parliament passes key business bills 
29 September 2008

The bill will aim to simplify company structures and registration and shifts company law from a capital maintenance regime based on par value to one based on solvency and liquidity. It decriminalises company law sanctions, where possible, but also prevents companies from indemnifying directors for fines or other penalties imposed on them.

One of the major innovations of the bill is the business rescue provision. The provision is largely self administered by the failing company, but with independent supervision and subject to court intervention at any time. Workers have to be consulted in any rescue plan, and recognises them as creditors with a voting interest relating to their unpaid wages.

The Consumer Protection Bill, if promulgated, will apply to most transactions in the ordinary course of business but, as trade and i ndustry minister Mandisi Mpahlwa explained to the House, the department does not believe that large transactions involving large businesses and the state require the protection offered by the bill. But it does codify a number of fundamental consumer rights such as the right to equal access to the consumer market, the right to choose, the right to fair marketing, to disclosure and to honest dealing.
There is also a right to fair value, accountability and redress and compensation.

The bill establishes a consumer commission as an organ of state under the minister. It will investigate prohibited conduct and enforce compliance, and will develop and accredit codes of practice. Trade and industry committee member, Farida Mohammed, told the house how strongly she felt about the bill, and recalled that before 1994 non white customers were prevented from trying on garments in a clothing store.

Mpahlwa said the new bills were “ meant to enhance the interest of the consumer and to ensure that smaller players and new entrants have got the possibility of participating in the economy ".

Michael Hamlyn, www.businessday.co.za