S16 MOI Registrations

COMPANIES ACT AMENDMENTS NO. 16 OF 2024

Changes to When a Company’s Memorandum of Incorporation Becomes Effective
Amendments to Section 16 of the Companies Act

An amendment to or adoption of a Memorandum of Incorporation may take effect 10 business days after CIPC considers the application to have been received. Previously, the timing of when an amendment or adoption of a Memorandum of Incorporation took effect was ambiguous, with no clarity on whether changes were effective once filed by a company or when accepted by the Companies Commission and filed in their registry.

Matters were further complicated when CIPC rejected applications, resulting in a new filing date being created. The previous wording of the Act also created a grey area regarding the Memorandum’s enforceability while it had been filed but not yet registered.

Changes made to a company’s Memorandum of Incorporation (the constitutional document of companies) take effect 10 business days after CIPC considers the application to amend or adopt the Memorandum of Incorporation as having been received by CIPC.
Alternatively, an amendment to the Memorandum of Incorporation may take effect from the date of registration or a later date as specified in the application.
Amendments to a Memorandum of Incorporation will no longer be considered effective from the date the notice is filed, subject to its registration.

The amendment seems to provide a positive default position as well, in that an amendment may be considered effective after 10 business days of being received by CIPC unless rejected or approved before this date. While this should improve the turnaround time for companies to complete their registrations, the emphasis remains on “received by,” meaning that the date of acknowledgement of receipt by CIPC may differ from the date filed by the company.

It will be interesting to see whether CIPC considers the date filed and the date of receipt as the same or whether this could cause delays in the registration periods of Memorandums of Incorporation. Until tested, companies should exercise caution before assuming an amendment to or adoption of a Memorandum is effective merely 10 days after filing.

An amendment to a company’s name, which is considered an amendment to the company’s Memorandum as well, will still only take effect from the date an amendment registration certificate is issued by CIPC.

The Companies Act Amendments 2024:

Pertinent changes were made to our South Africa Companies Act recently after the Companies Amendment Act 2024, No. 16 and the Companies Act Second Amendment, 2024 No. 17 were ascended into law on 25 July 2024.

The amended provisions are not yet operational and will come into effect after President Cyril Ramaphosa makes proclamation in the Gazette as to the effective date.

Statucor continues to unpack the amendments and the effect that they may have on our valued clients, and we look forward to publishing further communications on our observations in future. Click here for a full summary of all changes made to the Companies Act through the 2024 Amendments or view our News page for our latest articles on the Companies Act, Governance and Compliance matters that may be pertinent to you.