Company Law and Securities
What the exam tests
Company law under the Companies Act No. 7 of 2007 and securities regulation under the Securities and Exchange Commission Act No. 36 of 1987, including prospectuses, market conduct and takeovers.
Core rules
- A company is a separate legal person with limited liability. Incorporation, name, constitution, share capital, directors and registers are statutory.
- Directors owe fiduciary and statutory duties; they must act in the company's best interest and disclose conflicts.
- Charges over company assets must be registered within the statutory period; late or unregistered charges may be void against a liquidator or creditor.
- Share transfers, debentures and certified copies often require notarial attestation or certification; check board resolutions and the register of members.
- Securities offerings require a compliant prospectus unless exempt; insider dealing, market manipulation and false trading are offences.
Worked example
A company grants a mortgage to a bank and the notary prepares the deed. The notary checks the board resolution, the company's capacity and the register of charges. If the charge is not registered within the statutory period, the bank's security may be vulnerable in a liquidation. The notary should record the registration step and advise the client.
Traps
Assuming a company seal is always required; ignoring the board's authority; failing to search the register of charges; and treating an exempt private offering as a public issue.