Most people who launch a business together trust and know each other. They’re happy with a handshake deal and assume nothing can or will ever go wrong. In the business world this often very far from the truth – the reality is that things do go wrong. A shareholder’s agreement is a very important document […]
Category: Company Law
Valuation of Shares
A shareholders’ agreement is a critical document in a private company. It outlines the rights, responsibilities, and obligations of the shareholders. One of the key aspects covered in this agreement is the valuation of shares, which determines the worth of each shareholder’s stake in the company. Importance of Share Valuation in a Shareholders’ Agreement Share […]
Understanding Delinquent Directors and the Remedies Against them
The Companies Act 71 of 2008 has introduced the concept of a delinquent director to hold directors accountable for their actions. Understanding Delinquent Directors A delinquent director is one who has been found guilty of serious misconduct, including gross abuse of their position, gross negligence, wilful misconduct, or breach of trust. This can include exploiting company […]
The Nature Purpose of Derivative Action
Introduction A derivative action is a unique legal mechanism that allows a shareholder to sue on behalf of a corporation. This type of lawsuit is typically brought against insiders such as directors and officers who have allegedly failed in their corporate duties. Nature and Purpose of a Derivative Action The nature of a derivative action is rooted […]
Share Sale Agreements
Warranties and indemnities play a crucial role in share sale agreements. They are mechanisms that ensure trust between contracting parties. This article provides an overview of warranties and indemnities in the context of share sale agreements in South Africa. Warranties A warranty is a factual statement which, if untrue, may cause the provider to be in […]
Piercing the Corporate Veil
The principle of “piercing the corporate veil” is a cornerstone of corporate law in South Africa. It refers to the legal decision to treat a corporation as a mere “alter ego” of its shareholders or directors, thereby bypassing the company’s separate legal personality and holding the individuals behind it accountable. The Concept of Corporate Veil […]
Overview of Shareholder Dispute Resolution
Shareholder disputes are a common occurrence in the business world. They can arise due to a variety of reasons such as disagreements over business strategy, dividend policies, or allegations of misconduct. Resolving these disputes in an efficient and fair manner is crucial for the smooth functioning of the company. This article explores the various methods […]