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| THE
PHASING OUT OF CLOSE CORPORATIONS |
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Do you have a business
in a close corporation? Then you need to know
how the new Companies Act will affect close corporations.
New Companies Act
The new Companies Act 71, 2008 was signed into
law on 08 April 2009 and is expected to become
operational (and replace the current 1973 Act)
in April 2010.
Regulating CC’s
As soon as it is in operation, it will amend certain
provisions of the current Close Corporation Act
so that, for a period of 10 years, both the (new)
Companies Act and the current Close Corporation
Act will co-exist alongside each other and regulate
close corporations. |
 |
Effects
of new Act on CC’s
The effect of involving the new Companies
Act in the administration of close corporations
must now apply certain principles of the
Companies Act in their administration and
functioning.
| Close corporations
will, for example: |
| |
| • |
Be obliged to
prepare annual financial statements
(unless the corporation falls
in one of the exemption clauses)
|
| • |
That the principles of business
rescue, as addressed in the
new Companies Act, are made
applicable to corporations. |
|
| Other Provisions |
| |
| • |
The new Companies
Act also provides that no new
close corporations may be incorporated.
|
| • |
Close corporations that are
in existence at the time that
the new Act comes into effect
may continue to exist - at least
for 10 years. It is however
uncertain what happens thereafter.
|
| • |
The legislature may decide
to allow these close corporations
to exist indefinitely or it
may repeal the Close Corporation
Act and force these remaining
close corporations to convert
to companies. |
|
| Conversions |
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| • |
The new Companies
Act allows for existing close
corporations to convert into
companies should the members
decide to do so. |
| • |
All that is required is an
official notice of conversion,
a certified copy of the special
resolution to approve the conversion
and a new Memorandum of Incorporation
along with the necessary fee.
|
| • |
However, note that existing
companies will no longer be
allowed to convert into close
corporations. |
|
Conclusion
“The new Companies Act will
have a substantial impact on businesses
incorporated under the Close Corporations
Act. It is crucial for business owners
and managers to acquaint themselves
with the provisions of this Act”,
says Annetjie Van Rooyen, director
at STBB Smith Tabata Buchanan Boyes
attorneys. |
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| WORK
PERMITS FOR FOREIGNERS IN THE HOSPITALITY
INDUSTRY
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 |
The hospitality
industry is continually
improving service standards
and in this context it
is always interesting
for hotels, restaurants
or other business in the
hospitality service to
have input from abroad,
for example from Europe.
European
Flavour
If you succeed in
recruiting a person
from perhaps one
of the renowned
European hotel schools
or a person from
abroad with provable
and extensive hospitality
experience, then
this knowledge transfer
and heightened motivation
are guaranteed in
your business. |
Foreigner
Shy
Often businesses shy away
from employing foreigners
as they are unsure about
the legal options of employing
a foreigner and unsure
of the process, but seeking
assistance from experts
can make this an easy
and worthwhile process. |
SUMMARY OF PERMITS
Work in terms of the South African
Immigration Law is ‘every
activity normally associated
with the running of a specific
business or every activity consistent
with being employed or consistent
with the profession of a person.
It is irrelevant whether the
person is remunerated or not’.
| 1.
Visitor Permit with the
Authorisation to Work |
| |
| • |
If
a person wishes
to work in South
Africa for a short
period (3 - 6 months)
he/she has the option
to a apply for a
visitor
permit with the
authorisation to
work. |
| • |
This permit can
be applied for with
a letter of the
employer when entering
the country. They
are normally granted
for 3 months and
can be extended
for another 3 months
while in the Republic.
|
|
| 2.
Exchange Permit |
| |
| • |
If
you want to employ
a person who is
under the age of
25 an Exchange
Permit
to conduct work
can be applied for
under simplified
conditions. |
| • |
An exchange permit
to conduct work
allows a person
to work in South
Africa for up to
one year without
having to prove
that no South African
was as suitable
for the position.
|
|
| 3.
General Work Permit |
| |
| • |
Should
the prospective
employee be older
than 25 years old,
a General
Work Permit (GWP)
is generally the
right permit to
apply for. |
| • |
A GWP involves
some effort on the
employer side as
the employer has
to advertise the
position nationally
and has to explain,
why none of the
applicants would
qualify for the
position. |
| • |
Furthermore it
has to be confirmed
by the Department
of Labour that the
future employee
will not be employed
under conditions
inferior to those
of South Africans.
|
| • |
However, in the
case of Europeans
being employed,
the employment conditions
should never be
a problem. |
|
| Often it is also
the aim of a South African
business to employ a foreign
specialist to guarantee
highest standards immediately,
but also to facilitate
knowledge transfer and
to thus create a high
and sustainable level
of service and expertise. |
| 4.
