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So far pietervdm has created 284 blog entries.

The new Companies Act compliance deadline

As the May 2013 deadline looms, companies are advised to ensure they comply as exceptions are unlikely. Smaller companies may not be aware of what is expected of them before May 2013 Large corporates generally have the resources to ensure compliance with changes in legislation and generally do so timeously. Many smaller enterprises are either unaware of the implications of the new Companies Act or are putting off aligning themselves with the Act until the last minute in order to save costs, which is ineffective as aligning  with the new Companies Act may potentially save a company money. Continue reading “The new Companies Act compliance deadline” »

Corporate Lawyer – Why You Need One for Your Business

Setting up a business requires a good amount of investment, time and knowledge about the operations as well as the existing regulations and laws in your chosen field. Big corporations rely on the big law firms to handle the legal part of the business. However, for the smaller businesses, it is important to ensure that a corporate lawyer is ready to assist and give advice on regulations and law that may affect the business. Some starting corporations tend to neglect this part because of the thinking that things are simple and can be handled at their end without consulting the experts. The truth is that when things go wrong, as a result of ignoring this important aspect of the business, it can create a major financial implication to correct some situations. Continue reading “Corporate Lawyer – Why You Need One for Your Business” »

Company law – adequate consideration

Section 40 of the Companies Act requires that the board of directors of a company issue authorized shares only for adequate consideration to the company, as determined by the board. It is therefore the board, who decides on the terms of the issue as well as the consideration payable. Consideration will include the provision of services, any value and exchange of property as long as the consideration is of adequate value. If shares are issued in lieu of future services to be provided, the shares must be held in escrow untill such time as the services are indeed provided, before it is issued to the subscriber. Continue reading “Company law – adequate consideration” »

Legal Update December 2011

Business Buyers And Banks: Beware A Statutory Trap!   With rampant business failures a feature of our economy these days, do not buy (nor finance the purchase of) a business, its goodwill or assets – not, that is, without first seeking advice on whether or not the sale must first be advertised in terms of the Insolvency Act.   Playing with fire – the Appeal Court case, and the facts   A recent Supreme Court of Appeal case illustrates the dangers of not doing so. A company had sold its business and assets – movable and immovable – to a buyer for just over R22m. The buyer financed the deal with a loan from a bank, secured by means of mortgage bonds registered over the property. The parties had specifically agreed not to advertise the sale in terms of the Act. And that, as we shall see, can be a dangerous move indeed – a real case of playing with fire. Continue reading “Legal Update December 2011” »

Doing business in Africa, forthcoming changes

Africa has been considered as a notoriously difficult place to conduct business in. However, as a result of the drive by three regional trading groupings being the South African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) regional integration will be deepened. SADC, COMESA and EAC are aiming to create a free trade area with 26 Members States from Egypt to South Africa termed the COMESA-EAC-SADC Tripartite Free Trade Area. The COMESA-EAC-SADC Tripartite Free Trade Area is creating a customs union which will include the elimination of both tariff and non-tariff barriers for substantially all traded goods. Member States of the COMESA-EAC-SADC Tripartite Free Trade Area will have to harmonise their customs procedures and trade facilitation measures (such as standards, sanitary and phyto-sanitary measures and rules of origin). Continue reading “Doing business in Africa, forthcoming changes” »

Executive and Non-Executive director’s fiduciary duty: beware!

The rewarding and prestigious benefit that generally comes out of holding numerous executive and non-executive directorships is fast becoming a gain which directors will seek to avoid as it contributes to increased vulnerability on the part of directors who do not have the requisite experience or time to devote to their fiduciary obligations to companies on whose boards they participate. There is no distinction between the liability of executive and non-executive directors. South African common law has always imposed on directors a separate and distinct fiduciary duty to the company. In this fiduciary capacity, a director assumes two roles, as an “agent” acting on behalf of the company, and as a trustee who controls company assets. Continue reading “Executive and Non-Executive director’s fiduciary duty: beware!” »

Doing business in Africa, forthcoming changes

Africa has been considered as a notoriously difficult place to conduct business in. However, as a result of the drive by three regional trading groupings being the South African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) regional integration will be deepened. SADC, COMESA and EAC are aiming to create a free trade area with 26 Members States from Egypt to South Africa termed the COMESA-EAC-SADC Tripartite Free Trade Area. Continue reading “Doing business in Africa, forthcoming changes” »

Derivative actions in terms of the Companies Act

A derivative action is an action which can be brought on behalf of another. A derivative action is a remedy which is effective and which is unfortunately sometimes overlooked. The derivative action was only available to shareholders in terms of the 1973 Act. The ambit of interested parties has been extended in the New Companies Act to directors, officers, and trade unions. Even employees can bring a derivative action against a company. Continue reading “Derivative actions in terms of the Companies Act” »

Competition law on joint ventures & special purpose vehicles

With regards to any joint venture in whatever form – a company, partnership or in any other form, it is prudent to consider the application of competition law on the joint venture and/or special purpose vehicles.  We provide herewith an Update issued by the Competition Commission regarding these matters. While this Update is not binding on the Commission, it sets out the approach the Commission is likely to adopt in respect of certain transactions and may be updated from time to time to account for future developments. Continue reading “Competition law on joint ventures & special purpose vehicles” »

Legal Update November 2011

When Can Creditors Attack Trust Assets?    Trusts can be valuable estate planning tools, and are often legitimately used to protect assets from the risks of business failure. They must however be structured and administered correctly and lawfully otherwise, as illustrated in a recent High Court case, they are open to attack by creditors.  The facts were that a couple owed a bank in excess of R56m. The bank established that the couple had no assets in their own names, but that two trusts controlled by them held substantial assets, including their family home, furniture and other contents. The bank applied for, and obtained, a court order declaring the assets of both trusts to be assets of the couple personally, and therefore executable to satisfy the personal debt. Continue reading “Legal Update November 2011” »

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