Companies Act Training
The introduction of the new Companies Act which came into effective from 1 May 2011 has some far-reaching implications for all businesses in South Africa. The new Companies Act has been modernised and brought into line with international best practice.
Our office is able to assist clients by providing the following service to clients:
- Personal consulting in all aspects of the Companies Act 2008
- Provide current and up to date literature on company secretarial compliance
- Ensure a smooth transition from the old to the new Companies Act
- Liaise with the Companies Intellectual Properties Commission (CIPC) regarding the registration of the numerous documents to attain compliance
- Provide advice and guidance in terms of the drafting and implementation of the new Memorandum of Incorporation (MOI) and shareholders agreements
- Attend your Board meeting and provide an interactive overview of the new Companies Act.
Why the New Companies Act Matters
Enhanced Corporate Governance: The 2008 Act places greater emphasis on accountability, fairness, transparency, and social responsibility.
Directors and officers have expanded fiduciary duties, meaning decision-makers must act in the best interests of the company, its shareholders, and, in certain circumstances, its stakeholders (employees, creditors, suppliers, and the community). Modernized Company Structures: Traditional restrictive structures (such as separate memoranda for different companies) have been replaced by a more flexible Memorandum of Incorporation (MOI).
This shift allows companies to tailor their internal governance rules, rights, and responsibilities to their specific needs, rather than relying exclusively on rigid statutory default provisions.
Streamlined Registration and Compliance: The new Act introduced electronic filings, simplified registration processes, and clearer documentary requirements.
However, it also established stricter penalties for non-compliance, making it imperative for companies to stay current on all filings and disclosures. Minority Shareholder Protections: Improved provisions for minority shareholder rights—including the ability to apply for derivative actions—mean that boards and majority shareholders must pay closer attention to fair treatment and full disclosure.
Encouragement of Entrepreneurship: By offering one-person private companies (OPPCs), reducing initial capital requirements (for certain categories), and simplifying solvency and liquidity tests, the Act aims to promote small-business growth while still protecting creditors and other stakeholders.
Directors and officers have expanded fiduciary duties, meaning decision-makers must act in the best interests of the company, its shareholders, and, in certain circumstances, its stakeholders (employees, creditors, suppliers, and the community). Modernized Company Structures: Traditional restrictive structures (such as separate memoranda for different companies) have been replaced by a more flexible Memorandum of Incorporation (MOI).
This shift allows companies to tailor their internal governance rules, rights, and responsibilities to their specific needs, rather than relying exclusively on rigid statutory default provisions.
Streamlined Registration and Compliance: The new Act introduced electronic filings, simplified registration processes, and clearer documentary requirements.
However, it also established stricter penalties for non-compliance, making it imperative for companies to stay current on all filings and disclosures. Minority Shareholder Protections: Improved provisions for minority shareholder rights—including the ability to apply for derivative actions—mean that boards and majority shareholders must pay closer attention to fair treatment and full disclosure.
Encouragement of Entrepreneurship: By offering one-person private companies (OPPCs), reducing initial capital requirements (for certain categories), and simplifying solvency and liquidity tests, the Act aims to promote small-business growth while still protecting creditors and other stakeholders.
Ensuring a Smooth Transition from the Old to the New Companies Act
Gap Analysis and Readiness Assessment: We begin by conducting a thorough review of your current governance framework and secretarial practices under the old Companies Act (1973).
Key steps include:
Identifying which clauses in your existing Memorandum of Association (MOA) or Articles of Association are now inconsistent with the new Act.
Highlighting any unresolved compliance gaps (e.g., missing director indemnities, outdated share class provisions, or obsolete authority thresholds).
Drafting a comprehensive transition plan with clear milestones, responsibilities, and timelines.
Drafting or Amending the Memorandum of Incorporation (MOI): Under the new Act, the MOI is the supreme governing document of a company. We guide you through:
Deciding whether to adopt the standard CIPC Articles or to prepare a tailored MOI that addresses your unique governance requirements (e.g., specialized voting rights, differential dividend entitlements, or bespoke director appointment mechanisms).
Ensuring that all provisions in the new MOI reflect the mandatory and optional requirements of the Act, including alignment with your shareholders’ agreement (if applicable).
Obtaining shareholder ratification where necessary, through properly convened general meetings or written resolutions.
Re-registration and CIPC Submissions: Depending on the nature of your existing entity, you may need to re-register or amend your filing with CIPC. We handle: All documentary requirements, including certified resolutions, special resolutions, and the supporting documentation for name changes, share restructurings, or director changes. Direct liaison with CIPC officials to resolve queries or expedite approvals, thereby minimizing the risk of administrative delays.
Confirmation of successful crafting of the new company profile, from which point all future filings will reference the updated MOI and company details.
Key steps include:
Identifying which clauses in your existing Memorandum of Association (MOA) or Articles of Association are now inconsistent with the new Act.
Highlighting any unresolved compliance gaps (e.g., missing director indemnities, outdated share class provisions, or obsolete authority thresholds).
Drafting a comprehensive transition plan with clear milestones, responsibilities, and timelines.
Drafting or Amending the Memorandum of Incorporation (MOI): Under the new Act, the MOI is the supreme governing document of a company. We guide you through:
Deciding whether to adopt the standard CIPC Articles or to prepare a tailored MOI that addresses your unique governance requirements (e.g., specialized voting rights, differential dividend entitlements, or bespoke director appointment mechanisms).
Ensuring that all provisions in the new MOI reflect the mandatory and optional requirements of the Act, including alignment with your shareholders’ agreement (if applicable).
Obtaining shareholder ratification where necessary, through properly convened general meetings or written resolutions.
Re-registration and CIPC Submissions: Depending on the nature of your existing entity, you may need to re-register or amend your filing with CIPC. We handle: All documentary requirements, including certified resolutions, special resolutions, and the supporting documentation for name changes, share restructurings, or director changes. Direct liaison with CIPC officials to resolve queries or expedite approvals, thereby minimizing the risk of administrative delays.
Confirmation of successful crafting of the new company profile, from which point all future filings will reference the updated MOI and company details.
