Has your business kept abreast of all the regulatory legal updates that form the commercial law framework in South Africa? If not, you (as the business director) as well as your business, could land in hot water. Repercussions can range in anything from significant fines to mandatory jail sentences and company liquidation.
Compliance with the current regulations requires an understanding of significant commercial Acts such as the Public Finance Management Act, Broad-Based Black Economic Empowerment Act and the Employment Equity Act among many others. There are a number of similar by-laws that apply to individual municipalities or issues regarding health and safety. Forgetting what each Act and by-law entails could have disastrous consequences, and it is for this reason why businesses develop a compliance management system.
The news has been inundated in recent years with many large companies falling short of regulations, and have been charged by the South African government with fines so large that they are probable cause for front page headlines in the country’s newspapers. Most recently, millions of rands had to be paid to the South African Reserve Bank by South Africa’s largest banks for not upholding strict FICA requirements. But how do such large businesses succumb to non-compliance?
The answer lies in the structure of the business environment. Businesses have not developed practical compliance management systems to deal with regulations that they are faced with on a daily basis. Businesses are rather reactive concerning regulations, and therefore have to part with millions of rands in order to remain afloat. The problem may also be a sign that the business environment is overloaded with regulations, the red tape that so many business directors complain about.
This reoccurring issue adequately highlights the necessity for commercial law attorneys in South Africa. Commercial law attorneys are required to assist businesses in matters regarding regulations and by-laws that normal businesses have no way of highlighting or even distinguishing. Therefore, it becomes important for businesses to associate themselves with legal professionals so that they are protected when the time comes.