Johannesburg - The presidency and department of trade and industry (dti) on Thursday created confusion over the implementation of the new Companies Act when they were unable to say when exactly it would come into effect.
The act is due to be implemented on Friday, but there is no indication as to when President
Jacob Zuma - who is in Zambia for a regional summit - will sign it into law.
The delay at this stage appears to be indefinite although the dti said that the process is on track despite some "practical challenges".
It said the parliamentary process required in the adoption of the Act took "longer than anticipated".
"The Companies Amendment Bill is currently going through the necessary approval processes for the President’s assent," said the dti.
"The dti is of the view that the Presidency must be allowed to apply its mind sufficiently in processing the Companies Amendment Bill before signing it into law," it added.
The Presidency was unable to shed any light on the matter and referred Fin24 to the dti for an explanation of the delay.
The government has touted the new Companies Act as "transformative".
It aims to clarify the management of firms and increase the responsibilities of companies in their environment and communities.
For example, legal action against a company can be taken on by anyone suffering the consequences of the organisation’s actions, including communities and private individuals.
Company directors will also need to provide their shareholders with more information on their decison making processes.
Deloitte's regulation analyst, Johan Erasmus, said that directors will have to publish a "short document" - of about 30 pages - separate from their annual report which will outline the risks and opportunities in the environment the organisation operates in.
"The idea is that it will mitigate the risks as shareholders will have a better understanding of the context of the decisions taken by management," he said.
- Fin24.com