Journal of Corporate Commercial Law & Practice

Juta Journals
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The Journal of Corporate and Commercial Law & Practice (JCCLP) is a bi-annual periodical published by Juta for the University of Witwatersrand Law School. This journal covers the area of corporate and commercial law, with specific emphasis on how constitutional law, foreign law and public policy imperatives help improve and develop corporate and commercial law principles.
The JCCLP is supported by an eminent editorial committee and editorial advisory board of thought leaders in academics and practice.

Latest documents

  • Reimagining a new world of South African Insolvency Law: Advantage to creditors and section 39(2) of the constitution

    A recent judgment in an application for a final order of compulsory sequestration provided startling justification for granting the order even if the debtor's estate has no assets that would provide a pecuniary benefit and prospect of a dividend for creditors by relying in part on s 39(2) of the Constitution of the Republic of South Africa, 1996 and extensive quotations from two Constitutional Court decisions on other topics. The connections between the scope, purport and objects mentioned in s 39(2) and the subject matter of the case were not stated by the court but left to the reader to imagine and construct. Possible lines of justification are ventured in this article. The judgment's vision of radically reimagining the South African law of insolvency is based on misapplying s 12(1)(c) of the Insolvency Act 24 of 1936. In possible moves towards reforming South African insolvency law by abandoning the requirement of advantage to creditors in a new statute, it would be essential for the legislature to canvass detailed, well-informed, carefully considered research and guidance by experts on South African social, economic and financial policy in the current circumstances.

  • The independent non-executive director: Origins, regulation and persistent challenges

    The premise that non-executive directors acting independently from management is essential to the integrity of the company board has driven much of the corporate governance agenda for decades. This is the case, despite conflicting empirical evidence of the value or contribution of independent non-executives. In addition, the exact meaning of 'independence' in the context of the corporate board remains opaque, and expectations regarding the role and remit of the office are far from settled. This article elaborates on some of these themes. The discussion will introduce the reader to the salient concepts and offer an overview of the most prominent discourse and recent developments with reference to approaches in the United States, the United Kingdom, the European Union and other jurisdictions. Ultimately, the paper contributes to the ongoing debate surrounding the efficacy of the independent non-executive director as a critical oversight mechanism in good corporate governance and the extent to which regulation can and should scaffold the office.

  • Abusing business rescue proceedings by a director and its impact on King IV™ ethics of good corporate governance

    In the past few years, the impact of COVID-19 in South Africa has given rise to the need for business rescue proceedings for financially distressed businesses. Moreover, the looting, unrest, and floods in certain parts of South Africa have exacerbated businesses' financial stress. To help financially distressed companies in South Africa, the Companies Act 71 of 2008 has introduced a business rescue procedure aimed at helping these ailing companies. This mechanism aims to rehabilitate financially distressed companies so that they become solvent again and, if that is not possible, yield a better return for the company's creditors or shareholders than would result from the immediate liquidation of the company. Unfortunately, since the introduction of business rescue, evidence has shown that sometimes companies resort to business rescue proceedings to seek refuge from creditors even if the facts do not justify that the company should commence business rescue. In most cases, the abuse of business rescue is done by directors who pass a resolution that the company should embark on business rescue even if evidence shows that the company should not commence the proceedings. This is done notwithstanding the principles of the King IV Report on Corporate Governance™ (King IV™), which requires ethics and good governance on the part of directors. This article demonstrates how the abuse of business rescue can impact the principles of good governance and ethics of King IV™. It argues that directors should rethink their corporate practices and ethical standards when passing a resolution to commence business rescue proceedings.

  • Practice note: Supreme Court of Maryland overrules prior distinction between director’s managerial and non-managerial duties and reaffirms that the MGCL is the ‘sole source’ of director duties to the corporation and its stockholders
  • The value of the market price in contracts of sale: An analysis

    Every rule should be valuable to the law. More so if the rule affects the commercial interest of society. A rule may be adopted or formulated to regulate commercial transactions, particularly to support the efficiency of the market. The market price rule is formulated to measure the degree of damages a contract defaulter should pay. The rule should indeed be applied consistently and reasonably to avoid uncertainty and unfairness. It follows that the market value as a rule and measure of commercial liability should not escape analysis to determine its limitations and value in contracts of sale. Thus, this article aims to provide a thorough discourse on the market price rule and how it should be applied in contracts of sale. The purpose of this article is to provide a comprehensive exposition of what informs the market price and how the market price affects the determination of damages in contracts of sale.

