The Subdivision of Agricultural Land Act No. 70 of 1970 explained: Part 1
The subdivision of agricultural land or “farmland” is regulated by the Subdivision of Agricultural Land Act No. 70 of 1970 (hereafter “the Act”) which came into operation on 2 January 1971. Baker J, in the case of Van der Bijl v Louw, stated that the Act has its purpose in preventing the situation where farming units are created which are not economical or could be described as non-viable subunits. This prevention objective is achieved in essence by the Minister of Agriculture, Land Reform and Rural Development of South Africa, who has to give their consent before any subdivision may lawfully be effected. Section 2 of the Act will be the topic of discussion in Part 1 of this series of articles and encompasses actions which are excluded from the application of the Act. These actions include the scenarios as follows: Firstly, the application of the Act is excluded where any portion of agricultural land is subdivided in order to transfer a portion thereof to the State or a statutory body, or a transfer to the State or statutory body of an undivided share in land, or the selling or granting of any right to any portion of agricultural land to the State or statutory body. The meaning of “right” in the latter scenario is defined in Section 1 of the Act as not including any right to minerals or a prospecting or mining right, but merely a right in relation to agricultural land. The second exclusion to the application of the Act is where a person had died before 2 January 1971,which is the commencement date of the Act, and there was a consequent passing of an undivided share or any subdivision of land due to a provision in the deceased’s last will and testament or due to intestate succession where the deceased had not left a will. The third exclusion to the application of the Act is where a contract was entered into before the commencement of the Act, and such contract made provision for the passing of an undivided share in any agricultural land. The fourth exclusion is where a surveyor has completed and submitted to the surveyor-general the relevant subdivisional diagram and survey records to be examined and approved prior to the commencement of the Act. The fifth and final scenario that is excluded from the application of the Act is where a lease agreement for a portion of agricultural land had been concluded in writing before the commencement of the Subdivision of Agricultural Land Act Amendment Act, 1974 and such lease was registered with its provisions similar to Section 3(d) of the Act. Such provisions are lease contracts where the lease period amounts to 10 (ten) or more years in total, or, when consecutive lease contracts entered into did not amount to a total time period of less than 10 (ten) years. Thus, if a person who finds him or herself in circumstances where they are dealing with the subdivision of agricultural land and such circumstances are alike with any of the five scenarios above, then the Act will not be applicable. This means that such subdivision of farmland can be effected immediately without compliance to any other conditions and/or provisions as contained in the Act. In Part 2 of the series on “The Subdivision of Agricultual Land Act No. 70 of 1970 Explained”, we shall look at actions that are prohibited in the subdivison of agriculural land or actions amounting to such subdivison and consider any available remedies. Recources: CJ Nagel “The Subdivision of Agricultural Land Act 70 of 1970, Options to Purchase and Related Matters” 2016 (79) THRHR p 276. 1974 2 SA 493 (C) 499. T Sewapa “Subdivison of Agricultural Farmland” 2016 p 1. 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)
The Subdivision of Agricultural Land Act No. 70 of 1970 explained: Part 2
In this Part 2 of the series of “The Subdivision of Agricultural Land Act No. 70 of 1970 Explained”, we shall look at actions that are prohibited regarding the subdivision of agricultural land or any actions amounting to such subdivision and if there are any available remedies. Once again it is reiterated that The Subdivision of Agricultural Land Act No. 70 of 1970 (hereafter “the Act”) has its purpose to prevent the subdivision of farming units or the creation thereof, and such units not being economical in their nature. This objective is essentially achieved through the Act as the Minister of Agriculture, Land Reform and Rural Development of South Africa has to give his or her consent before any subdivision may lawfully be effected. The first three actions which are prohibited by the act are that agricultural land may not be subdivided; no undivided share in agricultural land shall vest in any other person if such undivided share is not already held by a person, and no part of such undivided share in agricultural land shall vest in any other person if such part is not yet held by another person. The fourth action which is prohibited concerns the leasing of agricultural land and the renewal of such lease. The Act states that no one may enter into a lease for which the period of such lease is 10 years or longer. Neither may the length of the lease be the natural life of the lessee and/or the life of any other mentioned person in such lease. Further actions which are prohibited surrounding the leasing of agricultural land by the lessee, is the renewal of such lease either by the continuation of the original lease or by entering into a new lease and such continued and/or renewed lease being for an indefinite period or the combined period of 10 (Ten) years. The following actions are prohibited by the Act, except where such actions relate to the purposes of a mine as defined in section 1 of the Mines and Works Act. These actions include the selling or advertising for the sale of a portion of agricultural land, whether or not the latter is surveyed or contains any building thereon. Furthermore, the selling or granting of a right to such portion is not allowed if it is: for more than 10 years; or for the natural life of any person; or to the same person if such consecutive periods amount to more than 10 (Ten) years. Section 3(f) of the Act states that no area of jurisdiction, local area, development area, peri-urban area, or other area referred to in paragraphs (a) and (b) of the definition of “agricultural land” in section 1 of the Act, shall be established on, or enlarged to include any agricultural land. Lastly, the action of giving public notice that a scheme relating to agricultural land, or any portion thereof has been submitted or prepared under the ordinance in question. Thus, if a person finds him or herself in circumstances where they are dealing with the subdivision of agricultural land and such circumstances are alike with any of the scenarios above, then such dealings will be prohibited in terms of the Act and will be null and void. This means that such actions will need the prior consent of the Minister to comply with the Act. In Part 3 of the series on “The Subdivision of Agricultural Land Act No. 70 of 1970 Explained”, we shall look at the procedure on how to apply for consent as required by the Minister. This will include the imposition, enforcement, or withdrawal of conditions by him or her, as well as any miscellaneous provisions. T Sewapa “Subdivison of Agricultural Farmland” 2016 p 1. Section 3(a)-(c) of the Act. Section 3(d) of the Act. No. 27 of 1956. Section 3(e)(i)-(ii) of the Act. 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)
How does the POPI Act affect credit bureaus?
When it comes to the protection of personal information, there are two acts that govern businesses and those working with such information. The Protection of Privacy Information Act (POPIA), which came into effect on the 1st day of July 2021, and the Promotion of Access to Information Act (PAIA), which came into effect on the 9th day of March 2001. With these two Acts in mind, the question is, does a third party have access to the personal information held by registered credit bureaus. POPIA refers to the legislation that governs the lawful processing of one’s personal information and is applicable to any person or organisation that collects, stores, and uses the personal information of any person. Personal information is defined as information that may be used to identify a person. Further, the information should not stand alone; for example, information containing a name and an identity number is more significant than a name on its own. PAIA refers to the legislation that gives effect to the constitutional right of access to any information held by the State, and any information that is held by another person that is required for the exercise or protection of their rights. Credit Bureaus are private bodies registered in terms of Section 43 of the National Credit Act, and as such, they retain, maintain and remove credit information held on a consumer’s credit record. This information is obtained from various sources, such as financial institutions, non-bank lenders, courts, and insurance companies, and is permitted in terms of Section 70(2)(a) and (b), section 70(3)(b) and Regulation 18 (7) of the National Credit Act, 34 of 2005 (NCA). When you complete a credit application form, there are legislated clauses that you agree to when you sign the application, consenting that the creditor may submit the information provided to the credit bureaus for verification. You further consent that the credit bureau involved may store the information on their database and share it with other creditor providers. Credit information includes both negative and positive information about a consumer, and includes, but is not limited to: information relating to identity and contact details, account information, payments and repayments, microloans, previous enquiries conducted on a consumer, information available publicly (such as court judgments), accounts that are in default, other adverse financial behaviour, collection efforts, debt restructuring or rescheduling information, disputes, fraudulent behaviour, property or deeds data, and/or other assets held. The report containing all or part of this information is then sold to lenders and other companies for assessment of risk in the provision of credit and for other purposes. Third parties are only allowed to access this information if they have a lawful or prescribed purpose as set out in Regulation 18 (4) of the NCA, or where the explicit consent of the consumer has been provided. The prescribed purposes, other than for purposes contemplated in the NCA, for which a report may be issued in terms of Section 70(2)(g) of the NCA, are: (a) An investigation into fraud, corruption, or theft, provided that the South African Police Service or another statutory enforcement agency conducts such an investigation; (b) Fraud detection and fraud prevention services; (c) Considering a candidate for employment in a position that requires trust and honesty in regard to the handling of cash or finances; (d) An assessment of the debtors book of a business for the purposes of: The sale of the business or debtors book of that