Journal of Corporate Commercial Law & Practice

Publisher:
Juta Journals
Publication date:
2021-07-05
ISBN:
2412-2998

Description:

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.

Issue Number

Latest documents

  • The Sustainability of the Proper Plaintiff Principle Under the Companies Act 71 of 2008

    The proper plaintiff principle was developed under common law in recognition of the separate personality of a company as one of the fundamental rules of company law. However, the concentration of the decision-making power in shareholding groups and the directors of the company eventually led to the realisation that the unconditional application of the principle threatened the rights of minority shareholders, creditors and the company itself. Corporate governance policies placing greater focus on the enlightened shareholder approach, have resulted in a corporate legal enforcement framework in the Companies Act 71 of 2008 that provides remedies extending legal standing to a larger class of persons. The inclusion of these remedies appears to put the proper plaintiff principle at risk as its relevance under the Act has now been put into question. This article examines the proper plaintiff principle and the remedies now available in the Companies Act. It also considers the reasoning behind the court's interpretation of the proper plaintiff principle and certain remedies regarding claims for reflective loss in Hlumisa Investment Holdings (RF) Ltd v Kirkinis , to illustrate that the principle remains relevant despite the inclusion of the corporate legal enforcement framework that is now embodied in the Companies Act 74 of 2008.

  • The Risk of Personal Liability For Money Damages Under the South African Companies Act, 2008 and the Possible Impact On Non-Executive Directors

    This article considers, critically, the risks associated with imposing personal liability for money damages under the South African Companies Act and the risks of willingness by non-executive directors to serve on the board of companies due to risks associated thereto. The article considers the legal position relating to liability as it is known under common law and as it was applied by the South African courts over the years. Further consideration is given to the legal positions of similar provisions in other jurisdictions practicing similar company law practices. The introduction of the provisions requiring imposition of monetary damages on directors in South Africa followed on a comparable practice globally, specifically, on those countries which share company law practices. However, it will be discussed what South African policymakers may possibly have not considered following the deliberations during the drafting stage – as was advised by the advisors who were appointed to carry out the drafting exercise. The impact of imposing money damages will be discussed and the use of other mechanisms to mitigate against the potential effect of the statutory provisions will be discussed. Through a detailed analysis of the rights associated with money damages, recommendations will be made on how to best deal with the effects of these provisions.

  • Exemption of Disposals of All Or Greater Part of the Company’s Assets Or Undertaking From Shareholder Approval Within the Corporate Group Context

    Section 112(1) of the Companies Act 71 of 2008 exempts a whollyowned subsidiary of a company from obtaining shareholder approval from its holding company to authorise the disposal of all or the greater part of the subsidiary's assets or undertakings. This exemption exposes the shareholder to abuses including the subsequent onward disposal of its newly acquired assets to a third party, which diminishes the value of the group as a whole, as well as the dilution of the holding company's shareholding. In light of these threats, the shareholder vote exemption provisions of the Companies Act may need to be re-examined for purposes of guarding against the aforementioned abuses.

  • Changes To Maryland General Corporation Law and Maryland Reit Law Effective October 1, 2024
  • A Legal Conspectus of Selected Challenges Affecting Financial Inclusion For the Poor and Low-Income Earners In South Africa
  • The Bottle Has Popped – How the Companies Act 71 of 2008 Has Incorporated Derivative Actions For Stakeholders In South African Law

    The legal position established in the famous case of Foss v Harbottle [fn1] (Foss v Harbottle) is no longer applicable under the new corporate legal framework of the Companies Act 71 of 2008 ('the Act'). The principle in Foss v Harbottle , stated simply, is that where a wrong is done to a company, only the company may sue for damages caused to it. I argue that the derivative actions established through the Act, along with South Africa's new corporate governance principles, negates the outdated notion that a company alone may sue for damages caused to it. Through the assessment of the case of Hlumisa Investment Holdings (RF) and Another v Kirkinis and Others [fn2] ('Hlumisa'), along with ss 218(2), 165, 157, 20(4) and 162(2) of the Act, it will be established that stakeholders of a company have the intrinsic legal standing to institute derivate actions on behalf of companies, in South African Company Law. footnote 1: Foss v Harbottle (1843) 2 Hare 461, 67 ER 189. footnote 2: Hlumisa Investment Holdings (RF) and Another v Kirkinis and Others 2020 (5) SA 419.

  • 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.

  • 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.

Featured documents