Changes Are Coming to The Companies Act – Be Ready for Them
Cabinet has approved the most wide ranging amendments to the Companies Act (the Act) since its launch in 2011.
Some of the important issues are briefly highlighted below. They are of course only proposed changes at this stage, published for comment and therefore subject to alteration (the comment period closes on 14 December). But take note of them now and if any of them are likely to impact your business significantly, ask your accountant for advice on how to prepare for them.
Securities Registers to be filed with the CIPC and publically available: Companies will per the proposed amendment now be required to annually send their securities registers (previously known as “share registers”) to the CIPC (Companies and Intellectual Property Commission). Some companies have been reluctant to disclose who their shareholders are but now the public will have anonymous access to this information by looking it up at the CIPC.
Greater public access to company information: In addition, the public will have greater access to information such as the Memorandum of Incorporation (MOI), the register of directors, and minutes and resolutions of shareholder meetings.
Changes to the MOI: One issue that has bedevilled companies is when changes to the MOI become effective. The proposed amendment states that the revised MOI becomes effective ten days after the company files with the CIPC.
Filing of annual financial statements (AFS): To date only companies subject to audit had to submit their AFS to the CIPC. The proposal is that all companies will have to do so.
Disclosure of Directors’ Remuneration: This section has been updated by proposing that each director and “prescribed officer” be named and their remuneration disclosed. This could involve administrative time as many companies have not ascertained if their senior managers, who are not directors, fall into the category of “prescribed officers”.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.