May 2015


Editor's Note - May 2015 Editor's Note May 2015

There was a time when I was suddenly really proud to be South African. I remember the queue in which we gladly stood for the referendum that sounded a resounding "yes" to change. I remember the defining moment when Nelson Mandela took office as the first president of a democratic South Africa. The queues that snaked round the suburbs for the first election.

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Clarity on company de-/re-registrations Company Law May 2015

The Supreme Court of Appeal has now had what should be the final word on this topic: when the Companies and Intellectual Property Commission (CIPC) reinstates a deregistered company under s82(4) of the Companies Act (71 of 2008) there is full retrospective reinstatement of the company and, if a third party feels prejudiced with that result, he can apply to court for a just and equitable order under s83(4). The case in question is Newlands Surgical Clinic v Peninsula Eye Clinic (086/2014) [2015] ZASCA 25 (20 March).

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Restoration of companies Company Law May 2015

Section 82 of the Companies Act (71 of 2008) (the New Act) replaced s73 of the Old Companies Act (61 of 1973).

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A "New Port" of call? Company Law May 2015

The business rescue provisions contained in Chapter 6 of the Companies Act (71 of 2008) do not address the effect that the adoption of a business rescue plan has on creditors' rights against sureties. The crisp but important question is whether a creditor loses its claim against a surety who provided security for the debts of a principal debtor that subsequently went into business rescue and after a business rescue plan was adopted.

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The rise in shareholder activism Company Law May 2015

Corporate collapses and the financial crises increased the focus on corporate governance, resulted in reviewed corporate governance practices (such as King III and the Code for Responsible Investing in South Africa (CRISA) and led to an increase in shareholder activism.

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Could negative control trigger financial assistance? Company Law May 2015

Sections 44 and 45 of the Companies Act, 2008 provide that a company may not give any financial assistance (which includes lending money, providing guarantees or securing any debt or obligation) to a "related or inter-related" company. The exception is if it is pursuant to an employee share scheme or approved by a special resolution adopted by the shareholders of the company within the previous two years. This article focuses on the requisite shareholder approval and what types of inter-company relationships (related or inter-related) and shareholding would trigger s44 and s45.

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Cancellation or suspension of agreements during business rescue Company Law May 2015

Can a creditor cancel an agreement with a company in business rescue and what is the consequence of a business rescue practitioner suspending an agreement before cancellation?

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Joint wrongdoers Company Law May 2015

Joint wrongdoers are persons who are jointly and severally liable in delict for the same damage. If one party is liable in terms of a contract, then the Apportionment of Damages Act (34 of 1956) does not provide for a recovery action against another party. Both parties have to be liable in delict for the same damage.

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Might dividends tax be unlawful under certain double tax agreements? Tax May 2015

It is now well understood that dividends paid to all nonresidents are subject to dividends tax at the rate of 15%, unless reduced in terms of a particular double tax agreement (DTA). (There are still a couple of DTAs that provide for a zero withholding tax on dividends but their days are numbered, and the lowest rate of withholding tax will be 5% where there is a so-called substantial holding – typically at least 10%, depending upon the DTA concerned.)

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How should you own residential property in the UK? Tax International Law May 2015

Should this be direct ownership, or through a company, trust or other structure? If you already own UK residential property should you change how it is owned? There is no simple answer. It will depend on a combination of factors including whether it is a long or short hold, the value of the property, whether it is going to be rented, the age and health of the owner(s), how it is funded and whether there is a need for confidentiality. There have been significant changes to the taxation of UK residential property recently. This will mean that existing UK property ownership should be reviewed, and care taken with how new UK property is purchased.

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A trusted path Trust Law May 2015

The idea of trust is a universal concept and stems from the depths of antiquity. Although Roman and Roman-Dutch law form the basis of South African common law, the trust, as it was received in South Africa, derives mainly from Germanic and English law. While South Africa's fundamental principles of trust law remain similar to English law and other common law jurisdictions, the courts have deviated in their treatment of sham trusts, alter-ego trusts and generally going behind the trust form.

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Employers beware – a withdrawn dispute may not be the end! Employment Law May 2015

After being dismissed, a disgruntled employee often refers an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) or the relevant bargaining council for conciliation and, if unresolved, arbitration. After a few days the same employee may decide, for whatever reason, to withdraw the dispute from the CCMA or the bargaining council, which is, seemingly, good news for an employer

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Red-Tape requirements Africa - Mozambique May 2015

In Mozambique, the growing influx of foreigners to meet the demand for skilled labour resulting from the expansion of various projects, means that there is a need to understand and master the legal framework for the employment of foreign labour.

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Putting the “people” into the deal Competition Law May 2015

The Competition Commissioner, Tembinkosi Bonakele, believes one important reason why so many mergers and acquisitions fail is because the merging parties have not put enough thought into the "people" aspect of the deal. Bonakele was recorded as stating that "a reluctance to look at this aspect of deals was evident in the merger applications that came before the Competition Commission". In his opinion, merging companies are now explicit about the impact of a merger on employment – but not as forthcoming as they should be. When Bonakele attended the Global Competition Review conference in Cape Town in February he indicated that "the competition authorities want merging parties to quantify the effect on employment and establish if there is any alternative".

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