Title: BOARDS AND DIRECTORS RESPONSIBILITIES AND RISK THE IMPACT OF THE NEW COMPANIES ACT AND BUSINESS LEGISLATION PRESENTED BY DR JOHN W HENDRIKSE
1BOARDS AND DIRECTORSRESPONSIBILITIES AND
RISKTHE IMPACT OF THE NEW COMPANIES ACTAND
BUSINESS LEGISLATIONPRESENTED BYDR JOHN W
HENDRIKSE
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2BOARDS AND DIRECTORSRESPONSIBILITIES AND RISK
- CORPORATE REFORM TIMELINES
- BOARD MISSION
- GOVERNANCE FRAMEWORK
- BOARD STRUCTURE
- BOARD RESPONSIBILITIES
- DIRECTORS RESPONSIBILITIES
- LIABILITIES OF DIRECTORS
- COMPETITION AMENDMENT ACT
- CONSUMER PROTECTION ACT
- CAVEAT VENDITOR
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3CORPORATE REFORMTIMELINES
- THE COMPANIES ACT (Act 71 of 2008)
- Enacted 8 April 2009
- Planned Commencement Date 1 July 2010
-
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4COMPETITION AMENDMENT ACT
- Approved by Parliament 22 October 2008
- Enacted 29 August 2009
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5CONSUMER PROTECTION ACT (Act 68 of 2008)
- Enacted 29 April 2009
- Planned Commencement Date July 2010
-
KING III
Release Date 1 September 2009
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6BOARD MISSION
- SURVIVE AND SUCCEED
- BEST INTEREST OF SHAREHOLDERS
- BEST INTEREST OF COMPANY
- CORPORATE STRATEGY
- CORPORATE GOVERNANCE
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7GOVERNANCE FRAMEWORK
SHAREHOLDERS
COMPANY
TRUSTEES
AGENTS
BOARD OF DIRECTORS
PERFORMANCE
CONFORMANCE
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8BOARD STRUCTURE
BOARD OF DIRECTORS
EXECUTIVE
NON-EXECUTIVE
INDEPENDENT
OTHER
AUDIT COMMITTEE 3 or MORE DIRECTORS
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9BOARD RESPONSIBILITIES
- GOING CONCERN
- SOLVENCY AND LIQUIDITY TEST
- SOLVENCY FINANCIAL POSITION
- NET ASSET VALUE
- MARKET VALUES REALISABLE VALUES
- LIQUIDITY
- LIQUID ASSETS
- SHORT TERM OBLIGATIONS
- INSOLVENCY AUDIT
- LONG TERM SUSTAINABILITY
- SHORT TERM LIQUIDITY CAPACITY
- CASH FLOW FROM OPERATIONS
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10DIRECTOR RESPONSIBILITIES
- CORE DUTIES SECTION 76
- DISCLOSE ANY CONFLICT OF INTEREST
- USE POSITION AND INFORMATION FOR COMPANYS
BENEFIT - DISCLOSURE OF MATERIAL INFORMATION
- PERFORM DUTIES
- IN GOOD FAITH
- IN BEST INTEREST OF THE COMPANY
- - WITH CARE, SKILL AND DILIGENCE
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11DIRECTOR RESPONSIBILITIES
- STRATEGY AND CORPORATE STRUCTURE
- DUTY TO COMPLY WITH THE ACT IN RELATION TO
DIFFERENT TYPES OF COMPANIES (Section 8) - DUTY TO COMPLY WITH THE COMPANYS MEMORANDUM OF
INCORPORATION (Section 13) - DUTY TO MANAGE THE BUSINESS AFFAIRS AT THE
COMPANY (Section 66(1)) - DUTY TO CARRY ON THE BUSINESS WITHOUT TRADING
RECKLESSLY OR UNDER INSOLVENT CONDITIONS (Section
22)
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12DIRECTOR RESPONSIBILITIES
- BOARD STRUCTURE AND CORPORATE ADMINISTRATION
- DUTY TO APPOINT BOARD COMMITTEES (Section 72)
- DUTY TO APPOINT AN AUDIT COMMITTEE (Section 94)
- DUTY TO APPOINT A COMPANY SECRETARY (Section 84
86) - DUTY TO CALL AND CONVENE A SHAREHOLDERS MEETING
(Section 61)
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13DIRECTOR RESPONSIBILITIES
- ACCOUNTABILITY AND ASSURANCE
- DUTY TO KEEP COMPANY RECORDS (Section 24)
- DUTY TO KEEP ACCOUNTING RECORDS (Section 28)
- DUTY TO COMPLY WITH CHAPTER 3 OF THE ACT (Section
34(1) 94) - DUTY TO PAY DIRECTORS REMUNERATION IN TERMS OF
MEMORANDUM OF INCORPORATION AND GET IT APPROVED
BY SHAREHOLDERS BY SPECIAL RESOLUTION (Section
66(8) 66(9))
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14DIRECTOR RESPONSIBILITIES
- ACCOUNTABILITY AND ASSURANCE CONTINUES
- DUTY TO APPOINT AUDITORS (Section 90 92)
- DUTY TO OBTAIN AN INDEPENDENT REVIEW OF THE
FINANCIAL STATEMENTS (Section 30)
