The doctrine of constructive notice applied under the old Companies Act. In terms of this doctrine, and because the constitutional documents of a company were (and still is) in the public domain, outsiders were presumed to have knowledge of any limitations on the powers and capacity of a company and or office bearers.
Under the new Companies Act (since May 2011) a company has the full legal capacity and powers of a natural person to the extent that a juristic person is capable of exercising any such power and/or having such capacity. The New Act furthermore partially excludes the operation of the doctrine of constructive notice. Under this Act, a third party will only be deemed to have knowledge of any limitations or restrictions on a company if the company includes the letters “RF” (referring to “Ring Fenced”) in its name.
According to a non-binding opinion published during December 2011, the Companies and Intellectual Property Commission recommends that the expression “RF” be used in a companyís name in all cases where -
- the purpose or objectives of the company is restricted or limited in the Memorandum of Incorporation (MOI);
- the powers of the company is restricted or limited in any way in its MOI;
- any other limiting or restricting condition is contained in the MOI;
- any requirement in addition to those set out in section 16 of the 2008 Act, for the amendment of any of the abovementioned restrictions or limitations is contained in the MOI;
- a special resolution to approve any matter (not contemplated in section 65(11) of the 2008 Act) is prescribed by the MOI;
- the MOI imposes on the company a higher standard, greater restriction, longer period of time or any similarly more onerous requirement, than would apply in terms of an unalterable provision of the 2008 Act; and
- the MOI contains a prohibition on the amendment of any particular provision of the MOI.