What are the most significant changes in companies act 2008?
Written by Dr. Adv. Leigh Hefer & Jayne Hunter-Rhys. COMPANY SECRETARY’S HANDBOOK (2021). Published by Genesis Corporate Services.
Structure and flexibility of types of companies, based on intention, and not on number of shareholders;
simplification of the formation of companies involving two forms – Notice of Incorporation (NOI) and Memorandum of Incorporation (MOI), and a payment of a prescribed fee (R175 – R475);
a flexible single Constitution of the company, namely, the Memorandum of Incorporation (MOI) as opposed to a Memorandum of Association and Articles of Association, with alterable and unalterable provisions;
a Capital Maintenance Rule based on a solvency and liquidity test (S & L Test), instead of par value and no par value;
enhanced rights of shareholders and the interface of Shareholders Agreements with the MOI;
enhanced directors and prescribed officers duties and liabilities, and the provision of indemnification;
different types of companies with different public interest scores (PI Scores) will determine whether a company has to be audited, independently reviewed, or neither, and the scope of financial reporting and applicable financial reporting standards;
public companies and state-owned companies have to comply with the enhanced accountability and transparency set out in Chapter 3 (External Audit, Company Secretary and Audit Committee) of Companies Act 2008 (the Act);
a whole chapter of the Act, namely Chapter 6 has been dedicated to business rescue (as opposed to liquidation or judicial management) to facilitate the rehabilitation of financially distressed companies;
the Act provides for the indefinite continuance of existing close corporations, but no new close corporations may be formed from 01 May 2011. However, in terms of Schedule 4 of the Act, close corporations have to comply with certain provisions of the Act and in certain circumstances require an audit and an annual general meeting (AGM) of the members;
only public companies and state-owned companies must have a company secretary;
audit committees are no longer a board committee but a corporate committee and will be appointed by shareholders at the AGM which require a minimum of three members;
all public companies, listed companies and state-owned companies, and all other companies or close corporations with a PI Score in excess of 500 points must appoint a social and ethics committee;
approvals required for any distributions, financial assistance (including intra-group loans), insider share issues and options;
fundamental transaction, take-overs and offers;
listed companies should comply with the amended Johannesburg Stock Exchange (JSE) Listings Requirements (LRs).
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.
Structure and flexibility of types of companies, based on intention, and not on number of shareholders;
simplification of the formation of companies involving two forms – Notice of Incorporation (NOI) and Memorandum of Incorporation (MOI), and a payment of a prescribed fee (R175 – R475);
a flexible single Constitution of the company, namely, the Memorandum of Incorporation (MOI) as opposed to a Memorandum of Association and Articles of Association, with alterable and unalterable provisions;
a Capital Maintenance Rule based on a solvency and liquidity test (S & L Test), instead of par value and no par value;
enhanced rights of shareholders and the interface of Shareholders Agreements with the MOI;
enhanced directors and prescribed officers duties and liabilities, and the provision of indemnification;
different types of companies with different public interest scores (PI Scores) will determine whether a company has to be audited, independently reviewed, or neither, and the scope of financial reporting and applicable financial reporting standards;
public companies and state-owned companies have to comply with the enhanced accountability and transparency set out in Chapter 3 (External Audit, Company Secretary and Audit Committee) of Companies Act 2008 (the Act);
a whole chapter of the Act, namely Chapter 6 has been dedicated to business rescue (as opposed to liquidation or judicial management) to facilitate the rehabilitation of financially distressed companies;
the Act provides for the indefinite continuance of existing close corporations, but no new close corporations may be formed from 01 May 2011. However, in terms of Schedule 4 of the Act, close corporations have to comply with certain provisions of the Act and in certain circumstances require an audit and an annual general meeting (AGM) of the members;
only public companies and state-owned companies must have a company secretary;
audit committees are no longer a board committee but a corporate committee and will be appointed by shareholders at the AGM which require a minimum of three members;
all public companies, listed companies and state-owned companies, and all other companies or close corporations with a PI Score in excess of 500 points must appoint a social and ethics committee;
approvals required for any distributions, financial assistance (including intra-group loans), insider share issues and options;
fundamental transaction, take-overs and offers;
listed companies should comply with the amended Johannesburg Stock Exchange (JSE) Listings Requirements (LRs).
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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