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

Chapter 1 : Interpretation, Purpose and Application

Part B : Purpose and application

7. Purposes of Act

 

 

The purposes of this Act are to—

a) promote compliance with the Bill of Rights as provided for in the Constitution, in the application of company law;
b) promote the development of the South African economy by—
i) encouraging entrepreneurship and enterprise efficiency;
ii) creating flexibility and simplicity in the formation and maintenance of companies; and
iii) encouraging transparency and high standards of corporate governance as appropriate, given the significant role of enterprises within the social and economic life of the nation;
c) promote innovation and investment in the South African markets;
d) reaffirm the concept of the company as a means of achieving economic and social benefits;
e) continue to provide for the creation and use of companies, in a manner that enhances the economic welfare of South Africa as a partner within the global economy;
f) promote the development of companies within all sectors of the economy, and encourage active participation in economic organisation, management and productivity;
g) create optimum conditions for the aggregation of capital for productive purposes, and for the investment of that capital in enterprises and the spreading of economic risk;
h) provide for the formation, operation and accountability of non-profit companies in a manner designed to promote, support and enhance the capacity of such companies to perform their functions;
i) balance the rights and obligations of shareholders and directors within companies;
j) encourage the efficient and responsible management of companies;
k) provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders; and
l) provide a predictable and effective environment for the efficient regulation of companies.