DTIC: Companies Amendment Bills tabled

DTIC: Companies Amendment Bills tabled

• 01 September 2023
• Accounting
• South African Accounting Academy

The Companies Amendment Bill and Companies Second Amendment Bill were tabled in Parliament on 28 August 2023 and have been published.

Released in draft form in October 2021 for public comment and informed by ‘detailed discussions’ in the National Economic Development & Labour Council, the Companies Amendment Bill seeks to:

• Remove certain obstacles to legitimate business activity, and to

• Facilitate greater ‘equity between directors and senior management on the one hand, and shareholders and workers on the other hand’ (among other things by ensuring greater transparency regarding the disclosure of senior executive remuneration and its ‘reasonableness’), and to

• Address various policy matters affecting social and ethics committees.

This is according to a memorandum on the Bill’s objects, which also draws attention to the withdrawal of certain provisions in the Bill’s October 2021 draft dealing with issues since addressed in the General Laws (Anti-Money Laundering & Combating Terrorism Financing) Amendment Act, 2022  – as well as related amendments to the Companies Act regulations.

The Companies Second Amendment Bill seeks to extend the time bar set out in section 162(2) of the Act in terms of which applications are made for a court order declaring a company director ‘delinquent or under probation’. According to a memorandum on the Bill’s objects, this is noting:

• Certain company-specific Zondo Commission recommendations which the Bill proposes should apply generally, and

• International best practice.

Access the following documents for more detail:

• Companies Amendment Bill

• Companies Second Amendment Bill

• Parliamentary papers announcing the Bills’ formal introduction

• General Laws (Anti-Money Laundering & Combating Terrorism Financing) Amendment Act

• Amendments to Companies Act regulations

Click here to download the Media Statement:

https://www.gov.za/speeches/changes-companies-law-south-african-parliament-begins-process-update-legislation-30-aug

Relevance to Auditors, Independent Reviewers & Accountants:

• The Companies Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.

• As an auditor, independent reviewer and accountant, you need to consider your client’s compliance with the Companies Act.

• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and company secretarial practitioners to keep abreast of such changes in so that companies continue to meet their compliance obligations.

Relevance to Your Clients:

• An entity (company or close corporation) has a duty to comply with the Companies Act, and directors have to fulfil their duties accordingly, otherwise they could be held liable.

• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies to be aware of the latest changes that may affect their compliance obligations.

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