The latest proposed changes to section 45 of the Companies Act

02 November 2021
South African Accounting Academy

The Department of Trade, Industry and Competition (DTIC) published the Companies Amendment Bill, 2021 (Bill) for public comment on 1 October 2021. The Bill is the second draft of the Companies Amendment Bill which was published in September 2018 (2018 Draft) which, if passed, will represent the first set of substantive amendments to the Companies Act 71 2008 (Act) since it came into effect on 1 May 2011.

The amendment to section 45 of the Companies Act is of particular interest.

Clause 11 of the Draft Amendment Bill 2021 proposes the following amendments to section 45:

Deleting the original heading of section 45 which referred to “Loans or other financial assistance to directors” and substituting it with “Financial assistance”.
Inserting a new sub-section (2A) which states, “The provisions of this section shall not apply to the giving by a company of financial assistance to, or for the benefit of its subsidiaries”.

The change in the heading reflects a more accurate representation of the section as it not only deals with financial assistance to directors, but also extends to prescribed officers and certain juristic persons.

Click here to download the Article:

https://www.cliffedekkerhofmeyr.com/export/sites/cdh/en/news/publications/2021/Corporate/Downloads/Corporate-Commercial-Alert-13-October-202.pdf

Click here to download the Revised Companies Amendment Bill:

http://www.thedtic.gov.za/wp-content/uploads/Revised_Companies_Amendment_Bill-1_October2021.pdf

Get all your CPD online. SA Accounting Academy (SAAA) offers Subscription Plans, Live Webinars, Webinars On-Demand, Access to Experts, Courses, Articles and more: https://cpd.accountingacademy.co.za.