business; or Any other transaction that is dependent upon determining the value of the business or the debtors book of that business. (e) Setting a limit of service provision in respect of any continuous service; (f) Assessing an application for insurance; (g) Verifying qualifications and employment; (h) Obtaining consumer information to distribute unclaimed funds, including pension funds and insurance claims; (i) Tracing of a consumer by a credit provider in respect of a credit agreement entered into between the consumer and the credit provider; or (j) Developing of a credit scoring system by a credit provider or credit bureau. Regulation 18 (5) sets out that should a report be required for a purpose set out in sub-regulation (4)(c) or (e) to (g), the consent of the consumer must be obtained prior to the report being requested. Section 57(1) of POPIA refers to the fact that the responsible party must obtain prior authorisation from the Regulator, in terms of Section 58, prior to processing information of data subjects, if the responsible party plans to: Process any unique identifiers of data subjects Process information on criminal behaviour Process information for the purpose of credit reporting Transfer special personal information While POPIA came into effect on 1 July 2020, with compliance being mandatory as of 1 July 2021 after the grace period of one year being given by the Information Regulator, the commencement of Section 58(2) of POPIA was amended to only come into effect on 1 February 2022, and is applicable to the processing referred to Section 57 mentioned above. In answer to our question above then, should your organisation require prior authorisation from the Information Regulator for the processing of information as per Section 57(1)(a)-(d), an application must be submitted to the Information Regulator prior to the 1 February 2022, failing which you may face penalties. Reference List: PROTECTION OF PERSONAL INFORMATION ACT NO 4 OF 2013 PROMOTION OF ACCESS TO INFORMATION ACT NO 2 OF 2000 NATIONAL CREDIT ACT NO 34 OF 2005 NATIONAL CREDIT REGULATIONS Section 58: https://popia.co.za/section-58-responsible-party-to-notify-regulator-if-processing-is-subject-to-prior-authorisation/ 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)
What are fair grounds for dismissal regarding off-duty misconduct?
With looting and violence severely impacting certain parts of South Africa in June 2021, many businesses are facing great challenges on various fronts. In light of the recent civil unrest, many employers have been faced with the question as to whether they are entitled to dismiss their off-duty employees for their participation in the looting and violence. In most instances, an employee’s conduct outside of the workplace and after working hours does not fall within the scope of the employer’s authority. However, where such conduct has an adverse impact on the business, the employer is entitled to follow fair disciplinary procedures, which may possibly lead to the dismissal of an employee. It is evident from case law that, in specific circumstances, off-duty misconduct can constitute a valid reason for dismissal. Dismissal for off-duty misconduct is more pertinent in cases where the employee’s conduct involves gross dishonesty or corruption and where, as a result, the relationship of trust between the employer and employee is irreparable. Item 7(a) of Schedule 8 of the code of good practice stipulates that the contravention of a rule regulating conduct in the workplace, or of relevance to the workplace, can form the basis for disciplinary action. Invariably, the question then becomes, “What constitutes conduct that is relevant to the workplace? Our law provides us with a test to make this determination. First, there must be a nexus (a link) between the conduct that is being scrutinised, the employee’s duties, and the employer’s business or the workplace. Second, the employer must have a legitimate interest in the conduct of the employee outside of working hours. If such a nexus can be established, then the employer is entitled to subject the employee to disciplinary action for his or her misconduct. Furthermore, our courts have ruled that a nexus between an employee’s misconduct while off duty and an employer’s business exists where the employee’s conduct has an adverse or intolerable effect on the efficiency, profitability, continuity, or reputation of the employer’s business. Thus, in the context of an employee caught looting, the following instances could establish the aforementioned nexus and potentially entitle an employer to take disciplinary action against an employee for their off-duty misconduct: If the employee was caught looting in his or her work uniform and can therefore easily be identified as an employee of the employer; Where the employee is not in work uniform but is still identifiable as being associated with the company. For example, the employee is in management or is ‘the face of the company’; Where the nature of the employee’s misconduct has an adverse impact on the employee’s duties. For example, if the employee is in the retail sector and is therefore entrusted with the employer’s stock. In light of the above, it is evident that employers do not enjoy an automatic right to dismiss employees who have been in caught in the act of looting or for any general off-duty misconduct by an employee. Employers are advised to properly assess and evaluate such occurrences before taking any action and speak to their legal adviser should they believe that there may be fair grounds for dismissal. 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)
