A critical analysis of the new capital maintenance rules in terms of the Companies Act 71 of 2008

Abstract

The objective of this study is to do critical analysis if the new Companies Act, with specific reference capital maintenance rules. Furthermore, this study will compare the current Companies Act with the new Companies Act, with a specific focus on sections 44, 45 and 48 of the new Companies Act and their comparison to sections 38, 85 and 226 of the current Companies Act. The next objective is to establish what impact the new piece of legislation will have on South African companies and whether the deficiencies in the current Companies Act have been addressed by the new Companies Act. The final objective is to establish whether this new piece of legislation gives adequate protection for the shareholders of a company. This study will focus on certain aspects of capital maintenance and excludes a comprehensive study of the capital maintenance rules, as the focus will be on certain sections in the current Companies Act and also the new Companies Act. This study will focus on the comparison between the new and current Companies Act. Furthermore, the focus will also be on the protection of the creditors of a company when analysing the different sections of the current companies act and the new companies act.