Hon Chairperson, the passage through Parliament of the Companies Amendment Bill, which is before us today, will mark an important step forward in reforming and modernising our companies legislation to the benefit of the vast majority of corporate citizens, and small businesses in particular.
In 2008 Parliament passed the Companies Act, which was Act No 71 of that year. The 2008 Act was a major piece of reform. It fundamentally overhauled the complex and much amended Companies Act that dated back to 1973 and placed South Africa among world leaders in company legislation.
Among other things, the 2008 Act provided for simplification in registration processes to cut red tape and to make the benefits of limited liability much more available to a broader range of economic actors than ever before; it provided for the codification of directors' duties without replacing common law principles; it enhanced protection for minority shareholders to increase shareholder activism and minimise the scourge of company scandals; it recognised employees' rights to participate in company governance; and it introduced an innovative business rescue provision that allowed for the early detection and effective turnaround of companies that are fundamentally sound but in financial distress, something we are convinced will go a long way towards saving jobs.
This Act was assented to by the President on 9 April 2009, for implementation 12 months thereafter. When we announced the effective date of implementation as 1 October 2010, requests were received from business for more time, and implementation was accordingly further deferred to 1 April 2011, effectively giving a full two years of preparation for both stakeholders and government.
In 2009, as we were developing regulations for this Act, it was discovered that there were a number of technical errors and omissions that could affect the interpretation of various provisions. We therefore commissioned a top team, led by Judge Dennis Davis, to identify these errors and omissions and to draft amendments to rectify these prior to the Act's coming into effect. This was done in the interests of greater certainty.
The result of this work was a Companies Amendment Bill which was approved by Cabinet and introduced in Parliament in November 2010. The Amending Bill, I should stress, did not seek to reopen the policy issues that had been decided on in the 2008 Act, and accordingly the Act remains intact, as it was in 2008, in policy terms.
The Companies Amendment Bill has been thoroughly canvassed in public hearings organised by the Portfolio Committee on Trade and Industry, which has developed a number of further amendments to accommodate legitimate concerns and issues raised by stakeholders. The result is that we are now presenting a significantly improved amending Bill to the House, but a Bill which nevertheless retains the policy balance struck in the 2008 Act. I want to commend both the Portfolio Committee on Trade and Industry and the Department of Trade and Industry, DTI, officials for a job which has been very well done.
The time allocated to me today does not permit a detailed discussion of the provisions of the Bill. These will be dealt with by speakers that follow me.
What I want to say in my remaining time is that, parallel with the process of introducing this amending Bill, the Department of Trade and Industry has been taking the necessary administrative steps to begin the implementation of the new Companies Act on the due date on 1 April 2011. We are ready to launch the new Companies and Intellectual Property Commission and to ensure that its doors are open for business on the due date.
I want to conclude by quoting from a letter I received yesterday from one of the top corporate lawyers in this country, Mr Michael Katz of Edward Nathan Sonnenbergs. I think we all know who Mr Katz is. He wrote of the new Companies Act, and I quote: I respectfully submit that this is an excellent piece of legislation that will put South Africa among the leaders of the world in company legislation.
He then went on to urge that the commencement of the Act should not be further delayed, arguing that for some time we have been living in two worlds with an old Act still in force, but market players knowing that there is a new Act which is coming into operation in due course. He added that in his view there had been more than adequate time for preparation. He concluded, and I quote again:
Whenever significant new legislation comes into operation there will be teething problems in the legislation itself and problems of getting ready for compliance. This is not, however, sufficient reason to justify the deferral of the implementation of the new Companies Act scheduled for 1 April.
I believe that Mr Katz is quite right. As the President so often tells us, the priority now is not further debate, diagnosis or lamentation but, in fact, implementation. By approving this amending Bill today, we will be taking an important further step towards the implementation of a major reform that will be of enormous benefit to the vast majority of our corporate citizens and their employees, and it will facilitate economic growth, development and the creation of decent work. I therefore have pleasure in commending this Bill to the House. Thank you very much. [Applause.]