The Companies Tribunal encouraging transparent, accountable, sustainable, and ethical business practices

CAPTION: The Chairperson of the Companies Tribunal, Advocate Maruping Lebala SC

The Companies Tribunal encouraging transparent, accountable, sustainable, and ethical business practices

By BRIAN KAJENGO

As more and more South Africans become entrepreneurs, it is not surprising that the issue of company names is becoming highly contested. Section 11(2) (a) of the Companies Act states, that the name of a company must not be the same as the name of another company, close corporation or co-operative. The fact that the name of one company is similar to the other, does not on that ground alone, justify a conclusion that there will be a likelihood of confusion even when the companies are trading in the common field of activity.

The Chairperson of the Tribunal Advocate Maruping Lebala said for the names to be regarded as confusing similar, it must be shown that a side-by-side use of the two company names will result in deception and/or confusion.

“This means therefore that mere similarity is not sufficient there must be a comparison of the two competing trade names for confusing similarity. Although the Tribunal applies High Court rules in its hearing procedures it is mindful of the need for flexibility and responsiveness in order to fulfill its mandate as a quasi- judicial body,” said Advocate Lebala.

The Companies Tribunal also provides mediation, conciliation and arbitration services. The use of resolving company disputes through mediation, conciliation and arbitration is highly encouraged as it simple, speedy, cost effective and enables parties to resolve their dispute without resorting to often lengthy and at times acrimonious court processes. 

Advocate Lebala added that the Companies Tribunal will thus play a critical role in alleviating the litigation work load in the High Court.   

The Companies Tribunal is one of the institutions established by the Act and is an agency of the Department of Trade and Industry.  The Tribunal has been in operation since September 2012 and comprises of members appointed by the Minister of Trade and Industry. Members have  expertise in the different areas envisaged in the Act; some of the members also serve as Acting Judges of the High Court; others are senior advocates and attorneys; a law Professor and Chartered Accountant.

The aim of establishing the Companies Tribunal was, amongst others, to provide accessible, speedy and cost effective mechanism for the resolution of company disputes. The Companies Tribunal is thus mandated to adjudicate certain types of disputes in terms of the Act.  The Companies Tribunal adjudicates disputes relating to company name and directorship of companies. It also considers applications for exemption from establishing a social and ethics committee; extension of time for holding of an annual general meeting (AGM), amendments of the Company’s Memorandum of Incorporation;  reviewing of compliance orders or notices issued by Companies and Intellectual Property Commission (CIPC). Such notices of the CIPC may relate to the appointment of a company secretary, auditor or audit committee.

One of the innovations brought about by the Act was the need for companies to establish social and ethics committees which report to shareholders and not to the Board. The establishment of social and ethics committees is intended to ensure sustainable development and ethical business practices. Companies are thus encouraged to establish such committees.

The Companies Tribunal is continuing in its efforts of strengthening the regulatory environment through the development of a new jurisprudence in company law and thus contributes to the realization of a globally competitive economy characterized by transparent, accountable, sustainable, and ethical business practices.

The Companies Tribunal can be contacted at www.companiestribunal.org.za or email registry@companiestribunal.org.za or telephone 012 – 394 3071.