12.4 APPROVAL OF THE ISSUE
Under the old Act approval for the issue of shares were generally granted to Directors in the situation of larger companies. In terms of the new Act the board may resolve to issue shares but only within the classes and to the extent that the shares have been authorised by or in terms of the company’s MOI. It is not necessary for shareholders to approve the issue of shares; it is really a question of what the MOI says.
If a company issues shares that have not been authorised or in excess of the number of authorised shares of any particular class the issuance of those shares maybe retroactively authorised in accordance with the companies MOI within 60 days. If the shareholders do not approve this then the transaction must be reversed and the share issue becomes a nullity.