The Black Economic Empowerment Codes of Good Practice (“BEE Codes”) published in 2013, introduced three priority elements, each with a sub-minimum requirement to be attained by measured entities. If not attained in any one of the priority elements, the measured entity’s BEE contribution is reduced with one level (“Discounting Penalty”). The priority elements are Ownership; Skills Development; and Enterprise and Supplier Development.
Often a landowner requires improvements to be made to his property, however, does not have the skill or capital to effect such improvements. The lessor can then agree with a lessee to effect improvements to the leased premises, which improvements made to the leased premises becomes the property of the lessor as landowner.
In the case of CIR v Nico, the court found that the trading stock, which formed part of the purchase price when the owner sold his business as going concern, would form part of gross income. This case highlighted the necessity for the asking price of a business sold as a going concern, not to be reflected as a lump sum. The selling price must be allocated to various items such as fixed assets, goodwill, stock and accounts receivable. This article focusses on the valuation of slow-moving and obsolete stock when selling a business as going concern.
The issue whether to quote prices with value added tax (‘‘VAT’’) included or excluded recently came up in the matter of Security Outfitters Safety Gear/L Munian/2016-4420F, a ruling handed down by the Directorate of the Advertising Standards Authority of South Africa (ASA Directorate) on 18 November 2016 (the ‘‘Ruling’’).
When a company (the “Acquirer”) plans to purchase another company (the “Target”), it is important to research the integrity of the counterparty. A proper legal, operational and financial due diligence will assist the Acquirer to asses risks relating to the Target.
Minority shareholders had limited protection under the Companies Act, 61 of 1973 (“the 1973 Act”). Only a member, being a minority shareholder, could approach a court in cases of oppressive or unfair prejudicial conduct. When approaching a court for relief under the 1973 Act, the minority shareholder had to show that the decisions taken by the board or majority shareholders were unfairly prejudicial, unjust or inequitable towards the minority shareholder.
Parties to an agreement should always be aware of the relevant jurisdictions and laws governing the enforcement of foreign judgments.
Our newsletter remitted in August 2016 and titled ‘‘Closing the Gap on Trusts’’ has reference. The article dealt with the new rules proposed by the TLAB expected to come into operation on 01 March 2017.
Section 22(3) of the Value Added Tax Act (the ‘‘VAT Act’’) states that where a vendor has claimed an input tax deduction on the basis of a tax invoice remitted, but has not made payment of the relevant consideration within a period of 12 (twelve) months, the transaction is effectively reversed.
Debt reduction measures have become more prominent considering the difficulty with which obligations towards creditors of a company are honoured. One of the most common transactions resulting in debt reduction / debt relief is the issuance of shares by a company – i.e. a company issues shares and utilises the subscription price paid for such shares to settle its debts. Another alternative is to capitalise shareholders’ loans.
The Companies Act states that any documents, accounts, books, writing, records or other information pertaining to a company must be kept for a period of 7 (seven) years. However, the Income Tax Act, the Customs and Excise Act and the Value Added Tax Act require records of a company to be kept for a period of no longer than 5 (five) years.
The Companies and Intellectual Property Commission (the ''Commission'') recently issued a public notice stating that all companies and close corporations which have continued to fail to submit their annual returns on an annual basis will be deregistered on the 29th of July 2016.