Companies have four working days to review the regulations of the new Companies Act, released on Wednesday ahead of the May 1 implementation date, which Grant Thornton South Africa chairperson Leonard Brehm said did not leave enough time to absorb the implications.

Brehm on Thursday expressed concern about the limited time available for businesses to review the significant changes and new sections in the 173 pages of the Act and its regulations, particularly with the upcoming Easter holidays.

“South African businesses require reasonable time to absorb, review and understand the implications of the Act and to carry out the requirements according to the new Act,” he noted.

Business Unity South Africa (Busa) urged business to come to grips with the new Companies Act as soon as possible, as the legislation and its accompanying regulations had significant legal repercussions for business and required important adjustments within a short period of time.

Busa acting executive director of economic policy Coenraad Bezuidenhout told Engineering News Online that the most significant challenge was the regulations, as they only became known after the law had been signed by President Jacob Zuma, causing unnecessary rush and uncertainty.

“Companies going through mergers and acquisitions are particularly uncertain about whether they fall under the new or the old law,” he noted.

Trade and Industry Minister Dr Rob Davies said on Wednesday that the new Companies Act was aimed at improving the business operating environment in South Africa and would not apply retrospectively.

Busa pointed out that it would have been preferable for the new Companies Act to have been signed into power earlier in April, or to have set the date for implementation at a later date.

"This would have allowed longer lead-time for business to make the necessary adjustments to ensure compliance with the Companies Act regulations, which in terms of the Act, could only be released upon its assent."

However, Bezuidenhout said that Busa, representing 80% of South African business, had not yet received any requests by its members to ask for a delay in the implementation of the legislation.

Although the new Companies Act heralded the introduction of numerous positive changes and reporting simplifications, which would benefit small business in particular, Busa urged government to take note of the implications of the manner in which regulatory changes were instituted, so as to facilitate smooth and cost-effective transitions from old to new regimes in future.

The Department of Trade and Industry could not be reached for comment.