Page 13 - Profmark BSA Guide 2025

An External Company
An external company means a foreign company (for profit or not for profit), which has
been incorporated outside of SA, that intends to, or is conducting business or non-
profit activities within SA. Section 23 of the Companies Act lists a series of activities
which will be regarded as “conducting business” as follows:
The foreign company:
■ Is a party to one or more employment contracts within SA, or
■ Is engaging in a course of conduct or has engaged in a course or pattern of
activities within SA over a period of at least six months, such as would lead a
person to reasonably conclude that the company intended to continually engage
in business or non-profit activities within SA.
Such a company remains primarily regulated by its country of origin or registration,
even though it does business in SA as an external company. It must register with the
Commission within 20 business days after it first begins to conduct business or non-
profit activities, as the case may be, within SA.

DIRECTORS AND OFFICERS

Directors
In terms of the Companies Act, the business and affairs of a company must be
managed by or under the direction of its board, which has the authority to exercise all
of the powers and perform any of the functions of the company.
Directors are ultimately responsible for acts committed in the name of the company
even though the routine running of the company is often delegated to management.
Directors do not need to be South African residents or nationals. The Act requires that
the register of directors reflects each directors’ nationality and passport number if they
are not South African. There are no restrictions on foreign managers.
The role of a director is a challenging one, accompanied by onerous duties and
responsibilities. With improving standards of corporate governance, directors
are required to be more and more accountable, transparent and responsive to
stakeholders and to society. Directors and officers are required to be cognisant

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