BUSINESS INSIGHTS: New MOI rules under Companies Act amendments
Various amendments to the Companies Act (Act 71 of 2008) came into effect on 27 December 2024. These amendments were contained in the Companies Amendment Act (Act 16 of 2024) and in the Companies Second Amendment Act (Act 17 of 2024).
One of these amendments was to section s16(9)(b). This section describes when an amendment to an MOI that is filed at the Companies and Intellectual Property Commission ('the Commission') comes into effect. This little amendment is very welcome because previously, there was much confusion about this. It was an uncomfortable position, because parties in commercial transactions that include new or amended MOIs as part of the agreed suite of transaction documents, want certainty as to when they come into effect.
The confusing language from the old sub-section said that the amendment came into effect on the date and time when the Notice of Amendment was 'filed' at the Commission, but the definition of 'file' referred to 'delivery' and it was not clear when delivery to the Commission occurred.
[Just note that this amendment does not apply to when an MOI amendment changes the name of a company, as this is dealt with under a different sub-section.]
The new position is that the amendment comes into effect:
(i) '10 business days after receipt of the Notice of Amendment by the Commission, unless endorsed or rejected with reasons by the Commission before the expiry of the 10 business days period; or
(ii) Such later date, if any, as set out in the Notice of Amendment.'
We recommend checking whether your template MOI, or any draft amendment to an MOI or draft new MOI contains a definition of 'Effective Date', or a clause referring to when the amendment or new MOI comes into effect that reflects the old position under the Companies Act. Updating it to reflect the new provision will be desirable so that the company can benefit from the clarity provided by the new provision, and to avoid debates about whether the MOI's provision or the amended Companies Act provision applies.
Written by Abigail Reynolds (Corporate & Commercial Law Specialist)
This article was originally published by Reynolds Attorneys
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
6 days ago
- The Citizen
Pick n Pay CEO receives the highest salary in retail. Here's how much others get
The lowest-paid CEO in grocery retail is Marek Masojada, CEO of Boxer, with R5.6 million, while the highest-paid is Sean Summers (pictured), CEO of Pick n Pay, with R24.9 million. At the top of the corporate ladder, the CEO stands as the face of pressure and power, a single person trusted with steering a company through stormy seas of inflation, consumer hesitancy and relentless competition. Those at the helm of retail companies are paid handsomely due to several factors, including qualifications, experience and responsibilities. These are the people whose vision keeps customers walking through the doors despite the crushing cost of living. The lowest-paid CEO in grocery retail is Marek Masojada, CEO of Boxer, with R5.6 million, while the highest-paid is Sean Summers, CEO of Pick n Pay, with R24.9 million. How do grocery retailers pay? Those who are on the sales floors, in the stockrooms and behind the registers receive significantly less pay despite them being the people who grind through the chaos, carry out plans and turn PowerPoint strategies into tangible success. Is it truly fair that those who ensure the vision comes to life earn a fraction of what the visionary earns? The Companies Amendment Act, signed into law in July 2024, requires public and state-owned companies to disclose the earnings of their top and lowest employees. The Citizen attempted, with no success, to obtain the breakdown of how much the lowest-paid employee in each of six prominent grocery retailers in South Africa earns, as well as their positions. Enquiries were sent out earlier in the week. ALSO READ: Is Boxer taking over, or is trouble brewing? Lowest-paid CEO in grocery retail According to Boxer's financial results for the 53 weeks ended March 2025, its CEO, Marek Masojada, received a basic salary of R5.6 million. His total remuneration was R18.5 million. The total remuneration includes basic salary, retirement and medical contributions of R1.1 million, benefits of R300 000 and a short-term performance bonus of R11.5 million. The financial results outlined that Boxer has a total of 31 906 employees. The retailer spends nearly R3.1 billion paying these employees, representing a 19.1% increase from the R2.5 billion spent in the previous financial year. ALSO READ: Pick n Pay turnaround taking shape as it delivers on first year of recovery plan Highest paid with no benefits According to Pick n Pay's financial results for the 53 weeks ended 2 March 2025, the man responsible for restoring the retailer's glory, Sean Summers, received