

(c)by one or more of its members,

(d)jointly by any or all of the parties mentioned in paragraphs (a), (b) and (c), or

(e)in the case of any company being wound up voluntarily, by the Master or any creditor or member of that company

(2)A member of a company shall not be entitled to present an application for the winding-up of that company unless he has been registered as a member in the register of members for a period of at least six months immediately prior to the date of the application or the shares he holds have devolved upon him through the death of a former holder and unless the application is on the grounds referred to in section 344 (b), (c), (d) (e) or (h)

(3)Every application to the Court referred to in subsection (1), except an application by the Master in terms of paragraph (c) of that subsection, shall be accompanied by a certificate by the Master, issued not more than ten days before the date of the application, to the effect that sufficient security has been given for the payment of all fees and charges necessary for the prosecution of all winding-up proceedings and of all costs of administering the company in liquidation until a provisional liquidator has been appointed, or, if no provisional liquidator is appointed, of all fees and charges necessary for the discharge of the company from the winding-up

(4)

(a)Before an application for the winding-up of a company is presented to the Court, a copy of the application and of every affidavit confirming the facts stated therein shall be lodged with the Master, or, if there is no Master at the seat of the Court, with an officer in the public service designated for that purpose by the Master by notice in the Gazette

(b)The Master or any such officer may report to the Court any facts ascertained by him which appear to him to justify the Court in postponing the hearing or dismissing the application and shall transmit a copy of that report to the applicant or his agent and to the company

347. Power of court in hearing application

(1)The Court may grant or dismiss any application under section 346, or adjourn the hearing thereof, conditionally or unconditionally, or make any interim order or any other order it may deem just, but the Court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets or that the company has no assets

(2)Where the application is presented by members of the company and it appears to the Court that the applicants are entitled to relief, the Court shall make a winding-up order, unless it is satisfied that some other remedy is available to the applicants and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy

(3)Where the application is presented on the ground that the company commenced business before the Registrar had certified that it was entitled to commence business, the Court may, instead of granting a winding-np order, give directions that the company shall obtain such certificate from the Registrar or make such other order as it thinks fit and the Court may order the costs or any part thereof to be paid by any person who in the opinion of the Court is responsible for the default

(4)Where the application is presented to the Court by—

(a)any applicant under section 346 (1) (e), the Court may in the winding-up order or by any subsequent order confirm all or any of the proceedings in the voluntary winding-up, or

(b)any member under that section, the Court shall satisfy itself that the rights of the member will be prejudiced by the continuation of a voluntary winding-up

(5)The Court shall not grant a final winding-up order in the case of a company or other body corporate which is already being wound up by order of Court within the Republic

348. Commencement of winding-up by Court

A winding-up of a company by the Court shall be deemed to commence at the time of the presentation to the Court of the application for the winding-up

Voluntary winding-up

349. Circumstances under which company may be wound up voluntarily

A company, not being an external company, may be wound up voluntarily—

(a)where its memorandum or articles provide—

(i)for the period of its duration, or

(ii)for its dissolution on the occurrence of any event, if that period has expired or that event has occurred and the company has by resolution passed at a general meeting resolved that it be wound up voluntarily, or

(b)if the company has by special resolution resolved that it be wound up voluntarily

350. Members voluntary winding-up and security

(1)A voluntary winding-up of a company may be a members’ voluntary winding-up if—

(a)a copy of the resolution passed under section 349 together with a copy of a further resolution passed at the same meeting nominating a person or persons for appointment as liquidator or liquidators lodged with the Master within twenty-one days after the passing of such resolutions, and

(b)security, to the satisfaction of the Master, for the payment of the debts of the company within a period not exceeding twelve months from the commencement of the winding-up, is furnished within the said period of twenty-one days, or

(c)the Master has dispensed with such security on production to him within the said period of twenty-one days of a sworn statement by the directors of the company, supported by a certificate by the auditor thereof, that to the best of his knowledge and belief and according to the records of the company, it has no debts

(2)The costs mimed in furnishing the security referred to in paragraph (h) of subsection (1) may be recovered from the company concerned

(3)Unless otherwise provided, in a members’ voluntary winding-up the liquidator may without the sanction of the Court exercise all powers by this Act given to the liquidator in a winding-up by the Court, subject to such directions as may be given by the company in general meeting

351. Creditors voluntary winding-up

(1)A voluntary winding-up of a company shall be a creditors’ voluntary winding-up in every case where a resolution provided for in section 349 has been passed after the consideration by the meeting concerned of the statement of affairs referred to in section 363 (1) and a copy of the said resolution is lodged with the Master within fourteen days after the passing thereof and in respect of which the provisions of section 350 relating to security do not apply

(2)Unless otherwise provided, in a creditors’ voluntary winding-up the liquidator may without the sanction of the Court exercise all powers by this Act given to the liquidator in a winding-up by the Court subject to such directions as may be given by the creditors

352. Commencement of voluntary winding-up

A voluntary winding-up shall be deemed to commence at the time of the passing of the resolution authorizing the winding-up

353. Effect of voluntary winding-up on status of company and on directors

(1)A company which is being wound up voluntarily shall, notwithstanding anything contained in its articles, remain a corporate body and retain all its powers as such, but shall from the commencement of the winding-up cease to carry on its business except in so far as may be required for the beneficial winding-up thereof

(2)As from the commencement of a voluntary winding-up all the powers of the directors of the company concerned shall cease except in so far as their continuance is sanctioned—

(a)by the liquidator or the creditors in a creditors’ voluntary winding-up, or

(b)by the liquidator or the company in general meeting in a members’ voluntary winding-up

General provisions affecting all windings-up

354. Court may stay or set aside winding-up

(1)The Court may at any time after the commencement of a winding-up, on the application of any liquidator, creditor or member, and on proof to the satisfaction of the Court that all proceedings in relation to the winding-up ought to be stayed or set aside, make an order staying or setting aside the proceedings or for the continuance of any voluntary winding-up on such terms and conditions as the Court may deem fit

(2)The Court may, as to all matters relating to a winding-up, have regard to the wishes of the creditors or members as proved to it by any sufficient evidence

355. Notice to creditors or members in review by court in winding-up and no re-opening of confirmed account

(1)In any review by the Court of any matter under the winding-up of a company where the general body of creditors, members or contributors is affected, notice io the liquidator shall be notice to them

(2)The Court shall not authorize the re-opening of any duly confirmed account or plan of distribution or of contribution otherwise than as is provided in section 408

356. Notice of winding-up of company

(1)The Master shall upon receipt of a copy of any winding-up order of any company lodged with him give notice of such winding-up in the Gazette

(2)Any company which has passed a resolution under section 349 for its voluntary winding-up, shall—

(a)within four teen days from its passing lodge with the Registrar on the prescribed form a copy of such resolution, and

(b)forthwith give notice of the voluntary winding-up of the company in the Gazette

(3)Any company which fails to comply with any provision of subsection (2) and every director or officer thereof who knowingly authorized or permitted such failure, shall be guilty of an offence

357. Notice of winding up certain officials and their duties thereanent

(1)A copy of every winding-up order, whether provisional or final and of any order staying, amending or setting such order aside, made by the Court, shall forthwith be transmitted by the Registrar of the Court to—

(a)the sheriff of the province in which the registered office of the company or main office of the body corporate is situated and to the sheriff of every province in which it appears that the company or such body corporate owns property,

(b)every registrar or other officer charged with the maintenance of any register under any Act in respect of any property within the Republic which appears to be an asset of such company,

(c)the messenger of every magistrate’s court by the order whereof it appears that property of such company is under attachment

(2)Where the assets of any such company are under four hundred rand in value, the Court may direct that its movable assets may, upon such terms as to security as it may determine, remain in the custody of such person as may be specified in the directions, and in that event it shall not be necessary to transmit a copy of any order to any sheriff or messenger

(3)A copy of every resolution for the voluntary winding-up of any company passed under section 349 and of every order of court amending or setting aside the proceedings in relation to the winding-up shall, within seven days after the passing or the making thereof, be transmitted by that company to the officers and registrars referred to in paragraphs M), (b) and (e) of subsection (1)

(4)

(a)Any officer and registrar to whom a copy of any such order or resolution is transmitted in terms of subsection (1) or (3) shall record such copy and note thereon the day and hour of receipt thereof

(b)Any registrar and officer referred to in paragraph (b) of subsection (1) shall upon receipt of a copy of any order or resolution referred to in subsection (1) or (3), enter a caveat in his register accordingly

(5)Any company which fails to comply with any of the requirements of subsection (3) and every director or officer of such a company who knowingly is a party to such failure, shall be guilty of an offence

358. Stay of legal proceedings before winding up order granted

At any time after the presentation of an application for winding-up and before a winding-up order has been made, the company concerned, or any creditor or member thereof may—

(a)where any action or proceeding by or against the company is pending in any court in the Republic, apply to such court for a slay of the proceedings, and

(b)where any other action or proceeding is being or about to be instituted against the company, apply to the Court to which the application for winding-up has been presented, for an order restraining further proceedings in the action or proceeding,

and the court may stay or restrain the proceedings accordingly on such terms as it thinks fit

359. Legal proceedings suspended and attachment void

(1)When the Court has made an order for the winding-up of a company or a company has passed a resolution for the voluntary winding up thereof—

(a)all civil proceedings by or against the company concerned shall be suspended until the appointment of a liquidator, and

(b)any attachment or execution put in force against the estate or assets of the company after the commencement of the winding-up shall be void

(2)

(a)Every person who, having instituted legal proceedings against a company which were suspended by a winding-up, intends to continue the same, and every person who intends to institute legal proceedings for the purpose of enforcing any claim against the company which arose before the commencement of the winding-up, shall within four weeks after the appointment of the liquidator give the liquidator not less than three weeks' notice in writing before continuing or commencing the proceedings

(b)If notice is not so given the proceedings shall be considered to be abandoned unless the Court otherwise directs

360. Inspection of records of company being wound up

(1)Any member or creditor of any company unable to pay its debts and being wound up by the Court or by a creditors’ voluntary winding-up may apply to the Court for an order authorizing him to inspect any or all of the books and papers of that company, whether in possession of the company or the liquidator, and the Court may impose any condition it thinks fit in granting that authority

(2)The provisions of subsection (1) shall not be construed as affecting any powers or rights conferred by any law upon any department of State or any person acting under its authority at all times to inspect or cause to be inspected, the books and papers of any company being wound up

361. Custody of or control over, and vesting of property of company

(1)In any winding-up by the Court all the property of the company concerned shall be deemed to be in the custody and under the control of the Master until a provisional liquidator has been appointed and has assumed office

(2)In any winding-up of any company, at all times while the office of liquidator is vacant or he is unable to perform his duties, the property of the company shall be deemed to be in the custody and under the control of the Master

(3)If for any reason it appears expedient, the Court may by the winding-up order or by any subsequent order direct that all or any part of the property, immovable and movable (including rights of action), belonging to the company, or to trustees on its behalf, shall vest in the liquidator in his official capacity, and thereupon the property or the part thereof specified in the order shall vest accordingly, and the liquidator may, after giving such indemnity (if any) as the Court may direct, bring or defend in his official capacity any action or other legal proceeding relating to that property, or necessary to be brought or defended for the purpose of effectually winding-up the company and recovering its property

362. Court may order directors officers and other to deliver property to liquidator or to pay into bank

(1)The Court may at any time after making a winding-up order or after the passing of a resolution for the voluntary winding-up of a company order any director, member, trustee, banker, agent or officer of the company concerned to pay, deliver, convey, surrender or transfer to the liquidator of the company forthwith, or within such time as the Court directs, any money, property or books and papers in his hands to which the company is prima facie entitled

(2)The Court may order any director, member, purchaser or other person from whom money is due to any company which is being wound up, to pay the same into a banking institution registered under the Banks Act, 1965 (Act No 23 of 1965), to be named by the Court for the account of the liquidator instead of to the liquidator, and such order may be enforced in the same manner as if it had ordered payment to the liquidator

(3)All money paid into a banking institution as aforesaid in the event of a winding-up by the Court shall be subject in all respects to the orders of the Court

363. Directors and other to submit statement of affairs

(1)Where it is intended to pass a resolution for a creditors’ voluntary winding-up of a company the directors of that company shall make out or cause to be made out, in the prescribed form, a statement as to the affairs of the company, lay it before the meeting convened for the purpose of passing such resolution and lodge two certified copies thereof with the Master within fourteen days after the passing of the said resolution

(2)Where an order for the winding-up of a company has been made by the Court—

(a)the persons who at the time of the winding-up order were directors and officers of the company, and

(b)such persons who have been directors or officers of the company or who participated in its formation, at any time within one year before the winding-up order, as may be required to do so by the Master,

shall make out or cause to be made out, in the prescribed form, such statement as to the affairs of the company and lodge two certified copies thereof with the Master within fourteen days from the date of the winding-up order in question or within such extended time as the Master or the Court may for special reasons appoint

(3)The Master may exempt any person referred to in subsection (2) from the obligation to comply with the requirements of that subsection if such person satisfies in by affidavit that he is unable to make out or cause to be made out or to verify such statement as to the affairs of the company concerned

(4)The statement as to the affairs of a company referred to in subsection (1) or (2)

(a)shall contain such matter and be in such form as prescribed including porticus’s of the company’s assets, debts, liabilities (including contingent and prospective liabilities) any pending legal proceedings by or against it the names, addresses and nature of the businesses of its creditors, the security held by each of them, the dates when each of the securities was given and, in the case of such a statement under subsection (2), such further information as the Master may require, and

(b)shall be verified by affidavit by each of the persons referred to in subsection (1) or (2) and such verifying affidavit shall be annexed to the said statement

(5)The Master shall transmit a copy of any statement as to the affairs of a company lodged with him in terms of this section to the liquidator on his appointment

(6)Any person shall be entitled by himself or his agent, on payment of the prescribed fee, to inspect or apply for a copy of or an extract from any statement as to the affairs of a company lodged with the Master in pursuance of tins section

(7)Any person who is required to make or cause to be made any statement as to the affairs of a company in terms of this section, shall be paid by the Master, out of the assets of the company, such costs and expenses in cut red by him in respect of the preparation and making of such statement as the Master may consider reasonable

(8)Any person who fails to comply with any requirement of subsection (1), (2) or (4), shall be guilty of an offence.

363A. Change of address by directors and secretaries and certain former directors and secretaries

(1)Any person who is a director or secretary of a company which is being wound up and who after the winding-up of such company has commenced but before the liquidator’s final account has in terms of section 408 been confirmed, changes his residential or postal address, shall notify the liquidator by registered post of his new residential or postal address within fourteen days after such change, or, if the liquidator has not been appointed on the date of such change, within fourteen days after the appointment of the liquidator.

(2)Any person who fails to comply with any requirement of subsection (1) shall be guilty of an offence.

(3)Whenever at the trial of any person charged with an offence referred to in subsection (2) it is proved that such person is a director or secretary of a company which is being wound up and that he has changed his residential or postal address after the winding-up of that company has commenced and that the liquidator has no written record of such change, it shall be presumed, unless the contrary is proved, that he did not notify the liquidator of such change.

[section 363A inserted by section 8 of Act 84 of 1980]

364. Master to summon first meetings of creditors and members and purpose therefore

(1)As soon as may be after a final winding-up order has been made by the Court c a resolution for a creditors’ voluntary winding-up of a company has been lodged with him, the Master shall summon—

(a)a meeting of the creditors of the company for the purpose of—

(i)considering the statement as to the affairs of the company lodged with the Master under section 363,

(ii)the proof of claims against the company, and

(iii)nominating a person or persons for appointments as liquidator or liquidator, and

(b)a meeting of the members of the company or, in the case where the winding-up concerns a company limited by guarantee, a meeting of the contributors in respect of that company, for the purpose of—

(i)considering the said statement as to the affairs of the company, and

(ii)nominating a person or persons for appointment as liquidator or liquidators,

unless the company in general meeting, when passing a resolution provided for in section 349, has already disposed of the matters referred to in subparagraphs (i) and (ii)

(2)Meetings of creditors under this section shall be summoned and held as nearly as may be in the manner provided by the law relating to insolvency, and meetings of members or contributories in the manner prescribed by regulation Provided that, in the case of a meeting of creditors, the Master may direct the company concerned or the provisional liquidator to send a notice of such meeting by post to every creditor of the company

365. Offences in securing nomination as liquidator and restriction on voting at meetings

(1)Any person who gives or agrees or offers to give to any member, creditor or contributory of a company any reward with a view to securing his own nomination or appointment or to securing or preventing the nomination or appointment of any person as the company’s liquidator, shall be guilty of an offence

(2)

(a)The provisions of the law relating to insolvency in respect of voting, the manner of voting and voting by an agent at meetings of creditors, shall apply mutatis mutandis to any meeting referred to in sections 351 and 364: Provided that in any winding-up by the court a director or former director of a company shall have no voting right in respect of the nomination of a liquidator on the ground of his loan account with the company or claims for arrear salary, travelling expenses or allowances due by the company or claims paid by such director or former director on behalf of the company.

(b)The provisions of paragraph (a) shall mutatis mutandis apply to a person to whom a right contemplated in the said paragraph has been ceded.

[subsection (2) substituted by section 27 of Act 111 of 1976]

366. Claims and proof of claims

(1)In the winding-up of a company by the Court and by a creditors’ voluntary winding-up—

(a)the claims against the company shall be proved at a meeting of creditors mutatis mutandis in accordance with the provisions relating to the proof of claims against an insolvent estate under the law relating to insolvency,

(b)a secured creditor shall be under the same obligation to set value upon his security as if he were proving his claim against an insolvent estate under the law relating to insolvency, and the value of his vote shall be determined in the same manner as is prescribed under that law,

(c)a secured creditor and the liquidator shall, where the company is unable to pay its debts, have the same right respectively to take over the security as a secured creditor and a trustee would have under the law relating to insolvency

(2)The Master may, on the application of the liquidator, fix a time or time within which creditors of the company are to prove their claims or otherwise be excluded from the benefit of any distribution under any account lodged with the Master before those debts are proved

Liquidators

367. Appointment of liquidator

For the purpose of conducting the proceedings in a winding-up of a company the Master shall appoint a liquidator or liquidator as hereinafter provided

368. Appointment of provisional liquidator

As soon as a winding-up order has been made in relation to a company, or a resolution for a creditors’ winding-up of a company has been lodged with the Master, he may appoint any suitable person as provisional liquidator of the company concerned who shall give security to the satisfaction of the Master for the proper performance of his duties as provisional liquidator and shall hold office until the appointment of a liquidator

369. Determination of person to be appointed liquidator

(1)In the case of a members’ voluntary winding-up of a company, the Master shall, subject to the provisions of section 370, appoint the person or persons nominated by the company in the resolution referred to in section 350 as liquidator or liquidators of the company concerned

(2)

(a)In the case of a creditors’ voluntary winding-up and a winding-up by the Court of a company, the Master shall, subject to the provisions of section 370, appoint the person or persons nominated by any meetings referred to in sections 350 and 364 as liquidator or liquidators of the company concerned, if the same person or persons have been nominated by the said meetings

(b)If the said meetings have nominated different persons, the Master shall, subject to the provisions of section 370, decide the difference and appoint all or any of the persons so nominated, as he thinks fit, as liquidator or liquidator of the company concerned

370. Master may decline to appoint nominated person as liquidator

(1)If a person who has been nominated ns liquidator by meetings of creditors and members or contributories of a company was not properly nominated or is disqualified from being nominated or appointed as liquidator under section 372 or 373 or has failed to give within a period of seven days as from the date upon which he was notified that the Master had accepted his nomination or within such further period as the Master may allow, the security mentioned in section 375 (1) or, if in the opinion of the Master the person nominated as liquidator should not be appointed as liquidator of the company concerned, the Master shall give notice in writing to the person so nominated that he declines to accept his nomination or to appoint him as liquidator and shall in that notice state his reason for declining to accept his nomination or to appoint him Provided that if die Master declines to accept the nomination for appointment as liquidator because he is of the opinion that the person nominated should not ne appointed as liquidator, it shall be sufficient if the Master states, in that notice, as such reason, that he is of the opinion that the person nominated should not be appointed as liquidator of the company concerned

(2)

(a)When the Master has so declined to accept the nomination of any person or to appoint him as liquidator or the Minister has under section 371 (3) set aside the appointment of a liquidator, the Master shall convene meetings of creditors and members or contribute les of the company concerned for the purpose of nominating another person for appointment as liquidator in the place of the person whose nomination as liquidator the Master has declined to accept or whom the Master has declined to appoint or whose appointment has been so set aside

(b)In the notice convening the said meetings the Master shall state that he has declined to accept the nomination for appointment as liquidator of the person previously nominated or to appoint the person so nominated and the reasons therefor, subject to the proviso to subsection (1), or that the appointment of the person previously appointed as liquidator has been set aside by the Minister, as the case may be, and that the meetings are convened for the purpose of nominating another person for appointment as liquidator

(c)The Master shall post a copy of such notice to every creditor whose claim against the company was previously proved and admitted

(d)The meetings referred to in paragraph (a) shall be deemed to be continuations of the first meetings of creditors, members or contributories or of the meetings referred to in sections 350 and 364

(3)If the Master again declines for any reason mentioned in subsection (1) to accept the nomination for appointment as liquidator by the meetings mentioned in subsection (2), or to appoint a person so nominated, he shall—

(a)act in accordance with the provisions of subsection (1), and

(b)if the person so nominated was nominated as sole liquidator or if all the persons so nominated have not been appointed by him, appoint as liquidator or liquidators of the company concerned any other person or persons not disqualified from being liquidator of that company

371. Remedy of aggrieved persons

(1)Any person aggrieved by the appointment of a liquidator or the refusal of the Master to accept the nomination of a liquidator or to appoint a person nominated as a liquidator, may within a period of seven days from the date of such appointment or refusal request the Master in writing to submit his reasons for such appointment or refusal to the Minister

(2)The Master shall within seven days of the receipt by him of the request referred to in subsection (1) submit to the Minister, in writing, his reasons for such appointment or refusal together with any relevant documents, information or objections received by him

(3)The Minister may, after consideration of the reasons referred to in subsection (2) and any representations made in writing by the person who made the request referred to in subsection (1) and of all relevant documents, information or objections submitted to him or the Master by any interested person, confirm, uphold or set aside the appointment or the refusal by the Master and, in the event of the refusal by the Master being set aside, direct the Master to accept the nomination of the liquidator concerned and to appoint him as liquidator of the company concerned

(4)The decision of the Minister under subsection (3) shall be final

372. Persons disqualified from appointment as liquidator

No person shall be qualified for nomination or appointment as the liquidator of a company, if he is—

(a)an insolvent,

(b)a minor or any other person under legal disability,

(c)a person declared under section 373 to be incapable of being appointed as a liquidator, while he remains so incapable,

(d)a person removed from an office of trust by the Court on account of misconduct or a person who is the subject of any order under this Act disqualifying him from being a director,

(e)a corporate body,

(f)any person who has at any time been convicted (whether in the Republic or elsewhere) of theft, fraud, forgery or uttering a forged document or perjury and has been sentenced therefor to imprisonment without the option of a fine or to a fine exceeding twenty rand, (g) any person who has by means of any misrepresentation or any reward, whether directly or indirectly induced or attempted to induce any person to vote for him in the nomination of a liquidator or to effect or assist in effecting his nomination or appointment as liquidator of any company,

(g)any person who has by means of any musrepresentation o1 any reward, whether directly or indirectly mduced or attempted to induce any person to vote for him in the nomination of a liquidator or to effect or assist in effecting his nomination or appomtment as liquidator of any company,

(h)a person who dees not reside in the Republic,

(i)any person who at any time during a period of twelve months immediately preceding the winding-up of a company acted as a director, officer or auditor of that company, and

(j)any agent authorized specially or under a general power of attorney to vote for or on behalf of a creditor at a meeting of creditors of the company concerned and acting or purporting to act under such special authority or general power of attorney

Provided that the provisions of paragraph (i) shall not apply to an auditor in the case of the voluntary winding-up of the company concerned by the members as contemplated in section 350.[section 372 amended by section 28 of Act 64 of 1977]

373. Persons disqualified by court from being appointed or acting as liquidators

The Court may, on the application of any interested person, declare any person proposed to be appointed or appointed as liquidator, to be disqualified from holding office, and, if he has been appointed, may remove him from office, and may, if it thinks fit, declare him incapable for life or for such period as it may determine of being appointed as a liquidator under this Act—

(a)if he has accepted or offered or agreed to accept or solicited from any auctioneer, agent or other person employed on behalf of a company in liquidation, any share of the commission or remuneration of such auctioneer, agent or person or any other benefit, or

(b)if he has, in order to obtain or in return for the vote of any creditor, member or contributory, or in order to exercise any influence upon his nomination or appointment as liquidator—

(i)procured or been privy to the wrongful insertion or omission of the name of any person in or from any list or schedule required by this Act, or

(ii)directly or indirectly given or agreed to give any consideration to any person, or

(iii)offered or agreed with any person to abstain from investigating any transactions of or relating to the company or of any of its directors or officers, or

(iv)been guilty of or privy to the splitting of claims for the purpose of increasing the number of votes

374. Master may appoint co-liquidator at any time

Whenever the Master considers it desirable he may appoint any person not disqualified from holding the office of liquidator and who has given security to his satisfaction, as a co-liquidator with the liquidator or liquidators of the company concerned

375. Appointment, commencement of office and validity of acts of liquidator

(1)When the person to be appointed to the office of liquidator of a company has been determined and when such person has given security to the satisfaction of the Master for the proper performance of his duties as liquidator, except where in the case of a members’ voluntary winding-up the company concerned has resolved that no security shall be required, the Master shall appoint him as liquidator of the company by issuing to him a certificate of appointment

(2)The said certificate of appointment shall be valid throughout the Republic

(3)A liquidator shall be entitled to act as such from the date of his certificate of appointment

(4)The acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification

(5)Upon receipt of such certificate of appointment the liquidator shall—

(a)within seven days after receipt thereof send a copy thereof to the Registrar under cover of the prescribed form, and

(b)give notice of his appointment in the Gazette

376. Title of liquidator

A liquidator shall be described as the liquidator of the particular company in respect of which he has been appointed, and not by his individual name

