Ramaphosa proclaims Companies Amendment Acts
The Department of Trade, Industry and Competition (dtic) has welcomed the proclamation of two Companies Amendment Acts of 2024 by President Cyril Ramaphosa, describing it as a “significant milestone” in South Africa’s corporate law.
The Acts, which were published in the Government Gazette on December 27, have now become operational.
Some sections of the Companies Amendment Act 16 of 2024 and the entire Companies Second Amendment Act 17 of 2024 came into effect on the date of publication.
The dtic points out that the Companies Amendment Act focuses on the ease of doing business by clarifying, simplifying and strengthening certain sections of the law. Operational provisions include sections 16, 25, 40, 48, 61, 90, 95, 135 and 204, among others, which companies can now implement.
However, not all sections of the Amendment Act are operational. Sections requiring the development of supporting regulations, such as those mandating remuneration disclosures and pay gap reporting to address income inequality, will only become operational once the regulations have been finalised.
The Companies Second Amendment Act is fully operational, addressing recommendations from the Zondo Commission into State Capture. It extends the time limit for bringing applications to declare director delinquent or place them under probation from two years to five years.
The application of the law is retrospective, applying to actions that took place before this Act or the extension of the time bar. In addition, the court has been empowered to extend the time bar to hold directors liable for costs, losses or damages incurred for acts that breach fiduciary duties, and the court can extend the time bar of such damages or losses on good cause shown beyond three years.
Overall, the court can extend the time bar beyond five years on good cause shown should circumstances require.
The two Acts were assented into law by Ramaphosa on July 26, 2024.
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