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Month: November 2016

WHAT’S THE BUZZ ABOUT BUSINESS RESCUE?

WHAT’S THE BUZZ ABOUT BUSINESS RESCUE?

a3_aIf a company/close corporation is in financial trouble and all possible avenues to save the business have been exhausted, there is one last option available to save the business: it can lodge an application for business rescue at the CIPC. In order to qualify for business rescue proceedings, the business must satisfy the requirements as set out in the next paragraph.

A company/close corporation will only be considered as a business rescue candidate if all three of the following requirements are met:

  1. The decision to start business rescue proceedings must be taken before any liquidation proceedings have been instituted against the business.
  2. The business is financially distressed.
  3. A business is seen as financially distressed if:
  • It seems reasonably unlikely that the business can pay its debts in the normal course of business for the next six months, or
  • It seems reasonably likely that the business will be insolvent in the next six months.
  • There seems to be a reasonable chance of rescuing the business.

What is the aim of a business rescue plan?

The aim of placing a company/close corporation under business rescue is to give the business some breathing space to implement the business rescue plan and give the business a fair chance to become a going concern again.

Alternatively, if the business is liquidated despite the business rescue proceedings, the aim is to hopefully have a higher return available for the creditors and shareholders than would have been the case if the business was liquidated before undertaking any business rescue proceedings.

To give a business the maximum chance of recovering its finances and to continue operating as a solvent enterprise, the business rescue plan normally restructures a business’ assets, liabilities and equity, as well as its way of doing business.

Who can be appointed as a business rescue practitioner?

There is a list of licensed business rescue practitioners available on the CIPC’s website.

What does a business rescue practitioner do?

The appointed business rescue practitioner will investigate the business’ situation and propose a business rescue plan. After the business rescue plan has been approved by the creditors and shareholders, the business rescue practitioner will implement the plan. The reason why the creditors and shareholders must approve the business rescue plan is that they will withhold their rights against the business to claim payment as long as the business is operating under the business rescue plan.

After implementing the business rescue plan, the business rescue practitioner will temporarily oversee and manage the business together with the current management.

The business rescue practitioner also takes over dealing with the creditors and shareholders. In addition, the business rescue practitioner will communicate with registered trade unions which represent employees of the business. If there are employees who are not members of any registered trade union, the business rescue practitioner will deal with these employees or their representatives as well.

The first step to start with a business rescue is for a business to file a notice with the CIPC that it wants to start with business rescue proceedings. The rest of the business rescue process and the business rescue documents which are required to be submitted to the CIPC, is set out on the CIPC’s website.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

REQUIREMENTS TO RESTORE A DEREGISTERED COMPANY

REQUIREMENTS TO RESTORE A DEREGISTERED COMPANY

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There are various circumstances in which a company (or close corporation) can become deregistered at the CIPC.

-The company itself can apply for deregistration at the CIPC, for any number of reasons.

-If a company has not submitted and paid its annual returns for more than two successive years, the CIPC will inform such a company of the fact and the intention of the CIPC to deregister said company. If such a company does not take any steps to remedy the situation, the CIPC will proceed to finally deregister it.

-If the CIPC believes that the company has been inactive for seven or more years.

How can a company be restored?

It is possible to restore such a company or close corporation which has been finally deregistered, but all outstanding information and annual returns (including the fees) will have to be lodged with the CIPC. An additional R200 prescribed re-instatement fee must also be paid.

Recently, the CIPC has set additional requirements to do this, which also impacts on the time, administration and cost to restore such a company. These requirements took effect from 1 November 2012.

The steps and requirements for the re-instatement process are:

