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Section 380 of The Companies Act No. 17 of 2015: Liability of subsequent holders of shares

    

(1) If a person becomes a holder of shares in respect of which—
(a) section 368 has been contravened; and
(b) because of that contravention another person is liable to pay an amount under the provision contravened, that person is also liable to pay that amount (jointly and severally with any other person so liable), unless the person is exempted from liability under subsection (4).
(2) If a company enters into an agreement in contravention of section 374 and—
(a) the agreement is or includes an agreement for the allotment of shares in the company;
(b) a person becomes a holder of shares allotted under the agreement; and
(c) because of the agreement and the allotment under it, another person is liable to pay an amount under section 380(1), the person who becomes the holder of the shares is also liable to pay that amount (jointly and severally with any other person so liable), unless the person is exempted from liability under subsection (4).
(3) Subsection (2) applies whether or not the agreement also contravenes section 368.
(4) A person otherwise liable under subsection (1) or (2) is exempted from that liability if either—
(a) the person is a purchaser for value and, at the time of the purchase, the person did not have actual notice of the contravention concerned; or
(b) the person derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under subsection (1) or (2).
(5) A reference in this section to a holder, in relation to shares in a company, includes a person who has an unconditional right—
(a) to be included in the company's register of members in respect of those shares; or
(b) to have a transfer of the shares executed in the person's favour.

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Disclaimer: This document is not to be taken as legal advise.

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