The new Companies Act came into effect on 1st May 2011. The Act affects every company in South Africa. Some changes to make note of are:
- Liability rules for directors.
- New rules for the incorporation, registration, organisation, and management of companies in South Africa
- New registration process.
- Defines the relationship between companies and their respective shareholders (or members) and directors.
- The ‘Memorandum and Articles of Association’ were renamed the Memorandum of Incorporation (MOI).
- No longer possible to register a Close Corporation.
- The shareholder agreement changed its position of importance from being the primary document to a lesser position. The documentation order of importance is Companies Act, Memorandum and lastly shareholders agreement.
All Franchisees/Principals or branches are responsible for having their respective entities properly registered in accordance with the new Companies Act as well as the Estate Agencies Affairs Act, which requires audited financials, of both the trust accounts and the business accounts, of the entity to submit to the EAAB on or before the 30th June annually.
Even though the new Companies Act and SARS may not require audited financials of an entity whose turnover is less than R5 million annually, the EAAA makes the audits for estate agencies compulsory.