topic 6

incorporators

profit company: 1+ or organ of state

non-profit: 3+ persons, organ of state or legal person

organ of state

any department of state or administration in sphere of government or any other functionary or institution exercising power in terms of constitution or exercsing public power

duties of incorporator

sign MOI, file NOI, serve as 1st director until sufficent directors appointed

procedures

sign MOI, file NOI, pay fee, External must register with commision within 20 business days after first business conduct, register address of principal office

NOI

in terms of section 13(1), informs commision of incorporation of company for purpose of having it registered for transparency and accountability

information in NOI

Company name, initial directors, registered office, date of ye, date on which company must be incorporated, appointment of secretary, auditor and audit commitee

notice of incorporation- ring fencing

NOI must contain prominent statement, drawing attention to provison and location in MOI

commision rejecting NOI

if initial directors are less than prescribed and the commision believes that initial directors are disqualified and remaining directors is less than prescribed

acceptance of incorporation

commision registers company: assign unique registration number, enter prescribed info, endorse NOI and copy of MOI and issue registration certificate and deliver to company

registration certificate

all requirements for incorporation complied with and company incorporated in terms of act=seperate legal person

Sibakhulu contruction pty ltd vs wedgewood village golf country estate pty ltd

old act allowed for a registered office and principal office, shown in this case where they looked at the difference betwee the two acts(1973 and 2008)- documents were served to the address

name of company

incorporator must bear in mind for NOI

company name requirements

may be registration number followed by South Africa, end in appropriate expression, prevents delay with incorporation. can include 1+ words with 1,k,?,# or rounded brackets.

not same as another

company, defensive name, registered trade mark, mark, word or expression protected by merchandise marks act, not similar to name, trademark, word or expression

name cannot falsely suggest that company

is part of another entity, organ of state, owned, managed or conducted by persons with a certain level of education or foreign state, government or international organisation

name may not include

word, expression or symbol that constitutes: propoganda for war, incitement of violence or advocacy for hatred based on discrimination

name must not constitute the passing off rule-Adidas AG and another vs pepkor retail limited

common law rule, one business adopts a feature of a competitor( ie. name) may be able to register name but prohibited from using it. Test: is there likelyhood that members of public will be confused into believing that business is asociated with another. offending company can profit

if the name of company is wrong then

registration not delayed, commision may instert, name can be same but registration number used and can be amended in NOI

if name coonfusingly similar

then commision tells applicant to write a notice to similar company and then that reciever of notice applies to companies tribunal to determine if name satisfies act

name unacceptable because of war propoganda, commision refers to SA human rights commision

application to tribunal within 3 months of notice, tribunal determinesif it meets the act and amend dispute and party can review decision

change name through

amending MOI, special resolution at shareholders meeting and file notice of amendment, commision issues amended registration certificate adn changes name in register

use of names

must be provided when demanded, cannot misstate to mislead, person cannot use name in way that they are acting on company’s behalf, must be in all notices and publications

MOI

document amended over time sets out rights, duties and responibilities of SH, Direc and other stakeholders. company incorporated under this act, a pre-existing company was structured and governed before the later of the effective date or date it was converted or domesticated companies

MOI provisions

must meet with act sec 15(1)(a), void if conravenes sec16(1)(b) and 6(1), SH can enforce rights, determine alterable vs unalterable

MOI must contain

unalterable provisions: some mandatory provisions that cannot be restricted or altered

compulsory provisions

name, signature clause, type of company

alterable provisions

rules which can be amended like changing the number of authorised shares

MOI may include

restrictive conditions: applicable to company and additional requirements for amendment of condition, provision prohibiting amendment of any particular provision of MOI

if restrictions included then

name must end with RF and NOI must make note of this

MOI amended by

special resolution which is proposed by board od directors or SH holding at least 10% of the voting rights. after amendment they must file NOA and pay fee

MOI can also be amended by

court order or board of directors

effect of amendment

takes place when NOA filed or when date set out in NOA

remedies for unfair amendments

unfair to SH or directors, prejudicial to their interests and unfairly disregards their interests- can apply to court under section 163 for relief

remedy when class rights are amended

the SH can force the company to buy-back their shares at fair value section 37(8)

access to MOI

public document to be inspected with fee and one kept at registered office where SH and other can always access it

rules of company

board can makes rules that are not mentioned in MOI or act, rules must be consistent with act and MOI, rules cannot be changed to alter the provision of the act only through MOI

rules of company becoming binding

board files a CoR 16.1 form with commision, rules immediately bind, put to vote at AGM(if ratified then stay and if rejected they lapse) with interim period being binding

who is binded to MOI

company, SH, director, prescribed officer and member of board, 3rd parties bound when they are given notice of contents

shareholder agreements

shareholders can agree on anything relating to the company between themselves, consistent with MOI and act, if not then void and these agreements do not need to be filed with commision