New Companies Act - Analysis by Cox Yeats Attorneys

The Companies Act 71 of 2008 (New Companies Act) will commence on 1 May 2011.

This note has been prepared on the basis of the New Companies Act, as amended by the latest version of the Companies Amendment Bill and as read with the final Companies Regulations.  We understand that the Companies Amendment Bill has been signed into law but as at the date of preparation of this note, have not had sight of a consolidated, final New Companies Act.

The New Companies Act changes existing South African company law in a number of ways.  Most notably, it enhances the rights of persons who have, to date, had limited or no protection under company law.  Employees and the trade unions which represent them are among them. 

The New Companies Act also requires that it be interpreted and applied in a manner which gives effect to its purposes, which include the promotion of compliance with the Bill of Rights in the Constitution.  Provisions in the New Companies Act which benefit stakeholders may in due course be interpreted more widely to achieve this purpose.

This note focuses primarily on profit companies, including private, public, personal liability and state-owned companies.  Separate notes with specific focus on close corporations, external companies and non-profit companies will be circulated in due course.

Any reference in this note to the securities of a company is, amongst other possibilities, a reference to shares and debentures issued or authorised for issue by a profit company.

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Alastair Hay | Cox Yeats
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