FAQs

A company needs a BEE-rating certificate to prove their level of BEE status. The certificate includes indicators such as the company’s turnover, the level of black ownership and the overall BEE status. The certificate is valid for a year and renewed annually based on evidence submitted for BEE implementation during the period under measurement.

The memorandum of incorporation (MOI) determines the minimum number of directors and alternate directors, which, in the case of a private company may not be less than one director. A customised MOI will also set out the eligibility requirements for a director as well as the directors' term of office. In the case of a standard MOI, the term of office is indefinite and there is no restriction on the number of directors. New directors may be elected by the Board of Directors when there is a vacancy or the company wishes to add directors. Vacancies on the board arise if a director:

resigns or dies

1. ceases to hold the office, title or designation in the company that entitles the person to be an ex officio director,
2. becomes incapacitated or disqualified or
3. is removed.

A director may be removed by:

1. An ordinary resolution adopted at a shareholders' meeting by the persons entitled to exercise voting rights in the election of that director. The director concerned must be given notice of the meeting and the resolution, at least equivalent to that which a shareholder is entitled to receive, regardless of whether the director is a shareholder. The director must be afforded a reasonable opportunity to make a presentation in person or through a representative to the meeting before the resolution is put to a vote.
2. A resolution of the board because it has determined that the director in question has become ineligible or disqualified in terms of section 69 of the Act, is unable to perform the functions of a director and is unlikely to regain that capacity within a reasonable time or has neglected or been derelict in the performance of the functions of a director.
3. An order of the court confirming the resolution of the board or removing the director from office if the court is satisfied that the director is ineligible or disqualified, incapacitated, or has been negligent or derelict.
4. A director may be appointed by the Board of Directors, unless the Memorandum requires shareholder approval.

It will only be re-instated if:

1. The company or close corporation was in business at the time of deregistration (Sufficient documentary evidence in the form of bank statements for a period of six months before and six months after deregistration are required).
2. Immovable property is registered in the name of the deregistered business; or
3. It is in the best interest of a creditor.

If none of the above can be proven by the documentary evidence, Aproface Business Consulting will not re-instate the company or close corporation and it is advised that a new company be registered at a cost of R490.00

Chapter 6 of the Companies Act 2008 (Act 71 of 2008) provides for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders.

All businesses that are financially distressed and want to take a decision to start rescue proceedings can file a notice to start business rescue proceedings with the CIPC.

Business rescue can be initiated by:

1. The board of directors;
2. By an application to court when the business is financially distressed;
3. Various affected persons by application to court (including shareholders, creditors, registered trade unions and employees).

The decision by a board to pass a resolution for business rescue needs to be done urgently to enable the business rescue practitioner to take control for the purposes of having a business rescue plan approved and thereafter implemented.

A business rescue practitioner will be appointed to oversee and supervise on a temporary basis the management, affairs and business of the company and to devise, prepare, develop and implement a business rescue plan. The plan will be implemented if approved by creditors and shareholders to the extent that the rights of the shareholders will be affected.

A director or a member would have a duty to pass a resolution for a company’s business rescue or alternatively resolve to wind up or liquidate as soon as he or she becomes knowingly aware that the company is either:

1. financially distressed or
2. is trading in insolvent circumstances (both factually in that its liabilities exceed its assets, and commercially in that it cannot pay its debts to creditors as and when they fall due

During the company’s business rescue proceedings, each director of the company:

1. would continue to exercise the functions of a director subject to the authority of the practitioner duly appointed
2. must assist the practitioner that is expected to operate the company and to continue to run its business may delegate any power or function to the practitioner duly appointed that would have full management control of the company in substitution for its board and pre-existing management.

Important: No liquidation proceedings must have commenced against the company when a decision is taken to start business rescue proceedings.

Print and Complete Notice of Beginning of Business Rescue Proceedings.

Scan and e-mail the completed and signed documents together with supporting information to:
consulting@aproface.co.za

1. Sworn statement with reasons for resolution set out in detail.
2. Indication of primary business activities, PI Score break down and total Resolution by company (directors)
3. Practitioner Nomination letter by company
4. Acceptance letter of the nomination from Practitioner (A business rescue practitioner has to be licensed as a practitioner before he can be appointed.
5. If the board decides not to adopt a resolution commencing business rescue proceedings, after considering the financial state of the company, the notice of decision not to begin business rescue (Notice of Beginning of Business Rescue Proceedings) must be filed with Aproface Business Consulting by emailing it to consulting@aproface.co.za together with a statement of the criteria for being financially distressed and the reason for not adopting a business rescue resolution.

At Aproface Business Consulting, we have efficient staff that will ensure that you get your new company 3 working days or less.

Differences	CO-OPERATIVE	SOLE PROPRIETORSHIP	PARTNERSHIP	CLOSE CORPORATION	COMPANY
Reason	To provide a service to members	Profit driven	Profit driven	Profit driven	Profit driven
Decision Making	Democratic	Owner controlled	Divided between partners	Proportional to interest held	Proportional to shares held
Capital	Members fees; subscribtion fees	Own contribution; capital that the business is able to raise	Own contribution; capital that the business is able to raise	Own contribution; capital that the business is able to raise	Raised through shareholders
No. of people	5 =/< no limit	1	2 < 20	1 > 10	Private = (1 > 50) Public = (7 > )
Membership limitations	Limited - on economic grounds	Limited in number	Limited in number	Limited in number	Private co = limited in number Public co = unlimited
Liability	Limited (to members unpaid shares / members fees)	Unlimited	Unlimited; (Exception: Undisclosed partners=no liability to 3rd parties; limited to partnership interest against partners)	Limited to interest held	Limited by shares capital

A trade mark is registrable if:

It serves the purpose of distinguishing the goods/services of one trader from those of another trader

1. It does not consist exclusively of a sign or an indication which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or other characteristics of your goods or services, or the mode or time of their production or of rendering of the services
2. Has not become customary in your field of trade
3. It does not represent protected emblems such as the national flag or a depiction of a national monument such as Table Mountain
4. It is not offensive or contrary to the law or good morals or deceptive by nature or way of use
5. There are no earlier conflicting rights

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