Details

Autor(en) / Beteiligte

• da Silva, Ettie Maria

Titel

Restriction of Rights of Transfer of Securities : Does Section 8(2) (b) (II) (bb) Of the Companies Act 71 of 2008 Create a Pactum de Non Cedendo?

Ort / Verlag

ProQuest Dissertations & Theses

Erscheinungsjahr

2018

Quelle

ProQuest Dissertations & Theses A&I

Beschreibungen/Notizen

• a) Introduction and purposeThe purpose of this paper is to explore the position and application of s 8(2)(b)(ii)(bb) of the Companies Act 71 of 2008 (‘the Act’) with specific reference to the purported restriction on the transferability of a private company’s securities. The discussion is limited to shares and does not consider other forms of security.The Van Wyk De Vries commission was appointed in 1963 and since that date there has been no comprehensive reform of company law in South Africa. It is for this reason that in November 1997 the DTI issued ‘South African Company Law for the 21st Century: Proposed Guidelines for Competition Policy 2004’. The guidelines outlined a broad legislative reform programme that included a review of existing securities regulations; institutions with principal oversight of corporate structures; and current practices and regulations in the area of corporate governance. The scope of the review was the reform of South African company law, which would involve an overall review of company law including the Companies Act, 1973, the Close Corporations Act, 1984, and the common law relating to these corporate entities.As a result of the review the Companies Act 71 of 2008 was signed into law on 8 April 2009 and came into effect on 1 May 2011 after substantial amendment by the Companies Amendment Act 3 of 2011. The Act specifically states: ‘This Act must be interpreted and applied in a manner that gives effect to the purposes set out in s 7.’2 The Act further stipulates that ‘the Commission, the Panel, the Companies Tribunal or court must promote the spirit, purpose and object of this Act and that if any provision of this Act, or other document in terms of this Act, read in its context, can be reasonably construed to have more than one meaning, one must prefer the meaning that best promotes the spirit and purpose of this Act.It is within the ambit of s 7 of the Act referred to above that this paper explores the position and application of s 8(2)(b)(ii)(bb) with specific reference to the purported restriction on the transferability of a private company’s shares.b) Methodologyi.Problem statementIn terms of the Act a ‘share means one of the units into which the proprietary interest in a profit company is divided.’3 In terms of common law, as confirmed in the case of Liquidators, Union Share Agency v Hatton, a share is a‘ius in personam, a right of action, the extent and nature of which and the liability attaching to the ownership of which depends on statute, the ownership of which passes by cession.’4 Given the accepted common-law nature of the share and the fact that ownership passes by cession, can one ever restrict transfer of ownership? In other words, can s 8(2)(b)(ii)(bb) of the Act create a pactum de non cedendo?The nub of the question is whether the statutory provision overrides the commonlaw principle of a share being freely transferable.