With two new laws – the Consumer Protection Act and the Companies Act - coming into force on the 1st April, franchisors are urged to have their company status and contracts assessed and if necessary changed to comply with the proposed regulations. FASA, together with its legal members Bowman Gilfillan and Eversheds, have played a crucial role in representing the franchise sector in negotiations with government on the CPA.
FRANCHISEES URGED TO REVIEW CONTRACTS AHEAD OF THE CPA
The draft guidelines for the development of industry Codes of Conduct for accreditation in terms of the provisions of Section 82 of the Consumer Protection Act were published for public comment on Friday 11th March and FASA, through its legal advisers, will once again submit their comments before the 31st March deadline. Even though the regulations to the Act are not yet out, franchisors are advised to scrutinise their current practices and contracts to ensure they are compliant with the Act. As contract wording should be amended to conform to the provisions of the Act, franchisors are advised to have their contracts checked out to ensure that their agreements are compliant.
COMPANIES AMENDMENT BILL ADOPTED AND IMPLEMENATION 1 APRIL 2011
On 10 March 2011 the Portfolio Committee on Trade and Industry adopted the new Companies Amendment Bill. The Bill will be debated in the National House of Assembly on 15 March 2011, and for consideration by the National Council of Provinces on 17 March 2011 before being signed off by President Jacob Zuma. The Act will introduce, amongst others, enhanced protection for minority shareholders, provide for a mechanism for business rescue of companies in distress, lighten the burden of registration and relieve small businesses of requirements to prepare audited financial statements. Several amendments still being contested will be addressed before the Act comes into force. Franchisors are again urged to consult with their lawyers or auditors to get clarification on their company status and how the Act will impact their business and those of their franchisees.
For a list of attorneys who are FASA members and can help you comply with these laws go to www.fasa.co.za