In mid-May 2025, the Supreme Court of Appeal found that the members of a close corporation were members of the governing body of that juristic person and therefore that the completion of extinctive prescription had been delayed under section 13(1)(e) of the Prescription Act, 1969 whilst the debtors were members of the CC.
A dispute arose
This Supreme Court of Appeal judgment confirms that the common law derivative action is available to members of close corporations.
The common law derivative action was abolished in section 165(1) of the Companies Act and replaced with a statutory derivative action for companies.
Sections 49 and 50 of the Close Corporation Act do not exclude
Since the passing of the Companies Act 2008 in May 2011 it is no longer possible to register a close corporation (CC). However, the Companies Act allows a CC that existed prior to 1 May 2011 to continue to exist or to convert to a private company.
Business owners often opt to convert their CCs