ATC240319: Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on the Companies Amendment Bill [B27B-2023] dated 19 March 2024

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on the Companies Amendment Bill [B27B-2023] dated 19 March 2024.

 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, having considered the subject of the Companies Amendment Bill [B27B-2023] reports on the Bill as follows:

 

1. Introduction

 

The Companies Amendment Bill was passed by the National Assembly and referred to the National Council of Provinces for concurrence on the 30 November 2023. The Committee received a briefing on the Bill from the Department of Trade, Industry and Competition on the 5 December 2023.

 

2. Purpose of the Bill

 

The purpose of the Companies Amendment Bill is to amend the Companies Act, 2008, so as to insert certain definitions and amend the definition of ‘‘securities’’; to clarify when a Notice of Amendment of a Memorandum of Incorporation takes effect; and to provide for the Commission to publish, as prescribed, the notice of the location of a company’s records.

Further, the purpose is to differentiate where the right to gain access to companies’ records may be limited; to provide for the preparation, presentation and voting on companies’ remuneration policy and directors’ remuneration report; to provide for the filing of a copy of the annual financial statement; and to empower the court to validate the irregular creation and the allotment or issue of shares. In addition it is to clarify that shares which are not fully paid are to be transferred to a stakeholder and dealt with in terms of a stakeholder agreement; to exclude the subsidiary company from the requirements relating to financial assistance; to provide for instances where a special resolution is required for the acquisition by a company of its own shares; to provide for a social and ethics committee report and remuneration report to also be presented at an annual general meeting of a public company; and to provide for the circumstances under which a private company will be a regulated company.

Further, the purpose is geared to provide for the publication of the application for exemption from the requirement to appoint a social and ethics committee; to deal with the composition of the social and ethics committee; to provide for the preparation by the social and ethics committee of a social and ethics committee report, as prescribed; committee report to be presented at the annual general meeting or shareholders meeting; as the case may be; to provide, in respect of a private company, personal liability company or non-profit company; and for the appointment of an auditor at a shareholders’ meeting if such appointment is a requirement in terms of the Act.

In addition, the envisaged Act is crafted to extend the definition of an employee share scheme to include situations where there are purchases of shares of a company; to provide for the determination by the Minister, in consultation with the Panel, of financial thresholds, for purposes of identifying the private companies to which Parts B and C of Chapter 5 of the Act apply; to provide for post-commencement finance for unpaid amounts that are due to the landlord during business rescue proceedings; and to provide for the Commission to substitute a contested name of a company under certain circumstances.

Finally, the purpose is crafted to provide for mediation, conciliation and arbitration by the Companies Tribunal only in respect of relief or complaints in terms of the Act; to further provide for the operation and governance of the Companies Tribunal; to provide for pronouncements that may be issued by the Financial Reporting Standards Council; and to provide for matters connected therewith.

 

3. Process followed

 

The Committee invited public comment through advertisements in newspapers, social media and on the websites of Parliament and government. The closing date for written submissions was 29 January 2024. The advertisement was published in all 11 official languages.

 

The Committee received submissions on the Bill from the following stakeholders:

1. Norton Rose Fullbright
2. Banking Association of South Africa (BASA) and Johannesburg Stock Exchange (JSE) (joint submission)
3. Cliffe Dekker Hofmeyer
4. Consumer Goods Council of South Africa (CGCSA)
5. Congress of South African Trade Unions (Cosatu) and Southern African Clothing and Textile Workers' Union (SACTWU)
6. The Institute of Directors South Africa (IoDSA)
7. IoDSA and King Committee
8. Law Society of South Africa (LSSA)
9. National Clothing Retail Federation of South Africa (NCRFSA)
10. Sasol
11. Webber Wentzel 
12. Association of Black Securities and Investment Professionals AEON, (ABSIP) and Just Share
13. Allan Gray
14. Computershare
15. Centre for Environmental rights
16. South African Institute of Chartered Accountants (SAICA) and Institute for Directors of South Africa Remuneration Committee Forum joint submission
17. South African Reward Association (SARA)
18. Western Cape Government (WCG)
19. Outsurance

The Committee held public hearings on 21 February 2024, and received responses from the Minister of Trade, Industry and Competition on 27 February 2024. This was followed by responses by the Department of Trade, Industry and Competition on the 5th and 12th of March 2024 on the submissions received.  On 12 March 2024, the Committee deliberated on the Bill.

 

4. Outcome of Committee’s consideration of the Bill

 

Five members of the African National Congress voted in support of the Bill. Two members of the Democratic Alliance voted against the Bill.

 

 

5. Conclusion

 

The Committee agreed to the Bill without amendments.

 

 

Report to be considered.