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Implementation of new Companies Act progressing well - Minister Rob Davies

By Tai Chishakwe - Aug 21, 2014
Implementation of new Companies Act progressing well - Minister Rob Davies

The implementation of the new Companies Act, which came into effect on 1 May 2011, replacing the Companies Act No 61 of 1973, is progressing well, says Trade and Industry Minister Rob Davies. The Act has been lauded for simplifying business registration processes, reducing red tape and enhancing transparency by companies.

Speaking at the Company Law Symposium held in Kempton Park, on Tuesday, Minister Davies said entrepreneurs and businesses have benefited from the Act.

He said the new Companies Act has allowed the companies and the Intellectual Property Commission (CIPC) to improve their online registration processes and made it possible for a number of companies to avoid liquidation since 2011, through the process of Business rescue.

“It should be noted that CIPC systems have improved immensely in the past two years and this is mainly due to the simplification of registration brought about by the Act. The refining of the new information technology and system data has also eradicated threats of company hijacking,” explained Minister Davies.

Additionally business rescue models have allowed for companies with capacity to save jobs and survive.

“Business rescue models have allowed for many companies with real capacity, capital, and skills to survive and save jobs. Since 2011, 1 338 business rescue notices were filed and only 73 resulted in liquidations,” said Minister Davies.

He added that these statistics show that there are processes that are still in continuation, and that there are other solutions other than bankruptcy and liquidation.

According to the minister, the simplification of registration is one of the few benefits of the Companies Act. He added that the partnership with banks to register businesses has also assisted in reducing some of the load from the commission.

The symposium, which concluded on Wednesday, was attended by more than 300 stakeholders comprising of business, law practitioners and government officials. The purpose of the symposium is to discuss and consider important principles arising from the Companies Act, including mergers and acquisitions, fundamental transactions, directors and prescribed officer’s duties and responsibilities.