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Private Company Mergers and Acquisitions – Understanding Different Roles

Private company mergers and acquisitions, or M&A, is an interesting business and legal area to understand especially for those who have intentions of either selling their companies, or merging with an existing one, or those who are interested in investment without having to start from scratch. It is important to understand the structure, people, and systems involved in M&A processes. You have to understand the different terminology and jargon that surround the implementation of private company merger and acquisition and the corresponding legal services necessary for the completion of the transaction. Continue reading “Private Company Mergers and Acquisitions – Understanding Different Roles” »

Legal Update February 2012

Who’s Liable For Your Leaking Roof?   You buy your dream house, you settle in, all’s well. Until it rains, and the roof starts leaking. Who’s liable?   The law, and the limits to voetstoots  First, determine whether the leak problem is a latent defect, i.e. one that “would not have been visible or discoverable upon inspection by the ordinary purchaser”.   Next, check the precise terms of the sale agreement. Standard practice is for property sellers to sell the property “as is”, by contracting out of liability for latent defects with a voetstoots clause. Continue reading “Legal Update February 2012” »

Private Company M&A, understanding valuation

A merger and acquisition is a big step, creating bigger companies from smaller ones. News about M&A can affect the corporate investment and finance world because of the impact on the financial environment. M&A is a rigid process that starts with determining the benefits of taking over one company or merging it with another existing company. The issue that is often considered is the valuation of the company being acquired or the companies that are merged. In an M&A deal, the participants have their own basis for the valuation of the company. The seller puts a high price tag while the buyer wants a lower tag attached to the company. Continue reading “Private Company M&A, understanding valuation” »

Private Company M&A

Private Company Mergers and Acquisitions (M&A) is the merging of two or more private companies or similar entities. Private Company M&A deals with the buying, selling or acquiring of shares in private companies and / or businesses, and the dividing and combining of these business entities. Private Company M&A falls within the category of business law services. Stages in the M&A Process: Consider the attributes of a target Selection of target Decide on a pricing model Valuation of the target The transaction Assessing the outcome Continue reading “Private Company M&A” »

Legal Update January 2012

Creditors: Know Your Rights In A Business Rescue    Why Business Rescue?  The new business rescue provisions in the Companies Act are aimed at –  Saving companies in financial distress from liquidation, and restoring them (completely or partially) to commercial viability, and  If rescue is impossible, at least giving stakeholders (such as creditors, employees and shareholders) a better return than liquidation would produce. The process, and the danger of abuse Continue reading “Legal Update January 2012” »

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” »

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