How you can improve your business’s cybersecurity
As a business owner in the digital age, one of the best things that you can do to gear yourself for the future of your industry is to learn how to protect your business and its interests from cyber threats that could lead to damages on a large scale. One of the most frequent minor inconveniences we face in the modern age is waiting for a program to update before we can use it again. You might find it frustrating if your anti-virus program wants to perform an update every other day, but these updates are vital to your continued safety. These updates are necessary as every moment that goes by is another moment in which a cybercriminal is attempting to exploit vulnerabilities in the digital universe. In fact, everything we know about cybersecurity right now is already outdated. Do not let it come as a shock or induce panic, though, as there are many practices/steps that you can implement to essentially eliminate all cyber-threats to yourself and your businesses. Start with yourself The best leaders learn before they teach others to follow. This is not to say that you need to learn everything there is to know about cyberinfrastructure and cybersecurity before you start speaking to your employees about it. But the only way that those in your employ will trust you enough to listen and take to heart what you say, is if you lead by example. Take time to familiarise yourself with cyber threats to your business. As a business leader, you are best equipped to identify the areas of your business most susceptible to cyberattacks. Once you have identified the most valuable information your business possesses, you can ramp up your security measures in the right areas to repel or prevent attacks against your company. Focus on re-learning As people who have grown up in a society where technology has grown in leaps and bounds over the years, we must not be as naïve as to think that what we knew 10 years ago is still as valid today. Cybersecurity, from now until the indistinct future where we transcend the need for a digital world (which will not be anytime soon), will constantly need to be revised, unlearnt, and re-learnt. Therefore, from the outset, it is necessary to take a systematic approach to cyber education that constantly revises its practices and implements new safety measures against the multiplicity of threats out there. Know about the array of cyberthreats out there To be best equipped for a cyberattack, you need to be aware of the various avenues for attack that exist and how these points of attack may present themselves to your business. Web-based attacks Web-based attacks make up the largest proportion of all cyberattacks (49%). These attacks are conducted while you are browsing the web and can take a variety of forms: from clicking a hyperlink to a malicious website, to enabling malicious web-scripts, to inadvertently installing malware. Phishing The second largest proportion of cyberattacks (43%) is phishing attacks, which often starts over email. Phishing is a method of cyberattack by which cybercriminals entice you to divulge sensitive information while purporting to be reputable sources. Spoofing Spoofing is when someone or something pretends to be something else in an attempt to gain a victim’s confidence, get access to a system, steal data, or spread malware. Malware Malware is a kind of malicious software that compromises a network/device/system. These include, but are not limited to, adware, viruses, trojan horses, and spyware. Put the infrastructure in place to minimise your risk As cyberattacks become more sophisticated, so do anti-virus programs (and other cybersecurity tools). Make sure you have the kind of infrastructure in place to maximise your security. Here are some considerations for improving your cybersecurity: Implementing firewalls between datapoints Investing in reputable (paid) anti-virus/anti-malware solution Encrypting the data you store on your servers Installing a Virtual Private Network (VPN) on your devices Teach your staff cyber (street) smarts The vast majority of cyberattacks require at least some kind of human interaction for it to be successful. While your infrastructure can do a lot to minimise risk, it can never eradicate it. That is why you need to invest in continuous staff training. Make sure to include cybersecurity training as part of your onboarding processes, while continually helping your staff make the best decisions while working online. Cybersecurity smarts are not only worthwhile in the office, but they are also becoming a necessity outside of the office. Promoting cyber-security as a habit could go a long way to protecting your employees and company no matter where they are. Test your security One tactic that many companies have been using to assess their risk of cyberattacks is that of co-ordinating mock security breaches in which employees are targeted with a cyber ‘threat’, which demands a response from them. Those who fail the test must be alerted to the real damages that could have been borne from threats to security and what the consequences of their actions may have been if there was a real security threat. Although it may seem a little drastic, it could very well serve as a much needed wake-up call for those who are naïve in their online activities. References https://purplesec.us/resources/cyber-security-statistics/ https://www.techrepublic.com/article/how-to-make-your-employees-care-about-cybersecurity-10-tips/ https://preyproject.com/blog/en/what-are-cyber-threats-how-they-affect-you-what-to-do-about-them/ 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)
