In the fourth of a series of articles, to be published in De Rebus magazine, regarding the implications of new Companies Act of 2008, Makhubele and Ratshimbilani, briefly discuss the new capital maintenance provisions contained therein.
The provisions relating to capital maintenance in companies have always been legislated, in some manner and to some extent, in order to protect the company’s creditors. This is underpinned by the common law notion that all capital contributions must be retained by the company. Any exception to this notion however, must be justified with the application of the solvency and liquidity test.
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