New Companies Act Workshop: The End of an ERA: Full Implementation of the Companies Act on 1 May 2013: What does this Mean for Your Company?

Transcription

1 New Companies Act Workshop: The End of an ERA: Full Implementation of the Companies Act on 1 May 2013: What does this Mean for Your Company? Background The 30 th of April 2013 marks a very important milestone in the operationalisation of the new Companies Act (Act No. 71 of 2008), which repealed the 1973 Companies Act as of 01 May 2011.At the time of the promulgation of the new Companies Act on 01 May 2011, it was clearly stipulated that: The repeal of the 1973 Companies Act did not affect transitional arrangements set out in Schedule 5 of the new Companies Act (See s224(3)); Pre-existing companies were recognised as if they had been incorporated and registered in terms of the new Companies Act (Item 2(1) of Sch. 5); Within 2 years after the effective date of the Act (i.e. 01 May April 2013), a pre-existing company could file any amendment to its Articles to bring it in line with the new Companies Act at no charge (Item 4(2)(a) of Sch. 5); During the period of 2 years after effective date of the Act: o Provisions of the Articles of the pre-existing company which are inconsistent with the Act take precedence (Item 4(4)(a)(i) of Sch. 5); o Provisions of the Company Rules of a pre-existing company which are inconsistent with the Act take precedence (Item 4(4) (a)(ii) of Sch. 5); o Any provision in the Shareholders Agreement of a pre-existing company which is in conflict with the Act or the Company s Articles takes precedence, unless the Agreement or the Articles provides otherwise (Item 4 (4) (a) (iii) of Sch. 5) Why this workshop? As the two year transitional period referred to in Schedule 5 comes to an end with effect from 30 April 2012, the question for every company is whether the provisions of its Memorandum and Articles of Association (jointly known as the Memorandum of Incorporation under the new Companies Act) are aligned to the new Companies Act and whether their Shareholders Agreements are aligned to the Act and the Memorandum of Incorporation (as any inconsistency will be resolved in favour of the Act and the Memorandum in terms of s15(7) of the Act) To answer this and other concerns regarding the impact of the full implementation of the new Companies Act on your company, Tong-Mongalo Corporate Services CC, will be hosting a series 1

2 of practical workshops in major centres of South Africa with effect from September 2012 to early Aim of the Workshops The aim of these workshops is to provide - An overview of the principal provisions of the new Companies Act provisions having an impact on the drafting of memoranda of incorporation. An analysis of the standard provisions found in the Memorandum and Articles of Association of pre-existing companies in line with the new Companies Act; A guideline for drafting a unique form of memorandum of incorporation Who should attend? Attorneys, advocates, auditors, accountants, financial and legal advisers, chief executive officers, directors, shareholders and owners of businesses Registration Fees R1, 600 or R1, 400 for early registration. Registration: 08:00 08:30 Session 1: 08:30 to 10:30 Session 2, Part 1: 11:00 to 13:00 Lunch: 13:00 14:00 Session 2, Part 2: 14:00 15:00 DATES AND VENUES Date Tuesday, 18 September 2012 Friday 28 September 2012 Friday 05 October 2012 Friday 26 October 2012 Venue Early Registration Cut-off date Cape Town 17 August 2012 Johannesburg 3 September 2012 Pretoria 10 September 2012 Durban 24 September

3 Date Friday 02 November 2012 Friday 30 November 2012 Friday 07 December 2012 Friday 11 January 2013 Friday 01 February 2013 Venue Early Registration Cut-off date Bloemfontein 5 October 2012 Mafikeng 1 November 2012 Rustenburg 1 December 2012 Kimberley 7 December 2012 Potchefstroom 5 January March 2013 Polokwane 5 February 2013 The Presenter - Prof Tshepo H. Mongalo A/PROF. TSHEPO H. MONGALO is the Regulatory Framework Manager for the Business Registration Reform Project in South Africa, an interdepartmental government project aimed at simplifying primary and secondary business registration procedures for all types of businesses in South Africa. Tshepo is also the founding member and Chief Executive of Tong-Mongalo Corporate Services CC, the business planning, regulatory framework and policy design, corporate commercial and corporate governance consulting firm based in Centurion and Cape Town in 3

4 South Africa. He is also the Corporate Law Consultant for Mabalane Seobe Inc., a black corporate commercial law firm based in Bloemfontein and Johannesburg, South Africa. He has also recently been appointed as a member and Deputy Chairperson of the Specialist Committee on Company Law (SCCL), a committee established in terms of s191 of the 2008 Companies Act to advise the Minister of Trade and Industry on company law and policy and the Companies & Intellectual Property Commissioner on the management of the Commission s resources. He received a B.Proc (Summa cum Laude) from the University of Natal in Durban; an LL.B. from the same University; and an LL.M. from Cambridge University in England, where he was the Deputy President of the Cambridge University Southern African Students Union (CUSAS). Tshepo is in the process of completing his PhD thesis on Using Corporate Law to Foster Corporate Cultures Respectful of Human Rights. During the 1998 academic year, he completed legal practical studies with distinction at the Durban centre of the South African Law Society s School for Legal Practice and started serving articles of clerkship at a well-known Durban law firm of Livingston- Leandy Inc. In 1999, he served as a Researcher/Judge Assistant to Justice L.W.H. Ackermann of the Constitutional Court of South Africa. Tshepo is an Associate Professor of Commercial Law at the University of Cape Town and the former Senior Lecturer of Business Law at the University of Natal, Durban (now University of KwaZulu-Natal). In private practice, Tshepo was the Project Manager and Lead Expert on the Corporate Law Reform Project within the Department of Trade & Industry South Africa (the dti), an initiative which led to the revamp of the corporate legislation in that country and the introduction of the new Companies Act, 71 of 2008, which became law as of 1 May Tshepo advises publicly- and privately-held companies and other entities on matters of corporation law in connection with corporate governance, corporate finance, corporate formation and corporate restructuring and other matters. He has advised some of the leading JSE listed companies, government departments, development finance institutions, an umbrella association of business entities, non-profit entities, higher educational institutions and private companies and close corporations in a wide range of corporate commercial matters. Tshepo has also taught 4

