New Companies Act and email signatures

The provisions of section 32 (4) of the new Companies Act, 2008 (new Act), which addresses the use and publication of a company’s name, provide for similar obligations to those imposed under the previous Companies Act, 1978 (previous Act), with the notable exception of the requirements for including directors’ names and nationalities in business letters and business emails.    

Both new and previous Acts require that a company’s name and registration number be mentioned in legible characters in all notices and other official publications of the company, including notices or other official publications in electronic format. The requirement extends to all bills of exchange, promissory notes, endorsements, cheques, and orders for money and goods purporting to be signed by or on behalf of the company in all letters, delivery notes, invoices, receipts, and letters of credit of the company.  

However, the new Act does not include the requirement contained in section 171(1) of the previous Act, which obliged companies to incorporate and display the full names and nationalities of each of its directors on trade catalogues, trade circulars and business letters of the company.

The provisions of the previous Act meant that companies were required to include the names of its directors (or a link to its website on which these names were listed) on all business email correspondence, which in general practice are included in a corporate email signature.

While this requirement is not provided for under the new Act, our view is that the exclusion was an oversight that could be corrected in an amendment to the new Act. We, therefore, would advise companies still to display the initials and surnames of all directors and the nationalities of any non-South African directors on all business letters, trade catalogues and trade circulars, including those in electronic format wherein a link to the company website containing this information would suffice.

By failing to comply with this requirement, should the relevant section in the new Act be amended, companies may be faced with compliance issues.

via New Companies Act and email signatures – Lexology

Tax-free transfer of residential property

If you own residential immovable property through a trust, company or close corporation CC you should really think about transferring the property into your own name.    Until 31 December 2012, a trust, company or CC can transfer residential property tax-free to beneficiaries or members if they meet certain conditions. These conditions are set out in paragraph 51A of the Eighth Schedule to the Income Tax Act, 1962.

One condition is that the property must be transferred to a person who ordinarily resided in the property for a certain period. But on 2 June 2011, the National Treasury announced that it intends changing the law to scrap this condition. The only requirement in this regard would be that the member or beneficiary had to use the property for domestic purposes.

The effect of the proposed change will be that companies, CCs and trusts may be able to transfer second homes and holiday homes to their members or beneficiaries tax-free.It is very important that you get solid tax advice if you are thinking about transferring residential property from your company, CC or trust. For instance, if the conditions referred to above are met, the entity should not suffer transfer duty or capital gains tax when it transfers the property. But the entity may still suffer donations tax.

via Tax-free transfer of residential property – Lexology

What does Pty Ltd stand for?

  • What does “PTY” stand for?

    “PTY”, usually used in conjunction with “Ltd”, thus “(Pty) Ltd”, stands for “(Proprietary)”. “PTY” representing “Proprietary” means “private ownership”. This illustrates one of the main features of PTY LTD Companies: that is, their shareholders are not publically declared, only their directors. Thus the ownership is private.

  • What does “Ltd” stand for?

    “Ltd” as used in the designation of a private or public company, for example, either “Bilkovo (Pty) Ltd” or “Bilkovo Ltd”, stands for “Limited” and refers to the limitation on the liability of company shareholders and directors.