Various amendments to the Companies Act (Act 71 of 2008) came into effect on 27 December 2024. These amendments were contained in the Companies Amendment Act (Act 16 of 2024) and in the Companies Second Amendment Act (Act 17 of 2024).
What Changed in Section 16(9)(b)?
One of these amendments was to section s16(9)(b). This section describes when an amendment to an MOI that is filed at the Companies and Intellectual Property Commission (“the Commission”) comes into effect. This little amendment is very welcome because previously, there was much confusion about this. It was an uncomfortable position, because parties in commercial transactions that include new or amended MOIs as part of the agreed suite of transaction documents, want certainty as to when they come into effect.
The confusing language from the old sub-section said that the amendment came into effect on the date and time when the Notice of Amendment was ‘filed’ at the Commission, but the definition of ‘file’ referred to ‘delivery’ and it was not clear when delivery to the Commission occurred.
[Just note that this amendment does not apply to when an MOI amendment changes the name of a company, as this is dealt with under a different sub-section.]
The New, Clearer Position
The new position is that the amendment comes into effect:
(i) ‘10 business days after receipt of the Notice of Amendment by the Commission, unless endorsed or rejected with reasons by the Commission before the expiry of the 10 business days period; or
(ii) Such later date, if any, as set out in the Notice of Amendment.’
What Should Companies Do Now?
We recommend checking whether your template MOI, or any draft amendment to an MOI or draft new MOI contains a definition of ‘Effective Date’, or a clause referring to when the amendment or new MOI comes into effect that reflects the old position under the Companies Act. Updating it to reflect the new provision will be desirable so that the company can benefit from the clarity provided by the new provision, and to avoid debates about whether the MOI’s provision or the amended Companies Act provision applies.
Written by Abigail Reynolds (Corporate & Commercial Law Specialist)
This article was originally published by Reynolds Attorneys
