LEGAL NEWS
Prescription of Debt – by Anye Jansen van Rensburg
Prescription of debt is a well-known concept, but very few people actually know what precisely it entails. There are four factors/questions to consider when determining if a debt has prescribed.
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Businesses (or “creditor(s)”) must register as credit providers when:
The sum total of all outstanding debts (or monies owing in
terms of credit agreements) exceed R 500 000. This is
regardless of the number of agreements involved.
Repercussions if not registered as a Credit Provider:
Where a creditor extends credit and is not registered as a
credit provider in terms of the National Credit Act 34 of
2005 (“the NCA”) then the creditor will have no claim in
terms of the NCA and may only have a claim based on
unjustified enrichment.
It is important that credit
providers are duly registered in order to protect their
businesses and claims.
Legal Standing of Acknowledgements of Debt by Meegan Henkeman.
An Acknowledgment of debt, commonly referred to as an “AOD”,
‘is a document which contains an unequivocal admission of
liability by the debtor. The debtor acknowledges that he or
she owes a particular sum of money to the creditor and
undertakes to repay what is owing on terms so agreed between
the parties therein. For many reasons these are useful tools
for any creditor.
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PROTECTION OF PERSONAL INFORMATION ACT (POPI) – by Nicolene Schoeman Louw
This year has marked the introduction of another piece of
legislation, namely the Protection of Personal Information
Act (POPI/Act). Although only recently accepted by the
National Assembly, it is important for everyone who handles
information to take note of some basic concepts contained in
this piece of legislation.
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WHAT THE COMPANIES ACT MEANS TO YOU
The Companies Act 61 of 1973 (the ‘old Act’) distinguished
between the rights and duties of executive and non-executive
directors.
The relationship between the company and its
executive directors was regulated by their employment or
service agreements and by prevailing corporate laws.
Under the old Act, executive directors are employees of the
company, while non-executive directors are not.
-Entrepreneur Magazine
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Exemption clauses and Consumer Protection Act – by Anye Jansen van Rensburg
Public policy requires that courts give effect to exemption clauses in instances where it entails that the court will by enforcing the clause give effect to the intention of the parties to the agreement. Thus giving effect to the caveat subscriptor rule of contract that parties are bound to an agreement that they have signed. The question is however when courts will not give effect to exemption clauses. The short answer is that exemption clauses that are against public policy will be unenforceable. Read full story
Lease agreements – the tax implications of poor drafting – by Luise Ostler
The person who drafts a contract or agreement must, as a
matter of course, take into account myriad factors when
ensuring the best result for both parties to that contract
or agreement. When it comes to ensuring that the tax
implications of a contract or agreement are favourable for
the party upon whom a tax liability may fall, the drafter
needs to ensure they consider not only the income tax
implications but also the implications for capital gains tax
(CGT), value-added tax (VAT) and in some cases estate duty.
Therefore, the responsibility that rests upon the shoulders
of a drafter is considerable.
Here, we discuss an
example of what can happen when a drafter fails to take into
account specific tax-related nuances in the context of lease
agreements, and improvements to rental premises in
particular.
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MORATORIUM ON CLAIMS IN BUSINESS RESCUE PROCEEDINGS – by Mzo Tshaka
One of the new concepts introduced by the new Companies Act (“the Act”) is the concept of business rescue. This concept finds its foundation in one of the stated purposes of the Act, which is to “provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders”. Amongst other things, business rescue is aimed at providing an alternative to a liquidation process, to make it easier for companies in financial difficulty to be rescued and to continue as commercially viable entities.
USING TRUSTS IN BUSINESS
Successful business owners often use trusts to limit risk
but do so without any consideration as to tax and other
implications or best strategy or option for their specific
circumstances. In my view, this is simply due to the lack of
understanding of what a trust is and how it works.
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Severability Clauses
Severability clauses are one of the most common clauses found in commercial contracts. There-fore, it is important to understand what they mean and how they affect your agreements. A severability clause usually states that if any portion or clause of a contract is found to be invalid or unenforceable for any reason, that part may then be ‘severed’ from the contract, allowing the remainder of the contract to operate normally. A severability clause may also state that no severance is permitted. In other words, should any part of the contract be deemed invalid, then the entire agreement is void. It is vital to be able to differentiate between such clauses to determine your contractual obligations with certainty.
What now for close corporations? – by Mzo Tshaka
There has been confusion among some owners of (largely)
small businesses who have not fully grasped the true
implications of the new Companies Act (the Act). Most of
these small enterprises are run as close corporations (CCs)
and some business owners have been unsure whether they can
continue to trade as CCs or if they needed to convert to
private companies under this new piece of business law. We
focus on what changes business owners need to make – if any.
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Removal of adverse information from credit bureaus - by Mzo Tshaka
On 25 February 2014 the Minister of Trade and Industry, Dr
Rob Davies, published the Regulations relating to the
removal of adverse consumer information from the credit
bureau (“the Regulations”).
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