Definitions

Home owners associations are legislated in accordance with the Companies Act, 1973 as amended.

2.1 Common Definitions

“accounting records” means information in written or electronic form concerning the financial affairs of a company as required in terms of this Act, including but not limited to, purchase and sales records, general and subsidiary ledgers and other documents and books used in the preparation of financial statements;

“acquiring party”, when used in respect of a transaction or proposed transaction, means a person who, as a result of the transaction, would directly or indirectly acquire or establish direct or indirect control or increased control over all or the greater part of a company, or all or the greater part of the assets or undertaking of a company;

“advertisement” means any direct or indirect communication transmitted by any medium, or any representation or reference written, inscribed, recorded, encoded upon or embedded within any medium, by means of which a person seeks to bring any information to the attention of all or part of the public;

“agreement” includes a contract, or an arrangement or understanding between or among two or more parties that purports to create rights and obligations between or among those parties;

“alterable provision” means a provision of the Companies Act in which it is expressly contemplated that its effect on a particular company may be negated, restricted, limited, qualified, extended or otherwise altered in substance or effect by that company’s Memorandum of Incorporation;

“alternate director” means a person elected or appointed to serve, as the occasion requires, as a member of the board of a company in substitution for a particular elected or appointed director of that company;

“annual general meeting” means the meeting of a public company required by section 61(7)

“audit” has the meaning set out in the Auditing Profession Act, but does not include an “independent review” of annual financial statements

“Auditing Profession Act” means the Auditing Profession Act, 2005 (Act No. 26 of 2005);

“auditor” has the meaning set out in the Auditing Act;

“beneficial interest”, when used in relation to a company’s securities, means the right or entitlement of a person, through ownership, agreement, relationship or otherwise, alone or together with another person to-

(a) receive or participate in any distribution in respect of the company’s securities;

(b) exercise or cause to be exercised, in the ordinary course, any or all of the rights attaching to the company’s securities; or

(c) dispose or direct the disposition of the company’s securities, or any part of a distribution in respect of the securities, but does not include any interest held by a person in a unit trust or collective investment scheme in terms of the Collective Investment Schemes Act, 2002 (Act No. 45 of 2002);

“board” means the board of directors of a company;

“close corporation” means a juristic person incorporated under the Close Corporations Act, 1984 (Act No. 69 of 1984);

“Commission” means the Companies and Intellectual Property Commission

“Commissioner” means the person appointed to or acting in the office of that name

“Companies Tribunal” means the Companies Tribunal established in terms of section 193

“companies register” means the register required to be established by the Commission in terms of section 187(4)

“company” means a juristic person incorporated in terms of this Act, a domesticated company, or a juristic person that, immediately before the effective date-

(a) was registered in terms of the-

(i) Companies Act, 1973 (Act No. 61 of 1973), other than as an external company as defined in that Act; or

(ii) Close Corporations Act, 1984 (Act No. 69 of 1984), if it has subsequently been converted in terms of Schedule 2;

(b) was in existence and recognized as an „existing company? in terms of the Companies Act, 1973 (Act No. 61 of 1973); or

(c) was deregistered in terms of the Companies Act, 1973 (Act No. 61 of 1973), and has subsequently been re-registered in terms of this Act;

“consideration” means anything of value given and accepted in exchange for any property, service, act, omission or forbearance or any other thing of value, including-

(a) any money, property, negotiable instrument, securities, investment credit facility, token or ticket;

(b) any labour, barter or similar exchange of one thing for another; or

(c) any other thing, undertaking, promise, agreement or assurance, irrespective of its apparent or intrinsic value, or whether it is transferred directly or indirectly;

“Constitution” means the Constitution of the Republic South Africa, 1996;

“Co-operative” means a juristic person as defined in the Co-operatives Act, 2005 (Act No. 14 of 2005);

“Council” means the Financial Reporting Standards Council established by section 203

“director” means a member of the board of a company, as contemplated in section 66, or an alternate director of a company and includes any person occupying the position of a director or alternate director, by whatever name designated;
“effective date”, with reference to any particular provision of this Act, means the date on which that provision came into operation in terms of section 225

