Stamp Duties Act, 1968 (Act 77 of 1968)
R 385
Close Corporations Act, 1984 (Act No. 69 of 1984)Part V : Internal Relations51. Payments by corporation to members |
| (1) | Any payment by a corporation to any member by reason only of his membership, may be made only— |
| (a) | if, after such payment is made, the corporation's assets, fairly valued, exceed all its liabilities; |
| (b) | if the corporation is able to pay its debts as they become due in the ordinary course of its business; and |
| (c) | if such payment will in the particular circumstances not in fact render the corporation unable to pay its debts as they become due in the ordinary course of its business. |
| (2) | A member shall be liable to a corporation for any payment received contrary to any provision of subsection (1). |
| (3) | For the purposes of this section— |
| (a) | without prejudice to the generality of the expression "payment by a corporation to any member by reason only of his membership", that expression— |
| (i) | shall include a distribution, or a repayment of any contribution, or part thereof, to a member; |
| (ii) | shall exclude any payment to a member in his capacity as a creditor of the relevant corporation and, in particular, a payment as remuneration for services rendered as an employee or officer of the corporation, a repayment of a loan or of interest thereon or a payment of rental; and |
| (b) | "payment" shall include the delivery or transfer of any property. |
