The Companies Act, 2008 constitutes a completely new corporate law for South Africa, and replaced the current Companies Act, 1973 (as amended by the Corporate Laws Amendment Act) and amended the Close Corporation Act, 1984.
This document provides a high level overview of the main features of the new Companies Act.
New features - old act vs new act
The Act provides for a number of new features, including:
- The classification of companies into either profit or non profit companies. Profit companies are divided into 4 categories – private companies, personal liability companies, state owned companies and public companies.
- The Act provides for stricter accountability and transparency requirements for state owned companies and public companies.
- A codified standard for director’s conduct and strict director liability provisions.
- A revised regime for takeovers and fundamental transactions. Specific provision is made for compulsory acquisition of minority shareholding in a takeover scenario, appraisal rights for dissenting minority shareholders, and court approval is only required where a significant minority (15%) is opposed to the transaction.
- A capital maintenance regime based on solvency and liquidity that abolishes the concept of par value shares and nominal value shares.
- A modern business rescue regime which is largely selfadministered by the company, under independent supervision, and subject to court intervention at any time on application by any of the stakeholders.
- The Act is characterised by flexibility, simplicity, transparency, corporate efficiency and regulatory certainty. It is drafted in plain language, and is not as detailed and prescriptive as the current Act. Companies are allowed flexibility to change certain requirements to suit their specific circumstances.