If the National Council of Provinces (NCOP) approves the Bill, subject to certain amendments, such amendments will be tabled before the National Assembly for concurrence, and thereafter directed to the Presidency for signature.
The Bill is aimed at overhauling the current regulatory framework for companies, as enshrined in the Companies Act No. 61 of 1973 (Companies Act).
The department's Director of Commercial Law and Policy, Corporate Consumer Regulation Division, McDonald Netshitenzhe, says the Bill is a culmination of a robust process that involved extensive consultation, as well as intense debate and discussion among various stakeholders over a five-year period.
Netshitenzhe lauded the proposed Bill for its objectives in promoting corporate governance, transparency, and access to information, amongst other regulatory oversight improvements.
According to the Bill, all companies, large and small, will be required to prepare annual financial statements, which will encourage sound financial management, as well as promote the sustainability of companies of all sizes.
However, Netshitenzhe says the Bill lends a helping hand to small businesses by reducing the regulatory burden placed on them.
Small enterprises will in most instances, be exempt from having their financial statements audited or reviewed.
The Bill will enable members of the public to request and obtain access to certain company records, such as a list of directors and shareholders.
“Similarly, trade unions will have the right to access the financial statements of a company, albeit through the soon-to-be established Companies and Intellectual Property Commission,” said Netshitenzhe, who added that this was for the purpose of exercising their right to initiate a business rescue process only.
Regarding issues of corporate governance, Netshitenzhe said the Bill makes provision for the appointment of an audit committee by shareholders of a public company.
Non-executive directors are to be appointed as members of the audit committee, as they are deemed to be independent from the day-to-day running of the company.
Article published courtesy of BuaNews