  1. The proper application CoR40.5 form Application for Re-instatement of Deregistered Company must be completed and submitted, originally signed by the duly authorised person.
  2. A certified copy of the identity document of the applicant (director / member) must be submitted.
  3. A certified copy of the identity document of the person filing the application must be submitted.
  4. A Deed Search, reflecting the ownership of any immovable property (or not) by the company, must be obtained and submitted together with the application.
  5. If the company does in fact own any immovable property, a letter from National Treasury must be submitted, indicating that the department has no objection to the re-instatement of the company.
  6. Also, if the company does in fact own any immovable property, a letter from the Department of Public Works must be submitted, indicating that the department has no objection to the re-instatement of the company.
  7. An advertisement must be placed in a local newspaper where the business of the company is conducted, giving 21 days’ notice of the proposed application for re-instatement.
  8. If the deregistration was due to non-compliance with regards to annual returns, an affidavit indicating the reasons for the non-filing of annual returns must be submitted.
  9. If the company itself applied for deregistration, an affidavit indicating the reasons for the original request for deregistration must be submitted.
  10. Sufficient documentary proof indicating that the company was in business or that it had any assets or liabilities at the time of deregistration must be submitted.
  11. All outstanding annual returns must be submitted and paid, along with any penalties.

Upon compliance of all of the above requirements, the CIPC will issue a notice to the company that it is restored.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

HOW DO I GET COPYRIGHT ON SOMETHING?

HOW DO I GET COPYRIGHT ON SOMETHING?

a1_aWhenever someone creates a piece of original work based on their own idea, they are automatically granted copyright on that creation. This includes work produced by authors, musicians, computer programmers, artists etc.

Once someone has taken their idea and turned it into material form, they will immediately own the copyright on their work without having to register it or inform someone else, the only exception to this is cinematograph films, which can be registered. After a musician has written and recorded a song, for instance, it would have automatically become copyrighted with the musician being the copyright owner. Things that are part of the public domain do not fall under copyright. A public speech by a politician or public lecture by an author falls within the public domain so would not have copyright. A newspaper journalist, for example, would be able to reproduce and quote from a public lecture without the speaker’s permission.

What if there was more than one person involved?

The person who has copyright ownership over a product differs for the type of creation. In the case of a literary work, such as a novel, it would be the person who first created the work, the author. However, if it is a film, the person who made all the arrangements of the film, such as the producer, would own the copyright, and not the actors and actresses. If a person created something under the proprietorship of someone else or a business, then the copyright belongs to that person or entity, not the creator.

Who will protect my copyrighted work?

All countries who have signed the Berne Convention will automatically protect the copyright of any original work that someone produces. That means if you create a painting here in South Africa, it will still be copyright protected in another country, such as America, that’s part of the Berne Convention.

Has someone violated my copyright?

If another person has made photocopies of your work for themselves only, then it’s not a copyright infringement. As mentioned earlier, recording, copying or reproducing a public speech is also not a copyright infringement. In the academic world, it’s common for people to use each other’s material or research. If the original author and their work is properly acknowledged by being cited, then no infringement has happened. However, if the original work has not been properly cited, it would be considered a serious copyright infringement, or plagiarism.

So when do I know if someone has infringed on my copyright? If another person has used or reproduced your original work to share with others for profit, without your permission, then it’s a copyright infringement. Taking another person’s song and selling it online without paying royalties or informing them, for instance, would be a serious copyright infringement. Another example is if someone takes the literary or academic work of the original author, and puts their own name to it, making it seem as if they were the original author.

What is the duration of copyright?

Copyright doesn’t last forever. However, they do last for an exceptionally long time. Copyright lifespans also differ depending on the work produced. Copyright on literary work lasts for 50 years after the death of the author. Copyright over films lasts for 50 years after the date the film was first shown. Computer programs have a copyright that lasts for 50 years after the first copies of the program were made available.

In short, if you have created something original, such as a song or painting, you don’t have to figure out how to protect it. The law automatically protects you as the original creator of your work. If someone does try copy your work without your permission, you don’t need to worry. Your claim on your song, book, painting, program etc. was set the moment you created it.

References

Icts.uct.ac.za. 2011. Information and Communication Technology Services. The University of Cape Town. Copyright Guidelines. [online] Available at: http://www.icts.uct.ac.za/ modules.php?name=News&file=article&sid=4749/
[Accessed 25/05/2016].

Saiipl.org.za. South African Institute of Intellectual Property Law. Copyright. [online] Available at: http://www.saiipl.org.za/introip/74-copyright/
[Accessed 25/05/2016].

Cipc.co.za. Companies and Intellectual Property Commission. Copyright. [online] Available at: http://www.cipc.co.za/index.php/trade-marks-patents-designs-copyright/copyright/
[Accessed 25/05/2016].

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)