corporate laws amendment bill seminar feedback
12 March 2007

Sam Moleko of Phatshoane Henney attended an information session on the Corporate Law Amendment Bill, presented by SAICA this March in Pretoria.

This session provided an overview of key features of the Corporate Laws Amendment Act.  The Act addresses urgent interim amendments to the Companies Act ahead of the Department of Trade and Industry’s revision of corporate law, including the Companies Act.  On the table are among others, changes to the financial assistance requirements in terms of section 38 of the Companies Act, differential reporting requirements that allow reporting relief for limited interest companies, the establishment of the Financial Reporting Standards Council, the intention to repeal the Close Corporation Act as well as the   creation of a distinction in the form of new definitions for widely held and limited interest companies.

The definitions will form the basis for determining which companies will be subject to various reporting and governance requirements in terms of the Bill.

A company is widely held if
(i) its articles provide for an unrestricted transfer of its shares;
(ii) its articles permits the offering of 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). A company is limited interest if it is not widely held. 

This overhaul by the DTI is being executed in two phases, the first being the Corporate Laws Amendment Bill dealing with urgent amendments some of which are listed above and is awaiting the President’s signature and gazetting.  The second phase entails a complete review of the companies Act, which is under consultation and comment by the public.

For more information on the Bill, contact the Knowledge Centre.
(Archived in Legislation Update is the Corporate Law Amendment Bill of July 2006)