Company Law Summary

Pages 26-37

Chapter 2: The Legal Concept of a Company

2.1: Introduction
Foundation of company law-concept of separate legal personality (SLP). flowing from this is
limited liability, perpetual succession, and that assets/profit belong to company itself, which may
sue/be sued in own name. But the concept of SLP has often been abused-now exceptions
thereto.

2.2: Definition of a Company:

S1 of the Companies Act (CA) 71 of 2008-recognises both companies formed under the CA and
the 1973 CA, as well as CC’s converted into companies ito Sch 2 of CA (continued existence
but in new form).

2.3: Legal Personality

2.3.1: The concept of Separate Legal Personality
Legal person is a legal concept, has no physical existence. Can incur legal rights and legal
duties. Cannot perform acts that are inherently human in nature eg: marriage. SLP-because
rights and obligations are distinct from those of the directors and shareholders.
SLP is affirmed in s19(1)(b) of the CA-from date and time of incorporation being registered,
company has all legal powers and capacity of a juristic person, except to the extent a juristic
person is incapable of exercising, or to the extent the MOI provides otherwise.
s8(4) of Constitution-some fundamental rights companies are entitled to (“to extent required by
the nature of the rights and the nature of the juristic person”) eg: equality, privacy. Where
possible and appropriate. Privacy ito companies not the same as ito people.(due to human
dignity basis, which companies do not have)

2.3.2: Salomon v Salomon & Co Ltd

First case to establish the principle that a company is a separate legal person quite distinct from
its shareholders and directors who in principle are not liable for the debts and liabilities of the
company.Aron Saloman was a sole trader for many years-wished to expand business and enjoy
benefits of limited liability and perpetual succession. He held 20001 out of 20007 shares. He
was a secured creditor, director, shareholder and employee. Company failed-went into
liquidation-amount realised from sale of assets was enough only for his debentures and not to
pay remaining creditors. Liquidator objected on behalf of trade creditors-contended company
was a sham, and he owned all ut six shares so he and the company were one. Liquidator
succeeded in appeal court. House of Lords reversed this decision-found that the company had
been validly formed and registered and was therefore a legal person. Court stated once a
company was legally incorporated it was a completely different juristic person with own rights
and liabilities.NB-no fraud on part of Saloman or on the creditors.Case legitimated the one man
company-common practice to have nominal shareholders who are not involved.

s14(4) of CA-registration certificate from companies commission is conclusive evidence that a)

the requirements for registration have been complied with; b) company is incorporated ito act
from date/time on certificate.

s19(1)(a) of CA: from date/time on certificate, company exists as a juristic person until its name
is removed from companies register, or court decides to pierce the veil.

2.3.3) Legal Consequences of SLP:

a) Limited Liability (unless personal liability company)

b) Perpetual Succession
c) Property and assets of company belong to the company
d) Profits of the company belong to the company (not even sole shareholder) (until declare
dividends)
e) Debts and Liabilities of Company belong to Company (unless personal liability company)
f) A shareholder has no right to manage the company’s business or enter into transactions
on its behalf; a shareholder is not an agent of the company, only those persons
authorised as representatives to bind the company may do so.
g) Company can sue or be sued in its own name.
h) Company may contract with its shareholders (because it is a separate person from them)

Pages 38-62

2.4) EXCEPTIONS TO THE PRINCIPLE OF SEPARATE LEGAL PERSONALITY

Metaphorically, once a company is formed a veil is draw between the company and its
shareholders. When will a court pierce the corporate veil? Exceptional procedure and drastic
measure-in most instances courts should uphold separate existence of a company-must be
compelling reasons to ignore this

Other exceptions to separate legal Personality egf where there is an underlying partnership
intention between the parties courts May recognise this and take cognisance of individuals
Behind the Wall such companies are known as domestic companies or quasi partnerships
courts have also been willing to treat a subsidiary company as an agent of the holding company
in certain cases