377. Filling of vacancies

(1)When a vacancy occurs in the office of liquidator, the Master shall—

(a)in the case of a winding-up by the Court or a creditors’ voluntary winding-up, convene meetings of creditors and members or contribution of the company concerned, and

(b)in the case of a members’ voluntary winding-up, convene or direct the company concerned to convene a meeting of members, or

(c)if there is a remaining liquidator or liquidator, direct him or them to convene the meetings referred to in paragraph (a) or (b),

for the purpose of nominating a person or persons for appointment as liquidator to fill the vacancy Provided that if the Master is of the opinion that the remaining liquidator or liquidators will be able to complete the winding-up, he may dispense with the appointment of a liquidator to fill the vacancy and may meet the remaining liquidator or liquidators to complete the winding-up

(2)All the provisions of this Act relating to the convening and conduct of the said meetings and the nomination and appointment of a liquidator shall apply to the filling of a vacancy in the office of liquidator

(3)Subject to the proviso to subsection (1), if for any reason a vacancy is not filled as provided in this section, the Master may appoint any person as provisional liquidator or as liquidator to fill such vacancy

378. Leave of absence or resignation of liquidator

(1)At the request of a liquidator the Master may permit him to absent himself from the Republic upon such conditions as the Master may think fit

(2)At the request of a liquidator the Master may relieve him of his office or direct him to resign, upon such conditions as the Master may think fit

(3)Every liquidator who is permitted to absent himself from the Republic or who is relieved of his office by the Master or so resigns therefrom, shall give notice thereof in the Gazette

379. Removal of liquidator by Master and by the court

(1)The Master may remove a liquidator from his office on the ground—

(a)that he was not qualified for nomination or appointment as liquidator or that his nomination or appointment was for any other reason illegal or that he has become disqualified from being nominated or appointed as a liquidator or has been authorized, specially or under a general power of attorney, to vote for or on behalf of a creditor, member or contributory at a meeting of creditors, members or contributories of the company of which he is the liquidator and has acted or purported to act under such special authority or general power of attorney, or

(b)that he has failed to perform satisfactorily any duty imposed upon him by this Act or to comply with a lawful demand of the Master or a commissioner appointed by the Court under this Act, or

(c)that his estate has become insolvent or that he has become mentally or physically incapable of performing satisfactorily his duties as liquidator, or

(d)that the majority (reckoned in number and in value) of creditors entitled to vote at a meeting of creditors or, in the case of a members’ voluntary winding-up, a majority of the members of the company, or, in the case of a winding-up of a company limited by guarantee, the majority of the contributories, has requested him in writing to do so, or

(e)that in his opinion the liquidator is no longer suitable to be the liquidator of the company concerned

(2)The Court may, on application by the Master or any interested person, remove a liquidator from office if the Master fails to do so in any of the circumstances mentioned in subsection (1) or for any other good cause

380. Notice of removal of liquidator

The Master shall give notice in the Gazette of the removal of any liquidator

381. Control of master over liquidator

(1)The Master shall take cognizance of the conduct of liquidators and shall, if he has reason to believe that a liquidator is not faithfully performing his duties and duly observing all the requirements imposed on him by any law or otherwise with respect to the performance of his duties, or if any complaint is made to him by any creditor, member or contributory in regard thereto, enquire into the matter and take such action thereanent as he may think expedient

(2)The Master may at any time require any liquidator to answer any enquiry in relation to any winding-up in which such liquidator is engaged, and may, if he thinks fit, examine such liquidator or any other person on oath concerning the winding-up

(3)The Master may at any time appoint a person to investigate the books and vouchers of a liquidator

(4)The Court may, upon the application of the Master, order that any costs reasonably incurred by him in performing his duties under this section be paid out of the assets of the company or by the liquidator de boms piopuis

(5)Any expenses incurred by the Master in carrying out any provision of this section shall, unless the Court otherwise orders, be regarded as part of the costs of the winding-up of that company

382. Plurality of liquidators, liability and disagreement

(1)When two or more liquidators have been appointed they shall act jointly in performing their functions as liquidators and shall be jointly and severally liable for every act performed by them jointly

(2)Whenever two or more liquidators disagree on any matter relating to the company of which they are liquidators, one or more of them may refer the matter to the Master who may thereupon determine the question in issue or give directions as to the procedure to be followed for the determination thereof

383. Cost and reduction of security by liquidator

(1)The cost of giving security by a person appointed as liquidator to an amount which the Master considers reasonable shall, subject to the provisions of section 89 (1) of the Insolvency Act, 1936 (Act No 24 of 1936), be paid out of the assets of the company concerned as part of the costs of liquidation thereof

(2)When a liquidator has in the course of the winding-up of a company accounted to the satisfaction of the Master for any property belonging to the company, he may in writing apply for the consent of the Master to a reduction of the security given by him and the Master, if he is satisfied that the reduced security will suffice to indemnify the company and the creditors and contributories thereof against any maladministration on the part of the liquidator in respect of the remaining property belonging to the company, may consent wholly or in part to such reduction

384. Remuneration of liquidator

(1)In any winding-up a liquidator shall be entitled to reasonable remuneration for his services to be taxed by the Master in accordance with the prescribed tariff of remuneration Provided that, in the case of a members’ voluntary winding-up, the liquidator’s remuneration may be determined by the company in general meeting

(2)The Master may reduce or increase such remuneration if in his option there is good cause for doing so, and may disallow such remuneration either wholly or in part on account of any failure or delay by the liquidator in the discharge of his duties

(3)No person who employs or is a fellow employee or in the ordinary employment of the liquidator, shall be entitled to receive any remuneration out of the assets of the company concerned for services rendered in the winding-up thereof and no liquidator shall be entitled either by himself or his partner to receive out of the assets of the company any remuneration for his services except the remuneration to which he is entitled under this Act

385. Certificate of completion of duties by liquidator and cancellation of security

(1)When a liquidator of a company has performed all the duties prescribed by this Act and complied with all the requirements of the Master, he may apply in writing to the Master for a certificate to that effect

(2)The Master shall, when he issues the said certificate, additionally state therein that he consents to the reduction of the security given by the liquidator to a stated amount or to its cancellation

Powers of liquidators

386. General powers

(1)The liquidator in any winding-up shall have power—

(a)to execute in the name and on behalf of the company all deeds, receipts and other documents, and for that purpose to use the company’s seal,

(b)to prove a claim in the estate of any debtor or contributory of the company and receive payment in full or a dividend in respect thereof,

(c)to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company Provided that no liquidator shall, except with the leave of the Court or the authority referred to in subsection (3) or (4), or for the purposes of carrying on the business of the company in terms of subsection (4) (f) have power to impose any additional liabilities upon the company,

(d)to summon any general meetings of the company or the creditors or contributories of the company for the purpose of obtaining its or their authority or sanction with respect to any matter or for such other purposes as he may consider necessary,

(e)subject to the provisions of subsections (3), (4) and (5), to take such measures for the protection and better administration of the affairs and property of the company as the trustee of an insolvent estate may take in the ordinary course of his duties and without the authority of a resolution of creditors

(2)Subject to the consent of the Master, a liquidator may, at any time before a general meeting contemplated in subsection (1)(d) is convened for the first time, terminate any lease in terms of which the company is the lessee of movable or immovable property.[subsection (2) substituted by section 9(a) of Act 84 of 1980]

(2A)At any time before a general meeting contemplated in subsection (1)(d) is convened for the first time the liquidator shall, if satisfied that any movable or immovable property of the company ought forthwith to be sold, recommend to the Master in writing accordingly, stating his reasons for such recommendation.[subsection (2A) inserted by section 9(b) of Act 84 of 1980]

(2B)The Master may thereupon authorize the sale of such property or any portion thereof on such conditions and in such manner as he may determine: Provided that if such property or a portion thereof is subject to a preferential right, the Master shall not authorize the sale of such property or portion unless the person entitled to such reverential right has given his consent thereto in writing.[subsection (2B) inserted by section 9(b) of Act 84 of 1980]

(3)The liquidator of a company—

(a)ma winding-up by the Court with the authority granted by meetings of creditors and members or contribution or on the directions of the Master given under section 387,

(b)in a creditors’ voluntary winding-up, with the authority granted by a meeting of creditors, and

(c)in a members’ voluntary winding-up, with the authority granted by a meeting of members,

shall have the powers mentioned in subsection (4)

(4)The powers referred to in subsection (3) are—

(a)to bring or defend in the name and on behalf of the company any action or other legal proceeding of a civil nature, and, subject to the provisions of any law relating to criminal procedure, any criminal proceedings Provided that immediately upon the appointment of a liquidator and in the absence of the authority referred to in subsection (3), the Master may authorize, upon such terms as he thinks fit, any urgent legal proceedings for the recovery of outstanding accounts,

(b)to agree to any reasonable offer of composition made to the company by any debtor and to accept payment of any part of a debt due to the company in settlement thereof or to grant an extension of time for the payment of any such debt,

(c)to compromise or admit any claim or demand against the company, including an unliquidated claim,

(d)except where the company being wound up is unable to pay its debts, to make any arrangement with creditors, including creditors in respect of unliquidated claims,

(e)to submit to the determination of arbitrators any dispute concerning the company or any claim or demand by or upon the company,

(f)to carry on or discontinue any part of the business of the company in so far as may be necessary for the beneficial winding-up thereof Provided that, if he considers it necessary, the liquidator may carry on or discontinue any part of the business of the company concerned before he has obtained the leave of the Court or the authority referred to in subsection (3), but shall not in that event be entitled, as between himself and the creditors or contributories of the company, to include the cost of any goods purchased by him in the costs of the winding-up of the company unless such goods were necessary for the immediate purpose of carrying on the business of the company and there are funds available for payment of the cost of such goods after providing for the costs of winding-up.

(g)to exercise mutatis mutandis the same powers as are by sections 35 and 37 of the Insolvency Act, 1936, (Act No 24 of 1936), conferred upon a trustee under that Act, on the like terms and conditions as are therein mentioned Provided that the powers conferred by section 35 aforesaid, shall not be exercised unless the company is unable to pay its debts,

(h)to sell any movable and immovable property of the company by public auction, public tender or private contract and to give delivery thereof,

(i)to perform any act or exercise any power for which he is not expressly required by this Act to obtain the leave of the Court

(5)In a winding-up by the Court, the Court may, if it deems fit, grant leave to a liquidator to raise money on the security of the assets of the company concerned or to do any other thing which the Court may consider necessary for winding up the affairs of the company and distributing its assets

(6)The Master may restrict the powers of a provisional liquidator

387. Exercise of liquidator’s powers in winding up by court

(1)Subject to the provisions of this Act, the liquidator of a company which is being wound up by the Court, shall, in the administration of the assets of the company, have regard to any directions that may be given by resolution of the creditors or members or contributors of the company at any general meeting

(2)In regard to any matter which has been submitted by the liquidator for the directions of creditors and members or contribution in general meeting, but as to which no directions have been given or as to which there is a difference between the directions of creditors and members or contributories, the liquidator may apply to the Master for directions and the Master may give or refuse to give directions as he may deem fit

(3)Where the Master has refused to give directions as aforesaid or in regard to any other particular matter arising under the winding-up, the liquidator may apply to the Court for directions

(4)Any person aggrieved by any act or decision of the liquidator may apply to the Court after notice to the liquidator and thereupon the Court may make such order as it thinks just

388. Court may determine questions in voluntary winding-up

(1)Where a company is being wound up voluntarily, the liquidator or any member or creditor or contributor of the company may apply to the Court to determine any question arising in the winding-up or to exercise any of the powers which the Court might exercise if the company were being wound up by the Court

(2)The Court may, if satisfied that the determination of any such question or the exercise of any such power will be just and beneficial, accede wholly or partly to the application on such terms and conditions as it may determine, or make such other order on the application as it thinks fit

389. Exercise of power to make arrangement and the binding of dissentient creditors

(1)Any arrangement entered into between a company able to pay its debts and about to be or in the course of being wound up and its creditors shall, subject to the provisions of subsection (2), be on the company if sanctioned by a special resolution of members and on the creditors of the company if acceded to by three-fourths in number and value of such creditors

(2)Any such creditor or member may, within three weeks from the completion of the arrangement, bring the same under review by the Court, and the Court may amend, vary, set aside or confirm the arrangement as it thinks just

390. Exercise of power of liquidator in voluntary winding up to accept shares for assets of company

(1)Where a company is proposed to be or is being wound up voluntarily and the whole or part of its business or property is proposed to be transferred or sold to another company, whether registered under this Act or not (in this section called the transferee company), the liquidator of the first-mentioned company (in this section called the transferor company) may, with the sanction of a special resolution of that company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive in compensation or part compensation for the transfer or sale, shares, policies or other like interests in the transferee company, for distribution among the members of the transferor company, or may enter into any other arrangement, whereby the members of the transferor company may, in lieu of receiving cash, shares, policies or other like interests, or in addition thereto, participate in the profits of or receive any other benefit from the transferee company Provided that, in the case of a creditors’ voluntary winding-up, the powers of the liquidator conferred by this section shall not be exercised save with the consent of three-fourths in number and value of the creditors present or represented at a meeting called by him for that purpose and of which not less than fourteen days’ notice has been given, or with the sanction of the Court

(2)Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company

(3)If any member of the transferor company who did not vote in favour of the special resolution, expresses his dissent therefrom in writing addressed and delivered to the liquidator or left at the registered office of the company within seven days after the passing of the resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by agreement or by arbitration in the manner provided by this section

(4)If the liquidator elects to purchase such member’s interest, the purchase money shall be paid before the company is dissolved and be raised by the liquidator in such manner as may be determined by special resolution of the company concerned

(5)A special resolution shall not be invalid for the purposes of this section by reason that it is passed before or concurrently with a resolution for winding up the company or for nominating liquidators, but if an order is made within a year of such resolution for winding up the company by the Court, the special resolution shall not be valid unless sanctioned by the Court

(6)For the purposes of an arbitration under this section, the provisions of the Arbitration Act, 1965 (Act No 42 of 1965), shall apply

Duties of Liquidators

391. General duties

A liquidator in any winding-up shall proceed forthwith to recover and reduce into possession all the assets and property of the company, movable and immovable, shall apply the same so fat as they extend in satisfaction of the costs of the winding-up and the claims of creditors, and shall distribute the balance among those who are entitled thereto

392. Liquidators duty to give information to Master

Every liquidator shall give the Master such information and such access to and facilities for inspecting the books and documents of the company and generally such aid as may be requisite for enabling that officer to perform his duties under this Act

393. Liquidator’s duty to keep records and inspection thereof

(1)Immediately after his appointment a liquidator shall open a book or other record wherein, he shall enter from time to time a statement of all money, goods, books, accounts and other documents received by him on behalf of the company

(2)The Master may at any time in writing require the liquidator to produce any such book or record for inspection

(3)Any creditor or contributor may, subject to the control of the Master, at all reasonable times personally or by his agent inspect any such book or record

394. Banking accounts and investments

(1)The liquidator of a company—

(a)shall open a current account in the name of the company in liquidation with a banking institution registered under the Banks Act, 1965 (Act No 23 of 1965), within the Republic, and shall from time to time deposit therein to the credit of the company all moneys received by him on its behalf,

(b)may, with the written consent of the Master, open a savings account in the name of such company with such a banking institution or a building society registered under the Building Societies Act, 1965 (Act No 24 of 1965), within the Republic, and may transfer thereto moneys deposited in the account referred to in paragraph (a) and not immediately required for the payment of any claim against such company,

(c)may, with the written consent of the Master, place moneys deposited in the account referred to in paragraph (a) and not immediately required for the payment of any claim against such company, on interest-bearing deposit with such banking institution or such building society within the Republic,

(d)shall not withdraw any money from any account referred to in paragraph (b) or (c) otherwise than by way of a transfer to the said current account

(2)Whenever required by the Master to do so, the liquidator shall in writing notify the Master of the banking institution or building society and the office, branch office or agency thereof with which he has opened an account referred to in subsection (1), and furnish the Master with a bank statement or other sufficient evidence of the state of the account

(3)A liquidator shall not transfer any such account from any such office, branch office or agency to any other such office, branch office or agency except after written notice to the Master

(4)All cheques or orders drawn upon any such account shall contain the name of the payee and the cause of payment and shall be drawn to order and be signed by the liquidator or his duly authorized agent

(5)The Master and any surety for the liquidator or any person authorized by such surety shall have the same right to information in regard to that account as the liquidator himself possesses, and may examine all vouchers in relation thereto, whether in the possession of the banking institution or building society or of the liquidator

(6)The Master may, after notice to the liquidator, in writing direct the manager of any office, branch office or agency with which an account referred to in subsection (1) has been opened, to pay over into the Guardians’ Fund all moneys standing to the credit of that account at the time of the receipt, by the said manager, of that direction, and all moneys which may thereafter be paid into that account, and the said manager shall carry out that direction

(7)

(a)Any liquidator who without lawful excuse, retains or knowingly permits his co-liquidator to retain any sum of money exceeding forty rand belonging to the company concerned longer than the earliest day after its receipt on which it was possible for him or his co-liquidator to pay the money into the bank, or uses or knowingly permits his co-liquidator to use any assets of the company except for its benefit, shall, in addition to any other penalty to which he may be liable, be liable to pay to the company an amount not exceeding double the sum so retained or double the value of the assets so used

(b)The amount which the liquidator is so liable to pay, may be recovered by action in any competent court at the instance of the co-liquidator, the Master or any creditor or contributory

395. Liquidator’s duties as to contributors

(1)In the case of a winding-up by the Court or of a creditors’ voluntary winding-up of a company, the liquidator shall, if necessary, settle a list of contributories

(2)A past member of a company limited by guarantee shall not be liable to contribute to its assets unless—

(a)at the commencement of the winding-up there is unsatisfied debt or liability of the company contracted before he ceased to be a member, and

(b)it appears to the liquidator that the present members are unable to satisfy the contributions required to be made by them in pursuance of this Act

396. Notices to contributions and objections

(1)As soon as the liquidator has settled the list of contributories, he shall send a notice to every person included in the list, stating that fact and the extent of the liability of that person

(2)Any person who objects to his inclusion in the fist, shall be entitled within fourteen days from the date of the notice to file an objection with the liquidator in the form of an affidavit giving full reasons why he should not be included in the list

(3)The liquidator may accept the objection and amend the of contributories or he may reject such objection and shall, if the objection is rejected, notify the person concerned accordingly by registered post

(4)A person whose objection has been rejected, shall be entitled, within fourteen days from the date of the notice provided for in subsection (3), to apply to the Master for a ruling as to whether his name should be included in the list, and the Master shall direct the liquidator to include his name in or to exclude it from the said list

397. Recovery of contributions and nature of liability

(1)

(a)A liquidator shall proceed to recover from the contributories a proportion of or the full amount of their liability as may be required from time to time, taking into consideration the probability that some of the contributories may partly or wholly fail to pay the amount demanded from them

(b)In the event of the death of any contributory or the insolvency of his estate, the liquidator may recover the contribution from the estate concerned

(2)

(a)The liability for the payment of any amount by a contributory to the company shall be a debt due by him to the company as from the date on which the amount was demanded from him by the liquidator

(b)A contributory shall not be entitled to set off against his liability any amount due to him by the company in respect of dividends, profits or director’s remuneration

398. Adjustment of rights of contributories

liquidator shall adjust the mights of the contributories among themselves, and distribute any surplus among the persons entitled thereto

399. Evidence as to contributions and contributories

(1)A letter of demand by the liquidator to a contributory for the payment of a contribution shall be prima facie evidence that the amount thereby appearing to be due, is due

(2)All books and papers of the company and of the liquidator shall, as between the contributories and the company, be prima facie evidence of the truth of all matters therein recorded

400. Liquidator’s duty to expose offences and to report thereon

(1)A liquidator shall examine the affairs and transactions of the company before its winding-up in order to ascertain—

(a)whether any of the directors and officers or past directors and officers of the company have contravened or appear to have contravened any provision of this Act or have committed or appear to have committed any other offence, and

(b)in respect of any of the persons referred to in para-graph (a), whether there are or appear to be any grounds for an order by the Court under section 219 disqualifying a director from office as such

(2)A liquidator shall, before lodging his final account with the Master, submit to him a report containing full particulars of any such contraventions or offences, suspected contraventions or offences and any such grounds which he has ascertained

(3)

(a)Any report submitted to the Master under subsection (2) shall be confidential and shall not be available for inspection by any person

(b)If any such report contains particulars of contraventions or offences committed or suspected to have been committed or of any of the said grounds, the Master shall forthwith transmit a copy thereof to the AttorneyGeneral concerned

(4)A liquidator shall conduct further investigation and shall render such assistance in connection with any prosecution or contemplated prosecution as the Master or the Attorney General may require

401. Attorney General may make application to court for disqualification of director

When an Attorney-General, upon receipt of the report referred to in section 400 (3) (2) and after such further enquiry as he may deem fit, is satisfied that there are grounds for an application to the Court for an order in terms of section 219, he may make such application to the Court

402. Liquidator’s duty to present report to creditors and contributories

Except in the case of a members’ voluntary winding-up, a liquidator shall, as soon as practicable and, except with the consent of the Master, not later than three months after the date of his appointment, submit to a general meeting of creditors and contributories of the company concerned a report as to the following matters

(a)The amount of capital issued by the company and the estimated amount of its assets and liabilities,

(b)if the company has failed, the causes of the failure,

(c)whether or not he has submitted or intends to submit to the Master a report under section 400 (2),

(d)whether or not any director or officer or former director or officer appears to be personally liable for damages or compensation to the company or for any debts or capabilities of the company as provided in this Act,

(e)any legal proceedings by or against the company which may have been pending at the date of the commencement of winding-up or which may have been or may be mstituted,

(f)whether or not further enquiry is in his opimon desirable in regard to any matter relating to the promotion, formation or failure of the company or the conduct of 1ts business,

(g)whether or not the company has kept the accounting records required by section 284, and, if not, in what respects the requirements of that section have not been complied with,

(h)the progress and prospects of the winding-up, and

(i)any other matter which he may think fit or in regard to which he may desire the directions of the creditors or the contributories

403. Liquidator’s duty to file liquidation and distribution account

(1)

(a)Every liquidator shall, unless he receives an extension of time as hereinafter provided, frame and lodge with the Master not later than six months after his appointment an account of his receipts and payments and a plan of distribution or, if there is a liability among creditors and contributories to contribute towards the costs of the winding-up, a plan of contribution apportioning their liability

(b)If the account lodged under paragraph (a) is not a final account, the liquidator shall from time to time and as the Master may direct, but at least once in every period of six months (unless he receives an extension of time), frame and lodge with the Master a further account and plan of distribution Provided that the Master may at any time and in any case where the liquidator has funds in hand, which ought in the opinion of the Master to be distributed or applied towards the payment of debts, direct the liquidator in writing to frame and lodge with him an account and plan of distribution in respect of such funds within a period specified

(2)Any account shall be lodged in duplicate in the prescribed form, shall be fully supported by vouchers, including the liquidator’s bank statements or certified extracts from his bank and building society accounts showing all deposits and withdrawals, and shall be verified by an affidavit in the prescribed form

404. Master may grant extension of time for lodging account

(1)If any liquidator is unable to lodge an account with the Master under section 403, he shall before the expiration of any relevant period prescribed under that section—

(a)make and lodge with the Master an affidavit stating the reasons why he is not able to lodge an account, the amount of funds in hand available for distribution, a summary of the position in respect of the winding-up, and whether he has applied for an extension of time, and shall send a copy thereof to each creditor of the company, and

(b)lodge with the Master written reasons for his inability to lodge the account in question together with a statement of the grounds, if any, upon which he claims an extension of time within which to lodge such account,

and the Master may thereupon grant such an extension of time as he may in the circumstances think necessary

(2)If any liquidator fails to lodge an account with the Master as required by section 403 and to comply with paragraphs () and (b) of subsection (1) of this section, the Master or any person having an interest in the company may serve a notice on the liquidator requiring him within two weeks after the date of the notice—

(a)to lodge the account in question with the Master, or

(b)to comply with the requirements of the said paragraphs (a) and (b) of the said subsection,

and the Master may, if the account has not been lodged but paragraphs (a) and (b) of the said subsection have been complied with, grant such an extension of time as he may in the circumstances think necessary

(3)Any liquidator who fails to satisfy the Master that he ought to receive an extension of time for the lodging of any account, may, after notice to the Master and to the person referred to in subsection (2), apply to the Court for an order granting such an extension of time within which to lodge that account

405. Failure of liquidator to lodge account or to perform duties

(1)If any liquidator fads to lodge an account with the Master as and when required by or under this Chapter or to lodge any vouchers in support of such account or to perform any other duty imposed upon him by this Chapter or to comply with any reasonable demand of the Master for information or proof required by him in connection with the liquidation of the company, the Master or any person having an interest in the company may, after giving the liquidator not less than two weeks’ notice, apply to the Court for an order directing the liquidator to lodge such account or vouchers in support thereof or to perform such duty or to comply with such demand

(2)The costs adjudged to the Master or to such person shall, unless ordered otherwise by the Court, be paid by the liquidator de bomsptopnis

406. Places for and periods of inspection of account

(1)Every liquidator’s account shall he open for inspection for such period, not being less than fourteen days, as the Master may determine—

(a)at the office of the Master, and

(b)if the office of the Master and the registered office of the company are not situated in the same district—

(i)at the office of the magistrate of the district in which such registered office is situated, or

(ii)if such registered office is situated in a portion of such district in respect of which an additional or assistant magistrate permanently performs the functions of the magistrate of the district at a place other than the seat of magistracy of that district, at the office of such additional or assistant magistrate, and

(c)if the company also carried on business at any other place, then also at the office of the magistrate (including any additional or assistant magistrate) of the district or the portion thereof in which any such other place is situate, as may be determined by the liquidator with the approval of the Master

(2)The liquidator shall lodge a copy of the account with every magistrate, additional magistrate or assistant magistrate in whose offices the account is to lie open for inspection

(3)The liquidator shall give due notice in the Gazette of the places at which any such account will he open for inspection and shall in that notice state the period during which the account will he open for inspection and shall transmit by post or deliver a similar notice to every creditor who has proved a claim against the company

