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Corporate Compliance

South Africa: Companies Amendment Bills signed into law

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Effective date to be published soon

In brief

President Cyril Ramaphosa signed the Companies Amendment Bill and the Second Amendment Bill (collectively, “Bills“) into law on 26 July 2024. As of 29 July 2024, the Bills have yet to be gazetted and there is no clarity yet as to their anticipated effective date. Once effective, the Bills are expected to have an immediate impact on doing business in South Africa.

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On Friday 26 July 2024, after a long wait, a Presidency media statement announced that the President has signed the Bills into law. The Bills have yet to be gazetted (as of 29 July 2024) and there is no clarity as to their anticipated effective date or whether companies will have a transitionary period of time in which to comply with the amendments.

The promulgation of the Bills will see a number of changes being made to the existing Companies Act; please refer to our previous memorandum for a more detailed analysis of certain of the amendments: Memorandum on the Companies Amendment Bills.

Many of these changes will assist companies in doing business in South Africa and have been received with great anticipation. For example, the amendment to section 45 removes the requirement for a company to pass a financial assistance resolution when providing financial assistance to its subsidiary and section 48(8) streamlines the process for repurchases of a company’s own shares.

Other changes aim at facilitating greater corporate transparency. For example, the amendments to section 30 will now require the naming of prescribed officers along with their remuneration in financials, and the introduction of section 30A requires the remuneration policy of the company to be approved by its shareholders.

Public companies should carefully consider the impact of the Bills on their notice of AGMs as certain items, which previously may have been non-binding advisory votes, will now become agenda items that require definitive shareholder approval. Once the Bills have been gazetted, there should be greater clarity on the effective date.

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Lydia Shadrach-Razzino is a partner in Baker McKenzie's Corporate M&A Practice Group in Johannesburg. Lydia is continuously recognised for her legal proficiency and was most recently included in the Legal 500 Private Practice Powerlist 2024: M&A | Africa - a meticulously researched guide that showcases Africa’s very best. She was a shortlisted finalist for Dealmaker of the Year in 2020 and again in 2021 and received the award in 2021, making her the first woman in the history of the award to have won. In 2022, Lydia was also awarded the Client Choice M&A Lawyer of the Year Award. In 2014, she was awarded the ABSIP Corporate Finance Lawyer of the Year award. She is also recognised by Chambers (for M&A and Private Equity), Legal 500 and Best Lawyers, and is featured in Who's Who Legal. Lydia has advised on several award-winning transactions including Vodacom on its acquisition of an interest in Vodafone Egypt, which was awarded Deal of the Year at the DealMakers Gala Awards in 2021. She advised Ascendis on its disposal of its Animal Health business to Acorn Private Equity, which was awarded Catalyst Private Equity Deal of the Year at the DealMakers Gala Awards in 2021.

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Kaylea Sher-Fisher is a senior associate in Baker McKenzie's Corporate M&A Practice Group in Johannesburg. She specialises in mergers and acquisitions, general commercial law, and private equity transactions.

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