a basic salary of R24.9 million. Unlike other CEOs who receive benefits, retirement contributions and medical benefits, as well as short-term performance bonuses, Summers does not receive these. However, he got a whopping R40.1 million in long-term awards. Pick n Pay said that employee costs increased by 1.1% to R6.4 billion during the period, up from R6.3 billion in the previous financial year. ALSO READ: What does the future hold for Spar? Retailer's profits nosedive R16 million for Spar CEO Spar seems to include the remuneration of executives and staff in its annual financial results, which are released towards the end of the year. However, The Citizen reached out, with no success, to the retailer to get the figures for 2025. According to the retailer's annual financial statements for the financial year 2024, released on 28 November 2024, Spar's CEO, Angelo Swartz, got paid a basic salary of R9.5 million. During the period, he received a performance-related bonus of R4.3 million, retirement funding contributions of R1.1 million, and allowances and other benefits totalling R1 million, costing the retailer R16 million in remuneration. ALSO READ: How Shoprite made R20 million profit per day Shoprite and Checkers led by one man Shoprite and Checkers are led by one man under Shoprite Holdings. The Citizen was unable to get the remuneration report of the group for 2025. According to the financial statement for 2024, the group's CEO, Pieter Engelbrecht, received a salary of R18 million. Apart from the salary, he received retirement and medical benefits of R500 000, benefits worth R919 000, a short-term performance bonus worth R17 million and a long-term incentive bonus worth R14.3 million, making his total cost to the company of R52 million. ALSO READ: Is Woolworths in trouble? CEO said financial performance 'disappointing' Woolies CEO Woolworths' annual results for the year ended June 2024 show that the total remuneration for its CEO, Roy Bagattini, in 2024 was R65.29 million. The breakdown of his remuneration package includes the base salary of R19.39 million and benefits worth R2.5 million. Additionally, he received both short-term and long-term incentives. NOW READ: Capitec CEO tops banking pay charts — but how do staff salaries compare? A look at how SA's top five banks pay
Daily Maverick
28-05-2025
- Daily Maverick
Daybreak Foods: Chicken producer hopes business rescue will hatch a turnaround
Creditors and almost 3,000 employees may finally see some resolution as the first business rescue meetings for beleaguered chicken producer, Daybreak Foods, kick off next week. Daybreak Foods, which has been in the spotlight over the past two months for animal cruelty, mismanagement, failure to pay staff and failure to pay contractors, has successfully applied to be placed under business rescue. Under the Companies Act, business rescue practitioner Tebogo Maoto is required to convene the first meeting of creditors and employees within 10 days of his appointment. The first meeting of creditors will be held virtually through Microsoft Teams on Monday, 2 June at 10am. The first meeting of employees will also take place virtually through Microsoft Teams on Tuesday, 3 June at 10am. In a notice, Maoto said the formal agenda for the meetings would be communicated to all affected parties in due course. In the interim, affected parties may address any queries they have directly to Motau at [email protected] In a media statement, the Public Investment Corporation (PIC), a major creditor and shareholder in Daybreak Foods, said it was of the 'firm belief that the company can be rescued and must be rescued, and that business rescue is the best path to preserve the company's value and potential, saving approximately 3,000 jobs, and importantly, to realise returns for clients and their beneficiaries on their investment'. Maoto was formally appointed as the senior business rescue practitioner (BRP) of Daybreak Foods on Thursday, 22 May 2025, after the company was placed under voluntary business rescue two days earlier. Maoto has significant experience in the field of business rescue, turnarounds and corporate restructurings, both in South Africa and in cross-border mandates. This extends to the turnaround and restructuring of various non-listed companies, including York Timber, Adax Bioenergy (Sierra Leone), Karstern Boerdery and Premier Hotel OR Tambo. A statement from the company notes that the business rescue proceedings for Daybreak Foods will focus on stabilising its ongoing operations, while Maoto assists with the development of a turnaround strategy and finding solutions to the funding shortfalls of Daybreak Foods. The PIC has already undertaken several measures to contribute towards stabilising Daybreak Foods, which include the injection of R74-million in working capital, intended to address the company's immediate liquidity needs. Daybreak Foods' interim chairperson Dr Charlotte Nkuna commented: 'We welcome the appointment of the BRP as part of the collective effort, together with the Public Investment Corporation, to rescue the Company and save approximately 2,800 jobs. We are confident that the business rescue proceedings will help Daybreak Foods to achieve a credible turnaround plan in the interest of all our stakeholders.' Daybreak Foods has a legal moratorium on any legal and/or enforcement actions being instituted against it, while the company's board and the BRP prepare the necessary proposals to rescue the company from its financial distress. DM
