Companies Act

by Liesl Winter

The coming into operation of the new Companies Act just over a year ago necessitates many changes by existing companies, yet many have been slow to get with the new programme.

The majority of companies ought to have their constitutional documents redrafted and duly implemented by 30 April 2013, in order for the company and its shareholders to avoid potential significant managerial, proprietary, and unforeseen tax consequences.

Even the "residence" of a company requires attention. Since 1 May 2012 reflecting the address of, for instance, the auditor of a company, as its "registered address", has been illegal. Under the new Companies Act, a company must register its "principal office" with the Companies and Intellectual Property Commission. In the case of Sibakhulu Construction (Pty) Ltd v Wedgewood Village Golf and Country Estate (Pty) Ltd it was held that a company’s principal office is the place where its general administration is centred.

We recommend that each company timeously have an assessment conducted of changes required for it to be compliant with the new Companies Act. We are well positioned to conduct such an assessment, and to implement the changes required.