What is a Startup Act?
● A Startup Act is essentially a component of policy or legislation that aims to make it easier for startups to establish, grow and scale.
● It prioritises businesses with anticipated high growth; specifically, businesses which leverage intellectual and technological innovation, which need to raise investment scale both exponentially and sustainably.
What is the purpose of a Startup Act ?
The core purpose of the Act is to form an economic bill that will help stimulate socio-economic development in South Africa.
This outcome can be achieved as outlined in section 7 of the Companies Act, 2008, among them most notably:
● Promote compliance with the Bill of Rights as provided for in the Constitution, in the application of company law;
● Promote the development of the South African economy by:
- Encouraging entrepreneurship and enterprise efficiency;
- Creating flexibility and simplicity in the formation and maintenance of companies;
- Encouraging transparency and high standards of corporate governance as appropriate, given the significant role of enterprises within the social and economic life of the nation;
- Promote innovation and investment in the South African markets;
- Reaffirm the concept of the company as a means of achieving economic and social benefits;
- Continue to provide for the creation and use of companies, in a manner that enhances the economic welfare of South Africa as a partner within the global economy;
- Promote the development of companies within all sectors of the economy, and encourage active participation in economic organisation, management and productivity;
- Create optimum conditions for the aggregation of capital for productive purposes, and for the investment of that capital in enterprises and the spreading of economic risk; and
- Provide a predictable and effective environment for the efficient regulation of companies.