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A critical analysis of the winding up grounds as set out in section 81(1)(d) of the Companies Act 71 of 2008

- Mohamed, Faheem

  • Authors: Mohamed, Faheem
  • Date: 2013-09-02
  • Subjects: Liquidation - South Africa , South Africa. Companies Act, 2008
  • Type: Thesis
  • Identifier: uj:7723 , http://hdl.handle.net/10210/8593
  • Description: LL.M. (Commercial Law) , Section 81(1)(d) of the Companies Act 71 of 2008 allows a company, one or more of its directors or shareholders to apply to a court of law to wind up a solvent company. In essence, they can do so under three specified circumstances namely, where the directors are deadlocked in the management of the company and the shareholders are unable to break the deadlock, the shareholders are deadlocked in voting power and have failed for a period that includes at least two consecutive annual general meeting dates, to elect successors to directors whose terms have expired, or it is otherwise just and equitable for a company to be wound up. Item 9 schedule 5(1) of the Companies Act 2008 states that chapter 14 of the Companies Act 1973 continues to apply in regard to winding-up and liquidation of companies under the Companies Act 2008 as if the Companies Act 61 of 1973 has not been repealed. By virtue of this schedule, section 347 of the Companies Act 1973 still remains applicable. However, section 347(1) of the Companies Act 1973 still makes reference to section 346 of the Companies Act 1973 which is no longer applicable for winding-up of a solvent company and for that very reason it appears as though the intention is that section 347(1) of the Companies Act 1973 should not apply in such circumstances, I recommended that an amendment be made to the Companies Act 2008 to rectify this discrepancy. In light of the inclusion of section 347(2) of the Companies Act 1973, by virtue of item 9 schedule 5 of the Companies Act 2008, an application brought by shareholders places a definitive onus and an additional burden on the applicants to prove that they have exhausted all remedies available to them and they had no other alternative but to bring a winding-up application as a last resort. The all encompassing provision of section 81(1)(d)(iii) of the Companies Act 2008, I argued, should allow for a winding-up of a company, even in respect of the weaker forms of deadlock, where it does not fit neatly within section 81(1)(d)(i) and section 81(1)(d)(ii) of the Companies Act 2008. The word ‘otherwise’, in my opinion, has been correctly included in section 81(1)(d)(iii) of the Companies Act 2008. The courts will inevitably be 8 | P a g e left to determine the perimeters of section 81(1)(d)(iii) of the Companies Act in relation to the sections 81(1)(d)(i) and 81(1)(d)(ii) of the Companies Act 2008. I discovered striking similarities to the wording of the just and equitable provision and this wording has been consistent in various versions of the companies acts (both current and previous) in various jurisdictions. The ejusdem generis principle, I argued, is not applicable and the just and equitable provision needs to be looked at independently of the other grounds. From the recent case law arising on the interpretation of section 81(1)(d) of the Companies Act 2008, it is clear that the various principles which were developed during the era of the previous companies acts were still applicable and relevant to the Companies Act 2008, unless the Supreme Court of Appeal in South Africa decides otherwise.
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The appropriateness of business rescue as opposed to liquidation : a critical analysis of the requirements for a successful business rescue order as set out in section 131(4) of the Companies Act 71 of 2008

- Sher, Lara-Jade

  • Authors: Sher, Lara-Jade
  • Date: 2014-05-26
  • Subjects: South Africa. Companies Act, 2008 , Corporation law - South Africa , Bankruptcy - South Africa , Business failures - Law and legislation - South Africa
  • Type: Thesis
  • Identifier: http://ujcontent.uj.ac.za8080/10210/379145 , uj:11169 , http://hdl.handle.net/10210/10763
  • Description: LL.M. (Commercial Law) , The Companies Act 71 of 2008 (hereinafter referred to as the Act) was passed by Parliament on 19 November 2008 and assented to by the President on 8 April 2009. The Act came into force on 1 May 2011 and contains the provisions regulating the new business rescue proceedings that replace judicial management under the Companies Act 61 of 1973. However, since the introduction of Chapter 6 of the Act, the courts South Africa still appear to be finding their feet with regard to many of the Act’s provisions. In spite of this, the new business rescue practice has become an important part of the South African corporate framework. The outbreak of recent case law has started to shape the direction, which business rescue, as interpreted by the Courts, is taking. An important debate among the courts is whether the courts should rescue a business entity or liquidating the businesses assets in order to settle claims against it. While a liquidation aims to divide the profit from the sale of assets amongst creditors and to dissolve the company, business rescue legislation provides for a restructuring of the financial structure of a distressed debtor to save the business as a going concern and to assist the settlement of claims against the business in full. The business rescue proceedings have been provided for by legislation in the Act, however, the result of the vast recent court decisions show that the Act may not be relied upon unconditionally without proper regard to the circumstances of each case. This research analyses the appropriateness of business rescue as opposed to liquidation by specifically looking at the requirements for a successful business rescue order. This research further analyses whether the decisions of the courts in present case law are on the correct path when interpreting the business recuse provisions in terms of the Act.
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Alternative dispute resolution : a new tool under the Companies Act 71 of 2008

