To explain the ruling of the court, Respublica entered into a lease agreement with the Tshwane University of Technology (the ‘‘TUT’’). A furnished premise with amenities was let to TUT for the sole purpose of providing accommodation to students. TUT in return, entered into sub-leases with students.
Section 12J of the Income Tax Act, 58 of 1962 (the “Act”) prohibits a Venture Capital Company (“VCC”) to invest in an investee company which does not meet all the requirements of a ‘qualifying investee company’ (“QIC”) as set out in the Act.
The Department of Trade and Industry published the new draft generic B-BBEE Codes for public comment.
A company’s conduct must at all times be aligned with the ‘spirit’ of the Companies Act, 71 of 2008 (the “Act”), being “high standards of corporate governance and high levels of transparency”.
The Supreme Court of Appeal was requested to consider whether the holder of a preference share was entitled to convert same to an ordinary share without the consent of the holders of 75% of the ordinary shares. The outcome would determine the valuation of the preference shares and the capital gain tax implications. The share capital of the Sidney Ellerine Trust (Pty) Ltd (the “Company”) consisted of 600 issued ordinary shares of R1/share and 112 000 redeemable non-cumulative preference shares of R1/share (the “Preference Shares”). All the issued Preference Shares were held by the late Sidney Ellerine (the “Deceased”).
Volkswagen South Africa (Pty) Ltd v Commissioner for the South African Revenue Service [2018] 1 All SA 716 (SCA)
The Companies Act 71 of 2008 (the “Act”) require directors of a company to act in good faith and for a proper purpose; in the best interest of the company; and with a degree of care skill and diligence
Section 7C of the Income Tax Act finds application where a person makes an interest-free loan to a trust, and that person is a connected person of that trust. The difference between the actual rate and the official rate (provided the loan bears interest at a rate lower than the official rate - currently 7.75%), will be deemed to be a donation to the trust and taxed at 20% (twenty percent) in the hands of the connected person.
Often loan agreements provide that a loan amount will be due and repayable upon written demand by the lender, alternatively within ‘n fixed period from when such written demand is delivered.
Refer our article published on 31 October 2017. Focus was on the basic principles of Venture Capital Companies (“VCCs”) and the preliminary requirements for qualifying as a VCC. However, in this edition we shift the focus to the requirements relating to companies in which a VCC may invest (“Investee/s”).
An example of a value-shifting arrangement may be where a parent (i.e. Mr. X) who owns all the shares in a company issues additional shares to his son at a discount, thereby reducing the value of his own shares. Mr. X effectively shifted value from himself to his son.
In terms of Section 26(1) of the Companies Act, a person who holds or has a beneficial interest in any securities issued by a profit company or who is a member of a non – profit company has the right to inspect the following records of the company.