The Department of Trade and Industry (the dti) is delighted to announce that the
Companies Amendment Act was signed by President Jacob Gedleyihlekisa Zuma
today, 20 April 2011. The signing of the Companies Amendment Act, the Proclamation
and the President’s minute puts into legal force the Companies Act of 2008 on 1 May
2011. The Companies Regulations and all other relevant documents will be published
and also come into force on implementation date.
“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”, said Trade and Industry Minister, Dr. Rob Davies.
According to Davies, business as a whole will reap the benefits of the Act
“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. 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.
The signing of the Companies Amendment Act implies that the Companies and
Intellectual Property Commission (CIPC), which was launched by Minister Davies on 18
April 2011, will be open for business as of 1 May 2011. The new Act does not allow
registration of Close Corporations (CCs), and therefore no new CCs will be registered
when the Act comes into legal force. However, CCs that are already in the system will
remain active indefinitely, unless they choose to convert into the new corporate regime
of the Companies Act of 2008. “The Act does not apply retrospectively and those
registrants/people who have already applied for CC’s before May 2011 will still receive
their certificates”, concluded Davies.
The Commission will ensure that the regulatory framework for enterprises promote
growth, employment, innovation, stability, good governance, confidence and
international competitiveness. The Act also gives the Commission powers to investigate
companies and to ensure that they comply with the legislation. This include seizing
documents and to address the burning issue of corporate identity hijacking.
the dti looks forward to working with the Commissioner, Ms Astrid Ludin, and Advocate
Rory Voller, Deputy Commissioner, in ensuring that the CIPC achieves greater levels of
performance and ensure that it works for the people.
Issued by: Communication and Marketing, the dti
Director Media Relations: Sidwell Medupe
Tel: (012) 394 1650
Mobile: 079 492 1774
the dti website: http://www.thedti.gov.za