New companies act – changes to business environment
The promulgation of this Act brings about several fundamental and important changes to South Africa’s laws regarding legal entities.
This article is not a legal opinion and you are advised to consult lawyers or auditors should you need more detailed information.
• From May 1 Close Corporations (CCs) may no longer be registered. Provision is now made for a company that is not required to be audited and which caters for the needs of small business. However, the Act is not retrospective: applications for the registration of CCs submitted on or before April 30 will still be processed.
• The new chapter on ‘business rescue’ provides for three types of practitioners who will assist and support the three different classifications of companies.
• The DTI has officially launched the Companies and Intellectual Property Commission (CIPC), which will replace the now defunct companies registration office CIPRO and its legal enforcement arm. The CIPC website is live from May 1.
The country’s large auditing houses regard the new Act and regulations positively. Leonard Brehm, Chairman of auditors Grant Thorntons SA, confirmed that the Companies Act includes important changes and underscored that “it is good legislation in the main…”, reported Business Times (April 24 2011).
Preferential Procurement (PP) Regulations
The finalisation of the new PP regulations, presently pending final cabinet approval, is eagerly anticipated and should see long-term relief and benefits for local suppliers, manufacturers and service providers, reported Business Times.
The “buy local” campaign Proudly South African (PSA) will be actively recruiting government departments to sign up and commit to purchasing goods and services made in South Africa as the major part of their daily consumables.
Strengthening the PSAs activities is one of the targets set out in the government’s policy action plan, IPAP2, which has identified a number of sectors where local procurement will be encouraged.
Consumer Protection Act
Compliance with the provisions of the far reaching Act is a must for distributors, importers, retailers, suppliers, vendors and wholesalers throughout the national economy.
Fines for non-compliance are severe with prescribed upper limits of R1-million or up to 10% of the transgressing organisation’s turn over.
In addition there are changes to the law regarding late delivery, proper performance and the transfer of risk in goods (see SmartProcurement’s April article on this topic).
This Act, which kicked in on April 1, 2011 and its far reaching implications for procurement departments and their personnel will be in the spotlight at a breakfast Workshop, headed up by a legal expert, in Centurion on June 30, 2011.
For more information on this intensive workshop, aimed at conveying the workings of this Act in the procurement environment, please contact Erieka Santos on 087 805 0893 or e-mail: firstname.lastname@example.org