Amendments to the Companies Act: What You Need to Know
The President signed the First and Second Companies Amendment Bills into law making significant to South Africa’s corporate governance framework. These updates, signed into law on 26 July 2024, introduce critical adjustments that accountants need to understand. The effective date for the changes is to be announced by the President at a future date. Here’s an accessible breakdown of the key changes:
Summary of key changes:
Remuneration Disclosures (Section 30(4) & Section 30A)
Entities Affected: Public and State-Owned Companies, and Private Companies which are required to be audited.
New requirements enforce that remuneration disclosures in annual financial statements list each director and officer individually. Public and State-Owned Companies must prepare a remuneration policy and report, which include detailed remuneration information and must be approved by shareholders at the annual general meeting.
Social and Ethics Committees
Entities Affected: State-Owned Companies, Listed Public Companies, and other companies scoring above 500 public interest points.
The amendments slightly relax the requirements for social and ethics committees, allowing exemptions under less stringent conditions and requiring most members to be non-executive directors.
Private Company Takeover Regulation (Takeover Regulations)
Entities Affected: Private Companies.
New triggers for compliance with Takeover Regulations include having 10 or more shareholders and meeting specific financial thresholds. This requires additional regulatory scrutiny for affected transactions.
Intra-group Financial Assistance (Section 45)
Entities Affected: All companies involved in intra-group financial assistance.
The amendments exclude certain intra-group financial assistance from stringent requirements, reducing administrative burdens, but keep certain approvals in place for specific scenarios.
Buy-back Regulations
Entities Affected: All companies conducting buy-backs.
Eases some conditions for buy-back transactions, particularly removing some onerous requirements but maintaining others like solvency and liquidity conditions.
Extended Director and Officer Liability and Delinquency (Second Amendment Bill)
Entities Affected: All companies.
Extends the time frame for initiating claims against directors and officers for fiduciary breaches and allows for longer periods to declare a person delinquent or under probation.
Miscellaneous Provisions
Amendments also address issues like company name changes, share issue irregularities, and alternative dispute resolution mechanisms among others, affecting all companies to various extents depending on the specific provision.
What Must Companies Do
Entities registered in South Africa should understand and comply with the new and changed provisions of the Companies Act. These amendments mean a greater involvement of accountants in ensuring that appropriate policies are set for new requirements, educating their clients, especially in preparing for and conducting annual general meetings under the new rules. It’s crucial for professionals in this field to stay updated on these changes to provide the best advice and maintain compliance.
Inform Your Clients About these Important Changes Using CIBA’s Template Letter
Keep up to date on regulatory changes with CIBA’s Companies Act Amendments – September 2024 course. Click below to enroll for free.
What you will learn
By attending this webinar you will gain the following competencies:
Exclusive Insights: Gain access to expert analysis from professionals in finance, and corporate governance.
Interactive Q&A Session: Have your specific questions answered by our panel of experts.
Practical Advice: Walk away with actionable steps to implement within your organisation.
Virtual Networking Opportunities: Connect with peers and industry leaders during the webinar.
Understand the Amendments: Gain a clear understanding of the latest changes to the Companies Act and how they affect your business.
Implications for Your Company: Learn about the legal, financial, and operational impacts of these amendments.
Compliance Strategies: Discover practical strategies to ensure your company remains compliant with the new regulations.
Expert Insights: Hear from leading financial and business experts who will share their insights and answer your pressing questions.
