On 27 December 2024, certain sections proposed in the Companies Amendment Act 16 of 2024 and the entire Companies Second Amendment Act 17 of 2024 became effective.
In our publication, Overview of the 2024 amendments to the Companies Act 71 of 2008 for Audit Committees and Financial Management, we provide a summary of the key changes now in effect. We specifically focus on how these changes affect audit committees and financial management.
Overview of the 2024 amendments
We also offer guidance on the actions that management must take to implement these changes in a timely and effective manner. Some of the amendments directly impact the smooth, day-to-day running of a company.
For example, the changes to section 16(9)(b) of the Companies Act now provide legal certainty about when amendments to a company’s Memorandum of Incorporation (MOI) take effect.
This is particularly relevant to audit committees and financial management. If a company amends its MOI to increase its authorised shares, once the time period outlined in section 16(9)(b) has passed, the directors may proceed to allot and issue shares. This can happen even if the Companies and Intellectual Property Commission (CIPC) has not yet issued a registration certificate.
Audit committees and financial management must, however, be aware of the exceptions to this rule. We outline these exceptions in our publication, Overview of the 2024 amendments to the Companies Act 71 of 2008 for Audit Committees and Financial Management.
Implications for audit committees and financial management
It is advisable for companies to review their MOI in light of the latest amendments. This helps determine whether an update is necessary to ensure the MOI aligns with the new requirements of the Companies Act.
The amendments to section 45 of the Companies Act state that financial assistance provided by a company to its subsidiary no longer needs to comply with section 45. This means that prior approval by special resolution, a solvency and liquidity test, and notice to shareholders and trade unions are no longer required.
However, the MOI still takes precedence if it contains stricter provisions than the Companies Act. If the MOI requires a special resolution for providing financial assistance to a subsidiary, then that approval remains necessary until the MOI is updated.
Another important area for audit committees and financial management to consider is the amendment to section 61 of the Companies Act. It now states that documents presented at a public company’s annual general meeting, as required by section 61(7), must include both a social and ethics committee report and a remuneration report.
Preparing for implementation
While the Companies Act requirements for these reports are not yet effective, we recommend applying the principles of the King IV Report on Corporate Governance when preparing them.
The draft King V Report, released by the Institute of Directors in South Africa in February 2025, proposes alignment with the Companies Act regarding these reports and other amendments.
For more information on these changes, consult our publication, Overview of the 2024 amendments to the Companies Act 71 of 2008 for Audit Committees and Financial Management, or contact one of the authors of this article.
| Anton de Bruyn | Partner | mail me | |  |
| Heather Ashe | Associate Director | mail me | |  |
| Robbie Cheadle | Associate Director | mail me | |  |
| Jerome Gray | Associate Director | mail me | |  |
| Taskeen Cassim | Senior Manager | mail me | |  |
| | KPMG South Africa | | |
