Topic: General

Buying or selling a business: Types of purchase price mechanisms

By Ildiko Gyarmati on June 3, 2020 Posted in General

When buying or selling a business, the way in which the purchase price is structured and paid is as important as the base price agreed on. There are various ways to structure the deal to bridge the gap between what price a seller is willing to sell at and what perceived value a purchaser is … Continue reading

Cancellation for breach of contract: 10 things to know

By Siyabonga Mathe on June 3, 2020 Posted in General

Cancellation as a remedy for breach of contract is only available where the parties have incorporated a right to cancel in their contract, or where the breach is of a sufficiently serious nature to justify cancellation. The contract may expressly state that if one of the parties breaches terms of the contract or fails to … Continue reading

Competition laws require online platforms in the ‘gig economy’ to protect SME and black suppliers

By Rosalind Lake (ZA) on May 27, 2020 Posted in General

The Competition Act was amended in February 2020 to introduce new rules to protect small, medium and black-owned suppliers in specific sectors (the buyer power provisions). These include the e-commerce and online services sectors (the gig economy). On 18 May 2020 the Competition Commission issued its guidelines on the buyer power provisions. These guidelines set … Continue reading

Entering into a compromise with creditors – ten things to consider

By Akhona Boloko and Shawn Barnett (ZA) on May 27, 2020 Posted in General

Companies may attempt to rearrange their financial affairs to minimise the financial impact of the pandemic (or for any other reason). Section 155 of the Companies Act provides an informal mechanism of restructuring a company’s obligations to creditors. Here are 10 things to consider when entering into a compromise with creditors: A compromise is an … Continue reading

You may not claim both a section 18A certificate and BEE points for donations to a non-profit entity

By Liesl Williams and Amber von Steiger on May 24, 2020 Posted in General

Donations to non-profit entities may carry a tax benefit for the donor – the hallowed section 18A certificate. This allows the donor to claim a tax refund and encourages donations. Non-profit entities that are Public Benefit Organisations (PBO) can issue these certificates. PBO status is granted by the South African Revenue Service (SARS) under the … Continue reading

Equitable Jurisdiction: The Pension Funds Adjudicator cannot make orders disregarding statutory provisions

By Amina Yuda and Michelle David on May 21, 2020 Posted in General

Since 1 April 2019, the Pension Funds Adjudicator has been empowered to apply the principles of equity in dealing with complaints. The concept of an equity jurisdiction has raised concerns in the industry due to its discretionary nature. The concept of ‘equitable jurisdiction’ has been the subject of a recent determination by the Financial Services … Continue reading

CIPC Intellectual Property services recommenced phased in from 1 May 2020

By Aletia Oberholster on May 21, 2020 Posted in General

The Companies and Intellectual Property Commission (CIPC) Intellectual Property (IP) division’s external systems resumed on 1 May 2020 but are managed by limited staff. Although provision was made to extend any deadlines which fell after 25 March 2020 to 6 May 2020 (excluding 4 and 5 May 2020), you will be required to apply for … Continue reading

Replacement of directions relating to the once-off movement of persons and transportation of their goods

By Carina van Vuuren and Jolene Ellish on May 18, 2020 Posted in General

The directions in terms of the Disaster Management Act relating to the movement of persons and goods which were issued on 7 May 2020 have been revoked and replaced. The new directions issued on 14 May 2020 offer more flexibility because the movement of persons is no longer restricted to residential property only. The new … Continue reading

Defence of justifiable error in signing a suretyship fails

By Patrick Bracher (ZA) on May 17, 2020 Posted in General

The respondent in Airports Company SA Limited v Masiphuze Trading (Pty) Ltd was unsuccessful in relying on the defence of justifiable error in trying to avoid being bound by a suretyship agreement that he signed but did not read. The respondent entered into a suretyship for a lease debt in respect of premises at the … Continue reading

Selecting a BEE shareholder – the process is not as unusual as you think

By Amber von Steiger on May 17, 2020 Posted in General

Broad-based black economic empowerment (BEE) ownership transactions that have gone wrong are often exciting fodder for emotive news articles. But BEE ownership transactions are fundamentally the same as any other ownership transaction and shareholder selection process that would be undertaken in the ordinary course. However, a lack of understanding of the regulatory framework often creates … Continue reading

Money laundering risks in a global pandemic

By Sabeeha Kathrada-Khan and Marelise van der Westhuizen (ZA) on May 15, 2020 Posted in General

The Financial Intelligence Centre (FIC) published a notice in March 2020 indicating that there will be no relaxation of obligations under the Financial Intelligence Centre Act 2001 (FICA) during the nationwide lockdown. A robust money-laundering policy ought to form an integral part of any company’s compliance program. Business’s compliance functions must operate effectively, even if … Continue reading

e-Commerce directions: Key measures for retailers, customers and courier and delivery service personnel

By Jenine Naidu on May 15, 2020 Posted in General

From 14 May 2020, the sale of all goods on e-Commerce platforms, with the exception of alcohol and tobacco products, are allowed. However, in terms of the new Alert Level 4 e-Commerce directions, retailers, delivery services and customers are required to observe strict protocols at all stages of the transaction. Below are the key measures … Continue reading

Understanding the ranking of creditors within the liquidation process

By Thabang Dikgale and Stephen Kennedy-Good on May 14, 2020 Posted in General

The number of liquidations and sequestrations will, unfortunately, increase due to the COVID-19 pandemic. Preference shareholders with unsecured loans and third party unsecured creditors must be aware of the ranking of unsecured creditors’ claims in the liquidation process. This note specifically focuses on the unsecured loan given by a preference shareholder and not the ranking … Continue reading

Referral of an unfair dismissal dispute v an automatically unfair dismissal dispute – does it matter?

