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Johannesburg – The South African Institute of Chartered Accountants (Saica) welcomes the initiative by government to reduce the red tape that has been hindering small business from prospering.
Ashley Vandiar, SAICA’s project director for Assurance confirmed that this is directly in line with the objective of the new Companies Act and will go a long way in promoting entrepreneurship and economic growth.
“We fully support the initiative to scrap verification fees for small businesses as this will promote a spirit of compliance with Black Economic Empowerment (BEE) without companies having to incur costs while doing so," said Vandiar.
"Going forward, only an affidavit confirming the BEE status will be required for a company to be recognised.”
However, Vandiar noted that merely obtaining an affidavit to gain recognition for BEE purposes is likely to increase fronting, while he warns that fronting is a serious common law offense.
“The new legislative changes are going to make it a criminal offense with serious consequences such as being sentenced up to 10 years in jail and paying a fine of 10% of the company’s annual turnover,” Vandiar said, expressing concern regarding the ethical reliance that can be placed on affidavits alone and those entrusted to issue them.
Vandiar would also like the government to consider the use of South African Chartered Accountants in the verification of small businesses.
- Fin24
Share your experience of setting up a business or simply ask a question. Our business panel can put you on the right path.
Ashley Vandiar, SAICA’s project director for Assurance confirmed that this is directly in line with the objective of the new Companies Act and will go a long way in promoting entrepreneurship and economic growth.
“We fully support the initiative to scrap verification fees for small businesses as this will promote a spirit of compliance with Black Economic Empowerment (BEE) without companies having to incur costs while doing so," said Vandiar.
"Going forward, only an affidavit confirming the BEE status will be required for a company to be recognised.”
However, Vandiar noted that merely obtaining an affidavit to gain recognition for BEE purposes is likely to increase fronting, while he warns that fronting is a serious common law offense.
“The new legislative changes are going to make it a criminal offense with serious consequences such as being sentenced up to 10 years in jail and paying a fine of 10% of the company’s annual turnover,” Vandiar said, expressing concern regarding the ethical reliance that can be placed on affidavits alone and those entrusted to issue them.
Vandiar would also like the government to consider the use of South African Chartered Accountants in the verification of small businesses.
- Fin24
Share your experience of setting up a business or simply ask a question. Our business panel can put you on the right path.
