COMPANIES AMENDMENT BILL : MINISTER OF TRADE AND INDUSTRY) [B -2004]
GENERAL EXPLANATORY NOTE:
Words iii bold type in square brackets indicate omissions from existing enactments.
Words underlined with a solid line indicate insertions in existing enactments.
To amend the Companies Act, 1973, so as to amend and inset a definition;
To prevent companies to have delinquent directors to serve as directors or in the management of such companies, and
To protect a bona fide owner or holder of a dematerialized share certificate against a rectification order by a court of law; and
To provide for matters incidental
BE IT ENACTED BY THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA AS FOLLOWS:
Amendment of section 1 Act 61 of 1973 as amended by section 1 of Act 76 of 1974,
Section 1 of Act 64 of 1977, section 1 of Act 84 of 1980, section 1 of Act 83 of 1981,
Section 1 of Act 29 of 1982, section 1 of Act 31 of 1986, section 1 of Act 82 of 1992,
Section 1 of Act 35 of 1998, section 2 of Act 37 of 1999, section 1 of Act 35 of 2001 and section 1 of Act 35 of 2002
1. Section 1 of the Companies Act, 1973 (thereinafter referred to as the principal
Act), is hereby amended -
(a) by the substitution for the words preceding paragraph (a) in the definition
of "'Master" of the following words:
"Master" means the Master of the [Supreme] High Court, and in relation to" and
(b) by the insertion after the definition of "Minister" of the following definition: "'National director or Deputy National director" means the national
director or deputy national director as defined in the National Prosecuting Authority Act. 1998 (Act No. 32 of 1998)".
Amendment of section 91A of Act 61 of 1973, as amended by section 1 of Act 60 of 1998
2. Section 91A of the principal Act is hereby amended by the insertion in subsection
(4) after paragraph (c) of the following subparagraphs;
(cA) A court may not order the name of a member of a company to be removed from. a sub-register, unless the person recorded as a member was a party to or had notice of a fraud or illegality, as in paragraph (c).
(cB) The provisions of subsection shall not preclude a court from awarding damages, whether under section 1 15 of the Act or in common law
Amendment of section 218 of Act 61 of 1973. as amended by section 17 of Act 59 of
1978 and section 24 of Act 132 of 1993
3. Section 218 of the principal Act is hereby amended -
(a) by the substitution in subsection (1) for the words preceding paragraph (a) of
the following words:
"(1) Any of the following persons shall be disqualified from being appointed or acting as a director of a company or to directly or indirectly take part in or be concerned in the management of any company
(b) by the insertion in subsection (1) after paragraph (c) of the following paragraph'.
(cA) any person who is disqualified from appointment as director or of officer or from the from the management of a body corporate or other undertaking under an Act or whose appointment as director or officer has, been terminated under an Act on the basis that he or she is not fit and proper to hold the office concerned:".
(c) by the insertion after subsection (1) of the following subsections;
(I A) The Master shall. ,upon receipt of a sequestration order under section 17 of the Insolvency Act. 1936. and the Registrar of the Court shall upon any order or conviction as contemplated in subsection 1(d)(ii) and (iii), send a copy of the order or conviction as the case may be, to the Registrar of Companies who shall notify each company of which the person to whom the order or conviction relates is a director, of the order or conviction.
(I B) The Registrar of Companies shall establish and maintain a register of the orders and convictions under subsection (IA) and such register shall be open to inspection mutatis mutandis as if it were a register contemplated in section 113".
(d) by the substitution for subsection (2) or the following subsection:
"(2) Any person disqualified from being appointed or acting as a director of a company and who purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company, and any director or officer who knew or should reasonably have known of the
contravention shall be guilty of an offence", and
(e) by the insertion after subsection (2) of the following subsection
"(2A) Any person disqualified from being appointed or acting as a director of a company or from the management of a body corporate or other undertaking and who purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company shall,
together with the directors and officers who knew or who should reasonably have known of such disqualification, be jointly and severally liable for all debts incurred by the company, for the period during which that person held such appointment or acted as director or directly or indirectly took part in or was concerned in the management of any company".
Amendment of section 219 of Act 61 of 1973
4. Section 2 19 of the principal Act is hereby amended -
(a) by the substitution in paragraph (a) of subsection (2) for subparagraph (i) of the following subparagraph
"(i) by the Court having jurisdiction to wind up the company affected by the act or omission in respect of which the order is sought, on application by the Master, or, in the case of a company being wound up or under judicial management, by the [Attorney-General] National director or
Deputy National director in terms of section 401, or by the liquidator or the judicial manager or by any person who is a creditor or is or has been a member of such company, or"
(b) by the substitution for subsection (3) of the following subsection:
"(3) Where an order under subsection (1) has been made, the person to whom the order relates shall give not less than ten days' notice to the Master, the [Attorney-General]National director or Deputy National director, the liquidator or the person who was the judicial manager of the company concerned, of any application he or she intends making for leave of the Court referred to in subsection (1), who shall draw the attention of the Court to any matter which may appear to them to be relevant, may give evidence and call witnesses".
(c) by the insertion after subsection (4) of the following subsection "(4A)(a) A copy of the order made under subsection (1) shall within seven days after the making of the order be transmitted _by the Registrar of the Court to the Registrar of Companies, who must notify every company of which the person to whom the order relates is a director, (b) The Registrar of Companies shall establish and maintain a register of the orders and convictions under subsection (4 A) (a) and such register shall be open to inspection mutatis mutandis as if it were a register contemplated in section 113".
(d) by the substitution for subsection (5) of the following subsection:
"(5) Any person who contravenes any order made under subsection (1) and any director or officer of a company in respect of which such a person is appointed or acts as a director or purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company, who knew or should reasonably have known of the contravention shall be guilty of an offence", and
(e) by the insertion after subsection (5) of the following subsection: " (6) Any person disqualified under this section from being appointed or acting as a director of a company and who purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company shall, together with the directors and officers who knew or who should reasonably have known of such disqualification, be jointly and severally liable for all debts incurred by the company for the period during which that person held such appointment or acted as director or directly or indirectly took part in or was concerned in the management of the company" Short title
5. This Act is called the Companies Amendment Act, 2004.