n Without Prejudice - From my window




I am not surprised to see that a call has been made for elements of the new Companies Act (71 of 2008) to be scrapped. I am surprised, however, that it has taken this long for responses of this nature to have been tabled.

Probably the most significant of the sections causing concern is that which deals with reckless trading (s22). It says that companies may not trade if they are insolvent which sounds, on the face of it, eminently sensible. The problem is - as Banking Association MD Cas Coovadia told parliament - that most of the companies in this country are technically insolvent even though commercially secure.


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