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.

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.

The implications of the decision in Helen Suzman Foundation v Judicial Service Commission 2018 (7) BCLR 763 (CC) 8 on the functioning of the South African Judicial Service Commission

2020 ◽  
Vol 24 ◽  
Author(s):  
Nomthandazo Ntlama
Keyword(s):  
South Africa ◽  
Decision Making ◽  
Human Rights ◽  
South African ◽  
Rule Of Law ◽  
Decision Making Process ◽  
Constitutional Court ◽  
Service Commission ◽  
Insight Into ◽  
Future Management

ABSTRACT The article examines the implications of the judgment of the Constitutional Court in Helen Suzman Foundation v Judicial Service Commission 2018 (7) BCLR 763 (CC) 8 on the functioning of the Judicial Service Commission (JSC). The judgment has brought to the fore a new lease of life relating to the JSC's post-interview deliberations as a disclosable record in terms of Rule 53(1)(b) of the Uniform Rules of Court. The disclosure seeks to provide an insight into the decision-making process of the JSC in the appointment of judicial officers in South Africa. It is argued that the judgment is two-pronged: first, the disclosure of the post-interview record enhances the culture of justification for decisions taken, which advances the foundational values of the new democratic dispensation; secondly, it creates uncertainty about the future management and protection of the JSC processes in the undertaking of robust debates on the post-interview deliberations. It then questions whether the JSC members will be privileged in their engagement with the suitability of the candidates to be recommended for appointment by the President. The question is raised against the uncertainty about which decision of the JSC will be challenged that will need the disclosure of the record because the judgment does not entail the national disclosure of the record in respect of each candidate but applies only when there is an application for review of the JSC decision. Key words: Judicial Service Commission, appointments, discretion, judiciary, independence, rule of law, discretion, accountability, transparency, human rights.

Meetings of Members Ordered by the Court

2020 ◽  
Author(s):  
Leslie Kosmin ◽  
Catherine Roberts
Keyword(s):  
Board Of Directors ◽  
General Meeting ◽  
Financial Statements ◽  
Company Law ◽  
Constitutional Rights ◽  
Share Capital ◽  
The Board Of Directors ◽  
A Company

The two key organs of a company are the board of directors and the members of the company exercising their constitutional rights in a general meeting. Company law attaches great significance to the due convening of general meetings of shareholders. The general meeting is the forum for considering many of the essential matters relating to the company’s affairs including increasing or reducing the share capital of the company, changes to the memorandum or articles of association, alterations to the composition of the board of directors, considering the content of the company’s financial statements and approving dividends.

14. Shareholders

2017 ◽  
Author(s):  
Derek French
Keyword(s):  
Decision Making ◽  
Company Law ◽  
Annual General ◽  
Private Companies ◽  
Holding Company ◽  
Wholly Owned Subsidiary ◽  
Mandatory Rules ◽  
Class Rights ◽  
A Company ◽  
The Way

This chapter focuses on the members or shareholders of a company and the way in which they take decisions on the company’s affairs by written resolution using a statutory procedure. It begins by considering the rules which determine who is a member of a company and the information on the members which a company must record. It then describes the mandatory rules of company law that allow members to participate in decision-making with regards to a company’s affairs; members’ class rights and the alteration of such rights; and the definitions of holding company, subsidiary and wholly owned subsidiary. Relevant provisions of the Companies Act 2006 governing written resolutions of private companies, meetings and annual general meetings, voting, adjournment of meetings and authorisation of political donations by companies are also discussed. The chapter analyses a number of particularly significant cases.