2.4.1 examples of the abuse of separate legal personality

No definite categorisation of the instances in which a court would Pierce the Veil. in the Cape
Pacific case the Supreme Court of Appeal imply there is we do not have a categorising
approach to piercing the veil in our law as this could lead to uncertainties as categories are not
an exhaustive list
a) West separate legal personality was used as a device by directed to evade his or her
fiduciary duty
Not permitted to evade fiduciary duties by device of interposing some other company
between themselves and company for which they are director so as to make it appear
that is it is the other company and not themselves entering into a transaction Robinson V
Randfontein Estates Court held that the subsidiary company was no different from the
holding company it was a mere device or camouflage to allow Robertson to evade his
fiduciary duties to the holding company.

b) Where separate legal personality was used to overcome a contractual Duty

Example where a person who is subject to a restraint of trade uses a CC or company as
a front to engage and the prohibited activity

2.4.2) the distinction between piercing the veil and lifting the Veil
When the course Pierce the Veil it treats the liabilities of the company as those of its
shareholders or directors and disregards the corporate Personality of the company
When the court lifts the bail it is merely taking into account to the company's shareholders or
directors are not necessarily ignoring the separate identity of the company
Even though a company may be a distinct legal person that does not always mean that the
character of its shareholders is irrelevant for example a rule against trading with the Enemy
could depend on the enemy character of another company as determined by who it's directors
or shareholders are (bracket continental tyre case)
the Krugersdorp case the judge mentioned that the difference between the facts of it and the
continental tyre case was that in the latter the enquiry related attributes that could not attach to
a legal person as the judge said ‘a company cannot have an enemy character’ purple for Policy
reasons it was necessary for the court to lift the Veil such a dilemma did not arise in the
Krugersdorp case where the question was that of ownership.

2.4.3) the approach adopted to piercing the veil in our common law
Present One cannot accurately State the circumstances in which the court will Pierce the Veil .
on the contrary the court in the Cape Pacific a technology in certain circumstances the court will
be Justified to discard the separate legal personality but remark that the law is far from settled
on the circumstances in which it would be permissible to do so. Also in hulse reutteer.

Quotes approach to piercing the veil laid down in the Cape Pacific case where the appellate
division lay down a number of general principles:
1) principal that' that courts should strive to uphold a company's separate personality to do
otherwise would undermine the policy and principles underpinning separate corporate
personality and its legal consequences
2) Each case must be decided on its own facts we do not have a categorising approach in
our law.
 3) a court has no general discretion to Simply disregard a company's separate legal
personality
4) Where there is fraud dishonesty or other improper conduct the need to preserve the
separate corporate identity would have to be balanced against policy considerations
which arise in favour of lifting or piercing the Veil
5) Flexible approach
6) It is not necessary that a company was conceived and founded in deceit even if a
company was legitimately established it's separate legal personality can still be
disregarded
7) The fact that the plaintiff has an alternative remedy to piercing the veil does not bother
Court from Pearson the Veil (Hulse Reutter v Godde)

2.4. domestic companies

Where there is an underlying partnership in tension between parties Court May recognise this
intention and take cognisance of the individuals are behind the corporate veil even though the
parties had formed a company to carry their intention into effect. Some indications that the
parties had formed a domestic company are the fact that an association was formed all
continued on the basis of a personal relationship involving Mutual confidence, an agreement or
understanding that all or some shareholders will participate in the Conduct of the business or an
agreement the profit of the company will be distributed in the form of salaries instead of by
wearing of dividends. Court will concern themselves with the business that the company is
actually carrying on when tended to carry on at the time as determined and agreed upon by its
shareholders and directors as opposed purely relying on the Memorandum of Incorporation