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15DIRECTOR RESPONSIBILITIES
- DISCLOSURE AND TRANSPARENCY
- DUTY TO PREPARE ANNUAL FINANCIAL STATEMENTS
(Section 29 30) - DUTY TO PREPARE A DIRECTORS REPORT (Section
30(3)) - DUTY TO ISSUE A PROSPECTUS (Section 100)
- DUTY TO DISCLOSE DIRECTORS REMUNERATION
INFORMATION (Section 30) - DUTY TO FILE AN ANNUAL RETURN (Section 33)
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16DIRECTOR RESPONSIBILITIES
- SHAREHOLDER TREATMENT
- DUTY TO ENSURE THAT SHAREHOLDERS CAN EXERCISE
THEIR VOTING POWER AND RIGHTS (Section 2(2) 58) - DUTY TO FACILITATE A SHAREHOLDERS MEETING
(Section 61) - DUTY TO OPERATE WITHIN THE FRAMEWORK OF THE
COMPANYS MEMORANDUM OF INCOPORATION (Section
15(3) (4) 36) - DUTY TO OPERATE IN THE BEST INTEREST OF THE
SHAREHOLDERS (Section 20(6) (7) THE COMPANY
(Section 76(3))
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17LIABILITIES OF DIRECTORS
- NEW COMPANIES ACT
- BREACH OF DUTIES
- BREACH OF ACCOUNTABILITY (Section 213 Section
214) - RECKLESS TRADING
- PROSPECTUS LIABILITY
- INSOLVENCY ACT( Section 424)
- PERSONAL LIABILITY COMPANY
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18COMPETITION AMENDMENT ACT
- PURPOSE OF THE ACT
- CRIMINAL LIABILITY
- RISK
- MITIGATING THE RISK
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19 CONSUMER PROTECTION ACT
- MARKETING ACTIVITIES
- DIRECT MARKETING AND COOLING-OFF PERIOD
- ADVANCE RESERVATIONS AND BOOKINGS
- DISCLOSURE AND INFORMATION
- FAIR AND HONEST DEALING
- OVER-SELLING
- CONSUMER AGREEMENTS
- FAIR VALUE, GOOD QUALITY AND SAFETY
- DAMAGE CAUSED BY GOODS
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20CONTINUES
- FRANCHISE AGREEMENTS
- BUSINESS NAMES
- CLASS ACTIONS
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21TYPES OF COMPANIES AND COMPLIANCE(New Companies
Act, Act 73 of 2008)
Compliance Requirements Public Companies State Owned Companies (SOC) Private Companies (in public interest)
Minimum number of Shareholders Minimum number of Directors Memorandum of Incorporation (MIC) Company Records Accounting Records Financial Statements (e.g. Annual Financial Statements) Audit 1 3 YES YES YES YES YES - 1 YES YES YES YES YES 1 1 YES YES YES YES YES
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22TYPES OF COMPANIES AND COMPLIANCE(New Companies
Act, Act 73 of 2008)CONTINUES
Compliance Requirements Public Companies State Owned Companies (SOC) Private Companies (in public interest)
Independent Review Company Secretary Audit Committee Registered Address Annual Return Annual General Meeting Deadline for AFS (after financial year end) N/A YES YES YES YES YES 6 months N/A YES YES YES YES YES 6 months N/A NO NO YES YES NO 6 months
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23TYPES OF COMPANIES AND COMPLIANCE(New Companies
Act, Act 73 of 2008)CONTINUES
Compliance Requirements Other Private Companies Personal Liability Company Non-Profit Company (NPC)
Minimum number of Shareholders Minimum number of Directors Memorandum of Incorporation (MIC) Company Records Accounting Records Financial Statements (e.g. Annual Financial Statements) Audit 1 1 YES YES YES YES By regulation or voluntary 1 1 YES YES YES YES NO 3 3 YES YES YES YES By regulation or voluntary
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24TYPES OF COMPANIES AND COMPLIANCE(New Companies
Act, Act 73 of 2008)CONTINUES
Compliance Requirements Other Private Companies Personal Liability Company Non-Profit Company (NPC)
Independent Review Company Secretary Audit Committee Registered Address Annual Return Annual General Meeting Deadline for AFS (after financial year end) N/A NO NO YES YES NO 6 months YES NO NO YES YES NO 6 months N/A NO NO YES YES NO 6 months
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25Online solutions to grow your business
26THE END
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