Magister Legum - LLM (Public Law and Jurisprudence) / Prior to 2010, as a result of a sluggish global economy, the amalgamation and merger procedure in South Africa was active although it was at an all-time low.1 However, in 2010, there was an increase in amalgamation and merger activity in South Africa which was more pronounced in cross-border deals in South Africa and general corporate restructurings.2 As a result of this, as well as the developed infrastructure that was placed in preparation for the FIFA 2010 World Cup, the country attracted more and more foreign markets to invest in South Africa which contributed to the increasing rate of amalgamations and mergers.3 Nevertheless, the global recession has also contributed to the increase in amalgamations and merger activity as many companies in South Africa have merged to buck the negative trend that most companies find themselves in, increase their revenue and work with each other to advance the position of the company on a par with those of its competitors. However, there are various other reasons as to why companies consolidate their assets and liabilities. Recently, Tiso Blackstar, a merged investment holding company, consolidated their assets, liabilities and skills between Blackstar Plc and Tiso Investment Holdings to expand its operations and to seek investment opportunities in Africa which is boasting with economic growth.4 The company was of the opinion that the merger would not only enhance its scale and profitability, but it would also put the group on a new growth path.5 There are many benefits in which companies may reap from amalgamations and mergers, but elucidating them is beyond the scope of this research.

The amendment of the Companies Act 61 of 1973 in 1999 by Companies Amendment Act 37 of 1999 made it possible for the first time, in South Africa, for a company to acquire its own shares and for a subsidiary to acquire shares in its holding company. The position introduced by the 1999 amendments was repealed in 2011 with the coming into effect of the Companies Act 71 of 2008. I have compared capital maintenance rule under the Companies Act 61 of 1973, as amended in 1999 with capital maintenance rule under the Companies Act 71 of 2008. I have also examined in detailed the requirements to be complied with when a company acquires its shares as well as the requirements to be complied with when a subsidiary acquires shares in its holding company. Copyright / Dissertation (LLM)--University of Pretoria, 2012. / Mercantile Law / unrestricted

Company law traditionally regulated capital by use of the capital maintenance principle. The Companies Act 71 of 2008 replaces the capital maintenance regime with one based on solvency and liquidity. This dissertation aims at analysing the capital rules relating to financial assistance as they are contained in the Companies Act 71 of 2008. This includes the provision of financial assistance for the purpose of or in connection with the purchase or subscription of securities in the company (section 44) and the provision of financial assistance to directors and prescribed officers of the lending company or of a related or inter-related company, or to a related or inter-related company (sections 45). The solvency and liquidity test, which is required to be applied when a company intends to provide financial assistance is analysed at the outset of the study. The work of renown authors are used for purposes of the study. The solvency and liquidity test comprises of two elements, namely solvency and liquidity. Each element of the test as well as the assets to be considered and valuation thereof is analysed. The greatest problem with regard to the test is which assets to include when the company is part of a group of companies and the lack of provision for the protection of preferential liquidation rights in all instances. Clarity is called for in these regards. Where there is a question as to valuation method of the assets, it is submitted that it is best left to be determined by the directors. The provision of financial assistance in terms of section 44 is analysed in detail. The provision of financial assistance to a person for the purpose of or in connection with the purchase of securities in a company is allowed, subject to certain conditions and requirements. Companies are also allowed to impose further conditions or requirements in the Memorandum of Incorporation. The key terms are defined and analysed, as well as the conditions or requirements for the provision of financial assistance. The scope of application of the section is cast incredibly wide due to the wide definition of “securities” and the extension of the application to financial assistance for securities in a “related or inter-related” company. The provision of financial assistance in terms of section 45 is analysed in the same manner (albeit in less detail) as section 44. The biggest problem here again is its wide scope of application due to the extension of application to provision of financial assistance to a “related or inter-related” company or director or a prescribed officer thereof. / Dissertation (LLM)--University of Pretoria, 2010. / Mercantile Law / unrestricted

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)

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)