In October 2024, we shared with you a series of three articles on the upcoming amendments to the Companies Act with regard to director remuneration, takeover transactions, and financial assistance and the buying of own shares . As of 27 December 2024, some (but not all) of these amendments became effective, and we set out the more important ones in the table below:
Section | Previous position | Current position |
45 | The provisions of section 45 applied to the provision of financial assistance to or for the benefit of subsidiaries or other related or inter-related companies | The provisions of section 45 no longer apply to the provision of financial assistance to or for the benefit of subsidiaries – the provisions still apply to the provision of financial assistance to other related or inter-related companies that are not subsidiaries |
48 | Section 48 required a special resolution to be passed, and the requirements of sections 114 and 115 to be applied, where a company acquires more than 5% of its issued shares | The amendments to section 48 have removed these onerous requirements and now only require a special resolution (i) where shares are acquired by the company from any of its directors or prescribed officers; or (ii) any acquisition other than as a result of a pro rata offer made to all shareholders of the company or a particular class of shareholders of the company transactions effected on a recognised stock exchange on which shares of the company are traded |
61 & 72 | At an AGM of a public company, the company was only required to present the directors’ report, audited financial statements and an audit committee report Not all companies needed to have a social and ethics committee | Public companies are now also required to present a social and ethics committee report and a remuneration report, and are required to appoint a social and ethics committee at an AGM The amendments introduce several new provisions that deal with the composition and functions of the social and ethics committee in much more detail |
135 | What constitutes “post-commencement finance” for purposes of business rescue proceedings | Going forward, where a company is contractually required to pay certain amounts to its landlord for rates, taxes, levies etc., and fails to do so, and the landlord pays such amounts on behalf of the company, such payment now constitutes post-commencement finance |
Other amendments that also became effective on 27 December 2024 include amendments to the definition of “securities” so that it only incudes shares and debentures; an amendment section 16 so that changes to a company’s MOI becomes effective 10 business days after filing the relevant notice of amendment; technical amendments to section 40 relating to the issue of shares where the consideration is not paid immediately on issue; amendments to section 90 and the appointment of auditors; amendments to section 95 and what would qualify as an “employee share scheme”; amendments to aid compliance with section 160 and the ability to require a company to change its name; allowing a longer period under sections 77 and 162 to declare a director delinquent or under probation; amendments to section 194 to create further powers, roles and responsibilities for the Companies Tribunal; and amendments to section 204 to give the Financial Reporting Standards Council the power to issue financial reporting pronouncements.
The following amendments in the Bills are however not yet in force and will only be so at a later date still to be promulgated:
- Section 30, 30A and 30B relating to additional disclosure regarding the remuneration of directors and officers, and the company’s remuneration policy
- Sections 25 and 26 relating to additional company records that must be made available to the public
- Section 38A and the regularisation of shares that have been improperly created, allotted, or issued.
Please get in touch with us, should you need legal advice on any of these amendments that are now effective or those still to be promulgated.
This article was prepared by Wildu du Plessis and Tristan Hussey.
The three articles we previously published on the amendments to the Companies Act were as follows:
Forthcoming amendments to the Companies Act to impact private companies and their takeover transactions:
Upcoming amendments to the Companies Act on the topic of director remuneration:
Upcoming amendments to the Companies Act for financial assistance and buying of own shares: