Introduction of the concept of Limited Interest Company
The Companies Act, 1973 of South Africa was amended by the Corporate Laws Amendment Act, 2006. This amendment introduced the concepts of widely held companies and limited interest companies under section 6.
Meaning of Limited Interest Company
Section 6(d) of the Companies Act prescribed that "a company is a limited interest company if it is not a widely held company".
Meaning of Widely Held Company
Section 6(a) of the Companies Act prescribed that "a company is a widely held company, if -
(i) its article provide for an unrestricted transfer of its shares;
(ii) it is permitted by its articles to offer shares to the public;
(iii) it decides by special resolution to be a widely held company; or
(iv) it is a subsidiary of a company described in subparagraph (i), (ii) or (iii). "
Abolition of the concept of Limited Interest Company
The Companies Act, 1973 was replaced by the Companies Act, 2008 with effect from 1 May 2011. With the new Act, the concept of "widely held companies" and "limited interest companies" got abolished and new differentiation between type of companies was introduced.