Question from Cole, What Approvals are Required for a Company to Sell its Major Assets Under South African Company Law?
Answer from AI:
Under South African company law, the sale of a major part or all of a company’s assets requires certain approvals. These approvals are primarily governed by the Companies Act 71 of 2008.
Board of Directors’ Approval
The first step in the process is usually for the board of directors to approve the proposed sale. This is because the board is responsible for managing the company’s affairs, which includes its assets.
Shareholders’ Approval
In addition to the board’s approval, the shareholders of the company must also approve the sale if it involves a major part of the company’s assets. According to section 112 of the Companies Act, if a company wants to dispose of all or the greater part of its assets or undertaking, it must obtain approval from its shareholders by way of a special resolution. A special resolution requires at least 75% of the voting rights exercised on the resolution to be in favor of it.
Takeover Regulation Panel (TRP) Approval
If the company is a regulated company (as defined in section 118 of the Companies Act), it may also need to obtain approval from the Takeover Regulation Panel (TRP). The TRP is a regulatory body established under the Companies Act to oversee transactions that could result in a change of control of a company.
Other Approvals
Depending on the nature of the company and its assets, other approvals may also be required. For example, if the company operates in a regulated industry, it may need to obtain approval from the relevant regulatory authority.
It’s important to note that this is a general overview and the specific requirements can vary depending on the circumstances. Therefore, it’s recommended that companies consult with a legal professional for personalized advice.
For more information, you can refer to the Companies Act 71 of 2008 and the Companies Regulations, 2011.
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Disclaimer: The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. While we strive to provide accurate information, we make no guarantees regarding the accuracy or legal validity of the information presented. Laws and regulations vary by jurisdiction and can change over time, and the application of laws can vary widely based on the specific facts and circumstances involved. Therefore, you should consult with a qualified legal professional before making any decisions related to legal matters. Do not rely solely on the information provided in this response for any legal decisions. We disclaim any and all liability with respect to actions taken or not taken based on the contents of this response.
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