“electronic communication” has the meaning set out in section 1 of the Electronic Communications and Transactions Act;

“Electronic Communications and Transactions Act” means the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002);

“exercise”, when used in relation to voting rights, includes voting by proxy, nominee, trustee or other person in a similar capacity;

“ex officio director” means a person who holds office as a director of a particular company solely as a consequence of that person holding some other office, title, designation or similar status specified in the company’s Memorandum of Incorporation;

“financial reporting standards”, with respect to any particular company’s financial statements, means the standards applicable to that company, as prescribed in terms of section29(4) and (5)

“financial statement” includes-

(a) annual financial statements and provisional annual financial statements;

(b) interim or preliminary reports;

(c) group and consolidated financial statements in the case of a group of companies; and

(d) financial information in a circular, prospectus or provisional announcement of results, that an actual or prospective creditor or holder of the company’s securities, or the Commission, Panel or other regulatory authority, may reasonably be expected to rely on;

“general voting rights” means voting rights that can be exercised generally at a general meeting of a company;

“Human Rights Commission” means the South African Human Rights Commission established in terms of Chapter 9 of the Constitution;

“incorporator”, when used -

(a) with respect to a company incorporated in terms of this Act, means a person who incorporated that company, as contemplated in section 13; or
(b) with respect to a pre-existing company, means a person who took the relevant actions comparable to those contemplated in section 13 to bring about the incorporation of that company;

“individual” means a natural person;

“juristic person” includes-

(a) a foreign company; and

(b) a trust, irrespective of whether or not it was established within or outside the Republic;

“Master” means the officer of the High Court, referred to Administration of Estates Act, 1965 (Act No. 66 of 1965), who has jurisdiction over a particular matter arising in terms of this Act;

“material”, when used as an adjective, means significant in the circumstances of a particular matter, to a degree that is-

(a) of consequence in determining the matter; or

(b) might reasonably affect a person’s judgement or decision-making in the matter;

“Memorandum of Incorporation”, or “Memorandum of Incorporation”, means the document. As amended from time to time that sets out rights, duties and responsibilities, members, directors and others within and in relation to a company, and other matters as contemplated in section15 of the Companies Act, 1973 and which-
(a) The company was incorporated under this Act, as contemplated in section 13;
(b) A pre-existing company was structured and governed before the later of the

(a) Effective date; or
(b) Date it was converted to a company in terms Schedule 2
(c) A domesticated company is structured and governed

“nominee” has the meaning set out in section 1 of the Securities Services Act, 2004 (Act No. 36 of 2004);

“non-profit company” means a company-

(a) incorporated for a public benefit or other object as required by item 1(1) of Schedule 1; and
(b) the income and property of which are not distributable to its incorporators, members, directors, officers or persons related to any of them except to the extent permitted by item 1(3) of Schedule 1;

“Notice of Incorporation” means the notice to be filed, by which the incorporators of a company inform the Commission of the incorporation of that company, for the purpose of having it registered;

“official language” means a language mentioned in section 6(1) the Constitution;

“ordinary resolution” means a resolution adopted with the support of more than 50% of the voting rights exercised on the resolution, or a higher percentage
(a) at a member meeting; or

(b) by holders of the company’s securities acting other than at a meeting

“participant” has the meaning set out in section 1 of the Securities Services Act, 2004 (Act No. 36 of 2004);

“person” includes a juristic person;

“personal financial interest”, when used with respect to any person-

(a) means a direct material interest of that person, of a financial, monetary or economic nature, or to which a monetary value may be attributed; but

(b) does not include any interest held by a person in a unit trust or collective investment scheme in terms of the Collective Investment Schemes Act, 2002 (Act No. 45 of 2002), unless that person has direct control over the investment decisions of that fund or investment;

“pre-existing company” means a company contemplated in paragraph (a), (b) or (c) of the definition of „company? in this section;

“pre-incorporation contract” means a written agreement entered into before the incorporation of a company by a person who purports to act in the name of, or behalf of, the proposed company, with the intention or understanding that the proposed company will be incorporated, and will thereafter be bound by the agreement;

“premises” includes land, or any building, structure, vehicle, ship, boat, vessel, aircraft or container;