- Mokhele, Thato Comfort

A critical enquiry into the need for avoidance provisions in business rescue proceedings

- Wright, Christopher John

  • Authors: Wright, Christopher John
  • Date: 2014-06-04
  • Subjects: South Africa. Companies Act, 2008 , Corporation law - South Africa , Bankruptcy - South Africa , Business failures - Law and legislation - South Africa
  • Type: Thesis
  • Identifier: uj:11388 , http://hdl.handle.net/10210/11026
  • Description: LL.M. (Corporate Law) , This dissertation firstly looks at the need for avoidance provisions over the course of insolvency proceedings and the attaching considerations in the development of same. Mention is also made of the difference between corporate rescue proceedings compared to liquidation. This brief comparative is essential as the different avoidance powers that are afforded to “rescue practitioners” when compared to “liquidators” is a common thread running through each of the following chapters. I will then shift the focus of my discussion to South Africa, briefly describing the avoidance powers that were afforded to a judicial manager under the Companies Act 61 of 1973. Thereafter, I will discuss the extent of any avoidance powers that have been afforded to a business rescue practitioner in terms of section 141(2)(c)(i) of the Companies Act 71 of 2008. This will involve consideration of the latest case law and other practical factors which will seek to build-on and/or enhance our judiciary’s decisions as to the extent of the avoidance powers that have been afforded to a business rescue practitioner. Once I have clearly set out the position in South Africa, I will consider the avoidance powers that have been afforded to an administrator in terms of Australia’s comparative corporate rescue mechanism, known as the administration of a company’s affairs with a view to executing a deed of company arrangement. Last, I will shift my focus to England, once again discussing and comparing the range of avoidance powers that are available to what they also term an administrator, when a distressed company enters Administration. At the end of each of the chapters setting out the powers that have been afforded to the business rescue practitioner and the administrators in both Australia and England, the position in South Africa will be analysed, with any and all uncertainties and/or inadequacies relating to our section 141(2)(c)(i) being identified. Finally, I will conclude my discussion by way of setting out my proposed recommendations that could assist in making South Africa’s business rescue regime both more effective and attractive to creditors – hopefully ensuring its continued effectiveness.
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Regulating the conversion of par value shares into shares without par value : a comparison between the law of Hong Kong and South Africa

- Teixeira, Ricardo Da Silva

Tax aspects of the amalgamation or merger procedure in the Companies Act 71 of 2008

- Chong, Sue Joon

The sources and obstacles of post-commencement finance in South Africa : a comparison with the United Kingdom and Australia

- Noomé, Jade

  • Authors: Noomé, Jade
  • Date: 2014-12-02
  • Subjects: South Africa. Companies Act, 2008 , Bankruptcy - South Africa , Bankruptcy - Great Britain , Bankruptcy - Australia , Corporate law - South Africa , Corporate law - Great Britain , Corporate law - Australia , Business failures - Law and legislation - South Africa , Business failures - Law and legislation - Great Britain , Business failures - Law and legislation - Australia
  • Type: Thesis
  • Identifier: uj:13140 , http://hdl.handle.net/10210/13121
  • Description: LL.M. (Mercantile Law) , Rescue refers to the restructuring of a company which would be necessary in order to preserve the said company and reinstate the entity‟s status to one of viability and profitability. One of the success factors of a business rescue is to develop and implement a business rescue plan, with one of the critical components of a successful business rescue plan involving securing post-commencement finance, which would be necessary to adhere to trade obligations as well as attempting to restore the company to a solvent position. The absence of post-commencement finance can result in the failure of business rescue altogether and thus the Companies Act has introduced a system of preference ranking in order to stimulate the required funding. This classification is encapsulated in section 135 of Chapter 6 in the Companies Act 71 of 2008. There is a prevalent shift of ideology from placing restrictions on a distressed company and a movement towards a capitalist approach creating a foundation for growth and re-entrance into the economy whereby distressed companies may continue as going concerns in terms of section 7(c) of the Companies Act, which will ultimately improve trade through the adherence to international standards ensuring employment as well as economic social benefits in section 7(d) of the Companies Act. The focus on distressed companies has allowed for the emphasis of previous legislation to be shifted away from a creditor-friendly approach to a debtor-friendly approach. This dissertation will attempt to briefly describe business rescue and analyse the concept and obstacles with regards to the provision of post-commencement finance in South Africa as well as international jurisdictions, specifically Australia and the United Kingdom...
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Business rescue: balancing the interests of all the relevant stakeholders

