A divisive reorganization involves a series of transactions having as effect and purpose the division of the trading activities carried on by a single company or group of companies between two or more companies or groups of companies. This can be achieved by a sale of assets or by a transfer of shares belonging to the corporation to be divided, which would generally give rise to taxable capital gains. / The thesis analyzes the tax implications of these two approaches, with particular focus on the latter, attempting a comparative view over the UK and Canadian relevant provisions. The two substantive chapters present the UK and, respectively, Canadian rules governing the treatment of disposal of corporate assets and shares, the available reliefs from capital gains taxation, as well as the special requirements for achieving tax-free demergers. Conclusions are aimed at suggesting a more simplified approach for Canadian divisive reorganizations, with a greater degree of codification.

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This dissertation presents a legal and economic history of the change in method of incorporation from special corporate charters via legislative act to general incorporation laws which make corporate privileges available to all who meet certain, minimal procedural requirements. Prior to the mid-1800's, corporate privileges were allocated by special legislative act in a market for corporate privileges. In this market, legislators had monopoly control over the use of corporate privileges within their respective jurisdictions. Thus, the issue examined is why the legislators relinquished their monopoly control. The thesis of this dissertation, stated briefly, is that legislators in both the United States and Great Britain abandoned the market for special corporate charters because events beyond their control made it difficult or impossible for them to continue to create and capture rents through the passage of special acts of incorporation. Exogenous legal and economic changes are identified and shown to be reliable predictors of the demise of special corporate chartering. In England, changes through the common law courts produced an inexpensive alternative to the corporate form and lowered the rates of return to legislators from passing special acts. In the United States, the growth of interstate commerce and an important Supreme Court decision, Paul v. Virginia, changed the legislative market for corporate privileges from one of localized monopolies into a competitive, national free market in corporate privileges. The historical experience suggests that the passage of a national incorporation law could lead to the same type of abuses that occurred prior to the development of the national free market in incorporation laws and the passage of liberal state general incorporation laws. / Ph. D.

The Companies Act of 71 of 2008 makes a number of important changes to the rules relating to capital maintenance. In line with the objectives of the Companies Act of 71 of 2008, section 44 of the Act has removed the prohibition on the provision of financial assistance by a company which was contained under the previous section 38 of the Companies Act 61 of 1973. Despite the repeal of the prohibition, a transaction which involves the provision of financial assistance by a company for the acquisition of or subscription of its own securities still needs to be effected in accordance with the requirements and conditions that are provided under the Act and Memorandum of Incorporation. To explore the new developments, within this study, the provision of financial assistance in terms of section 44 of the Companies Act of 2008 is, therefore, analysed in detail. On the other hand, the UK Companies Act of 2006 repealed the prohibition on the giving of financial assistance by private companies in most circumstances. It, however, retained the prohibition to public companies only because of the requirements of the Second Company Law Directive (77/91/EEC). This study also explores the rules of financial assistance by a company under the UK Companies Acts in detail. Though the source of financial assistance by a company both in South Africa and in English Company laws is rooted in the English decision of the Trevor v Whitworth case, currently these countries have adopted what is deemed appropriate and significant in their own countries. This study, therefore, examines and compares the rules governing the provision of financial assistance by a company in the company laws of these two countries. / Mercantile Law / LL.M. (Commercial law)

