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The Removal of a Director in terms of a Sharholders’ meeting and the associated legal mine field

In practice one often finds one’s self dealing with the situation where the shareholders of a private company who are also the directors of said company have fallen into a dispute and have reached the situation where they can no longer work together. At this point in time, one of the shareholders may look to [...]

Unauthorised Distributions and the Dangers of turning a Blind Eye

It goes without saying that the primary goal of a profit company is to increase the wealth of its shareholders, by paying dividends and causing the price of the company’s shares to increase. The company’s board is entrusted with managing the business and affairs of the company in the interests of the company’s shareholders, as [...]

Insolvency and Partnerships

Introduction From the moment a partnership is sequestrated, its creditors are mostly confined to the partnership assets and inevitably deprived of any recourse against the partners individually.  According to Michalow v Premier Milling Company Limited 1960 (2) SA 59 (W) (“Michalow case”), a partnership is treated, for purposes of insolvency law, “as a separate entity [...]

Considering the ECTA when drafting Non-Variation clauses

Any astute attorney, when drafting a contract, will be very careful to ensure that the contract meets two essential standards: firstly, that the contract clearly represents the intentions of the contracting parties involved and, secondly, that the contract pronounces the fact that such intentions coincide and are unequivocally agreed between the parties. A dispute relating [...]

Trustees Acting Without Authorisation

It is often the case that contracts entered into by trustees on behalf of a trust are regarded as being void. Cameron JA in Land and Agricultural Bank of South Africa v Parker and Others 2005 (2) SA 77 (SCA) stated that, “It is a fundamental rule of law… that in the absence of contrary [...]

Important Announcement !!!

VDMA is proud to announce that as from 05 June 2014 we have been approved by the Oval Table as a South Africa "Magic Circle" law firm bestowing upon us the highest honor achievable in the legal industry in South Africa. Wikipedia describes the “Magic Circle” as an informal term for those firms who are [...]

The Turquand Rule And Its Effect On Directors Acting Without Authority

  Introduction The Turquand Rule was initially intended to mitigate the stark effects of the doctrine of constructive notice by entitling bona fide third parties who contract with a company, to assume that all of the company’s internal governance necessary for the conclusion of a valid contract has been properly carried out. An irrebuttable presumption [...]

Do Employees Owe a Fiduciary Duty to Their Employer?

Section 76 of the Companies Act No. 71 of 2008, the (“Act”), provides for a partially codified system of directors’ duties.  In terms of this section, a director must always carry out his fiduciary duties of having to act in good faith and in the best interests of the company.   It is therefore commonplace [...]

“trading as” – the Legalities

It is common practise that companies often trade under names other than their name which is registered with the Companies and Intellectual Property Commission (“CIPC”), for example “Winsoft (Pty) Ltd t/a Software Industries”.   Logically, such trade names may not be the same as any other company name or trademark. Selecting such a trade name [...]

The Legal implications of the Voetstoots clause

  When you buy something there is an implied warrantee that the merx (object of sale) is free from any defects. It is however possible, that one can contract out of this implied warranty by inserting an exemption clause into the contract that says that the sale is voetstoots. The term voetstoots is a Dutch [...]

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