5 commercial law, contract law, corporation law and corporate governance courses to both undergraduate and postgraduate students at the Universities of Natal, Nottingham (England) and Cape Town. In addition to authoring Corporate Law and Corporate Governance: A Global Picture of Business Undertakings in South Africa (2003), Van Schaik Publishers, Tshepo is the co-author (with Cephas Lumina and Fahreen Kader) of Forms of Business Enterprise: Theory, Structure and Operation (2004), Van Schaik Publishers; Companies and Other Business Structures in South Africa (2008), Oxford University Press; and Modern Company Law for a Competitive South African Economy (2010), Juta & Co. Tshepo is the author of several law review articles and a frequent speaker on company law issues. In addition to being actively involved in the revision of the South African corporate laws, Tshepo is the Advisory Committee Member of the South African Law Reform Commission on 'Project 25' which is aimed at statutory law revision of the legislation administered by the Department of Trade & Industry (the dti) since Moreover, Tshepo is the former occasional representative of the dti in South Africa APRM(African Peer Review Mechanism) National Governing Council from 2006 to 2008; the former Reporter on Company Law Reform to the Standing Advisory Committee on Company Law in South Africa (SACCL), a body appointed in terms of s18 of the Companies Act, 61 of 1973, from 2004 to 2008; the former leading government representative in the National Economic Development and Labour Council (NEDLAC) Task Team on Company Law Reform from 2004 to 2008; the former dti representative in the African Union s initiative on the Harmonization of Business Laws in Africa in 2007; the former Visiting Scholar to the Faculty of Law at the University of Nottingham from the end of 2001 to 2002; the former Visiting Scholar in the Faculty of Law at the University of Cambridge and the recipient of the prestigious Colenso Scholarship at St John's College at the University of Cambridge in 2004; and the former member of the Executive Committee (EXCO) of the Consumer & Corporate Regulation Division (CCRD) of the dti from More important than any of the foregoing, Tshepo is married to Minah B. Tong-Mongalo, of Pampierstad, Northern Cape, and they are the parents of two boys, Pholoso and Mohau Mongalo. 5

6 THE FULL IMPLEMENTATION OF THE COMPANIES ACT ON 1 MAY 2013 WORKSHOP OUTLINE: SESSION 1: 08:30 TO 10:30: AN OVERVIEW OF PRINCIPAL PROVISIONS IMPACTING ON THE DRAFTING OF THE MEMORANDUM OF INCORPORATION: 1. Contents of the Memorandum of Incorporation (MoI); 2. Rules of Company; 3. Amending MoI; 4. Validity of actions; 5. Rights to information; 6. Extended accountability; 7. Authorised shares; 8. Pre-emptive rights; 9. Issue of Debt Instruments; 10. Financial assistance for share purchases; 11. Financial assistance and loans to directors; 12. Capitalisation shares; 13. Beneficial registration of shares; 14. Governance generally; 15. Proxies; 16. Record Dates; 17. Shareholders meetings; 18. Notice of meetings; 19. Conduct of Share holder meetings; 20. Meeting Quorum; 21. Adjournment of meetings; 6

7 22. Resolutions; 23. Board s authority; 24. Composition of board; 25. Compensation for directors; 26. Term of directors; 27. Election of Directors; 28. Filling vacancies; 29. Eligibility of Directors; 30. Board committees; 31. Board meeting quorum; 32. Electronic board meetings; 33. Notice of board meetings; 34. Notice of meetings; 35. Acting outside meetings; 36. Indemnification of Directors; 37. Jurisdiction of TRP over private companies; 7

8 SESSION 2: PART 1: 11:00 TO 13:00: ANALYSIS OF THE STANDARD PROVISIONS OF PRE- EXISTING COMPANIES CONSTITUTIONS. 1. Introduction and Background to the new Companies Act 2. Reviewing standard provisions of the Memorandum and Articles of association in line with the new Companies Act: 2.1 Memorandum of Incorporation: (a) (b) (c) (d) (e) (f) (h) (i) (j) Company Names; Purpose describing the main business; Main Object; Ancillary objects excluded; Powers; Conditions; Pre-incorporation contracts; Capital: (1) Par value; (2) No Par value; Association clause 2.2 ARTICLES OF ASSOCIATION (TABLE B: ARTICLES FOR A PRIVATE COMPANY) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Interpretation; Restrictions; Shares and Certificates of Shares; Variation of Rights; Register of Members; Transfer and Transmission of Shares; Conversion of Shares into Stock; Alteration of Capital; General Meetings; Notice of General Meetings; 8

9 (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) (w) (x) (y) (z) (aa) (bb) (cc) Proceedings at General Meetings; Inspection of Minutes; Votes of Members; Directors; Alternate Directors; Powers and Duties of Directors; Borrowing Powers; Managing Director; Minutes and Minute Books; Foreign Committees; Disqualification of Directors; Rotation of Directors; Proceedings of Directors; Dividends and Reserves; Accounting Records; Annual Financial Statements; Audit; Notices; Winding-up. SESSION 2: PART 2: 14:00 TO 15:00: AN OVERVIEW OF PRINCIPAL PROVISIONS IMPACTING ON THE DRAFTING OF THE MEMORANDUM OF INCORPORATION: 1. A guideline for drafting a unique form of memorandum of incorporation 2. Closure (15h00). 9