Answer to Question #180179 in Law for Paul

Question

Expand on the requirements of and the regulation of Domesticated Companies

in terms of the Companies Act 71/2008

Answer 1

The Companies Act 71 of 2008 aims to provide for the formation, operation, and accountability of nonprofit companies in a way designed to promote and enhance the capacity of these companies to perform their tasks. The Act also ensures registration of offices of foreign companies (domesticated company) carrying on business within the Republic. A domesticated company is a foreign company whose registration has been transferred to South Africa from a foreign jurisdiction in which it was registered. The transfer must comply with the following; in order to be transferred the majority of the company’s shareholders are required to be resident in South Africa, the majority of its directors are or will be South African citizens, and immediately following the transfer of the registration, the company will satisfy the solvency and liquidity test. The company is thus regulated as if it had been incorporated in South Africa, and is subject to all the requirements of the Companies Act.