This blog was co-authored by: Preshanta Poonan, candidate attorney
The Companies Amendment Bill, 2021 published on 1 October 2021 for public comment proposes amendments to section 26 of the Companies Act of 2008 which outlines the requirements for a company to make documents accessible for inspection to third parties aligned with the provisions of the Promotion of Access to Information Act (PAIA) and section 32 of the Constitution.
The Bill provides that, along with the company’s annual financial statements, memorandum of incorporation and amendments, company’s rules, notices and minutes of annual meetings and records of directors, companies must give access to a copy of their securities register and register of disclosures of beneficial interests. Currently, third parties are required to request access to the securities register at the company’s designated office. The Bill requires companies to file these documents with the CIPC, thereby allowing public access to this information. This information will be available on the CIPC platform on an anonymous basis and no reasons will need to be given for requesting it.
This right of inspection will not apply to smaller private, personal liability and non-profit companies where the annual financial statements have been internally prepared (and such company has a public interest score of less than 100) or the annual financial statements have been independently prepared by the company (and such company has a public interest score of less than 350).
The Bill aims to align the Act with PAIA to allow for more transparency and openness with regard to a company’s information.
Third parties should be cautious when placing reliance on information regarding the securities register and register of disclosures of beneficial interests as the obligation imposed on companies to file those records is an annual obligation. Companies are not obliged to file changes that take place during the course of any financial year and those changes will only reflect upon the filing of the next annual return.