LAW: Companies Act Deadline Moved at Last Minute
Recent Gauteng Business News
The announcement at the eleventh hour yesterday that the implementation date for the new Companies Act has been put on hold for “a few days” is disconcerting and frustrating.
“The poor project management of the entire process will most certainly affect South Africa’s reputation in the international financial sectors,” says Grant Thornton SA’s national chairman, Leonard Brehm. “In addition, the impact of this constant delay is detrimental to the professional services, company secretarial and legal sectors of the economy.”
Senior executives and various business associations have, since 2010, been urging the Department of Trade and Industry (dti) to reassess the 1 April deadline adding that the date was unrealistic considering some of the more dramatic amendments that are to be implemented. Yet, the dti stubbornly stuck to the deadline, assuring the nation that all plans were on track for the scheduled implementation date, with no delays expected. Until the dti commented in a statement yesterday afternoon, that the parliamentary process was only finalised on 24 March 2011 thereby not providing the Presidency with enough time to process the Bill before signing it into law.
A new date has yet to be announced by the dti with the Department’s website stating there are only “a few days” to go, while some experts believe it will be delayed until 1 May.
Brehm adds that the lack of clarity on the new implementation date is exasperating and confirmation of a new date should be a priority for the dti. “Many business processes rely on certainty of Company Law. An unclear delay as to when the new act is to be implemented is confusing and disappointing to say the least.”
The interruptions this brings to normal business activity is completely unnecessary, continued Brehm. The delay of the new Act will also have a cost implication for companies as businesses scramble to resolve company secretarial concerns in terms of paperwork and documentation that may now need to be redrafted according to the new timeline.
“The new Act will bring long-overdue changes to company law that will significantly modernise business practices, but at this stage we do not know what the final content of the regulations will be. The regulations are a vital part of the framework.” Brehm concludes.
Business News Sector Tags: Law|