scholarly journals REGULATION OF MERGERS AND ACQUISITIONS IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008: AN OVERVIEW

2020 ◽  
Vol 7 (1) ◽  
pp. 91-118
Author(s):  
M. Phakeng
Keyword(s):  
Mergers And Acquisitions ◽  
South African ◽  
Company Law ◽  
The South ◽  
Shareholder Protection ◽  
Different Types ◽  
New Type ◽  
A Company

The Companies Act 71 of 2008 (the 2008 Act) replaced the Companies Act No. 61 of 1973, effective 1 May 2011. The 2008 Act was aimed at keeping pace with developments in company law internationally. It is not intended to entirely replace the well-established principles and has largely retained the pre-existing South African company law. The mergers and acquisitions provisions are aimed at creating transparent, efficient, and simple procedures. Different types of mergers and acquisitions are clearly defined as “affected transactions” or “offers” in section 117. Section 118 provides for companies to which the provisions apply. The reasons for regulating these transactions and powers of the regulator – The Takeover Regulation Panel, have been reviewed, clarified, and improved. The previous section on disposal of all or greater part of assets or undertaking of a company has been re-written. The 2008 Act further introduces a new type of affected transaction in section 113, in the form of a “merger” or an “amalgamation.” The 2008 Act has retained the scheme of arrangement in section 114, but has changed its format by removing compulsory court application and approval. The courts get involved under certain prescribed circumstances. The 2008 Act has enhanced shareholder protection for fundamental transactions in the form of section 164 – Appraisal Rights and section 115, dealing with shareholder approval of fundamental transactions. Some scholars and practitioners have criticised certain provisions. However, in general, the provisions have received favourable commentary. They regarded as progressive and comparable with others internationally.

Protection of shareholders class rights in company law

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anthony Nwafor
Keyword(s):  
South African ◽  
Case Law ◽  
Company Law ◽  
The South ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
Class Rights ◽  
A Company ◽  
Business Challenges

Purpose A company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company’s organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights. Design/methodology/approach A doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law. Findings The findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights. Practical implications The paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company. Originality/value The paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights.

18. Company Law III Company Meetings, Shareholder Protection, and Liquidation of Companies

2017 ◽  
Author(s):  
Lucy Jones
Keyword(s):  
Company Law ◽  
Minority Shareholders ◽  
Market Abuse ◽  
Shareholder Protection ◽  
Different Types ◽  
Insider Dealing ◽  
The Difference ◽  
A Company

This chapter discusses the different types of company meetings and how meetings are convened and managed. It examines the different types of resolutions that may be made by shareholders both at meetings and outside meetings, and the rights of shareholders to propose their own resolutions. It explains the difference between voting by a show of hands and voting by poll. It considers the protection given by law to minority shareholders. It discusses the meaning of insider dealing and market abuse and the penalties they attract. The chapter concludes with a discussion of methods by which a company can be wound up and the meaning of wrongful and fraudulent trading.

scholarly journals “DUPED” SHAREHOLDERS MAY APPLY FOR WINDING-UP ORDER – SECTION 81(1)(e) OF THE COMPANIES ACT 71 OF 2008 Pinfold v Edge to Edge Global Investments Ltd 2014 (1) SA 206 KZD

Obiter ◽  
2014 ◽  
Author(s):  
Darren Subramanien
Keyword(s):  
South African ◽  
The South ◽  
High Court ◽  
First Case ◽  
Public Company ◽  
Kwazulu Natal ◽  
A Company

In what is the first case of its kind that to have come before the South African courts the shareholders in Pinfold v Edge to Edge Global Investments Ltd (2014 (1) SA 206 KZD) were granted permission by the KwaZulu Natal High Court (Durban) to wind up Edge to Edge Global Investments, a public company on allegations of fraud committed by the directors of the company. The application was brought before the court in terms of section 81(1)(e) of the Companies Act 71 of 2008. The decision is significant as it provides insight as to what the courts would consider to be fraudulent, illegal and a misuse or waste of the company's assets by the directors of a company, and what the shareholders of a company need to prove in order to be successful in an application based on section 81(1)(e) of the Act.

scholarly journals Occupational segregation of work and income disparities among South African women

