[Ch4201s277]277.   Conversion of company limited by shares to company limited by guarantee

            (1) A company limited by shares may be converted to a company limited by guarantee without a share capital where -

     (a)     there is no unpaid liability on any of its shares;

     (b)     all its members agree in writing to the conversion and to the surrender to the company for cancellation of all the shares held by them immediately before the conversion; and

     (c)     a new constitution appropriate to a company limited by guarantee is lodged.

            (2) Where-

     (a)     a copy of the new constitution and of the special resolution adopting the constitution; and

     (b)     a declaration by a director and the secretary of the company stating that the requirements of subsection (1) have been complied with, are filed, the Registrar shall, subject to the other provisions of this Act, issue a certificate of the conversion.

            (3) The conversion of a company under this section shall-

     (a)     take effect on the issue of the certificate;

     (b)     operate so that all shares are deemed to have been validly surrendered and cancelled notwithstanding anything in Part VI;

     (c)     have effect so that every member who has not agreed to contribute to the assets of the company in the event of its being wound up shall cease to be a member; and

     (d)     not affect any right or obligation of the company except as otherwise provided in this section or render defective any proceedings by or against the company.

[Ch4201s278]278.   Conversion of company into close company

            (1) Any private company having five or fewer members all of private whom qualify for membership of a close company in terms of section 249 may be converted into a close company, provided that every member of the company becomes a member of the close company.

            (2) In respect of a conversion referred to in subsection (1) there shall be filed with the Registrar an application for conversion accompanied by any new constitution which may be filed by the company.

            (3) The application for conversion shall-

     (a)     state the size expressed as a percentage of each member’s interest in the close company;

     (b)     state the aggregate of the contributions of the members which shall be for an amount not greater than the excess of the fair value of the assets of the company fairly valued over its liabilities:

                      Provided that the company may treat any portion of such excess not reflected as members’ contributions as amounts which may be distributed to members; and

     (c)     state the name and address of the person appointed to be the accounting officer of the close company.

            (4) If the provisions of subsections (2) and (3) have been complied with, the Registrar shall, if he is satisfied that the company concerned has complied materially with the requirements of the Act-

     (a)     register the company as a close company; and

     (b)     issue to the close company a new certificate of incorporation confirming the conversion and cancel the previous certificate of incorporation and give notice in the Gazette of the conversion.

            (5) The close company shall forthwith after its conversion from a private company, give notice in writing of the conversion to all creditors of the company at the time of conversion, and to all other parties to contracts or legal proceedings in which the private company was involved at the time of the conversion.

            (6) A private company which converts into a close company shall within 21 days of the conversion remove the term "Proprietary" or "Pty" from its name and add the designation "CC" to its name and this shall be regarded as a change of name for the purposes of section 34(3), (4) and (5), but not for the purposes of subsections (1) and (2) of that section.

            (7) The conversion of a company under this section shall-

     (a)     take effect on the issue of the certificate; and

     (b)     not affect the identity of the company or any right or obligation of the company or render defective any legal proceedings by or against the company.

[Ch4201s279]279.   Conversion of close company into a private company

            (1) A close company may be converted into a private company limited by shares if-

     (a)     all the members agree in writing-

           (i)       to convert the company into such a company, and

          (ii)       to a share capital for the company and the division thereof into shares; and

     (b)     each member agrees in writing to take up a specified number of shares.

            (2) In respect of a conversion referred to in subsection (1) there shall be filed with the Registrar an application for conversion accompanied by any new constitution which may be filed by the company.

            (3) The application for conversion shall state-

     (a)     the amount of capital of the company and the division thereof into shares;

     (b)     the number of shares issued to each shareholder; and

     (c)     the full names and residential addresses of each director and the secretary and their written consents to acting as such.

            (4) Where the company has complied with the preceding subsections the Registrar shall issue to the company a new certificate in the prescribed form confirming the conversion and cancel the previous certificate of incorporation and give notice in the Gazette of the conversion.

            (5) A close company which converts into a private company shall within 21 days of the date of conversion remove the designation CC from its name and shall add the term "Proprietary" or "Pty" to its name and this shall be regarded as a change of name for the purposes of section 34(4) and (5) but not for the purposes of subsections (1), (2) and (3) of that section.

            (6) The conversion of a company under this section shall-

     (a)     take effect on the issue of the certificate; and

     (b)     not affect the identity of the company or any right or obligation of the company or render defective any proceedings by or against the company.

[Ch4201s280]280.   Conversion of public and private companies

            (1) A public company that has not for the time being more than 25 members may convert to a private company by filing with the Registrar-

     (a)     a copy of a special resolution passed to that effect; and

     (b)     a declaration by a director or secretary of the company stating the full names, addresses and descriptions of all the members, and the number of shares held by each of them respectively.

            (2) A private company may, subject to its constitution, convert to a public company by filing with the Registrar a copy of a special resolution passed to that effect.

            (3) A private company which converts into a public company shall within 21 days of the date of its conversion remove the term "(Proprietary)" or "(Pty)" from its name and this shall be regarded as a change of name for the purposes of section 34 (4) and (5) but not for the purposes of subsections (1), (2) and (3) of that section.

            (4) Where a company has complied with subsection (1) or (2), the Registrar shall issue to the company a new certificate in the prescribed form confirming the conversion and cancel the previous certificate of incorporation.

            (5) The conversion of a company under this section shall-

     (a)     take effect on the issue of the certificate; and

     (b)     not affect the identity of the company or any right or obligation of the company or render defective any legal proceedings by or against the company.