PUBLICATIONS

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 when and how to utilise a 345 Letter of Demand, as...

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 refusal” and are an important tool for shareholders to...

REGULATING CRYPTO ASSETS – IS IT THE BEST WAY FORWARD?
On or about 20 November 2020 the Financial Sector Conduct Authority (“FSCA”) took its first meaningful strides towards incorporating crypto assets into the South African legal framework by publishing a draft declaration (“Draft Declaration”) which declared crypto assets as a “financial product” in terms of the...

SHADOW DIRECTORS VERSUS PRESCRIBED OFFICERS
Background: The Companies Act No. 71 of 2008 (“Companies Act”) defines a director as either a member of the board of a company, as contemplated in section 66 of the Act, or an alternate director of a company and includes any person occupying the position of a director or alternate director, by whatever name...

NEW OFFICE ANNOUNCEMENT: VDMA IS OPENING A NEW OFFICE IN STELLENBOSCH
VDMA is excited to announce that it will be opening a new office in Stellenbosch during the course of September 2022. Stellenbosch has increasingly become the top destination for specialist service providers and decision makers in business. It is therefore the opportune time for VDMA to expand its footprint into...

LOOP STRUCTURES EXPLAINED
Until recently, South African investors contemplating foreign investments were required to take note of the South African exchange control regulations in order to avoid a potential pitfall, namely creating a loop structure. Loop structures come into existence when a South African individual or company transfers...

HEALTH CHECK IN RESPECT OF COMPLIANCE WITH THE PROTECTION OF PERSONAL INFORMATION ACT NO. 4 OF 2013
Background: The Protection of Personal Information Act No. 4 of 2013 (“POPIA”) was signed by the President of the Republic of South Africa (“RSA”) on 19 November 2013 with the first of its provisions coming into effect on 11 April 2014, and the majority of the remaining provisions taking effect on 1 July 2020. 1 July...

THE HISTORY AND BENEFITS OF SHARE BUY-BACKS
A share buy-back, also commonly referred to as a share repurchase, is a process whereby a company buys back its own shares from its shareholders, whether by agreement or by virtue of a scheme of arrangement as contemplated in terms of the Companies Act No. 71 of 2008 (“2008 Companies Act”) (“Share Buy-Backs”) - a...

THE CONSEQUENCES FOR A COMPANY’S FAILURE TO LODGE ITS ANNUAL FINANCIAL STATEMENTS
Section 186 of the Companies Act No. 71 of 2008 (“Companies Act”) stipulates, amongst other things, that one of the main objectives of the Companies and Intellectual Property Commission (“CIPC”) is the efficient, effective and widest possible enforcement of the Companies Act. In order to achieve such objective,...

THE FINER DETAILS OF RING-FENCED COMPANIES IN TERMS OF THE COMPANIES ACT NO. 71 OF 2008
In terms of the Companies Act No. 71 of 2008 (“Companies Act”), if a company wishes to restrict the nature of its business or powers, or limit the amendment of any provision of its memorandum of Incorporation (“MOI”), the company’s MOI must be amended to reflect this restriction and the letters “RF” (meaning...