(4)The magistrate shall cause to be affixed in some public place in or about his office a list of all such accounts as have been lodged in his office, showing the respective periods during which they will be open for inspection, and shall upon the expiry of any such period endorse on the account in question his certificate that the account has lam open at his office for inspection in terms of this section and transmit the account to the Master

407. Objections to account

(1)Any person having an interest in the company being wound up may, at any time before the confirmation of an account, lodge with the Master an objection to such account stating the reasons for the objection

(2)If the Master is of opinion that any such objection ought to be sustained, he shall direct the liquidator to amend the account or give such other directions as he may think fit

(3)If in respect of any account the Master is of the opinion that any improper charge has been made against the assets of a company or that the account is in any respect incorrect and should be amended, he may, whether or not any objection to the account has been lodged with him, direct the liquidator to amend the account, or he may give such other directions as he may think fit

(4)

(a)The liquidator or any person aggrieved by any direction of the Master under this section, or by the refusal of the Master to sustain an objection lodged thereunder, may within fourteen days after the date of the Master’s direction and after notice to the liquidator apply to the Court for an order setting aside the Master’s decision, and the Court may on any such application confirm the account in question or make such order as it thinks fit

(b)If any such direction given by the Master under this section affects the interests of a person who has not lodged an objection with the Master, such account as amended shall again he open for inspection in the manner and with the notice as prescribed in section 406, unless the person affected consents in writing to the immediate confirmation of the account

408. Confirmation of account

When an account has lain open for inspection as prescribed in section 406 and—

(a)no objection has been lodged, or

(b)an objection has been lodged and the account has been amended in accordance with the direction of the Master and has again lam open for inspection, if necessary, as in section 407 (4) (b) prescribed, and no application has been made to the Court within the prescribed time to set aside the Master’s decision, or (c) an objection has been lodged but has been withdrawn or has not been sustained and the objector has not applied to the Court within the prescribed time,

the Master shall confirm the account and his confirmation shall have the effect of a final judgment, save as against such persons as may be permitted by the Court to re-open the account after such confirmation but before the liquidator commences with the distribution

409. Distribution of estate

(1)Immediately after the confirmation of any account the liquidator shall proceed to distribute the assets in accordance therewith or to collect from the creditors and contributories liable to contribute thereunder the amounts for which they may respectively be liable

(2)The liquidator shall give notice of the confirmation of the account in the Gazette and shall in such notice state, according to the circumstances, that a dividend is being paid or that a contribution is to be collected and that every creditor and contributory liable to contribute is required to pay to the liquidator the amount for which he is liable and the address at which the contribution is to be paid

410. Liquidators duty as to receipts and unpaid dividends

(1)The liquidator shall without delay lodge with the Master the receipts for any dividends paid or other proof of payment thereof

(2)If any dividend remains unpaid for a period of two months or such longer period as the Master may approve) after the confirmation of the relevant account, the liquidator shall immediately pay the amount to the Master for deposit in the Guardians’ Fund for the account of the creditor or member concerned

(3)

(a)Any failure by a liquidator to furnish the Master within the said period of two months with a proper receipt or other proof of payment in respect of any dividend which has not been deposited as aforesaid, shall be prima facie evidence that such dividend has been retained by him and has not been dealt with as prescribed in this section, and the Master may thereafter institute proceedings against the liquidator under section 405

(b)The Court may at the hearing of such proceedings order the liquidator to pay any such dividend which has not been paid or deposited and in addition to pay to the Master for the benefit of the Consolidated Revenue Fund an amount equal to the amount of such dividend

(4)Any creditor or member of a company entitled to any dividend may, if payment thereof is delayed, after notice to the liquidator, apply to the Court for an order compelling the liquidator to pay that dividend to such creditor or member

411. Payment of money deposited with Master

Any person claiming to be entitled to any money deposited with the Master by a liquidator under the provisions of this Act may apply to the Master for payment thereof, and the Master may, on a certificate by the liquidator or on other sufficient evidence that the person claiming such payment is entitled thereto, pay the amount in question to the person concerned

Provisions to meetings in winding-up

412. Meetings of creditors and members and voting at meetings of creditors

(1)In any winding-up of a company, meetings of creditors and members or contributories shall, save as otherwise provided in this Act, be convened and held in the following manner

(a)In the case of meetings of creditors, as nearly as may be in the manner prescribed for the holding of meetings of creditors under the law relating to insolvency, and

(b)in the case of meetings of members or contributories, in the manner prescribed by regulation

(2)The provisions of section 52 of the Insolvency Act, 1936 (Act No 24 of 1936), shall mutatis mutandis apply to the right of any creditor to vote at a meeting of creditors in a winding-up of a company

413. Meetings to ascertain wishes of creditors and others

Whereby this Act the Court is authorized, in relation to a winding-up to have regard to the wishes of creditors, members or contributories—

(a)the value of the respective creditors' claims and the voting rights of the various members or contributories of the company in terms of its memorandum or articles shall also be taken into consideration, and

(b)the Court may, if it thinks fit, for the purpose of ascertaining the wishes of such creditors, members or contributories direct meetings of the creditors, members or contributories to be called, held and conducted in such manner as it directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the Court

414. Duty of directors and officers to attend meetings

(1)In any winding-up of a company unable to pay its debts, every director and officer of the company shall—

(a)attend the first and second meetings of creditors of the company, including any such meeting which is adjourned, unless the Master or the officer presiding or presides at any such meeting has, after consultation with the liquidator, authorized him in writing to absent himself from that meeting,

(b)attend any subsequent meeting or adjourned meetings of creditors of the company which the liquidator has in writing requested him to attend

(2)The Master or officer who is to preside or presides at any meeting of creditors, may subpoena any person—

(a)who is known or on reasonable grounds believed to be or to have been in possession of any property which belongs or belonged to the company or to be indebted to the company or who in the opinion of the Master or such other officer may be able to give material information concerning the company or its affairs, in respect of any time before or after the commencement of the winding-up, to appear at such meeting, including any such meeting which has been adjourned, for the purpose of being interrogated, or

(b)who is known or on reasonable grounds believed to have in his possession or custody or under his control any book or document containing any such information as is referred to in paragraph (it), to produce that book or document or an extract therefrom at any such meeting or adjourned meeting

(3)Any director or officer of a company who fads to comply with any provision of this section, shall be guilty of an offence

415. Examination of directors and others at meetings

(1)The Master or officer presiding at any meeting of creditors of a company which is being wound up and is unable to pay its debts, may call and administer an oath to or accept an affirmation from any director of the company or any other person present at the meeting who was of might have been subpoenaed in terms of section 414 (2) (a), and the Master or such officer and any liquidator of the company and any creditor thereof who has proved a claim against the company, or the agent of such liquidator or creditor, may interrogate the director or person so called and sworn concerning all matters relating to the company or its business or affairs in respect of any time, either before or after the commencement of the winding-up, and concerning any property belonging to the company Provided that the Master or such officer shall disallow any question which is irrelevant or would in his opinion prolong the interrogation unnecessarily

(2)In connection with the production of any book or document in compliance with a subpoena issued under section 414 (2) (b) or the interrogation of a person under subsection (1) of this section, the law relating to privilege as applicable to a witness subpoenaed to produce a book or document or give evidence in a magistrate’s court shall apply Provided that a banker at whose bank the company concerned keeps or at any time kept an account, shall be obliged, if subpoenaed to do so under section 414 (2) (b), to produce—

(a)any cheque in his possession which was drawn by the company within one year before the commencement of the winding-up, or

(b)if any cheque so drawn is not available, any record of the payment, the date of payment and the amount of the cheque which may be available to him, or a copy of such record, and shall, if called upon to do so, give any other information available to him in connection with any such cheque or the account of the company

(3)No person interrogated under subsection (1) shall be entitled at such interrogation to refuse to answer any question upon the ground that the answer would tend to incriminate him

(4)The Master or officer presiding at any meeting aforesaid shall record or cause to be recorded in the manner provided by the rules of court for the recording of evidence in a civil case before a magistrate’s court the statement of any person giving evidence under this section Provided that if a person who may be acquired to give evidence under this section, has made to the liquidator or his agent a statement which has been reduced to writing, or has delivered a statement in writing to the liquidator or his agent, that statement may be read by or read over to that person when he is called as a witness under this section and, if then adhered to by him, shall be deemed to be evidence given under this section

(5)Any evidence given under this section shall be admissible in any proceedings instituted against the person who gave that evidence or the body corporate of which he is or was an officer

(6)Any person called upon to give evidence under this section may be represented at his interrogation by an attorney with or without counsel

(7)Any person other than a director or officer of the company concerned subpoenaed to attend a meeting of creditors for the purpose of being interrogated under this section shall be entitled to such witness fees, to be paid out of the funds of the company, as he would be entitled to if he were a witness in civil proceedings in a magistrate’s court

(8)Any director or other officer of a company who is called upon to attend any meeting of creditors held after the second meeting or an adjourned second meeting, shall be entitled to an allowance out of the funds of the company to defray his necessary expenses in connection with such attendance

416. Application of provisions of Insolvency Act, 1936

(1)The provisions of sections 66, 67 and 68 of the Insolvency Act, 1936 (Act No 24 of 1936), shall, in so far as they can be applied and are not inconsistent with the provisions of this Act, mutabs mutandis apply in relation to—

(a)any person who is in terms of section 414 (1) of this Act required to attend any meeting of a company being wound up and which is unable to pay its debts, as if such person were an insolvent required to attend any meeting referred to in section 64 of the Insolvency Act, 1936, and

(b)any person subpoenaed in terms of section 414 (2) of this Act to attend any meeting of the creditors of such a company or to produce any book or document at any such meeting, and the provisions of section 65 of the Insolvency Act, 1936, shall, in so far as they can be applied and are not inconsistent with the provisions of this Act, mutatis mutandis apply in relation to the production of anv book or document or the interrogation of any person under section 415 of this Act, as if such person had been subpoenaed to produce any book or document or were being interrogated under the said section 65 of the Insolvency Act 1936

(2)In applying the said sections 66, 67 and 68 of the Insolvency Act, 1936, in terms of subsection (1) of this section, any reference in any of the said sections or in section 64 or 65 of that Act-

(a)to the estate of an insolvent, shall be construed as a reference to the estate of the company concerned,

(b)to the trustee of an insolvent estate, shall be construed as a reference to the liquidator of such company,

(c)to a meeting of the creditors of an insolvent, shall be construed as a reference to a meeting of the creditors of such company,

(d)to a creditor who has proved a claim against an insolvent estate, shall be construed as a reference to a person who has proved a claim against such company,

(e)to the business or affairs or property of an insolvent, shall be construed as a reference to the business or affairs or property of such company,

(f)to any person indebted to an insolvent estate, shall be construed as a reference to a person indebted to such company,

(g)to the sequestration of an insolvent estate, shall be construed as a reference to the commencement of the winding-up of such company

Examination of persons in winding-up

417. Summoning and examination of persons as to affairs of company

(1)In any winding-up of a company unable to pay its debts, the Court may at any time after it has made a winding-up order summon before it any director or officer of the company or person known or suspected to have in his possession any property of the company or believed to be indebted to the company, or any person whom the Court deems capable of giving information concerning the trade, dealings, affairs or property of the company

(2)

(a)The Court may examine any person summoned under subsection (1) on oath or affirmation concerning any matter refer red to in that subsection, either orally or on written interrogatories, and may reduce his answers to writing and require him to sign them

(b)Any such person may be required to answer any question put to him at the examination, notwithstanding that the answer might tend to incriminate him, and any answer given to any such question may thereafter be used in evidence against him

(3)The Court may require any such person to pi educe any books or papers in his custody or under his control relating to the company but without prejudice to any hen claimed with regard to any such books or papers, and the Court shall have power to determine all questions relating to any such hen

(4)If any person who has been duly summoned under subsection (I) and to whom a reasonable sum for his expenses has been tendered, fails to attend before the Court at the time appointed by the summons without lawful excuse made known to the Court at the time of its sitting and accepted by it, the Court may cause him to be apprehended and brought before it for examination

418. Examination by commissioners

(1)

(a)Every magistrate and every other person appointed for the purpose by the Court shall be a commissioner for the purpose of taking evidence or holding any enquiry under this Act in connection with the winding-up of any company

(b)The Court may refer the whole or any part of the examination of any witness or of any enquiry under this Act to any such commissioner, whether or not he is within the jurisdiction of the Court which issued the winding-up order

(c)The Master, the liquidator, any creditor, member or contributory of the company may be represented at such an enquiry by an attorney, with or without counsel, who shall be entitled to interrogate any witness Provided that a commissioner shall disallow any question which is irrelevant or would in his opinion prolong the interrogation unnecessarily

(2)A commissioner, shall in any matter referred to him have the same powers of summoning and examining witnesses, of requiring the production or delivery of documents and, if the commissioner is a magistrate, of punishing defaulting or recalcitrant witnesses and of allowing costs and expenses to witnesses, as the Court which appointed Lum

(3)A commissioner shall report on any examination or enquiry to the Court which appointed him, in such manner as the Court directs

(4)Any witness who has given evidence before a Court under section 417 or before a commissioner under this section, shall be entitled, at his cost, to a copy of the record of his evidence

Dissolution of companies and other bodies corporate

419. Dissolution of companies and other bodies corporate

(1)In any winding-up, when the affairs of a company have been completely wound up, the Master shall transmit to the Registrar a certificate to that effect and send a copy thereof to the liquidator

(2)The Registrar shall record the dissolution of the company and shall publish notice thereof in the Gazette

(3)The date of dissolution of the company shall be the date of recording referred to in subsection (2)

(4)In the case of any other body corporate the certificate of the Master under subsection (1) shall constitute its dissolution

420. Court may declare dissolution void

When a company has been dissolved, the Court may at any time on an application by the liquidator of the company, or by any other person who appears to the Court to have an interest, make an order, upon such terms as the Court thinks fit, declaring the dissolution to have been void, and thereupon any proceedings may be taken against the company as might have been taken if the company had not been dissolved.[section 420 substituted by section 10 of Act 84 of 1980]

421. Registrar keep a register of directors of dissolved companies

(1)The Registrar shall establish and maintain a register of directors of companies which have been dissolved and were unable to pay their debts, and cause to be entered therein, in respect of each such director—

(a)his full forenames and surname, and any former forenames and surname, his nationality, if not South African, his occupation, his date of birth and his last known residential and postal addresses,

(b)the name of the company of which he was a director when such company was dissolved for the reason that it was unable to pay its debts and, where more than one company was dissolved at the same time, the names of those companies,

(c)the date of his appointment as director,

(d)the date of dissolution of the company or companies

(2)The liquidator shall, within fourteen days after the date of the certificate referred to in section 419 (1), send to the Registrar on a prescribed form, in duplicate, in respect of each director of the company who was a director thereof at a date within two years before the commencement of the winding-up, the particulars referred to in subsection (1) (a) to (d) of this section, together with a statement as to which director, in his opinion, was the effective cause of the company being unable to pay its debts

(3)The Registrar shall, under cover of a prescribed form, send to each director one copy of the particulars furnished under subsection (2) in respect of that director, and where the liquidator has in a statement furnished under the said subsection expressed any opinion as to which director was the effective cause of the company being unable to pay its debts, the Registrar shall at the same time send a copy of such statement to the director named therein

(4)A director may, within one month of the date of the form referred to in subsection (3), object by affidavit or otherwise, to his name being entered in the register referred to in subsection (1)

(5)If after considering the objections made by or on behalf of a director or if a director fails to object and the Registrar is of opinion that the name of the director should be entered in the register, he shall inform such director accordingly

(6)The Registrar shall, on the expiration of one month after the date of his decision under subsection (5) or, if an application under subsection (7) is then pending, after the application has been disposed of and the Court has not ordered otherwise, enter the name of the director in the register

(7)Any person aggrieved by the decision of the Registrar to make an entry or not to make an entry in the register, shall be entitled, within one month of the date of such decision, to apply to the Court for relief, and the Court shall have power to consider the merits of the matter, to receive further evidence and to make any order it deems fit

(8)Any liquidator who fails to comply with the provisions of subsection (2), shall be guilty of an offence

(9)The provisions of section 9 as to the inspection of documents kept by the Registrar and extracts therefrom certified by the Registrar shall mutatis mutandis apply to the register to be maintained by him under this section

422. Disposal of records of dissolved company

(1)When any company has been wound up and is about to be dissolved, the books and papers of the company and of the liquidator may be disposed of—

(a)in the case of a winding-up by the Court, in such way as the Master may direct,

(b)in the case of a members’ voluntary winding-up, in such way as the company by special resolution may direct,

(c)in the case of a creditors’ voluntary winding-up, in such way as the creditors may direct

(2)After five years from the dissolution of the company, no responsibility shall rest on the liquidator, or any person to whom the custody of the books and papers has been committed, by reason of the same not being forthcoming to a person claiming to be interested the^rein

Personal liability of delinquent directors and others and offences

423. Delinquent directors and others to restore property and to compensate the company

(1)Where in the course of the winding-up or judicial management of a company it appears that any person who has taken part in the formation or promotion of the company, or any past or present director or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company or has been guilty of any breach of faith or trust in relation to the company the Court may, on the application of the Master or of the liquidator or of any creditor or member or contributory of the company, enquire into the conduct of the promoter, director or officer concerned and may order him to repay or restore the money or property or any part thereof, with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retention, breach of faith or trust as the Court thinks just.[subsection (1) substituted by section 28 of Act 111 of 1976]

(2)This section shall apply notwithstanding that the offence is one for which the offender may be criminally responsible

424. Liability of directors and others for fraudulent conduct of business

(1)When it appears, whether it be in a winding-up, judicial management or otherwise, that any business of the company was or is being carried on recklessly or with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court may on the application of the Master, the liquidator, the judicial manager, any ci editor or member or contributory of the company, declare that any person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct

(2)

(a)Where the Court makes any such declaration, it may give such further directions as it thinks proper for the purpose of giving effect to the declaration, and in particular may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him or any company or person on his behalf or any person claiming as assignee from or through the person liable or any company or person acting on his behalf, and may from time to time make such further orders as may be necessary for the purpose of enforcing any charge imposed under this subsection

(b)For the purposes of this subsection, the expression “assignee” includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest was created, but does not include an assignee for valuable consideration given in good faith and without notice of any of the matters on the ground of which the declaration is made

(3)Without prejudice to any other criminal liability incurred, where any business of a company is carried on recklessly or with such intent or for such purpose as is mentioned in subsection (1), every person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be guilty of an offence

(4)The provisions of this section shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is made

425. Application of criminal provisions of the law relating to insolvency

If any person who is or was a director or officer of a company in respect of which a winding-up order has been granted, whether or not such order has been discharged or confirmed under the provisions of this Act, and which is or was unable to pay its debts, Jias committed any act or made any omission in relation to any assets, books, records, documents, business or the affairs of such company, which act or omission, if such act had been committed or such omission had been made by a person whose estate was sequestrated on the date upon which the winding-up of such company commenced, in relation to his assets, books, documents, business or affairs, or those of his estate, would have constituted an offence under the law relating to insolvency, such past or present director or officer shall be guilty of such offence and liable on conviction to the penalties provided therefor in the said Jaw relating to insolvency, and all the provisions of the said law relating to insolvency shall mutatis mutandis apply in respect of such act or omission, the method of establishing the same, and such past or present director or officer charged with the same

426. Private prosecution of directors and others

(1)If it appears in the course of the winding-up of a company that any past or present director, member or officer of the company has been guilty of an offence for which he is criminally liable under this Act or, in relation to the company or the creditors of the company, under the common law, the liquidator shall cause all the facts known to him which appear to constitute the offence, to be laid before the Attorney-General concerned and, if the said Attorney-General certifies that he declines to prosecute, the liquidator may, subject to the provisions of section 386 (3) and (4), institute and conduct a private prosecution in respect of such offence

(2)The Court may, upon application by the liquidator, order the whole or any portion of the costs and expenses incidental to such private prosecution to be paid out of the assets of the company in priority to all other liabilities

Chapter XV
Judicial management

427. Circumstances in which company may be placed under judicial management

(1)When any company by reason of mismanagement or for any other cause—

(a)is unable to pay its debts or is probably unable to meet its obligations, and

(b)has not become or is prevented from becoming a successful concern,

and there is a reasonable probability that, if it is placed under judicial management, it will be enabled to pay its debts or to meet its obligations and become a successful concern, the Court may, if it appears just and equitable, grant a judicial management order in respect of that company

(2)An application to Court for a judicial management order in respect of any company may be made by any of the persons who are entitled under section 346 to make an application to Court for the winding-up of a company, and the provisions of section 346 (4) (a) as to the application for winding-up shall mutatis mutandis apply to an application for a judicial management order

(3)When are application for the winding-up of a company is made to Court under tins Act and it appears to the Court that if the company is placed under judicial management the grounds for its winding-up may be removed and that it will become a successful concern and that the granting of a judicial management order would be just and equitable, the Court may grant such an cider in respect of that company

428. Provisional judicial management order

(1)The Court may on an application under section 427 (2) or (3) grant a provisional judicial management order, stating the return day, or dismiss the application or make any other order that it deems just

(2)A provisional judicial management order shall contain—

(a)directions that the company named therein shall be under the management, subject to the supervision of the Court, of a provisional judicial manager appointed as hereinafter provided, and that any other person vested with the management of the company’s affairs shall from the date of the making of the order be divested thereof, and

(b)[paragraph (b) deleted by section 11 of Act 84 of 1980]

(c)such other directions as to the management of the company, or any matter incidental thereto, including directions conferring upon the provisional judicial manager the power, subject to the rights of the creditors of the company, to raise money in any way without the authority of shareholders as the Court may consider necessary,

and may contain directions that while the company is under judicial management, all actions, proceedings, the execution of all writs, summonses and other processes against the company be stayed and be not proceeded with without the leave of the Court

(3)The Court which lies granted a provisional judicial management order, may at any time and in any manner, on the application of the applicant, a creditor or member, the provisional judicial manager or the Master, vary the terms of such order or discharge it

429. Custody of property and appointment of provisional judicial manager on the granting of judicial management order

Upon the granting of a provisional judicial management order—

(a)all the properly of the company concerned shall be deemed to be in the custody of the Master until a provisional judicial manager has been appointed and has assumed office,

(b)the Master shall without delay—

(i)appoint a provisional judicial manager (who shall not be the auditor of the company or any person disqualified under this Act from being appointed as liquidator in a winding-up) who shall give such security for the proper performance of his duties in his capacity as such, as the Master may direct, and who shall hold office until discharged by the Court as provided in section 432 (3) (a),

(ii)convene separate meetings of the creditors, the members and debenture-holders (if any) of the company for the purposes referred to in section 431

430. Duties of provisional judicial manager upon appointment

A provisional judicial manager shall—

(a)assume the management of the company and recover and reduce into possession all the assets of the company,

(b)within seven days after his appointment lodge with the Registrar, under cover of the prescribed form, to copy his letter of appointment as provisional judicial manager, and

(c)prepare and lay before the meetings convened under section 429 (b) (n) a report containing—

(i)an account of the general state of the affairs of the company,

(ii)a statement of the reasons why the company is unable to pay its debts or is probably unable to meet its obligations or has not become or is prevented from becoming a successful concern,

(iii)a statement of the assets and liabilities of the company,

(iv)a complete list of creditors of the company (including contingent and prospective creditors) and of the amount and the nature of the claim of each creditor,

(v)particulars as to the source or sources from which money has been or is to be raised for purposes of carrying on the business of the company, and

(vi)the considered opinion of the provisional judicial manager as to the prospects of the company becoming a successful concern and of the removal of the facts or circumstances which prevent the company from becoming a successful concern

431. Purpose of meetings convened under section 429 (b) (ii)

(1)Any meeting convened under section 429 (b) (ii) shall be presided over by the Master or a magistrate having jurisdiction in the area where the meeting is held and shall be convened and held in the manner prescribed by section 412 in respect of a meeting in the winding-up of a company

(2)The purpose of any such meeting shall be

(a)to consider the report of the provisional judicial manager under section 430 (c) and the desirability or otherwise of placing the company finally under judicial management, taking into account the prospects of the company becoming a successful concern,

(b)to nominate the person or persons (not being disqualified under section 429 (b) (i) whose names shall be submitted to the Master for appointment as final judicial manager or managers,

(c)in the case of any such meeting of creditors, the proving of claims against the company, and

(d)to consider the passing of a resolution referred to in section 435(1).[paragraph (d) added by section 12(c) of Act 84 of 1980]

(3)The chairman of any such meeting shall prepare and lay before the Court a report of the proceedings of such meeting, including a summary of the reasons for any conclusion arrived at under subsection (2) (a)

(4)The provisions of this Act relating to the proof of claims against a company which is being wound up and to the nomination and appointment of a liquidator of any such company shall mutatis mutandis apply with reference to the proof of claims against a company which has been placed under judicial management and the nomination and appointment of a judicial manager of such a company

432. Return day of provisional order of judicial management and powers of the court

(1)Any return day fixed under section 428 (1) shall not be later than sixty days after the date of the provisional judicial management order but may be extended by the Court on good cause shown

(2)On such return day the Court may after consideration of—

(a)the opinions and wishes of creditors and members of the company,

(b)the report of the provisional judicial manager under section 430,

(c)the number of creditors who did not prove claims at the first meeting of creditors and the amounts and nature of their claims,

(d)the report of the Master, and

(e)the report of the Registrar,

grant a final judicial management order if it appears to the Court that the company will, if placed under judicial management, be enabled to become a successful concern and that it is just and equitable that it be placed under judicial management, or may discharge the provisional order or make any other order it may deem just

(3)A final judicial management order shall contain—

(a)directions for the vesting of the management of the company, subject to the supervision of the Court, in the final judicial manager, the handing over of all matters and the accounting by the provisional judicial manager to the final judicial manager and die discharge of the provisional judicial manager, where necessary,

(b)[paragraph (b) deleted by section 13 of Act 84 of 1980]

(c)such other directions as to the management of the company, or any matter incidental thereto, including directions conferring upon the final judicial manager the power, subject to die rights of the creditors of the company, to raise money in any way without the authority of shareholders, as the Court may consider necessary

(4)The Court which lies granted a final judicial management order, may at any time and in any manner vary the terms of such order on the application of the Master, the final judicial manager or a representative acting on behalf of the general body of creditors of the company concerned by virtue of a resolution passed by a majority in value and number of such creditors at a meeting of those creditors

433. Duties of final judicial manager

A judicial manager shall, subject to the provisions of the memorandum and articles of the company concerned in so far as they are not inconsistent with any direction containing in the relevant judicial management order—

(a)take over from the provisional judicial manager and assume the management of the company,

(b)conduct such management, subject to the orders of the Court, in such manner as he may deem most economic and most promotion of the interests of the members and creditors of the company,

(c)comply with any direction of the Court made in the final judicial management order or any variation thereof,

(d)lodge with the Registrar—

(i)a copy of the judicial management order and of the Master’s letter of appointment under cover of the prescribed form,

(ii)in the event of the judicial management order being cancelled, a copy of the order cancelling it, within seven days of his appointment or of the cancellation of such judicial management order, as the case may be,

(e)comply with the requirements of section 173 with which the company would have been obliged to comply if it had not been placed under judicial management,

(f)keep such accounting records and prepare such annual financial statements, interim reports and provisional annual financial statements as the company or its directors would have been obliged to keep or prepare if it had not been placed under judicial management,

(g)convene the annual general meeting and other meetings of members of the company provided for by this Act and in that regard comply with all the requirements with which the directors of the company would in terms of this Act have been obliged to comply if the company bad not been placed under judicial management,

(h)convene meetings of the creditors of the company by notices issued separately on the dates on which the notices convening annual general meetings of the company are issued or on which any interim report is sent out to members and in the case of a private company not later than six months after the end of its financial year, and submit to such meetings reports showing the assets and liabilities of the company, its debts and obligations as verified by the auditor of the company, and all such information as may be necessary to enable the creditors to become fully acquainted with the company’s position as at the date of the end of the financial year or the end of the period covered by any such interim report or, in the case of a private company, as at a date six months after the end of its financial year,

(i)lodge with the Master copies of all the documents mitted to the meetings as provided in paragraphs (g) and (h),

(j)examine the affairs and transactions of the company before the commencement of the judicial management in order to ascertain whether any director, past director, officer or past officer of the company has contravened or appears to have contravened any provision of this Act or has committed any other offence, and within six months from the date of his appointment submit to the.Master such reports as are in terms of section 400 required to be submitted to the Master by a liquidator, and in relation to which the provisions of that section shall apply,

(k)examine the affairs and transactions of the company before the commencement of the judicial management in order to ascertain whether any director, past director, officer or past officer of the company is or appears to be personally liable for damages or compensation to the company or for any debts or liabilities of the company, and within six months from the date of his appointment prepare and submit to the Master and to the next succeeding meeting of members and of creditors of the company, a report containing full particulars of any such liability, and

(l)if at any time he is of opinion that the continuation of the judicial management will not enable the company to become a successful concern, apply to the Court, after not less than fourteen days' notice by registered post to all members and creditors of the company, for the cancellation of the relevant judicial management order and the issue of an order for the winding-up of the company

434. Application of assets during judicial management

(1)A judicial manager shall not without the leave of the Court sell or otherwise dispose of any of the company’s assets save in the ordinary course of the company’s business

(2)Any moneys of the company becoming available to the judicial manager shall be applied by him in paying the costs of the judicial management and in the conduct of the company’s business in accordance with the judicial management order and so far as the circumstances permit in the payment of the claims of creditors which arose before the date of the order

(3)The costs of judicial management and the claims of creditors of the company shall be paid mutatis mutandis in accordance with the law relating to insolvency as if those costs were costs of the sequestration of an estate and those claims were claims against an insolvent estate

434A. Remuneration of provisional judicial manager or judicial manager

(1)The provisional judicial manager or the judicial manager shall be entitled to such remuneration for his services as may be fixed by the Master from time to time.

