Posts by Stratlaw

A tag-along clause is an important provision often included in shareholder agreements, particularly within the South African corporate context. This clause provides minority shareholders with the right to join in on the sale of shares by majority shareholders, ensuring they can exit the company under similar terms in the event of a third-party sale. Understanding…

A drag-along clause is a critical provision often included in shareholder agreements, particularly in the context of South African corporate law. This clause enables majority shareholders to force minority shareholders to sell their shares in the event of a third-party acquisition, thereby facilitating smoother transactions and protecting the interests of the selling shareholders. Understanding Drag-Along…

In South Africa, the appointment and termination of directors are governed primarily by the Companies Act 71 of 2008 and the company’s Memorandum of Incorporation (MOI). Understanding the legal framework surrounding these processes is essential for effective corporate governance. Appointment of Directors The appointment of directors is a critical aspect of corporate governance, ensuring that…

In the corporate landscape of South Africa, distinguishing between shareholders, directors, and employees is essential, as each group plays a unique role within a company. The Companies Act 71 of 2008 provides a framework defining their respective functions, rights, responsibilities, and entitlements to remuneration. Shareholders Shareholders are individuals or entities that own shares in a…

In South Africa, the quorum for shareholders’ and directors’ meetings is governed primarily by the Companies Act 71 of 2008. Understanding these provisions is crucial for ensuring that meetings are valid and that decisions made are enforceable. Additionally, the company’s Memorandum of Incorporation (MOI) can significantly impact these requirements. Quorum for Shareholders’ Meetings According to…

Introduction In the landscape of corporate finance, it is not uncommon for financial institutions to require personal security from shareholders when extending loans to a company. This situation raises important questions about the rights of shareholders under South African law. This article examines the legal framework governing a shareholder’s right to refuse personal security for…

Introduction In South Africa, the proof of shareholding is a critical aspect of corporate governance and shareholder rights. The Companies Act 71 of 2008 provides a framework for the maintenance of records that establish and verify ownership of shares in a company. Two primary mechanisms for proving shareholding are the share register and share certificates.…

Introduction In South Africa, the financial relationship between shareholders and a company encompasses both capital contributions through share purchases and additional funding via shareholder loans. These obligations are governed by the Companies Act 71 of 2008 and the company’s memorandum of incorporation (MOI). This article explores the legal framework surrounding these obligations, their implications for…

Introduction In South Africa, the rights of minority shareholders are protected under the Companies Act 71 of 2008. This legislation recognizes the importance of safeguarding the interests of minority shareholders to ensure equitable treatment within corporate governance. This article explores the legal framework that underpins the protection of minority rights and its implications for corporate…

Introduction In South Africa, the fiduciary responsibilities of company directors are governed by the Companies Act 71 of 2008. Among these responsibilities is the crucial prohibition against directors using corporate opportunities for personal gain at the expense of the company. This article examines the legal framework surrounding this prohibition and its implications for corporate governance,…