BEQUESTS TO BENEFICIARIES MARRIED IN COMMUNITY OF PROPERTY

When you make a bequest in your will to a beneficiary who is married in community of property, the inheritance will fall into the joint estate of that beneficiary and his or her spouse. It is customary to provide in a will for the exclusion of inheritances from a marriage in community of property. However, such a provision in your will may not provide sufficient protection for your beneficiary against the claims of creditors of the beneficiary’s spouse, if they are married in community of property.

The creditors of the beneficiary’s spouse will be entitled to bring a claim against the joint estate, as well as against such a beneficiary’s separate property (including any inheritance which is excluded from community of property), in seeking settlement of their claim.

Contact our Estates Department on 041 5019800 for advice and to draft your will.

DO YOU REQUIRE A LIQUOR LICENSE FOR A SPECIAL EVENT OR A NEW BUSINESS VENTURE?

A liquor license is required for the retail sale of liquor, consumption on and off a premises as well as the retail and consumption of liquor at a special event.  It is important to note that an application for a liquor license is required to be lodged 3 months in advance of your special event.

Should you require a quotation or further information on obtaining a liquor license, please contact Goldberg & de Villiers’ Corporate and Commercial Law Department on 041 501 9806 or cindy@goldlaw.co.za or nicole@goldlaw.co.za.

ARE YOUR DIRECTORS AWARE OF THEIR FIDUCIARY DUTIES TOWARDS THE COMPANY?

A director’s fiduciary duties are regulated by the Companies Act 71 of 2008 as well as common law. Are your directors however aware of exactly what their fiduciary duties are, when they commence and terminate and the extent thereof?

For director training or further information on director’s duties or any agreements associated therewith, please contact Goldberg & de Villiers’ Corporate and Commercial Law Depatment on 041 501 9806 or email cindy@goldlaw.co.za / nicole@goldlaw.co.za for personalized expertise in corporate and commercial law. 

HOW TO START A BUSINESS – 8 TIPS

Starting a business can be an overwhelming and daunting exercise. There are various aspects to consider which will ultimately be determined by the type of business you intend operating. But where exactly do you start?

Here are 8 useful tips to get you started in the right direction:

Choose a legal structure:

Some of the structures available for businesses include a sole proprietorship, partnership, close corporation, company or a trust.  The requirements and legal liability associated to the various structures differs and it is important to consider this carefully in order to choose a structure that best suits your intended business and to ensure that you are safeguarded in the unfortunate event of the business failing. It is equally important to ensure that the relationship with any partners are formalised in clear and concise agreements to ensure all parties understand their respective roles and responsibilities.

Register your business:

Once you have decided on the appropriate legal structure you will need to register it with the relevant offices, such as the Companies and Intellectual Property Commission (CIPC) or the Masters Office. You may further wish to register your business as a member with organisations or bodies that could assist you with marketing your brand and/or products/services.

Obtain applicable licences:

Depending on the nature of your business, you may be required to obtain certain licences in order to conduct your business legally.  These could include, amongst others, a liquor licence, music rights licence or a business trading licence.

Select your business premises:

For many businesses, choosing the right location for your business plays an important role in its success. Ensure that your right to operate from the premises is secure, whether it is by virtue of ownership or rental of the property concerned and that the zoning of the property is appropriate.

Compliance with law:

It is important to ascertain and comply with legal requirements applicable to your business, such as the Tobacco Products Control Act, the Consumer Protection Act and the Companies Act. This further includes compliance with relevant labour legislation if you have employees. Experience shows that obtaining upfront assistance and guidance in these areas pays huge benefits so ensure that you have carefully covered all these areas to avoid costly setbacks at a later stage. 

Obtain adequate insurance:

Starting a business is a costly exercise and it is advisable to seek guidance from a trusted advisor in respect of specific risks pertaining to your business and to insure your business against such risks. Certain industries require insurance as a pre-requisite to operating your business and you would need to ensure same is adequately in place.

