Section 45 Companies Act

Lenders often ask which of s44 45 and 46 of the companies act no.

Section 45 companies act. Company or subsidiary acquiring company s shares. Provided that nothing in this section shall apply to a share held by a person whose name is entered as holder of beneficial interest in such share in the records of a depository. 1 a company shall not make a distribution as defined by section 51 except out of profits available for the purpose.

Members severally liable for debts where business carried on with fewer than seven or in the case of a private company two members. An act to reform company law and restate the greater part of the enactments relating to companies. It is a punitive section and can result in personal liability for the directors of a company or the members of a close corporation.

Compliance with section 45 of the companies act no. Section 45 is not a new section of the companies act. Section 45 addresses loans or other financial assistance to directors.

The applicability of these sections is considered in the following example surety example which occurs frequently in funding transactions. The above parties section 45 extends to more than a traditional group of companies and incorporates an extremely wide pool of companies close corporations trusts and individuals. The lender lends money to one company in a group of companies borrower and obtains suretyships for the borrower s obligations from some or all of the other group companies each a surety.

This includes inter company loans and loans between related and inter related parties. Companies will need to identify all relationships and analyse whether the individual company close. Compliance with section 45 of the companies act no 71 of 2008 is proving a challenging matter to companies and clients alike.

However cipc now requires you to note your compliance with this section as part of the new cipc compliance checklist. The directors may authorise the company to provide direct or indirect financial assistance to a director prescribed officer of the company or of a related or inter related company or to a. 71 of 2008 the act loans or other financial assistance to directors which includes inter company loans and loans between related and inter related persons financial assistance includes lending money guaranteeing a loan or other obligation and securing any debt or obligation.