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

• Author: Hayath, B.
• DOI: https://doi.org/10.47348/JCCL/V8/i1a3
• Published date: 10 November 2022
• Date: 10 November 2022
• Citation: (2022) 8(1) JCCL&P 35
• Pages: 35-49

https://doi.org/10.47348/JCCL/V8/i1a3

35

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

BATOOL HAYATH*

Attorney of the High Court of South Africa

ABSTRACT

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.

Keywords: Companies Act 71 of 2008, common law, statutory

provisions, Turquand Rule, pre-incorporation contracts, stipulatio

alteri, director’s duties

I INTRODUCTION

The Companies Act 71 of 2008 (2008 Companies Act), which came

into effect in May 2011, was an overhaul of the Companies Act

61 of 1973 (1973 Companies Act).1 Some of the reasons for the

enactment of the 2008 Companies Act include, amongst others, the

political changes that South Africa experienced since the enactment

of the 1973 Companies Act, including a new Constitution of the

* BA LLB (Wits), LLM candidate (Wits).

1 D Davis, Walter Geach (eds) & A Loubser et al Companies and Other Business

Structures 4 ed (2019) 4.

(2022) 8(1) JCCL&P 35

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