Companies Act, 1973 (Act No. 61 of 1973)Chapter III: Types and forms of CompaniesConversion of Companies and Close Corporations29C. Conversion of close corporation into company |
| 1) | A close corporation may, with the written consent of all its members, be converted into a company, provided that every member of the close corporation becomes a member of such company. |
| 2) | A close corporation to be converted into a company as contemplated in subsection (1) may, subject to the provisions of this section, apply to be incorporated as a company under Chapter IV of this Act. |
| 3) | If an application referred to in subsection (2) complies with the provisions of the said Chapter IV and of subsection (4)- |
| a) | the Registrar shall register the memorandum and articles in accordance with the provisions of section 63; and |
| b) | the Registrar shall satisfy himself that simultaneously with such registration, the registration of the founding statement of the close corporation concerned is cancelled in accordance with the provisions of the Close Corporations Act, 1984. |
| 4) |
| a) | An application referred to in subsection (2) shall be accompanied by- |
| i) | a statement of the paid-up share capital (if any) for an amount not greater than the excess of the fair value of the assets to be acquired by the company, over the liabilities to be assumed by the company by reason of the conversion: Provided that the company may treat any portion of such excess not reflected as paid-up share capital, as distributable reserves; and |
| ii) | a statement by the close corporation's accounting officer, based on the performance of his duties under the Close Corporations Act, 1984, that he is not aware of any contravention of the said Act by the close corporation or its members or of any circumstances which may render the members of the close corporation together with the close corporation jointly and severally liable for the corporation's debts. |
| b) | The shares or the nominal value of the shares to be held in the company by the members individually need not necessarily be in proportion to the members' interests as stated in the founding statement of the close corporation concerned. |
| 5) | The Registrar shall give notice in the prescribed manner of the conversion of a close corporation into a company. |