Rights of shareholders under the Companies Act No 07 of 2007: A Descriptive Analysis

Abstract

The Companies Act No 07 of 2007 is seen as a mastery piece of legislation in the Country. It is a combination of both the Canadian and the New Zealand’s law on the subject matter and is a significant deviation from the English Law which has been the focal point in most of our commercial law statutes for well over a century. One of the key features of the new companies’ legislations is the due recognition it has given to the shareholders. The Act has given a proper definition to the term ‘shareholder’ and has introduced a significant amount of rights and duties which under earlier legislations the shareholders were unable to enjoy. Shareholders while bring the owners of the shares and the properties of a company handover the same upon trust to a company governed by a board of directors. Shareholders would be at risk of corruption and fraud if they cannot get themselves involved in the decision-making process. In helping to bring a mechanism of participation and voice raising, the companies’ Act has invented new concepts such as Minority buyout rights, formalized actions such as the derivative actions and have made provisions regarding oppression and mismanagement. This paper focuses on the new rights and duties which the companies’ Act has introduced to both protect and enhance the shareholders of a company