2002 ◽  
Vol 5 (1) ◽  
pp. 111-122 ◽  
Author(s):  
P. Lalthapersad
Keyword(s):  
Labour Market ◽  
South African ◽  
African Women ◽  
The South ◽  
Female Workers ◽  
Income Disparities ◽  
Different Types ◽  
South African Women ◽  
Wage Disparities ◽  
Made In

Despite the increase in the number of women participating in the South African labour market in recent years, little progress has been made in removing wage disparities, eradicating women's marginality in the labour market, reassessing women's work or changing the traditional occupational ghettos of women. Not only does the South African labour market exhibit anomalies in respect of the gender composition of occupations, there are substantial differences by race. A good barometer of determining the extent to which men and women undertake different types of jobs, is to analyse the percentage of male and female workers per occupational category.

scholarly journals Making sense of the disclosure of latent defects in financial statements and company acquisition contracts

2011 ◽  
Vol 13 (1) ◽  
pp. 76-84
Author(s):  
Cornelius Killian
Keyword(s):  
South African ◽  
Financial Statements ◽  
The South ◽  
Legal Principles ◽  
Appeal Court ◽  
Making Sense ◽  
Court Judge ◽  
Latent Defects ◽  
Legal Nature ◽  
A Company

This paper analyses the statement made by the South African Appeal Court Judge Holmes in the Phame v Paizes (1973) case and, using economic and unique South African legal principles, it examines the true legal nature of a contract to regulate company acquisitions.1 Two solutions are offered for financial managers in South Africa: (1) the contract to regulate company acquisitions is a forward contract and (2) the difficulty in identifying latent defects should not be grounds for reducing the price paid for a company or enterprise in the South African legal system.

scholarly journals REPRESENTATION OF A COMPANY WHEN CONTRACTING WITH ANOTHER PERSON UNDER SOUTH AFRICAN COMPANY LAW Makate v Vodacom (Pty) Ltd [2016] ZACC 13

Obiter ◽  
2018 ◽  
Vol 39 (2) ◽  
Author(s):  
Vela Madlela ◽  
Palollo Michael Lehloenya
Keyword(s):  
Board Of Directors ◽  
South African ◽  
Company Law ◽  
Third Party ◽  
Constitutional Court ◽  
Legal Nature ◽  
The Board Of Directors ◽  
The Law ◽  
The Impact ◽  
A Company

A company is an artificial person and has no mind, will or hands of its own. It is, therefore, compelled to act through human agents. The board of directors is responsible for the management and direction of the business affairs of the company. Under South African company law the directors’ powers of management are statutorily entrenched (S 66(1) of the Companies Act 71 of 2008). The board of directors may, however, delegate its powers to an individual director (or individual directors), a committee of the board, a managing director or other officers of the company. Before an individual director or officer of the company can conclude a binding transaction on behalf of their company, they must have the authority to do so. In South Africa, the issue of authority to enter into a transaction or agreement on behalf of a company is dealt with using the principles of the law of agency.The crisp issue in this note relates to the circumstances in which an individual company director or officer who, when contracting with another person, purports to be acting on behalf of the company will bind the company. In the recent case of Makate v Vodacom (Pty) Ltd ([2016] ZACC 13 (hereinafter “Makate v Vodacom”)), which involved a claim for reasonable compensation by the inventor of the concept of “Please Call Me” against Vodacom (Pty) Limited (hereinafter “Vodacom”), the Constitutional Court dealt specifically with the authority of a director to conclude a contract with a third party on behalf of the company. This note discusses Makate v Vodacom and the approach of the court regarding when a company will be bound by contracts concluded by its director or another person purporting to represent the company in a transaction with a third party. It examines the main judgment of Jafta J and the concurring judgment of Wallis J in relation to the legal nature of ostensible authority in the absence of actual authority.The note further looks at the issue of prescription, which Vodacom in its defence raised against the claim for compensation brought by Mr Makate. It explores the circumstances in which prescription can be successfully invoked to deflect a contractual claim brought against a company, the impact of the Constitution in this area of the law and whether the claim lodged by Mr Makate amounted to a “debt” for purposes of the Prescription Act (68 of 1969). To this end, again, both the main judgment of Jafta J and the concurring judgment of Wallis J are examined. This is followed by critical insights on the implications of this case and some concluding remarks.