5 Tips to digitally expand your business’s professional network
The importance of networking – especially during COVID-19 – should not be overlooked. While many business owners have been struggling to stay afloat in the economic downturn that has resulted from the events of 2020, they may have been neglecting one of their key resources in maintaining their success. Good networking skills are one of the most valuable business assets that any business owner can possess. How you connect to others in your field of work (and this includes your competitors) can have a marked effect on your ability to make the right decisions at the right time with the right resources at your disposal. Naturally, networking does not come easily at a time like this, when social distancing measures are, even by optimistic projections, set to stay in place for quite a while. How then can you, as a business owner, keep expanding your network, your knowledge, and your connections under the current conditions? Here are five tips: 1. Curate your new first impression (your digital presence) Handshakes, networking events, and comfortable face-to-face meetings are no longer an option for the time being. For this reason, having a digital presence is vital to your continued networking success. Business owners would do well to remember that in the absence of personal contact meetings, their digital presences form the basis for any potential connection’s first impression of them. So, remember that social media and email are your friends so long as the framework of your media networks is steady, and you curate your current content so that whoever lands on your or your business’s page immediately has an understanding of your identity and the identity of your company. 2. Plan a strategy Don’t make the mistake of coming out of the gates guns blazing. The Coronavirus pandemic has taken its toll on many business owners, and if your business is struggling, the worst approach would be to start something that you cannot see through to completion or one that demands too much attention from others. Focus your energy on one or two platforms, where you will be able to keep your dots connected. 3. Revise your elevator pitch in a new medium Finding new ways to present your core message and goal in an effective way will be pivotal to digital networking. An elevator pitch is often only as successful as the way in which it is presented. You can no longer rely on traditional charisma and body language (although for some, this may come as a relief). Become familiar with etiquette and conventions in different kinds of media and find new ways of displaying confidence and digital charisma by knowing when to break the mould. The fastest way to make a real connection will rely on a presentation that stands out among others like you. 4. Start small Since you no longer have the ability to connect in the same ways as before, people will be naturally apprehensive at first. One of the simplest ways to build the initial rapport is by either offering something small (without expecting anything back in return) as a token of good faith, or asking for something reasonable that does not demand much time/resources from your recipient (which expresses your faith in their knowledge/ability). Even business relationships are, after all, based on the principle of give-and-take – just try to keep a balance. 5. Persevere through failed connections Take time to keep track of each individual attempt to connect with other professionals and of instances where these attempts are already in the process. Follow-up communication can go a long way to solidifying a relationship that would otherwise just have fallen by the wayside. You don’t want to come across as being too pushy, but the reality is that many emails, especially on busy days, are missed or actively dismissed because of time constraints. Following up a day or two later can help you connect with those who missed your email or trigger a memory that an email had been sent from your address previously. Even a third or further follow-up can help you make your mark where others give up. Are you ready to make the kind of connections that will lead to more business or improve the way that you do business? While networking in the digital age (especially when paired with social restrictions) can seem daunting, many businesses are missing out on real success and growth because of it. Make your mark, expand your professional network, and set yourself apart from the rest. References: https://www.welcometothejungle.com/en/articles/networking-during-corona https://www.allbusiness.com/network-small-business-owner-113187-1.html https://www.businessknowhow.com/tips/networking.htm 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)
The threat of fake news to your business