2. 4.5: agency or alter ego doctrine

In the normal relationship between the company and it's directors or shareholders the company
is the principal and the directors and shareholders are agents of the company.
In certain circumstances depending on the fact the normal relationship may be inverted either
expressly or implicitly for example when a director does not treat the company as a separate
entity but merely as a means of furthering their own private business if there's in such instances
this company may be regarded as the agent or alter ego of such director this is an abuse of the
company's separate legal existence
In treating a company as the agent of such a director or controlling shareholder the separate
legal personality of the company is still recognise the mail is not pierced however liability is
imposed personally on the individual in their capacity at the principle of the company this is an
example of a lifting the Veil

some factors for applying this Doctrine of the following

the company is grossly under capitalise new line there is a failure to observe corporate
formalities new line non payment of dividends while substantial salaries are paid to controlling
shareholder
Profits of company treated as though they were the prophets of the individual
Siphoning of company funds and absence of corporate records and officers or directors that are
non-functioning. no single factors relevant but all together to be regarded as a whole.

2.4.6) company groups

a holding company is a separate legal entity from its subsidiary. if it can be shown that is
subsidiary company acted as the agent of its holding company but then on ordinary agency
principles liability will attach to the holding company and not to the subsidiary
See page 53

2.4.7: piercing the corporate veil under the act

s163(4)
(4) Whenever a court, on application by an interested person, or in any proceedings in
which a company is involved, finds that the incorporation of, or any act by or on behalf
of, or any use of, that company constitutes an unconscionable abuse of the juristic
personality of the company as a separate entity, the court may declare that the company
is to be deemed not to be a juristic person in respect of such rights, obligations or
liabilities of the company, or of such member or shareholder thereof, or of such other
person as specified in the declaration, and the court may give such further order or orders
as it may deem fit in order to give effect to such declaration.

This is the first statutory provision in our law that permits a court to disregard the separate
juristic personality of a company. it is suggested that were the requirements of the section are
not met and cannot be relied on the common law remedy of piercing the veil would probably still
apply as this provision does not override the common law instances. at common law The
remedy of piercing the veil is to be used as a Last Resort. although it is still an exceptional
remedy under this provision it is not necessarily only one of Last Resort. it's also good more
certainty and visibility to The Doctrine of piercing the Veil. (perhaps better suited to s6-anti
avoidance provisions)

a) application or proceedings
the declaration by a court that a company is deemed not to be a juristic person maybe
sort by way of application or may occur in terms of action proceedings
b) interested person
this is not to be interpreted too restrictively or widely. Interest is limited to a mere
financial or monetary interest- see section 65 of the close corporations Act

c) incorporation of a company, Act by or on behalf of the company or the use of the company
unconscionable abuse of the juristic personality of a company may occur on its Incorporation,
as a result of any Act by or on behalf of it, or as a result of the use of a company as a legal
entity. this action is not only applicable where a company is formed as a sham But also wear a
company is initially legitimately established but is subsequently misused.
d) unconscionable abuse
Hulse Reutter- Order for the corporate veil to be pierced there must be some abuse of the
distinction between the corporate entity and those who control it which results in an unfair
advantage being afforded to those in control. however this section removes the requirement of
an unfair advantage that simplifying the test. the most troublesome aspect of this section is
that it does not define what it means by unconscionable. however it is arguably less strict than
the previous requirement of gross abuse. for example in the airport cold storage case, the
court considered the following factors is relevant in coming to the conclusion that there had
been the gross abuse of the juristic personality:
book closed corporation which part of a conglomerate of associated family businesses and they
hadr little regard to the separate legal personality of the entities concerned, it had not kept
proper books, had operated without appointing an Accounting Officer, had voluntarily assumed
a debt owing by the family business when it was Incorporated and had acquired significant
deaths from the start of commencing business which had amounted to reckless trading
the court held that the defendants could not now choose to take refuge behind the corporate veil
that they had previously chosen to ignore.