(2)In fixing the remuneration the Master shall take, into account the manner in which the provisional judicial manager or the judicial manager has performed his functions and any recommendation by the members or creditors of the company relating to such remuneration.

(3)The provisions of sections 151 and 151bis of the Insolvency Act, 1936 (Act No. 24 of 1936), shall apply with reference to any fixing of remuneration by the Master under this section.

[section 434A inserted by section 14 of Act 84 of 1980]

435. Prejudicial management creditors may consent to preference

(1)

(a)The creditors of a company whose claims arose before the granting of a judicial management order in respect of such company may at a meeting convened by the judicial manager or provisional judicial manager for the purpose of this subsection, or by the Master, in terms of section 429(b)(ii), resolve that all liabilities incurred or to be incurred by the judicial manager or provisional judicial manager in the conduct of the company’s business shall be paid in preference to all other liabilities not already discharged exclusive of the costs of the judicial management and thereupon all claims based upon such first-mentioned liabilities shall have preference in the order in which they were incurred over all unsecured claims against the company except claims arising out of the costs of the judicial management.[paragraph (a) substituted by section 15(a) of Act 84 of 1980]

(b)If a judicial management order is superseded by a winding-up order—

(i)the preference conferred in terms of paragraph (a) shall remain in force except in so far as claims arising out of the costs of the winding-up are concerned, and

(ii)all claims based on such liabilities incurred by the judicial manager shall be taken to have been proved and the provisions of section 366 shall not apply in respect thereof

(2)

(a)A meeting convened by the provisional judicial manager or the judicial manager in terms of subsection (1) shall be convened by him by written notice sent by registered post at least ten days before the date of the meeting, as specified in the notice, to every creditor of the company whose name and address is known to him, and also by notice in one or more newspapers circulating in the district where the company's main place of business is situated.

(b)The last-mentioned notice shall comply with the provisions of section 40(3)(c) of the Insolvency Act, 1936 (Act No.24 of 1936), and shall appear at least ten days before the date of the meeting.

[subsection (2) substituted by section 29 of Act 111 of 1976 and by section 15(b) of Act 84 of 1980]

(3)The provisional judicial manager or the judicial manager, as the case may be, shall preside over a meeting referred to in subsection (2), and the laws relating to insolvency shall apply mutatis mutandis in respect of the conduct of any such meeting, the right to vote thereat, the manner of voting and the calculation of the value of votes, as if such meeting were a meeting of creditors in an insolvent estate: Provided that for the purposes of voting at any such meeting convened by a provisional judicial manager, the claims of creditors shall be determined to the satisfaction of the provisional judicial manager.[subsection (3) added by section 15(b) of Act 84 of 1980]

436. Voidable and undue preferences in judicial management

(1)Every disposition of its property which if made by an individual could for any reason be set aside in the event of his insolvency, may, if made by a company unable to pay its debts, be set aside by the Court at the suit of the judicial manager in the event of the company being placed under judicial management, and the provisions of the law relating to insolvency shall mutatis mutandis apply in respect of any such disposition

(2)For the purposes of this section the event which shall be deemed to correspond with a sequestration order under the Insolvency Act, 1936 (Act No 24 of 1936), in the case of an insolvent, shall be the presentation to the Court of the application in pursuance of which a judicial management order is granted

437. Period of judicial management to be discounted in determining preference under mortgage bond

The time during which any company being a mortgage debtor in respect of any mortgage bond, is subject to a judicial management order, shall be excluded in the calculation of any period of time for the purpose of determining whether such mortgage bond confers any preference in terms of section 88 of the Insolvency Act, 1936 (Act No 24 of 1936), as applied to the winding-up of companies by this Act

438. Position of auditor in judicial management

Notwithstanding the granting of a judicial management order in respect of any company and for so long as the order is in force, the provisions of tins Act relating to the appointment and reappointment of an auditor and the rights and duties of an auditor shall continue to apply as if any reference in the said provisions to the directors of the company were a reference to the judicial manager

439. Application to judicial management of certain provisions of winding-up

(1)In every case in which a company is placed under judicial management, the provisions of sections 12 (2), 360, 412, 423, 424 and 425 shall apply as if the company under judicial management were a company being wound up and the judicial manager were the liquidator

(2)The provisions of section 417 and, if the Court so orders, any provision of sections 414, 415, 416 and 418, shall apply in a judicial management as they apply in a winding-up of a company which is unable to pay its debts, any reference to the liquidator being taken to be a reference to the judicial manager

440. Cancellation of judicial management order

(1)If at any time on application by the judicial manager or any person having an interest in the company it appears to the Court which granted a judicial management order that the purpose of such order has been fulfilled or that for any reason it is undesirable that such order should remain in force, the Court may cancel such order and thereupon the judicial manager shall be divested of his functions

(2)In cancelling any such order the Court shall give such directions as may be necessary for the resumption of the management and control of the company by the officers thereof, including directions for the convening of a general meeting of members for the purpose of electing directors of the company

Chapter XVI
Penalties for Offences

441. Penalties for offences

(1)Any company, director, officer or person convicted of any offence referred to in any of the undermentioned sections shall be liable to be sentenced, in the case of an offence referred to—

(a)in section 132, to a fine not exceeding ten thousand rand or imprisonment for a period not exceeding ten years or to both such fine and such imprisonment,

(b)in section 37, 143, 145, 145A, 146, 146A, 147(2)(a), 148, 149, 153(4), 156, 162, 169, 218, 219, 230, 231, 232, 233, 255, 256(5), 260, 284, 320(2) or 424, to a fine not exceeding two thousand rand or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment;[paragraph (b) substituted by section 30 of Act 111 of 1976]

(c)in section 15A, 38, 141, 153 (3), 165, 222, 224, 226, 234, 237, 238, 249 (1), 250, 251 or 275, to a fine not exceeding one thousand rand or to imprisonment for a period not exceeding one year or to both such fine and such imprisonment;[paragraph (c) substituted by section 27(1)(a) of Act 59 of 1978]

(d)in section 90, 286, 288, 297, 298, 299, 302, 308, 312 (5), 363, 363A, 365, 414 or 421, to a fine not exceeding five hundred rand or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment;[paragraph (d) substituted by section 27(1)(b) of Act 59 of 1978 and by section 16(a) of Act 84 of 1980]

(e)in section 242 or 287, to a fine not exceeding one hundred rand or to imprisonment not exceeding a period of three months or to both such fine and such imprisonment,

(f)in section 168, 185,256 (6), 312 (4), 320 (I) or 333 (1), to a fine not exceeding one thousand rand,

(g)in section 81, 93, 164, 166, 170,207, 211 (7), 239, 291 or 295, to a fine not exceeding five hundred rand;[paragraph (g) substituted by section 29(a) of Act 64 of 1977 and by section 16(b) of Act 84 of 1980]

(h)in section 112, 113, 131 or 179, to a fine not exceeding two hundred rand,

(i)in section 49, 50, 67,68, 147 (2) (b), 181, J86, 189, 192, 206,313 or 333 (2), to a fine not exceeding one hundred rand,

(j)in section 204 or 245, to a fine not exceeding one hundred rand for each meeting in respect of which the contravention has taken place,

(k)in section 171, 200 (5) or 311, to a fine not exceeding fifty rand,

(l)in section 215, to a fine not exceeding five hundred rand and an additional fine not exceeding ten rand for every day during which the contravention continues,

(m)in section 172, to a fine not exceeding one hundred rand for every day during which the contravention continues,

(n)in section 46, 51, 58, 80, 96, 98, 102, 139, 173, 200 (6), 213, 253, 269, 271, 309, 356 or 357, to a fine not exceeding ten rand for each day during which the contravention continues;[paragraph (n) substituted by section 16(c) of Act 84 of 1980]

(o)in section 211(6), 216 or 252, to a fine not exceeding five rand for each day during which the contravention continues.[paragraph (o) substituted by section 29(c) of Act 64 of 1977 and by section 27(1)(c) of Act 59 of 1978]

(2)The Court convicting any company, director, officer or person for failure to perform any act required to be performed by it or him by or under this Act, may, in addition to any penalty which the Court imposes, order such company, director, officer or person to perform such act within such period as the Court may fix

Chapter XVII
Repeal of Laws and Commencement of Act

442. Repeal of laws

The laws specified in Schedule 5 are hereby repealed to the extent set out in the third column of that Schedule

443. Short title and date of commencement

This Act shall be called the Companies Act, 1973, and shall come into operation on the first day of January, 1974, except sections 15 and 18 which shall come into operation on promulgation of this Act, and except such other sections as may be determined by the Munster which shall come into operation on a date fixed by the State President by proclamation in the Gazette

Schedule 1

Table A – Articles for a public company having a share capital

Interpretation

1In these articles, unless the context otherwise indicates—

(a)the ‘Act’ means the Companies Act 1973 and

(b)foreign committee’ means a committee appointed under article 64 of these articles

Commencement of business

2The directors shall have regard to the restrictions on the commencement of business 1mposed by section 172 of the Act

Shares and certificates of shares

3Subject to the provisions if any of the memorandum and without prejudice to any special rights previously conferred on the holders of existing shares any share may be issued with such preferred, deferred or other special rights or subject to such restrictions (whether in regard to dividend, voting return of share capital or otherwise) as the company may from time to time determine and the company may determine that any preference shares shall be issued on the condition that they are, or are at the option of the company, liable to be redeemed

4Every person whose name is entered in the register of members shall be entitled to one certificate for all the shires registered in his name or to several certificates each for a part of such shares Every share certificate shall specify the number of shares in respect of which it is issued Every original member shall be entitled to one share certificate free of charge but for every subsequent certificate the directors may make such charge as from time to time they may think fit Provided that if a share certificate is defaced lost or destroyed, 1t may be renewed on payment of such fee, if any not exceeding twenty five cents and on such terms if any as to evidence and indemnity as the directors may think fit

5Share certificates shall be issued under the authority of the directors, or the foreign committee when authorized thereto by resolution of the directors in such manner and form as the directors shall from time to time prescribe If any shares are numbered all such shares shall be numbered in numerical progression beginning with the number one 1nd each share shall be distinguished by its appropriate number and if any shares ire not numbered, catch share certificate in respect of such shares shall be numbered in numerical progression and each share certificate distinguished by its appropriate number and by such endorsement as may be required under section 95 (2) of the Act

6Certificate for shares registered in the names of two or more persons shall be delivered to the person first named in the register as a holder thereof and delivery of a certificate for a share to that person shall be a sufficient delivery to all joint holders of that share

Variation of rights

7If at any time the share capital is divided into different classes of shares the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of the holders of three fourths of the issued shares of that class or with the sanction of a resolution passed at a separate general meeting of the holders of the shares of the class, and the provisions of section 199 of the Act shall sutatis mutandis apply to the said resolution and meeting as if the resolution were a special resolution To every such separate general meeting the provisions of these articles relating to general meetings shall mutatis mutandis apply but so that the necessary quorum unless the company has only one member shall be two persons holding or representing by proxy at least one third of all the issued shares of the class

Register of members

(a)The company shall maintain at its registered office a register of members of the company as provided 1n section 105 of the Act The register of members shall be open to inspection, as provided in section 113 of the Act

(b)The company may maintain a branch register under section 110 of the Act and the provisions of paragraph a) shall mutatis mutandas apply to such register

Payment of commission

(a)The company may pay a commission at a rate not exceeding ten percent of the issue price of a share to any person 1n consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares of the company or for procuring or agreeing to procure whether absolutely or conditionally subscriptions for any shares of the company

(b)Such commission may be paid in cash or by the allotment of shares of the company

(c)The company may on any issue of shares pay such brokerage as may be lawful

Transfer and transmission of shares

10The instrument of transfer of any share of the company, not being a security in terms of section 134 of the Act, shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof

11Subject to such restrictions as may be applicable any member may transfer all or any of his shares by instrument in writing in any usual or common form or any other form which the directors may approve

12The directors may suspend the registration of transfers during the fourteen days immediately preceding any general meeting of the company and at any other times, provided that the periods of suspension shall not in any one year exceed sixty days

13The directors may decline to recognize any instrument of transfer unless—

(a)a sum not exceeding twenty-five cents is paid to the company in respect thereof

(b)the instrument of transfer is accompanied by the certificate of the shares to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer and

(c)the share transfer duty thereon has been paid

14Every instrument of transfer shall be left at a transfer office of the company at which it is presented for registration, accompanied by a certificate of the shares to be transferred Every power of attorney given by a shareholder authorizing the transfer of shares, shall, when lodged, produced or exhibited to the company or any of its proper officers, be deemed as between the company and the donor of the power to continue and remain in full force and effect, and the company may allow that power to be acted upon until such time as express notice in writing of its revocation has been lodged at such of the company’s transfer offices as the power was lodged, produced or exhibited as aforesaid The company shall not be bound to allow the exercise of any act or matter by an agent for a shareholder unless a duly certified copy of that agent s authority be produced and lodged with the company

15The executor of the estate of a deceased sole holder of a share shall be the only person recognized by the company as having any title to the share In the case of a share registered in the names of two or more holders the survivors or survivor or the executor of the deceased survivor shall be the only persons recognized by the company as having any title to the share

16Any person becoming entitled to a share in consequence of the death or insolvency of a member shall, upon such evidence being produced as may from time to time be required by the directors have the right, either to be registered as a member in respect of the share or instead of being registered himself, to make such transfer of the share as the deceased or insolvent could have made, but the directors shall in either case have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by the deceased or insolvent before the death or insolvency

17The parent or guardian of a minor and the curator bams of a lunatic member and any person becoming entitled to shares in consequence of the death or insolvency of any member or the marriage of any female member or by any lawful means other than by transfer in accordance with these articles, may, upon producing such evidence as sustains the character in which he proposes to act under this article, or of his tide as the directors think sufficient transfer those shares to himself or any other person subject to the articles as to transfer hereinbefore contained This article is hereinafter referred to as the transmission clause

18A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share be entitled a respect of it to exercise any right conferred by membership in relation to meetings of the company

19A person who submits proof of his appointment as the executor administrator trustee curator or guardian in respect of the estate of a deceased member of the company or the estate of a member whose estate has been sequestrated or who is otherwise under a disability or as the liquidator of anybody corporate which is a member of the company shall be entered in the register of members of the company nomine officii and shall thereafter, for all purposes, be deemed to be a member of the company

Conversion of shares into stock

20The company may by special resolution convert all or any of its paid up shares into stock, and reconvert such stock into any number of paid up shares

21The holders of stock may transfer the same or any part thereof in the same manner and subject to the same articles as the shares from which the stock arose might prior to conversion have been transferred, or as near thereto as circumstances permit but the directors may from time to time fix the minimum amount of stock transferable and restrict or forbid the transfer of fractions of such minimum but the minimum shall not exceed the nominal amount, in the case of shares of par value or the issue price in the case of shares of no par value, of the shares from which the stock arose

22The holders of stock shall according to the amount of the stock held by them have the same rights, privileges, and advantages as regards dividends, voting at meetings of the company and other matters as if they held the shares from which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of the company) shall be conferred by any such aliquot part of stock as would not, if existing in shares, have conferred that privilege or advantage

23Such of the articles of the company (other than those relating to share warrants) as are applicable to shares shall apply to stock, and the word ‘share’ and shareholder therein shall include stock and stock holder

Share warrants

24The company may issue share warrants, and accordingly the directors or, if so authorized any foreign committee may in their discretion, with respect to any share, on application in writing signed by the person registered as holder of the share and authenticated by such evidence as the directors or foreign committee may from time to time require as to the identity of the person signing the request and on receiving the certificate of the share and the stamp duty (if any) on the warrant and such sum as the directors may from time to time require, issue a warrant duly stamped if stamp duty is payable stating that the bearer of the warrant is entitled to the shares therein specified and may provide by coupons or otherwise for the payment of dividends or other moneys on the shares included in the warrant

25A share warrant shall entitle the bearer to the shares included in it and the shares shall be transferred by the delivery of the share warrant and the provisions of the articles of the company with respect to transfer and transmission of shares shall not apply thereto

26The bearer of a share warrant shall on surrender of the warrant to the company for can collation and on payment of such sum as the directors may from time to time prescribe, be en titled to have his name entered as a member in the register of members in respect of the shares included in the warrant

27The bearer of a share warrant may at any time deposit the warrant at the office of the company and so long as the warrant remains so deposited the depositor shall have the same right of signing a requisition for calling a meeting of the company and of attending and voting and exercising the other privileges of a member at any meeting held after the expiration of two clear days from the time of the deposit as if bis name were inserted in the register of members as the holder of the shares included in the deposited warrant Not more than one person shall be recognized as depositor of the share warrant The company shall, on two days written notice return the deposited share warrant to the depositor

28Save as herein otherwise expressly provided no person shall as bearer of a share warrant sign a requisition for calling a meeting of the company or attend, or vote, or exercise any other privilege of a member at a meeting of the company or be entitled to receive any notices from the company, but the bearer of a share warrant shall be entitled in all other respects to the same leges and advantages as if he were named in the register of members as the holder of the shares included in the warrant and he shall be a member of the company

29The directors may from time to tune make rules as to the terms on which (if they think they fit) a new share warrant or coupon may oe issued by way of renewal in case of defacement loss or destruction

Alteration of capital

(a)The company may from time to time by special resolution increase the share capital by such sum divided into shares of such amount or may increase the number of its shares of no pai value to such number as the resolution shall prescribe

(b)The company may increase its share capital constituted by shares of no par value by transferring reserves or profits to the stated capital, with or without a distribution of shares

(c)New shares shall be subject to the same provisions as to transfer transmission and Otherwise as the shares in the original capital

31The company may, by special resolution—

(a)consolidate and divide all or any of its share capital into shares of larger amount than its existing shares or consolidate and reduce the number of the issued shares of no par value

(b)increase the number of its issued no par value shares without an increase of its stated capital

(c)sub divide its existing shares or any of them into shares of smaller amount than is fixed by its memorandum

(d)convert all of its ordinary or preference share capital consisting of shares having a par value into stated capital constituted by shares of no par value

(e)convert its stated capital constituted either by ordinary or preference shares of no par value into share capital consisting of shares having a par value

(f)cancel any shares which, at the date of the passing of the resolution have not been taken by any person, or which no person has agreed to take

(g)reduce its share capital, stated capital any capital redemption fund or any share premium account in any maimer and with, and subject to any incident authorized, and consent required, by law

(h)subject to the provisions of section 99 of the Act convert its issued preference shares into shares which can be redeemed

General meetings

32The company shall hold its first annual general meeting within eighteen months after the date of its incorporation and shall thereafter in each year hold an annual general meeting Provided that not more than fifteen months shall elapse between the date of one annual general meeting and that of the next and that an annual general meeting shall be held within six months after the expiration of the financial year of the company

33Other general meetings of the company may be held at any time

34Annual general meetings and other general meetings shall be held at such time and place as the directors shall appoint or at such time and place as is determined if the meetings are convened under section 179 (4), 181 182 or 183 of the Act

Notice of general meetings

35An annual general meeting and a meeting called for the passing of a special resolution shall be called by not less than twenty one clear days notice in writing and any other general meeting shall be called by not less than fourteen clear days notice in writing The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given and shall specify the place the day and the hour of the meeting and shall be given in manner hereinafter mentioned or in such other manner, if any as may be prescribed by the company in general meeting to such persons as are, under these articles, entitled to receive such notices from the company Provided that a meeting of the company shall, notwithstanding the fact that it is called by shorter notice than that specified in this article, be deemed to have been duly called if it is so agreed by a majority in number of the members having a right to attend and vote at the meeting being a majority holding not less than ninety five per cent of the total voting rights of all the members

Proceedings at general meetings

36The annual general meeting shall deal with and dispose of all matters prescribed by the Act, including the sanctioning of a dividend, the consideration of the annual financial statements, the election of directors and the appointment of an auditor, and may deal with any other business laid before it All business laid before any other general meeting shall be considered special business

37No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business Save as herein otherwise provided, three members present in person or by proxy, or to the company is a wholly owned subsidiary the nominee of the holding company, present in person or by proxy shah be a quorum

38If within half an hour after the time appointed for the meeting a quorum is not present the meeting if convened upon the requisition of members shah be dissolved, in any other case it shall stand adjourned to a day not earlier than seven days and not later than twenty one days after the date of the meeting and if at such adjourned meeting a quorum is not present within half an hour after the time appointed for the meeting the members present in person or by proxy shall be a quorum

39Where a meeting has been adjourned as aforesaid, the company shall upon a date not later than three days after the adjournment publish in a newspaper circulating in the province where the registered office of the company is situated, a notice stating—

(a)the date, tune and place to which the meeting has been adjourned

(b)the matter before the meeting when it was adjourned and

(c)the ground for the adjournment

40The chairman if any of the board of directors shall preside as chairman at every general meeting of the company If there is no such chairman or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the members present shall elect one of their number to be chairman

41The chairman may with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting at which the adjournment took place When a meeting is adjourned, the provisions of articles 38 and 39 shall mutatts mutandis apply to such adjournment

42At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman or members referred to in section 198 (1) (b) of the Act, and unless a poll is so demanded a declaration by the chairman that a resolution has on a show of hands been carried or carried unanimously or by a particular majority or negatived and an entry to that effect in the book containing the minutes of the proceedings of the company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution The demand for a poll may be withdrawn

43If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded Scrutineers shall be elected to determine the result of the poll In the case of an equality of votes, whether on a show of hands or on a poll the chairman of the meeting at which the show of hands takes place, or at which the poll is demanded shall be entitled to a second or casting vote

44A poll demanded on the election of a chairman or on a question of adjournment, shall be taken forthwith A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs The demand for a poll shall not prevent the continuation of a meeting for the transaction of any business other than the question upon which the poll has been demanded

Inspection of minutes

45The minutes kept of every general meeting and annual general meeting of the company under section 204 of the Act may be inspected and copied as provided in section 113 of the Act

Votes of members

46Subject to any rights or resist tenons for the time being attached to any class or classes of shares on a show of hands every member present in person and if a member is a body corporate its representative shall have one vote and so a poll every member present in person or by proxy shall be entitled to exercise the voting rights determined by section 195 of the Act

47In the case of joint holders the vote of the poison whose name appears first in the legist er of members and who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders

