COMPANIES ACT AMENDMENT NO. 16 OF 2024
Reappointment of Auditors by Shareholders at an Annual General Meeting
Amendment of Section 90 of the Companies Act
The amendment to Section 90 of the Companies Act reiterates that auditors must be reappointed each year by the shareholders of a company and reduces the amount of time in which an auditor must not have been previously involved in aspects of the company before their appointment from five years to two years.
- The amendment requires that auditors be reappointed “annually at the shareholders’ meeting,” replacing the previously stated “Annual General Meeting,” which, by definition of the Companies Act, previously only applied to public companies.
- An auditor must not have been involved in various aspects of the company at any time during the two years preceding their appointment. This includes, among others, having been an employee, director, company secretary, related party, or having assisted in the compilation of annual financial statements or maintenance of financial records of the company. This period has been reduced from five years to two years.
Save for public companies, Section 60 of the Companies Act raises the question of whether it would be permissible for private and other types of companies to reappoint their auditors by way of written resolution, given that Section 60 of the Companies Act permits resolutions that could be adopted at a shareholder meeting to be done by way of written resolution instead.
The Companies Act Amendments 2024:
Pertinent changes were made to our South Africa Companies Act after the Companies Amendment Act 2024, No. 16 and the Companies Act Second Amendment, 2024 No. 17 were ascended into law on 25 July 2024.
The above amendments came into effect after proclamation was made in the Gazette during December 2024.
Statucor continues to unpack the amendments and the effect that they may have on our valued clients, and we look forward to publishing further communications on our observations in future. Click here for a full summary of all changes made to the Companies Act through the 2024 Amendments or view our News page for our latest articles on the Companies Act, Governance and Compliance matters that may be pertinent to you.
By Herman Moolman
Statucor (Pty) Ltd © 2025
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