THE COMPANIES ACT FLAG AND CONSUMER PROTECTION ACT FLAG INFO

NEW COMPANIES ACT

The Companies Act of 2008, as amended during March 2011 (the “new Act”) will replace virtually the whole of the 1973 Companies Act, when it comes into operation. The new Act introduces a host of new concepts, rights, remedies, obligations, procedures and sanctions.

There is no doubt that it will have a profound impact on the manner in which businesses, both large and small, are conducted in the future. It is therefore essential that businesses and their professional advisers acquire a good understanding of the new Act as quickly as possible.

The new Act modernises our company laws and brings them into line with the company laws of most western nations. In particular, in relation to listed companies, accountability, corporate social responsibility and stakeholders’ rights. It also introduces a new administrative enforcement regime in place of criminal sanctions.

A striking feature of the new Act is the number of new remedies it gives stakeholders, including trade unions representing employees and minority shareholders. It also simplifies and makes significant changes to the laws governing take-overs and mergers, and replaces the SRP Code and Rules of the SRP with a more comprehensive, modernised set of Takeover Regulations.

The new Act introduces more comprehensive provisions regarding accounting records, financial statements and corporate governance, but allows great flexibility in the design and governance of companies. It also replaces the judicial management system with a more modern and practical business rescue regime.

We will be writing articles, sending regular updates in the form of newsletters and conducting seminars to ensure that our clients are fully informed.  Our series of seminars will give you an in-depth understanding of how the new Act will impact on the way in which companies of all sizes conduct their businesses.

CONSUMER PROTECTION ACT

On 1 April 2011 the Consumer Protection Act 68 of 2008 came into full effect. The Act was signed by the President in 2009.  Certain of the framework provisions came into effect on 24 April 2010.  The Minister of Trade & Industry has also published regulations which provide much of the detail in relation to the implementation of the Act and certain of its key provisions.

This important piece of legislation will significantly change the way business is conducted inSouth Africa. The Act requires, among other things, that business dealings with consumers are fair and reasonable.

The Act has repealed and replaced (in whole or in part) various other legislation, including, the Lotteries Act 57 of 1997, the Consumer Affairs (Unfair Business Practices) Act 71 of 1988 and the Trade Practices Act 76 of 1976.

The impact of the Act on the manner in which goods and services are marketed and supplied in South Africa as well as the potential exposure to fines and increased consumer complaints makes it important for corporate companies to familiarise themselves (from a business and trade perspective) with the key provisions of the Act and to align their business practices and relevant agreements with the Act.

Our Consumer Protection Act team has advised extensively on this new piece of legislation and its impact on the South African market, including by conducting audits of terms and conditions and engaging with our clients to find practical ways of implementing the new requirements that the Act has introduced.  The team conducts regular client seminars and sends regular client updates in relation to new developments arising from the Act.  Members of the team have also published articles on the Act in a range of publications and news media and have given a series of television and radio interviews on hot topics.




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