The Companies Act Flashcards
What will the company act promote?
Efficiency of companies are management by encouraging transparency and high standards of corporate governance
What will the act insure?
Legislation governing companies in South Africa is more compatible and harmonise with the best practices
Why can’t know new close corporations be registered?
The intention is to phase out close corporations
Why was the close corporations act amended?
To bring the act in line with the companies
What do you close corporations wishing to convert to a company need to file?
File a notice of conversion and complete specify document of the paying a filing fee
What are the two types of companies?
Nonprofit companies and profit companies
What is a non-profit company?
A company registered with the objective that it is related to cultural or social activities, communal or group interest
What must a non-profit company not distribute?
Income or property to any member or director
What can’t a non-profit company convert to you?
A proper company as it is misleading to the public
Name the four types of proper companies
- State owned companies
- Private companies
- Public companies
- Personal liability companies 
State owned companies
SOC
What are state owned companies?
Registered in terms of the companies act and our government or municipality owned
Private companies
[(Pty) Ltd]
What a private companies?
No longer limited to 50 shareholders. Ownership is unlimited. Restrict transfer ability of shares 
Public companies
[Ltd]
What is a public company?
Requires only one shareholder with a minimum amount of seven shareholders when needed
Personal liability companies
[Inc or Incorporated]
What are personal liability companies?
Directors are jointly and severally liable with the company for all the debts
What a company is called that are established under specific conditions?
Ring fenced companies (RF)
Why are ring fence companies established?
To provide a specific function
What is the formation of a company under the companies act?
• One or more persons may incorporate as a profit company – non-profit company three or more
• Done we notice to incorporate and memorandum of incorporation has been filed at the companies and intellectual property commission
• Notice to incorporate is done by notice given to the commission from the Inc where the commission of the intent to the company registered 
What does CIPC stand for?
Companies and intellectual property commission
What does MOI stand for?
Memorandum of incorporation
What is the memorandum of incorporation?
Detailed document providing all the information that the memorandum and articles of association did
What did the memorandum of incorporation said out?
Rights, duties and responsibilities of all shareholders, directors and any other relevant offices 
How many rules does the memorandum of incorporation have which could be out to see if the company?
53 rules
In terms of special conditions what does the memorandum of incorporation have?
Contain special conditions relating to the company and will state the requirements for the amendment
What would be issued once the commission Is happy? 
A registration certificate – for food or requirements
What does the companies act places special emphasis on?
Transparency, Accountability and integrity of companies
What are the two duties are prescribed officers have?
• Fiduciary duty
• Duty to act with care and skill
