CONVERTING DEBT INTO SHARES: A PRACTICAL LEGAL OVERVIEW
Introduction In the lifecycle of a growing business, it is not uncommon for companies to rely on shareholder or third-party loans to fund operations and expansion. However, as businesses evolve, the continued existence of debt on the balance sheet may become...
LAWFUL DISTRIBUTIONS IN TERMS OF THE COMPANIES ACT NO. 71 OF 2008
In terms of the Companies Act No. 71 of 2008 (“Companies Act”), a distribution, in broad terms, encompasses any direct or indirect transfer by a company of money or other property of the company (save for its own shares), whether out of capital or profits, the...
WHEN IS IT APPROPRIATE TO MAKE USE OF A SECTION 345 LETTER OF DEMAND?
Background: A letter of demand in terms of section 345 of the Companies Act No. 61 of 1973 (the “Old Act”) is a powerful tool for debtors who are owed an amount of money exceeding R100 (one hundred Rand) (“345 Letter of Demand”), however, creditors should be aware of...
THE IMPORTANT ROLE WHICH PRE-EMPTIVE RIGHTS PLAY FOR SHAREHOLDERS OF PRIVATE COMPANIES
Background: Pre-emptive rights give shareholders of a private company the right to acquire additional shares in a future issue or transfer of a company’s shares prior to those shares being offered to third parties. These rights are also known as “rights of first...