The contours of profit-making activities of non-profit companies : an analysis of the new South African Companies Act

Loading...
Thumbnail Image

Authors

Cassim, Maleka Femida

Journal Title

Journal ISSN

Volume Title

Publisher

Cambridge University Press

Abstract

While for-profit companies regularly embark on non-profit activities, the converse issue has recently come to attention, namely whether non-profit companies may embark on profit-making activities. This has given rise to a confusing conundrum of practical importance, not only in South Africa but also in other jurisdictions. This article discusses whether non-profit companies, under the South African Companies Act of 2008, may have purely commercial objects. It also addresses the intertwined question of the contours of permissible profit-making activities. Since the non-profit company is the modern successor to the section 21 company under the previous Companies Act of 1973, this article considers the recent case of Cuninghame v First Ready Development 249, in which the Supreme Court of Appeal was faced with the problem of a section 21 company with a commercial object. The article also explores the administration of rental pool agreements by non-profit companies, which arose in the Cuninghame case.

Description

Keywords

Non-profit organisation (NPO), Profit-making, South African Companies Act of 2008

Sustainable Development Goals

Citation

Maleka Femida Cassim (2012). The Contours of ProfitMaking Companies: An Analysis of the New South African Companies Act. Journal of African Law, 56, pp 243267, DOI: 10.1017/S0021855312000046