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