Company directors, being human, may be tempted to promote their own interests rather than those of the companies on whose boards they serve. Directors are subject to a number of legal duties. A director has a fiduciary duty to act in good faith and in the best interests of the company. A number of other duties flow from this duty such as the duty to avoid a conflict of interests. The duty of a director not to appropriate a corporate opportunity belonging to the company of which he or she is a director, also flows from the duty to avoid a conflict of interests. The common-law duties of directors which have their origins in English law, have developed over a number of years. Because of the difficulty that directors had in establishing what their duties were, a number of jurisdictions embarked on a process of codifying or partially codifying these duties. South Africa, Australia and England are three countries that have promulgated legislation which has resulted in the codification or partial codification of directors’ duties. The purpose of the codification or partial codification of directors’ duties was firstly to clarify the duties of directors, and secondly to make the duties more accessible to those affected by them – the directors of companies. In South Africa the Companies Act 71 of 2008 has partially codified the duties of directors. Because directors’ duties have only been partially codified there is uncertainty regarding their scope. This dissertation will focus on the possible effect of the 2008 Companies Act on the duty of a director not to take a corporate opportunity falling to the company. In this dissertation I address two issues involving the effect of the 2008 Companies Act on the duty of a director not to appropriate a corporate opportunity belonging to the company. Firstly, I consider whether the partially codified directors’ duties are wide enough to cover issues involving the appropriation of corporate opportunities. Secondly, I consider the appropriate common-law test or tests to be applied in determining whether, in the specific circumstances, an opportunity should be classified as a corporate opportunity. In considering whether the partially codified duties of directors are wide enough to include the corporate-opportunity rule, I compare the approach to corporate opportunities and the corporate-opportunity rule in South Africa, Australia and England. / Mercantile Law / LL.M. (Corporation Law)

The Companies Act of 71 of 2008 makes a number of important changes to the rules relating to capital maintenance. In line with the objectives of the Companies Act of 71 of 2008, section 44 of the Act has removed the prohibition on the provision of financial assistance by a company which was contained under the previous section 38 of the Companies Act 61 of 1973. Despite the repeal of the prohibition, a transaction which involves the provision of financial assistance by a company for the acquisition of or subscription of its own securities still needs to be effected in accordance with the requirements and conditions that are provided under the Act and Memorandum of Incorporation. To explore the new developments, within this study, the provision of financial assistance in terms of section 44 of the Companies Act of 2008 is, therefore, analysed in detail. On the other hand, the UK Companies Act of 2006 repealed the prohibition on the giving of financial assistance by private companies in most circumstances. It, however, retained the prohibition to public companies only because of the requirements of the Second Company Law Directive (77/91/EEC). This study also explores the rules of financial assistance by a company under the UK Companies Acts in detail. Though the source of financial assistance by a company both in South Africa and in English Company laws is rooted in the English decision of the Trevor v Whitworth case, currently these countries have adopted what is deemed appropriate and significant in their own countries. This study, therefore, examines and compares the rules governing the provision of financial assistance by a company in the company laws of these two countries. / Mercantile Law / LL.M. (Commercial law)

This thesis critically examines the statutory unfair prejudice remedy provided for in section 163 of the Companies Act 71 of 2008 (‘the Act’). Section 163 is evaluated against its equivalents in England, Australia and Canada. Section 163 is considered against its predecessors to determine whether problems associated with the formulation and application of its predecessors have now been eradicated. It is argued that although it is important to ensure that company legislation is able to provide protection of an international standard to shareholders to be able to attract capital investment in a competitive market, one has to be cautious of slavishly following legislative trends in foreign jurisdictions. The South African legislature indiscriminately incorporated only parts of the Canadian unfair prejudice remedy in section 163. This approach also resulted, amongst others, in the introduction of foreign concepts. The legislature further failed to take cognisance of the unique historical developments relating to the unfair prejudice remedy in South Africa. This has led to the reintroduction of problems experienced with previous formulations of the statutory unfair prejudice remedy in South Africa and left certain problems relating to the interpretation and application of the statutory unfair prejudice remedy unresolved. Consideration is also given to the interrelationship between section 163 and some of the statutory remedies in the Act. Section 163 is also assessed in the context of the Constitution of the Republic of South Africa, 1996. In conclusion, recommendations for possible legislative amendments are made and an interpretational framework for the interpretation and application of the statutory unfair prejudice remedy in section 163 is provided. / Mercantile Law / LL. D. (Mercantile Law)