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Shares and Shareholder Transactions – Getting the Necessary Legal Service

The ownership of a corporation lies on the individuals or entities that have shares in the business. The ownership is divided in terms of shares. The shares are attested through a certificate that states the unit of ownership in the business. This share represents the stake of a shareholder in the totality of the business. This setup holds true not only in private but also in public corporations. The shareholders have their corresponding representation to the corporation based on the number of shares that they hold. This certificate also determines the amount of profit that he is entitled to. Shareholder transactions are interests that a shareholder wants to undertake in relation to the processing or disposal of his shares. There are certain activities that involve the exercise of the rights and privileges of a shareholder. These transactions may involve financial considerations and would need valuation of the shares and stakes in the company. Continue reading “Shares and Shareholder Transactions – Getting the Necessary Legal Service” »

The Basics of Shares and Shareholder Transactions

A corporation is an entity owned by individuals whose interest is for profit in the business that the corporation is engaged in. Each corporation divides the ownership in terms of shares to its shareholders. Shares are represented by a certificate attesting the unit of ownership not just in corporations, but even in limited partnerships and mutual funds. Each share represents a fraction of the business and the shareholder becomes a part owner of the business. This is true for both private and public corporations. However, shareholders own a share or shares of stock but not the corporation, per se. Continue reading “The Basics of Shares and Shareholder Transactions” »

Legal Update March 2012

The New Dividends Tax: Read All About It (And A Warning!) From 1 April, STC (Secondary Tax on Companies) will be replaced by DT (Dividends Tax – which, just to confuse the issue, some commentators are calling “DWT” for “Dividend Withholding Tax”). What changes? The rate – 10% – stays as is. But whereas STC is payable by a company when it declares a dividend, DT is payable by the shareholder receiving it. The company must withhold the tax, deduct it from the dividend, and pay it over to SARS on behalf of the shareholder. Reduced rates and exemptions – under STC, exemptions were based on the status of the declaring company. Under DT, exemptions and reduced rates are based on the status of recipients. Thus various levels of exemption apply to dividend recipients who are (for example – this isn’t a comprehensive list) local companies, approved Public Benefit Organisations, pension and similar funds Continue reading “Legal Update March 2012” »

Joint Ventures – Implementation Basics

A joint venture is a legal agreement involving parties interested in engaging in a particular business purpose. This agreement results to the sharing of all profits and losses in relation to the business undertaking. This legal relationship between two or more parties is different from a partnership. A partnership involves the agreement of individuals to form a business or organization with the interest of making profits. A successful joint venture requires that the parties involved combine resources and their expertise to attain the goals set for the undertaking. Continue reading “Joint Ventures – Implementation Basics” »

Understanding the Requirements of a Joint Venture

You may be running your own business but you are seeing an untapped market for a particular product that you can deliver. However, you recognise that there are constraints if you will work on this undertaking as an individual company. You also see that the undertaking or the particular project that you want to implement can be realized if you consider another company or companies to enter into the business. This can be because you need the expertise in a particular business area or because of the financial requirements that need to be satisfied to implement the project. If this is the case, your best option is to enter into a joint venture. A joint venture is a legal agreement between two or more parties for the purpose of managing a particular business undertaking. It is clearly different from a partnership because a partnership requires the agreement between or among individuals to enter into a business for the purpose of making profits. A joint venture is limited to a project or an activity that can be a subset of the bigger business venture. Continue reading “Understanding the Requirements of a Joint Venture” »

Corporate Restructuring – Making the Process Easy

Things can be stressful when a company risks losing the business. This can be seen in financial statements and day to day monitoring of cash flows and income reports. Businesses need to recognise the indicators of imminent bankruptcy and should take steps to save the situation by considering some necessary legal or corporate measures. One consideration when this situation arises is corporate restructuring. Corporate structuring requires the “shaking” of the corporate resources, processes and systems to come up with a more viable structure in order to sustain the business. It requires a detailed study and analysis of the current business models, marketing strategies, human resource structures, financial processes, expenditures, and other operational aspects of the business. It can also involve studying the external factors that affect the current business condition. In other words, corporate restructuring is a holistic approach to ensure the business will still be worth operating, making it profitable and reasonable to operate. Continue reading “Corporate Restructuring – Making the Process Easy” »

Corporate Restructuring – Getting Business Legal Services

Companies can experience a period where they consider whether is is viable to proceed with operation or file for bankruptcy. If, after careful consideration of circumstances, the former is the best business decision, the course of action is corporate restructuring. This involves a focused effort to analyse existing business strategies and devise mechanisms to create or revise new approaches to improve and increase the company’s profitability. This is an effort that involves close attention to company resources, processes, responsibilities, people and other aspects of the business. This is aimed at increasing profitability while decreasing liabilities and costs. Corporate restructuring is needed when a risk of failure or default is becoming apparent. When the risks can still be managed and there’s a possibility of turning things around, corporate restructuring becomes the best approach to take. With contingency planning this solution will be effective. Continue reading “Corporate Restructuring – Getting Business Legal Services” »

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” »

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