Having shareholders who are individuals can present a problem if any of them are married in community of property in South Africa.
This is because the shareholding resides in a joint estate and the husband holds the marital power and administers the joint estate. Joint estates can be terminated by death or divorce and can end up being sequestrated if one of the spouses commits an act of insolvency.
It is therefore important to ascertain the marital status of individuals who become shareholders in your company and to keep abreast of the marital status of all individuals who are shareholders.
You must therefore properly cater for a forced sale provision in the MOI or in a shareholders agreement in circumstances of death, divorce or sequestration of shareholders who are married in community of property.