Abstract:
The company developed through an evolutionary process. Our conceptualization of the company
and its position in law is determined by our philosophical approach to justice (our underlying system
of belief), the resultant theory of law that we adopt and the underlying economic, political and social
environment in which the company operates.
Three broad philosophical approaches to justice are identified in this study. The first revolves
around the idea of maximizing welfare, the second around the idea of respecting freedom and the
third approach sees justice as bound up with virtue and the good life. It is argued in this thesis that
we cannot detach arguments about justice and rights from arguments about virtue and the good life.
It is not possible to devise a grand theory of the nature of the company. But from a normative
perspective the communitarian theory and arguably the concession theory (more particularly the
dual concession theory of Dine) is the most acceptable theory of the nature of the company. The
real entity theory, as articulated by Dodd, is the preferred theory of the corporate personhood of the
company. A company, especially a large company, is a public or quasi-public entity and a corporate citizen that should have the same legal, social and moral rights and responsibilities as a natural
person.
From a normative perspective the entity maximization and sustainability model (EMS model) and
the stakeholder model are the most attractive models of corporate governance. It is generally
accepted that the ultimate purpose of the company must be to serve society. Subject to this ultimate
and supreme objective, the corporate objective on a narrower level must be to maximize and sustain
the company as a separate legal entity.
The aforesaid conceptualization of the company corresponds with the normative value system that
underpins the Constitution of the Republic of South Africa, 1996 (the Constitution), and therefore
also the Companies Act 71 of 2008 (the Companies Act of 2008). The Constitution encompasses a
social democratic vision for South Africa in which commercial autonomy must be tempered by
virtue, dignity and social and economic equality. The Companies Act of 2008 gives express
recognition to bring company law within our constitutional framework.
There has been a fundamental paradigm shift in the normative value system that underpins our
company law since liberalism and laissez-faire reigned supreme in the eighteenth and nineteenth
century Great Britain, from which country our company law originates. The underlying philosophy
and approach of our company law is now more aligned with that of Canada. This also has an
important effect on the rights, protections and remedies of creditors and employees of the company.