48The parent or guardian of a minor and the nutator boms of a lunatic member and also any person entitled under the transmission clause to transfer any shares may vote at any general meeting in respect thereof in the same manner as if he were the registered holder of those shares Provided that forty eight hours at least before the time of holding the meeting at which he pi eposes to vote he shall satisfy the directors that he is such parent guardian or cutator that be sent led under the transmission clause to transfer those shares or that the directors have previously admitted his tight to vote in respect of those shares Co executors of a deceased member in whose name shares stand in the register shall for the purposes of this article be deemed to be omit holders of those shares

49On a poll votes may be given either personally or by proxy

Proxies

50The instrument appointing a proxy shall be in writing under the hand of the appetite or of his agent duly authorized in writing or if the appetite is a body corporate under the hand of an officer or agent authorized by the body corporate A proxy need not be a member of the company The holder of a general or special power of attorney whether he is him self a member or not given by a shareholder shall be entitled to attend meetings and to vote if duly at thonzed under that power to attend and take part in the meetings

51The instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a notanally certified copy of such power or authority shall be deposited at the registered office of the company not less than forty eight hours before the time for holding the meeting at which rhe person named in the instrument proposes to vote, and in default of complying herewith the instrument of proxy shall not be treated as valid No instrument appointing a proxy shall be valid after the expiration of six months from the date when it was signed unless so specifically stated in the proxy itself and no proxy shall be used at an adjourned meeting which could not have been used at the original meeting

52The instrument appointing a proxy shall be in the following form or as near there as circumstances permit

(Note A member entitled to attend and vote is entitled to appoint a proxy to attend speak and on a poll vote in his car and such proxy need not also be a member of the company)’

Directors

53The number of the directors shall not be less than two and the names of the first directors may be determined in writing by a majority of the subscribers of the memorandum Until directors are appointed, whether or not the directors have been named by a majority of the subscribers of the memorandum every subscriber of the memorandum shall be deemed for all purposes to be a director of the company

54The remuneration of the directors shall from time to time be determined by the company in general meeting

55If any director be called upon to perform extra services or to make any special exertions in going or residing abroad or otherwise, for any of the purposes of the company, the company may remunerate that director either by a fixed sum or by a percentage of profits or otherwise as may be determined, and such remuneration may be cither in addition to or in substitution for the remuneration determined under article 54

56The shareholding qualification of a director shall be the holding of at least one share of the company, and it shall be his duty to comply with the provisions of section 213 of the Act except where the company is a wholly owned subsidiary, when a director shall not be required to hold a share of the company

Alternate directors

57Each director shall have the power to nominate any person who is a shareholder of the company (except where the company is a wholly owned subsidiary, when such person need not be a shareholder) possessing the necessary qualifications of a director, to act as alternate director in hts place during his absence or inability to act as such director provided that the appointment of an alternate director shall be approved by the board and on such appointment being made the alternate director shall in all respects be subject to the terms, qualifications, and conditions existing with reference to the other directors of the company

58The alternate directors, whilst acting in the stead of the directors who appointed them shall exercise and discharge all the powers, duties and functions of the directors they represent The appointment of an alternate director shall be revoked, and the alternate director shall cease to hold office, whenever the director who appointed him ceases to be a diiector or gives notice to the secretary of the company that the alternate director representing him has ceased to do so and in the event of the disqualification or resignation of any alternate director during the absence or inability to act of the director whom he represents, the vacancy so arising shall be filled by the chairman of the directors who shall nominate a person who is a shareholder of the company (except where the company is a wholly owned subsidiary when such person need not be a shareholder of the company) to fill such vacancy subject to the approval of the board

Powers and duties of directors

59The business of the company shall be managed by the directors who may pay ail expenses incurred in promoting and incorporating the company and may exercise all such powers of the company as are not by the Act or by these articles, required to be exercised by the company in general meeting subject to these articles to the provisions of the Act and to such regulations, not inconsistent with the aforesaid articles or provisions as may be prescribed by the company in general meeting but no regulation prescribed by the company in general meeting shall invalidate any prior act of the directors which would have been valid if such regulation had not been prescribed

Borrowing powers

60The directors may exercise all the powers of the company to borrow money and to mortgage or bind its undertaking and property or any part thereof and to issue debentures, debenture stock and other securities whether outright or as security for any debt liability or obligation of the company or of any third party Provided that the amount for the time being remaining undischarged in respect of moneys borrowed or secured by the directors as aforesaid (apart from temporary loans obtained from the company s bankers in the ordinary course of business) shall not at any time without the prior sanction of the company in general meeting, exceed one half of the amount of the issued share capita) plus the amount of the share premium account (if any) or of the stated capital

Managing director

61The directors may from time to time appoint one or more of their body to the office of managing director or manager for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another) as they may think fit and may revoke such appointment subject to the terms of any agreement entered into in any particular case A director so appointed shall not while holding such office be subject to retirement by rotation or taken into account in determining the rotation of retirement of directors, but bis appointment shall determine if he ceases for any reason to be a director

62The directors may from time to time entrust to or confer upon a managing director or manager, for the time being, such of the powers and authorities vested in them as they may think fit, and may confer such powers and authorities for such time and to be exercised for such objects and purposes and upon such terms and conditions and with such restrictions as they may think expedient, and they may confer such powers and authorities either collaterally or to the exclusion of, or in substitution for ail or any of the powers and authorities of the directors and may from time to tune revoke or vary all or any of such powers and authorities

Minutes

63The directors shall, in terms of section 204 of the Act cause minutes to be kept—

(a)of all appointments of officers

(b)of names of directors present at every meeting of the company and of the directors, and

(c)of all proceedings at all meetings of the company and of the directors

Such minutes shall be signed by the chairman of the meeting at which the proceedings took place or by the chairman of the next succeeding meeting

Foreign committees

64The directors may from tune to time appoint persons resident in a foreign country to be a foreign committee for the company in that country with such powers and duties as the directors may from time to time determine The directors may from time to time establish branch registers of members and transfer offices in foreign countries, close them at any time and may appoint and remove agents for any purposes in any foreign country

Disqualification of directors

65The office of director shall be vacated if the director—

(a)ceases to be a director or becomes prohibited from being a director by virtue of any provision of the Act or

(b)Without the consent of the company in general meeting holds any other office of profit under the company except that of managing director or manager, or

(c)resigns his office by noticing in writing to the company and the Registrar, or

(d)for more than six months is absent without permission of the directors from meetings of directors held during that period, or

(e)is directly or indirectly interested in any contract or proposed contract with the company and fails to declare his interest and the nature thereof in the manner required by the Act

Rotation of directors

66At tine first annual general meeting of the company all the directors shall retire from office, and at the annual general meeting in every subsequent year one third of the directors for the time being, or if then number is not three or a multiple of three, the number nearest to one third, shall retire from office

67The directors to retire every year shall be those who have been longest in office since their last election, but as between people who became directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot

68A retiring director shall be eligible for reelection

69The company at the annual general meeting at which a director retires in the manner aforesaid or at any other general meeting may fill the vacancy by electing a person thereto

70If at any meeting at which an election of directors ought to take place the offices of the retiring directors are not filled, unless it is expressly resolved not to fill such vacancies, the meeting shall stand adjourned and the provisions of articles 38 and 39 shall apply mutatis mutandis to such adjournment and if at such adjourned meeting the vacancies are not filled the retiring directors or such of them as have not had their offices filled shall be deemed to have been reelected at such adjourned meeting unless a resolution for the reelection of any such director shall have been put to the meeting and negatived

71The company may from time to time in general meetings increase or reduce the number of directors and may also determine in what rotation such increased or reduced number is to retire from office

72Unless the shareholders otherwise determine in general meeting any casual vacancy occur ring on the board of directors may be filled by the directors but the director so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose stead he is appointed was last elected a director

73The directors shall have power at any time and from time to time to appoint a person as an additional director but so that the total number of directors shall not at any time exceed the number fixed according to these articles and such director shall retire from office at the next following annual general meeting and shall then be eligible for re election, but shall not be taken into account in determining which directors are to retire by rotation at such meeting

74No appointment of a director except that of a retiring director re elected at an annual general meeting or a general meeting of the company, shall take effect until the consent of such director to act as a director of the company, referred to in section 211 of the Act has been lodged with and receipt thereof has been acknowledged by the Registrar

Proceedings of directors

75The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit Questions arising at any meeting shall be decided by a majority of votes In the event of an equality of votes, the chairman shall have a second or casting vote A director may and the secretary on the requisition of a director shall, at any time convene a meeting of the directors

76Subject to the provisions of sections 234 to 241, inclusive, of the Act, a director shall not vote in respect of any contract or proposed contract with the company in which he is interested, or any matter arising therefrom and if he does so vote his vote shall not be counted

77The quorum necessary for the transformation of the business of the directors may be fixed by the directors, and unless so fixed shall when the number of directors exceeds three, be three and when the number of directors does not exceed three, shall be two

78The continuing directors may act notwithstanding any vacancy on their body but if and so long as their number to reduce below the number fixed by or pursuant to these articles as the necessary quorum of directors the continuing directors may act for the purpose of increasing the number of directors to that number or of convening a general meeting of the company, but for no other purpose

79The directors may elect a chairman of their meetings and determine the period for which he is to hold office but if no such chairman is elected or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same the directors present may elect one of their number to be chairman of the meeting

80The directors may delegate any of their powers to committees consisting of such members or members of their body as they think fit Any committee so formed shall, in the exercise of the powers so delegated conform to the rules that may be imposed on it by the directors

81A committee may elect a chairman of its meetings If no such chairman to elected or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may elect one of their number to be chairman of the meeting

82A committee may meet and adjourn as it thinks fit Questions arising at any meeting shall be determined by a majority of votes of the members present and in the event of an equality of votes the chairman shall have a second or casting vote

83All acts done by any meeting of the directors or a committee of directors or by any person acting as a director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such directors or person acting as aforesaid or that they or any of them were disqualified be as valid as if every such person had been duly appointed and were qualified to be a directory

Dividends and reserve

84The company in annual general meeting may declare dividends but no dividend shall exceed the amount recommended by the directors

85The directors may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company

86No dividend shall be paid otherwise than out of profits, or bear interest against the company

87The directors may, before recommending any dividend set aside out of the profits of the company such sums as they think fit as a reserve or reserves, which shall, at the discretion of the directors be applicable for any purpose to which the profits of the company may be properly applied and, pending such application may at the like discretion either be employed in the business of the company or be invested in such investments (other than shares of the company) as the directors may from time to time think fit The directors may also without placing the same to reserve carry forward any profits which they may think prudent not to divide

88Notice of any dividend that may have been declared shall be given in the manner provided to the persons entitled to share therein

89Every dividend or other moneys payable in cash in respect of shares may be paid by cheque warrant coupon or otherwise as the directors may from time to time determine, and shall, if paid otherwise than by coupon either be sent by post to the registered address of the member entitled thereto or be given to him personally, and the receipt or endorsement on the cheque or warrant of the person whose name appears in the register as the shareholder or his duly authorized agent or the surrender of any coupon shall be a good discharge to the company in respect thereof Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable in respect of the shares held by them as joint holders

90The company shah not be responsible for the loss in transmission of any cheque warrant, coupon or other document sent through the post to the registered address of any member, whether or not it was so sent at his request

Accounting records

91The directors shall cause such accounting records as are prescribed by section 284 of the Act to be kept Proper accounting records shall not be deemed to be kept if there are not kept such accounting records as are necessary fairly to present the state of affairs and business of the company and to explain the transactions and financial position of the trade or business of the company

92The accounting records shall be kept at the registered office of the company or at such other place or places as the directors think fit and shall always be open to inspection by the directors

93The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounting records of the company or any of them shall be open to inspection by members not being directors, and no member (not being a director) shah have any right of inspecting any accounting records or documents of the company except as conferred by the Act or authorized by the directors or by the company in general meeting

Annual financial statements and interim reports

94The directors shall from time to time, in accordance with sections 286 and 288 of the Act, cause to be prepared and laid before the company in general meeting such annual financial statements group annual financial statements and group reports (if any) as are referred to in those sections

95The directors shall, in accordance with section 303 of the Act, prepare or cause to be prepared interim reports, a copy of which shall be sent to every member of the company and to the Registrar

96A copy of any annual financial statements, group annual financial statements and group reports which are to be laid before the company in annual general meeting, shall not less than twenty one days before the date of the meeting be sent to every member of, and every holder of debentures of the company and to the Registrar Provided that this article shall not require a copy of those documents to be sent to any person of whose address the company is not aware or to more than one of the joint holders of any shares or debentures

Audit

97An auditor shall be appointed in accordance with Chapter X of the Act

Notices

98A notice may be given by the company to any member either by advertisement or personally, or by sending it by post in a prepaid letter addressed to such member at his registered address, or (if he has no registered address in the Republic) at the address Of any) within the Republic supplied by him to the company for the giving of notices to him Any notice which may be given by advertisement shall be inserted in the Gazette and in such newspapers as the directors may from time to time determine

99Whenever a notice is to be given personally or sent by post the notice may be given by the company to the joint holders of a share by giving the notice to the joint holder named first in the register in respect of the share

100Whenever a notice is to be given personally or sent by post the notice may be given by the company to the persons entitled to a share in consequence of the death or insolvency of a member, or by sending it through the post in a prepaid letter addressed to them by name or by the title of representatives of the deceased or trustees of the insolvent or by any like description at the address (if any) in the Republic supplied for the purpose by the persons claiming to be so entitled, or (until such address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or insolvency had not occurred

101Notice of every general meeting shall be given in any manner authorized—

(a)to every member of the company (including bearers of share warrants) except in the case of notices to be given personally or sent by post, those members who (having no registered address within the Republic) have not supplied to the company an address within the Republic for the giving of notices to them,

(b)to every person entitled to a share in consequence of the death or insolvency of a member who but for his death or insolvency would have been entitled to receive notice of the meeting and

(c)to the auditor for the time being of the company

No other person shall be entitled to receive notice of general meetings

102Any notice by post shall be deemed to have been served at the time when the letter containing the same was posted and any notice by advertisement shall be deemed re have been given on the day upon which the advertisement was published in the Gazette and in proving the giving of the notice by post, it shall be sufficient to prove that the letter containing the notice was properly addressed and posted

103A notice given to any member shall be binding on ail persons claiming on his death or on any transmission of his interests

104The signature to any notice given by the company may be written or printed or partly written and partly printed

105When a given number of days notice or notice extending over any other period is required to be given the day of service shall not be counted in such number of days or period

106If the company has a seal it shall not be affixed to any instrument except by the authority of a resolution of the directors and shall be affixed in the manner and subject to such safeguards as the directors may from time to time determine

Winding up

107If the company be wound up, the assets remain after payment of the debts and liabilities of the company and the costs of the liquidation shall be applied as follows

(a)To repay to the members the amounts paid up on the shares respectively held by each of them, and

(b)the balance (if any) shall be distributed among the members in proportion to the number of shares respectively held by each of them

Provided that the provisions of this article shall be subject to the rights of the holders of shares, (if any) issued upon special conditions

108In a winding up any pai t of the assets of the company including any shares or securities of other companies may with the sanction of a special resolution of the company be divided among the members of the company in specie or may with the same sanction, be vested in trustees for the benefit of such members, and the liquidation of the company may be closed and the company dissolved

Table B – Articles for a private company having a share capital

Interpretation

1In these articles, unless the context otherwise indicates—

(a)'the Act means the Companies Act 1973 and

(b)foreign committee means a committee appointed under article 65 of these articles

Restrictions

2The directors shall have regard to the restrictions on the commencement of business imposed by section 172 of the Act

3The company is a private company and accordingly—

(a)the right to transfer its shares is restricted

(b)the number of members of the company (exclusive of persons who are in the employment of the company and of persons who having been formerly in the employment of the company were, while in such employment and have continued since the determination of such employment to be members of the company) is limited to fifty

(c)any invitation to the public to subscribe for any shares or debentures of the company is prohibited, and

(d)the company shall not have power to issue share warrants to bearer

4Where two or more persons hold one or more shares of the company jointly, they shall for the purposes of article 3 be treated as a single member

Shares and certificates of shares

5Subject to the provisions, if any of the memorandum and without prejudice to any special rights previously conferred on the holders of existing shares any share may be issued with such preferred deferred or other special rights, or subject to such restrictions (whether in regard to dividend voting return of share capital or otherwise) as the company may from time to time determine, and the company may determine that any preference shares shall be issued on the condition that they are or are at the option of the company liable to be redeemed

6Every person whose name is entered as a member in the register of members shall be entitled to one certificate for all the shares registered in his name, onto several certificates, each for a part of such shares Every share certificate shall specify the number of shares in respect of which it is issued Every original member shall be entitled to one share certificate free of charge but for every subsequent certificate the directors may make such charge as from time to time they may think fit Provided that if a share certificate is defaced lost or destroyed, it may be renewed on payment of such fee if any, not exceeding twenty five cents and on such terms, if any, as to evidence and indemnity as the directors may think fit

7Share certificates shall be issued under the authority of the directors, or the foreign committee when authorized thereto by resolution of the directors in such manner and form as the directors shall from time to time prescribe If any shares are numbered all such shares shall be numbered in numerical progression beginning with the number one, and each share shall be distinguished by its appropriate number and if any shares are not numbered, each share certificate in respect of such shares shall be numbered in numerical progression and each share certificate distinguished by its appropriate number and by such endorsement as may be required under section 95 (2) of the Act

8A certificate for shares registered in the names of two or more persons shall be delivered to the person first named 1m the register as a holder thereof and delivery of a certificate for a share to that person shall be a sufficient delivery to all joint holders of that share

Variation of rights

9If at any time the share capital is divided into different classes of shares the nights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may be varied with the consent in writing of the holders of three fourths of the issued shares of that class or with the sanction of a resolution passed at a separate general meeting of the holders of the shares of the class and the provisions of section 199 of the Act shall mutatis mutandis apply to the said resolution and meeting as if the resolution were a special resolution To every such separate general meeting the provisions of these articles relating to general meetings shall mutatis mutandis apply but so that the necessary quorum, unless the company has only one member shall be two persons holding or representing by proxy at least one third of all the issued shares of the class

Register of members

(a)The company shall maintain at its registered office a register of members of the com-pany as provided in section 105 of the Act The register of members shall be open to imspection as provided 1n section 113 of the Act

(b)The company may maintain a branch register under section 110 of the Act and the provisions of paragraph (a) shall mutatis mutandis apply to such register

Transfer and transmission of shares

11The directors shall have power to refuse to register the transfer of any shares without giving reasons therefor

12The instrument of transfer of any share of the company not being a security in terms of section 134 of the Act shall be executed both by the transferor and transferee and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof

13Subject to such of the restrictions as may be applicable any member may transfer all or any of his shares by instrument 1n writing in any usual or common form or any other form which the directors may approve

14The directors may decline to recognize any instrument of transfer unless—

(a)a sum not exceeding twenty five cents is paid to the company in respect thereof,

(b)the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer and

(c)the share transfer duty thereon has been paid

15Every instrument of transfer shall be left at a transfer office of the company at which tt is presented for registration accompanied by a certificate of the shares to be transferred Every power of attorney given by a shareholder authorizing the ‘zansfer of shares shall, when lodged, produced or exhibited to the company or any of us proper officers, be deemed as between the company and the donor of the power to continue and remain in full force and effect and the company may allow that power te be acted upon until such time as express notice in writing of its revocation has been lodged at such of the company s transfer offices as the power was lodged produced or exhth ced as aforesaid The company shall not be bound to allow the exercise of any act or matter by an agent for a shareholder unless a duly certified copy of that agent s authority be produced and lodged with the company

16The executor of the estate of a deceased sole holder of a share shall be the only person recognized by the company as having any title to the share In the case of a share registered in the names of two or more holders the survivors or survivor or the executor of the deceased survivor shall be the only persons recognized by the company as having any title to the share

17Any person becoming entitled to a share in consequence of the death or insolvency of a member shall, upon such evidence bemg produced as may from time to time be required by the directors, have the right either to be registered as a member in respect of the share or instead of being registered himself, to make such transfer of the share as the deceased or insolvent could have made but the directors shall, im either case have the same right to decline or suspend registra tion as they would have had in the case of a transfer of the share by the deceased or insolvent before the death or insolvency

18The parent or guardian of a minor and the curator boms of a lunatic member and any person becoming entitled to shares in consequence of the death or msolvency of any member or the marriage of any female member or by any Jawful means other than by transfer in accordance with these articles, may upon producing such evidence as sustains the character in which he proposes to act under this article, or of his title as the dnectors think sufficient transfer those shares to himself or any other person, subject to the articles as to transfer heretnbefore containedThis article is hereinafter referred to as the transmission clause’

19A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share except that he shall not before being registered as a member in respect of the share be entitled 1m respect of it to exercise any right conferred by membership In relation to meetings of the company

20Any person who submits proof of hits appointment as the executor, administrator, trustee, curator or guardian in respect of the estate of a deceased member of the company, or of a member whose estate has been sequestrated or of a member who is otherwise under a disability or as the liquidator of anybody corporate which is a member of the company, shall be entered in the register of members of the company nomine officu and shall thereafter, for all purposes, be deemed to be a member of the company

21If a member of the company desires to sell all or any of his shares of the company he shall give notice in writing of his intention to sell to the directors of the company, and state the once he requires for the shares

22The directors shall within one month of the date of receipt of the notice referred to in article 21 advise every other member of the company of the contents thereof and each such mem her shall be entitled to acquire the shares so offered within one month after the date of the receipt of such advice Provided that if more than one member makes an offer for all of the shares so offered, the shares shall be sold to each such member in equal proportions and where fractional proportions of shares remain such members shall become joint holders of such fractional pro portions of the shares

23If the members of the company are unable to agree upon the selling price of the shares, the auditor of the company may be requested to determine the true and fair value thereof and the members shall accept that value as the selling price of the shares

24If none of the members of the company offers to purchase the shares within the time referred to in article 22, or if members of the company offer to purchase a part of the shares so offered the member who is offering the shares for sale may offer the shares or the remaining portion of the shares which have not been purchased by members of the company for sale to any other person and notwithstanding the provisions of article 11, the directors shall approve the registration of the shares in the name of that person unless they have good reason to refuse such registration

Conversion of shares into stock

25The company may by special resolution convert all or any of its paid up shares into stock, and reconvert such stock into any number of paid up shares

26The holders of stock may transfer the same or any part thereof, in the same manner and subject to the same articles as the shares from which the stock arose might prior to conversion have been transferred or as near thereto as circumstances permit but the directors may from time to time fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of such minimum, but the minimum shall not exceed the nominal amount in the case of shares of par value, or the issue price in the case of shares of no par value of the shares from which the stock arose

27The holders of stock shall, according to the amount of the stock held by them have the same rights privileges and advantages as regards dividends voting at meetings of the company and other matters as if they held the shares from which the stock arose but no such privilege or advantage (except participation in the dividends and profits of the company) shall be conferred by any such aliquot part of stock as would not if existing in shares have conferred that privilege or advantage

28Such of the articles of the company as are applicable to shares shall apply to stock, and the word share and shareholder therein shall include stock and stock holder

Alteration of capital

(a)The company may from time to time by special resolution increase the share capital by such sum dividend into shares of such amount, or may increase the number of its shares of no par value to such number, as the resolution shall prescribe

(b)The company may increase its share capital constituted by shares of no par value by transferring reserves or profits to the stated capital with or without a distribution of shares

(c)New shares shall be subject to the same provisions as to transfer transmission and otherwise as the shares in the original capital

30The company may by special resolution—

(a)consolidate and divide all or any of its share capital into shares of larger amount than its existing shares or consolidate and reduce the number of the issued shares of no par value

(b)increase the number of its issued no par value shares without an increase of its stated capital

(c)sub divide its existing shares or any of them into shares of smaller amount than is fixed by its memorandum

(d)convert all of its ordinary or preference share capital consisting of shares having a par value into stated capital constituted by shares of no par value

(e)convert its stated capital constituted either by ordinary or preference shares of no par value into share capital consisting of shares having a par value

(f)cancel any shares which at the date of the passing of the resolution have not been taken by any person, or which no person lies agreed to take

(g)reduce its share capital stated capital any capital redemption fund or any share premium account in any manner and with and subject to, any incident authorized and consent required by law

(h)subject to the provisions of section 99 of the Act convert its issued preference shares into shares which can be redeemed

General meetings

31The company shall hold its first annual general meeting within eighteen months after the date of its incorporation and shall thereafter in each year bold an annual general meeting Provided that not more than fifteen months shall elapse between the date of one annual general meeting and that of the next and that an annual general meeting shall be held within six months after the expiration of the financial year of the company

32Other general meetings of the company may be held at any time

33Annual general meetings and other general meetings shall be held at such time and place as the directors shall appoint or at such time and place as to determined if the meetings are convened under section 179 (4), 181, 182 or 183 of the Act

Notice of general meetings

34An annual general meeting and a meeting called for the passing of a special resolution shall be called by not less than twenty one clear days notice in writing and any other general meeting shall be called by not less than fourteen clear days notice in writing The notice shall be exclusive of the day on which it to served or deemed to be served and of the day for which it is given and shall specify the place, the day and the hour of the meeting and shall be given in manner hereinafter mentioned or in such other manner if any, as may be prescribed by the company in general meeting, to such persons as are, under these articles entitled to receive such notices from the company Provided that a meeting of the company shall, notwithstanding the fact that it is called by shorter notice than that specified in this article be deemed to have been duly called if it is so agreed by a majority in number of the members having a right to attend and vote at the meeting being a majority hold mg not less than ninety five per cent of the total voting rights of all the members

Proceedings at general meetings

35The annual general meeting shall deal with and dispose of ail matters prescribed by the Act including the sanctioning of a dividend the consideration of the annual financial statements, the election of directors and the appointment of an auditor, and may deal with any other business laid before it All business laid before any other general meeting shall be considered special business

36No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business Save as herein otherwise provided, two members present in person or by proxy or if the company has one member such member present in person or by proxy or if the company is a wholly owned subsidiary the nominee of the holding company in person or by proxy, shall be a quorum

37If within half an hour after the time appointed, for the meeting a quorum is not present the meeting if convened upon the requisition of members, shall be dissolved, in any other case it shall stand adjourned to a day not earlier than seven days and not later than twenty one days after the date of the meeting and if at such adjourned meeting a quorum is not present within half an hour after the time appointed for the meeting the members present in person or by proxy shall be a quorum

