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

Schedule 5 : Transitional Arrangements

7. Company finance and governance

 

 

1) A person holding office as a director, prescribed officer, company secretary or auditor of a pre-existing company immediately before the effective date, continues to hold that office as from the effective date, subject to the company’s Memorandum of Incorporation, and this Act.

 

2) A person contemplated in sub-item (1) who, in terms of this Act, is ineligible to be, or disqualified from being a director, alternate director, prescribed officer, company secretary or auditor, is regarded as having resigned from every such office in any company as from the effective date.

 

3) As from the effective date, a pre-existing company is deemed to have a number of vacancies on the board equal to the difference between—
a) the minimum number of directors required by or in terms of this Act; and
b) the actual number of directors of that pre-existing company immediately before the effective date, if that number is less than the minimum referred to in paragraph (a).

 

4) A vacancy in the office of director, company secretary or auditor of a pre-existing company as from the effective date, irrespective whether arising by operation of sub-item (2) or (3), or otherwise, is to be filled in accordance with this Act.

 

5) Despite anything to the contrary in a company’s Memorandum of Incorporation, the provisions of this Act respecting—
a) the duties, conduct and liability of directors apply to every director of a pre-existing company as from the effective date;
b) rights in terms of this Act of shareholders to receive any notice or have access to any information apply as from the effective date to every pre-existing company;
c) meetings of shareholders or directors, and adoption of resolutions apply as from the effective date to every pre-existing company; and
d) Chapter 5 applies as from the effective date to every pre-existing company, except to the extent it is exempted by or in terms of that Chapter.

 

6) Approval of any distribution, financial assistance, insider share issues, or options, are subject to this Act, even if any such action had been approved by a company’s shareholders before the effective date, despite anything to the contrary in the company’s Memorandum of Incorporation.

 

7) A right of any person to seek a remedy in terms of this Act applies with respect to conduct pertaining to a pre-existing company and occurring before the effective date, unless the person had commenced proceedings in a court in respect of the same conduct before the effective date.

 

8) A pre-existing company is not in contravention of this Act by reason only of a failure to—
a) maintain any record for the duration required by section 24(1), if—
i) the company disposed of that record before the effective date; and
ii) at the time the company disposed of the record it was not required, by or in terms of any public regulation, to continue to maintain that record; or
b) include in its notice of incorporation in terms of the previous Act a prominent statement comparable to that required by section 13(3) of this Act.

 

9) A provision of the Memorandum of Incorporation of a pre-existing company comparable to a provision contemplated in section 15(2) has the same validity after the effective date that it had immediately before that date, despite any failure of the company to have drawn attention to that provision in the manner required by section 13(3).

 

10) Section 19(4) applies to any provision of the Memorandum of Incorporation of a pre-existing company that is comparable to a provision contemplated in section 15(2), from the time that the company files a notice of that provision.

 

11) The five consecutive financial years contemplated in section 92(1) must be calculated from the date of commencement of this Act.