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Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part D : Capitalisation of profit companies

38A. Validation of irregular creation, allotment or issuing of shares

 

(1) Where a company purports to create, allot or issue shares by virtue of any provision of this Act, the Memorandum of Incorporation of the company, any other law or otherwise, where the creation, allotment or issuing of those shares is invalid or the terms of creation, allotment or issue are inconsistent with, or not authorised by those provisions, a court may—
(a) upon receipt of an application made by the company or by any party who holds an interest in the company; and
(b) after satisfying itself that it is just and equitable to do so,

make an order validating the creation, allotment or issue of these shares or confirming the terms of the creation, allotment or issue, subject to such conditions as may be imposed by the court.

 

(2) After the payment of all prescribed fees by the company, the shares are deemed to have been validly created, allotted or issued upon the terms of the creation, allotment or issue of the shares and subject to the conditions as may be imposed by the court.

 

[Section 38A inserted by section 8 and 24(b) of the Companies Amendment Act 16 of 2024, Notice No 5082, GG50991, dated 30 July 2024]