On 26 July 2024, President Cyril Ramaphosa signed into law the Companies Amendment Bill and the Companies Second Amendment Bill, introducing significant changes to the Companies Act 71 of 2008. Effective from 27 December 2024, one key change is the new subsection 45(2A), which exempts financial assistance provided by a company to its subsidiaries from the stringent requirements of section 45. This amendment aims to reduce the compliance burden and enhance business flexibility by eliminating the need for shareholder approval and the solvency and liquidity test for such financial assistance.

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.

On 28 August 2023, the Minister of Trade, Industry, and Competition published proposed amendments (the Companies Amendment Bill and Companies Second Amendment Bill) to the Companies Act No. 71 of 2008. We have set out a summary of certain of these amendments, which, in our view, are noteworthy, as well as our views on these amendments.

Important amendments to the Companies Act, No. 71 of 2008, which came into effect on 1 April 2023 and the Companies Regulations, 2011, which came into effect on 24 May 2023, have implications for companies registered and incorporated in accordance with the laws of South Africa.