{"id":41924,"date":"2025-06-25T09:23:21","date_gmt":"2025-06-25T07:23:21","guid":{"rendered":"https:\/\/stbb.co.za\/dev2\/?p=41924"},"modified":"2025-06-29T21:12:00","modified_gmt":"2025-06-29T19:12:00","slug":"blog-recapping-the-companies-act-amendments-what-businesses-should-know","status":"publish","type":"post","link":"https:\/\/stbb.co.za\/dev2\/blog-recapping-the-companies-act-amendments-what-businesses-should-know\/","title":{"rendered":"Blog | Corporate insights: Recapping the Companies Act amendments"},"content":{"rendered":"

At STBB, our corporate governance specialists have extensive experience interpreting and applying the provisions of the Companies Act and accompanying regulatory instruments. As reported in January<\/u><\/a>, various amendments to the Companies Act<\/u><\/a> took effect late last year. Six months after the operationalisation of these amendments, our company law experts note that many clients are still navigating the changes. Accordingly, this article provides a useful recap of these key corporate amendments.<\/p>\n

Amendments in terms of the Companies Amendment Act<\/strong><\/p>\n

The vast majority of the now operational revisions to the Companies Act (\u2018the Act\u2019) are contained in the Companies Amendment Act, which are detailed below:<\/p>\n

Amending a Memorandum of Incorporation<\/em>
\nUnder section 16 of the Act, an amendment to a company\u2019s Memorandum of Incorporation will take effect 10 business days after CIPC receives the Notice of Amendment, unless the Commission endorses or rejects the amendment with reasons within that period. Notably, the existing provision allowing the amendment to take effect on a date specified in the Notice remains unchanged.<\/p>\n

Consideration for shares<\/em>
\nThe amendments to section 40(5) and (6) of the Act, which deal with shares issued for future consideration, clarifies key terminology. The term \u2018trust\u2019 is replaced with \u2018stakeholder agreement\u2019, and the reference to a \u2018third party\u2019 is replaced with \u2018stakeholder\u2019, to more accurately reflect the commercial relationship. importantly, this section remains an exception to the general rule that shares must be fully paid upon issue.<\/p>\n

Financial assistance<\/em>
\nin a welcome move, financial assistance granted by a company to or for the benefit of its own subsidiaries is now expressly excluded from the financial assistance requirements and restrictions otherwise imposed by section 45.<\/p>\n

Company or subsidiary acquiring company\u2019s shares<\/em>
\nUnder section 48 of the Act, a company repurchasing its own shares is no longer required to comply with the procedures under sections 114 and 115, which generally apply to fundamental transactions. However, if the company intends to acquire shares from a director or a related person, or if the repurchase is not done via:<\/p>\n