Managing business relationships:

Your business will involve various relationships with, for example, suppliers and customers. Make sure that the agreed terms of the relationships are properly and clearly set out in a validly executed contract to protect the interests of your business and to enable you to properly manage same.

Protect your intellectual property:

As your business develops, you will grow a brand and reputation. Your business may further be based on a product or creation that it unique and new. Before sharing this with the world, make sure that you have taken the appropriate steps to protect and secure your right to such intellectual property.

This is not an exhaustive list of the various aspects that are important to consider and cater for when starting your own business. You will likely be investing a great deal in the success of your business and it therefore makes sense to ensure that you seek and obtain professional advice and guidance from the outset.

Contact Sandy Scholtz at Goldberg & de Villiers Inc. for professional legal assistance on 041 – 501 9800.

AIR BNB OWNERS AND BUYERS – SHOULD YOU BE WORRIED ABOUT THE NEW REGULATIONS?

“While travel on our platform accounts for less than 1 in 8 visitors to South Africa, those guests boosted the economy by R8.7 billion and helped create 22,000 jobs last year alone” and “Regulation is a useful and necessary tool of good policy, but policy comes first. Sadly, the current wording of the draft Bill is very vague and unclear. It indicates the creation of specific regulatory approaches without any explanation of what they are trying to encourage or solve.” (Airbnb)

Firstly, there is no doubt that Airbnb can be highly profitable for you if you have – or buy – the right property in the right place at the right time.

Just be sure to comply with all municipal zoning and other by-laws and (if you are in a community housing scheme) any Body Corporate or Home Owners Association requirements. There is also a host of other legal, tax, financial and practical concerns to consider – proper legal advice (and a short-term letting contract tailored to meet your particular needs) will pay handsome dividends.

A new factor to take into account now is government’s proposed new regulation of short-term rental schemes like Airbnb and its accommodation booking platform. The news has sent shivers down the spines of both existing and prospective Airbnb owners.

But is there actually anything to worry about? It’s much too soon to be sure but there may be grounds for optimism. Let’s start with a look at what has actually happened to date.

Here are the facts so far

•             Government’s declared intention is to regulate short-term home rentals because, it says, of perceptions that it may be hurting the tourism sector. Like other digital disruptors – Uber springs to mind – Airbnb has literally thrown a cat among the pigeons, and we are no doubt now seeing the fallout.

•             The proposal is contained in the Tourism Amendment Bill, published on 15 April 2019 with a 60 day window for public comment which has now been extended to 15 July.  The Bill includes a provision for “the determination of thresholds for short-term home sharing”.

•             The relevant new definition in the Bill is: “‘short-term home rental’ means the renting or leasing on a temporary basis, for reward, of a dwelling or a part thereof, to a visitor.”

•             Reaction from stakeholders has been varied to say the least, with media reports suggesting a heady mix of both strong support for, and bitter opposition to, the new proposals. Perhaps most pertinently Airbnb has met with the Minister of Tourism and reportedly supports “fair and proportional rules that are evidence-based, benefit local people, and distinguish between professional and non-professional activity taking into account local conditions.”

So where to from here?

Time alone will tell what the final Amendment Act will actually look like, but the majority opinion does seem to be that in the end result a fair and workable balance will be struck between the need to regulate the industry on the one hand, and the need to encourage entrepreneurship and grow tourism on the other.

Expect an outcry and court challenges if that doesn’t happen.

For more information, contact the professional legal team at Goldberg & de Villiers Inc on 041 501 9800.