“prescribed” means determined, stipulated, required, authorized, permitted or otherwise regulated by a regulation or notice made in terms of this Act;

“prescribed officer” means a person who, within a company, performs any function that has been designated by the Minister in terms of section 66(10);

“present at a meeting” means to be present in person, or able to participate in the meeting by electronic communication, or to be represented by a proxy who is present in person or able to participate in the meeting by electronic communication;

“private company” means a profit company that -
(a) is not a public, personal liability, or state-owned company; and
(b) satisfies the criteria set out in section 8(2)(b)

“profit company” means a company incorporated for the purpose of financial gain for its shareholders;

“public company” means a profit company that is not a state-owned company, a private company or a personal liability company;

“public regulation” means any national, provincial or local government legislation or subordinate legislation, or any licence, tariff, directive or similar authorisation issued by a regulatory authority or pursuant to any statutory authority;

“records”, when used with respect to any information pertaining to a company, means any information as contemplated in companies ACT, 1973

“record date” means the date established under which a company determines the identity of its shareholders and their shareholdings for the purposes of this Act;

“registered auditor” has the meaning set out in the Auditing Profession Act;

“registered external company” means an external company that has registered its office as required by section 23, and has been assigned a registration number in terms of that section;

“registered office” means the office of a company, or of an external company, that is registered as required by section 23;

“registration certificate”, when used with respect to a-

(a) company incorporated on or after the effective date, means the certificate, or amended certificate, issued by the Commission as evidence of the incorporation and registration of that company;

(b) pre-existing company registered in terms of-

(i) the Companies Act, 1973 (Act No. 61 of 1973), means the certificate of incorporation or registration issued to it in terms of that Act;

(ii) the Close Corporations Act, 1984 (Act No. 69 of 1984), and converted in terms of Schedule 2 to this Act, means the certificate of incorporation issued to the company in terms of that Schedule, read with section 14; or

(iii) any other law, means any document issued to the company in terms of that law as evidence of the company’s incorporation; or

(c) registered external company, means the certificate of registration issued to it in terms of this Act or the Companies Act, 1973 (Act No. 61 of 1973); or
(d) a domesticated company, means the certificate issued to it upon the transfer of its registration to the Republic in terms of section 13(5) to (11);

“regulated person or entity” means a person that has been granted authority to conduct business by a regulatory authority;

“regulation” means a regulation made under this Act;

“regulatory authority” means an entity established in terms of national or provincial legislation responsible for regulating an industry, or sector of an industry;

“related”, when used in respect of two persons, means persons who are connected to one another

“relationship” includes the connection subsisting between any two or more persons who are related or inter-related, as determined in accordance with Section 2;

“rules” and “rules of a company” means any rules made by a company as contemplated in section 15(3) to (5);

“securities” means any shares, debentures or other instruments, irrespective of their form or title, issued or authorized to be issued by a profit company;

“securities register” means the register required to be established by a profit company in terms of Section 50(1);

“special resolution” means –
(a) in the case of a company, a resolution adopted with the support of at least 75% of the voting rights exercised on the resolution, or a different percentage contemplated in section65(10)

a. at a shareholders meeting; or
b. by holders of the company’s securities acting other than at a meeting, as

(b) in the case of any other juristic person, a decision by the owner or owners of that person, or by another authorized person, that requires the highest level of support in order to be adopted, in terms of the relevant law under which that juristic person was incorporated;

“unalterable provision” means a provision of this Act that does not expressly contemplate that its effect on any particular company may be negated, restricted, limited, qualified, extended or otherwise altered in substance or effect by a company’s Memorandum of Incorporation or rules;

“voting power”, with respect to any matter to be decided by a company, means the voting rights that may be exercised in connection with that matter by a particular person, as a percentage of all such voting rights;

“voting rights”, with respect to any matter to be decided by a company, means-

(a) the rights of any holder of the company’s securities to vote in connection with that matter, in the case of a profit company; or

(b) the rights of a member to vote in connection with the matter, in the case of a non- profit company;

“voting securities”, with respect to any particular matter, means securities that-

(a) carry voting rights with respect to that matter; or

(b) are presently convertible to securities that carry voting rights with respect to that matter;