Stamp Duties Act, 1968 (Act 77 of 1968)
R 385
Companies Act, 1973 (Act No. 61 of 1973)Chapter V: Share capital, Acquisition by Companies of own Shares, Shares, Allotment and Issue of Shares, Members and Register of Members, Debentures, Transfers, and Restrictions on Offering Shares for SaleShare capital80. Restriction of power to pay commission and discounts; return to Registrar |
| 1) | A company may pay commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or of his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company if- |
| a) | the payment of the commission is authorised by the articles; and |
| b) | the commission paid or agreed to be paid does not exceed ten per cent of the price at which shares are issued or any lesser rate fixed by the articles; and |
| c) | the amount or rate per cent of the commission paid or agreed to be paid is- |
| i) | in the case of shares offered to the public, disclosed in the prospectus; or |
| ii) | in the case of shares not offered to the public, disclosed in a statement in the prescribed form and where any circular or notice, not being a prospectus, inviting subscription for shares is issued, also disclosed in that circular or notice; and |
| d) | the number of shares for which persons have agreed, for a commission, to subscribe absolutely, is disclosed in the manner aforesaid. |
| 2) | The statement referred to in subsection (1)(c)(ii) shall be lodged with the Registrar for registration before the payment of the commission to which the statement relates. |
| 3) | Save as aforesaid and subject to the provisions of section 81, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or of his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company, whether the shares or money be so applied by being added to the purchase price of any property acquired by the company or to the contract price of any work to be executed for the company or the money be paid out of the nominal purchase price or contract price, or otherwise. |
| 4) | Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay. |
| 5) | A vendor to, promoter of, or other person who receives payment in money or shares from, a company, shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been lawful under this section. |
| 6) | If default is made in complying with the requirements of subsection (2) relating to the lodging of the statement referred to therein with the Registrar, the company, and every director and officer of the company who knowingly is a party to the default, shall be guilty of an offence. |
