Sales Agreement

The sales agreement is the most common of all the business agreements. It involves the buyer and the seller and the possession or ownership of a property in exchange of a specified amount as stated in the contract. Conditions have to be met first before the deal is sealed. The contract of this agreement contains the detailed information about the seller, buyer, and the property. The type of sale, initial agreement date, any amount deposited, and date of the completion of the contract and ownership transfer are stipulated in the contract. Sales agreement is, most of the time, subject to certain revisions.

Joint Venture Agreement

A joint venture agreement is an alliance of two or more parties to execute a short-term business project. The short-term time element of a joint venture agreement distinguishes it from a partnership. In this agreement, the parties, as stipulated in the contract, agree in sharing the losses incurred and the profits gained in the business undertaking. The sharing of losses and profits is properly outlined. In forging an alliance, it should be noted that the resources owned or possessed by the participating parties are complementary. In this kind of business agreement, responsibilities and expectations for all the participants are also set and stipulated in the contract.

Agency Agreement

An agency agreement involves persons and/or organizations bound by a certain contract on the nature of work, amount of pay, and terms of agreement. One is referred to as the agent and the other is referred to as the principal. In this agreement, the agent performs business on behalf of the principal on specified circumstances. The agent performs a fiduciary role in the interests of the principal and receives compensation or commission for the use of his/her expertise. Examples of agents are brokers and lawyers in the discharge of their duties.
Trade Agreement

A trade agreement is a contractual agreement common between states or countries of the world related to trade relations between them. A trade agreement intended for two parties is called a bilateral trade agreement. A multilateral trade agreement is intended for more than two parties. Trade agreements are intended to increase trade between or among parties and lessen trade barriers. Reciprocity is an important feature of this kind of agreement which means that what the parties gain is as much as what they lose. Without this element of reciprocity, the parties will not be forced to sign the contract.

Distribution Agreement

A distribution agreement is a contractual agreement between a supplier and a manufacturer where the supplier is bound to sell and/or distribute manufactured products. There are cases when the contract stipulates terms which involve advertising of the same products. Basically, it’s the manufacturer that pays in order to enter into the distribution agreement. Yet, there is another agreement that ensures that the supplier and the manufacturer make money out of the deal.

Franchise Agreement

Franchise agreement involves a contract that stipulates the obligation of the franchiser and the franchisee to the enterprise and to each other. The contract also involves territorial rights and reasons for termination. The contract also includes details such as the nature and trademark of the franchise. The franchiser has full control of the way the product or service is projected to the customers though the franchisee remains to be the owner of the enterprise. The operation of a franchise does not require a specific time.

Competition law is a major branch of business legal matters that needs to have a very careful balancing act for those that are trying to grow a business in today’s landscape.

Competition is a healthy part of industry and without it; things don’t look so appealing to consumers. It is a great part of the landscape that makes the world’s economy shift into favorable points.

When there is a healthy abundance of competition, the consumer wins, companies grow in size, and everyone will benefit, it’s when problems arise that the consumer ends up hurting just as bad as businesses that have to close down as a result to the issues that are presented through anti-trust. There are many cases in which this occurs, and it grows annually thanks to the increase of online businesses.

I am very excited since I have been afforded the opportunity to address the group for an hour and a half on the subject of doing business in South Africa.

As I progress with the preparation of my presentation, I experience a growing realization of how fortunate myself and all South Africans are to live in this beautiful country, free from natural disasters, war and strange diseases.

I do not know enough of the local economy to address the group on business opportunities, but would inspire them to take comfort in the fact that we are a democracy with rule of law, a stable government, a matured sophisticated financial services and banking system, a growing emerging market, and a well established infrastructure, “easy to do business attitude” and willingness to welcome foreign investment.

Although in some respects we are a first world country and in others, a third world country, we are always conscious and mindful of the circumstances of the less fortunate and the previously disadvantaged. There are however, in my opinion, very successful measures in place to deal with these matters.

What makes this rating significant is that there are only 6 admitted attorneys currently attending to matters dealt with by Van Der Merwe Attorneys, a valid indication of the standard of skills that we posess.

“Deal Makers” is an independent publication, which is widely recognized as a leading publication regarding mergers, acquisitions and corporate finance activities.

Once again this achievement would not have been possible without our clients’ trust and instructions.

We value their support and we will continue to use our best endeavors to add value to their organizations and aspirations.

Extract of Dealmakers in the Busdiness Day newspaper on 9 May 2013.

There is an element of predictability in the rules and practices that businesses will apply to merger and acquisition deals moving forward.

When one evaluates current trends, regulations and risks it is fairly easy to determine how the commercial landscape is changing and what the new rules will be.