The Citizen
28-05-2025
- The Citizen
Hawks investigating Peet and Melany Viljoen for fraud with Tammy Taylor franchises
The Hawks are investigating Peet and Melany Viljoen for contraventions of the Companies Act in running Tammy Taylor Global Franchising. The Hawks confirmed this afternoon that they are investigating Peet and Melany Viljoen for fraud after a judge ordered in April that a copy of his order be forwarded to the National Prosecuting Authority (NPA) for investigation and possible prosecution for not complying with the Companies Act. Brigadier Thandi Mbambo, spokesperson for the Hawks, confirmed that the Hawks are investigating the matter after a case was opened at the Sandton police station. Judge Joseph Raulinga made the order after a prospective Tammy Taylor franchisee, Lebohang Hlathuka, sued Tammy Taylor Global Franchising as well as both the Real Housewives of Pretoria star and her husband to get back the R600 000 she paid for a Tammy Taylor franchise. Hlathuka also argued that the way the Viljoens conducted the business of Tammy Taylor Global Franchise is prohibited by the Companies Act, as they were knowingly party to an act and omission calculated to defraud her, and asked the court to refer the matter to the NPA for investigation and prosecution. ALSO READ: Tammy Taylor Global Franchising gets a big hiding in South African high court Sections 214 and 216 of the Companies Act Section 214 of the Companies Act deals with false statements, reckless conduct and non-compliance. It renders a director or any person guilty of a criminal offence if the director or person was knowingly a party to an act or omission by a company calculated to defraud a creditor or employee of the company, or a holder of the company's securities or with another fraudulent purpose. Section 216 of the Act deals with the penalties for non-compliance with the Companies Act and provides that someone convicted of an offence in terms of the Companies Act is liable to a fine or imprisonment for up to ten years or both. ALSO READ: Judge orders Viljoens to immediately stop using Tammy Taylor trademark Judge agrees Tammy Taylor transaction was unconscionable, unjust and unreasonable In addition, Hlathuka asked the court to declare the transaction to buy a Tammy Taylor franchise unconscionable, unjust and unreasonable in terms of the Consumer Protection Act (CPA) and order Tammy Taylor Global Franchising and the Viljoens to immediately cease the sale of Tammy Taylor franchises in South Africa without first obtaining the necessary authorisation and/or license from the proprietor of the registered Tammy Taylor and associated trademarks in terms of the CPA. Raulinga declared the transaction unconscionable, unjust and unreasonable in terms of the CPA and void. In addition, he ordered that Tammy Taylor Global Franchising must refund Hlathuka her R600 000 with interest. He also ordered that Tammy Taylor Global Franchising, as well as both the Viljoens immediately cease representing that they have the legal authority to sell Tammy Taylor nail franchises in South Africa without permission under the Trademarks Act and without authorisation or a license. In addition, he ordered that they must remove all references to Tammy Taylor from their websites, stationery, forms, marketing material, salon products and social media platforms within 30 days from 25 April. Raulinga also ordered that the Viljoens must pay Hlathuka's legal costs. ALSO READ: VIDEO: Tammy Taylor sues Melany and Peet Viljoen for $100 million Viljoens planning to appeal, on holiday in Perth to start Tammy Taylor franchise The lawyer acting for Tammy Taylor Global Franchising and the Viljoens informed Hlathuka's lawyer that they will appeal the order. After private investigator Mike Bolhuis stated last week that the Viljoens planned to leave South Africa by 24 May, Peet Viljoen told Rapport newspaper that they are going on holiday to Perth in Australia where they will open a franchise. Bolhuis alleged that the Viljoens already sold some of their assets to finance their 'attempt to leave South Africa'. He added that the Viljoens are being investigated for fraud, theft, intimidation, extortion, harassment and contravention of the Cybercrimes Act. The Viljoens did not respond to a request for comment.
