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15 S. Afr. Mercantile L.J. 264 (2003)
Pre-emption Rights and the Sale of Shares

handle is hein.journals/safrmerlj15 and id is 272 raw text is: experiences when it tries to enforce payment of levies against sectional
owners, see Ex parte Body Corporate of Caroline Court supra at 1237-
1238; Roger Green & Peter Feuilherade 'Lost Property' June 2001 De
Rebus 18). In terms of the court's finding in Reddy, a creditor of a body
corporate who wishes to enforce his claim is limited to the procedure
provided in section 47 of the STA. As the court held, this section should
be interpreted so as to include all members of the body corporate and not
only those who were members when the debt was incurred, as was argued
by the members in the case before the court (at 645B).
In conclusion: whether a body corporate established in terms of the
STA can be liquidated or sequestrated is a matter that urgently needs
legislative intervention. Parliament has three options: it can provide that
the body corporate can be liquidated in terms of the Companies Act, the
Insolvency Act, or section 48 of the STA. The latter will require an
amendment of section 48 of the STA specifically to provide for the
winding up of the body corporate on the general ground of insolvency,
and to authorize the courts to give directions regarding the winding up.
The court could, for example, be given the power to prescribe which
provisions of the Companies Act or Insolvency Act apply, or to give such
directions as it deems fit for the purposes of winding up of the estate of a
body corporate. This discretion may include the power to determine that
the existing body corporate is dissolved and a new one immediately
formed by the existing members.
Pre-emption Rights and the Sale of Shares
University of Pretoria
In Smuts v Booyens; Markplaas (Edms) Bpk v Booyens 2001 (4) SA 15
(SCA), Markplaas had two shareholders, S and R. They had a pre-emption
right in terms of articles 21-24 of its articles of association (the standard
clauses as contained in Table B of Schedule 1 to the Companies Act 61 of
1973). The pre-emption right had the effect that if a member of the company
wanted to sell his shares, he had to notify the directors of this intention in
writing and state the price that he was willing to accept (this was actually an
invitation of offers). The directors then had to communicate the notice to the
remaining shareholders, who could acquire the shares by making an offer to
the intended seller that he could accept. If the remaining members did not
make an offer for the shares, the seller could then offer the shares to any
other person. The directors were not entitled, without good cause, to refuse
registration of the shares in the names of the persons to whom the shares

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