In December 2024, two critical pieces of legislation reshaped South Africa’s company law landscape: the Companies Amendment Act, 16 of 2024 and the Companies Second Amendment Act, 17 of 2024. These Acts aim to modernize corporate governance, streamline internal procedures, and enhance accountability within South African businesses.

For directors, shareholders, and legal compliance officers, understanding these changes isn’t optional, it’s essential.

Companies Amendment Act, 16 of 2024

Key changes:

Memorandum of Incorporation (MOI) Amendments (Section 16)

  • Amendments to the MOI take effect 10 business days after being received by the CIPC, unless endorsed or rejected earlier.
  • Impact: Companies must account for this delay in any transaction where MOI amendments are critical.

Financial Assistance to Subsidiaries (Section 45)

  • No longer requires shareholder approval for financial assistance to subsidiaries.
  • Impact: Simplifies intra-group financing.

Share Buy-Backs (Section 48(8))

  • Special resolution suffices; no longer need to follow Sections 114/115.
  • Impact: Streamlines corporate actions like share repurchases.

Remuneration Reports (Sections 30A & 30B)

  • Public and state-owned companies must adopt a remuneration policy (valid for 3 years) and produce annual remuneration reports for shareholder votes.
  • Impact: Greater transparency and shareholder engagement on executive pay.

Social & Ethics Committees (Section 72)

  • Must be appointed at the AGM; subsidiary exemptions clarified.
  • Impact: Reinforces ethical standards and oversight.

Definition of “Securities” Narrowed (Section 1)

  • Now includes only shares and debentures.
  • Impact: Provides clarity and legal certainty.

Expanded Employee Share Scheme Definition (Section 95)

  • Now includes share purchase schemes.
  • Impact: Encourages wider employee ownership.

Access to Records (Section 26)

  • Public access to documents like the MOI and annual financials, subject to thresholds.
  • Impact: Strengthens transparency while safeguarding sensitive data.

Validation of Irregular Shares (Section 38A)

  • Courts can validate share issues that failed procedural requirements.
  • Impact: Offers a remedy to administrative oversights.

Takeover Regulations for Private Companies (Section 118)

  • Now applies to private companies with 10+ shareholders meeting certain thresholds.
  • Impact: Expands regulatory reach over larger private firms.

Auditor Appointments (Section 90)

  • Can occur at a general meeting, not just AGMs; reduced disqualification periods.
  • Impact: Provides greater flexibility in audit governance.

Business Rescue Enhancements (Section 135)

  • Landlords’ unpaid rent claims during business rescue are now post-commencement finance.
  • Impact: Improves landlord protection in insolvency contexts.

Dispute Resolution Expansion (Sections 166 & 167)

  • The Companies Tribunal may now mediate, conciliate, and arbitrate disputes.
  • Impact: Supports more accessible and informal dispute resolution.

Companies Second Amendment Act, 17 of 2024

Key changes:

Director Liability Period (Section 77(7))

  • Courts may extend the 3-year limit to bring claims against directors.
  • Impact: Enhances accountability for long-term misconduct.

Delinquent Director Applications (Sections 162(2)-(3))

  • Period to declare a director delinquent extended to 5 years post-tenure, with possible court extensions.
  • Impact: Strengthens tools to prevent repeat misconduct.

At SNR Associates Inc., we offer tailored compliance audits, board advisory services, and assistance with MOI updates, remuneration reports, and more. Our team is ready to ensure your company stays compliant, transparent, and prepared for the future.

Contact us today for a consultation.

This blog post is provided for general informational purposes only and does not constitute legal advice. While this articles may reflect the views and interpretations of SNR Associates Inc. based on current legislation and professional analysis as of the date of publication, readers should consult with a qualified legal professional regarding their specific circumstances before acting on any information contained herein. SNR Associates Inc. accepts no responsibility for any loss or damage arising from reliance on this content.