CPA threshold changes to R2 million

The Consumer Protection Act (“CPA”) protects all individuals. In addition, a feature which appears to be unique to the South African consumer protection legislation, juristic persons* which have an annual turnover and total asset value of under a particular threshold amount, are protected as consumers in the same way as individuals.

Initially, this threshold was determined as R3 million by the Minster of Trade and Industry, Rob Davies. However, to the surprise of the legal fraternity, and in a move which has not received much media attention, the Minister issued a further notice on 1st April 2011, determining that the threshold is R2 million.

This of course narrows the number of juristic persons protected by the CPA, and from a supplier’s perspective, is a positive change. If you are a start-up or small business, this means that you will enjoy the special protections under the CPA only for the periods that neither of your total asset value or your annual turnover peaks above the R2 million mark.

*Juristic persons include companies and close corporations, and for purposes of the CPA, also partnerships, bodies corporate, trusts and associations.

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