Abstract
The Companies Act 71 of 2008 was enacted in April 2009 and the Act, inter alia, seeks to promote compliance with the Bill of Rights in the Constitution in the application of company law.1 The implementation of the Act has led to the modification and abolition of certain common law doctrines such as ultra vires, Constructive Notice, and the Turquand rule. This was done to provide greater protection to third parties contracting with companies. In Botswana, the Companies Act 32 of 2003 was signed into law in 2004 and it also ushered in changes to the existing company law principles in Botswana.
The Doctrine of Constructive Notice was abolished in South Africa and Botswana in terms of section 19(4) of the South African Act and section 28 of the Botswana Act respectively. The Doctrine was abolished in order to provide greater protection to third parties dealing with companies. What is fascinating about the abolition of the Doctrine is that the approach used in both countries is different, South Africa retains a modified statutory Doctrine of Constructive Notice in section 19(5)(a) of the Act which applies in limited circumstances, whereas Botswana expressly abolishes the Doctrine without qualification.
South Africa introduced a modified statutory version of the common law Turquand rule in section 20(7) of the Act and Botswana likewise introduces such in section 27(1) of the Botswana Act. This dissertation seeks to assess and compare the effectiveness of the protective mechanisms offered to third parties dealing with companies under the South African Companies Act 71 of 2008 and the Botswana Companies Act 32 of 2003. This will be done by examining the relevant common law principles, case law, statutory provisions, and academic literature. The dissertation deduces by providing a concise conclusion and recommendations where applicable.