Companies Act inaccuracies cleaned up

Cape Town – The companies amendment bill was tabled in Parliament on Tuesday and is aimed at tidying up the slack wording and inaccuracies in the original Companies Act which was first passed in 2008 and assented to by the president in 2009.
 
A memorandum attached to the bill explained the need for it and said that during consultations on regulations, it became apparent that there were sections containing technical errors, incorrect referencing, omissions and grammatical errors.

"Furthermore, it became apparent that some of the regulations would be ultra vires for lack of empowering provisions in the act empowering the minister to issue them," the memorandum said. 
"As a result … some of the policies and principles of the act are adversely affected," it said.

"In addition, some of the policies are expressed in language that creates undesirable doubt about the intent, and an equally undesirable degree of uncertainty as to their meaning and effect. Considering the nature of the errors, it is probable that in its
present form, the Companies Act, 2008, will result in doubt and uncertainty that could lead to litigation."
The bill says that the uncertainty, and the cost of resolving it through costly legal disputes, may act as a drag on the economy which would have been "fundamentally inimical to the goals of the act itself."

The amendment bill now hopes to provide a proper statutory foundation for the regulations that will be needed to administer and enforce the act.
Amendments are inserted to address uncertainty resulting from lacunae in the act, none of which can properly be resolved by the regulations.
Technical deficiencies are tackled to remove inconsistencies and disharmony among provisions of the act itself and to avoid  conflicts with other legislation or regulations and to remove ambiguities as to how certain provisions were to be applied to give full effect to the policy of the act.

According to the memorandum the proposals contained in the amendment bill aimed at rectifying errors in the principal Act, should be seen against the magnitude and nature of the new act.
"The Act embodies a comprehensive and modernised legal regime providing for the incorporation, registration, organisation and management of juristic persons," the memorandum said.

"It is in nature and extent one of the most extensive laws to be passed by our democratic Parliament, covering almost 400 pages."

Source: INet Bridge