Document: The Companies Act, No. 71 of 2008: An Explanatory Guide

The process of developing the Companies Act, No. 71 of 2008 began in earnest over five years ago. For guidance, the developers looked to South African Company Law for the 21st Century: Guidelines for Corporate Law Reform (May 2004), a policy document developed by the Department of Trade and Industry (the dti). The ultimate goal in repealing the Companies Act, No. 61 of 1973, was to ensure that the regulatory framework for enterprises of all types and sizes promoted growth, employment, innovation, stability, good governance, confidence and international competitiveness.

The Companies Act was introduced in Parliament during 2008 and published for general comment on 27 June 2008 as Bill No. 61 of 2008. The Portfolio Committee on Trade and Industry received a large volume of written comments, as well as oral representations during the public hearings on the Companies Bill, in the latter half of 2008. These comments and representations had a significant influence on the content of the Bill, as finally approved by the Committee and Parliament in November 2008. The Act was translated into Afrikaans as the other official language and signed off by the President in April 2009. Due to a sunset clause in the Act, it could not be put into operation within a period of one year after promulgation. It is envisaged that the Act will become effective in April 2011, when all sub-delegated legislation matters, including regulations, have been resolved.