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Implement the Companies Act electronically

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John Giles

The new Companies Act 71 of  2008 (“Companies Act”) has been signed into law and commenced on 1 May 2011. It addresses various aspects not adequately dealt with in the old 1973 Companies Act, including the use of:

  • information in electronic form;
  • electronic communications; and
  • technology.

The new Companies Act enables you to use technology and the electronic form of information and communications to save you time and money

The administration of companies has been brought into the twenty first century – the information age.  It is worth taking note because these inclusions can save you time and money.  However, there are also some issues and regulatory requirements – this article will help you avoid them.  If you are a vendor of ICT goods or services to companies, there will be opportunities for you to help companies make use of these new provisions.

The Companies Act recognises electronic communications as defined in the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”), to be a:

communication by means of data generated, sent, received or stored by electronic means and includes:

(a) voice, where the voice is used in an automated transaction; and

(b) a stored record“.

The Companies Act provides for electronic compliance.  In many ways it eases the administrative burden by enabling people to use technology and the electronic form of documents and communications. Let us look at some ways in which the Act can make your life easier.  More articles on some specific areas will follow soon.


The meaning of “present at a meeting” includes participating in the meeting by electronic communication.  So, if you participate in a meeting using video conferencing facilities or Skype, then you are present.  This could save much time and effort – no more flights across the country for board meetings or shareholder meetings!  You can now attend all of them entirely through electronic means.  Video conferencing facilities will definitely become a lot more popular. The flip side of the coin is that directors should always remember that “electronic presence” will bring about the same liabilities in terms of section 77 of the Companies Act as physical presence at meetings.

Original documents – Section 6(7)

Where an original document can be used in terms of the Companies Act, an unchanged electronically generated reproduction of a document may be substituted for the original. Section 6(7) states that:

“An unaltered electronically or mechanically generated reproduction of any document, other than a share certificate, may be substituted for the original for any purpose for which the original could be used in terms of this Act, if that reproduction satisfies any applicable prescribed requirements as to the form or manner of reproduction”

Remember though that this does not apply to

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Some sections of #POPI have commenced. Read what the impact is at bit.ly/RhG8sv. #POPIA #popiact

About 4 days ago