Please enable JavaScript.

Coggle requires JavaScript to display documents.

Companies Act Ch 2: Formation, Administration and Dissolution of Companies…

- - - - Limited/ Ltd
        
        Public Company
      - SOC Ltd
        
        State Owned
      - Proprietary Limited/ (Pty) Ltd
        
        Private Company
      - NPC
        
        Non-Profit Company
      - Incorporated/Inc
        
        Personal Liability Company
    - - Reserve names for future use, File an application with the Commission (CIPC) and pay the prescribed fee
        
        Name reservation lasts for 6 months
  - - - For a Profit company, 1 or more founding persons are required.
      - For a Non-Profit company, 3 or more founding persons are required.
      - Sign and complete the MOI (Memorandum of Incorporation) in person or through a proxy.
        
        Fill out a Notice of Incorporation (NOI).
    - - CIPC (Companies and Intellectual Property Commission) will accept the filed NOI.
      - CIPC will assign a registration number to the company.
      - CIPC will endorse both the NOI and MOI.
      - CIPC will issue a registration certificate as proof of the company's incorporation.
  - - - A document outlining the rights, duties, and responsibilities of shareholders, directors, and other stakeholders within a company.
      - This document is used to incorporate the company under the relevant Act.
    - - Changing the effect of alterable provisions in the Act.
      - Dealing with matters not addressed in the Act.
  - - - Engaging in business with the intent to defraud individuals or for any fraudulent purpose.
      - Trading under circumstances where the company is insolvent.
      - Carrying on business recklessly, exhibiting gross negligence.
    - - 2.) The company is required to respond to the notice within 20 business days.
        
        Business days - Mon To Fri
        
        :<3: In the assessment STATE "Business Days"
      - 3.) If the company fails to respond within the specified time, a compliance notice will be issued, instructing the company to cease its business or trade.
      - 1.) The commission will issue a notice to the company, requesting proof of their non-involvement in such conduct.
  - - - Offices
      - Bank Accounts
      - Shareholders and Board Meetings
      - Property
- - - - Year End Change:
        
        The financial year end can only be changed once a year.
        
        The new year end must be after the date the notice is filed.
        
        The Board is responsible for determining the financial year end.
    - - Companies are required to maintain accurate and complete accounting records in one of the official languages of the Republic.
      - The accounting records should be kept at the registered office of the company or made accessible from there.
  - - - Must state if it is audited, reviewed or not
      - Name and professional designation of person who prepared or supervised preparation
    - - First page must state:
        
        That it represents a summary
        
        If original financial statements is audited
        
        Name of person who prepared original financial statements
        
        Steps to obtain copy of original financial statements
    - - Prepared according to accounting standards
      - Fairly represent the state of affairs and business of the entity and explain transaction and financial position.
      - Show
        
        Assets, Liabilities, Equity, Income & Expenses
        
        Date on which the statements were produced and accounting period
  - - - If records are moved from the registered office, the company must file a notice setting the new location where the records are being moved to.
      - The company records must be kept at the registered office within the Republic of South Africa.
    - - Shareholders have the right to access all the company records.
    - - Kept for 7 years or as long as the company exists if < 7 years
      - Company must maintain:
        
        AFS (Annual Financial Statements)
        
        Accounting records
        
        Copy of reports presented at AGM
        
        Notices and minutes of shareholders meeting, including resolutions and documents
        
        Full name, ID or passport number, occupation, date of recent election/appointment, name & registration number of all companies he/she is a director.Copy of reports presented at AGM
        
        Notice and minutes of directors' meetings (directors committees & audit committees)
        
        Records of directors
        
        Copy of MOI, changes thereof, and rules made by the board
        
        Copies of written communication sent to holders of securities
      - Kept in written format or format that can be converted to written format
      - Profit companies must also maintain:
        
        Securities "share" register
        
        Records of auditors and company secretary
        
        Name and date of appointment
        
        If a firm is appointed as an auditor, the name of the partner
  - - - AFS must:
        
        Approved by board and signed by authorised director
        
        Presented at first shareholders meeting after approval by board
        
        Include audit report (if audited) and directors report
      - AFS required to be audited must disclose:
        
        Amount of pensions paid and contributions to pension fund for current and past directors
        
        Amount paid for loss of office to current and past directors
        
        Remuneration and benefits received by each director
        
        Number and class of securities issued to a director or related person to them and consideration receiver
        
        Details of service contracts of current directors and officers
      - Every company must prepare AFS:
        
        Within 6 month after year end; or
        
        Shorter period if AGM is earlier
- - - - PI score is calculated as the sum of the following:
        
        One point for every R 1 million (or portion thereof) in third party liability of the company at the financial year end
        
        One point for every R 1 million (or portion thereof) in turnover during the financial year; and
        
        A number of points equal to the average number of employees of the company during the financial year
        
        One point for every beneficial shareholder (profit company) or member of the company (non profit company) at the end of the financial year.
  - - - Classes and number of shares
  - - - MOI may provide further restrictions
      - Each shareholder was offered the right before any other person to subscribe within reasonable time for % of shares equal to his/her voting power
  - - - In terms of agreement underwriting the shares, securities or rights
      - In proportion to existing holdings and on the same terms and conditions as offered to other shareholders
      - In the exercise of a pre-emptive right to be offered and to subscribe shares
        
        A privilege extended to select shareholders of a company that will give them the right to purchase additional shares in the company before the general public
      - In terms of employee share scheme
        
        Scheme established by the company for purpose of offering participation therein only by employees
      - In terms of an general offer to the public
    - - Person related to director/officer
      - Nominee of such person
      - Director/Future director/Officer
- - - - For a related company (holding company/subsidiary) or inter-related companies (fellow-subsidiaries)
      - The purpose or in connection with subscription of options or securities issued or to be issued
    - - Special resolution
        
        Remember to apply S65
      - Comply with the solvency and liquidity test immediately after financial assistance
        
        Remember to apply S4
      - Terms are reasonable and fair
      - MOI conditions are met
      - If the above is met:
        
        director can approve the assistance
      - If above not met:
        
        Assistance is void
        
        Directors can be liable (if not voted against the decision)
    - - Assistance provided in ordinary course of business as money lender
      - In terms of employee share scheme
  - - - Director or officer of the company or related or inter-related company (holding/sub/fellow sub)
    - - Comply with the solvency and liquidity test immediately after financial assistance
        
        Remember to apply S4
      - Terms must be fair and reasonable
      - Special resolution
        
        Remember to apply S65
      - Must be in terms of an employee share scheme
    - - Main business is money lending
      - For legal expenses or other expenses incurred on behalf of the business
      - Expenses for removal of director or officer at company’s request
    - - Written notice of the resolution to all shareholders & trade unions
        
        Otherwise within 30 business days after year end
        
        Within 10 business days of resolution
        
        Total value of the loan exceeds 1/10 of 1% of the company’s net worth
  - - - Comply with the solvency and liquidity test immediately after distribution
        
        Remember to apply S4
      - Directors resolution
      - Distribution based on:
        
        Directors resolution
        
        Remember to apply S65
        
        Court order/legal obligation
    - - Within 120 days of resolution/court order
        
        Require new directors resolution