38Where a meeting has been adjourned as aforesaid, the company shall upon a date not later than three days after the adjournment send a written notice to each member of the company stating—

(a)the date time and place to which the meeting has been adjourned

(b)the matter before the meeting when it was adjourned, and

(c)the ground for the adjournment

39The chairman if any of the board of directors shall preside as chairman at every general meeting of the company

40If there is no such chairman or if at any meeting, he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman the members present shall elect one of their number to be chairman

41The chairman may, with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting at which the adjournment took place When a meeting is adjourned, the provisions of articles 37 and 38 shall mutatis mutandis apply to such adjournment

42At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the Deci nation of the result of the show of hands) demanded by the chairman or members referred to in section 198 (I) (6) of the Act and unless a poll is so demanded a declaration by the chairman that a resolution has on a show of hands been earned or carried unanimously or by a particular majority or negatived and an entry to that effect in the book containing the minutes of the proceedings of the company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution The demand for a poll may be withdrawn

43If a poll is duly demanded it shall be taken in such manner as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was de made Scrutineers shall be elected to determine the result of the poll

44In Hie case of an equality of votes, whether on a show of hands or on a poll the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote

45A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs The demand for a poll shall not prevent the continuation of a meeting for the transaction of any business other than the question upon which the poll has been demanded

Inspection of minutes

46The minutes kept of every general meeting and annual general meeting of the company under section 204 of the Act may be inspected and copied as provided in section 113 of the Act

Votes of members

47Subject to any rights or restrictions for the time being attached to any class or classes of shares on a show of hands every member present in person and if a member is a body corporate, its representative, shall have one vote and on a poll every member present in person or by proxy shall be entitled to exercise the voting rights determined by section 195 of the Act

48In the case of joint holders the vote of the person whose name appears first in the register of members and who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders

49The parent or guardian of a minor and the curator boms of a lunatic member and also any person entitled under the transmission clause to transfer any shares may vote at any general meeting in respect thereof in the same manner as if he were the registered holder of those shares Provided that forty eight hours at least before the time of holding the meeting at which he proposes to vote he shall satisfy the directors that he is such parent, guardian or curator or that he is entitled under the transmission clause to transfer those shares or that the directors have previously admitted his right to vote in respect of those shares Co executors of a deceased member in whose name shares stand in the register shall, for the purposes of this article be deemed to be joint holders of those shares

50On a poll, votes may be given either personally or by proxy

Proxies

51The instrument appointing a proxy shall be in writing under the hand of the appointer or of his agent duly authorized in writing or if the appointee is a body corporate, under the hand of an officer or agent authorized by the body corporate A proxy need not be a member of the company The holder of a general or special power of attorney whether he is himself a member or not given by a shareholder shall be entitled to attend meetings and to vote if duly authorized under that power to attend and take part in the meetings

52The instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a normally certified copy of such power or authority shall be deposited at the registered office of the company not less than forty eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote and in default of com plying herewith the instrument of proxy shall not be treated as valid No instrument appointing a proxy shall be valid after the expiration of six months from the date when it was signed unless so specifically stated in the proxy itself and no proxy shall be used at an adjourned meeting which could not have been used at the original meeting

53The instrument appointing a proxy shall be in the following form or as near thereto as circumstances permit

Directors

54The number of the directors shall not be less than one and the names of the first directors may be determined in writing by a majority of the subscribers of the memorandum Until directors are appointed whether or not the directors have been named by a majority of subscribers of the memorandum, every subscriber of the memorandum shall be deemed for all purposes to be a director of the company

55The remuneration of the directors shall from time to tune be determined by the company in general meeting

56If any director be called upon to perform extra services or to make any special exertions in going or residing abroad, or otherwise, for any of the purposes of the company the company may remunerate that director either by a fixed sum or by a percentage of profits or otherwise as may be determined, and such remuneration may be either in addition to, or in substitution for the remuneration determined under article 55

57The shareholding qualification of a director shall be the holding of at least one share in the company, and it shall be his duty to comply with the provisions of section 213 of the Act, except where the company is a wholly owned subsidiary when a director shall not be required to hold a share of the company

Alternate directors

58Each director shall have the power to nominate any person whether a member of the company or not possessing the necessary qualifications of a director to act as alternate director in his place during his absence or inability to act as such director, provided that the appointment of an alternate director shall be approved by the board and on such appointment being made, the alternate director shall, in all respects, be subject to the terms, qualifications and conditions existing with reference to the other directors of the company

59The alternate directors, whilst acting in the stead of the directors who appointed them shall exercise and discharge all the powers duties and functions of the directors they represent The appointment of an alternate director shall be revoked and the alternate director shall cease to hold office whenever the director who appointed him ceases to be a director or gives notice to the secretary of the company that the alternate director representing him has ceased to do so, and in the event of the disqualification or resignation of any alternate director during the absence or inability to act of the director whom he represents, the vacancy so arising shall be filled by the chairman of the directors who shall nominate a person to fill such vacancy subject to the approval of the board

Power and duties of directors

60The business of the company shall be managed by the directors who may pay all expenses incurred in promoting and incorporating the company, and may exercise all such powers of the company as are not by the Act, or by these articles, required to be exercised by the company in general meeting subject to these articles to the provisions of the Act and to such regulations, not inconsistent with the aforesaid articles or provisions as may be prescribed by the company in general meeting, but no regulation prescribed by the company in general meeting shall invalidate any prior act of the directors which would have been valid if such regulation had not been made

Boriowing powers

61The directors may exercise all the powers of the company to borrow money and to mortgage or bind its undertaking and property or any part thereof and to issue debentures debenture stock and other securities whether outright or as security for any debt liability or obligation of the company or of any third party Provided that the amount for the time being remaining undischarged in respect of moneys borrowed or secured by the directors as aforesaid (apart from temporary Ioans obtained from the company s bankers in the ordinary course of business) shall not at any time without the prior sanction of the company in general meeting exceed one half of the amount of the issued share capital plus the amount of the share premium account (if any), or of the stated capital

Managing director

62The directors may from time to time appoint one or more of their body to the office of managing director or manager for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another) as they may think fit and may revoke such appointment subject to the terms of any agreement entered into in any particular case A director so appointed shall not while holding such office be subject Co retirement by rotation or be taken into account in determining the rotation of retirement of directors but his appointment shall determine if he ceases for any reason to be a director

63The directors may from time to time entrust to or confer upon a managing director or manager for the time being such of the powers and authorities vested in them as they may think fit, and may confer such powers and authorities for such time and to be exercised for such objects and purposes and upon such terms and conditions and with such restrictions as they may think expedient, and they may confer such powers and authorities either collaterally or to the exclusion of or in substitution for all or any of the powers and authorities of the directors and may from time to tune revoke or vary all or any of such powers and authorities

Minutes and minute books

64The directors shall, in terms of section 204 of the Act, cause minutes to be kept—

(a)of all appointments of officers

(b)names of directors present at every meeting of the company and of the directors, and

(c)of all proceedings at all meetings of the company and of the directors

Such minutes shall be signed by the chairman of the meeting at which the proceedings took place or by the chairman of the next succeeding meeting

Foreign committees

65The directors may from tune to time appoint persons resident in a foreign country to be a foreign committee for the company in that country with such powers and duties as the directors may from time to time determine The directors may from time to tune establish branch registers of members and transfer offices in foreign countries, close them at any time and may appoint and remove agents for any purposes in any foreign country

Disqualification of directors

66The office of director shall be vacated if the director—

(a)ceases to be a director or becomes prohibited from being a director by virtue of any provision of the Act or

(b)without the consent of the company in general meeting holds any other office of profit under the company except that of managing director or manager, or

(c)resigns his office by notice am writing to the company and the Registrar, or

(d)for more than six months is absent without permission of the directors from meetings of directors held during that period, or

(e)is directly or indirectly interested in any contract or proposed contract with the company and fails to declare his interest and the nature thereof in the manner required by the Act

Rotation of directors

67The company in general meeting may from time to tune determine the number of directors, their terms of office and the manner of their retirement An annual general meeting or other general meeting of the company may fill any vacancy and a retiring director shall be eligible for re-election

68If at any meeting at winch an election of directors ought to take place the offices of the retiring directors are not filled unless it is expressly resolved not to fill such vacancies the meeting shall stand adjourned and the provisions of articles 37 and 38 shall apply mutatis mutandis to such adjournment, and if at such adjourned meeting the vacancies are not filled, the returning directors or such of them as have not had their offices filled shall be deemed to have been re-elected at such adjourned meeting unless a resolution for the re election of any such director shall have been put to the meeting and negatived

69The company may from time to time in general meeting increase or reduce the number of directors, and may also determine in what rotation such increased or reduced number is to retire from office

70Unless the shareholders otherwise determine in general meeting any casual vacancy occurring on the board of directors may be filled by the directors, but the director so appointed shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose stead he is appointed was last elected a director

71The directors shall have power at any time, and from time to time to appoint a person as an additional director bat so that the total number of directors shall not at any time exceed the number fixed according to these articles, and such director shall retire from office at the next following annual general meeting and shall then be eligible for re election but shall not be taken into account in determining which directors are to retire by rotation at such meeting

72No appointment of a director, except that of a retiring director re elected at an annual general meeting or a general meeting of the company, shall take effect until the consent of such director to act as a director of the company, referred to in section 211 of the Act, has been lodged with and receipt thereof has been acknowledged by the Registrar

Proceedings of director

73The directors may meet together for the dispatch of business adjourn and otherwise regulate their meetings as they think fit Questions arising at any meeting shall be decided by a majority of votes In the event of an equality of votes the chairman shall have a second or casting vote A director may, and the secretary on the requisition of a director shall, at any time convene a meeting of the directors

74Subject to the provisions of sections 234 to 241 inclusive of the Act a director shall not vote in respect of any contract or proposed contract with the company in which he is interested or any matter arising therefrom and if he does so vote his rote shall not be counted Provided that this article shall not apply where the company has only one director

75The quorum necessary for the transaction of the business of the directors, unless there is only one director may be fixed by the directors and unless so fixed shall when the number of directors exceeds three be three and when the number of directors does not exceed three, shall be two

76Subject to the provisions of the Act, a resolution in writing, signed by all the directors, shall be as valid and effectual as if it had been passed at a meeting of the directors duly convened and held

77The continuing directors may act notwithstanding any vacancy on their body, but, if and so long as their number is reduced below the number fixed by or pursuant to these articles as the necessary quorum of directors, the continuing directors may act for the purpose of measuring the number of directors to that number or of convening a general meeting of the company but for no other purpose

78The directors may elect a chairman of their meetings and determine the period for which he is to hold office, but if no such chairman is elected or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same the directors present may elect one of their number to be chairman of the meeting

79The directors may delegate any of their powers to committees consisting of such members or members of their body as they think fit Any committee so formed shall, in the exercise of the powers so delegated conform to any rules that may be imposed on it by the directors

80A committee may elect a chairman of its meetings If no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the tune appointed for holding the same, the members present may elect one of their number to be chairman of the meeting

81A committee may meet and adjourn as it thinks fit Questions arising at any meet in g shall be determined by a majority of votes of the members present and in the event of an equality of votes the chairman shall have a second or casting vote

82All acts done by any meeting of the directors or a committee of directors or by any person acting as a director shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such directors or person acting as aforesaid or that they or any of them were disqualified be as valid as if every such person had been duly appointed and were qualified to be a director

Dividends and reserve

83The company in annual general meeting may declare dividends but no dividend shall exceed the amount recommended by the directors

84The directors may from time to time pay to the members such interim dividends as appear to the directors to be justified by the profits of the company

85No dividend shall be paid otherwise than out of profits or bear interest against the company

86The directors may, before recommending any dividend set aside out of the profits of the company such sums as they think fit as a reserve or reserves which shall at the discretion of the directors be applicable for any purpose to which the profits of the company may be properly applied and, pending such application may, at the like discretion either be employed in the business of the company or be invested in such investments (other than shares of the company) as the directors may from time to time think fit The directors may also without placing the same to reserve carry forward any profits which they may think prudent not to divide

87Notice of any dividend that may have been declared shall be given in the manner hereinafter provided to the persons entitled to share therein

88Every dividend or other moneys payable in cash in respect of shares may be paid by cheque warrant, coupon or otherwise as the directors may from time to time determine, and shall, if paid otherwise than by coupon either be sent by post to the registered address of the member entitled thereto or be given to him personally, and the receipt or endorsement on the cheque or warrant of the person whose name appears in the register as the shareholder or his duly authorized agent, or the surrender of any coupon shall be a good discharge to the company in respect thereof Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable in respect of the shares held by them as joint holders

89The company shah not be responsible for the loss in transmission of any cheque warrant, coupon or other document sent through the post to the registered address of any member, whether or not it was so sent at his request

Accounting records

90The directors shall cause such accounting records as are prescribed by section 284 of the Act to be kept Proper accounting records shall not be deemed to be kept if there are not kept such accounting records as are necessary fairly to present the state of affairs and business of the company and to explain the transactions and financial position of the trade or business of the company

91The accounting records shall be kept at the registered office of the company or at such other place or places as the directors think fit, and shall always be open to inspection by the directors

92The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounting records of the company or any of them shall be open to inspection by members not being directors, and no member (not being a director) shall have any right of inspecting any accounting records or document of the company except as conferred by the Act or authorized by the directors or by the company in general meeting

Annual financial statements

93The directors shall from time to time in accordance with sections 286 and 288 of the Act cause to be prepared and laid before the company in general meeting such annual financial statements group annual financial statements and group reports (if any) as are referred to in those sections

94A copy of any annual financial statements group annual financial statements and group reports which are to be laid before the company in annual general meeting shall not less than twenty one days before the date of the meeting be sent to every member of and every holder of debentures of the company, and if the company is a controlled company, also to the Registrar Provided that this article shall not require a copy of these documents to be sent to any person of whose address the company is not aware or to more than one of the joint holders of any shares or debentures

Audit

95An auditor shall be appointed in accordance with Chapter X of the Act

Notices

96A notice may be given by the company to any member either by advertisement or personally or by sending it by post in a prepaid letter addressed to such member at his registered address or (if he has no registered address in the Republic) at the address (if any) within the Republic supplied by him to the company for the giving of notices to him

97Whenever a notice is to be given personally or sent by post, the notice may be given by the company to the joint holders of a share by giving the notice to the joint holder named first in the register in respect of the share

98Whenever a notice is to be given personally or sent by post, the notice may be given by the company to the persons entitled to a share in consequence of the death or insolvency of a member or by sending it through the post in a prepaid letter addressed to them by name, or by the title ol representatives o^f the deceased or trustees of the insolvent or by any like description, at the address (if any) in the Republic supplied for the purpose by the persons claiming to be so entitled or (until such address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or insolvency had not occurred

99Notice of every general meeting shall be given in any manner authorized—

(a)to every member of the company except, in the case of notices to be given personally or sent by post those members who (having no registered address within the Republic) have not supplied to the company an address within the Republic for the giving of notices to them,

(b)to every person entitled to a share in consequence of the death or insolvency of a member who, but for his death or insolvency, would have been entitled to receive notice of the meeting and

(c)to the auditor for the time being of the company

No other person shall be entitled to receive notice of general meetings

The name and address of the secretary of the company

100Any notice by post shall be deemed to have been served at the time when the letter con taming the same was posted and in proving the giving of the notice by post it shall be sufficient to prove that the letter containing the notice was properly addressed and posted

101A notice given to any member shall be binding on ail persons claiming on his death or on any transmission of his interests

102The signature to any notice given by the company may be written or printed or partly written and partly printed

103When a given number of days’ notice or notice extending over any other period is required to be given the day of service shall not be counted in such number of days or period

104If the company has a seal, it shall not be affixed to any instrument except by the authority of a resolution of the directors and shall be affixed in the manner and subject to such safeguards as the directors may from time to time determine

Winding up

105If the company wound up the assets remaining after payment of the debts and liabilities of the company and the costs of the liquidation shall be applied as follows

(a)To repay to the members the amounts paid up on the shares respectively held by each of them, and

(b)the balance (if any) shall be distributed among the members in proportion to the number of shares respectively held by each of them

Provided that the provisions of this article shall be subject to the rights of the holders of shares (if any) issued upon special conditions

106In a winding up, any part of the assets of the company, including any shares or securities of other companies may with the sanction of a special resolution of the company be paid to the members of the company in specie, or may with the same sanction, be vested in trustees for the benefit of such members, and the liquidation of the company may be closed and the company dissolved

Schedule 2

Common powers of companies

Included in the powers of every company as laid down by section 34 of the Act and subject to the provisions of the Act the memorandum and articles of the company, are the following common powers

(a)To purchase or acquire in any way stock-in trade, plant machinery land buildings agencies, shares debentures and every other kind or description of movable and movable property,

(b)to manage, insure, sell lease mortgage, dispose of, give in exchange, work develop build on improve, turn to account or in any way otherwise deal with its undertaking or all or any part of its property and assets

(c)to apply for, purchase or by any other means acquire protect prolong and renew any patents, patent rights licences, trade marks concessions or other rights and to deal with and alienate them as provided in paragraph [2] (b)

(d)to borrow money,

(e)to secure the payment of moneys borrowed in any manner including the mortgaging and pledging of property and without detracting from the generality thereof in particular by the issue of any kind of debenture or debenture stock, with or without security,

(f)to lend money to any person or company

(g)to invest money in any manner,

(h)to open and operate banking accounts and to overdraw such accounts,

(i)to make draw issue execute, accept, endorse and discount promissory notes, bills of exchange and any other kind of negotiable or transferable instruments

(j)to enter into indemnities, guarantees and suretyships and to secure payment thereunder in any way,

(k)to form and have an interest in any company or companies for the purpose of acquiring the undertaking or all or any of the assets or liabilities of the company or for any other purpose which may seem directly or indirect I v calculated to benefit the company, and to transfer to any such company or companies the undertaking or all or any of the assets or liabilities of the company

(l)to amalgamate with other companies

(m)to take part in the management, supervision and control of the business or operations of any other company or business and to enter into partnerships,

(n)to remunerate any person or person, either in cash or by the allotment of shares (credited as fully paid-up) for services rendered in its formation or in the development of its business

(o)to make donations,

(p)to undertake and execute any trust

(q)to act as principals, agents, contractors or trustees,

(r)to pay gratuities and pensions and establish pension schemes profit sharing plans and other incentive schemes in respect of its directors officers and employees,

(s)to distribute in species or in kind any of its assets among its members,

(t)to enter into contracts outside the Republic and to execute any contracts, deeds and documents in any foreign country, and

(u)to have a seal and to use such seal for any purpose in the Republic or in any foreign country

Schedule 3

Matters which must be stated in a prospectus in addition to those specified in the Act

Interpretation

For the purposes of this Schedule, unless the context otherwise indicates—

(a)shares’ shareholders ’ and number of shares ’ include respectively debentures”, debenture holders and number of debentures’,

(b)every person shall be deemed to be a vendor who has entered into any contract, absolute or conditional, for the sale or purchase of or for any option to purchase any property to be acquired by the company, in any case where—

(i)the purchase money is not fully paid at the date of the issue of the prospectus,

(ii)the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospectus

(iii)the contract depends for its validity or fulfilment on the result of that issue,

(c)where any property is to be acquired by the company on lease this Schedule shall have effect as if the expression vendor included the lessor and the expression purchase money included the consideration for the lease, and the expression sub teaser included a sub lessee

(d)property includes movable and immovable property and also shares in any other body corporate, and

(e)the Act means the Companies Act, 1973

Part I

1Name address and incorporation

(a)The name and address of the registered office and of the transfer office the date of incorporation of the company and if an external company, the country in which it has been incorporated

(b)If the company is a controlled company the name and address of the registered office of its controlling company

2Description of businessA general description of the business carried on or to be earned on by the company and its controlled companies

3Directors and management

(a)The names, occupations and addresses of the directors and proposed directors of the company and their nationalities if not South African

(b)The term of office for which any director or managing director has been or is to be appointed the manner in and terms on which any future director or managing director will be appointed and particulars of any right held in respect of the appointment of any director or managing director

(c)Particulars of any remuneration or proposed remuneration of the directors or proposed directors in their capacity as directors, managing directors or in any other capacity whether determined by the articles or not by the company and any of its controlled companies

(d)The name and address of the manager or proposed manager of the company

(e)If the business of the company or any part thereof is managed or is proposed to be managed by a third party under a contract the name and address (or the address of its registered office if a company) of such third party and a description of the business so managed or to be managed

4AuditorThe name and address of the auditor of the company

5SecretaryThe name and address of the secretary of the company

6History, state of affairs and prospects of company

(a)The general history of the company and its controlled companies stating, inter aha—

(i)the length of time during which the business or businesses of the company and its controlled companies have been earned on,

(ii)brief particulars of any reconstruction or reduction of capital during the past ten years,

(iii)a summary of any offers of shares of the company to the public for subscription or sale during the preceding five years, the amounts allotted in pursuance thereof, whether issued to all shareholders in proportion to their shareholdings and if not to whom issued, the reasons why the shares were not so issued and the basis of allotment

(b)A general description giving a fair presentation of the state of affairs and business of the company and its controlled companies

(c)In respect of the company and its controlled companies, and if the proceeds or any part of the proceeds of the issue of shares are or is to be applied directly or indirectly, in any manner resulting in the acquisition by the company of the shares of any other body corporate by reason of which or anything to be done in consequence thereof or in connection therewith that body corporate will become a controlled company of the company, in respect of each of the preceding five years particulars of—

(i)the average earnings before and after tax

(ii)the dividends paid in cents,

(iii)the dividend cover for each year and

(iv)the general history of the bodies corporate as required under subparagraphs (a) and (b)

(d)The opinion of the directors, stating the grounds therefore, as to the prospects of the business of the company and its controlled companies

7Purpose of the offerA statement of the purpose of the offer giving reasons why it is considered necessary for the company to raise the capital offered, and if the capital offered is more than the amount of the minimum subscription referred to in paragraph 21, the reasons for the difference between the capital offered and the said minimum subscription If it is the intention to acquire a business undertaking, a brief history of such business undertaking

8Share capital of the companyParticulars of the share capital—

(a)if consisting of shares of par value, the nominal and issued share capital share premium and share capital held in reserve the number and classes of shares and their nominal value,

(b)if consisting of shares of no par value, the issued capital the number of shares issued and held in reserve and the classes of shares,

(c)a description of the respective preference conversion and exchange rights to dividends, profits or capital of each class, including redemption rights and rights on liquidation or distribution of capital assets,

(d)the number of founders and management or deferred shares, if any, and any special rights attaching thereto and the nature and extent of the interest of the holders in the property and profits of the company

9Previous issues of debenturesWhere debentures are offered—

(a)the aggregate amount raised by the issue of debentures before the date of this offer

(b)particulars of debentures issued during the preceding period of two years, specifying the classes of debentures, whether secured or unsecured and, if secured, the property comprising the security,

(c)any other material outstanding loans

10Options or preferential lights in respect of sharesThe substance of any contract or arrangement or proposed contract or arrangement, whereby any option or preferential right of any kid has been or is proposed to be given to any person to subscribe for any shares of a company giving the number description and amount of any such shares and including the following particulars of the option or right

(a)The period during which it is exercisable

(b)the pine to be paid for shares subscribed for under it,

(c)the consideration (if any) given or to be given for tt or for the right to it,

(d)the names and addresses of the persons to whom it, or the right to it, was given or if given to existing shareholders as such, the relevant shares, and

(e)any other material fact or circumstance relevant to the granting of such option or right

Subscribing for shares shall, for the purpose of this paragraph, include acquiring them from a person to whom they have been allotted or have been agreed to be allotted with a view to bis offering them for sale

11Shares issued or to be issued otherwise than for cashThe number of shares which within the preceding two years have been issued, or have been agreed to be issued, to any vendor, promoter or other person, as fully paid up otherwise than in cash, and the consideration for which those shares have been issued or are proposed or are intended to be issued

12Property acquired or to be acquired for shares

(a)Particulars of any property purchased or acquired by the company or proposed to be purchased or acquired the purchase price of which is to be defrayed in whole or in part out of the proceeds of the issue, or is to be or has within the preceding two years been paid in whole or in part in securities of the company or out of the funds of the company, whether in cash or shares, or the purchase or acquisition of which has not been completed at the date of issue of the prospectus and the nature of the title or interest therein acquired or to be acquired by the company,

(b)the amount, if any, paid or payable as purchase money in cash or shares for any such property as aforesaid specifying the amount if any, payable for goodwill

(c)the names and addresses of the vendors

(d)the amount payable in cash or shares to the vendor and where there is more than one separate vendor or the company is a sub purchaser the amount so payable to each vendor

(e)brief particulars of any transaction relating to the property completed within the preceding two years in which any vendor of the property to the company or any person who is or was at the time of the transaction a promoter or a director or proposed director of the company had any interest, direct or indirect Provided that where the vendors or any of them are a partnership the members of the partnership shah not be treated as separate vendors Provided further that this subparagraph shall not apply to any property if the amount of the purchase money is not material or if the contract for its purchase or acquisition was entered into in the ordinary courseof the company s business, the contract not being made in contemplation of the issue nor the issue in consequence of the contract and

(f)particulars of the price at which any such property as aforesaid which is immovable property or an option over immovable property has been bought and sold within three years prior to the date of the prospectus where any promoter or director has been interested in such transaction or where any promoter or director has been a member of a partnership syndicate or other association of persons which has been so interested, with the dates of any such purchases and sales and the names of any such promoter or director, stating the amount payable by or to each in respect of any such purchase or sale For the purposes of this subparagraph shares of a company the sole asset of which is immovable property shall be deemed to be immovable property and particulars of the purchase price of the immovable property purchased by the company at any time, shall be stated

13Amounts paid or payable to promotersThe amount paid within the preceding two years or intended to be paid to any promoter with his name and address or to any partnership syndicate or other association of which he is or was member, and the consideration for such payment and any other benefit given to such promote partnership, syndicate or other association within the said period or intended to be given and the consideration for the giving of such benefit