  • Co-existence of statutory provisions and common-law rules make the smooth application of the Companies Act of 2008 to be untenable in certain respects

    The Companies Act 71 of 2008 does not provide a complete codification of company law in South Africa, with the common law still having application. While the Act has done away with certain common-law rules, for instance, the common-law derivative action, it has, in other instances, maintained a co-existence of common-law rules and statutory provisions. This article discusses how the co-existence of common-law rules and statutory provisions impacts the smooth application of the Act in the context of the Turquand Rule, pre-incorporation contracts and the common-law stipulatio alteri, and the partial codification of directors' duties in the Act.

  • A case for excluding foreign companies from the application of the Companies Act of 2008 is unconvincing

    The approach adopted in the Companies Act 71 of 2008 (2008 Companies Act) is to significantly limit the regulation of foreign companies conducting business (or non-profit activities) in South Africa that meet the registration requirements of the Act.[fn1] The rationale behind this approach is understood as being s 7(c) of the Act – to promote innovation and investment in South African markets.[fn2] This article argues that the general exclusion of external companies from the 2008 Companies Act inadvertently impedes the furtherance of several stated purposes of the Act – which, in turn, adversely impacts the ability to achieve innovation and investment in South African markets. This article also argues that external companies are effectively excluded from certain provisions that may benefit them (including corporate governance and business rescue provisions). The current position also results in some uncertainty and unpredictability in relation to the determination of whether a foreign company is required to adhere to the registration requirements in terms of s 23 of the Act, application of certain provisions, and conflict of laws on matters that remain ungoverned by the 2008 Companies Act regarding external companies. The general exclusion of external companies from the Act is a matter that requires future reconsideration (in a manner that ensures that the stated purposes of the Act are met and that the framework within which external companies operate in South Africa is not disregarded). footnote 1: F H I Cassim, M F Cassim & R Cassim et al Contemporary Company Law 2 ed (2012) 97–8. footnote 2: Ibid.

  • Personal liability of non-executive directors in South Africa: A global comparative analysis

    The South African Companies Act 71 of 2008 (SA Companies Act) contains extensive provisions detailing the circumstances under which directors may be held personally liable for their actions completed while carrying out their duties. These statutory provisions are a partial codification and modernisation of the existing common-law provisions that had previously regulated this area of company law. These provisions still apply to the extent that they comply with the Act's statutory provisions. The common-law tradition in South African company law has its roots in the English common law, which has spawned many other legal traditions, from that applicable in Australia to the tradition that has emerged (and diverged) in the United States of America. This article examines whether, in applying the statutory provisions of the SA Companies Act, the manner in which personal liability may be ascribed to directors would amount to a standard more onerous than jurisdictions with similar legal traditions to South Africa and, as such, render the position of director in South Africa as (comparatively) undesirable. A further examination of whether a director is an executive or a non-executive director is relevant to establish whether liability will ensue and to confirm the position in South African law on this matter. Some of the distinctions between such directors are laid out in the seminal case of Kaimowitz v Delahunt. Overall, this article seeks to ascertain whether the trajectory of South African company law is aligned with the modern forms of the same law that have evolved in its 'sibling jurisdictions' (legally speaking). It further seeks to establish whether any variance thereof would result in unintended detriment to the aims of the concerned laws – that is, promoting good corporate governance, and thus attracting good corporate leaders to the Republic.

  • Is directors’ liability under the Companies Act of 2008 a potentially dangerous trap in comparison to other jurisdictions?

    Company law jurisprudence is still emerging in South Africa, especially with the birth of the comprehensive Companies Act 71 of 2008. Academics have focused on directorial duties, with harsh criticism on the shoulders of the legislature. This piece examines the role of non-executive directors specifically but directors holistically under South African law to potentially illustrate how red tape and compliance are strangling this role. Arriving at this conclusion, directorial duties under the common law and the Act are compared and scrutinised. In addition, directorial protective instruments are tested to analyse whether the Act has sufficiently protected directors enough to allow for entrepreneurship and risk-taking but also to hold overstepping directors accountable for extensive breaches of director duties.

  • The myth of a central role by institutional shareholders in corporate governance

    The need for transparent and high standards of corporate governance is expressly highlighted in s 7 of the Companies Act 71 of 2008. There has been a wide call by those concerned with corporate governance for institutional investors to take a central role in ensuring corporate governance reform is successfully achieved. A number of concerns are highlighted that stand in contrast with this expectation of institutional investors taking on such a lead role. These concerns relate to competition in the investment market, performance incentives, short-termism, unwarranted interference with director authority, lack of expertise, the burden of investment and existing statutory mechanisms making this expectation unrealistic and a potential for more problems rather than a solution.

Featured documents

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