business law revamp for sa 2008
4 June 2007
The process of establishing comprehensive legislation and a regulatory framework for business in SA has reached the final stretch and should be in place - if all goes to plan - early next year. The first draft of the Companies Amendment Bill, which will become the new Companies Act, was issued by the department of trade and industry (DTI) for public comment in March this year and will probably appear in front of parliament in June.
Apart from some technical and routine amendments over the years, this is the first official overhaul of the current Companies Act and its sister legislation, the Close Corporation Act, in thirty years.
Experts agree that the revamp is long overdue following the Treasury's initial concerns regarding corporate reform in 2001.
The subsequent release of Justice Myburg's report on director responsibility and auditor interaction, continuous legislative hurdles encountered by companies with BEE transactions and alignment with international jurisdictions emphasised the need even further.
Phillip Austin, a partner in accounting and auditing at Deloitte, says the bill will reduce the cost of registering and maintaining a company and the regulatory burden and compliance costs for small and medium-sized businesses, while enhancing corporate governance, transparency and accountability of large and widely-held firms.
The current 443 sections will be replaced with only 227 sections and six schedules in the new bill.
John Monks, the head of the European Trade Union Confederation, said that company law provides the legal basis for one of the most important institutions organising the economy.
On the one hand, it is hoped that local bureaucracy won't be the biggest obstacle for resident businesses to conform and prosper, by getting tangled up in red tape and not meeting their planned deadlines next year.
On the other, enterprises need to get with the programme and not allow themselves enough rope to hang themselves with.
Ruan Jooste, www.fin24.co.za