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On 11 March 2022, the Constitutional Court (“CC”) handed down judgment in the matter of Barnard Labuschagne Incorporated / South African Revenue Service and Another CCT60/21. This case concerns the rescindability of civil judgments obtained by SARS in terms of the Tax Administration Act No. 28 of 2011 (“TAA”).

The South African Revenue Service (“SARS”), is empowered to scrutinize and make a finding on any transactional agreement concluded between parties in respect of a taxing position taken in terms of a provision of Tax Act.

The date (“Redemption Date”) on which a Preference Share is redeemed [buy-back] is significant when considering the definition of a ‘Hybrid Equity Instrument’ as defined in Section 8E of the Income Tax Act (“ITA”).

Section 48 of the Companies Act No 71 of 2008, permits a company to acquire its own share equity issued to its shareholder/s by means of a transaction colloquially known as a ‘share buy-back transaction’ (“Buy-Back”).

The Value-Added Tax Act No 89 of 1991 (“VAT Act”) contains certain rules in Section 8(25) to provide for Value-Added Tax (“VAT”) relief by treating the supplier and the recipient of goods or services as the same taxpayer during corporate reorganisation transactions (“Restructuring Transactions”) as provided for in Part III of the Income Tax Act No. 58 of 1962 (“ITA”). The effect thereof is that the Restructuring Transaction is concluded on a tax-neutral basis.

Section 19(1)(b) of the Companies Act, Act 71 of 2008 (the “Act”) provides that a company has all legal capacity and powers of a natural person as far as it can be applied. The purposes and powers of a company may be limited, restricted, or qualified in the Memorandum of Incorporation (“MOI”).

The disclosure process in a Sale of Shares / Business Agreement (the “Sale Agreement”) provides the seller the opportunity to disclose liabilities / potential liabilities to the purchaser which could avoid liability against a future claim for breach of warranty.

It is not uncommon for companies to raise capital by preference share funding (i.e. issuing preference shares to investors) as an alternative to debt funding for new business ventures and / or fulfilment of contractual obligations.

The Companies and Intellectual Property Commission ("CIPC") has issued Practice Note 2 of 2021 regarding the appointment and resignation of directors in a company. This Practice Note attempts to reduce complaints regarding unauthorised changes to directors and is effective as of 1 August 2021.

The Protection of Personal Information Act (“POPIA”) is effective as of 1 July 2021. POPIA regulates how Personal Information and Special Personal Information of natural and juristic persons are processed.

The concept of control as envisaged in the Competition Act (the “Act”) has been a fiercely debated topic with regard to the legislature’s intention of what constitutes control and whether a party to a merger has crossed the proverbial bright line to trigger the notification requirement for a merger.

The Practice Note clarifies how Broad-Based Ownership Schemes (“BBOS”), Employee Share Ownership Programmes (“ESOPs”), Trade Unions, Investment Holding Companies that are BBOS, Not for Profit Companies (“NPCs”) and Trusts, (collectively referred to as “Discretionary Collective Enterprises”) should be interpreted in light of the B-BBEE Codes of Good Practice (“Codes”).