1) Any company having ten or fewer members all of whom qualify for membership of a corporation in terms of section 29 of this Act, may be converted into a corporation, provided that every member of the company becomes a member of the corporation.
2) In respect of a conversion referred to in subsection (1), there shall be lodged with the Registrar-
a) an application for conversion, in the prescribed form, signed by all the members of the company, containing a statement that upon conversion the assets of the corporation, fairly valued, will exceed its liabilities, and that after conversion the corporation will be able to pay its debts as they become due in the ordinary course of its business;
b) a statement in writing by the auditor of the company that he has no reason to believe that a material irregularity contemplated in subsection (3) of section 26 of the Public Accountants' and Auditors Act, 1951 (Act No. 51 of 1951), has taken place or is taking place in relation to the company or, where steps have been taken in terms of that subsection, that such steps and other proceedings in terms of the subsection have been completed; and
c) a founding statement referred to in section 12 lodged in accordance with section 13.
3) For the purposes of the founding statement referred to in subsection (2)(c)-
a) there shall, in regard to the requirements of section 12(f), be a statement of the aggregate of the contributions of the members, which shall be for an amount not greater than the excess of the fair value of the assets to be acquired by the corporation over the liabilities to be assumed by the corporation by reason of the conversion: Provided that the corporation may treat any portion of such excess not reflected as members' contributions, as amounts which may be distributed to its members;
b) the members' interests stated in terms of section 12(e) need not necessarily be in proportion to the number of shares in the company held by the respective members at the time of the conversion.
4) If the provisions of subsection (2) have been complied with, the Registrar shall, if he is satisfied that the company concerned has complied materially with the requirements of the Companies Act-
a) register the founding statement in accordance with the provisions of section 13;
b) satisfy himself that, simultaneously with such registration, the registration of the memorandum and the articles of association of the company concerned is cancelled in accordance with the provisions of the Companies Act;
c) endorse on the founding statement, or otherwise issue in writing, a certificate of incorporation as provided by section 14(1): Provided that such certificate shall state the fact that the corporation has been converted from a company and shall mention the name and registration number of the former company; and
d) give notice in the prescribed manner Gazette of the conversion.
5)
a) On the registration of a corporation converted from a company, the assets, rights, liabilities and obligations of the company shall vest in the corporation.
b) Any legal proceedings instituted by or against the company before the registration may be continued by or against the corporation, and any other thing done by or in respect of the company shall be deemed to have been done by or in respect of the corporation.
c) The conversion of a company into a corporation shall in particular not affect-
i) any liability of a director or officer of the company to the company on the ground of breach of trust or negligence, or to any other person pursuant to any provision of the Companies Act; or
ii) any liability of the company, or of any other person, as surety.
d) The juristic person which prior to the conversion of a company into a corporation existed as a company, shall notwithstanding the conversion continue to exist as a juristic person but in the form of a corporation.
6) The corporation shall forthwith after its conversion from a company, give notice in writing of the conversion to all creditors of the company at the time of conversion, and to all other parties to contracts or legal proceedings in which the company was involved at the time of the conversion.
7) Upon the production by a corporation which has been converted from a company of a certified copy of its founding statement referred to in subsection (4)(a), to any registrar or other officer charged with the maintenance of a register under any law, and on compliance with all the requirements pursuant to any such law as to the form of application (if any) and the payment of any required fee, such registrar or officer shall make in his register all such alterations as are necessary by reason of the conversion of the company into a corporation: Provided that no transfer or stamp duties shall be payable in respect of such alterations in registers.
8) If the accounting officer mentioned in the founding statement of a converted corporation is not the person who or firm which has acted as auditor for the company, the appointment of that person or firm shall lapse upon the conversion into a corporation.
9) If a corporation is converted into a company in accordance with the provisions of the Companies Act, the registration of the founding statement of the corporation shall be cancelled simultaneously with the registration of the memorandum and articles of association of the company in terms of that Act.