THE USE OF CLINIC NOTES WHEN DETERMINING SICK LEAVE

In order for sick leave to be granted on the back of a medical certificate, the medical certificate is to accord to Section 15(1) of the Ethical and Professional Rules of the Medical and Dental Professions Board of the Health Professions Council of South Africa.  In this regard, for there to be a valid certificate it must contain the following:

  1. The name, address and qualifications of the practitioner;
  2. The name of the patient;
  3. The employment number of the employee (if required);
  4. The date and time of the examination;
  5. An explanation by the medical practitioner stating whether the medical certificate is issued under the opinion of the medical practitioner’s personal or professional obligations deduced from an examination or if the patient provided them with information that is based on adequate medical grounds;
  6. A description of the illness, disorder or disease is to be provided in a manner understandable by those not in the medical professions.  Instances where the patient does not wish for their ailment to be stated, the medical practitioner or dentist is to simply specify that it is their opinion, after conducting examination, that the patient or employee is not fit to work;
  7. The patient or employee is completely unable to perform their duties or that such employee may remain within the work place as they are still able to perform less vigorous duties;
  8. The exact time frame of the recommended sick leave;
  9. The date on which the medical certificate of illness was issue; and
  10. The full details of the medical practitioner together with his signature.

When it comes to medical certificates obtained at Clinics, there is a tendency of these certificates not being signed by a registered practitioner.  However, it must be understood that all clinics as well as hospitals consist of a team of qualified medical practitioners or staff.  A person claiming to be ill and subsequently attending a Clinic or Hospital, has to be examined by such qualified practitioner and obtain an adequate medical certificate for employment purposes. 

Examinations that have been conducted by nurses or persons who are not qualified to perform examinations with the purpose of providing a diagnosis are not acceptable.  Therefore, a medical certificate is to be provided and clearly signed by a person who is certified and a qualified medical practitioner.

A medical certificate that is provided by a person who does not fall under the category of qualified medical practitioners, although granted the authority to conduct such examinations, is deemed as not being a valid medical certificate thus being unacceptable.

It is thus essential that an employee or patient that attends a clinic is to ensure that the medical certificate that he/she receives is valid and signed by a qualified medical practitioner and is not merely an attendance certificate.  Should it be the latter, it would not form part of sick leave and the employee could receive unpaid leave.

The following are reasons that do not constitute valid reasons to invoke an employee’s entitlement to sick leave:

  1. Routine check-ups;
  2. Examinations;
  3. Tests;
  4. Visits to Optometrists, Gynaecologists and Physiotherapists, etc.;
  5. Collecting of medicine from the pharmacy; and
  6. Visits to specialist medical practitioners.

Credit: Lungie Luvuno, Candidate Attorney within Goldberg & De Viliers Inc., Human Resources and Labour Law Department.

For information please contact Tracey Mouton, Director, Goldberg & de Villiers Inc – traceym@goldlaw.co.za | (041) 501 9818.

YOU SIGNED A PROPERTY SALE AGREEMENT, CAN YOU STILL ACCEPT A BETTER OFFER?

You put your property on the market and an acceptable but not-perfect offer comes in. On the “a bird in the hand is worth two in the bush” principle you want to accept the offer even though it’s not ideal.

Perhaps it’s not perfect because it’s subject to a suspensive condition – common ones give the buyer time to sell his/her current house or to obtain a bond. In both scenarios your sale will fall through if the buyer is unsuccessful within the stated time, and if that happens you are back to square one after a long and fruitless delay. Bear in mind that that delay could be a protracted one depending on what your sale agreement actually provides – normally no less than 30 days to get a bond, sometimes several months to sell an existing house. That’s a lot of very valuable marketing time lost – and you’ll never know for sure whether you just missed out on that “perfect offer”.

The “72-hour clause” and what it does

This is where the “72-hour”, “continued marketing” or “escape” clause comes in handy.

In a nutshell, it allows you to continue marketing your property until suspensive conditions are met. If your marketing pays off and an unconditional offer does come in, you can give your existing buyer 72 hours’ notice to match it. So the buyer would have an opportunity to make the sale unconditional – either by waiving (abandoning) the condition or by fulfilling it.

If the buyer fails to do whatever the clause requires within the 72 hours, you are clear to accept the new offer. If on the other hand the buyer does perform in time, the existing sale immediately becomes fully binding and the transfer process can get underway.