Equality and Non-Discrimination in the South African Constitution

2000 ◽  
Vol 4 (1) ◽  
pp. 47-71
Author(s):  
Joan Small ◽  
Evadne Grant
Keyword(s):  
South Africa ◽  
South African ◽  
Human Dignity ◽  
Constitutional Court ◽  
Bill Of Rights ◽  
The South ◽  
Legal Effect ◽  
The Law ◽  
South African Constitution

Equality occupies the first place in most written constitutions, but in South Africa, its importance is magnified both in terms of the text of the Constitution and in terms of the context in which that Constitution operates. The Bill of Rights is expected, in South Africa, to help bring about the transformation of the society. These expectations of transformation through the operation of the Bill of Rights are informing the development of the law in relation to equality and non-discrimination by the Constitutional Court. The concept of discrimination is uniquely defined in the South African Bill of Rights. The Courts are struggling to give legal effect to the terminology. The test developed by the Court to interpret the equality clause, it is submitted, is comprehensive and informed. But the application of the test is sometimes problematic. This paper addresses the evolving concepts of equality and discrimination in South Africa and discusses some of the difficulties with certain aspects of the test for discrimination, including the concepts of unfairness and human dignity, which have caused division among the judiciary.

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.

scholarly journals PERLUASAN PENGATURAN PENGURUSAN PERSEROAN TERBATAS DALAM PEMBAHARUAN HUKUM PERSEROAN TERBATAS

2020 ◽  
Vol 8 (10) ◽  
pp. 1495
Author(s):  
Pande Putu Indahyani Lestari ◽  
I Gede Agus Kurniawan
Keyword(s):  
Board Of Directors ◽  
Research Method ◽  
Limited Liability ◽  
Company Law ◽  
Legal Research ◽  
Legal Entity ◽  
Study Results ◽  
The Board Of Directors ◽  
A Company

Tujuan studi ini untuk mengkaji perluasan pengaturan pengurusan perseroan terbatas dalam pembaharuan hukum Perseroan Terbatas. Dalam UUPT menyebutkan bahwa Direksi berwenang dan bertanggung jawab penuh untuk menjalankan pengurusan Perseroan. Studi ini menggunakan metode penelitian hukum normatif, yakni suatu penelitian menggunakan berdasarkan dengan pendekatan bahan hukum, baik hukum primer dan hukum sekunder. Hasil studi menunjukkan bahwa Direksi sebagai organ perseroan bertanggung jawab atas kepentingan Perseroan, apabila dalam suatu Perseroan tidak memiliki Direksi maka Perseroan tidak akan bisa berjalan atau beroperasional dengan baik selayaknya sebuah badan hukum. Kemudian dalam hal ini ketika masa jabatan Direksi sudah habis mengakibatkan terjadinya kekosongan kepengurusan Direksi, di dalam UUPT tidak ada yang mengatur manakala suatu Perseroan sudah tidak memiliki Direksi. The purpose of this study is to examine the expansion of management arrangements for limited liability companies in the legal renewal of Limited Liability Companies. The UUPT states that the Directors are authorized and fully responsible for carrying out the management of the Company. This study uses a normative legal research method, which is a research using based on the approach of legal materials, both primary and secondary law. The study results show that the Board of Directors as a corporate organ is responsible for the interests of the Company, if in a Company does not have a Board of Directors, the Company will not be able to operate or operate properly as a legal entity. Then in this case when the term of office of the Board of Directors has expired resulting in a vacancy in the management of the Board of Directors, in the Company Law no one regulates when a Company does not have a Board of Directors.

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.

14. Shareholders

2016 ◽  
Author(s):  
Derek French ◽  
Stephen W. Mayson ◽  
Christopher L. Ryan
Keyword(s):  
Decision Making ◽  
Company Law ◽  
Annual General ◽  
Private Companies ◽  
Holding Company ◽  
Mandatory Rules ◽  
Class Rights ◽  
A Company ◽  
The Way

This chapter focuses on the members or shareholders of a company and the way in which they take decisions on the company’s affairs by written resolution using a statutory procedure. It begins by considering the rules which determine who is a member of a company and the information on the members which a company must record. It then describes the mandatory rules of company law that allow members to participate in decision making with regards to a company’s affairs; members’ class rights and the alteration of such rights; and the definitions of holding company, subsidiary, and whollyowned subsidiary. Relevant provisions of the Companies Act 2006 governing written resolutions of private companies, meetings and annual general meetings, voting, adjournment of meetings, and authorisation of political donations by companies are also discussed. The chapter analyses a number of particularly significant cases.

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