Chapter five: Corporate governance Legal and regulatory framework: recent developments Companies Bill, 2009 540. The Companies Bill (2009) provides for the registration/incorporation, operation and liquidation of companies. Some of the important differences between the Bill and the 1967 Act are the following: • With regard to incorporation requirements, the Bill removes the requirement for a ‘Memorandum and Articles of Association’ that previously required the services of legal practitioners. It introduces a simple incorporation document, otherwise referred to as ‘Articles of Incorporation’, which can be prepared easily. It also provides for incorporating companies with one shareholder. The Bill permits incorporation applications to be submitted electronically. Further, it clarifies the regulatory and supervisory powers of the Registrar of Companies. • The Bill addresses the relationship between company managers, shareholders and creditors. While company directors have wide management discretion, the Bill also provides a mechanism for shareholders to take part in decisions about the management style of the company and to question managers’ decisions. It provides for the right of shareholders to access company records and documents. Further, the duties of directors, especially the duties of care and loyalty, are clearly stated. • The rights of shareholders, including minority rights, are clearly spelt out. In addition, the Bill contains flexible provisions about derivative and representatives actions as well as personal actions brought by shareholders against directors. Further, it contains provisions about the rights of creditors (i.e., in the event of mergers and liquidation). • The Bill allows directors to decide on discounts and commissions relating to the sale and purchase of company shares. A company is not prohibited from providing financial assistance for the purchase of its shares and may buy its own shares in certain circumstances. These are improvements as well, because the 1967 Act provided otherwise. • The Bill ensured that simple language, which can be understood by Basotho investors, was used. • The Bill removes the requirement for spousal consent and allows any person, including those married in community of property, to be promoters and directors of companies without obtaining consent from spouses. Commercial dispute resolution 541. The government has, after a long delay and thanks to the facilitation of the CBL, established a commercial court in an effort to expedite adjudication. It is believed that the delay in adjudicating commercial cases will be avoided, thereby promoting sound financial intermediation. The CBL, the commercial banks, the MoFDP, the MTICM and the Privatisation Unit are among the many local stakeholders who have vested interests in the efficient operations of the Commercial Court. Detailed information on the Commercial Court was not readily available. 151