- Sephesu, Kagiso

Oakdene Square Properties (Pty) Ltd v Farm Bothasfontein (Kyalami) (Pty) Ltd : a case discussion of the Supreme Court of Appeal decision with reference to the reasonable prospect requirement set out in Chapter 6 of the Companies Act 71 of 2008

- Mti, Yanga

Is business rescue the "life jacket" alternative to our "sinking" liquidation proceedings? : A critical analysis of the Business Rescue and Liquidation proceedings compared

- Du Plooy, Shani

  • Authors: Du Plooy, Shani
  • Date: 2015-07-14
  • Subjects: South Africa. Companies Act, 2008
  • Type: Thesis
  • Identifier: uj:13733 , http://hdl.handle.net/10210/13999
  • Description: LL.M. (Commercial Law) , The introduction of Chapter 6 of the Companies Act No 71 of 2008 into the South African corporate insolvency setting had a noteworthy impact on procedures as we knew it and replaced its predecessor, judicial management in terms of the Companies Act no 61 of 1973. Chapter 6 provides for business rescue proceeding, its main function being to assist and rehabilitate financially distressed companies. The significance of this chapter is that it promotes proactive action to be taken by companies in initiating business rescue proceedings when possible financial distress becomes apparent. Business rescue proceedings can commence by making use of S 129 of the Companies Act No 71 of 2008 or of S 130 of the Companies Act No 71 of 2008. S 129 allows for the board of directors of the company to pass a resolution permitting business rescue proceedings to apply to the relevant company. S 130, on the other hand, makes provision for an affected person to apply to the High Court with a query regarding a company and business rescue proceedings. A remarkable number of new provisions were introduced relating to business rescue procedures and with their introduction came the responsibility of our Courts to interpret its rightful place within our law. As a result, the valuable question of when our courts should aim to rescue a company and when to liquidate the company’s assets in order to settle its debts, must be asked. Both proceedings have the same aim; that is helping the financially distressed company pay its debts. However, both also employ vastly different methods to achieve their aims and with different consequences. Business rescue aspires to rescue the company by restructuring its financial arrangements in order to allow for the business of the company to be sold as a going concern. Business rescue further aims to help the company settle all its claims against it in full. Liquidation, on the other hand, aspires to sell all the company’s assets and divide the profit of the sale to settle the claims of the company’s creditors. The company will thereafter be dissolved. This dissertation aims to analyse the suitability of business proceedings compared to liquidation proceedings by purposefully examining the requirements for both proceedings as well as their advantages. Furthermore, this dissertation will provide for a comparative study between the Australian and South African business rescue proceedings respectively.
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Is post commencement finance proving to be the thorn in the side for business rescue proceedings under the Companies Act of 2008?

- Freebody, Giles John

  • Authors: Freebody, Giles John
  • Date: 2015-07-14
  • Subjects: South Africa. Companies Act, 2008
  • Type: Thesis
  • Identifier: uj:13739 , http://hdl.handle.net/10210/14004
  • Description: LL.M. (Commercial Law) , With the onset of the new corporate rescue regime in South Africa, the impact of the current post commencement finance culture in the country could have adverse effects on such proceedings. Due to the growing number of financially distressed entities, this topic, and in particular, turnaround funding in developing countries like South Africa is becoming more and more relevant. Due to the juvenility of the current legislation regarding business rescue proceedings, there are still issues that need addressing. One of the major stumbling blocks of these proceedings stems from a lack of post commencement finance. In comparison to other, more established jurisdictions, South Africa seems to be behind in the commercial rescue realm. Thus, an evaluation of post commencement financing in South Africa is critical in order to determine whether the relationship is positive or negative in terms of the actual proceedings themselves. By way of normative methodology this paper will describe the magnitude of post commencement finance in South Africa as well as address the reasons for the situation this country finds itself in. Finally an attempt will be made to show the best way(s) in which to go about creating a culture within the economy that is partial to participation in the rehabilitation of distressed institutions. To this end, it appears from the literature and studies undertaken that the post commencement finance environment is lacking essential components. Through time, the development and refinement of these applicable provisions and influential factors will enable the corporate landscape to evolve into a competent dwelling for companies facing financial woes.
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A critical analysis of the business rescue requirements according to Newcity Group v Allan David Pellow and section 131(4) of the Companies Act of 2008

- Ngwenya, Pervia Kudakwenyu

A critical analysis on how the courts have circumvented abuse arising from the shortfalls of legislation in business rescue Yatzee Investments CC v CAPX Finance Pty Ltd (3300/2015) [2015] ZAWCHC 117 (26 August 2015)

- Mashego, Morwesi

African Banking Corporation of Botswana v Kariba Furniture Manufacturers & Others (228/2014) [2015] ZASCA 69 (20 May 2015) : a discussion of the meaning of the term “binding offer” in terms of section 153(1)(b)(ii) of the Companies Act

- Soobramanie Abby, Shalini

Directors’ liability for reckless trading under the Companies Act 71 of 2008, with reference to the Companies Act 61 of 1973

- Finger, Chana

Interpretation of ‘liquidation proceedings’ in terms of Section 131(6) of the Companies Act : a case analysis of Richter v ABSA Bank Limited

- Silva, Angela Rosa E.

