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In this guide
- The documents that rule your company
- Director duties — personal, codified, enforced
- Shares: issuing, transferring, fighting
- CIPC compliance that actually bites
- When trouble comes: business rescue and deadlock
- The five-document minimum for any serious company
- Frequently asked questions
- Speak to an Attorney Today
- Get help with this
By Onah Attorneys Inc • Updated July 2026 • Legal information, not a substitute for advice on your specific matter.
The Companies Act 71 of 2008 rewrote South African corporate life — codified director duties, personal liability, business rescue, and a compliance regime CIPC now enforces through blocked filings and deregistration. This guide covers what directors and shareholders actually need: the documents that govern the company, the duties that bind you personally, and the compliance calendar that keeps the company alive.
The documents that rule your company
The MOI (Memorandum of Incorporation) is the public constitution — board powers, share classes, reserved matters. The shareholders’ agreement is the private deal — pre-emptive rights, tag/drag-along, deadlock resolution, exit valuations. Where they conflict, the MOI wins, which is why the two must be drafted together, not bolted on years apart.
Director duties — personal, codified, enforced
Section 76 codifies fiduciary duties: act in good faith, for proper purpose, in the company’s best interests, with the care and skill of a reasonably diligent director. Section 77 makes breaches personally actionable; Section 22 outlaws reckless or insolvent trading. ‘I didn’t know’ is not a defence the Act respects — informed dissent recorded in minutes is.
Shares: issuing, transferring, fighting
Share issues need board (and often shareholder) approval under Sections 38–41 — botched issues are void and haunt due diligence forever. Transfers follow the MOI and shareholders’ agreement pre-emptives. Buy-backs (Section 48) and financial assistance (Section 45) carry solvency-and-liquidity tests with personal liability for directors who skip them.
CIPC compliance that actually bites
Annual returns keep the company registered — miss them and deregistration voids contracts and freezes accounts. Beneficial ownership filings are now mandatory and block annual returns when absent. Registers of directors, shareholders and beneficial owners must live at the registered office. This is cheap discipline against expensive rescue.
When trouble comes: business rescue and deadlock
Financially distressed companies can enter business rescue (Chapter 6) — a moratorium plus a practitioner-led plan, powerful when used early and cosmetic when used late. Shareholder deadlock without an agreement ends in Section 163 oppression applications or liquidation — both far costlier than the deadlock clause nobody wanted to negotiate at incorporation.
The five-document minimum for any serious company
A tailored MOI; a shareholders’ agreement; director service contracts; a compliant share register with certificates; and standard terms of trade with attorney-client costs and retention-of-title clauses. Companies holding these five survive disputes, due diligence and SARS audits at a fraction of the drama.
Frequently asked questions
Am I personally liable for company debts?
Not by default — but sureties you sign, reckless trading (s22), unauthorised acts and fiduciary breaches (s77) all pierce the shield. Directors of struggling companies need advice before trading on, not after.
MOI or shareholders’ agreement — which do I need?
Both, drafted together. The MOI binds the company and world; the shareholders’ agreement governs the partners privately — exits, valuations, deadlock, funding. One without the other leaves fights unpriced.
What happens if annual returns aren’t filed?
CIPC deregisters the company: contracts void, bank accounts freeze, property strands. Reinstatement is possible but slow and costly — the cheapest legal work we do is the filing calendar that prevents it.
Can a 50/50 company survive a deadlock?
Only with a deadlock mechanism agreed in writing — casting votes, buy-sell (shotgun) clauses, or mediation-then-valuation. Without one, courts and liquidators inherit your company.
Speak to an Attorney Today
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