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Month: April 2017

IS YOUR BUSINESS LEGALLY COMPLIANT?

IS YOUR BUSINESS LEGALLY COMPLIANT?

Compliance refers to a company obeying all of the legal laws and regulations regarding how they manage the business, their staff, and their treatment towards their consumers. The point of compliance is to make sure that corporations act responsibly.

Is compliance for every business the same?

Certain businesses may be required by law to register with an industry association. For instance, if you want to practice as a public auditor and issue an opinion on assurance engagements, you must be registered with the South African Institute of Chartered Accountants (SAICA) and the Independent Regulatory Board of Auditors (IRBA). Compliance in this regard would depend on the type of business involved.

What are general requirements for all businesses:

Tax compliance (SARS, VAT Act) – First and foremost, the business enterprise must be registered with SARS for tax purposes (to be taxed on the income that it makes), secondly, if the business is an employer it must register itself as such and as an agent of government required to deduct employees’ tax from the earnings of employees and pay the amounts deducted over to SARS on a monthly basis. Thirdly, if applicable, a business may register for VAT in terms of the VAT Act.

The Occupational Health and Safety Act – The government requires businesses that employ people to provide a work environment that is safe and without risk to the health of employees.

Skills Development Levy (SDL) – Employers must pay 1 percent of their workers’ pay to the skills development levy every month. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund to pay for training.

The Compensation for Occupational Injuries and Diseases Act (COIDA) – This Act seeks to ensure that employers are duly covered to provide compensation for disablement caused by occupational injuries or diseases sustained by employees in the course of their employment, or for death resulting from such injuries or diseases.

Unemployment Insurance Fund (UIF) – Employers must register with the Department of Labour to ensure that their employees are appropriately covered when out of employment.

Auditing requirements – Depending on the type of company you register, it may be required to be audited on an annual basis.

Financial Intelligence Centre Act (FICA) – If your company will be engaged with financial services, estate agencies, insurance, etc. you are required to comply with this Act in order to combat money laundering.

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)

References:

http://www.bonaman.co.za/business-compliance-101-for-entrepreneurs/

https://bizconnect.standardbank.co.za/manage/operations-compliance/reference-documents/legislation-business-compliance.aspx

CO-OWNING PROPERTY WITH SOMEONE ELSE: THE UPS AND DOWNS

CO-OWNING PROPERTY WITH SOMEONE ELSE: THE UPS AND DOWNS

What is co-ownership?

Co-ownership is when one or more people jointly own the same property. In essence, it is when they legally share ownership without dividing the property into physical portions for their exclusive use. It is thus commonly referred to as co-ownership in undivided shares.

It is possible to agree that owners acquire the property in different shares; for instance, one person owns 70 percent and the other 30 percent of the single property. The different shares can be recorded and registered in the title deeds by the Deeds Office.

The benefits

On paper, it’s a great idea. For starters, the bond repayments and costs of maintaining the home are halved. However, there can be problems and although not every friendship or relationship is destined to disintegrate, there does often come a time when one of the parties involved wants to sell up and move on to bigger and better things.

The risks

If ownership is given to one or more purchasers, without stipulating in what shares they acquire the property, it is legally presumed that they acquired the property in equal shares.

The risks, the benefits and the obligations that flow from the property are shared in proportion to each person’s share of ownership in the property. For instance, one of the co-owners fails to contribute his share of the finances as initially agreed, resulting in creditors such as the bank or Body Corporate taking action to recover the shortfall.

Having an agreement

If two people own property together in undivided shares it is advisable to enter into an agreement which will regulate their rights and obligations if they should decide to go their own separate ways.

The practical difficulties that flow from the rights and duties of co-ownership are captured by the expression communio est mater rixarum or “co-ownership is the mother of disputes”. It is therefore important that, when the agreement the co-owners entered into does not help them solve disputes, certain remedies are available to them.

The agreement should address the following issues:

  1. In what proportion will the property be shared?
  2. Who has the sole right to occupy the property?
  3. Who will contribute what initial payments to acquire the property.
  4. Who will contribute what amounts to the ongoing future costs and finances.
  5. How the profits or losses will be split, should the property or a share be sold?
  6. The sale of one party’s share must be restricted or regulated.
  7. The right to draw funds out of the access bond must be regulated.
  8. A breakdown of the relationship between the parties.
  9. Death or incapacity of one of the parties.
  10. Dispute resolution options before issuing summons.
  11. Termination of the agreement.

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)

References:

http://igrow.co.za/co-ownership-of-property-what-you-need-to-know/

http://www.privateproperty.co.za/advice/property/articles/the-pitfalls-of-property-co-ownership/5046

http://www.jgs.co.za/index.php/property/owning-prop-jointly-the-do-s-and-dont-s

FULFILLING DUTIES OUTSIDE OF YOUR JOB DESCRIPTION.

FULFILLING DUTIES OUTSIDE OF YOUR JOB DESCRIPTION.

It often happens in the workplace that an employee is requested to assist in other departments, when such need arises due to sickness, resignation or the like.

For example, Linda, a secretary in the bookkeeping department, is requested to assist the sales department with secretarial duties while Janet is on maternity leave.

In the above example, Linda’s normal working hours are divided between the two departments and the request did not require of her to work any additional hours, over and above her normal working hours.

In such instances, Linda’s employer may even consider granting additional remuneration (an honorarium or ex gratia payment) to her, as a token of appreciation for her willingness to assist.

A number of legislation governs the relationship between employers and employees, such as the Basic Conditions of Employment Act 75 of 1997 (“the BCEA”). The BCEA serves to regulate the basic conditions of employment, such as the regulation of working time, ordinary hours of work and overtime.

An employee’s job description is usually set out in his/her employment contract and may even contain a term along the following lines:
“In addition to the duties referred to herein, the employee may from time to time be required to execute other instructions reasonably assigned to him/her.”

It is advisable to include such a term in an employee’s contract of employment, in order for the employee to take cognisance of the fact that he/she may be expected to fulfil duties other than those contained in their job description from time to time.

There is no provision in the BCEA which prevents a condition other than those contained therein being included in a contract of employment, but any provision which sets conditions which are less favourable than those provided for by the BCEA, are invalid.

It should be mentioned however that such instruction to fulfil duties other than those described in an employee’s job description should always be both lawful and reasonable. In the example above, the request from Linda’s employer requires her to perform essentially the same functions as set out in her job description- only for a different department, which request appears to be both lawful and reasonable.

Furthermore, seeing as Linda is not required to provide assistance to the sales department outside of her normal working hours, no additional remuneration is payable (except where the employer elects to do so on an ex gratia basis). Should Linda have had to work overtime in order to perform the additional duties as set out above, the contract of employment should provide for remuneration thereof.

It is advisable that an employer includes a clause in all its contracts of employment, which states specifically that the employee’s job description is not exhaustive and that the employer may from time to time request the employee to perform certain functions outside of his/her job description (such request being both lawful and reasonable).

Employers should further guard against setting a precedent when paying additional remuneration to an employee for performing certain functions outside their normal job description. If such additional remuneration is paid regularly and consistently, it becomes an “established practice” and therefore a term of employment. A failure to then make such a payment may amount to an unfair labour practice, or it may be seen as a unilateral change to the terms and conditions of employment, which could expose the employer to certain claims by the employee.

It is also advisable to include a further term in the contract of employment that the employer is not obliged to pay any additional remuneration in such instances and any such payments will be in the sole and absolute discretion of the employer.

Compiled By: MICHELLE TALJAARD

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)