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Thread: New Companies Bill 2007

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    just me duncan drennan's Avatar
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    New Companies Bill 2007

    It seems that the Companies Act is under review and the drafts of the new act have now been released. You can download them from the DTI's website.

    There is an article on MyBroadband wrt the new companies bill - some interesting extracts,

    • New company structures - NPCs (non profit companies), CHCs (closely held companies) and WHCs (widely held companies)
    • "virtual companies - where directors and shareholders meet in cyberspace, communicate electronically and do business online regardless of location, time and distance"
    • Cost of registering and regulatory burden to be reduced
    • 227 sections and six schedules vs. current act of 443 sections
    • "The new Bill also allows the creation, distribution and retention of company notices and records in electronic format only and even gives an electronic copy of a document the same status as the original paper version thereof"
    • "The Bill simplifies the strict digital signature requirements of section 13 of the Electronic Communications and Transactions Act (ECT Act) by recognising both electronic signatures and advanced electronic signatures as valid signatures of electronic records."
    • Increased personal liability for directors
    • Changes to required record keeping (old act = 45 types of docs for 15 years, new bill = 7 types of docs for 7 years


    Obviously this is going to impact on how we run our businesses, as well as how we structure our businesses. I'm hoping for a lot of positive changes, especially on the regulatory/compliance front. This can be a great thing for all of us, but we first need to read, examine, and discuss the nuances.

    Just like with the BEE draft codes small business can have an effect on the final implementation if we work together and form momentum as a whole - that's the point of this forum.

    PS. Admin, could you set up a new area in the regulatory compliance forum for discussion of the new bill?
    Last edited by Dave A; 26-Sep-09 at 04:15 PM. Reason: character set issue
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    Site Caretaker Dave A's Avatar
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    Increased personal liability for directors
    Now there's a mixed bag. Although with the nature of sureties nowadays
    The trouble with opportunity is it normally comes dressed up as work.

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    just me duncan drennan's Avatar
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    Has anyone had a look at the new companies act in more detail, or possibly know of a reasonable summary of the changes? I am particularly interested in how it will affect Pty Ltd companies.
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    Platinum Member Marq's Avatar
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    I haven't had a chance to get a detailed look yet. Have an idea there are still a few things being ironed out.

    It seems thought that your average type pty, with one or a few directors will be much the same as a cc is now. Not much difference, no audit required, just an accountant sign off with minimal statutory stuff.
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    Site Caretaker Dave A's Avatar
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    I've just read section 225
    This Act is called the Companies Act, 2008, and comes into operation on a date fixed by the President by proclamation in the Gazette, which may not be earlier than one year following the date on which the President assented to this Act.
    It was assented to by the President on 8th April 2009. So there's some time to go before the effects kick in.

    It is published on Acts online here in their usual indexed style (great for online reading), or there is a pdf version from DTI here.

    I like the idea of getting some sort of summary of pertinent points together. Perhaps if we use the TFSA wiki?
    Last edited by Dave A; 28-Sep-09 at 02:54 PM.
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    Site Caretaker Dave A's Avatar
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    I've started adding some wiki pages. Relevant pages made so far can be found in the company law category.

    The audit requirements are interesting. It seems under the right circumstances, private companies and non-profit companies need not be audited or present audited financial statements.

    It poses an interesting question in a trust-as-shareholder situation where the director is a nominee of the trust. I'll look at that aspect again with a fresh mind in the morning to see how the situation might apply. (Would love to hear other opinions on this too).
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Marq's Avatar
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    The auditing of the various options is one of the items that I believe is still under review/for comment - or it was, according to the presenter of the last seminar I attended earlier in June this year on this subject. As said this act will only come in next year and then it is likely to be subjected to review and change then anyway.

    Good idea for the Wiki Dave - I tried to attach the ED001 on the subject of framework for non public entities but it was too big (Obviously not a simple summary format- to many words and fluff) If I find something of a one page summary or presentation slide type format, will post that - but cannot find at this stage.
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    Site Caretaker Dave A's Avatar
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    I've uploaded the ED001-Financial reporting framework for non-public entities here for Marq. For the record, it's a 704kB download.
    Last edited by Dave A; 15-Sep-13 at 07:57 AM. Reason: fixed URL
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    just me duncan drennan's Avatar
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    There are now four types of companies under the act, but what exactly does it mean to be a personal liability company? The act seems quite vague as to the meaning of the term. I assume that is similar to the current CC?

    What are the implications of choosing to be a personal liability company or a private company?
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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by duncan drennan View Post
    what exactly does it mean to be a personal liability company?
    Duncan, that's for professions where you can't be absolved of personal responsibility for acts performed in the name of the company. These companies have the suffix Inc. on their company names. Legal firms, audit firms, medical doctors, at least some of the engineering professions... essentially where professional personal liability pierces the corporate veil.
    Last edited by Dave A; 02-Oct-09 at 06:02 PM.
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