“… for the benefit of immunity from liability for its debts, those running the corporation may not use its formal identity to incur obligations recklessly, grossly negligently or fraudulently. If they do, they risk being made personally liable.” (Quoted in the judgment below) Particularly in hard times, it is not at all uncommon to find yourself unable to recover a debt from a company in financial straits whilst at the same time you know that its directors...
“All is fair in love and war…and business is war.” (Jasmine Kundra) When company directors are locked in dispute, one of them may be tempted to cut off the other’s access to emails and to the business server – a tactic likely to have immediate and serious consequences for the director thus cut off. Its appeal as a tactic to force the other director to the negotiating table is obvious, but the question is whether the director thus deprived has any legal...
“Creditors have better memories than debtors” (Benjamin Franklin) In these hard times of pandemic and economically destructive unrest, an unfortunate number of businesses face collapse, and many will opt for the “first aid for companies” option of business rescue. Creditors coming out of that process with a shortfall (only the luckiest creditors are likely to emerge with full settlement) will naturally look to any personal suretyships they hold...
“For him to be forced out of a career of choice to start working in a different field at a time when many businesses are closing down, retrenchments and lay-offs being commonplace and individual[s] doing everything possible to survive and cope with the health and economic devastating effects of the covid 19 pandemic, is plainly unreasonable and contrary to public policy and constitutional values” (extract from judgment below) Consider this unhappy (but not...
“…the mere exercise of majority shareholding voting rights does not amount to oppression…” (extract from judgment below) What happens when a company’s directors and shareholders fall out and cannot reconcile their differences? “Relief from oppressive or prejudicial conduct” If you should find yourself in such an unfortunate situation, our Companies Act offers you several possible remedies. Professional advice specific to your case is essential...
“O Wonder! …O Brave New World” (Shakespeare) Regrettably the pandemic still shows no sign of going away any time soon, and the social distancing it has brought to our “new normal” leaves companies with a dilemma. How can you comply – safely and lawfully – with the Companies Act’s stringent requirements for the holding of Annual General Meetings and (where needed) interim General Meetings? The good news is that our South African legislation has for...