By Pieter Strydom
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In this fifth article unpacking the amendments relating to the first and Second Companies Amendments Acts of 2024; we deal exclusively with the amended provisions of Section 16 of the Companies Act, Act 71 of 2008 (the “Act”) and the effect it will have on companies, going forward.
Section 16 of the Act deals specifically with the requirements to be met when amending the Memorandum of Incorporation (“MOI”) of a company.
Prior to the Amendments Act, 2024
Section 16(9) previously held ambiguity to the extent that no clarity existed on whether changes were effected once the Notice to Amend was filed by the company or when it was accepted and filed in the registry with the Companies and Intellectual Properties Commission (“CIPC”). A further concern under the pre-amended Act was the enforceability of an MOI that has been filed but not yet registered.
Subsequent to the Amendments Act, 2024
The proposed amendment to Section 16(9) entails that it will read as follows:
- 10 business days after receipt of the Notice of Amendment by the Commission, unless endorsed or rejected with reasons by the Commission prior to the expiry of the 10 business days period; or
- such later date, if any, as set out in the Notice of Amendment.
This amendment brings about a matter of certainty regarding the filing of a Notice of Amendment to a company’s MOI. The newfound position, in terms of the amendment, will be that the amendment takes effect 10 business days from receipt of the Notice of Amendment by the office of the CIPC, unless the amendment is endorsed or rejected with reasons prior to the expiry of the 10-business-day period.
Amendment in effect
The amendment of Section 16 of the Act, as discussed above, as well as all the amendments set out in the Second Companies Amendment Act became operative on 27 December 2024.