A note for buyers

The clause is usually there for the seller’s benefit so perhaps avoid it when you can. But if it’s a choice between your offer being accepted or not, bear in mind that having a signed sale agreement at least gives you a solid base for a full bond application and/or a concerted effort to finalise your own house sale.

Just be ready to react quickly if the seller does indeed give you the 72 hour notice – you don’t want to be rushing around in a last-minute panic.

Buyers and sellers – check the wording!

Although 72-hour clauses are common in standard sale agreements, the exact wording can vary substantially, and may need tailoring to meet your specific needs. You might for example want to be given proof of availability of funds together with a bond clause waiver, or proof that the sale of the buyer’s house is a viable one – every situation will be different.

Apart from everything else, make sure that –

•           The 72 hour period specifically excludes Saturdays, Sundays and Public Holidays (religious holidays too if important to you),

•           You can extend the 72 hours by mutual agreement if you want to,

•           There are clear requirements for the method and timing of giving notice and of waiving conditions, and

•           You aren’t binding yourself to anything else that could turn around and bite you down the line.

Delete the clause if it doesn’t apply.

Please feel free to contact any of the conveyancers in the Property Law Department at Goldberg & de Villiers Inc Attorneys – adri@goldlaw.co.za; twg@goldlaw.co.za and bardine@goldlaw.co.za for more information.

ESTATE AGENTS : SECURING YOUR TRADE SECRETS (AND YOUR COMMISSION)

As an estate agent you will know that without a valid Fidelity Fund Certificate (FFC) you are not entitled to any commission for the successful sales or leases you put together. All your hard work in fulfilling your mandate will come to naught. Your client need pay you nothing.

As a recent High Court case warns, you will also be unable to enforce any restraints of trade you enter into with your employees. And that’s a major risk if your trade secrets are as valuable to you as they are to most agencies.

The company that converted from a CC without changing its FFC

•             The agency’s fatal mistake was that for 5 years after the conversion it continued to hold FFCs in the CC’s name. During that period it employed an intern agent in terms of an Intern Agency Agreement which included a restraint of trade clause prohibiting the employee “from engaging or participating in the property industry for a period of six (6) months after the termination of the agreement”.

•             A close corporation (CC) trading as an estate agency held an FFC.

•             When the intern agent resigned and joined another agency, the company approached the High Court for an order interdicting and restraining her “from utilising and/or communicating confidential information relating to its business affairs, property listings, pricing, valuations etc” and “from operating in any capacity in the residential property market” in a list of named suburbs for 6 months.

•             It converted to a company, retaining the same name so that the only change was the “CC” at the end of its name becoming “(Pty) Ltd”.

•             In the 18 months she had been with them, said the agency, she had “gained knowledge of valuable importance pertaining to the business of the [agency]. To that extent this matter was of cardinal importance to the [agency].”

•             The agency argued that the FFC issued to the CC should be deemed to have been issued to the company “because it is the ‘same’ entity”. Rejecting this, the Court said the FFC had been issued for 5 years to a different, non-existing entity. Moreover an agency must if operating in a corporate entity have separate FFCs for all its directors (if a company) or members (if a CC) in addition to its own.

•             Accordingly, said the Court, the company could not act as an estate agent and its internship agreement incorporating the restraint of trade was “null and void thus unenforceable”.

Check and double check that all your FFCs are in order and in the correct names. Change nothing in your holding structure without having a plan in place to update all your FFCs immediately.

A final thought for agencies

Take into account possible administrative delays, the Court here specifically warning that “It is not enough that the application is being processed or some other hiccup is in the process of being solved. The provisions are clear and peremptory.” Either you have a valid FFC in place at the critical time or you don’t.

For professional legal advice, contact Goldberg & de Villiers Inc on 041 5019800.

Credit : LawDotNews

EXPATS AND EMPLOYERS: PLAN NOW FOR THE NEW EXPAT TAX CHANGES

This article is important to you if you are either a South African working abroad or an employer of one. If you don’t fall into either of those categories, but know someone who does, please think of passing this on.

