The Companies Act, the latest in a series of shockingly drafted legislation coming from the department of Trade and Industry is rightfully coming under some heavy criticism, as reported in the Mail and Guardian by Ilham Rawwot:

“A war is raging over the new Companies Act between prominent critics from the financial and legal sector and the Department of Trade and Industry.
The key complaints are that the drafting of the Act was driven by foreigners who do not have sufficient knowledge of local conditions, there was insufficient consultation, submissions by local experts on the draft law were ignored and key sections are contradictory. The critics say that, although the new law is intended to protect minorities, it entails a complicated and open-ended process, which is unlikely to have this effect.

They also say its unclear and error-ridden nature will have severe and costly implications for companies. It is riddled with spelling mistakes, and words are missing, which makes sections nonsensical.

The Act, the result of a six-year process, was signed into law in April last year by then-president Kgalema Motlanthe without an effective date and contained more than 100 errors.

Following an outcry, a so-called “rectification notice” was gazetted in December. This, apparently the first in South African legal history, has created more problems. Stakeholders were expecting that an Amendment Bill would be promulgated, which would include their submissions, but the cryptic notice merely listed 103 changes, which deal with punctuation, grammar, spelling and inconsistencies, but does not explain what the changes would be.”

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