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Deadlock Provisions: A brief look at the Texan Shoot-Out and the Dutch Auction clauses

When parties start a new venture they are filled with ambition and optimism. They make grand plans to expand and conquer the business world. However, before long they start making plans on how to escape the nightmare that is their business partner. A prudent party can avoid this situation by inserting a deadlock provision into [...]

Understanding the revised Broad-Based Black Economic Empowerment Codes on Large Enterprises in South Africa

Broad-Based Black Economic Empowerment (“B-BBEE”) is a South African government initiative and investment treaty, which echoes the national constitutional commitment to promote equality in order to address the historical imbalances of Apartheid. The B-BBEE structure does so by facilitating economic transformation and the creation of a new indigenous class of Black entrepreneurs in the mainstream [...]

VDMA’s contribution to the Thomson Reuters Agricultural Law Global Guide

We are pleased to share VDMA’s contribution to the Thomson Reuters Agricultural Law Global Guide entitled ‘Agricultural law in South Africa: overview’. Thomson Reuters is a major multinational mass media and information firm founded in Toronto, Ontario, Canada and listed on the Toronto and New York Stock Exchanges. VDMA’s contribution to the renowned legal publication [...]

Suretyship vs Guarantee

Suretyship and guarantees are important mechanisms in our economy. They act as a safety net for transactions both big and small. This begs the question: what is the difference between a guarantee and a suretyship? The main distinction, which will be discussed in more detail below, is that the suretyship is based on accessory liability [...]

The implementation of schemes of arrangements, as fundamental transactions

A fundamental transaction is one which fundamentally alters a company. One such transaction is a scheme of arrangement in terms of section 114 of the Companies Act, No. 71 of 2008 (“the Act”). A scheme of arrangement is a binding agreement entered into between a company and its shareholders as a legal mechanism to effect [...]

‘Fair value’ in light of the Delaware Decisions

Many developed countries (including Canada, New Zealand and all the states in the United States of America) have adopted the remedy of dissenting shareholders’ appraisal rights. The remedy is an innovation to the South African company law landscape and was recently provided for in Section 164 of the Companies Act No. 71 of 2008 (“Act”). [...]

The Corporate Opportunity Rule

In sharp contrast to the non-profit rule is the common law corporate opportunity doctrine which finds its application in South African company law in instances where a director misappropriates and exploits for himself, an economic opportunity of the company. Such an opportunity is said to be a ‘corporate opportunity’ or one which is the ‘property’ [...]

When must a foreign company register as an external company in the Republic South Africa?

Section 23 of the Companies Act No. 71 of 2008 (the “Companies Act”) provides that a foreign company must be regarded as “conducting business, or non-profit activities, as the case may be, within the Republic” if that foreign company: is a party to one or more employment contracts within the Republic of South Africa; or [...]

Looking back at 2015

  Looking back at 2015, we are once again astonished by the excellent year we have enjoyed! It is our privilege to serve and add value wherever possible, and we are humbled by the continued support we receive from our loyal clients.   Some of VDMA’s highlights for 2015:   1. We were ranked No. [...]

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 [...]

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