New Company's Act generates interest :: Mmegi Online

It is interesting to note that the new Companies Act, referred to as the Companies Act, 2003, that came into force on 3 July 2007, is beginning to send shockwaves across Botswana's entire financial markets. As the market begins to digest the new information in the Act, it is becoming quite clear with increasing certitude that the new Act raises interesting debates regarding the 'definition of private companies' when viewed in light of other financial instruments such as the Income Tax Act.

Although it is appreciated that the new Companies Act is modern, simple and most likely to attract foreign direct investment to Botswana, the New Act, in my opinion, seems to be inconsistent with provisions stipulated in other Statutes. For instance, it is my considered opinion that the definition of a 'private company' under the Income Tax Act seems to be at loggerheads with the New companies Act.

It is therefore necessary to give a background about the scenario before the new Companies Act and the new scenario after the introduction of the new companies Act.
Under the Old Companies Act that has been scrapped, a private company was defined under section 31 as follows;

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