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Close Corporations Act, 1984 (Act No. 69 of 1984)

Part IV : Membership

34. Disposal of interest of insolvent member

 

(1) Notwithstanding any provision to the contrary in any association agreement or other agreement between members, a trustee of the insolvent estate of a member of a corporation may, in the discharge of his duties, sell that member's interest—
(a) to the corporation, if there are one or more members other than the insolvent member;
(b) to the members of the corporation other than the insolvent member, in proportion to their member's interests or as they may otherwise agree upon; or
(c) subject to the provisions of subsection (2), to any other person who qualifies for membership of a corporation in terms of section 29.

 

(2) If the corporation concerned has one or more members other than the insolvent, the following provisions shall apply to a sale in terms of subsection (1)(c) of the insolvent member's interest.
(a) The trustee shall deliver to the corporation a written statement giving particulars of the name and address of the proposed purchaser, the purchase price and the time and manner of payment thereof;
(b) for a period of 28 days after the receipt by the corporation of the written statement the corporation or the members, in such proportions as they may agree upon, shall have the right, exercisable by written notice to the trustee, to be substituted as purchasers of the whole, and not a part only, of the insolvent member's interest at the price and on the terms set out in the trustee's written statement; and
(c) if the insolvent member's interest is not purchased in terms of paragraph (b), the sale referred to in the trustee's written statement shall become effective and be implemented.