The public will get a chance to have their say on the Draft Companies Amendment Bill, which among others aims at improving ease of doing business in respect of certain provisions of the Companies Act.
“The series of amendments in the 2021 Bill are aimed at achieving three policy objectives – improving ease of doing business in respect of certain provisions of the Companies Act; providing for greater transparency on wage ratios at firm level and; addressing true or beneficial ownership of companies, to address money laundering challenges,” said the Department of Trade, Industry and Competition (dtic).
The department made this announcement on Wednesday ahead of the publishing of the bill on Friday, 1 October 2021.
Addressing the media in Pretoria, dtic Minister Ebrahim Patel said the department is releasing the bill for public comment prior to Cabinet considering it for approval.
“The amendments in the bill seek to update the Companies Act in light of developments in the field, address public concerns and improve the ease of doing business. One area covered in the Bill relates to remuneration policies and we are not the only country grappling with the challenge of high levels of inequality,” Patel said.
Patel said the bill proposes a transparency-driven approach, with clearer shareholder powers than what is currently the case.
“Public comments would be appreciated on this and the other provisions of the bill. Since the implementation of the Companies Act a number of deficiencies have manifested which has caused unnecessary costs of compliance and retards the efficient and effective conduct of business.”
Professor Michael Katz, Chairman of the Specialist Committee on Company Law (SCCL) said certain unintended consequences of the existing legislation have adversely impacted on the conduct of business and the bill aims to remedy these problems.
“All of these remedial measures take into account best practice which has arisen during the intervening period since the drafting of the existing Act,” Professor Katz said.
Professor Katz said the amendments contained in the Bill set out to improve accountability and scrutiny on remuneration practices, promote shareholder activism and corporate governance.
“Furthermore, they also relieve companies of onerous, impractical and burdensome provisions in previous iterations of companies’ legislation.
“Lastly, they give South Africa instruments to undertake its role in the global offensive against illicit cross-border behaviour,” he said.
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