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Month: June 2017

IS YOUR BUSINESS BEING LIQUIDATED?

IS YOUR BUSINESS BEING LIQUIDATED?

Many businesses fail and consequently have to face financial crises that few recover from and in most instances, results in business owners shutting doors for good. If your business has no assets or liabilities, the more simpler process of deregistration takes place. The liquidation process needs to be followed if your business has assets, liabilities or both.

The Liquidation of Your Business

Liquidation is the process by which your company or close corporation effectively declares itself insolvent. Your business can undergo voluntary liquidation, where you choose to voluntarily liquidate it, or when you undergo compulsory liquidation through action by your creditors.

Once your business has been placed under liquidation, it will stop all its business activities in so far as may be required for the “winding-up”, i.e. the process of selling all the assets of your business, paying off your creditors, distributing any remaining assets to the partners or shareholders and then dissolving your business. A liquidator will be appointed to perform all these tasks.

The Consequences of Liquidation

When your business gets liquidated, all contracts concluded with the business remain in effect. The liquidator has to make the decision whether or not he/she intends to abide by the contract or to terminate it, which will depend on what would be the most beneficial decision to the creditors. However, if the liquidator chooses to terminate the contract, the other contracting parties have a monetary claim against the insolvent estate as a concurrent creditor, i.e. creditors who do not hold any security.

If you are a director and/or shareholder of your business, then you should be especially cautious when your business gets liquidated, because you will still be liable for debt for which you have signed surety, i.e. taking responsibility for another’s performance of an undertaking. If a director acted negligent or fraudulent in his/her capacity as the director, he/she can also be rendered personally liable.

The liquidation of your business does not terminate employment contracts; it is up to the liquidator to decide whether to do so or not, and this decision must be in line with the Labour Relations Act 66 of 1995, Basic Conditions of Employment Act 75 of 1997, and the Insolvency Act 24 of 1936. However, employment contracts are suspended upon liquidation of the employer; during this suspension period, the employee is not obliged to render any services to the employer, and he/she is not entitled to receive any payment or employment benefits that arise from the contract. An employee whose services have been terminated because of liquidation, is entitled to claim losses suffered from the employer’s liquidated estate.

Dealing with Your Taxes

SARS has a preferent claim in the business’s insolvent estate, meaning that SARS gets paid before the business’s concurrent creditors. If the business gets liquidated voluntary and there is still debt owed to SARS after the winding-up of the business, the shareholders may, in terms of the Tax Administration Act 28 of 2011, be held personally liable in certain circumstances. The Value Added Tax Act 89 of 1991 places you as a member or a director of the business, who has regularly partaken in the management of the company, in the position of a trustee of the government’s money and you will be held liable for the business’s VAT.

Other taxes are deemed to be civil debt, and money owed to SARS simply gets written off if SARS does not get a dividend from your business’s insolvent estate, or if your business is deregistered. However, SARS may issue criminal summons against business owners in this regard.

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:

Smesouthafrica.co.za. (2017). When you have to liquidate your biz – 5 considerations you shouldn’t overlook. [online] Available at: http://www.smesouthafrica.co.za/16586/When-you-have-to-liquidate-your-biz-5-considerations-you-shouldnt-overlook/ [Accessed 23 Jun. 2017].

Investopedia Staff. (2017). Winding Up. [online] Investopedia. Available at: http://www.investopedia.com/terms/w/windingup.asp [Accessed 23 Jun. 2017].

MY EX’S NEW PARTNER IS ABUSIVE TO MY CHILDREN

MY EX’S NEW PARTNER IS ABUSIVE TO MY CHILDREN

It is important for a child to have access to both parents, and in a situation where both parents were actively involved in the child’s life, the access to both parents should be as equal as possible. As much as you don’t want to pry on your ex’s time with your children, what should you do if your ex’s new partner is abusive towards your child? Section 28(1)(d) of the Constitution of the Republic of South Africa states that every child has the right to be protected from maltreatment, neglect, abuse or degradation.

What defines abuse?

  • Physical Abuse: This type of abuse is one where the abuser conducts an act which leads to physical bodily harm such as bruises, cuts, burns and fractures.
  • Emotional Abuse: Emotional abuse constitutes domestic violence, and is identified as a pattern of degrading or humiliating conduct towards the child.
  • Verbal Abuse: This kind of abuse may be harder to differentiate from emotional abuse; verbal abuse is the act towards the child, and emotional abuse is the result.

What to do?

A parent cannot stop the other parent from having access to a child. Visitation must be in accordance with the parenting plan. The Children’s Act stipulates that the rights of the children are the most important, and their rights should be protected, promoted and respected. The child’s emotional and intellectual needs are considered when making decisions about what is best for the child.

