What’s News?
Companies Act Amendment
The Companies Act was recently amended and signed into law by the President as Act 16 of 2024.
It addresses the following:
Enhanced director accountability: strengthened provisions for director responsibilities and liabilities
Corporate governance: introduction of new requirements for corporate governance frameworks
Shareholder rights: expanded rights and protection for minority shareholders
Financial reporting: updated standards and requirements for financial disclosures and reporting
Business rescue proceedings: revisions to the procedures and timelines for business rescue.
It’s concerning that the amendments to the Companies Act 2008 (Act 16 of 2024) did not update the public interest score provisions to account for inflation. As a result, many smaller companies are now being unnecessarily subjected to mandatory audits, simply because the thresholds have not been adjusted to reflect the current economic landscape. This outdated measure places an undue burden on businesses that, in many cases, do not have the resources to bear the cost of an audit, diverting attention and finances away from growth, and innovation. It’s a clear signal that regulatory frameworks need to evolve in step with economic realities.