With less than 24 hours to go it is now almost certain that the new Companies Act will miss the April 1 deadline for implementation.
Trade and Industry Minister Rob Davies, who is currently travelling outside the country, has not yet signed the regulations that accompany the new act. And it appears that President Jacob Zuma’s office has not yet received all of the relevant documents that have to be signed by him before the new act becomes effective.
Sources close to the process believe that at this stage it looks as though the implementation may be closer to May 1 than April 1.
There also appears to be some confusion about the final regulations relating to the Consumer Protection Act. As of yesterday afternoon these had not been published and gazetted by the Department of Trade and Industry (dti). However, legal sources reported that they were expected to be published at some stage today.
The Consumer Protection Act does come into force today, March 31.
Zodwa Ntuli, the deputy director-general at the dti, said that the regulations accompanying the act, which run to over 220 pages, were “finished and ready for publishing”.
She said, with regard to the Companies Act, that in addition to the main regulations there were smaller sets of regulations, such as the accreditation process for individuals relating to the new business rescue provisions that had to be finalised.
Ntuli said that the dti was “just checking” on these smaller regulatory issues and the implementation process would be completed within a matter of days.
Legal sources say that the Companies and Intellectual Property Registration Office (Cipro) is also likely to be a cause of some delay. In terms of the new act, Cipro will become the Companies Commission and will have a considerably greater level of responsibility.
Cipro’s website was dogged by technical problems for much of last week. However, these problems do not appear to have dampened its expectations for an April 1 launch date. The website has a countdown to the April 1 deadline.
Commenting on the delay in publishing the final regulations, Robby Coelho, a partner at law firm Webber Wentzel, said that business had been forced to prepare for the act on the basis of the draft regulations. “In almost all cases, this has involved redrafting and changing policies, procedures, business practices and all agreements and company documentation.”
Coelho added that in some cases, companies had changed their entire business models. “Make no mistake, this is a very time consuming and expensive exercise for businesses.”
He said that a further difficulty was the likelihood that the final regulations would be different to the draft regulations. - Ann Crotty