South Africa: Companies Amendment Bill signed into law

Effective date to be announced soon

brief

President Cyril Ramaphosa signed the Companies Amendment Bill and the Second Amendment Bill (collectively the “bill”) will come into force on 26 July 2024. As of 29 July 2024, the Bill has not been published in the Gazette and the expected date of its entry into force is unclear. Once it comes into force, the Bill is expected to have an immediate impact on doing business in South Africa.

On Friday, July 26, 2024, after a long wait, a Palace media statement announced that the President had signed the bill into law. The bill has not yet been gazetted (as of July 29, 2024), and it is unclear when it will come into effect, or whether companies will have a transition period to comply with the amendments.

The enactment of the Bill will make a number of changes to the existing Companies Act; for a more detailed analysis of some of the amendments, please see our previous memorandum: Memorandum on the Companies Amendment Bill.

Many of the changes will help companies do business in South Africa and are highly anticipated. For example, the amendment to section 45 removes the requirement for a company to pass a financial assistance resolution when providing financial assistance to its subsidiaries, and section 48(8) simplifies the process for companies to buy back their own shares.

Other changes are aimed at increasing corporate transparency. For example, amendments to Section 30 now require the names of designated officers and their remuneration to be published in financials, while the introduction of Section 30A requires that a company’s remuneration policy must be approved by shareholders.

Listed companies should carefully consider the impact of the Bill on their AGM notices, as certain items that may have previously been non-binding advisory votes will now become agenda items requiring final shareholder approval. Once the Bill is published in the Gazette, the effective date should be clearer.