Section 130: Major transactions

130. Major transactions (1) A company shall not enter into a major transaction unless the transaction is— (a) approved by special resolution; or (b) contingent on approval by special resolution. (2) In this section— “assets” includes property of any kind, whether tangible or intangible; “major transaction”, in relation to a company, means— (a) the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than 75 per cent of the value of the company’s assets before the acquisition; (b) the disposition of, or an agreement to dispose of, whether contingent or not, assets of the company the value of which is more than 75 per cent of the value of the company’s assets before the disposition; or (c) a transaction that has or is likely to have the effect of the company acquiring rights or interests or incurring obligations or liabilities the value of which is more than 75 per cent of the value of the company’s assets before the transaction. (3) A company shall not enter into a transaction of the kind referred to in subsection (1) which involves the acquisition or disposition or the acquiring of rights, interests or incurring obligations of, in any case, more than half the value of the company’s assets unless the transaction is— (a) approved by ordinary resolution; or (b) contingent on approval by ordinary resolution, and the description of a major transaction in subsection (2) (a), (b) and (c) shall, in all respects, apply when determining the nature of such transaction except that “half of the value” shall be applied instead of “75 per cent of the value”. C35 – 85 [Issue 1] Companies Act (4) The provisions of subsection (5) shall apply to a transaction under subsection (3) in the same manner as they apply to a major transaction except that “75 per cent of the value” shall be applied instead of “half of the value”. (5) Nothing in paragraph (c) of the definition of “major transaction” in subsection (2) shall apply by reason only of the company giving, or entering into an agreement to give, a charge secured over assets of the company, the value of which is more than 75 per cent of the value of the company’s assets for the purpose of securing the repayment of money or the performance of an obligation. (6) This section shall not apply to a major transaction or a transaction under subsection (3) entered into by a receiver appointed pursuant to an instrument creating a charge over all or substantially all of the property of a company. (7) No lender or other person dealing with a company shall be concerned to see or inquire whether the conditions of this section have been fulfilled and no debt incurred or contract entered into with the company by a person dealing with it shall be invalid or ineffectual, except in the case of actual notice to that person, at the time when the debt was incurred or the contract was entered into, that the company was acting in breach of this section. (8) This section shall not apply to an investment company including an authorised mutual fund. [S. 130 amended by s. 4 (k) of Act 20 of 2002 w.e.f. 1 December 2001.]