As an employee earning foreign remuneration (salary, leave pay, bonuses, allowances, commission etc), you currently enjoy an uncapped tax exemption (on that remuneration only, not on other foreign income) provided that you work overseas –

  • For more than a total of 183 days during any 12 month period, and
  • More than 60 of those days are consecutive.

That however is set to change from 1 March 2020, when only the first R1m p.a. of your earnings will be exempt – you will pay tax on anything over that. With the Rand’s weakness showing little sign of abating, a lot of expats and their employers are going to be affected.

Are you a “tax resident”?

Only “tax residents” are affected, so the first thing you should establish is whether you are still a tax resident or not. That’s not always easy, so take professional advice in any doubt.

To illustrate some of the complexities involved, both physical emigration/relocation and “financial emigration” are different concepts to “tax emigration”. Moreover the Income Tax Act’s tests for tax residency are hardly a model of clarity – you are a “resident for tax purposes” if you are either an “ordinary resident” or a resident in terms of the “physical presence test” –

  1. You are, says SARS, an “ordinary resident” if South Africa is the country to which you “will naturally and as a matter of course return after [your] wanderings’, your “usual or principal residence”, or your “real home”.
  2. Even if you aren’t an “ordinary resident”, you will still be a resident under the “physical presence test” if you are physically present in South Africa for more than –
  3. “91 days in total during the year of assessment under consideration; and
  4. 91 days in total during each of the five years of assessment preceding the year of assessment under consideration; and
  5. 915 days in total during those five preceding years of assessment.”

Under the physical presence test however if you are outside the country for a continuous period of at least 330 days you are not regarded as a tax resident.

Should you “tax emigrate”?

If you are indeed a tax resident, don’t think of changing that status without taking full advice. “Tax emigration” and “financial emigration” are complicated processes and full of pitfalls. For example you could be entitled to foreign tax rebates or other relief on your taxable (i.e. +R1m) foreign earnings, or there may be other benefits to remaining a tax resident. So it is important to have an expert look at your specific situation and determine what is best for you overall.

The big thing is to be aware that change is coming. Some long-range planning is the only way to be certain that there are no unpleasant surprises waiting to spring out on you down the line.

For more information, contact the professional legal team at Goldberg & de Villiers on 041 5019800.

Credit: LawDotNews

DON’T BE NEGLIGENT WITH NEGLIGENCE. NEGLIGENCE vs GROSS NEGLIGENCE

The most important element to grasp when dealing with matters that are based on negligence or gross negligence is to understand the meaning of each term and the manner in which an offence for each comes into existence.

Negligence is the failure to fulfil the standard of care that ought to be exercised by a reasonable person during certain events or under certain circumstances. The standard of care to be taken is one that would prevent injury or loss to another person or entity.

The offence of negligence is determined through the reasonable person test which entails asking the question of whether a reasonable person who is placed in a certain position would have foreseen that harm would result if certain acts were conducted or omitted.

However the most important aspect to look at is whether the alleged guilty party truly failed to take the steps that a reasonable person would have taken to guard against imminent harm.

An example of negligence would be when an investigator fails to conduct the proper checks and balances of keeping persons away from a crime scene when conducting an investigation.

The question is did such investigating officer foresee that, through their failure to conduct the necessary checks and balances, harm in the form of a contaminated crime scene would be the result.

Gross Negligence is a much more serious offence than negligence and may have extremely unfavourable consequences. An act or omission is seen as being grossly negligent when a person relentlessly acts in a manner that is negligent. It also applies in instances where the persons’ act or omission is of an extremely serious nature.

Legally, gross negligence has been recognised as an inclination or mind set of total, reckless and harmful disregard a person has towards their actions and the consequences that may arise from such act or omission.

Therefore, where gross negligence is deemed to be the form of error that occurred the duty to apply reasonable care where due ought to have evidently been voluntarily as well as consciously disregarded.

An example of gross negligence would be where an employee who foresees the fact that the vehicle they are driving is losing power and cannot be controlled adequately, reconciles with themselves and continue driving such vehicle up a steep hill where the likelihood of such vehicle coming to a sudden halt at an incline is very high resulting in it rolling back onto vehicles behind it.

