“The new Consumer Protection Act and Companies Act essentially mean that South Africa today is a different country to start a business in than it was last year,” says Barrie Terreblanche, author of Starting Your Own Business, 12th Edition.
He says: “Anyone starting a business in South Africa today has to be aware of at least the broad outlines of these two ground-breaking laws, and this is what we have tried to do in the new edition – to explain the principles of the new legislation, and update the latest regulations and best practice on the companion website.”
In terms of the New Companies Act, Terreblanche believes the most important changes are to company registrations. However he says that entrepreneurs mustn’t think that just because they have registered a company, they have started a business. “It has only started once you have made a sale and someone has paid you for it.”
Up until now, there was nothing stopping people from selling bad products, but now with the introduction of the Consumer Protection Act (CPA), customers have recourse, explains Terreblanche. Even those who are distributing or selling bad products can be sued by a customer. He says there has also been a shift in the onus, the consumer is no longer required to provide proof. A further warning he gives in line with the CPA, is to be careful of consultants. “Beware of lawyers and consultants bearing policy documents. Rather take a careful, ‘wait and see’ approach and look at what your peers are doing.”
Terreblanche believes the acts are going to change the business environment, but they both still need to be properly interpreted.
Further reading
Barrie Terreblanche is the author of Starting Your Own Business, 12th Edition, which contains all the information you need to start, manage and sustain a small business in South Africa. It is divided into three parts that cover the key stages in starting a business: Planning, Getting started and Scaling up. Available in paperback from bookshops across South Africa, at a recommended retail price of R225,95. For more information email oxford.za@oup.com