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New impacts on the Net Income of Controlled Foreign Companies

The minister of Finance raised a concern that the current Controlled Foreign Company (“CFC”) rules do not include foreign companies held by interposed trusts or foundations. South Africa force taxes on worldwide income of South African residents. The Income Tax Act contains anti-avoidance provisions. An example of one of these provisions was the introduction of [...]

The extension of preferential rights – the collateral consideration

Recent development in our law highlighted the implication of the verbal extension of preferential rights embodied in a written agreement. This article briefly discusses the legal principles surrounding pre-emptive rights, the new legal developments in this regard and the dangers associated with extending same. A contract may grant a preferential right to conclude a subsequent [...]

SARS is deducting my income tax

SECTION 12J OF THE INCOME TAX ACT NO. 58 OF 1962: SARS IS NOW PREPARED TO DEDUCT ALL YOUR TAXABLE INCOME: PART ONE One of the significant hurdles facing South Africa’s burgeoning small and medium-sized businesses is the access to equity finance. To assist in alleviating such difficulties, the government, in conjunction with the South [...]

Liquidated damages: The compensation lifeboat

Liquidated damages are those pre-agreed damages that are included in an agreement and serve as a safeguard in the form of compensation at the disposal of an aggrieved party where the other party fails to perform. An example of such a provision would be where Party A, as part of a private equity transaction, purchases [...]

Welcome back!

Dear Valued Clients, Welcome back! We wish you prosperous and successful 2018. 2017 was an exciting year for us. We have relocated our Centurion office to larger premises, increased our professional and support team, secured office space for the relocation of our Johannesburg offices in 2018 and extensively developed our local and international client base. [...]

Provisions Concerning Non-Profit Companies

In terms of the Companies Act 71 of 2008 (“Companies Act”) a non-profit company must have a memorandum of incorporation which sets out at least one object of the company. Each such objective must furthermore be either a public benefit objective or an object relating to one or more cultural or social activities, or communal [...]

Board Committees

Except to the extent that a memorandum of incorporation (“MOI”) of a company provides otherwise, the Companies Act No. 71 of 2008 (“Companies Act”) allows for the board of directors of a company to appoint any number of committees of directors and delegate any of the board of directors’ authority to such board committees. Generally, [...]

The Impact of Business Rescue on Employees

Business rescue has become a popular alternative to liquidation of a company. The Business Rescue procedure was introduced through section 6 of The Companies Act 71 of 2008 (“Companies Act”). One of the principal differences between the two is that, while under the supervision of the business rescue practitioner, the company continues to trade. The [...]

Board Meetings

Section 73 of the Companies Act No. 71 of 2008 prescribes the manner in which board meetings of a company must be convened. A director who is authorized by the board of directors: (i) may call a meeting at any time; and (b) is obliged to call a meeting if 25% percent of the directors [...]

London Visit During Black History Month

In celebration of Black History Month in October, Pieter van der Merwe and Marilize Jerling attended a legal conference in London in October 2017, representing both VDMA and South Africa in their attendance. Guest speakers at the conference included the Honourable Justice Albert ‘Albie’ Louis Sachs, a former judge of the constitutional court of South [...]

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