Companies

Question 1

Companies and Intellectual Property Commission (CIPC):

Answer 1

1. Registration of companies
2. Keep certain information
3. Ensure Companies Act is implemented and complied with
4. Receive complaints re contraventions of Act - investigate
5. Valid complaint - Issue compliance notice
6. To promote Alternative Dispute Resolution (ADR)
7. To review orders of the Commission

Question 2

Companies Tribunal:

Answer 2

-To promote Alternative Dispute Resolution (ADR)
-To review orders of the Commission

Question 3

What is a company

Answer 3

• Juristic personality: The company exists independently from its members.
• Company can make its own decisions with the help of its board who serve as representatives.
• Registration requirements:
• Must be incorporated in terms of the applicable legislation.
• Object of gain: Profit
• Work together

BUT: The definition does not always apply - still possible to set up:
- A company with only one shareholder
- A non-profit company

Question 4

Acquisition of juristic personality

Answer 4

1. Specific Act
2. Registration in terms of companies act
3. Conduct in terms of common law
   -Property of members and the JP must be held separately.
   - JP must have the capacity to acquire rights and authority.
   - Locus standi (standing before the court in its own name.)

Question 5

Consequences of JP

Answer 5

1. Treated like a legal subject with own rights and obligations
2. Company acts independently of its shareholders
3. Shareholders have limited liability
4. Assets are the exclusive property of the company
5. Perpetual succesion
6. Members aren’t automatically agents
   7.

Question 6

Piercing the corporate veil

Answer 6

The company is merely a mask or alter ego for the individuals behind the company

Common law-
1. Misuse
2. Unconscionable injustice
3. Directing mind and will
4. Discrimination against a company in respect of the race of its members

Legislation:
- Doing business recklessly, with gross negligence, with intent to defraud any person or for any fraudulent purpose= Directors will be held personally liable.
- Unconscionable abuse - S 20(9)= Unconscionable abuse of the juristic personality of the company as a separate entity

Consequences:
-The company continues to exist, but the normal consequences of juristic personality are disregarded.
- members of the company can be held personally liable for loss/damages incurred by the company