The Companies Act 71 of 2008 (‘the Act’) has replaced the Companies Act 61 1973 (‘the Previous Act’) and amended the Close Corporation Act, 1984 (‘the Close Corporation Act’) as from 1 May 2011. The new act with its 225 sections in comparison to the 443 section of the Previous Act is still an impressively voluminous document, amplified by its 4 schedules. A high level comparison between some of the key administrative and financial reporting issues has been researched and documented by Deloitte.

It is important to note that the practice whereby companies or close corporations trade under names other than their registered names have ceased with the implementation of the Consumer Protection Act, 2008 on 1 April 2011. This means that a trading name must be the registered name of the entity. In terms of section 81 of the CPA, a business name may not be the same as, or confusingly similar to an entity already registered. The name may also not be the same as or similar to a registered trade mark belonging to another person.

The New Act will go a long way in promoting sound Corporate Governance, transparency, and access to information, among other regulatory oversight improvements. Transparency will be ensured through:

• Greater director accountability; and
• The appropriate participation of all stakeholders.