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Investing: Direct shareholding vs Partnerships

  Direct Shareholding Incorporation of an investment company which will acquire for instance real estate properties (“Investment Company”) The investors acquire a direct shareholding in the Investment Company The shareholders agreement and the Investment Company memorandum of incorporation (collectively “the Constitutional Documents”) will regulate the relationship between the shareholders inter se and between the shareholders [...]

Same Same but Different

The doctrine of the undisclosed principal is an age old doctrine that has troubled many legal minds over the years. It has been described as odd, anomalous, unsound and inconsistent with legal principles not only in South Africa but also in England. Despite the constant battle associated with the implementation of this doctrine, our courts [...]

Your rights and remedies in respect to access to company information in terms of the Companies Act

Section 26 of the Companies Act No. 71 of 2008 (“Companies Act”) a person who holds or has a beneficial interest in any securities of a profit company or who is member of a non-profit company has the right to inspect and copy, without any charge for such inspection or upon the payment of no [...]

All things MOI

A Memorandum of Incorporation (“MOi”) is the founding document required for the formation of a company in terms of the new Companies Act 71 of 2008 (“Act”). There are virtually no bounds when it comes to what to include in an MOI and MOIs often vary in degree from company to company. Any provision may [...]

Shedding light on sale and repurchase transactions

In the recent finding in Mercuria Energy Trading Pte Ltd and Mercuria Energy Group Ltd v. Citibank NA and Citigroup Global Markets Ltd [2015] EWHC 1481 (Comm) on 22 May 2015 the Commercial Court of London ruled on important principles of the sale and repurchase of commodities. The principle consideration is whether the bank has [...]

A Short Summary of the Environmental Liability of Directors and Shareholders

There is a vast scope of legislation pertaining to environmental and mining affairs. We will however only focus on the main acts, which specifically deal with the liability resulting from a breach of a company’s environmental obligations. The National Environmental Management Act No. 107 of 1998, as amended (“NEMA”), provide as follows: Any manager, agent [...]

The Retrospectivity of Deregistration and Reinstatement Processes of Close Corporations

In Reddy v Absa Bank (20096/2014) [2015] ZASCA 83 (28 May 2015), P Reddy the sole member of Missouri Trading Close Corporation (“Missouri”) appealed against a decision of the Kwa-Zulu Natal division of the High Court. The facts are as follows: Missouri was deregistered in terms of s 82(3)(a) of the Companies Act 71 of 2008 (“the [...]

Why Every Contract Should Include a Force Majeure Clause

The term force majeure can be directly translated to "superior forces". It is an expression used to describe a wide range of events such as an act of God or public enemy, fire, an explosion, earthquake, flood, storm or other adverse weather condition. It also applies to war, civil commotion, sabotage, riot, strikes, lock-outs or [...]

VDMA ranked as Top Law Firm in South Africa for Unlisted Transactions Deal Value for First Quarter 2015 by leading industry publication Dealmakers

The Ratings are as follows:   We would like to take this opportunity to say a big thank you to our valued clients who have entrusted us with their transactional work in the first quarter of 2015. We are again very grateful for your continued support and loyalty. Furthermore, we would like to thank our [...]

An overview on general notarial bonds (“GNB”)

A mortgage is classified as a limited real right and therefore the mortgage limits the rights of ownership of the mortgagor while providing the mortgagee with certain limited rights to the property. The mortgagor may accordingly not sell the property or burden it with servitudes without the mortgagee’s permission but the mortgagor is entitled to [...]

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