<% 'response.redirect "services.asp" %> Meise Nkaiseng Lawyers Attorneys in Vereeniging, Sasolburg, Vanderbijlpark South Africa
 
 

Corporate and Commercial Legal Services
The Corporate and Commercial Law Department is headed by Steven Meise, who is competently and confidently assisted by various attorneys and support staff members.


The Corporate and Commercial Law Department provides legal, transactional and policy advice and service in a wide range of corporate and commercial related matters, including those listed below:
Broad Based Black Economic Empowerment transaction advice and structuring, including drafting of BEE Agreements

The Broad Based Black Economic Empowerment Codes ('the BBBEE Codes') were published on 9 February 2007. The extent to which legal entities comply with the Black Economic Empowerment Act, 53 of 2003 and the 'the BBBEE Codes is measured in terms of the following seven elements

  1. ownership (equity) in the entity by black persons;
  2. management control of entities by black persons;
  3. employment equity targets;
  4. skills development and the transfer of skills to black employees;
  5. preferential procurement from black owned entities;
  6. enterprise development of black enterprises; and
  7. socio - economic development investments.

Legal entities which seek to do business with government institutions must demonstrate their level of BBBEE compliance as calculated in terms of the scorecard contained in the BBBEE Codes. In other cases legal entities will be required to comply because their customers will want to increase their own BBBEE points by procuring goods and services from “empowered” enterprises. As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised on a complex range of BBBEE transactions and assisted clients with the structuring of transactions to derive maximum BBBEE benefit. Meise Nkaiseng Attorneys also provides regulatory and compliance advice on issues such as: 
 

  1. the interaction between the BBBEE Codes and various specific sector charters;
  2. the interpretation of the BBBEE Codes and scorecards,
  3. the calculation of points, and
  4. the structuring of a corporate entity to improve its BBBEE profile.
Corporate Formations

The new Companies Act 2008 has identified two types of companies to be incorporated. A company can either be a profit company or a non-profit company. A profit company is defined as a company incorporated for the purpose of generating financial gain for its shareholders. A non-profit company is incorporated for public benefit and its income and property are not distributable to its incorporators. A non-profit company may be regarded as a successor to the previous Section 21 companies in the current Act. Profit companies can be (i) a state-owned company (SOC); (ii) a private company (Proprietary Limited), if it is not state-owned and the Memorandum of Incorporation prohibits it from offering its securities to the public and restricts the transferability of its securities; (iii) a personal liability company (Incorporated), if it meets the criteria for a private company and the Memorandum of Incorporation states that it is a personal liability company and (iv) a public company (Limited) in any other case. The new Companies Act 2008 states in Schedule 3(2) that Close Corporations (CCs) can still be incorporated until this Act comes into operation. After the new Companies Act 2008 comes into operation no new CCs can be incorporated. Current CCs can choose to either convert to a company or continue to exist until deregistration or dissolution in terms of the Close Corporations Act. No automatic conversion or dissolution is provided for CCs that continue to exist will have to compile financial statements as is currently the case, but will be required to be audited on the same terms and conditions as the Minister regulates in the case of companies. As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised on a complex range of Corporate Formations and assisted clients with registering companies and CCs, including drafting Articles of Association, Shareholders Agreements and Association Agreements. Meise Nkaiseng Attorneys will also be in a position to provide assistance to clients to enable them to convert their current company formation [as per the existing Companies Act] to comply with the formation prescribed in the new Companies Act 2008, together with the drafting of Memoranda of Incorporation and Shareholders Agreements in the form advocated in the new Companies Act 2008. 
 
Schemes of arrangement

The new Companies Act 2008 is expected to come into force some time between June 2010 and October 2010. It will replace the existing Companies Act of 1973, save for chapter 14, which will continue to apply to company liquidations. The new Act introduces business rescue proceedings envisaged in Chapter 6, Part A; the scheme of arrangement provisions in section 114; and the compromise provisions in section 155. Briefly, business rescue proceedings may be instituted where a company may imminently become insolvent or illiquid. This is defined to occur where it appears unlikely that the company will be able to pay off its debts within the immediately ensuing six months, or it appears likely that the company will become insolvent within the same period.


The Act provides for the temporary supervision of the affairs of the company, a temporary moratorium on its debts, and the development of a plan to rescue the company. In the existing Act, section 311 contains the scheme of arrangement and compromise provisions.

Schemes of arrangements are typically agreements between a company and its shareholders (or a particular class of shareholder), whereas a compromise is an agreement between a company and its creditors (or a particular class of creditor).

