GUIDE TO THE MEMORANDUM OF INCORPORATION

9. SECTION 6 – ANTI-AVOIDANCEA court on application by the Commission, Panel, or an exchange in respect ofa company listed on that exchange, may declare any agreement, transaction,arrangement, resolution or provision of a company’s MOI or rules –a) To be primarily or substantially intended to defeat or reduce the effect ofa prohibition or requirement established by or in terms of an unalterableprovision of the Act;b) Void to the extent that it defeats or reduces the effect of a prohibition orrequirement established by or in terms of an unalterable provision of this Act.Inserted – Amendment Act – Section 6(15)To the extent that the specific content or particular effect of any provision of acompany’s MOI –a) Is required of the company by or in terms of any applicable publicregulation or by the listing requirements of an exchange andb) Has the effect of negating, restricting, limiting, qualifying extending or otherwisealtering the substance or effect of an unalterable provision of the Act,that provision of the company’s MOI must not be construed as being contraryto Section 15(1)(a) – which states that the MOI must be consistent with theAct and is void to the extent it contravenes or is inconsistent with the Act.An agreement that does not have the effect of amending the MOI, andis still consistent with the MOI and Act will still be valid and bindingon parties – as long as also not fall foul of Section 6, even if it is not ashareholder’s agreement.Aspects to bear in mind when considering the effects of Section 6 (antiavoidance):●●●●The MOI and rules are public documents, subject to access by the public(see Table C on page 42), and any amendments thereto are required tocomply with the Act, as set out at page 13;A shareholders agreement is an agreement executed between the shareholdersas parties thereto and is therefore a private contractual arrangement,which may be varied or amended by agreement between the parties thereto.●●●●●●10. SECTION 218 – CIVIL ACTIONSSection 218(1): Subject to any provision of this Act specifically declaringvoid an agreement, resolution, provision of an agreement, MOI or rules of acompany, nothing in the Act renders void any other agreement, resolutionor provision of an agreement, resolution, MOI or rules of a company thatis prohibited, voidable or that may be declared unlawful in terms of thisAct, unless a court has made a declaration to that effect regarding thatagreement, resolution or provision.Section 218(2): Any person who contravenes any provision of this Act isliable to any other person for any loss or damage suffered by that personas a result of that contravention;Section 218(3): The provisions of this section do not affect the right to anyremedy that a person may otherwise have;36