Business Day reports that an amended version of the new Companies Act , which had been botched by the Department of Trade and Industry was published on the 28th July 2010.

Sanchia Temkin for Business Day:

“…..(the DTI) released the latest copy of the amended Companies Act, which has addressed significant grammatical errors and concerns about flaws in the legislation.

However, company law experts said yesterday that the Companies Act of 2008 had been “commercially flawed” and a “source of embarrassment” to start with.

“A series of grammatical errors and typos was used as an excuse to play down the real reasons for the rectification process,” said Nicolaas van Wyk, technical and support executive of the Association of Chartered Certified Accountants SA.

Mr van Wyk said that the act had contained a number of unworkable commercial provisions relating to insolvency issues, such as the new- business rescue provisions.

The latest amendments come after the government initiated a rectification process in December.

Madelein Burger-Van der Walt, a partner at commercial law firm Webber Wentzel, said the intention of the amendments was to correct the act, where it was “fundamentally flawed” and to tighten up the legislation, particularly regarding the use of language and grammatical errors.

Ms Burger-Van der Walt said one of the most contentious amendments to the legislation was the right of the business-rescue practitioner to “cherry pick” which agreements a company should honour during business-rescue proceedings.

The provision had far-reaching consequences for any party to an agreement in business-rescue proceedings, and in particular on funding arrangements, she said.

For instance, a loan may be suspended for the duration of the proceedings, she said. The obligation of a company may only be cancelled if the practitioner applies to the court and the court is satisfied that such a cancellation would be just and reasonable.”

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