As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised corporate clients in distress on the most appropriate form of debtor protection to invoke in light of their prevailing circumstances and has assisted clients with the implementation of such relevant advice. Meise Nkaiseng Attorneys will also be in a position to provide assistance to corporate clients in distress to enable them to invoke the amended protection afforded to them by the new Companies Act 2008, including business rescue proceedings.
Corporate Restructuring

Restructuring comprises reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized for its present needs. Additional reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning or buy-out. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations and the extent of the expenses occasioned thereby. Common considerations and steps regarding corporate restructuring are:  

  1. ensure that the company has enough liquidity to operate during implementation of a complete restructuring
  2. produce accurate working capital forecasts
  3. provide open and clear lines of communication with creditors who mostly control the company's ability to carry on business
  4. prepare a detailed business plan.
As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised on various corporate restructuring arrangements and assisted clients with the implementation of such advice. Meise Nkaiseng Attorneys will also be in a position to advise and implement corporate restructuring to the extent contemplated in the new Companies Act 2008.
 
Insolvency Law : Liquidations and sequestrations [forced and voluntary]

Meise Nkaiseng Attorneys often advises directors who find their companies trading in what may be insolvent circumstances, which advice includes ensuring that directors are not subject to claims for personal liability due to reckless trading, suretyship undertakings or provisions contained in the company’s articles of association or shareholder’s agreement.  Meise Nkaiseng Attorneys also provides advice on forensic legal issues. This is critical when dealing with liquidations of companies, corporate and commercial fraud and reckless trading matters. Meise Nkaiseng Attorneys is able to assist clients during all stages of the insolvency process, including providing support in the conduct of insolvency enquiries, as well as guiding clients on strategic decisions such as embarking on the winding-up process as an alternative to litigation.

Due diligence investigations
Due diligence comprises:
  1. an investigation focusing on material future matters which may impact on a proposed transaction,
  2. an examination achieved by asking certain key questions, including: do we buy, how do we structure the acquisition and how much do we pay?, and
  3. an examination aiming to make an acquisition decision based on the principles of valuation and shareholder value analysis.
Due diligence investigations are used to investigate the viability of a multitude of transactions, including mergers and acquisitions, joint ventures and management buy-outs. Whatever the type of transaction, the process of a due diligence should question the essential assumptions underlying its final approval and implementation.
Meise Nkaiseng Attorneys has properly trained personnel and is regularly instructed by clients to perform detailed due diligence investigations prior to the clients embarking on commercial transactions and to advise on the process necessary to achieve the required information from a due diligence report.
 
The Duties and Responsibilities of Directors

Currently director’s duties are regulated by the common law, the Companies Act 61 of 1973 and the Corporate Laws Amendment Act of 2006. Once the new Companies Act 2008 becomes law, the statutory duties as is contained in the current Companies Act and Corporate Laws Amendment Act will be replaced and the new Companies Act 2008 will include a simplified version thereof. In general, director’s duties can be divided into two categories, namely (i) the duty of care, skill and diligence and (ii) fiduciary duties. When exercising their duties of care, skill and diligence, directors must display the utmost good faith towards the company and must act with the necessary skill and care in performing their functions. The fiduciary duties include (i) the duty to act in good faith and in the best interests of the company, (ii) the duty to avoid conflicts of interest, (iii) not to use the position as director for personal gain and (iv) to exercise their powers for the purposes for which they are granted. Section 76 of the new Companies Act 2008 contains the existing common law principles of both the fiduciary duty and duty of care and skill. When acting in capacity as director of a company, the director must exercise the powers and perform the functions of director in good faith and for the proper purpose, in the best interests of the company and with the degree of care, skill and diligence that may reasonably be expected of a person carrying out the same functions in relation to the company as those carried out by the director and having the general knowledge, skill and experience of the specific director. Directors must also disclose any personal financial interest that they, or a related person, might have in a matter that will be considered at a board meeting. Only direct, material interests of financial, economic or monetary value need to be disclosed. Directors are required to disclose interests in an existing contract in which the company has a material interest. Should directors come across any information that may be relevant to the company, they are obliged to release that information to the company unless that information is immaterial, available to the public in general or if there is an ethical or legal duty on the director not to divulge the information? Another duty of a director is the duty not to use that position or information obtained while acting in the capacity as director for personal gain or to cause harm to the company or a subsidiary of the company. If a director is found to have breached any one of his duties, section 77(2) of the new Companies Act 2008 states that the director may be held liable in accordance with the common law for any loss, damages or costs sustained by the company as a result of the director’s breach. The new Companies Act 2008 does, however, afford some protection to directors. Amongst others the Act provides for the company to advance expenses to the director for defending a claim arising out of the director’s service to the company. The company may, however, not indemnify the director for willful misconduct or breach of trust. The company is also allowed to pay expenses incurred by the director in defending a claim which has been withdrawn or that has been dismissed. The company is also allowed to purchase insurance to protect both the director and the company against the risks of liability. As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised various Boards of Directors and individual Directors regarding the rights, duties and responsibilities of the Boards of Directors and individual Directors and has assisted clients with the implementation of such advice. Meise Nkaiseng Attorneys will also be in a position to advise Boards of Directors and individual Directors regarding their rights, duties and responsibilities to the extent contemplated in the new Companies Act 2008.
 