By Verushka Reddy and Kriyanka Reddi on May 13, 2020 Posted in General

It is the unfairness of a dismissal that is referred to conciliation, and not the reason for the dismissal. In resolving unfair dismissal disputes, the courts will look at substance over form. The court in Association of Mineworkers and Construction Union v Ngululu Bulk Carriers (Pty) Limited (in liquidation) and Others found that where AMCU … Continue reading

Relaxation of regulations for the property sector

By Carina van Vuuren, Elizabeth McCaul and Jolene Ellish on May 13, 2020 Posted in General

Under Alert Level 4, people can move house, the deeds office will soon reopen, and municipalities will resume functions, including the issuing of clearance certificates and meter reading. On 7 May 2020 separate directions in terms of the Disaster Management Act relating to Municipal Governance operations and the movement of persons and goods were issued. … Continue reading

Risk assessments for corporate donations

By André Vos and Sabeeha Kathrada-Khan on May 12, 2020 Posted in General

Charity contributions, sponsorships and donations often form an integral part of a company’s social responsibility initiatives. The generosity of companies making donations not only support the company in reaching its internal social responsibility targets, but also spark corporate morale and boosts a company’s public image. One of the positive sides of society’s reaction to the … Continue reading

Director’s disclosure of personal financial interests – What happens when you don’t walk away from the table?

By Raphael Chitambira and Stephen Kennedy-Good on May 12, 2020 Posted in General

A director of a company who has a personal financial interest, or knows that a related person has a personal financial interest, in a matter to be considered at a board meeting must disclose that interest and any other material information relating to the matter before it is discussed at the board meeting (section 75 … Continue reading

An arbitrator’s notes are irrelevant and not part of the record on review

By Siyabonga Mathe on May 11, 2020 Posted in General

An arbitrator’s notes do not form part of the record of arbitration proceedings, and the losing party, intent on a review, cannot compel the disclosure of the notes. In Zamani Marketing and Management Consultants v HCI Invest 15 Holdco, the claimant instituted proceedings in terms of the Arbitration Act 1965 to review and set aside … Continue reading

Chief Inspector of Mining ordered to publish health and safety guidelines to manage and mitigate against COVID-19 under Alert Level 4

By Danielle Ebrahim-Naseem, Murray Alexander and Georg Kahle on May 8, 2020 Posted in General

The Labour Court’s looming deadline of 18 May 2020, compels government to issue detailed guidelines on health and safety and requires that all employers prepare and implement a Code of Practice to mitigate the effect of COVID-19 on mine employees returning to work. Under Alert level 4, various mining operations are allowed to operate at … Continue reading

1000 strong: brush up on your legal knowledge

By Aneesa Bodiat and Patrick Bracher (ZA) on May 8, 2020 Posted in General

Our archive now contains over one thousand accessible, searchable blog posts, covering a wide range of topics. Here are some you may have missed – read them to quickly brush up on your legal knowledge: Corporate law How to establish a business in South Africa Blockchain, syndicated lending and secondary market trades 10 things to … Continue reading

CIPC has changed its approach to business rescue application filings during the lockdown

By Stephen Kennedy-Good, Olivia Radford and Yishika Moodley on May 6, 2020 Posted in General

Voluntary business rescue applications filed with CIPC during 24 March to 30 April 2020 will be processed by CIPC to reflect the dates on which they were filed. These applications do not have to be resubmitted. Similarly, the appointment of business rescue practitioners that were filed with CIPC during 24 March to 30 April 2020 … Continue reading

Annual returns process updated to include the completion of a compliance checklist

By Stephen Kennedy-Good, Ugendran Odayar and Yishika Moodley on May 6, 2020 Posted in General

The CIPC has granted an extension for the filing of annual returns (due to the lockdown), but the process now includes the completion of a compliance checklist, to prove compliance with the Companies Act. Annual returns All companies (including external companies) and close corporations are required to file their annual returns with the Companies and … Continue reading

Remember to issue shares when converting a CC to a private company

By Raphael Chitambira on May 5, 2020 Posted in General

Since the passing of the Companies Act 2008 in May 2011 it is no longer possible to register a close corporation (CC). However, the Companies Act allows a CC that existed prior to 1 May 2011 to continue to exist or to convert to a private company. Business owners often opt to convert their CCs … Continue reading

CIPC recommencement of services

By Stephen Kennedy-Good and Yishika Moodley on May 4, 2020 Posted in General

Services recommencement The Companies and Intellectual Property Commission (CIPC) has announced that it will be recommencing services on Wednesday, 6 May 2020. Those services will however be done with reduced staff, and therefore delays are inevitable. Business rescue proceedings In regard to business rescue proceedings, the CIPC has stated that any filings made between 24 March … Continue reading