14Commissions paid or payable in respect of underwritingThe amount if any, or the nature and extent of any consideration, paid within the preceding two years, or payable as commission to any person (including commission so paid or payable to any sub underwriter, who is a promoter or director or other officer of the company) for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares of the company the name occupation and address of each such person particulars of the amounts which each has underwritten or sub underwritten, or the rate of the commission payable for such underwriting or sub underwriting contract with such person and when such person is a company the names of the directors of such company and the nature and extent of any interest direct or indirect in such company of any promoter, director or other officer of the company in respect of which the prospectus is issued

15Preliminary expensesIn the case of every company which has been carrying on business for less than two years since the date of issue of its certificate to commence business the amount or estimated amount of preliminary expenses and the persons by whom any of those expenses have been paid or are payable, and the amount or estimated amount of the expenses of the issue and the persons by whom and of those expenses have been paid or are payable

16Material contractsThe dates and the nature of and the parties to every material contract, not being a contract entered into in the ordinary course of the business carried on or business intended to be earned on by the company or a contract entered into more than two years before the date of issue of the prospectus and a reasonable time and place at which any such contract or a copy thereof may be inspected

17Interest of directors and promotersFull particulars of the nature and extent of any material interest if any, of every director or promoter in the promotion of the company, if such promotion or formation occurred within five years of the date of the prospectus or in the property acquired within two years of the date of the prospectus or proposed to be acquired by the company or where the interest of such director or promoter consists in being a member of a partnership company syndicate or other association of persons the nature and extent ot the interest of such partnership company syndicate or other association and the nature and extent of such director's or promoter’s interest in the partnership, company, syndicate or other association, with a statement of all sums paid or agreed to be paid to him or to it in cash or shares or otherwise by any person in the case of a director either to induce him to become or to qualify him as, a director or in all cases otherwise for services rendered by such director or promoter, or by such partnership company, syndicate or other association in connection with the promotion or formation of the company

18Particulars of the offer

(a)Particulars of the shares offered, including—

(i)the class of shares

(ii)the nominal amount of the shares, if applicable

(iii)the number of shares offered

(iv)the issue price, and

(v)other conditions of the offer

(b)Particulars of the debentures offered, including—

(i)the class of debentures,

(ii)the conditions of the debentures

(iii)if the debentures are secured particulars of the security specifying the property composing the security and the nature of the title to the property, and

(iv)other conditions of the offer

19Time and date of opening of the offerThe time and date of the opening of the subscription lists or the offer

20PremiumThe amount payable by way of premium (if any) on each share which has been or is to be issued, stating the dates of issue, the reasons for any such premium and where some shares have been or are to be issued at a premium and other shares at par or at a lower premium also the reasons for the differentiation and how any premium has been or is to be disposed of

21Minimum subscription

(a)The minimum amount which in the opinion of the directors must be raised by the issue of the shares in order to provide the sums or if any part thereof is to be defrayed in any other manner the balance of the sums required to be provided in respect of each of the following matters

(i)The purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue,

(ii)any preliminary expenses payable by the company and any commission so payable to any person in consideration of his agreeing to subscribe for or of his procuring or agreeing to procure subscriptions for any shares of the company

(iii)the repayment of any moneys borrowed by the company in respect of any of the foregoing matters,

(iv)working capital stating the specific purposes for which it is to be used and the estimated amount required for each such purpose

(v)any other expenditure stating the nature and purpose thereof and the estimated amount in each case and

(b)the amounts to be provided in respect of the matters aforesaid otherwise than out of the proceeds of the issue and the sources from which those amounts are to be provided

22Statement as to adequacy of capitalA statement of the opinion of the directors to the effect that the capital of the company and its controlled companies if any (including the amount to be raised in pursuance of this offer), is adequate for the purposes of the company and its business and if they are of the opinion that it is inadequate the reasons therefor the manner in which and the sources from which the company is to be financed and the extent thereof

Part II – Reports to be set out

23Report by auditor of company

(1)A report by the auditor of the company with respect to—

(a)profits or losses and assets and liabilities in accordance with subparagraph (2) or (3) of this paragraph as the case requires and

(b)the rates of the dividends if any paid by the company in respect of each class of shares of the company in respect of each of the five financial years immediately preceding the issue of the prospectus giving particulars of each such class of shares on which such dividends have been paid and particulars of the cases in which no dividends have been paid in respect of any class of shares in respect of any of those years and it no annual financial statements have been made out in respect of any part of the period of five years ending on a date three months before the issue of the prospectus containing a statement of that fact

(2)If the company has no controlled companies the report shall—

(a)as regards profits or losses, deal with the profits or losses of the company in respect of each of the five financial years immediately preceding the issue of the prospectus, and

(b)as regards assets and liabilities, deal with the assets and liabilities of the company at the last date to which the annual financial statements of the company were made out

(3)If the company has controlled companies, the report shall—

(a)as regards profits or losses, deal as provided by subparagraph (2) with the company’s profits or losses, and in addition deal as a whole with the combined profits or losses of its controlled companies so far as they concern the members of the company and

(b)as regards assets and liabilities, deal separately with the company s assets and liabilities as provided by subparagraph (2) and, in addition, deal either—

(i)as a whole with the combined assets and liabilities of its controlled companies with or without the company s assets and liabilities or

(ii)individually with the assets and liabilities of each controlled company,

and shall indicate as regards the assets and liabilities of the controlled companies the allowance to be made for persons other than members of the company,

(c)where a controlled company has been incurring losses the amounts of such losses and the manner in which the company has made provision for such Josses

(4)To the report of the auditor there shall be annexed a report by the directors of the company setting out any material change in the assets or liabilities of the company or any of its controlled companies which may have taken place between the last date to which the annual financial statements of the company or its controlled companies as the case may be were made out and the date of issue of the prospectus

24Report by accountants where business to be acquiredIf the proceeds or any part of the proceeds, of the issue of the shares or any other funds are to bo applied directly or indirectly in the purchase of any business, a report made by accountants (who shall be named in the prospectus) upon—

(a)the profits or losses of the business in respect of each of the five financial years immediately preceding the issue of the prospectus and

(b)the assets and liabilities of the business at the last date to which the financial statements of the business were made out

25Report by accountants where body corporate will become a contiolied company

(1)If the proceeds or any part of the proceeds of the issue of the shares are or is to be applied, directly or indirectly, in any manner resulting in the acquisition by the company of shares of any other body corporate by reason of which or anything to be done in consequence thereof or in connection therewith that body corporate will become a controlled company of the company, a report made by accountants (who shall be named in the prospectus) upon—

(a)the profits or losses of the other body corporate in respect of each of the five financial years immediately preceding the issue of the prospectus, and

(b)the assets and liabilities of the other body corporate at the last date to which the annual financial statements of the body corporate were made out

(2)The said report shall—

(a)indicate how the profits or Losses of the other body corporate dealt with by the report would in respect of the shares to be acquired have concerned members of the company and what allowance would have fallen to be made in relation to assets and liabilities so dealt with, for holders of other shares if the company had at all material times held the shares to be acquired, and

(b)where the other body corporate has controlled companies deal with the profits or losses and the assets and liabilities of the body corporate and its controlled companies in the manner provided by subparagraph (3) of paragraph 23 in relation to the company and its controlled companies

26Accountants not qualified to make reportsAny report by accountants required by this Schedule shall not be made by any accountant who is a director officer or employee or a partner of or in the employment of a director officer or employee of the company or of the company's controlled or controlling company or of a company controlled by the company s controlling company

27Qualification in respect of references to period of five yearsIf in the case of a company which has been carrying on business or of a business which has been carried on for less than five years the annual financial statements of the company or business have only been made out in respect of four years three years, two years or one year this Part of this Schedule shall have effect as if references to four years three years two years or one year as the case may be were substituted for references to five years

28Adjustment of figures in reportsAny report required by this Part of this Schedule shall either indicate by way of note any adjustments as regards the figures of any profits or losses or assets and liabilities dealt with by the report which appear to the persons making the report necessary shall make those adjustments and indicate that adjustments have been made

Part III – Matters which must be stated in a prospectus under section 148 (1) (b) of the Act

29Part I of Schedule to applyThe requirements set out in Part I of tins Schedule shall apply to a prospectus under section 148(1)(6) of the Act

30Certain paragraphs of Part ll to applyThe requirements set out in paragraphs 24 and 25 of this Schedule shall apply to a prospectus under section 148 (1) (b) of the Act

31Report by directors as to maternal changesA report by the directors of the company setting out any material change in the assets or liabilities of the company or any of its controlled companies which may have taken place between the last date to which the annual financial statements of the company or its controlled companies, as the case may be were made out and the date of issue of the prospectus, shall be incorporated in the prospectus

Part IV – Directions as to the form of a prospectus

32The information required to be stated in a prospectus shall be set out to print or type and shall not be less conspicuous than that in which any additional matter is printed or typed and shall be set out in separate paragraphs under the headings included in this Schedule

33A prospectus must deal with each of the applicable paragraphs of this Schedule under its pi escribed heading but not necessarily in the same order, and shall in each case by way of a number in brackets, or otherwise, refer to the number of the paragraph of this Schedule In the last para graph of the prospectus under the heading— Paragraphs of Schedule 3 which are not applicable —the numbers of the paragraphs of this Schedule which are not applicable shall be stated

34As far as possible the general matter of a prospectus should be presented in narrative form and statistical matter in tabular form

35A prospectus under Part III of this Schedule need not be a separate document but may be incorporated in any statement required by the stock exchange concerned

Schedule 4

Requirements for annual financial statements and interim reports

Preliminary

1The annual financial statements shall fairly present the state of affairs and operations and results thereof of the company, together with any matenal matters not specifically described by the Act or this Schedule which have affected or are likely to affect the business of the company, both by way of figures and by narrative report complementing and explaining where necessary figures in financial statements The requirements in this respect in relation to interim reports are contained in Part IV of this Schedule

2This Schedule has effect in addition to the requirements of the Act in respect of annual financial statements and interim reports

3A company may in addition to matters expressly permitted by this Schedule give any in formation required by this Schedule to be stated ma balance sheet or income statement, in the form of a note or annexure thereto if such presentation would be more effective or convenient

Interpretation

(1)For the purposes of this Schedule unless the context otherwise indicates—‘accounting date ’ means in the case of annual financial statements the date on which the financial year of a company terminates and in the case of interim reports the date on which the accounting period concerned terminatesaccounting period means in the case of annual financial statements the financial year of the company and in the case of men reports, the period concerned for which an accounting is required by the Act“ distributable reserve” means, subject to subparagraph (3) of this paragraph any amount which has been carried to reserves and which may in accordance with generally accepted accounting practice and legal principles be taken to the credit of the income statement and distributed by way of dividend and docs not include any amount retained by way of providing for any known liability and non distributable reserve ’ shall be construed accordingly‘ fellow subsidiary means, in relation to another company, a company which is a subsidiary of the same holding company of women that other company is a subsidiary,group annual financial statements’ mean the annual financial statements in respect of groups of companies as prescribed by section 289 of the Actgroup of companies or group means a holding company not itself being a wholly owned subsidiary, together with all the companies being its subsidiaries“group report” means the report prescribed by section 292 of the Actholding company ’ includes a controlling company'listed investment means an investment in regard to which permission has been granted to deal therein on a recognized stock exchange or on any stock exchange of repute outside the Republic and unlisted investment shall be construed accordinglymaterial means anything significant in relation to the circumstances applicable to each companyprovision ’ means, subject to subparagraph (3) of this paragraph any amount written off or retained by way of providing for depreciation renewals or diminution in value of assets or retained by way of providing for any known liability including the liability for income tax the amount of which cannot be determined with substantial accuracy,‘subsidiary includes a controlled company, and the Act means the Companies Act 1973

(2)In respect of distributable reserve and provision referred to in subparagraph (1), ‘ liability includes all liabilities in respect of expenditure contracted for and all disputed or contingent Labilities

(3)Where—

(a)any amount written off or retained by way of provision for depreciation, renewals or diminution in value of assets other than assets acquired for sale in the ordinary course of the company s business not being an amount written off in relation to fixed assets before the first day of January 1953 or

(b)any amount retained by way of provision for any known liability,

is in excess of that which in the opinion of the directors and the auditor is reasonably necessary for the purpose the excess shall be treated for the purposes of this Schedule as a reserve and not as a provision, and if contrary to the opinion of the directors the auditor considers that an amount should be treated as a reserve, he shall report specifically on the subject to the share holders

Part I

A balance sheet

Share capital and shares

5There shall be stated—

(a)the authorized and issued share capital

(b)the classes of shares, their respective number and nominal value into which the authorized share capital is divided and in the case of shares of no par value the number of such shares

(c)the number of the issued shares and the amount of the issued share capital in respect of each class of shares,

(d)the stated capital account setting out the preliminary expenses, commission and expenses of issue of no par value shares charged against such account during the account mg period

(e)the amount of the share premium account

(f)in respect of redeemable preference shares the earliest and latest dates on which the company has power to redeem them, whether they must be redeemed in any event or are liable to be redeemed at the option of the company, and the premium if any payable on redemption and

(g)in respect of preference shares convertible into ordinary shares the conditions of conversion rights of conversion or a note where these conditions may be inspected

Reserves and provisions

6The respective aggregate amounts if material, of reserves and provisions (other than provisions for depreciation, or diminution in value of assets) shall be stated under separate headings and sub headings indicating the types of reserves and provisions

7In respect of the financial year concerned there shall be stated (unless it is shown in the income statement or a statement or report annexed thereto or the amount involved is not material)—

(a)the source of and the amount of any transfers to reserves and aforesaid provisions and

(b)the amount and the application of any transfer from reserves and aforesaid provisions

Liabilities

Debentures

8There shall be stated—

(a)the amount and classes of debentures issued and if convertible into shares the con dictions of conversion and the dates on which debentures may, or shall be redeemed or where the conditions of conversion are numerous a note where these conditions may be inspected,

(b)where any of the company’s debentures are held by a nominee of or trustee for, the company the nominal amount of the debentures and the amount at which they are stated in the books of the company

(c)particulars of any redeemed debentures which the company has power to re issue

General

9The liabilities shall be summarized with such particulars as are necessary to disclose their general nature and shall be classified under headings and sub headings appropriate to the company s business and where the amount of any class of liability is not material it may be included under the same heading as some other class

Overdrafts loans and dividends

10There shall be shown under separate headings—

(a)the aggregate amount of bank overdrafts

(b)the amounts of loans made to the company where the date of repayment of the loan is more than one year after the accounting date the rates of interest in respect thereof the respective dates of repayment and if repayable in instalments, the amounts thereof (the matters prescribed in this subparagraph may, if desired be stated by way of a note),

(c)the aggregate amount which has been declared or is recommended for distribution by way of dividend

Secured liabilities

11Where any liability of the company is secured by any assets of the company otherwise than by operation of law, that fact shall be stated specifying the liability and the assets by which it is secured

Indebtedness to companies in group

12There shall be shown under separate headings—

(a)the aggregate amount of indebtedness (whether on account of loan or otherwise) to the company s subsidiaries

(b)the aggregate amount of the company s indebtedness to all bodies corporate of which it is a subsidiary or a fellow subsidiary distinguishing between indebtedness in respect of debentures and otherwise

Assets

General

13The assets shall be summarized with such particulars as are necessary to disclose their general nature and shall be classified under headings and subheadings appropriate to the company s business and where the amount of any class of assets is not material it may be included under the same heading as some other class

14Fixed assets, current assets and assets that are neither fixed nor current shall be separately identified

Fixed assets

15The method or methods used to arrive at the amount of the fixed assets and the assets which are neither fixed nor current under each heading shah be stated

(1)The method of arriving at the amount of any fixed asset (and asset neither fixed nor current) shall subject to subparagraph (2) be to take the difference between—

(a)its cost, or if 11 stand s in the company s books at a vault ion the amount of the vault, and

(b)the aggregate amount provided or written off since the date of acquisition or valuation as the case may be for depreciation or diminution of value

(2)Subparagraph (1) shall not apply—

(a)to assets the replacement of which is provided for wholly or partly—

(i)by making provision for renewals and charging the cost of replacement against the provision so made or

(ii)by charging the cost of replacement direct to revenue

(b)to any listed and unlisted investments

(c)to interests of the company in its subsidiaries or

(d)to goodwill patents or trade marks

(3)In respect of the assets under each heading whose amount is arrived at in accordance with subparagraph (1) of this paragraph there shall be shown—

(a)the aggregate of the amounts referred to in paragraph (a) of that subparagraph and

(b)the aggregate of the amounts referred to in paragraph (b) thereof

(4)As regards the assets under each heading whose amount is not arrived at in accordance with the said Subparagraph (1) because their replacement is provided for as mentioned in sub paragraph (2) (a) of this paragraph there shall be stated—

(a)the means by which their replacement is provided for and

(b)the aggregate amount of the provision if any made for renewals and not issued

(5)As regards any land and buildings which are fixed assets there shall also be stated—

(a)a description of such land and buildings and the situation thereof

(b)the date of their acquisition by the company

(c)their purchase price and

(d)the costs of additions or improvements since the date of acquisition which costs shall be analyzed to indicate the years in which the additions md improvements to buildings were earned out

Provided that where there are more than five different items of land and buildings a company may if it considers that compliance with this subparagraph would be inconvenient or cumbersome include the information in a schedule or register and shall in that event state in the balance sheet that the said schedule or register shall be open for inspection by members or their duly authorized agents at the registered office of the company The provisions of section 113 of the Act in regard to the inspection of a register of members shall mutatis mutandis apply to the inspection of the said schedule or register

(6)As regards any fixed assets the amount of which is arrived at by reference to a valuation, the provisions of paragraph 5 (6) and (e) shall not apply but there shall be stated the years in which the assets were severally valued and the several values, and in the case of assets that have been valued during the financial year concerned the names and qualifications of the persons who valued them and the basis of valuation used by them Provided that where there are more than five different items of land and buildings which have over the years been severally valued a company may, if it considers that compliance with this subparagraph would be inconvenient or cumbersome, include the information in a schedule or register and shall in that event state in the balance sheet that the satd schedule or register shall be open for inspection by members or their duly authorized agents at the registered office of the company The provisions of section 113 of the Act in regard to the inspection of the register of members shall mutatts mutandis apply to the inspection of the said schedule or register

Interests in subsidiaries

17The aggregate number of interests of the company if a holding company consisting of shares of, or amounts owing (whether on account of loan or otherwise) by its subsidiaries, distinguishing shares from indebtedness shall be set out in the balance sheet separately from the other assets of the company

Indebtedness of holding company and fellow subsidiaries

18The aggregate amount of the indebtedness to the company of all holding companies and fellow subsidiaries shall be set out distinguishing between indebtedness in respect of debentures and otherwise

Loans and credit to directors and employees

19The aggregate amounts of any outstanding loans under section 38 (2) (b) and (c) of the Act and the particulars required by sections 295 and 296 of the Act shall be shown under separate headings

Goodwill patents and trade marks

(1)If the amount of the goodwill and of any patents and trade marks or part of that amount is shown as a separate item in, or is otherwise ascertainable from the accounting records, or from any contract for the sale or purchase of any property to be acquired by the company, or from any documents in the possession of the company, the said amount so shown or ascertainable, so far as it is not written off, or, as the case may be, the said amount so far as it is so shown or ascertainable shall be stated as a separate item

(2)Nothing in the preceding subparagraph shall be taken as requiring the amount of the goodwill patents and trade marks to be stated otherwise than as a single item

Investments

(1)There shall be shown under separate headings the aggregate amounts respectively of the company s listed and unlisted investments not being interests in subsidiaries dealt with in group annual financial statements or group reports

(2)There shall be shown—

(a)in respect of the company s listed investments the aggregate market value where it differs from the amount of the investments as stated and

(b)in respect of the company s unlisted, investments unless the information under paragraph 22 is stated the aggregate of the directors valuation of such investments

22Where no directors valuation as prescribed by paragraph 21 (2) lb) ts shown the following information shall be stated in a note or statement to be annexed to the balance sheet

(a)The aggregate amount of the company s income for the financial year concerned that is ascribable to the investments

(b)the amounts of the company s share before and after taxation of the net aggregate profits of the companies of which shares are held (and the extent bv which such profits have been affected by abnormal items) being profits for the several accounting periods in respect of which they have issued annual financial statements during the company s financial year concerned, after deducting those companies losses for those periods (or vice versa)

(c)the amount of the company's share of the aggregate of the share capital distributable and non distributable reserves and undistributed profits accumulated by the companies of which shares are held since the dates when the investments were acquired after deduct mg the losses accumulated by them since that time (or i tee versa)

(d)the manner in which any losses have been dealt with in the company s financial statements

23There shall be shown in the balance sheet or in an annexure thereto except in the case where the aggregate amount of the interest of the company consisting of shares or amounts owing (whether on account of loan or otherwise to another company) is riot material, the names of all companies (excluding subsidiary companies) of which the company beneficially owns shares and in each case either the number of shares so held or the percentage of the amount of such shares in the aggregate amount of the listed or unlisted investments Where a percentage is so given there shall be a statement as to whether this is a percentage of the aggregate book value market value or director s valuation as the case may be

24Where the proceeds or any part of the profit made on the realization of any investment is applied to went down the amount of the remaining investments that fact and the amount so applied shall be stated in the balance sheet Provided that the requirements of this paragraph shall not apply in respect of the proceeds of or profits on the realization of investments dealt with under paragraph 36 (a)

Current assets

(1)For the purposes of this paragraph stock, means any property, whether corporeal or incorporeal, which the company buys, or manufactures, or processes, or develops or sells in the ordinary course of its business

(2)The amount of stock shall be shown as a separate item and, where the amount of stock and work in progress is material in relation to either the trading results or the financial position, it shall be classified under appropriate subheadings which shall include where applicable—

(a)raw materials (including component parts)

(b)finished goods,

(c)merchandise which shall include any form of stock not mentioned in subparagraph (1) and which may itself be shown under appropriate subheadings,

(d)consumable stores (including maintenance spares)

(e)work in progress (including standing crops)

(f)contracts in progress

Provided that where the Directors are of the opinion that classification into some or all of the categories referred to would result in a failure to present a fair view, then the classification should be reduced to those categories where a fair view would be obtained and the reasons given for not indicating all categories

(3)In regard to the method of determining the value of stock there shad be stated—

(a)whether it is consistent with the method of the previous year,

(b)whether it is the lower cost or net realizable or replacement value or other expressly specified value,

(c)the accounting basis which has been used in determining the value of stock on hand Where several different bases of determining the value of stock have been used and, in the opinion of the directors, a statement of all the bases used would be of tittle value to the shareholders an intelligible summary of the bases used must be stated,

(d)in the case of work in progress and contracts in progress whether the value includes both direct costs and overheads,

(e)in the case of spares held for maintenance purposes the method of providing for obsolescence employed

(4)There shall be stated any additional information required fairly to present the value of the stock including in the case of contracts in progress whether profits or losses hare been taken into account and, if so, to what extent

(5)ff in the opinion of the directors any of the current assets have not a value on realization in the ordinary course of the company s business at least equal to the amount at which they are stated the fact that the directors are of that opinion and the extent of the estimated shortfall shall be stated

Preliminary expenses commissions and discounts

26There shall be stated under separate sub headings so far as they are not written off—

(a)the preliminary expenses,

(b)any expenses incurred in connection with any issue of shares or debentures,

(c)any sums paid by way of commission in respect of any shares or debentures

(d)any sums allowed by way of discount in respect of any debentures and

(e)the amount of the discount allowed on any issue of shares at a discount

Corresponding amounts of preceding year

27Except in the care of the first balance sheet the corresponding amounts at the end of the immediately preceding financial year in respect of all items shown in the balance sheet shall be stated

Notes to balance sheet

28The matters stated in paragraphs 29 to 35 inclusive shall be stated by way of a note or in a statement or report annexed to the balance sheet, if not otherwise shown

Shares or debentures held by subsidiary

29To the extent that the information can be reasonably obtained there shall be stated the number, description and amount of the shares and debentures of the company held by its subsidiaries or their nominees but excluding any such shares or debentures in respect of which the subsidiary is concerned in a representative capacity or as a trustee under a trust in which neither the company nor any subsidiary thereof is beneficially interested otherwise than by way of security for the purposes of a transaction entered into by it in the ordinary course of business which includes the lending of money Where a company has any reservation as to whether the information is the full information it must qualify the statement and give its reasons for such reservation

Options and preferential rights to shares

30The number description and amount of any shares of the company which any person has an option to subscribe for or in respect of which any person has any preferential right of subscription, shall be stated together with the following particulars

(a)The period during which the option or right is exercisable,

(b)the price to be paid for shares subscribed for under it

Directors authority to issue shares

31The amount of any share capital or the number of shares which the directors are authorized to issue either by virtue of the articles or by resolution of the shareholders the terms of such authority and the period for which it was granted, shall be stated

Arrear dividends

32The amount of any arrears of fixed cumulative dividends on each class of the company s shares and the period for which the dividends are in arrear

Contingent liabilities

(1)Particulars of any encumbrance on the assets of the company to secure the liabilities of any other person including where practicable the amount secured shall be staled

(2)The general nature of any other contingent liabilities not provided for and where practicable the aggregate or estimated amount of those liabilities if rt is material shall be stated

Contracts for capital expenditure

34Where practicable the aggregate amount or estimated amount if it is material of contracts for capital expenditure not otherwise provided for and the aggregate amount or estimated amount if it is material of capital expenditure authorized by the directors which has not been contracted for shall be stated There shall also be stated the source from which funds to meet such expenditure will be provided

Basis of conversion of foreign currency

35The basis on which foreign currencies have been converted into South African currency where the amount of the assets or liabilities affected is material, shall be stated

B Income statement

36There shall be shown separately in the income statement—

(a)profits or losses on share transactions, showing the application of profits or part thereof to write down the amount of the remaining investments, if not already dealt with under paragraph 24

(b)the amount of income from investments distinguishing between listed and unlisted investments

(c)the aggregate amount of income from subsidiaries stating whether dividends (merest fees or other specified income

(d)the aggregate amount of the dividends paid and proposed, and if such dividends are provided partly or wholly from capital profits a statement to that effect

(e)the aggregate amount of profits and losses on the realization scrapping or other disposal of non trading fixed and other non current assets