Future Practices:

• To start with, businesses will attribute more focus to the business they seek to merge with/acquire , with an emphasis on proper due diligence;
• There will be a trial implementation phase before the implementation of mergers and acquisitions to enable businesses to be sure of proper integration and synergy;
•  Proper identification and analyzation of target companies is crucial to proper planning;
•  Identification of the key terms of the deal to be negotiated and agreed;
•  Greater emphasis on effective integration, especially in respect of systems, people, and culture;
•  An increasing movement within the M&A sector towards cash generating businesses;
•  Identifying the correct markets to expand into with the focus on increased profitability.
•  Identifying and dedicating the correct skilled team to negotiate a transactions and the correct team to implement the transaction;
•  As much as possible, funding of transaction will be executed byutilising cash reserves;
•  An increase by businesses in cross boarder deals to diversify as it becomes progressively less burdensome from a legal and regulatory perspective to do these types of transactions;
•  Greater focus on local knowledge in respect of cross boarder transactions than is currently utilised;
•  M&A activity will be approached more cautiously in general.

Of course, the word “best” is a relative word, but you can generate thoughts, opinions and ideas, and create a good decision based on the information that you have gathered.

Aside from these basic questions, here are some important factors that needed to be evaluated before choosing your corporate lawyer. These factors are carefully evaluated, not just based on others’ opinion, but based on your preferences at the same time.

• A good business lawyer must show that he / she genuinely cares about all your business concerns.
• Someone who is a good listener, without anticipating what you’re about to discuss next.
• While success is very important for most businesses, your business attorney will help you achieve your success based on your goals, and not based on how others define success.
• Aside from being a good listener, he / she is must also be good in probing questions and discussing issues that can lead to more relevant topics and ideas.
• Gives ideal and alternative suggestions on dealing with business issues or problems.
• A good corporate lawyer comprehends your goals. The lawyer is not just someone that will suggest things that you can do based on what the law says and what is right, but he / she also has to give suggestions based on what your goals are. Without knowing your goals, it will be difficult for the professional to give suggestions that can lead your business towards success.
• Can answer all your inquiries promptly, completely and clearly.
• Shows respect to you, your time and staff altogether.
• Promptly answers your phone calls, text messages and / or emails.
• Gives you an explanation on the things happened in the past that may have caused you to reach your goals.
• In every course of action that you make, the best corporate lawyer tells you the possible consequences of these actions. He / She will give you both the pros and cons of a specific action, and let you weigh your decisions properly.
• Additionally, aside from giving you consequences on certain decisions made, a business lawyer will also give you an assessment of your success rate and chances depending on the actions and your plans at the same time.

If you currently have a business lawyer and you don’t like what you’re getting, the chances are, you may not have evaluated him / her properly. Remember, choosing a corporate lawyer is an investment. It is not just a service that you need, because you want to get out of trouble. Instead, it is an asset to your company which can lead you towards your business’ success.

For example, if you want to sell your house, you cannot just download a real estate contract off the internet. You need it to be well-written, with the terms and conditions as well as additional sections within that agreement that you specifically want to be added. There is not specific format, but there are things that you have to bear in mind when coming up with a contract. This is why hiring a lawyer when it comes to agreements play an essential role, and this is one of the firsts in terms of the ABC of agreements.

Another aspect in the ABC of agreements includes your opening offer. Regardless of what type of contract you have, it is important that you have an opening offer and the initial amount that the buyer has to pay for the house, property or business. Majority of documented agreements are done by the seller, which is why it is even more important that if you are a property owner, seeking legal advice is more important.

Remember that the offer is one of the things that the buyer will be looking into, so make sure that you On the other hand, as a buyer, you have to understand these things too, to avoid going over a number of flaws and things that you may have problems with in the near future with your contract.

Aside from the opening offer, your agreement must also indicate the payment terms (if any), and additional terms and conditions that you think is significant. The offer must at least include information which is actually benefit both parties, and give a detailed explanation on other agreement rules.

The closing statement is another significant part of the ABC of agreements. Whenever creating a legal document, you have to start it with a good opening statement, a body and the offer, and of course the closing statement. The closing statement summarizes everything, while it also indicates that both parties have read and understood the written agreement.

Sometimes, revisions had to be made – don’t worry; this is a normal thing and most lawyers will have to look at the agreement a couple of times before finalizing everything. This is because everything has to be clean and perfect before both parties involved place their signatures showing their adherence to the agreement.

To know more about the ABC of agreements, you can consult your lawyer. Legal advice is given to people who are in great need of it. Today, you can simply search the internet for advice and schedule a one-on-one consultation with one of the best lawyers that is in town.

Furthermore, we worked towards this goal of our own accord and without external pressure to improve our BEE status.

It is important for us to be ahead of the proverbial curve in the manner with which we conduct business. In this vein, it is not sufficient for us to merely have a superior BEE status, but rather that we use this status to better explore how we can add real value to the lives of the under-privileged.

We believe that to build a sustainable business it is fundamentally important to recognize the interests of the wider community and to apply practices that enrich the lives of people beyond our own offices. We recently wrote an article about who the real interest holders in companies are.

Companies are an integral part of our society and as we specialize in company law, it is critical to us that as much as possible we incorporate methods and practices into our business that.uplift the wider community.