Liability for fraudulent and reckless trading : a critical analysis of Engelbrecht NO and Others NNO v Zuma and Others [2015] 3 All SA 590 (GP)

- Kekana, Nosisa Bomkazi

Loans or other financial assistance to directors : a critical analysis of section 45 of the Companies Act 71 of 2008

- Nemutanzhela, Ndivhudzannyi Prince

  • Authors: Nemutanzhela, Ndivhudzannyi Prince
  • Date: 2016
  • Subjects: Stockholders - Legal status, laws, etc. , South Africa. Companies Act, 2008 , New Zealand. Companies Act, 1993
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/90527 , uj:19991
  • Description: Abstract: The Companies Act 71 of 2008 replaced the Companies Act 61 of 1973. The objective of the Companies Act 71 of 2008 is, inter alia, to balance the rights and obligations of shareholders and directors within the companies. In line with this objective, section 45 of the Companies Act 71 of 2008 now allows a company to provide financial assistance to its directors and other persons. By allowing financial assistance, the Companies Act 71 of 2008 takes into consideration the interests of third parties and minority shareholders within the company. In this regard, it has allowed financial assistance subject to compliance with certain requirements and conditions. According to some of these requirements and conditions, the board of directors should, inter alia, ensure that immediately after providing the financial assistance, the company would satisfy the solvency and liquidity test. However, despite the aforesaid requirements, the provisions of section 45 are not satisfactory and, in certain respects, too far-reaching and treat directors too leniently. It is recommended, inter alia, that the legislature, in future amendments to the Companies Act 71 of 2008, should maintain a single solvency and liquidity test or scrap the test regards the provision of financial assistance to directors. Furthermore, terms and concepts such as “financial assistance” and “fair and reasonable” should be comprehensively defined. A comparison between the South African and New Zealand jurisdictions revealed that the South African legislature can learn from the New Zealand Companies Act 105 of 1993. For instance, in New Zealand, the board of directors applies the solvency and liquidity test in instances where the shareholders authorise financial assistance. Keywords: financial assistance; director; section 45 of the Companies Act 71 of 2008; liability of a director; section 161 of the New Zealand Companies Act 105 of 1993. , LL.M. (Corporate Law)
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Selective repurchases of shares and protection of shareholders in terms of the Companies Act 71 of 2008

- Manganye, Languta Armstrong

  • Authors: Manganye, Languta Armstrong
  • Date: 2016
  • Subjects: Stockholders - Legal status, laws, etc. - South Africa , Corporation law - South Africa , South Africa. Companies Act, 2008 , Stock repurchasing - Law and legislation - South Africa , Stocks - Law and legislation - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/90448 , uj:19977
  • Description: Abstract: Section 48 of the Companies Act provides directors with exclusive powers to conduct repurchases either selectively or proportionately and with or without the shareholders’ approval. These exclusive powers, particularly the powers to selectively repurchase shares may prejudice the interest of shareholders in a company. The study is to analyses the provisions of the Companies Act 71 of 2008 to determine whether it adequately protects the interests of shareholders. The analysis will be made in comparison with protective measures contained in the New Zealand Companies Act 1993. The Companies Act 71 of 2008 does not distinguish between selective or proportionate repurchases. Section 48 of the Companies Act 71 of 2008 sets out the requirements to be complied with by a company when repurchasing any of its shares and in addition it set out the requirements for repurchases of shares held by directors or prescribed officers and their related persons or repurchases conducted in terms of a scheme of arrangement. The forms of protection available to shareholders depends on whether a shareholder is a director or whether a selective repurchase is undertaken in terms of a scheme of arrangement. Shareholders will have to rely on protective measures outside section 48 of the Companies Act 71 of 2008, for them to protect themselves, and in particular when a repurchase is not conducted in terms of a scheme of arrangement. The protective measures in repurchases conducted through a scheme of arrangement includes the shareholders’ approval requirement, voting restrictions and appraisal right. The protective measures available to shareholders who are directors for a repurchase which does not constitute a scheme of arrangement is the shareholders’ approval requirement. The New Zealand Companies Act appears to better protect the interest of shareholders by requiring that selective repurchases be approved by all shareholders and if not, repurchases are subject to ideal protective measures such as the disclosure requirement, observance of the best interests of the company and shareholder, and that the price paid for shares must be fair to the company and the remaining shareholders. , LL.M. (Corporate Law)
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Shareholder protection in closely held companies

- Grimbeek, Jessica

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