Did you know: if you amend anything in your company’s existing shareholders agreement (for example, if there is a change in shareholding), or if you try to bring your existing memorandum and articles of association in harmony with the new Companies Act, the amended document will have to comply in full with the new Companies Act from that moment on. This means the 2 year grace period for the amended document will cease to apply! Strangely, it does not seem that all amendments to your existing memorandum and articles of association will mean the grace period falls away. Only those aimed at bringing the memorandum and articles of association in harmony with the new Companies Act will terminate the grace period. As a result of this complexity in the law, if you make any amendments to your existing company documents, seek legal advice!

Did you know: the following areas of the new Companies Act apply to all existing companies no matter what that company’s documents say, and there is no two year grace period before your company has to comply with these sections:
• Duties, conduct and liability of directors
• Rights of shareholders to receive any notice or to have access to any information
• Meetings of shareholders and directors and adoption of resolutions
• Fundamental transactions, takeovers and offers as per Chapter 5, and
• Approval of any distribution, financial assistance, insider share issues, or options (even if approved before the effective date)

Did you know: to convert a CC to a company under the new Companies Act, the CC just files a specific notice of conversion along with an amended Memorandum of Incorporation (which complies with the new Companies Act), the prescribed filing fee, and a statement of consent which must be signed by at least 75% of the members’ interest (to file a notice of conversion is free now, but there will be a small fee for the Memorandum of Incorporation)

Did you know: if you convert your CC to a company under the new Companies Act, every member of the CC is entitled to become a shareholder, BUT the shareholding in the new company does not necessarily have to equate to the proportion of member’s interest as it is currently held in the CC.

Did you know: Schedule 3 of the new Companies Act makes several provisions of the new Act applicable to CCs immediately, so CCs must comply with these sections, such as:
• Names of corporations
• Transparency and accountability including regarding:
• disqualification from managing the CC, and
• annual financial statements and auditing;
• Business rescue provisions
• Liquidation, and
• Dissolution and deregistration.

Written by Abigail Reynolds