Companies Act: DA calls on President Zuma to clarify implementation date
It is deeply ironic that the implementation of the Companies Act will now be delayed past the original implementation date of 1 April. The Democratic Alliance (DA) led a sustained effort in Parliament to convince the Department of Trade and Industry (DTI) and the ANC members of the committee to delay implementation to allow the business sector time to understand the last minute changes to the legislation. The rejection of this request by the ANC was one of the main reasons why the DA and other opposition parties voted against the Companies Amendment Bill.
It now appears as if the President has not yet signed the Bill effectively, thereby delaying its implementation, despite the DTI's insistence on a 1 April implementation date. In an effort to clarify the confusion the DTI made a statement that they will be recommending to the Presidency that they provide 1 May as the implementation date.
This additional time would give South African businesses space to better understand how the law affects them, but it won't provide sufficient certainty because there is no guarantee that the Presidency will go along with the recommendation. The President must now urgently provide clarity as to when the legislation will be implemented. Failure to do this will simply further the confusion around when business's needs to comply.
Such confusion, especially in the realm of company law, acts as a powerful disincentive to investment in South Africa. There has been considerable uncertainty about which corporate law, affecting every company in the country, actually applies in South Africa.
Many companies and their advisors have incurred costs to comply with a law which is now delayed once more. This is an unacceptable situation that will remain until the president steps in to clarify the implementation date.
Statement issued by Tim Harris MP, DA Shadow Minister of Trade and Industry, April 3 2011
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