"The new Companies Act is a major piece of legislation and reform which has a number of features to it which will certainly improve the environment for business operation in South Africa.” This was said by the Minister of Trade and Industry, Dr Rob Davies at the launch of the new Companies Act Awareness Campaign in Cape Town yesterday.
“Among other things the Companies Act has simplified the procedures of registration of companies in that it has removed the entire documentary obligation under the existing Company Act. A single registration document will be required and it can be done very easily. A company can trade on a number without necessarily using a name.
There is a reduction particularly on the regulatory burden on small medium micro enterprises. The requirement for financial reporting for small companies has been reduced considerably in that they do not have to produce audited financial statements, but will need to have financial reporting at an appropriate low level," said Davies
"The major innovation is the introduction of business rescue scheme which means that instead of companies going into major judicial management as they do now, which is almost invariably a route to an eventual bankruptcy, a rescue process will be initiated. Then creditors can be held at bay while stakeholders work to rescue the company which is a major and very important innovation," added Davies
He also said the department is in a process of rectification of the act, where a number of drafting errors were uncovered. A team of leading experts on company law were put together to work with the Department of Trade and Industry (dti) to go through the draft and identify the errors to be included in the rectification bill to be presented in Parliament.
"The rectification bill will not change any of the policy issues, it just deals with the drafting issues," conclude Davies.
The dti will be organising a programme of events throughout the country starting from March 2010. This will include seminars and workshops with industry stakeholders. The campaign is expected to reach 400 000 people.
Issued by: Department of Trade and Industry
25 February 2010
