The Takeover Regulation Panel (“TRP”) plays a crucial role in regulating corporate transactions in South Africa, ensuring fairness and transparency for shareholders in dealings involving regulated companies. Regulated companies, as defined in section 118 of the Companies Act No. 71 of 2008 (“Companies Act”), are companies in which 10% (ten percent) or more of their issued securities have been transferred over the last 24 (twenty-four) months, other than between or among related or inter-related persons (“Section 118 Requirement”). However, the landscape is poised for change as the Companies Amendment Bill 2023 (“Amendment Bill 2023”) proposes a significant alteration in the determination of regulated companies.

This article explores the general purpose of the TRP, highlights the existing criteria for regulated companies, and delves into the proposed shift towards considering company size and number of shareholders over securities transfers in the determination of regulated companies.

The General Purpose of the TRP:

The primary objective of the TRP is to maintain an equitable and orderly market and ensure fairness for shareholders of regulated companies. This objective is achieved by regulating fundamental transactions such as the disposal of the greater part of the assets or undertaking, mergers or amalgamations, and schemes of arrangements. To ensure fairness and transparency in such fundamental transactions for shareholders, regulated companies are required to obtain approval from the TRP.

Regulated companies are also subject to various notification requirements and such companies and/or other persons involved in such companies may be obligated to make mandatory offers or compulsory acquisitions under specific circumstances. These provisions are integral to safeguarding the interests of shareholders and the broader financial market.

Existing Criteria for Regulated Companies:

The Section 118 Requirement is the current prevailing requirement for determining whether a company is regulated or not. This criterion was established to identify companies where significant changes in ownership and control were taking place, necessitating TRP oversight.

Proposed Changes: A Shift Towards Company Size and number of Shareholders:

The Section 118 Requirement creates a large umbrella of companies to which TRP oversight applies. Seemingly, it was never the intention that the TRP limitations would have such a wide scope of application.

It appears that in order to address this issue, the Amendment Bill 2023 seeks to introduce a fundamental change in the criteria for regulated companies. Instead of relying on the movement of securities, the proposed amendment suggests determining regulated companies based on the number of shareholders of the company and size of the company. More specifically, it requires that in order to qualify as a regulated company, the company must have 10 (ten) or more direct or indirect shareholders and must meet or exceed the financial thresholds based on an annual turnover or asset value of the company as determined by the Minister, in consultation with the TRP.

This shift towards company size and number of shareholders rather than securities transfers represents a substantial departure from the existing framework as established in terms of the current Companies Act.


The TRP’s primary objective is to regulate corporate transactions in regulated companies, ensuring fairness and transparency for shareholders. Historically, regulated companies were identified based on the number of securities transfers, but the proposed amendment to the Companies Act seeks to shift the focus to company size and number of shareholders. This change ensures that TRP oversight is appropriately targeted. As the Amendment Bill 2023 progresses, it will be essential to closely monitor its implementation and assess its impact on corporate transactions in South Africa.

VDMA’s team of experts is at your disposal for any company law assistance that you or your business may require.

Published 27 September 2023