In the digital age, information is everywhere. At the click of a button a message can travel across oceans in the time it takes to blink. For the large part, it’s an incredible testament to human invention. But for some part, as with the spread of destructive fake news, it reveals our ugly side. In the time of COVID 19, fake news is especially destructive when it encourages methods of virus prevention that are untrue. And while most fake news regarding the coronavirus does not directly impact businesses, there have been plenty of instances where fake news regarding the virus have resulted in damages and losses: Fake News Causing Supply Shortages When South Africa was about to enter its lockdown at the end of March, we had already received reports of stockpiling taking place in other countries. Soon South African supermarkets also saw shortages of items like toilet paper and disinfectants. This caused supply shortages, resulting in empty racks in the stores. So, when a WhatsApp message attributed to Checkers was busy spreading in May, the Shoprite group had to act quickly to let consumers know that the claim was not true that “sugar, fish oil, rice, flour and soap powder” were facing a scarcity issue. Fake News Impersonating Real News While social media is a great tool to stay connected, it is also a conduit for fake news centred on trending topics. During the early development of the pandemic, sources impersonating well-known media outlets revelled in the panic that ensued by publishing false information regarding the spread of COVID-19. The news agencies that were being impersonated had to act quickly to quash the spread of misinformation and limit the disreputation caused. Fake News Leading to Arson As COVID-19 has been spreading this year, so too has 5G technology. This has led to countless rumours that 5G signals cause COVID-19. There is, however, no evidence that supports the claim. Not only is it scientifically impossible for radio waves to transmit a biological virus, but it is also clear that the coronavirus is spreading rapidly in places where 5G technology is absent. For telecommunication companies implementing 5G technologies across the country, the spread of misinformation can cause great damage. Not only can the spread of misinformation lead to decreased sales of devices that use 5G technology, but there have also been instances where misinformed people have set 5G towers alight. These are but some of the many instances where fake news had adverse effects. Since panic is heightened during a pandemic, misinformation can spread even faster than it usually does. Something as simple as a false report of a COVID-19 case at your place of business can be extremely damaging. Apart from the global COVID-19 pandemic, there are many other instances where fake news can damage a business. While most of the fake news in the digital universe is used to procure clicks and ad-revenue, fake news can also be fabricated to cause defamation, damage to brands, competitive sabotage, loss of customers, etc. Because of the reputational and financial damage that fake news can cause, it is paramount to respond to fake news swiftly and decisively. Unfortunately, though, many businesses are not geared to tackle the news that might affect them. For this reason, an action plan in the form of a rapid-response protocol is needed. Rapid-response protocol Identify the threat Before you respond to fake news, make sure that you know what false claims are being made. Although this step might seem obvious, it is crucial that your response is formulated in relation to the misinformation being spread and not as a result of hearsay or rumours. Evaluate the level of the threat Not all fake news will require a response. Consider what the impact the false news has (or can have) on your business. Does it relate to your business, a product/service being sold, or is it a fake news article with a more general scope? Only prepare to comment on fake news that might harm your business. Identify the truth Once you know what false claims are being made, compare what you know to be false with what you know to be true. Gather info that will help you formulate your response. If possible, it will be good to support your claims with concrete information that verifies the truth. Update all your online presences Although there may be people spreading fake news that impacts your business, it doesn’t mean that everyone will be as naïve to believe the news without verifying it. Your online presence (specifically your social media pages and website) is the most reliable source of public information. Make sure to debunk the fake news where people will be searching for your response. Formulate a press statement/release Write a release that both debunks the fake news and that expresses the reality of the issue put in question by the fake news. Send out the press statement to all relevant sources Prepare a list of media contacts ready to send your statement to. This list should also specifically include any media outlets in your niche. By maximising the availability of a true statement, it minimises damage caused by fake news and discourages people from spreading false news. If possible, find the source of the fake news If you can find the originator of the fake news, it is pertinent to have them retract the fake news and publish the truth. If the fake news was published on social media, you could report both the fake news post and the account from which the fake news came. Often, cutting fake news off at the source dramatically limits its spread. In the digital age, with the exponential growth of digital information, preparing a response protocol for threats from fake news articles is critical. Make sure that your business is educated in identifying fake news and knowing what to do when it may cause harm. Reference list: https://www.bizcommunity.com/Article/196/15/204108.html https://www.businessinsider.co.za/here-is-what-you-need-to-know-about-5g-in-sa-2020-5 https://www.enca.com/south-africa/sa-news-organisations-targeted-in-fake-twitter-accounts Government Gazette Vol 657, No. 43107, 18 March 2020
Is it time to say goodbye to your business?
