President Cyril Ramaphosa’s cabinet has approved the bill amending the 2021 Business Bill for public comment, with the bill expected to introduce several new regulations for business in South Africa.
One of the main goals of the bill is to promote transparency around “who owns what” in South African businesses, said Trade, Industry and Competition Minister Ebrahim Patel.
“Finding out beneficial or beneficial ownership is a critical step in global efforts to combat money laundering, corruption and terrorist financing,” he said.
“The Bill Amending the Companies Bill proposes new beneficial ownership provisions, imposing on companies the obligation to know and disclose the identity of their beneficial shareholders who hold a beneficial interest of 5% or more of the total shares of a company.
Patel said the proposed laws are also aimed at making doing business in South Africa easier.
Since the implementation of the Companies Act, several shortcomings have emerged which have resulted in unnecessary compliance costs and delaying the effective and efficient conduct of business, he said.
“The bill aims to eliminate, as far as possible, these loopholes,” said Professor Michael Katz, chairman of the Commission specialized in company law (SCCL).
“In addition, some unintended consequences of existing legislation have also had a negative impact on the conduct of business and, again, the bill seeks to address these issues. All of these corrective measures take into account the best practices that have occurred in the period since the drafting of the existing law, ”he said.
Patel said the amendments contained in the bill were also aimed at improving accountability and control over compensation practices, promoting shareholder activism and corporate governance.
“In addition, they also relieve businesses of the onerous, inconvenient and cumbersome provisions of previous versions of corporate law. “Finally, they give South Africa the instruments to assume its role in the global offensive against illicit cross-border behavior,” he said.
To read: New law forcing South African companies to report pay gaps between managers and workers.