‘Pre-Incorporation Contracts: Statutory Reform’ (2009) 2 South African Law Journal 255 -269
Posted: 15 Apr 2016
Date Written: April 4, 2016
This paper examines certain aspects of the regulation of pre-incorporation contracts contained in s 21 of the Companies Act, 2008, read with the definition of the term ‘pre-incorporation contract’ contained in s 1. The policy considerations underlying the current provision regulating this issue (s 35 of the Companies Act 61 of 1973) and some of the difficulties of interpretation that section has presented will be considered, with a view to evaluating whether there is any policy shift evident in s 21, and whether its provisions represent an improvement on its predecessor. The formulation of s 21 draws on the provisions of its counterpart in the recently amended New Zealand Companies Act, 1993, and so the paper also gives consideration to those provisions. The paper finds that although the imported provisions relating to pre-incorporation contracts are based on a more balanced and nuanced policy, the South African importation of these provisions is less than ideal, as it duplicates problematic provisions which ought to have been avoided. The paper therefore concludes that the proposed reforms relating to pre-incorporation contracts in South Africa are in principle commendable, but suffer from some defects which should have been rectified before enactment.
Keywords: Company Law, Pre-incorporation contracts, South Africa, New Zealand
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