What are the meanings of “control” and “hold” in terms of section 3 of companies act 2008?
Written by Dr. Adv. Leigh Hefer & Jayne Hunter-Rhys. COMPANY SECRETARY’S HANDBOOK (2021). Published by Genesis Corporate Services.
Section 3(2) contains the test whether a person controls all of the general voting rights or the majority of it associated with issued securities of a company.
Section 3(2) provides that for the purposes of determining whether a person controls all or a majority of the general voting rights associated with issued securities of a company:
2.1 voting rights which are exercisable only in certain circumstances are to be taken into account only when those circumstances:
2.1.1 have arisen;
2.1.2 are under the control of the person holding the voting rights;
2.2 voting rights which are exercisable only on the instructions or with the consent of another person are to be treated as being held by a nominee of that other person;
2.3 voting rights held by a person:
2.3.1 as nominee for another person are to be treated as held by that other person;
2.3.2 in a fiduciary capacity are to be treated as held by the beneficiary of those voting rights. This includes trustees of a trust because a trust is not a separate legal person at common law. The voting rights in respect of shares which are registered in the name(s) of the trustees in the trust, are deemed to be exercisable by the beneficiaries of the trust.
Source: Section 3 of Companies Act 71 of 2008
Hard copy and E-Book Publications for the Professionals, Company Secretaries, Company Directors and Prescribed Officers, Members of CCs, Business Owners, Lecturers and Students on various business, compliance and legislative topics.
Section 3(2) contains the test whether a person controls all of the general voting rights or the majority of it associated with issued securities of a company.
Section 3(2) provides that for the purposes of determining whether a person controls all or a majority of the general voting rights associated with issued securities of a company:
2.1 voting rights which are exercisable only in certain circumstances are to be taken into account only when those circumstances:
2.1.1 have arisen;
2.1.2 are under the control of the person holding the voting rights;
2.2 voting rights which are exercisable only on the instructions or with the consent of another person are to be treated as being held by a nominee of that other person;
2.3 voting rights held by a person:
2.3.1 as nominee for another person are to be treated as held by that other person;
2.3.2 in a fiduciary capacity are to be treated as held by the beneficiary of those voting rights. This includes trustees of a trust because a trust is not a separate legal person at common law. The voting rights in respect of shares which are registered in the name(s) of the trustees in the trust, are deemed to be exercisable by the beneficiaries of the trust.
Source: Section 3 of Companies Act 71 of 2008
Hard copy and E-Book Publications for the Professionals, Company Secretaries, Company Directors and Prescribed Officers, Members of CCs, Business Owners, Lecturers and Students on various business, compliance and legislative topics.
Updated on: 23/05/2023
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