16. Company Law I

2019 ◽  
pp. 452-478
Author(s):  
Lucy Jones
Keyword(s):  
Company Law ◽  
Company Limited ◽  
Different Types ◽  
A Company

This chapter explains how companies limited by shares are formed and looks at the contents of companies’ constitutions. The discussions cover the role of promoters in setting up a company and the meaning of a company ‘off the shelf’. The chapter examines the steps and documentation necessary to register a new company limited by shares and the rules relating to a company’s name. It discusses the constitutional documents of a company and the rules relating to its constitution. The chapter concludes with a discussion of the financing of companies. It examines the different types of shares and the issuing of shares. It also considers debentures and charges.

scholarly journals The Device of Weighted Votes in Blocking the Removal of Directors from Office under the South African Companies Act 71 of 2008

2019 ◽  
Vol 63 (2) ◽  
pp. 281-302
Author(s):  
Rehana Cassim
Keyword(s):  
South African ◽  
Voting Rights ◽  
The South ◽  
A Company

AbstractA director may serve a company in more than one capacity. In his capacity as a shareholder, a director may hold voting rights in the company. One consideration regarding the removal of a director from office is their removal by shareholders in circumstances where the directors are themselves shareholders in the company and hold weighted votes. This article appraises whether, under the South African Companies Act 71 of 2008, a shareholding-director who holds shares with weighted votes would validly and lawfully be able to block his removal from office by the company's shareholders. This article makes suggestions regarding the use of weighted votes to block the removal of directors from office, and calls for an important amendment to the South African Companies Act 71 of 2008 to prevent weighted votes being used as a device to block the removal of directors from office.

18. Company Law III

2019 ◽  
pp. 507-532
Author(s):  
Lucy Jones
Keyword(s):  
Company Law ◽  
Minority Shareholders ◽  
Market Abuse ◽  
Different Types ◽  
Insider Dealing ◽  
The Difference ◽  
A Company

This chapter discusses the different types of company meetings and how meetings are convened and managed. It examines the different types of resolutions that may be made by shareholders both at meetings and outside meetings, and the rights of shareholders to propose their own resolutions. It explains the difference between voting by a show of hands and voting by poll. It considers the protection given by law to minority shareholders. It discusses the meaning of insider dealing and market abuse and the penalties they attract. The chapter concludes with a discussion of methods by which a company can be wound up and the meaning of wrongful and fraudulent trading.

Finding Juridical Dispositions Germane to the Interpretative Context to be Attributed to ‘Reasonably’ under Section 4 of the Companies Act 71 of 2008

2020 ◽  
Vol 35 (1) ◽  
Author(s):  
Simphiwe Bidie
Keyword(s):  
Decision Making ◽  
Board Of Directors ◽  
South African ◽  
Legal Order ◽  
Company Law ◽  
Constitutional Court ◽  
Bill Of Rights ◽  
Principle Of Legality ◽  
A Company ◽  
Legal Meaning

This article takes the view that the inclusion of the term ‘reasonably’ under s 4 of the Companies Act 71 of 2008 has profound foundational importance. It satisfies an important constitutional mandate embodied in s 1(c) of the Constitution, 1996: that the principle of legality be observed in all decision-making. Because of this requirement, the actions of a company director are required to be scrutinised in the light of the Constitution. This may mean that the courts must determine decisions made by directors having regard for the country’s overall constitutional and economic objectives. Therefore, the inclusion of the term seems to be a validation, because the Constitutional Court has held in many cases that the principle of legality is fundamental to the South African constitutional legal order, as required by section 1(c) of the Constitution, 1996. Practically, as vanguards of the constitutional principles, the courts would be expected to infuse the principle of legality into their interpretative duties in order to instil in the company-law sphere an environment that will foster compliance with the Bill of Rights and ensure predictability and certainty. This article pertains specially to circumstances where a board of directors has erred in law by misdirecting itself or by falling short when considering and/or interpreting ‘reasonable circumstances’. This is particularly necessary since the legal meaning the Act contemplates by including the term ‘reasonably’ in s 4 requires urgent examination before directors proceed to distribute company money or property.

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