Close Corporations Amendment Act 64 of 1988

Close Corporations Amendment Act, 1988 (No. 64 of 1988)

GENERAL EXPLANATORY NOTE:
[ ]  Words in bold type in square brackets indicate omissions from existing enactments. 
__ Words underlined with solid line indicate insertions in existing enactments.

Act

• to amend the Close Corporations Act, 1984, so as
• to make It clear that the Supreme Court shall have concurrent jurisdiction in any matter relating to close corporations in which the magistrate's court has jurisdiction;
• to further regulate the conversion of companies Into corporations;
• to provide explicitly that the trustee of a trust inter vivos in that capacity may not hold a member's interest in a close corporation;
• to effect certain adjustments in the English text; and
• to make further provision in connection with the approval and signing of annual financial statements by members of a corporation; and
• to provide for matters connected therewith.

(English text signed by the State President.) 
(Assented to 17 June 1988.)

BE IT ENACfED by the State President and the. Parliament of the Republic of South Africa, as follows:- 

Substitution of section 7 of Act 69 of 1984

1. The following section is hereby substituted for section 7 of the Close Corporations Act, 1984. (h.e reinafter referred to as the principal Act): 

"Courts having jurisdiction in respect of corporations

7. For the purposes of this Act the [court] courts having jurisdiction in any matter, including [liquidation] winding up, in respect of any corporation [and any matter referred to in section 36, 42 (3) (b), 49 (1) or 64 (1)] shall be any magistrate's court, and any provincial or local division of the Supreme Court of South Africa, within whose area of jurisdiction the registered office or main place of business of the corporation is situate or, in relation to any such matter in respect of which [such] a magistrate's court has in any particular case on account of any provision of the Magistrates' Courts Act, 1944 (Act No. 32 of 1944), no jurisdiction, any provincial or local division of the Supreme Court of South Africa within whose area of jurisdiction any such office or place of business is situate.". 

Amendment of section 27 of Act 69 of 1984, as amended by section 7 of Act 38 of 1986

2. (1) Section 27 of the principal Act is hereby amended by the addition to subsection (5) of the folowing paragraph:

"(d) The juristic person which prior to the conversion of a compnay into a corporation existed as a company, shall notwithstanding the conversion continue to exist as a juristic person but in the form of a corporation.".

(2) Subsection (1) shall be deemed to have come into operation on 1 January 1985.

Amendment of section 29 of Act 69 of 1984

3. (1) Section 29 of the principal Act is hereby amended by the substitution for subsection (1) of the following subsection: 

"(1) Subject to the provisions of subsection (2) (b) and (c), only natural ersons may be members of a corporation and no juristic person or trustee of a trust inter vivos in that capacity shall directly or indirectly (whether through the instrumentality of a nominee or otherwise) hold a member's interest in a corporation.".

(2) Subsection (1) shall be deemed to have come into operation on 13 April 1987.

Amendment ofsection 58 of Act 69 of 1984, as amended by section 12 of Act 38 of 1986

4. Section 58 of the principal Act is hereby amended-

(a) by the substitution in the English text in subsection (1) and in the words of subsection (2) preceding paragraph (a) for the expression "financial statements", wherever it occurs, of the expression "annual financial statements"; and

(b) by the substitution for subsection (3) of the following subsection:

"(3) The annual financial statements shall be approved and signed by or on behalf of [every member of] a member holding a member's interest of at least 51 per cent, or members together holding members' interests of at least 51 per cent, in the corporation.".

Amendment of section 63 of Act 69 of 1984

5. (1) Section 63 of the principal Act is hereby amended by the substitution for paragraph (d) of the following paragraph:

"(d) where a juristic person or a trustee of a trust inter vivos in that capacity purports to hold, whether directly or indirectly, a member's interest in the corporation in contravention of any provision of section 29, such juristic person or trustee of a trust inter vivos and any nominee referred to in that section shall, notwithstanding the invalidity of the holding of such interest, be so liable for every debt of the corporation incurred during the time the contravention continues;".

(2) Subsection (1) shall be deemed to have come into operation on 13 April1987.

Short title

6. This Act shall be called the Close Corporations Amendment Act, 1988.

Commencement

29 June 1988