(f)the amount charged to revenue by way of provision specifying the nature of each pro vision or the amount withdrawn from such provisions and not applied for the purposes thereof

(g)the amount provided for taxation (specifying the origin and different classes of taxes) in respect of the financial year concerned and the amount, if any so provided in respect of any other financial year

(h)the amounts selectively set aside for redemption of shares and of loans

(i)the amount if material set aside or proposed to be set aside to, or withdraw from, reserves

(j)the amount if material of any credit or charge arising in consequence of an event in a preceding financial year

(k)the amount of interest (or other consideration) on any loans including debentures and bank overdrafts made to the company

(l)the amount of interest on share capital paid out of capital during the financial year concerned and the rate of such interest

(m)the "mount paid by way of leasing charges for the use of any asset other than immovable property which if owned by the company would have been subject to a charge for depreciation, and

(n)the respective amounts paid as remuneration for managerial technical administrative or secretarial services however described other than to the bona fide employees of the company

37The amount of the remuneration of the auditor shall be shown under a separate heading and shall distinguish between the fee for the audit the fee for other services and his expenses

(1)Unless the directors are of the opinion that the disclosure of the amount of turnover or the percentage increase or decrease of turnover would be harmful or meaningless to the company and the reasons for such opinion are stated, there shall be shown—

(a)the aggregate amount of the turnover for the financial year concerned, or

(b)the increase or decrease of the aggregate turnover for the financial year concerned expressed as a percentage of the aggregate turnover for the preceding financial year

Provided that where by virtue of the nature of the business of the company there could be doubt as to what is meant by turnover there should be indicated (by way of a note) upon what basis turnover has been determined

(2)The method employed to determine the amount of turnover shall be stated and, if a method different to that employed in the preceding financial year is used, that fact shall be stated

39Except in the case of the first income statement the corresponding amounts for the immediately preceding financial year for all items shown in the income statement shall be stated

Notes to the income statement

40The matters referred to in paragraphs 41 42 and 43 shall be stated by way of a note, if not otherwise shown

41If provision for depreciation replacement or the diminution in value of fixed assets is made by some method other than a depreciation charge or provision for renewals or diminution in value or is not provided for the method by which it is provided for or the fact that it is not provided for, shall be stated

42If no provision for taxation has been made that fact the reason therefor and the financial year in respect of which no provision has been made, shall be stated

43There shall be stated any material respects in which any items included in the income statement (stating in each case the amount involved) are affected by—

(a)transactions of a sort not usually undertaken by the company or otherwise by circumstances of an exceptional or non recurrent nature, including the amounts paid as fines, in respect of contraventions of the Act,

(b)any change in the basis of accounting or

(c)any change in the methods for the determination of the amount of any assets

C Statement of source and application of funds

44There shall be annexed to the balance sheet or separately contained therein a statement showing the sources and the application of any funds received and applied during the financial year specifying at least-

(1)funds derived from—

(a)net income (before deduction of taxes dividends paid and proposed and internal provisions and retentions),

(b)the disposal of specified fixed and other non current assets,

(c)the proceeds of loans raised and debentures issued,

(d)the proceeds of shares issued

(e)repayments received on Ioans and advances made, and

(f)any reduction in net working capital (being current assets less current liabilities) and

(2)funds applied to

(a)meeting any loss

(b)the acquisition of specified fixed and other non current assets

(c)the redemption of any loans and debentures

(d)loans and advances made and the purposes for which made,

(e)liability for taxes

(f)dividends paid and proposed, and

(g)any increase in net working capital (being current assets less current liabilities)

Part II – Annual group financial statements and group reports in respect of groups of companies

Preliminary

45The provisions contained in paragraphs 46 to 49 inclusive shall apply to all forms of annual' group financial statements and to group reports provided for in paragraphs 55 to 58 inclusive, where no annual group financial statements are submitted Provided that this paragraph shall not apply to a holding company which is a wholly owned subsidiary of another company incorporated in the Republic

46Any profit or loss arising from transactions within the group in so far as those profits or losses may not have been realized or incurred in respect of a transaction with a person or company outside the group shall be excluded in determining the total group profit or loss or the interest Of the holding company in the profit or loss of any subsidiary

47Inter group balances shall be excluded in determining the total assets and liabilities of the group

(1)Dividends declared by a subsidiary out of profits accrued prior to the date on which it became a subsidiary of the holding company being pre acquisition profits so far as they are material and reasonably ascertainable shall not, in the hands of that holding company form part of its profits available for distribution by way of dividends unless—

(a)such holding company is itself the subsidiary of another body corporate and

(b)the shares of the subsidiary were acquired from that other body corporate or a subsidiary of it, and

(c)the profits out of which the dividend is declared accrued after the company became a subsidiary of that other body corporate or of a subsidiary of it

(2)For the purpose of establishing whether any profit accrued prior to the acquisition of the shares of the subsidiary the profit or loss for any financial year of the subsidiary may if it is not practicable to apportion it with reference to the facts be treated as if it accrued from day to day during that year and be apportioned accordingly

49There shall be stated any qualifications contained in the report of the auditors of the subsidiaries on their annual financial statements and any note or saving contained in those financial statements to call attention to the matter which apart from the note or saving would properly have been referred to in such a qualification note or saving in so far as the matter which is the subject of the qualification is not covered by the holding company s own annual financial statements or the annual group financial statements and is material from the point of view of its members

Group annual financial statements in the form of consolidated financial statements

50Subject to the provisions of paragraphs 51 to 53 inclusive, the consolidated balance sheet and the consolidated income statement shall combine the information contained in the separate balance sheets and income statements of the holding company and of the subsidiaries dealt with in such consolidated financial statements but with such appropriate adjustments as may be necessary fairly to present the state of affairs as at the accounting date and the results of the operations during the accounting period, of the group of companies

51Subject as aforesaid and to Part V of this Schedule, the consolidated financial statements shall, in giving the said information comply, so far as practicable, with the requirements of this Act and this Schedule as if they were the financial statements of an actual company

52Section 297 of the Act (concerning the disclosure of directors’ remuneration) shall not by virtue of the requirements of paragraphs 50 and 51 apply for the purposes of consolidated financial statements

53In relation to any subsidiaries of the holding company not dealt with in the consolidated financial statements—

(a)paragraph 12 (concerning indebtedness to companies in the group) paragraph 17 (concerning interests in subsidiaries), paragraph 18 (concerning indebtedness of holding company and fellow subsidiaries) and paragraph 29 (concerning shares or debentures held by subsidiaries) shall apply for the purposes of such consolidated financial statements as if those statements were the statements of an actual company of which they were the subsidiaries, and

(b)there shall be annexed the information required by paragraphs 55 to 59 inclusive in respect of group reports if annual group financial statements are not prepared but as if references therein to the holding company s annual financial statements were references to the consolidated financial statements

Annual group financial statements in a form other than consolidated financial statements

54Where annual group financial statements are prepared in a form other than consolidated statements they shall present the same or equivalent information concerning the state of affairs and the results of the operations of the group of companies as contained in the consolidated financial statements including the aggregate amounts of—

(a)in so far as it is reasonably ascertainable the excess (if any) of the cost of the shares of subsidiaries in the group over the net asset value of such shares at the date of acquisition and the non distributable reserve (if any) arising in consequence of the excess of the net value of the assets at date of acquisition over the cost of the shares of the subsidiaries Provided that capital reserves arising on the acquisition of shares in a subsidiary may be set off against any excess of cost of shares of other subsidiaries over the net asset value of such shares

(b)the holding company s share of the non distributable reserves of subsidiaries

(c)the interest of outside shareholders being shareholders other than the holding company and its subsidiaries or their nominees in the subsidiaries in the group

(d)the interest of the holding company in so far as it has not been disclosed in the annual group financial statements, m—

(i)the accumulated revenue profits or losses and accumulated distributable reserves of subsidiaries for the period after the dates on which they respectively became subsidiaries to the preceding accounting date and

(ii)the revenue profits or losses of subsidiaries for the accounting period

Requirements in respect of group reports where annual group financial statements are not submitted

55Where annual group financial statements in respect of all the companies in the group are not submitted, the information required to be stated in terms of paragraphs 56 to 58, inclusive, shall be set out in a group report annexed to the annual financial statements of the holding com pany and if any such information is not obtainable the reason therefor shall be stated Provided that his paragraph shall not apply to a holding company which is a wholly owned subsidiary of another company incorporated in the Republic

56The reasons shall be stated why the subsidiaries or any of them are not dealt with in annual group financial statements

57In regard to the shareholders equity liabilities and assets of the subsidiaries not dealt with in annual group financial statements there shall be stated the aggregate amounts of—

(a)the cost of the holding companys investment in shares of subsidiaries,

(b)the excess (if any) of the cost of the shares of the subsidiaries over the net asset value of such shares at the date of acquisition and the non distributable reserve (if any) arising in consequence of the excess of the net value of the assets at the date of acquisition over the cost of the shares of subsidiaries Provided that capital reserves arising on the acquisition of shares in a subsidiary may be set off against any excess of cost of shares of other subsidiaries over the net asset value of such shares

(c)the holding company s share of the non distributable reserves of subsidiaries

(d)the interest of outside shareholders being shareholders other than the holding company and its subsidiaries or their nominees, in the subsidiaries

(e)long term loans owing by companies in the group

(f)fixe assets,

(g)net curent assets

(h)goodwill if any show me the books of the subsidiaries in so far as it has not already been absorbed in the calculation referred to in subparagraph (b), and

(i)separately seated assets not included in subparagraphs (f), (g) and (h)

58In regard to revenue profits or losses and distributable reserves of the subsidiaries not dealt with in annual group financial statements there shall be stated the aggregate interest of the holding company in—

(a)the accumulated revenue profits or losses and accumulated distributable reserves of subsidiaries for the period from the dates on which they respectively became subsidies to the preceding accounting date

(b)the revenue profits or losses and distributable reserves attributable to any shares of sub diaries disposed of during the accounting period,

(c)the revenue profits or losses of subsidiaries for the accounting period,

(d)dividends paid or declared by subsidiaries during the accounting period, and

(e)the revenue profits or losses and distributable reserves at the accounting date not dealt with in the annual financial statements of the holding company

Part III

Directors report

Preliminary

(1)The director’s report shall deal in narrative form with all descriptive matters under appropriate headings and amounts or statistics shall be set out as far as practicable in tabular form

(2)Any matter not prescribed by this Schedule, but which is material for the appreciation of the state of the affairs of the company and its subsidiaries, if any, shall be dealt with in the directors report under appropriate headings

(3)Where any amounts are stated the corresponding amounts if any in respect of the immediately preceding accounting period shall be stated

General review

(1)The said report shall generally review the business and operations of the company during the accounting period and the results thereof and shall deal with every fact or circumstance material to the appreciation of the state of the company s affairs by its members including a statement of the estimated proportion of profit or loss attributable to the various classes of business of the company

(2)The said report shall deal with any material fact or circumstance which lies occurred between the accounting date and the date of the report

Specific matters

61Unless such information is already given in any document bound with the annual financial statements, the said report shall state—

(a)the nature of the business of the company and of its subsidiaries if any and any major change therein during the accounting period,

(b)in aggregate figures the amounts and particulars of any shares and debentures issued during the accounting period and the purposes for and circumstances in which such shares and debentures have been issued

(c)any major change in the nature of the fixed assets of the company and of its subsidiaries, if any, during the accounting period or any change in policy relating to the use of fixed assets,

(d)the amount if any already paid or declared or proposed to be paid by way of dividend in respect of each class of shares,

(e)the fact that the business of the company or any part thereof or of a subsidiary has been managed by a third person or a company in which a director has an interest under any agreement during the accounting period (if il has been so managed) and the name of such third person or company and the director s interest in such company,

(f)the names of the directors and the secretary, his business and postal addresses, and any changes during the accounting period and

(g)the name of the company s holding company and its ultimate holding company if any and if any such bolding company has been incorporated in a foreign country the name of that country

Matters to be stated where company is a holding company

A – General information

62If the company is at the accounting date a holding company and if it is not itself a wholly owned subsidiary, the directors report shall in respect of each subsidiary state

(a)the name and if incorporated in a foreign country the name of that country

(b)if any of the businesses, or part thereof of any subsidiary controlled by the holding company have been managed during the accounting period by any thud person under an agreement that fact and the name of such third person, and

(c)if the financial year of any subsidiary did not end with that of the company—

(i)the reasons for that fact, and

(ii)the accounting period of such subsidiary in respect of which the information has been included in the annual financial statements of the holding company

B – Financial information in respect of subsidiaries

Interest in each subsidiary

63In respect of each subsidiary and any company which was a subsidiary at the preceding accounting date but which is no longer a subsidiary at the accounting date to which the report refers there shall be stated-

(a)the amount of its issued capital of any class, the proportion thereof held directly or indirectly by the holding company and any changes in such holdings during the accounting period

(b)the amount of the interest of the holding company consisting of shares of the subsidiary or amounts owing to the holding company (whether on account of loan or otherwise) distinguishing shares from indebtedness and any change in such interest during the accounting period

Income earned by and received from each subsidiary

64In so far as concerns the interest of the holding company in its subsidiaries there shall be stated the aggregate amount of profits after tax and the aggregate amount of the losses (after taking into account taxation if any, paid by subsidiaries reporting losses)

C – General review of group

65The said report shall—

(1)generally review the business and operations of the group of companies during the accounting period and the results thereof and shall deal with every fact or circumstance mutual to the appreciation of the state of affairs of the group by the members of the holding company, and

(2)deal with any material fact or circumstance which has occurred in the group of companies between the accounting date and the date of the report

Part IV – Interim report and provisional annual financial statements

Preliminary

(1)The information appearing in the interim report and the provisional annual financial statements shall not require to be audited

(2)Where amounts are not available from the accounting records in respect of information to be shown in the interim report and the provisional annual financial statements, any such amount may be stated by way of estimate, provided the fact that it is an estimate is stated

Interim report

(1)The interim report shall deal in narrative form with all descriptive matter under appropriate headings, and amounts or statistics shall be set out as far as practicable in tabular form

(2)Any matter not prescribed by Part IV of this Schedule but which is material to the appreciation of the results of the operations during the interim accounting period of the company and its subsidiaries (if any) shall be dealt with in the interim report under appropriate headings and in particular there shall be stated any material change as compared with the book value, in the net realizable value or replacement value of any of the assets of which the directors are aware

(3)Where any amounts are given the corresponding amounts (if any) in respect of the immediately preceding corresponding interim accounting period shall be stated

68The interim report shall state-

(a)the net profit or loss, after taxation of the company for the interim accounting period and in the case of a holding company, the consolidated net profit or loss for the period,

(b)dividends paid or proposed by the company during the interim accounting period,

(c)any comments on any fact or circumstances relative to the state of the affairs of the company which are necessary better to appreciate the information given, including information regarding capital commitments acquisitions and disposals of subsidiaries and changes in the relative holding in any subsidiary and references to the results of subsidiaries

(d)the extent, if any to which any change in the base of accounting has affected the report as compared with previous reports

Provisional annual financial statements

69The provisional annual financial statements shall state—

(a)the net profit or loss, after taxation, of the company for the year and, in the case of a holding company, the consolidated net profit or loss for the year

(b)dividends paid or proposed by the company during the year

(c)any comments on any facts or circumstances relative to the state of the affairs of the company which are necessary better to appreciate the information gen, including information regarding capital commitments, acquisitions and disposals of subsidiaries and changes in the relative holding in any subsidiary and reference to the results of subsidiaries

(d)the extent, if there is any change to which any change in the basis of accounting has affected the report as compared with previous reports

Part – V

Applicability of schedule to banking and insurance companies

(1)A company which carries on the business of a banking institution within the meaning of the Banks Act 1965 (Act No 23 of 1965), shall not be subject to the requirements of Part I of this Schedule other than those provided in respect of—

(a)the balance sheet by paragraphs 8 (b), 10 (c) 11 12 17, 18, 19 (in so far as it concerns loans under section 38 (2) (6) and (c) of the Act), 20, 21 (1) 25 (5) 26 27 28 29, 30 31 32,33 34and35, and

(b)the income statement by paragraphs 37 and 39,

but where in its balance sheet capital reserves revenue reserves or provisions (other than pro visions for depreciation renewals or dimmmution in value of assets) are not stated separately any heading stating an amount arrived at after taking into account such a reserve or provision shall be so framed or marked as to mdicate that fact and its income statement shall indicate by appro priate words the manner in which the amount stated for the company s profit or loss has been arrived at Provided that the Minister may direct that any insurance company whose Lusiness inclides to a substantial extent business other than msurance business, shall comply with all the requirements of the said Pait I or such of them as may be specified in the direction either m respect of the whole of its busimess or such par. thereof as may be so specified

(2)The annual financial statements of a company described in subparagraph (1) shall not be deemed by reason only of the fact that they do not comply with any requirements of the said Part I from which the company is exempt in terms of this paragraph not to give the fur presentation required by the Act

(1)A company which carries on the business of insurance within the meaning of the Insurance Act, 1943 (Act No 27 of 1943), shall not be subject to the requirements of Part I of this Schedule other than those provided in respect of—

(a)the balance sheet, by paragraphs 8 (b), 10 (c), II, 12 17, 18 19 (in so far as it concerns loans under section 38 (2) (b) and 6) of the Act) 20, 26, 27 28 29, 30 31 32 and 35, and

(b)the income statement by paragraphs 37 and 39

but where in its balance sheet capital reserves revenue reserves or provisions (outlier than pro visions for depreciation renewals or diminution in value of assets) are not stated separately any heading stating an amount arrived at after taking into account such a reserve or provision shall be so framed or marked as to indicate that fact and its income statement shall indicate by appropriate words the manner in which the amount stated for the company s profit or loss has been arrived at Provided that the Minister may direct that any insurance company whose business includes to a substantial extent business other titan insurance business, shall comply with all the requirements of the said Pait I or such of them as may be specified in the direction either in respect of the whole of its business or such pan thereof as may be so specified

(3)Where an insurance company is entitled to the benefit of ibis paragraph any wholly owned subsidiary thereof shall also be so entitled if its business consists only of business which is complementary to insurance business of the classes carried on by the insurance company

72Where a company entitled to the benefit of any provision contained in this Part of this Schedule is a holding company the reference in Part II of this Schedule to consolidated financial statements complying with the requirements of the Act shall in relation to consolidated financial statements of that company, be construed as a reference to those requirements in so far only as they apply to the separate annual financial statements of that company

Schedule 5

Repeal of laws

Number and Year of Act	Title	Extent of Repeal
Act No 46 of 1926	Companies Act, 1926	The whole
Act No 11 of 1932	Companies Act 1926, Amendment Act 1932	The whole
Act No 23 of 1939	Companies Amendment Act, 1939	The whole
Act No 13 of 1942	Companies Amendment Act 1942	The whole
Act No 16 of 1946	Companies Amendment Act 1946	The whole
Act No 37 of 1950	Companies Amendment Act 1950	The whole
Act No 67 of 1951	Companies Amendment Act, 19ol	The whole
Act No 46 of 1952	Companies Amendment Act, 1952	The whole
Act No 18 of 1960	Companies Amendment Act 1960	The whole
Act No 36 of 1961	Companies Amendment Act 1961	The whole
Act No 69 of 1962	Commonwealth Relations Act, 1962	Sections 3, 4 & 5
Act No 14 of 1963	Companies Amendment Act 1963	The whole
Act No 7 of 1964	Companies Amendment Act 1964	The whole
Act No 18 of 1965	Companies Amendment Act 1965	The whole
Act No 69 of 1965	Securities Transfer Act 1965	The whole
Act No 94 of 1967	Revenue Laws Amendment Act, 1967	Section 1
Act No 97 of 1967	Companies Amendment Act, 1967	The whole
Act No 62 of 1968	Companies Amendment Act 1968	The whole
Act No 90 of 1969	Companies Amendment Act, 1969	The whole

History of this document

01 May 2011

Repealed by Companies Act, 2008

14 December 2007 amendment not yet applied

Amended by Corporate Laws Amendment Act, 2006

11 January 2006 amendment not yet applied

Amended by Judicial Matters Amendment Act, 2005

20 October 2004 amendment not yet applied

Amended by Companies Amendment Act, 2004

09 July 2004 amendment not yet applied

Amended by Judicial Matters Amendment Act, 2003

17 January 2003 amendment not yet applied

Amended by Judicial Matters Amendment Act, 2002

01 January 2003 amendment not yet applied

Amended by Insolvency Second Amendment Act, 2002

22 November 1996 amendment not yet applied

Amended by Abolition of Restrictions on the Jurisdiction of Courts Act, 1996

29 June 1988 amendment not yet applied

Amended by Companies Amendment Act, 1988

01 December 1985 amendment not yet applied

Amended by Companies Amendment Act, 1985

10 April 1985 amendment not yet applied

Amended by Companies Amendment Act, 1985

01 January 1985 amendment not yet applied

Amended by Companies Amendment Act, 1984

Amended by Companies Amendment Act, 1988

04 July 1984 amendment not yet applied

Amended by Companies Amendment Act, 1984

01 December 1981 amendment not yet applied

Amended by Companies Amendment Act, 1981

21 October 1981 amendment not yet applied

Amended by Companies Amendment Act, 1981

01 September 1980 amendment not yet applied

Amended by Companies Amendment Act, 1980

25 June 1980 this version

Amended by Companies Amendment Act, 1980

17 May 1978

Amended by Companies Amendment Act, 1978

Read this version

07 October 1977

Amended by Companies Amendment Act, 1978

Read this version

26 May 1977

Amended by Companies Amendment Act, 1977

Read this version

06 May 1977

Amended by Companies Amendment Act, 1976

Read this version

23 July 1976

Amended by Companies Amendment Act, 1976

Amended by Companies Amendment Act, 1977

Read this version

01 March 1976

Amended by Companies Amendment Act, 1977

Read this version

01 July 1975

Amended by Companies Amendment Act, 1976

Read this version

01 January 1974

Amended by Companies Amendment Act, 1976

Amended by Companies Amendment Act, 1977

Amended by Companies Amendment Act, 1980

Amended by Companies Amendment Act, 1984

Commenced

Note: date of commencement of sections 337-426 (Chapter XIV)

Read this version

13 July 1973

Published in Government Gazette 3972

Read this version

19 June 1973

Assented to

Subsidiary legislation

Title
Regulations for the Winding-Up and Judicial Management of Companies, 1973 Business, Trade and Industry · Finance and Money	Government Notice R2490 of 1973
Companies Administrative Regulations, 1973 Business, Trade and Industry · Finance and Money	Government Notice R1948 of 1973

▲ To the top

Companies Act, 1973

Act 61 of 1973

Companies Act, 1973

Collections

Related documents

Ask AI

Companies Act, 1973

Act 61 of 1973

1. Definitions

Chapter IApplication of Act

2. General application of Act and preservation of rights of existing companies

3. Restricted application of Act in case of banking and insurance companies and certain other associations

4. Transitional provisions as to unlimited companies and partly paid-up shares

Chapter IIAdministration of Act

Office for registration of companies and Registrar

5. Companies Registration Office and register

6. Seal of the Companies Registration Office

7. The Registrar of companies, his appointment and delegation of power

8. Exemptions from liability

9. Inspection and copies of documents in companies registration office, and by foreign governments and universities

10. Manner of payment of fess to companies registration office

11. Annual report by Registrar

12. Jurisdiction of Court under this Act and review of decisions of Registrar

13. Security for costs in legal proceedings by companies and bodies corporate

14. Copies of Court orders to be transmitted to Registrar and Master

Regulations by the Minister and proclamations by the State President

15. Regulations

15A. Prohibition of disclosure of, and exemption from obligation to disclose, certain information

16. Regulations and proclamations to remain in force

17. Proclamations

Standing advisory committee

18. Standing advisory committee

Chapter IIITypes and forms of companies, conversions and limitations on partnerships and associations

19. Types of companies

20. Meaning of "private company" and cessation of its privileges

21. Incorporation of associations not for gain

Conversion of one type or form of company into another type or form of company

22. Conversion of a public company having a share capital into a private company and vice versa

23. Conversion of a company into an incorporated association not for gain, or into a company limited by guarantee

24. Conversion of a company limited by guarantee into a company having a share capital

25. Conversion of unlimited company

26. Notice of intended conversion of company

27. Contents and form of articles on conversion

28. Amendment of certificate of incorporation of converted company and when conversion effective

29. Effect of conversion and alteration of other registers

Limitations on partnerships and associations for gain

30. Prohibition of associations or partnerships exceeding twenty members, and exemption

31. Unregistered associations carrying on business for gain not to be corporate bodies

Chapter IVFormation, objects, capacity, powers, names, registration and incorporation of companies, matters incidental thereto and deregistration

Formation, objects and powers

32. Mode of forming company

33. Capacity main object and ancillary object of company

34. Powers of company

35. Power as to pre-incorporation contracts

36. Acts ultra vires the company not void

37. Loans made and security provided by a subsidiary

38. No financial assistance to purchase shares of company or holding company

39. Company not to be member of its holding company

40. No division into interest rights to profits or shares in guarantee companies

Names of companies

41. Names of companies not to be undesirable

42. Reservation of name

43. Registration of translation and shortened form of name or defensive name

44. Change of name and effect therefore

45. Order to change name

46. Provisions as to order to change name

47. Registrar may call for affidavits and shall give reasons for decisions as to names

48. Recourse to court in matters as to names

49. Formal requirements as to names of companies

50. Use and publication of name by company

51. Improper use of word “Limited” or “Incorporated” an offence

Memorandum of association

52. Requirements for memorandum of association

53. Memorandum may contain special conditions and may provide for unlimited liability of directors

54. Form and signing of memorandum

Alteration of Memorandum

55. Alteration of memorandum to objects and powers

56. Alteration of memorandum as to special conditions and other provisions

57. Substitution of memorandum in other language

58. Lodgment of altered memorandum

Chapter I
Application of Act

Chapter II
Administration of Act

Chapter III
Types and forms of companies, conversions and limitations on partnerships and associations

Chapter IV
Formation, objects, capacity, powers, names, registration and incorporation of companies, matters incidental thereto and deregistration

Chapter V
Share capital, reduction of capital, shares, allotment and issue of shares, members and register of members, debentures, transfers, and restrictions on offering shares for sale