People will have more time to voice their opinions on the new Companies Bill
Time is running out for the first phase of public comment on government's new Companies Bill, which aims to bring business up to speed with international laws. But more time will be made available to get the public's input.
The Minister of Trade and Industry Mandisi Mpahlwa said yesterday the bill would replace the outdated Companies Act, and had been published for comment on February 12. "The initial public comment period extends until 19 March 2007, but the department of trade and industry only intends to take the bill back to cabinet in about June of this year, thus providing for a longer public consultation process that will involve discussions on several drafts of the legislation," Mpahlwa said.
He hoped that the department would be able to introduce the bill to parliament at the end of the year, saying, "parliament will of course provide further opportunities for public engagement (before this)".
"This reform is long overdue. It represents the first significant review of South African company law in over 30 years. Much has changed in the intervening years. Corporate structures and financial instruments have developed and evolved significantly," the minister said.
"The political and economic landscape for South Africa has changed. Corporate failures here and elsewhere have raised questions about standards of governance. These factors all set the scene for a significant overhaul and modernisation of our company law," he added.
He said the reform objectives were to "reduce the cost of registering and maintaining a company and the regulatory burden and compliance costs for small and medium-sized businesses. It would also result in improved regulatory oversight and governance and better redress for shareholders," Mpahlwa said. "Very significantly, the bill introduces a new business rescue scheme that will facilitate the turnaround of struggling firms."
The formation process of the bill has been ongoing since 2002. The first discussion document outlining the aims of the reform was released in June 2004.
A complete draft of the Companies Bill was then put to focus groups consisting of practitioners, business representatives, acade-mics and government stakeholders in July 2006 before entering its current stage of public comment.