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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

36. Authorisation for shares

 

 

1) A company’s Memorandum of Incorporation
a) must set out the classes of shares, and the number of shares of each class, that the company is authorised to issue;
b) must set out, with respect to each class of shares—
i) a distinguishing designation for that class; and
ii) the preferences, rights, limitations and other terms associated with that class, subject to paragraph (d);
c) may authorise a stated number of unclassified shares, which are subject to classification by the board of the company in accordance with subsection (3)(c); and
d) may set out a class of shares—
i) without specifying the associated preferences, rights, limitations or other terms of that class;
ii) for which the board of the company must determine the associated preferences, rights, limitations or other terms; and
iii) which must not be issued until the board of the company has determined the associated preferences, rights, limitations or other terms, as contemplated in subparagraph (ii).

 

2) The authorisation and classification of shares, the numbers of authorised shares of each class, and the preferences, rights, limitations and other terms associated with each class of shares, as set out in a company’s Memorandum of Incorporation, may be changed only by—
a) an amendment of the Memorandum of Incorporation by special resolution of the shareholders; or
b) the board of the company, in the manner contemplated in subsection (3), except to the extent that the Memorandum of Incorporation provides otherwise.

 

3) Except to the extent that a company’s Memorandum of Incorporation provides otherwise, the company’s board may—
a) increase or decrease the number of authorised shares of any class of shares;
b) reclassify any classified shares that have been authorised but not issued;
c) classify any unclassified shares that have been authorised as contemplated in subsection (1)(c), but are not issued; or
d) determine the preferences, rights, limitations or other terms of shares in a class contemplated in subsection (1)(d).

 

4) If the board of a company acts pursuant to its authority contemplated in subsection (3), the company must file a Notice of Amendment of its Memorandum of Incorporation, setting out the changes effected by the board.