e) deemed not to be a juristic person

Balancing approach in Cape Pacific case- the need to preserve the company's separate legal
personality must be balanced against those policy considerations in favour of piercing the Veil

f) rights obligations or liabilities

A court May declare a company not to be a juristic person in respect of certain rights,
obligations or liabilities of the company, team member or shareholder or any other person
specified in the declaration. The Impossible abuse must be in respect of particular write
applications or liabilities of the company or its members or shareholders otherwise the course
does not have the power to intervene in terms of this particular section

g) further orders
in declaring a company not to be a dick person a court is given a wide discretion to make any
further orders which it deems fit in order to give effect of such declaration

2.4.8 imposing personal liability on the directors of a company

Certain instances the act in imposes liability on the directors of the company for the loss,
damages of costs sustained by the company. Are instances of lifting the Veil. where the act
makes provision for such the courts are not faced with the vexing question of whether in the
circumstances the veil ought to be pierced. the justification for the statutory lifting of the veil is to
be found in the policy of the statute.
see the slides for discussion with section 77(3).
This includes instances such as acting without authority, reckless trading, fraud, false or
misleading statements, unlawful Distributions,, causing the company to act contrary to the
Companies Act or the Memorandum of Incorporation, contravening the Companies Act.
Pages 62-95

Chapter 3: Types of companies

3.1) Introduction:
Entity of company not just large structures, can even be a single person. Also not limited to
pursuit of profit. The Companies Act 71 of 2008 creates scope for different types of companies.
Act purports to create simplicity and flexibility in formation and maintenance of companies to
better SA economy. Ito NPO-act seeks to ‘support and enhance the capacity of such companies
to perform their functions’. No longer allows for establishment of new closed corporations-small
owner managed companies absorbed.

Partnerships-governed largely by common law. Removes restriction on number of partners.

Must be formally registered to be a company, otherwise it is a partnership.

Pre-existing companies-transitional arrangements-pre existing companies continue to exist as if

incorporated and registered ito the Act. Given 2 years to amend constitution without charge or
fee, and can change names. Deemed to have changed concluding words in compliance with act
(inc, etc).

3.2) Profit and non-profit companies

4 types of companies, 1 type of npc-formed for a public benefit object, income and property
cannot be distributed to members and directors.subject to modified version of the act and s1
essential rules. A profit company is formed for financial gain for shareholders (have a share
capital ito 1873 act)

3.3) Types of profit companies

Purpose is financial gain for shareholders, formed by one or more persons as incorporators
regardless of type (NPC requires 3). Have a large number of shareholders. Public and state
owned companies are subject to more demanding disclosure, accountability and transparency.
This includes financial statement audits

3.4) The private company

A profit company that is not state owned and its MOI both prohibits the offer of any of its
securities to the public and restricts the transferability of its securities. 2 major differences from
1973 Act-abolished 50 shareholder restriction, restriction on transferability of shares widened to
securities.

Name must end with ‘proprietary Limited’ or (Pty) Ltd. need only have one directed unless moi
stipulates more. Formed by one or more persons as incorporators.Some private companies
annual financial statements need to be reviewed but not audited, unless they have a significant
social or economic impact and thus a wider responsibility to public as shown by size of
workforforce/nature and extent of their activities. Exempt from independent review and audit if
one person holds(or has beneficial interest in) all securities issued by the company or where
every holder is also a director.

Restriction on transferability of securities

Manner and form restriction: act prescribes moi must not restrict but not manner and form of
restriction.Some options: right of preemption, subject to director or shareholder approval.
Securities-shares, stocks, depository receipts, bonds etc (s1 securities Services Act). debt
instruments are also securities.

Existing shareholders have preemptive rights ito s39. These allow them to preserve their voting
power and prevent dilution of such power.

3.5) The Public company

Undefined in Act.profit company, not state owned, private not personal liability. Securities may
be freely offered to public to raise capital. Shareholders may freely transfer unless moi says
otherwise.

Greater connection to public-more safeguards and more demanding disclosure and

transparency regime. Name must end with ‘limited’ or ltd. minimum 3 directors on board. Audit
committee must consist of at least 3 non-executive directors. 1973 min 7 members requirement
now abolished. Obliged to convene agm of shareholders.