The rights of shareholders

The new Companies Act 2008 will enhance the rights of shareholders, inter alia, in the following manners:
 

  1. dissenting shareholders will have appraisal rights. The appraisal rights will be available whenever the company proposes to enter into certain fundamental transactions or to alter its Memorandum of Incorporation in a manner adverse to the rights of any class of shares. Shareholders who unsuccessfully oppose such actions in the prescribed manner will thereafter be able to compel the company to repurchase all of their shares for their fair value, unless a court orders otherwise.

  2. shareholders may seek the removal of a director from the board of a company or apply to court for an order declaring a director to be delinquent or under probation. The other directors will thereupon be required to decide whether the allegedly neglectful director should remain on the board, and their decision will be subject to a court review at the instance of any dissatisfied shareholder or director.

  3. The new Companies Act 2008 regulates fundamental transactions to a greater extent than was previously the case. Apart from takeover offers made to the shareholders of a company, the new Companies Act 2008 contemplates three kinds of fundamental transactions, namely disposals of the majority of a company's assets or undertaking; mergers; and schemes of arrangement. All three of these types of fundamental transactions will require approval of the transaction by a 75% majority of shareholders voting on the transaction at a meeting. In addition, where the transaction involves the disposal of a majority of the assets or undertaking (measured on a consolidated basis) of the holding company of the company contemplating the disposal, the same approval of the shareholders of that holding company will be required. A court review will now be essential wherever 15% or more of the votes cast at the meeting on the transaction were cast against the transaction or a court grants any shareholder leave to have the transaction reviewed. On a review, the court will be able to set aside the resolution approving the transaction, if the transaction is manifestly unfair to any class of the company's shareholders or the vote on the transaction was materially tainted by conflict of interest, inadequate disclosure or other irregularity.
     

As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised various Shareholders and companies regarding their rights, duties and responsibilities and has assisted clients with the implementation of such advice. Meise Nkaiseng Attorneys will also be in a position to advise Shareholders and companies regarding their rights, duties and responsibilities to the extent contemplated in the new Companies Act 2008.
Corporate governance advice

Corporate governance deals with the complex set of relationships between the company and its board of directors, management, shareholders, and other stakeholders. In recent years the regulators and legislators have intensified their focus on how companies are being run. They are endeavoring to create a template for new corporate governance and disclosure measures, which is beneficial for both the stakeholders and controllers.
The latest KING COMMISSION ON GOVERNANCE report, namely KING III, recommends that all corporate entities should apply both the principles in the Code and the best practice recommendations. These principles include the role and function of the Board of Directors, composition of the Board of Directors, Board Appointment process, Director Development, Appointment of Company Secretary, Performance Assessment of the Board of Directors, Directors individually and Board Committees, Appointment of Board Committees, Approval of Remuneration : non-executive directors, remuneration policy, Corporate Citizenship : leadership, integrity and responsibility, Audit Committees, Risk Management, Internal Audits, Integrated Sustainability, Reporting and Disclosure, Compliance with Laws, Regulations, Rules and Standards, managing Stakeholder Relationships and fundamental and affected transactions.
As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised various companies regarding the implication and benefits of good corporate governance and has assisted clients with the implementation of such advice. Meise Nkaiseng Attorneys will also be in a position to advise companies regarding the implication and benefits of good corporate governance to the extent contemplated in the new Companies Act 2008.
Joint ventures

A joint venture takes place when two parties come together to take on one project. In a joint venture both parties are invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major companies and other corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for companies and corporations that are just starting in the business world or for established companies and corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project, as well as the resulting profits.

