Lucinda Steenkamp Types of Amendments Amendment of MOI of a company include the following Sect 16 Amending the MOI full MOI adoption only certain sections Name changes Amendment of main business preexisting companies ID: 632858
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Slide1
Company MOI Amendments
SHARES
Lucinda SteenkampSlide2
Types of Amendments
Amendment of
MOI of a company include
the following
:
(Sect 16)
Amending the MOI (full MOI adoption / only certain sections)
Name changes
Amendment of main business (pre-existing companies)
Removal of shortened / translated names
Company type changes
Increase / decrease in share capital
Add/remove ring fencing conditions (RF)
Conversion of par value shares to no par value shares
Slide3
Shares
Probably one of the biggest changes of the Companies Act relates to a company’s share structure and capital.
In
terms of the new Companies Act, the elimination of the traditional concepts of nominal or par value shares was introduced subject to Schedule 5, Item 6.
No
company may create new par value shares, or increase existing par value shares except for Banks as defined in the Banks Act
.
Existing par value shares may be re-classified. Par value shares may however not be sub-divided, as this inadvertently leads to an increase which is not allowed by the ActSlide4
Shares
Companies cannot have par value and no par value shares of the same class (sect 36 (1)(b) ), which requires a clear distinction between the classes of shares
.
Example: 1000 ordinary par value shares of R1 each
1000 ordinary
Class A
no par value shares
In order to increase the number of par value shares, companies must first convert the shares to that of no par value and then increase, OR in the alternative create a new class of no par value shares. Slide5
Shares
Adoption of a new MOI does not negate the automatic conversion of par value shares, to shares with no par value. Separate process required.
Report
as set out in Regulation 31(7) is necessary for the conversion
of par value shares to no par value shares. (Lodged with par value conversion application)
The
report as required in terms of Regulation 31(7) must also be filed with SARS with regards to possible capital gains tax implications, due to the conversion
.Slide6
Shares
CIPC does not keep any record of shareholders or shareholding percentages. Companies must keep their own records (
Reg
32 of the Companies Act Regulations
)
Share certificates are therefore only issued by the company itself and cannot be obtained from CIPC
The new Companies Act also abolished the necessity to lodge any issue (allotment) of authorized shares (previous CM15) with CIPC. Companies must keep their own records. Important to note is that companies cannot issue more shares than that which is authorized.Slide7
Shares
Each profit company is registered on the CIPC database independently, with its own name and registration number. (No ref to holding company or subsidiaries)
Arrangements with regards to rights, privileges,
etc
of holding companies and subsidiaries must be dealt with by each company internally.
Being a holding company means that the particular company is the holder of the majority shares (51%) of the voting interests in another company (the subsidiary). Slide8
Questions?