A further question to ask is whether such reasonable person would have taken the necessary actions to prevent the harm that was foreseen by them. Therefore the elements of negligence and gross negligence must be applied accordingly to each set of facts per matter.

A glimpse into the courts

In the case of FAWU obo Maphutha / Eskort Ltd 2011 4 BALR (CCMA) (hereinafter referred to as the FAWU case) Mr Maphutha was dismissed from his position of employment as Engine Room Operator due to the allegation of gross negligence.

The facts behind his dismissal were that the employee had not switched on the machinery during a particular night shift which resulted in the substantial loss of production time as well as wasted costs for the company.

The employee stated that he had emphatically attempted to start the machinery and to make telephonic contact with the relevant supervisors to inform them of the problem he was facing regarding the machinery.

The employee thus put it forward that his actions were not negligent as he attempted to switch the machinery on as well as make contact with the relevant superior.

The company stated that the employee was not supposed to attempt to fix the water problem but to contact his superior.

The commissioner overseeing the matter acknowledged the fact that the employee did make contact with the company electrician, who in return advised the employee upon leaving the premises to contact the foreman or the production manager should the problem continue which was not done by the employee.

A further observation was made with regards to contact being made to the relevant superiors by the employee in that the employee completely failed to contact the maintenance manager, who was contactable for 24 hours a day, of which no explanation was provided by the employee as to why he failed to contact the maintenance manager.

The commissioner held that had the employee contacted the maintenance manager there would have not been a substantial loss of production time and costs. Therefore through these actions he acted irresponsibly.

The commissioner brought to light the fact that employers, according to employment principals, have the right to set reasonable standards within their workplace and that they may require that their employees work in accordance to such reasonable standards.

Therefore during instances where an employee holds a position of trust, where specific actions or omissions that are negligent bring about dire consequences for the employer, such relationship of trust is undermined where an employee fails to apply due diligence and a standard of care.

The investigation into an alleged negligence allegation is not to necessarily look into the employee’s rebelliousness but to look at such employee’s lacklustre attitude toward the standard of care that accompanied the detrimental act or omission.

An employee may be deemed as being fairly dismissed on the grounds of negligence when such employee fulfils the requirements of failing to adhere to a standard of care and skill that is reasonably expected of them.

The commissioner further describes that in order for an employee to be held as being grossly negligent to the point where a single act or omission conducted at first instance could result in dismissal such employee would have to:

1.    Untiringly not fulfil a certain duty or task,

2.    The employees act or omission would have to have been of an extremely serious and or unpardonable nature,

3.    The consequences of the act or omission are dire,

4.    Where an employee is in an employment position where an act or omission would result in serious consequences especially if such act or omission is negligent, and

5.    Where an employee possesses or claims to hold specialised skills and or experience fails to apply such skills and experience to a detrimental point.

The employee in the FAWU case was dismissed for gross negligence as it was evidential that they did not attempt to telephonically make contact with the manager as they ought to have done.

The result of such failure was a substantive loss on the company’s side. The fact that Mr Maphutha failed to contact the manager for assistance was the crux of the matter as it indicates that he did not follow procedure and not the fact that he failed to start the machinery within the plant.

Therefore the commissioner held that the sanction of dismissal was fair in this matter as Mr Maphutha’s failure to contact the relevant manager for assistance cannot be seen as the actions of a reasonable person.

The key points to consider for a fair dismissal based on negligence are that the employee failed to exercise the standard or level of care and skill that can reasonably be expected of such employee.

Therefore it is extremely important to identify, consider and be able to differentiate the elements of negligence and gross negligence as it may have an enormous impact on an outcome to a matter of negligence or gross negligence.

Should you wish to obtain further information regarding this topic please contact Goldberg & de Villiers Inc, Pembridge House, Bird Street, Port Elizabeth on 041 5019800. Email info@goldlaw.co.za.