An external company is not a company as defined in the Companies Act, and it cannot therefore have prescribed officers with the obligations and liabilities imposed by the Act.
Prescribed officers are employees or other persons who, although they are not directors, exercise executive control over a significant part of a company’s business or participate
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
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
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
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
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
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
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
Businesses across the country are facing serious headwinds.
South African law requires that directors must exercise their powers in the best interests of the company, and with the degree of care, skill and diligence that may be reasonably expected of a person carrying out those functions. Directors can be held personally liable, and are now
Limiting risk in a pandemic
The effects of COVID-19 on the economy has led to many companies facing the possibility of being declared financially distressed. The mounting pressure on directors to appropriately fulfil their duties in response to this crisis will continue into the foreseeable future.
Risk advisory: Practical considerations and steps for directors
While