GUIDE TO THE MEMORANDUM OF INCORPORATION

●●with the intent to defraud any person, a court may declare any person whois party to the carrying on of the business in such manner, liable for all orany of the debts of the CC. This Section has been amended by Schedule 3of the Companies Act – every person who is knowingly a party to the carryingon of the business in any such manner, shall be guilty of an offence.Sections 3(1), 11, 16, 22(2) and (4), 41, 47(7), 49(5), 55 and 58(4) ofthe CC’s Act are repealed – Schedule 3.12. DEFINITIONSSOME IMPORTANT DEFINITIONS IN THE ACT(Section 1 of the Act, as amended by the Amendment Act)accounting records means information in written or electronic formconcerning the financial affairs of a company as required in terms of thisAct, including but not limited to, purchase and sales records, general andsubsidiary ledgers and other documents and books used in the preparationof financial statements;all or greater part of the assets or undertaking when used in respect ofa company, means – (a) in the case of the company’s assets, more than50% of its gross assets fairly valued, irrespective of its liabilities, or (b) inthe case of the company’s undertaking, more than 50% of the value of itsentire undertaking, fairly valued;audit and auditor has the meaning set out in the Auditing Profession Act,but “audit” does not include an independent review of annual financialstatements as contemplated in S30(2)(b)(ii)(bb);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’ssecurities;b) exercise or cause to be exercised, in the ordinary course, any or all ofthe rights attaching to the company’s securities; orc) dispose or direct the disposition of the company’s securities, or anypart of a distribution in respect of the securities but does not includeany interest held by a person in a unit trust or collective investmentscheme in terms of the Collective Investment Schemes Act 2002;debt instrument includes any securities other than the shares of acompany irrespective of whether they are issued in terms of a securitydocument or not such as a trust deed, but does not include promissorynotes and loans whether constituting an encumbrance on the assets of thecompany or not;knowing, knowingly or knows when used with respect to a person, andin relation to a particular matter, means that the person either (a) hadactual knowledge of the matter, or (b) was in a position in which theperson reasonably ought to have (i) had actual knowledge (ii) investigatedthe matter to an extent that would have provided the person with actualknowledge, or (iii) taken other measures which, if taken, would reasonably beexpected to have provided the person with actual knowledge of the matter;38