Exceptional Skills Work
Permit |
| |
| • |
For
the case of the
securing specialists’
services the Immigration
Law can offer a
specific permit,
the so called Exceptional
Skills Work Permit.
|
| • |
In order to qualify
in this category,
the foreigner has
to be able to prove
that his skills
are not or basically
not available in
South Africa and
in what way these
skills will be beneficial
to the country.
|
| • |
As proof, a confirming
letter by a South
African or foreign
organ of state or
from an established
South African academic,
cultural or business
body has to be submitted.
|
| • |
For an exceptional
skills permit advertising
of the position
is not necessary
as the applicant
has proven that
his/her skills are
not available in
South Africa, advertising
the position could
therefore not lead
to finding a suitable
South African in
any event. |
|
| 5.
Inter-Company-Transfer
Permit |
| |
| • |
Should
the South African
company just want
to “borrow”
an employee for
a duration not exceeding
2 years from an
affiliated foreign
company, it can
do so quite easily
via an Inter-Company-Transfer
Permit. |
| • |
With a confirming
letter from the
South African company
as well as from
the foreign affiliated
company and the
submission of the
foreign work contract,
an employee can
be seconded for
a certain amount
of time. |
| • |
Also in this
case, an advertisement
of the position
is not required
by the law as no
other applicant
could fulfil the
requirement of being
employed in the
affiliated company
and thus being known
knowledgably and
trusted. |
|
| 6.
Quota Work Permit |
| |
| • |
The
Immigration Act
has also created
the so called Quota
Work Permit.
|
| • |
Several categories
of professions have
been identified
that should be allowed
to work in South
Africa under simplified
conditions. |
| • |
Unfortunately
none of these conditions
are really for the
hospitality industry
at present. |
|
| 7.
Corporate Permit |
| |
| • |
Finally,
should a South African
business (e.g. a
hotel or hotel group)
need to employ a
number of foreign
employees, it has
the option to apply
for Corporate
Permit.
|
| • |
A corporate permit
allows a company
to permanently employ
a certain number
of foreigners in
specific positions.
|
| • |
The employer has
to show the need
for the specific
positions to be
covered by the foreigners.
|
| • |
The necessity
to employ several
foreigners can,
for example, arise
out of lack of skills
in South Africa,
or the need of a
specific nationality
for the job (e.g.
Asian chefs for
an Asian restaurant).
|
| • |
Once the employer
has obtained a corporate
permit they can
employ the applied
number of foreigners
under very simplified
conditions. |
|
 |
| Should
any of this have
sparked your interested
or you have questions,
you can contact
Julia Moss
and Dirk
Meissner
at +27 (0) 21 886
7606 or meissner@ibn.co.za |
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LEGALLY
SPEAKING…
Courtesy of Smith Tabata Buchanan
Boyes Attorneys (STBB)
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#1
CAVEAT AGAINST A PROPERTY |
The deeds office notes a caveat
against a property as a reminder
to itself and interested parties
that some other action is required
when next the property is dealt
with in any way.
For example, sometimes a property
is re-surveyed and the property
details may change as a result.
The Surveyor General will then
note a caveat against the property
so that when next the property
is dealt with, the amended details
are noted in the title deed
and deeds office database.
#2
BEWARE OF THE RISK OF
MAKING IT A PRACTICE TO
COMMUNICATE WITH CLIENTS
ONLY BY WAY OF E-MAIL
|
In a recent judgment,
the Court confirmed that
when a Bank agrees to
a mode of communication
(in this case e-mail)
an expectation is created
that all correspondence
between itself and a client
will be in that mode,
including a Section 129
Notice in terms of the
NCA. In this matter the
mortgagor fell into arrears
and the bank sent a Section
129 Notice via normal
mail.
Defending the action,
the mortgagor alleged
that his usual mode of
communication with the
bank was via e-mail and
that he could therefore
rightly assume that any
legal communication would
also be delivered to him
in this way.
The Court held that the
mortgagor had been led
to believe that all communication
with the bank would be
via e-mail. Therefore,
sending the Section 129
Notice by normal mail
may well preclude the
Bank from alleging that
the Notice was properly
delivered. |
 |
#3
ACCRUAL SYSTEM AND INHERITANCE
|
Many parties believe that the
accrual system as set out in
their antenuptial contracts
only plays a role on the division
of their estates upon divorce.
The accrual system is however
also applicable on division
of their estates upon the death
of one party. Spouses should
therefore be aware of the effect
of the accrual system when drawing
up a will.
For example, should one spouse
bequeath his/her estate to a
family trust or children this
may require the surviving spouse
to make an accrual payment to
the deceased’s estate
and could have severe financial
implications for the survivor.
It is therefore important that
sound professional advice be
obtained when drawing up a will.
Speak to one of our directors
in our Trust and Estate Planning
Department should you wish to
know more.
Sourced from STBB |
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