Complying with Changes in Legislation

Business Rescue

Regulation 129 establishes the Business Rescue Practice Regulatory Board, which is a juristic person and will regulate business rescue practitioners.

Regulation 132 designates the functions of the Regulatory Board, which includes:

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  Advising the minister on the qualifications for admission of persons to the practice of business rescue practitioner;
  
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  Accrediting, and suspending or withdrawing the accreditation of, persons who meet the prescribed qualifications for admission to the practice of business rescue practitioner;
  
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  Maintaining a register of accredited business rescue practitioners;
  
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  Establishing standards and codes of good practice for the conduct of business rescue proceedings;
  
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  Receiving and resolving complaints concerning the conduct of business rescue practitioners.
  

qualifications for the business rescue practitioner:

Within two years after the effective date, the Board must recommend to the Minister minimum qualifications for accreditation of persons as business rescue practitioners.

Until the promulgation, by regulation, of minimum qualifications, a person may be appointed as the business rescue practitioner of a company if:

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  The company is a state owned or public company, or a company that is required to have its annual financial statements audited, and the person
  
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    Is an attorney, who has been admitted to practice as such for at least 10 years, and has engaged predominantly in commercial practice during that time;
    
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    Is a member in good standing of a professional body that is a member of the International Federation of Accountants, who has been admitted to practice as such for at least 10 years, and has engaged predominantly in commercial practice during that time;
    
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    Is a practicing liquidator, or business turn-around practitioner, registered as such for at least 10 years; or
    
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    Has a recognised degree in law, commerce or business management, and has at least 10 years experience in conducting business rescue proceedings; or
    
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    The company is a company not contemplated above, and the person has at least 5 years standing or experience in respect of any of the qualifications set out in that paragraph.
    

fees for business rescue practitioners:

The basic remuneration of a business rescue practitioner, to be determined at the time of the appointment of the practitioner by the company, or the court, as the case may be, may not exceed:

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  R 2 000 per hour, to a maximum of R 25 000 per day, in the case of a practitioner of a state owned or public company;
  
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  R 1 250 per hour, to a maximum of R 15 625 per day, in the case of a practitioner of another company.
  
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  In addition to the remuneration determined, a practitioner is entitled to be reimbursed for the actual cost of any disbursement made by the practitioner, or expenses incurred by the practitioner to the extent reasonably necessary to carry out the practitioner's functions and facilitate the conduct of the company's business rescue proceedings.
  

Companies Amendment Bill, 2010

Objective

Most changes deal with language, grammatical errors and typos.  Changes affecting the meaning of the Companies Act, 2008 are as follows:

Right to incorporate a company or transfer the registration of foreign company (Section 13)

The 2008 Act states that one or more persons may incorporate a profit company. The draft Bill proposes that an organ of state may also incorporate a profit company.

The Bill also proposes that a foreign company may apply in the prescribed manner and form, and with the prescribed application fee, to transfer its registration to the Republic from the foreign jurisdiction in which it is registered, and thereafter exist as a company in terms of this Act as if it had been originally so incorporated and registered.

A foreign company may transfer its registration if:

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  The law of the jurisdiction in which the company is registered permits such a transfer, and the company has complied with the requirements of that law in relation to the transfer;
  
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  The transfer has been approved by the company’s shareholders in accordance with the law of the jurisdiction in which the company is registered, if that law imposes such a requirement; or
  
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  By the equivalent of a special resolution in terms of this Act, if the law of the jurisdiction in which the company is registered does not require such shareholder approval;
  
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  The whole or greater part of its assets and undertaking are within the Republic, other than the assets and undertaking of any subsidiary that is incorporated outside the Republic;
  
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  The majority of its shareholders are resident in the Republic;
  
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  The majority of its directors are or will be South African citizens; and
  
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  Immediately following the transfer of registration, the company will satisfy the solvency and liquidity test; and will no longer be registered in another jurisdiction.
  

A foreign company may not transfer its registration to the Republic if the foreign company:

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  Is permitted, in terms of any law or its Articles or Memorandum of Incorporation, to issue bearer shares; or
  
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  Has issued any bearer shares that remain issued;
  
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  The foreign company is in liquidation;
  
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  A receiver or manager has been appointed, whether by a court or otherwise, in relation to the property of the foreign company;
  
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  Is engaged in proceedings comparable to business rescue;
  
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  Has entered into a compromise or arrangement with a creditor, and the compromise or arrangement is in force; or
  
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  An application has been made to a court in any jurisdiction to put the foreign company into liquidation, to wind it up or to have it declared insolvent.