  • Firstly, try to speak to the person whom you have joint custody with, to try to come up with a solution before approaching legal representatives.
  • If this fails, report the suspected abuse. This report will serve in your child’s favour when in court.
  • Apply for the amendment of the parenting plan. This can include limited visitation which should be administered through the Office of the Family Advocate.
  • Only three people may request amendment or termination of the agreement:
  1. Parents of the child,
  2. The child, or
  3. A person who is acting in the interest of the child.
  • Rights can be minimised or terminated by the court

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:

The Children’s Act Explained. (2017). [ebook] p.3. Available at: http://www.justice.gov.za/vg/children/dsd-Children_Act_ExplainedBooklet1_June2009.pdf [Accessed 12 Jun. 2017].

TEAM BUILDING JUNE 2017

TEAM BUILDING JUNE 2017

The Personnel committee being Reinett Joubert, Wilna Stassen and Zelda Novella organized the Team Building event held on Friday 2 June. We were divided into three teams with a goal to compete with each other for the best potjie in MHI.

First there was a game of Lost Island with a few hidden treasures that needed to be discovered before the clock started on the potjies.

The orange team calling themselves Shrimply Delicious boasted a starter with mussel soup and fried prawns.

A21Jurgens with Vikki, Wilna, Michelle, Aletta, Ansie and Michelle.

The blue team each took on the personas of the Smurfs with Chris Faure as Papa Smurf. They made a mean and flavourful chicken potjie as main course.

A22Chris with Liaan, Riëtte, Estelle, Olivia, Marcelle, Denver and Zelda.

The green team, known as the Green Gremlins made the Chocolate potjie pudding.

A23Stefanus with Mariska, Reinett, Zenobia, Elna, Noleen, Michelle and Catherine.

Our judges for this event were:

A24

Charlain Swart, Foti Sousalis and Deon Meyer.

When all was said and done and the judges tasted all, the winners were chosen :

The winners of finding the Hidden treasures first were the Green Gremlins.

The winners of the best dressed table was Shrimply Delicious.

And the prize for the Best Potjie and the Most GEES, was won by none other than

The SMURFS!!

Everyone participated and had a wonderful afternoon of fun.

RESCISSION OF DEFAULT JUDGEMENT

RESCISSION OF DEFAULT JUDGEMENT

You borrowed money from a friend or family member and they have since obtained Default Judgement against you for non-payment of an amount owing to them, which led to you being blacklisted. What can you do now?

If you didn’t defend a summons issued against you for payment of money to a Plaintiff (Creditor), the Plaintiff will ask the court to grant a judgement against you (Defendant/Debtor), which remains valid for 30 years. In the event that you feel dissatisfied with the judgement or you as the Debtor has since repaid the outstanding debt and interest in full, you are permitted/allowed to apply for Rescission of Judgement, rescinding the judgement that was handed by court.

Rescission of Judgement in the High Courts:

Rule 31(2)(b) of the High Court Rules determines that an Applicant (Debtor) may within 20 days after he has knowledge of default judgement taken against him, apply to court upon notice to the Respondent (Creditor) to set aside default judgement and the court may upon “good cause” shown set aside the default judgement. The Applicant has to prove 3 elements to the Court to comply with the words “good cause”.

The first element is the Applicant must give a reasonable explanation for his default. The Applicant must show that his default was not wilful, and wilful default exist where; firstly the Applicant has knowledge that the action is being brought against him; secondly the Applicant deliberately refrains from entering an appearance to defend; and thirdly the Applicant has a certain mental attitude to the consequences of default.

The second element is the Applicant must show the existence of a bona fide defence. Once the Applicant satisfied the court that he was not in wilful default, he has to demonstrate that a substantial defence exists, in other words he has a prima facie case against the Respondent (Creditor).

The third element is the Applicant’s application must be brought bona fide. In other words it must be clear that he intends to use his defence and that the reason for the Application for Rescission of Judgement is to enable him to have his day in court.

In the case where Judgement was granted for non-payment of a debt and the debt has been paid in full by the Debtor, consent by the Creditor to the Rescission is not enough, and the Debtor has to comply with the requirements as discussed above.

Rescission of Default Judgement in Magistrate’s Courts:

Rule 49(1) of the Magistrates’ Court Rules determines that if a Defendant (Debtor) is seeking to rescind a default judgement he has 20 court days from date on which the default judgement came to his knowledge to serve and file the application for his rescission. Notice of the application must be given to all the parties to the proceedings. The Applicant is required to show “good cause” why the judgement should be rescinded or, alternatively, the court must be satisfied that there is good reason to do so.

The first requirement, namely “good cause” shown is the same requirement as discussed above at High Courts. Rule 49(1) makes provision for an alternative, namely courts may rescind the judgement if it is satisfied that there is “good reason” to do so. This alternative appears to set a lower standard than that of “good cause”, but it does not lower the requirements for the Applicant.

In the case where Judgement was granted for non-payment of a debt and the debt has been paid in full, the Debtor can apply to have the judgement rescinded if the Creditor consents to the rescission.

It is important to note that courts has a wide discretion in deciding whether or not the Applicant has shown “good cause”, but where the Applicant was in wilful default Application for Rescission of Default Judgement will normally fail.

Compiled By: Grantham Williams

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)