SAIPA: Company Bill 2008

BACKGROUND
In early 2003 the Department of Trade & Industry (dti) initiated the Company Law Reform Process which nears completion this week with the publication for public information of the Revised Companies Bill, 2008. The publication follows hot on the heels of the Cabinet’s approval of the Bill on 14 May and the State Law Advisers’ certification thereof on 2 June 2008.

The Revised Bill is the result of an arduous process which commenced with the drafting and publication of the Policy Document entitled “Company Law For the 21st Century: Guidelines for Corporate Law Reform” (published on 23 June 2004 in Government Gazette No. 26493, Vol. 468). After extensive consultations on the Policy Document during 2004 and 2005, the dti drafted and published the Draft Companies Bill, 2007, for public comment in February 2007.

Whilst drafting the Companies Bill, the dti engaged in a parallel process of drafting urgent amendments to the Companies Act, 1973, (Act No. 61 of 1973). This process culminated in the enactment of the Corporate Laws Amendment Act, 2006 (Act No. 24 of 2006) which became effective on 14 December 2007.

The Corporate Laws Amendment Act, 2006 did not constitute the overall reform of the Companies Act, 1973, as it only brought about interim amendments to the primary legislation (viz. the 1973 Companies Act).

After publication of the Draft Companies Bill, 2007, the dti embarked on an extensive consultation process and the resulting comments were instrumental in the completion of the Revised Companies Bill, 2008.

The Companies Bill, unlike the Corporate Laws Amendment Act, regulates all aspects of the corporate existence of companies - starting from the incorporation, registration, organisation and management of companies of all types; to providing for equitable and efficient amalgamations, mergers and takeovers of companies, the efficient rescue of financially distressed companies; to introducing appropriate legal redress for investors and third parties with respect to companies as well as re-structuring the regulatory framework for the effective enforcement of the legislation.

It is envisaged that the Bill will be effective by either late 2009 or early 2010.

SAIPA WELCOMES THE NEW BILL
The South African Institute of Professional Accountants (SAIPA) welcomes the long-awaited publication of the revised Companies Bill, 2008. The publication of this Bill marks an important milestone in the existence of the accounting profession and of SAIPA. SAIPA is particularly grateful for the opportunities it has been afforded in the Company Law process by the Department of Trade & Industry (the dti) and for the engagement that SAIPA has had with the drafting team throughout the process.

Click here to read "Brief guide on the revised companies bill 2008" (PDf file 62kb)