One of the simplest forms of joint venture is where the parties decide to retain their own independence and base their co-operation entirely upon contract. Alternatively, the parties may decide to combine on a more permanent basis, e.g. through forming a partnership or creating a corporate joint venture. These arrangements are referred to as “structural” joint ventures as they all involve the adoption of structures which bring with them certain specific legal consequences. The parties may decide to go for an even more radical structural solution (e.g. by merging some or all of their business activities or by one party taking over another) but even the creation of a corporate joint venture is likely to be substantially less expensive than a merger or a takeover.

Contractual joint ventures tend to be most appropriate where the project is a once-off project (or of a limited duration) and relatively simple in its scope. Contractual joint ventures are therefore typically used where: 


i)    a consortium intends to put in a bid for a specific contract with a view to forming a more permanent joint venture if the bid is successful,

ii)   the participants are co-operating on a defined project for a   defined period of time, or

iii)   the participants wish to co-operate on a specific research and development project.

 
As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised and assisted clients with forming various types of joint ventures and drafting the relevant Agreements incidental thereto.
Incentive schemes

Motivating, rewarding, and retaining top performers is key for any successful organization that seeks to maintain or exceed growth expectations. The key is automating the entire reward process enterprise-wide including employees, teams, executives, and sales. Success strategies inherent within this dynamic web-based system encourage high-level performance and profitability to impact the bottom-line and drive organizational growth.

As corporate and commercial attorneys, Meise Nkaiseng Attorneys has advised and assisted clients with drafting Incentive Scheme Policies which are applicable to the nature of the particular client’s business. Meise Nkaiseng Attorneys will also be in a position to advise and assist companies to introduce and implement Incentive Schemes, particularly relevant to Directors, and which are aligned to the prescriptions of the new Companies Act 2008.
Investigating fraud & implementation of legal procedures to effect recovery

Fraud takes on many forms. These activities include misappropriation of cash or inventory, fraudulent financial reporting and money laundering. In looking at these activities, a three-step approach is recommended :  

i)    secure and collect all tangible and oral evidence in a manner consistent with the rules of   evidence to ensure admissibility,

ii)   analyze the evidence, and

iii)   present the evidence to the client in an understandable manner.

These stages normally involve using the technology of computer forensic analysis, data analytics and conducting interviews. Typically, securing and collecting tangible and oral evidence will include a search and analysis of e-mails, documents and files that may be hidden, password protected, or encrypted, files that have been generated from the operating system, databases of all user input and activity, recently opened, accessed, created or deleted files, and on-line activities, including Internet banking transactions.

Successful fraud investigations require interviewing potential witnesses, people with information about a particular offence, and in some cases, speaking with the suspected perpetrators of fraud themselves. A professional interviewer will always have a detailed and organized plan in place. The objective of an interview in a fraud situation is to gather facts related to potential motives on the part of the suspect, and to verify opportunities presented to the suspect for committing a fraud.

Going through a fraud investigation can be a stressful time for a company, but can be fairly comfortably endured with cooperation, patience and the right knowledge.

Meise Nkaiseng Attorneys has properly trained personnel and is regularly instructed by clients to perform investigations into fraudulent activities and implement legal procedures to effect recoveries.

Corporate and Commercial Litigation

Commercial transactions and business and corporate relationships often go bad and turn into disputes, resulting in costly litigation. Unable to resolve the dispute through negotiations or discussions between the parties, one party may find that litigation is the only way to end the matter. Unfortunately, litigation is often a fact of modern business life.
Corporate and / or Commercial litigation is a general term that applies to any type of litigation or controversy related to business issues and / or corporate relationships. Corporate and Commercial litigation matters can range from relatively simple, uncomplicated matters, to highly complex matters that could take several years to resolve. Improperly handled litigation can lead to additional, unnecessary expense for a litigant. Even if a litigant is successful, the amount of money and time it spends fighting may exceed the amount of damages it is ultimately able to collect. In addition, protracted litigation can have a negative impact on the operations of a litigant’s business.
Examples of areas included under the general heading of corporate and / or commercial litigation include: 

i)    contract disputes, including breach of contract

ii)   shareholder and partnership disputes

iii)   breach of fiduciary duty cases

iv)  disputes over corporate management and control

v)   business dissolutions

vi)  employment disputes

vii) franchise disputes

viii) consumer fraud and consumer protection issues

ix)  debt collection actions.

Meise Nkaiseng Attorneys has properly trained personnel and is regularly instructed by clients to perform investigations into fraudulent activities and implement legal procedures to affect recoveries. Meise Nkaiseng Attorneys will also be in a position to advise and assist clients to manage potential corporate and / or commercial litigation disputes in the most effective manner, including the extent to which such potential litigation may be influenced or affected by the prescriptions of the new Companies Act 2008.