Acts Online
GT Shield

Companies Act, 1973 (Act No. 61 of 1973)

Chapter IV: Formation, Objects, Capacity, Powers, Names, Registration and Incorporation of Companies

Formation, Objects and Powers

39. Company not to be a member of its holding company

 

 

1) Save as is provided in subsection (2), if shares in a company are acquired in accordance with section 89 by its subsidiary, for as long as such shares are held by the subsidiary-
a) no voting rights attaching to such shares may be exercised; and
b) the percentage of votes able to be cast at any meeting of shareholders shall be reduced by the number of shares held by the subsidiary: Provided that this subsection shall not apply where the shares are acquired in a subsidiary of the holding company which is also a subsidiary of the acquiring company.

 

2) The provisions of subsection (1) shall not apply in relation to a subsidiary acting in a representative capacity or as a trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

 

3) [Subsection (3) deleted by section 4 of Act No. 37 of 1999].

 

4) [Subsection (4) deleted by section 4 of Act No. 37 of 1999].

 

5) In relation to a company limited by guarantee which is a holding company, the reference in this section to shares of a company, shall be construed as including a reference to the interest of its members as such, whatever the form of that interest.