South Africa has been experiencing very slow economic growth and international rating agencies have subsequently downgraded South Africa’s investment outlook to “junk status”. This, and a myriad of other factors, have negatively impacted South African businesses, especially small and medium business enterprises. Many of these struggling enterprises are now at a crossroads: do they continue trading and hope that things will improve, whilst risking incurring further debts, or do they cut their losses and give up? This article will briefly explain what the difference is between business rescue and liquidation, two legal avenues which are available to financially distressed companies. Business rescue: Failing companies traditionally only had the option to liquidate. The Companies Act 71 of 2008 (hereinafter referred to as “the Act”) has created another option in the form of business rescue proceedings.[1] Companies which are in financial distress can be placed under business rescue where after a business rescue practitioner will be appointed. The main objective of business rescue proceedings is to reorganise and restructure the business in order to make it a more profitable and stable entity. This is achieved by placing the company and the management of its affairs, business and property under temporary supervision. Furthermore, it provides for the development and implementation of a business rescue plan.[2] Business rescue proceedings can, similarly to liquidation proceedings, be launched on a voluntary basis or by way of a court application brought by creditors or other affected persons. A company must be in financial distress before it can file for business rescue. A company will be deemed to be financially distressed for purposes of this Act if: “(i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months; or (ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months”.[3] Companies meeting either of the requirements as set out above will thus be eligible to commence with business rescue proceedings in order to rehabilitate the financially distressed company. Some of the most prominent effects of a company being placed under business rescue are the following: A general moratorium on legal proceedings against the company is imposed. Creditors will accordingly not be able to institute civil claims against the company or execute on any court orders already granted.[4] A guarantee or surety previously given by the company in favour of any other person may not be enforced by any person against the company.[5] The company may only dispose of its property in the ordinary course of its business in a bona fide transaction which is at arm’s length.[6] The business rescue practitioner can “cancel or suspend entirely, partially or conditionally any provision of an agreement to which the company is a party at the commencement of the business rescue period, other than an agreement of employment.”[7] This places the business rescue practitioner in a powerful position to alleviate some of the financial commitments of the struggling company by renegotiating payment schemes with the company’s creditors. The ultimate objective of business rescue proceedings is to save companies. This should, if possible, be the preferred course of action for a financially distressed company since it has the potential to preserve jobs and to reinstitute a stable and solvent company which can contribute to the South African economy. Liquidation: The objective of liquidation proceedings is fundamentally different from that of business rescue proceedings. Liquidation proceedings are not aimed at rescuing a financially struggling company, but rather to permanently end the company. It is important to note that liquidations of insolvent companies are still done in terms of the Companies Act 61 of 1973 (hereinafter referred to as “the Old Act”). A company is regarded as being insolvent if its liabilities exceed its assets, or if it is unable to pay its debts as and when it becomes due.[8] Liquidation of a company results in the establishment of a concourses creditorium and the company will cease to trade and its assets will be frozen. All civil proceedings against the company will stop as well as any execution processes against the company. The Master of the High Court will appoint a liquidator who will be responsible for collecting all of the company’s assets and to distribute same between the creditors after the costs of the liquidation have been paid. Liquidation and business rescue proceedings, although applicable in similar circumstances have very different objectives and one should thus consider these objectives when choosing one or the other. Business rescue proceedings should be strongly considered where there is a reasonable prospect that the company may be able to trade on a solvent basis again. However, it does sometimes happen that a company is completely “down and out” and that there are absolutely no prospects of the company ever being able to service its debts and/or to trade on a financially viable manner again. In such cases, one should liquidate the company in order to protect the remaining assets in favour of the creditors. You should consult a knowledgable attorney if your company is financially distressed in order to determine the best way forward. Reference List: Companies Act 71 of 2008. Companies Act 61 of 1973. [1] Chapter 6 of the Companies Act 71 of 2008. [2] The purpose of the business rescue plan is to “rescue the company by restructuring its affairs, business, property, debt and other liabilities, and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company.” See section 128(1)(b)(iii) and section 150 in this regard. [3] Section 128(1)(f) of the Companies Act 71 of 2008. [4] Section 133. [5] Section 133(2). [6] Section 134(1)(a). [7] Section 136(2). It is important to note that employees remain employed by a company under