3.6) Personal liability company

Satisfies the criteria for a private company and its MOI states that it is a personal liability
company

The memorandum of incorporation will state the Company as being a Personal Liability
Company. The directors are jointly and severally liable for all debts and liabilities incurred during
their term of office. (No limited liability) Similar to partnership but has perpetual succession.
Examples of people forming this type of Company: accountants, lawyers, doctors (this is
because their profession doesn’t allow them to have limited liability) Identified: NAME
incorporated or (INC).

s19(3) of Act - directors and past directors are jointly and severally liable. Person must be
regarded as having received notice of the effect of this section on a personal liability company.
Id a director pays any such debt they would have a right of recourse against other directors for
their proportional share of the debts.

3.7) The state-owned company

An enterprise registered as a company ito the act that either falls within the meaning of “state
owned enterprise” ito the Public Finance Management Act or is owned by a municipality and is
otherwise similar to a state-owned enterprise.

Regarded as enterprises directly or indirectly controlled by the state. Generally the same
provisions as for public companies apply. Minister has power to grant exemptions. Public
Finance Management Act prevails in conflict.

Minister may grant total, partial or conditional exemption from a provision of the act on the
grounds that those provisions overlap with or duplicate an applicable regulatory scheme
established ito other national legislation.grants exemption by way of government gazette on
advice of companies commission. An exemption may be granted only to the extent that the
alternative ensures the purposes of the act are achieved at least as well as the act.

Like a public company, must appoint a company secretary, an audit committee and an auditor
and a social and ethics committee. Name ends in “SOC Ltd”.

3.8) Non-Profit Companies

A company that is incorporated for a public benefit object or an object relating to one or more
cultural or social activities or communal or group interests and it is of the essence that the
income and property of a non profit company must not be distributable to its incorporators,
members, directors, officers or persons relating to them subject to certain exceptions permitted
by the act.

Communal or group interest relates to cultural and social activities and excludes those of a
purely commercial nature.group-must have common interest. Must be interpreted eiusdem
generis. Company name must end with NPC. requires min 3 incorporators. May be formed with
or without members.not generally subjected to extended disclosure transparency and audit
requirements of the act.

MOI must set out at least one object of the company. Each object must either be a public benefit
object or an object relating to one or more cultural or social activities or communal or group
interests. Moi must also be consistent with the following as per item 1 of schedule 1;

a) Assets and income: however derived are applied to advance its objectives
b) Financial benefit or gain: above but with some exceptions for: reasonable remuneration
for goods or services rendered, for expenses incurred in advancing the objective, in
terms of a bona fide agreement, in respect of any legal binding obligation, and of any
right of that person to the extent that those rights are administered by the company in
order to advance its objectives.
c) Winding up/dissolution: no past or present member or director etc is entitled to any part
of the company’s net value after its obligations and liabilities have been met. The entire
 net value must be distributed to NPC with similar objective, any npc within sa, or a
voluntary association or non profit trust with similar objectives as per MOI.
d) Tax: no automatic advantages

Incorporators of an NPC:
3 or more. They are its first directors and members (if any).

Members of NPCs and voting rights

An npc may be incorporated with or without members. They may be voting or non voting
members as per MOI. Generally votes carry equal weight but MOI may say otherwise.
Must set out requirements and grounds for loss of membership.

Directors of NPCs
If no members-directors appointed by board or others as per MOI. If voting members
must elect any of the directors-moi must provide for election of at least a third of those
elected directors each year. An npc may not give loans, secure debts or otherwise give
direct or indirect financial assistance to its directors. Extends to directors of
related/interrelated companies. Exceptions: does not prevent transactions that are in the
ordinary course of the company’s business and for fair value; constitute an accountable
advance to meet legal expenses in a matter concerning the company; “ meet expenses
to be incurred by the person on behalf of the company; to defray the person’s expenses
for removal at company’s request; are ito an employee benefit scheme generally
available to all/a specific class of employees.

