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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part D : Capitalisation of profit companies

35. Legal nature of company shares and requirement to have shareholders

 

 

1) A share issued by a company is movable property, transferable in any manner provided for or recognised by this Act or other legislation.

 

2) A share does not have a nominal or par value, subject to item 6 of Schedule 5.

 

3) A company may not issue shares to itself.

 

4) An authorised share of a company has no rights associated with it until it has been issued.

 

5) Shares of a company that have been issued and subsequently—
a) acquired by that company, as contemplated in section 48; or
b) surrendered to that company in the exercise of appraisal rights in terms of section 164, have the same status as shares that have been authorised but not issued.

 

6) Despite the repeal of the Companies Act, 1973 (Act No. 61 of 1973), a share issued by a pre-existing company, and held by a shareholder immediately before the effective date, continues to have all of the rights associated with it immediately before the effective date, irrespective of whether those rights existed in terms of the company’s Memorandum of Incorporation, or in terms of that Act, subject only to—
a) amendments to that company’s Memorandum of Incorporation after the effective date;
b) the operation of subsection (5); and
c) the regulations contemplated in item 6(3) of Schedule 5.