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Companies Act no. 71 of 2008 and the effect on approved or exempt companies

22 February 2013   (0 Comments)
Posted by: SAIT Technical
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By SARS Legal & Policy

The implementation of the new Companies Act No.71 of 2008 (new Companies Act) which came into operation on 1 May 2011 has a direct impact on companies, including "associations not for gain" incorporated under section 21 of the Companies Act, 1973, that are approved or exempt from income tax under the Income Tax Act No. 58 of 1962 (IT Act).

In order for an approved or exempt company to maintain its approved or exempt status, the South African Revenue Service (SARS) would like to bring your attention to the following:

• A condition of the approval or exemption from income tax is that the SARS Tax Exemption Unit (TEU) must be informed of any amendments to the memorandum and articles of association, including the adoption of the new memorandum of incorporation as required under the provisions of the new Companies Act. Copies of any amendments to the memorandum and articles of association including the new memorandum of incorporation must be submitted to the SARS TEU.

• The requirements relative to the approval or exemption from income tax must be included in the new memorandum of incorporation, for example, a company approved as a public benefit organisation will be required to include the relevant conditions as required by section 30 of the IT Act in the new memorandum of incorporation. Similarly recreational clubs approved under section 30A of the IT Act will be required to include the relevant conditions as required by that section in the new memorandum of incorporation.

• SARS encourages approved or exempt companies to ensure compliance with the IT Act before registering the new memorandum of incorporation with the Companies and Intellectual Property Commission (CIPC) to avoid incurring unnecessary administrative costs.

All enquiries must be addressed to the SARS TEU, through one of the following channels:

Postal Address: PO Box 11955

PO Box 11955

PO Box 11955

Hatfield

0028

Physical Address: 271 Veale Street

271 Veale Street

271 Veale Street

Nieuw Muckleneuk

Pretoria

Telephone: 012 483 1700

Facsimile: 012 483 1701

Facsimile: 012 483 1701

Email: teu@sars.gov.za


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