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Update on the New Companies Act
April 8, 2010 – 2:49 pm by Nicholas Hall
As many readers may know the Companies Act 71 of 2008 (a.k.a. The New Companies Act), was signed into law in April 2009. However, it has not yet been put into force.
It’s been nearly a year since the Act was signed in as law, and there have been some developments. The Minister of Trade and Industry published Draft Regulations as well as “rectifications” in December 2009, which seek to correct some of the numerous errors in the Act, as well as give some content to some of its provisions. The closing date for comments on these regulations was 1 March 2010. The final regulations where meant to come out on 31 March 2010, but as yet they have not been published. This may be due to a number of criticisms that the Regulations have received. There has also been negative feedback on the publication of the so called “rectifications”, which mainly deal with correcting spelling and grammatical errors. Some commentators point out that South Africa has never used rectifications to correct an Act. They argue that the correct procedure would be to either include the changes as part of the regulations or to have an amendment to the Act. Whether this will lead to further delays of the release of the final regulations is unknown.
The Minister confirmed that the Companies Act will come into force in the “third-quarter” of 2010 but no fixed date has been given. However, given the amount of criticism the Act and the regulations have received (not to mention that final regulations have yet to be released) it is unlikely that that the Act will be ready by this time.
We will keep you updated on any developments on the New Companies Act.
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Tags: Companies-Act
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