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.
