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Company MOI Amendments SHARES Company MOI Amendments SHARES

Company MOI Amendments SHARES - PowerPoint Presentation

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Company MOI Amendments SHARES - PPT Presentation

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

par shares companies company shares par company companies act moi conversion increase cipc share holding capital class existing required

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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?