Fundamental transactions of NPCs:

Prohibited from converting to a profit company, amalgamating or merging with one. May
not dispose any assets, undertaking or business to a pc, other than for fair value, except
to such an extent that such disposals occur in the ordinary course of activities of the
NPC.

Voting members must approve disposal merger etc w/another npc.

Pre-existing s21 companies: are recognised as NPCs under new act and are deemed to
have amended their moi by the effective date stating they are NPC’s and have changed
their names to end w/ “NPC”.

3.9 External Companies

Whereas a ‘foreign company’ is an entity incorporated in another jurisdiction outside the

RSA, such a company which carries on business within SA qualifies as an ‘external
company’ and must be registered as such under the act. Only external companies are
 required to register with the companies commission and to adhere to the applicable
provisions.

When is a company “conducting business or non-profit activities within the Republic”?

When it has engaged in any ONE of the following activities in SA:
1) The holding of shareholder or board meeting or otherwise conducting internal
affairs
2) establishment/maintenance of bank accounts/other financial accounts
3) est/maintain offices/agencies for the transfer, registration or exchange of the
foreign company's own securities
4) Creation or acquisition of any debts, mortgages or any security interests in
property
5) Securing or collection of any debt, enforcement of any mortgage or security
interest
6) Acquisition of any interest in property
7) Entering into of contracts of employment
Being currently engaged or having engaged in any of the above would suffice. Conducting
business vs establishing a place of business ito 1973 act. Extends definition and protection of
3rd parties.

Defines as an external profit company, an external npc or a registered external company.

Application of the Act to external companies

Act does not apply to foreign companies, only external companies (except ch4-applies to foreign
securities offered in SA) unlike 1973 Act (to promote investment and protect employees and
third parties), only certain provisions apply, including the following:
1) Obligation of an EC to register as such and provide certain info upon registration
2) Obligation to continuously maintain at least one office in SA and register its address
3) Duty to file an annual return in the prescribed form
4) Obligations relating to use of company’s name and registration number
5) Various sections protecting the names of registered EC’s.
6) Certain provisions on fundamental transactions and in particular requirements for a
special resolution by external holding companies
7) Protection for whistleblowers who disclose info about ECs.

Advantages-protects name, can receive from dissolved NPCs.

Failure to register does not affect the validity of contracts/ transaction entered into with a
third party, depending on circumstances.

Domesticated company-foreign company whose registration has been transferred to the

RSA.
 Pages 95-108

-Closed Corporations
-3.10: A new approach

Act adopts a momentous stance on CC’s-existing may continue indefinitely but no new
ones may be formed, as the Act aims to implement an effective and simplified regime for
maintaining small companies based on characteristics of CC’s-thus no need for
application of CC Act. But problematic-reality favours CC’s (popular, effective, simple).
Sch 3 of CA amends various provisions of CCA to avoid regulatory arbitrage. Includes
amendments to transparency and accountability provisions. Sch 2 of the Act deals with
the conversion of a CC to a company

-3.10.2: Conversion of a Closed Corporation to a Company

May do so at any time under the Act, by filing a notice of conversion in the prescribed
manner and form and accompanied by the following:
● A certified copy of special resolution approving conversion (but CC’s do not pass
special resolutions). Draft Companies amendment bill-satisfied by written
statement signed by members holding 75% interest in the CC.
● New or amended MOI consistent w/CA. (but CC is governed by a founding
statement not an MOI
● A prescribed fee

Then register by companies commission, and cancels its registration under the CCA, gives
notice in GG of conversion and enables registrar of deeds to effect the necessary changes
resulting from conversions and name changes.

