Namibia needs a good company law that will facilitate a protective and fertile environment for economic activity. The law must, therefore, create a business environment that is attractive to the investor and the entrepreneur to stimulate economic activity in Namibia.
Business and Intellectual Property Authority (BIPA), in collaboration with the trade ministry, has since 2019 initiated the legislative reform process. This included the review of the Companies Act, 2004 (Act No. 28 of 2004) and the Close Corporation Act, 1988 (Act No. 26 of 1988), in conjunction with other acts that may have an impact on the latter legislation.
Yesterday, BIPA stated it is now at an advanced stage of the law review process, and kicked off with the five-day international roundtable consultative forum on corporate business law reform.
The roundtable is aimed at bringing together expert stakeholders in the areas of corporate and tax law, insolvency law, corporate governance, mergers and acquisitions and financial intelligence, amongst others.
The thinking around the review is to consolidate the two acts mentioned herein above – and in so doing, birth a single corporate business law that would regulate all forms of business entities, including aspects of business rescue and corporate governance.
Company law provides the anchor for economic growth and development to raise income, promote investment and create employment.
At the official opening yesterday, trade minister Lucia Iipumbu said legislation reform of the above-mentioned laws is the result to move towards the current needs.
“We have moved with speed to look at different mechanisms of reforming those acts in place – just to make the business environment conducive. The highlight is that we must do it with speed. Time is against Namibia, and we will remain behind. Our norm and process in Namibia of crafting a policy takes 3 to 4 years, and this is concerning,” said Iipumbu.
She further tasked the team to consider the process of intellectual property registration.
Due to the fact that our current laws are outdated, the processes and procedures do not speak to the current environment, and it has, thus, been a hindrance to the ease of doing business in Namibia.
Namibia has generally not performed well on the ease of doing business ranking due to a number of challenges, of which one was the number of days it takes to start a business, stressed the minister.
Some of the hindrances to the realisation of Namibia to move forward include the apparent bureaucratic red tape, the unfavourable regulatory framework for doing business, archaic business law concepts and processes, as well as corruption and its related vices.
“We must be mindful that we are not caught up in the web of corruption; sometimes, we say we want to fast-track processes, but we do it for a different reason. We must do it for a clear purpose. We must not do it because we want to favour a specific component or individual,” urged Iipumbu.
BIPA identified the following recommended amendments that need to be done to the Close Corporations Act and the Companies Act, among others:
The Act must promote procedural simplicity and flexibility, and thus cater to the needs of small owner-managed companies.
“Remove or do away with unnecessary complexities relating to types of companies and provide for the difference between a private company, which does not call upon third-party finance, and a public company, which has a much broader array of shareholders, where disclosure and protection may need to be greater,” reads a report from BIPA.
Furthermore, the act should include registration of public enterprises (to register for the type of company as aligned with the classification of profit (commercial) or non-profit (non-commercial) by the Public Enterprises Governance Act.
– mndjavera@nepc.com.na