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Definition

A transaction undertaken by a company which involves: (1) the sale of all or a large part of the assets of the company (2) a scheme of arrangement, or (3) an amalgamation or merger. The Companies Act (71 of 2008) in chapter 5 requires that such transaction requires a special resolution or a court order. The requirements for a special resolution default to 75% of the voting shares but can be higher or lower than this if agreed in the Memorandum of Incorporation (MOI). The purpose of defining a fundamental transaction is to ensure that major transactions and especially those which aim to change the ownership or control of a business are approved by special resolution.

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