SMEs - the new Companies Act

There is a new version of the South African Companies Act on its way. This is a highly modified version of the previous Act, and is supposedly coming into action later this year.

A key change which is interesting from a number of respects, is an attempt to introduce the equivalent of Chapter 11 in the USA as I understand it. The intention is to help businesses that get into trouble to get through the difficulties they are experiencing by giving them some temporary protection from their creditors.

The current system is prohibitively expensive and not particularly helpful to SMEs.

I am busy reviewing this new version of the Companies Act and will hopefully be able to shed more light on this particular topic in the next week or two.

However, it will require that the business be an incorporated business, in other words a company, remembering that the Closed Corporation will also disappear and become a simple form of company, on which I will also provide more information.

SMEs in South Africa - the end of Closed Corporations

The Companies Act is about to undergo a major review. This has a number of good aspects and as with everything else in life a number of bad. The questions is whether or not you have a clue about this Act and how it will impact on you?

Too many businesses simply allow the government to do what they like, without providing feedback, whether positive or negative. It is imperative that you read the legislation and decide for yourself what the impact will be on your business.

So go to the following website link and review the Act. http://www.michalsons.com/wp-content/uploads/2009/04/companies_act_71_2008.pdf

Understand the impact.


If you have any problems with the Act then let us know on rob@smorfitt.co.za and we can forward your input to the government.