Joint Ventures and Competition Law – do JVs require merger notification?
Joint ventures (JVs) are not defined in the Competition 89 of 1998 however, general principles of competition regulation are applied in determining whether the formation or expansion of a JV constitutes a notifiable transaction. It should be noted that even if the JV does not, in the parties’ assessment or the assessment of the Commission, the parties conduct may still be subject to the Competition Act and must ensure that they do not fall foul of its provisions, for example, by engaging in prohibited practices (sections 4, 5, 8 and 9).
Mergers and Acquisitions: When is a merger notifiable, what are the consequences of failing to notify the Competition Authorities and what must I do?
In order to trigger a notifiable transaction, the transaction must be considered a merger in terms of the Competition Act 89 of 1998 (“the Act”). The second requirement is whether the transaction meets the financial thresholds.
Pre-Emptive Rights and Sale of Shares Provisions for Shareholders
A private company registered in accordance with the Companies Act 71 of 2008 ('the Act') must restrict the transferability of its securities. This is required in section 8(2)(b)(ii)(bb) of the Act. A standard MOI (part of the set of documents issued by CIPC upon a company being formed) may not however suit your requirements and more...
The Dangers of the One-Page Agreement
I am often asked to provide clients with a one page document to record a business relationship, be it for the supply of services or for the sale of goods, or to record a change in the parties' relationship with each other, for example in a change to a shareholders' agreement or a change in more...
You have cleaned out the storeroom during lock down but have you looked at getting your company’s documents in order?
The financial and operational stress placed on many businesses as a result of the COVID-19 lockdown may inevitably result in restructure of ownership, whether voluntary or by agreement. If your business is a company or close corporation (also referred to as a "CC" of which there are still a number in existence, even though new CCs cannot be registered) you may be re-considering how your business needs to change in order to be sustainable in the future, or you may be looking at your business with renewed focus which may necessitate a change in ownership whether by the exit of shareholders (or members in the case of a CC) or the introduction of new ones.
The Non-Disclosure Agreement
A non-disclosure agreement signed before a formal legal agreement is entered into to govern the business relationship between parties (such as a supply of goods or services or licence agreement) should generally have only a very narrow scope.
Selling your Business – “Best Time to Draw up the Sale Documents”
In the financial planning world, it is often said that the best time to start saving is 10 years ago. The same can perhaps be said for when the best time is to draw up (or at least think about) the documents for the sale of your business. When reading through a draft sale of more...
The big question: Discounting Transaction or Incidental Credit?
A question often asked, and understandably so, is what is the difference between a discounting transaction and an incidental credit transaction? On first glance at the definitions in the National Credit Act, 2005 (the “NCA”) they seem almost identical, but one needs to look at the nature of the transaction to differentiate between the two.
Credit providers – Do not forget to comply with Section 129 of the NCA
Before a credit provider takes any action against a consumer that is in arrears, a credit provider must ensure that it has satisfied the provisions of section 129, section 130 and section 168 (which deals with the serving of documents) of the National Credit Act, 2005 (“NCA”). In doing this, a credit provider must provide more...
Brief synopsis on what not to forget when considering a share buy-back in terms of the Companies Act, 2008
There are 4 main sections of the Companies Act, No. 71 of 2008 (the “Act”) that need to be taken into account (aside from sections 44 and 45 governing the provision of financial assistance) when a company buys back shares from a shareholder, namely: Section 4: which provides that the company must be able to more...
Cyber-Crime Insurance – Understanding and Complying with the Fine Print
You have decided to take out insurance against loss due to cyber-crime related activities. But what are your obligations to mitigate loss that may be incurred. Just as you may be required to have an alarm system fitted in your house to comply with your household contents insurance policy. Similarly, it is also important to more...
Electronic contracts – what is the legal status of concluding a contract online or via email and is a person’s signature sufficient to satisfy the requirements of an electronic signature?
Concluding a contract online or by email by means of a data message or using an electronic signature can cause uncertainty in terms of whether the contract is legally enforceable. However, with the introduction of the Electronic Communications and Transactions Act 25 of 2002 (ECT Act), South Africa has recognised the legality of data messages more...