In this regard, we are proud to be uniquely positioned to have potentially the best BEE rating amongst all the specialist commercial law firms in South Africa.

Depending on your skill set and your experiences, people may have their own perspective on which companies they should invest to and work for. But first and foremost, what’s the difference between public and private company M&A? Let’s first take a glimpse on what these two are, making it easier for you to make the right decisions in the near future.

Public Company – shares and stocks of public companies are available for everyone and are for sale. They are publicly sold in the stock market, and any investor may take into account whether they wanted to buy the stocks from that company or not.

Private Company – On the other hand, a private company’s stocks and shares are not available in the stock market. Certain considerations and documentations must be done for one to buy and get a percentage of the shares for that company. Unless you own the company, work for them or one of its founders, you cannot simply buy “shares” unlike in public companies.

These are the two general differences of public and private companies. But what does it have to do with mergers and acquisitions?

Unless you’re planning on doing investment banking for a huge corporation, investing and attempting to buy stocks from a private company seems impossible. Private Company M&A usually happens when the establishment has decided that they’re starting to slow down in terms of their revenues, and are looking for other ways where they can get back on track without losing from their competitors.

Sometimes, these establishments even offer to buy smaller yet threatening competitors and trying to see if they’d be interested in a merger or acquisition deal. Just like anything else, you have to know which industry you’re about to enter, and you have to learn what the consequences are – positively and negatively at the same time.

If you’re starting out, going for public rather than private M&A will be the best way to try everything out. You can get involved in mergers and acquisitions of shares with private companies, but you have to be pretty knowledgeable first before even entering this venture.

There are public companies that you can check out and  buy shares from easily from the stock market. At least, you will have an idea on how the market actually works, and you will not get overwhelmed as soon as you have clients woking from a private company.

Get to know what your deals are. Have a better understanding on these differences and at least have legal knowledge and advice before finally making a decision. A simple mistake in this industry can lead you to bigger problems in the near future.

Transfer prices are the prices at which an entity transfers goods and services to connected persons.

The amended laws which relate to the implementation of the prevention of this loss by SARS has been developed on the same level as other first world countries in order to comply with international best practice and apply to “affected transfers” as defined in the Income Tax Act 58 of 1962 (“the Act”):

   ‘affected transaction’ means any transaction, operation, scheme, agreement or understanding where-

a)that transaction, operation, scheme, agreement or understanding has been directly or indirectly entered into or effected between or for the benefit of either or both—

i)

aa)a person that is a resident; and

bb)any other person that is not a resident;

ii)

aa)a person that is not a resident; and

bb)any other person that is not a resident that has a permanent establishment in the Republic to which the transaction, operation, scheme, agreement or understanding relates;

iii)

aa)a person that is a resident; and

bb)any other person that is a resident that has a permanent establishment outside the Republic to which the transaction, operation, scheme, agreement or understanding relates; or

iv)

aa)a person that is not a resident; and

bb)any other person that is a controlled foreign company in relation to any resident,

and those persons are connected persons in relation to one another; and

b)any term or condition of that transaction, operation, scheme, agreement or understanding is different from any term or condition that would have existed had those persons been independent persons dealing at arm’s length;”

Amongst the amendments to the South African tax law, is the amendment to section 31(1) of the Act.  The new section 31 seeks to capture indirect transactions for transfer pricing purposes, thereby substantially widening the scope and application of the section. There are two key changes in this section of the Act:

The first amendment is that in the past legislation focused on the pricing of cross-border transactions between related parties. The result of this was that if this was not adhered to, SARS could substitute the price with what it considered to be an arm’s length price. This simply means that the transaction should have the substantive financial characteristics of a transaction between independent parties, where each party will strive to get the utmost possible benefit from the transaction. Although this principle still applies, SARS has taken a broader stance on the arm’s length principle and does not only consider the pricing but all aspects of the transaction which could indicate whether it is an arm’s length transaction or not;

The second change is relating to transfer pricing adjustments. Where in the past SARS was granted the discretion of making the adjustments to ensure that the transfer pricings were at arm’s length, this onus has now been shifted to the taxpayer. As such, the taxpayer is burdened with the legal obligation of ensuring that the transfer pricing is adjusted to arm’s length pricings.

The determination of an arm’s length consideration is not an exact science but requires judgment on the part of both the taxpayer and the Commissioner. Accordingly, taxpayers and the Commissioner need to approach each case, having due regard for the unique business and market realities applicable to each individual case.

In this regard, the new rule provides that where there is a difference between the actual price and the arm’s length price, the difference will be deemed to be a loan for the purposes of section 31 of the Act and interest must be charged thereon at an arm’s length interest rate. This deemed interest will accrue until the loan has been repaid in full, including the interest amount.

There are no specific penalties as of yet for this particular type of default, however, the provision of section 75 (penalty on default), 76 (additional tax in the event of default) and 104 (offences and penalties) shall apply to this situation alike any other default as stipulated in the respective sections.