-Effects of conversion:
● Every member of converted CC is entitled to become a shareholder of the resulting
company (1973 Act-obliged not entitled). Shares not necessarily proportional to interest
in CC.
● Juristic person that existed as a CC prior to conversion continues to exist as a juristic
person in the form of a company.
● Assets, liabilities, rights and obligations of CC vest in company
● Any legal proceedings instituted by/against CC before registration may be continued
by/against company (anything done by NCC-deemed to have been done by company)
● Any enforcement measures commenced under CCA may be brough against company
on same basis
● Any liability of a member of the CC for the debts oof the CC under the CCA survives the
conversion and continues as if the conversion had not occurred

-3.11: Conversion of Companies

New Act is almost silent on conversion of a company from one type to another. Specifically
precludes conversion of NPC to PC (indespensible provision). Ito profit companies-where they
amend their MOI in such a manner that it no longer meets the criteria for its particular type, it
must at the same time a,emd its name appropriately to reflect the category into which it now
falls. This suggests conversion is done by amendment of MOI, generally by way of a special
resolution, to effect necessary changes to criteria-does not spcify any firther requirements.
Unlike in 1973 Act (special resoluton approved by court for personal liability company removing
the provision for joint and several liability on directors)-creditors of a personal liability company o
longer have a right of recourse to directors once this provision is removed by special resolution
(although presumably no retrospective effect). S19 of the CA- A company is a juristic person
from time of incorporation until removal from register. A company that has changed its name
may still have previously recommended legal proceedings by or against it continue under new
name.

Pages 99-109

Chapter 4: Formation of Companies and the Comoany Constitution

4.1) incorporation and registration of companies

New Act-formation of company is a right, not a privelage-promotes commercial enterprise and
economic development. Fundamental object of the act-to promote thee development of the ​of
the sa economy by creating flexibility and simplicity in the formation and maintenance of
companies (s7b(ii). Simplified procedure seeking to elimanate delay and costs. Reduced
regulatory oversight

4.1.2) Incorporation of the company

a) The incorporators: responsible for the incorporation of the company. Min 1 for profit
company, min 3 for NPC. (1973-7 for public, 2 for private). No longer requires
incorporator to subscribe for shares in the company. Responsibilites: sign MOI,
automatically director until sufficient diredctors appointed or elected.
b) Procedure for incorporation: previously name had to first be reserved. Now-incorporators
must complete and sign MOI (person/proxy). Moi-sole fou dning document of company,
sets out rights, dutis and responsibilites of shareholders and directors. Must then file a
NOI (name, initial directors, registered office, financial year end date), a copy of the MOI
snd prescribed fee must be sent to the Companies Commission.

If the MOI contains provisons prohbiting the amendment or impeding such, the NOI must
contain a prominent statement drawing attention to such and its llocation.

4.1.3) Registration of the Company

After accepting the filed NOI, the companies commission must register the company asap by a)
issuing a unique registration number, ba0entering prescribed info incl name in companies
egister, c) enforse the NOI and MOI copy, d) issue and deliver registration certificate to the
company.

a) The registration certificate: conclusive evidence that requirements have been

met. Company is a juristic person from date stipulated on certificate. Either date
issued or requested by nOI.
b) Rejection of the NOI by Companies Commission: two grounds for mandatory
rejection-where the number of initial directors is less than prescribed
(private/personal liability-1; npc/public-3), or if commission reasonably believes
that any directors are disqualified and the remainder would be insuffivient.
Discretionary ground-NOI is incomplete or improperly completed. Subject to
Act-substantive compliance reuired-invalid if deviation from norm affects
substance or would reasonably mislead a person reading it.
c) Registration of external companies: must register within 20 days of conducting
business in RSA. must supply copy of registration certificate in its jurisdiction of
incorporation. Becomes a registered external company.

4.1.4) The registered office

Each company must have at least one, provide recquisite info in NOI or on external registration.
Must file notice of change-tkes effect after 5 business days or on stated date. NB-company
lacks physical presence, use registered office to service a court process. Keep records, or if in
another location-file notice of location of records.

Pages 105-161; 212-261