The 2008 Companies Act also provides that no new close corporations may be incorporated. Close corporations that are in existence at the time that the new Act comes into effect may continue to exist indefinitely.
The new Act allows for existing close corporations to convert into a private company (governed under the new Act) should the members decide to do so, as is the position under the current (1973) Companies Act. All that is required is an official notice of conversion, a certified copy of the special resolution to approve the conversion and a new Memorandum of Incorporation along with the necessary fee. However, from the date that the 2008 Act becomes effective, existing companies may no longer convert into close corporations.
The Memorandum of Incorporation ("MOI") will replace the Memorandum and Articles of Association that are the current constitutional documents of your company. Two categories devides all companies under the New Companies Act:-
Profit companies: - state owned, private, personal liability and public companies
Non profit companies: - Section 21 non-profit companies replaced these companies
The Act no longer provides for par value shares, instead all shares issued by companies in term of the New Act will be no par value shares. Audit committees needs to be appointed for public and state-owned companies and to comply with enhanced accountability and transparency requirements. The directors' duties have become very important and increased protection is afforded to shareholders of companies.
Important facts: -
Replace your existing Memorandum and Articles of Association with a new Memorandum of Incorporation;
Convert your par value shares to no par value shares during the five year grace period provided for share converstions or prior to effective date of the New Act;
Revise any existing shareholders' agreements;
Draft any new shareholders' agreements before the effective date of the New Act;
If required, adopt incidential rules relating to the governance of the company as contemplated in the New Act.
