Thursday, September 30, 2010

New Companies Act implementation delayed

The Department of Trade and Industry ("DTI") today announced that it was postponing the implementation of the new Companies Act until 1 April 2011.

Johannesburg - The implementation of the Companies Act and the Consumer Protection Act have been delayed until April next year to give the government and others time to get ready to comply with the legislation, the department of trade and industry said on Tuesday.

The decision was made after Minister Rob Davies assessed the "level of readiness of the administrative processes required for smooth implementation", and requests by affected parties to prepare properly for compliance with the laws, the department said.

"This will enable the department to finalise all processes required to effectively administer these two pieces of legislation.

"The department is in the process of finalising regulations which will give effect to both pieces of legislation, and the postponement will allow time for more consultation with stakeholders before finalisation."

The ministry said it recognised that the laws would have a significant impact on business practice. The postponement would allow affected parties to adjust their operations.

The legislation had been due to be implemented in the last quarter of the year.

However, there were repeated warnings that business needed more time to prepare to adhere with the onerous requirements in the Consumer Protection Act in particular.

It was argued that companies would have to make a vast financial investment to devise new sales and marketing, pricing, refunds and accounting policies and procedures; conduct extensive staff training; review and reconsider all contracts and product labelling; and purchase or upgrade information technology systems. fin24