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E-Mail |
Marketing Department |
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OR use this
form |
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Western Cape |
Blaauwklip Office Park 2
Webersvallei Rd, Stellenbosch
Tel: (021) 880 5400
Fax: (021) 880 5430
P O Box 820
Stellenbosch, 7599 |
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Gauteng |
Unit B5.
Clearview Office Park,
Wilhelmina Avenue,
Constantia Kloof,
Roodepoort
Tel: (011) 991-5500
Fax: (011) 991-5506
PO Box 21341,
Helderkruin, 1733 |
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Yes, section 64 of the Close Corporations Act 69 of 1984
specifically states that “If it at any time appears that any
business of a corporation was or is being carried on
recklessly, with gross negligence or with intent to defraud
any person or for any fraudulent purpose, a Court
may…declare that any person, who was knowingly a party to
the carrying on of the business in any such manner, shall be
personally liable for all or any of such debts or other
liabilities of the corporation as the Court may direct…..”.
Section 71 of the aforementioned Act affords the Master of
the High Court discretion to direct that such member repay
any unreasonable direct or indirect payment of a salary or
other remuneration to a member within a period of 2 years
prior to liquidation, to the Close Corporation.
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Creditors
should provide all relevant information relating to
irregularities and/or hidden assets to the provisional
liquidator at the outset of any matter. The Insolvency Act
(24 of 1936) and Companies Act (61 of 1973) provide useful
mechanisms to gather information about dubious transactions
and “hidden assets”. These mechanisms are known as
enquiries. Enquiries are normally expensive to conduct and
where there are no assets and consequently no funds in the
insolvent estate or liquidated company, creditors who wish
for such an enquiry to take place will have to fund it
initially. However should assets or money be recovered as a
result of such enquiry, those creditors who funded the
enquiry will recover the incurred legal costs. In certain
instances they may also be the only creditors entitled to
share in the proceeds recovered as a result of the enquiry
and subsequent actions instituted and funded by them.
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Any creditor (actual or prospective) of the
Company (in liquidation) or the liquidator may convene an
enquiry in terms of section 417 and 418 of the Companies
Act. Normally the creditor/s will have to provide the
initial funding of such an enquiry. |
The Master of
the High Court is part of the executive arm of the State and
falls within the jurisdiction of the Department of Justice.
The Master’s role is inter alia to oversee the
administration of insolvent estates and liquidated companies
and close corporations. Any irregularities in the
administration of an insolvent estate should be reported to
the Master of the High Court.
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You should contact the liquidator of the
company or the trustee of an insolvent estate with a request
to be placed on the mailing list of creditors. He should
then, if as yet available, supply you with a copy of his
report on the assets and liabilities of the matter and
advise whether there is a danger that creditors who prove
claims may have to pay a contribution towards the costs of
administration. If you have been advised by the
liquidator/trustee that there is no risk of a contribution,
you may submit a claim which must be submitted on a
prescribed form and which can normally be requested from the
liquidator/trustee. The claim form is in the form of an
affidavit and must be completed and signed before a
Commissioner of Oaths and returned to the
liquidator/trustee, together with supporting documentation.
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To take
control of the assets of the estate, collect the assets
wherever it may be found and to “liquidate” the assets to
cash by selling them once authorised to do so. The proceeds
are then distributed to creditors in terms of the provisions
of the Insolvency Act, subsequent to the confirmation of a
Liquidation and Distribution account by the Master of the
High Court.
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Liquidators
are remunerated on a fixed percentage scale of the
realisation of assets. In the case of immovable property,
the liquidator will be entitled to 3% of the purchase price.
When moveable assets are sold and debts collected, the
liquidator will be entitled to 10% of the proceeds of such a
sale or collection. The liquidator entitled to receive
payment upon confirmation of the relevant liquidation and
distribution account by the Master of the High Court.
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A requisition is a form, which liquidators
send to creditors requesting them to “support” his
application to the Master of the High Court for his
appointment as provisional liquidator of the Company (in
liquidation) . |
| You send a
fax or e-mail to the liquidator’s office requesting that
your name be put on the mailing list of creditors. |
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The meetings which are held before the
Master of the High Court or a Magistrate, are normally
convened for the purpose:
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of proving creditors’ claims;
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to vote on important issues such as the
appointment of the final liquidator;
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to provide the liquidator with directions
(i.e. whether to institute legal action) and
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to interrogate witnesses.
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Simply put, a
secured creditor holds some or other identifiable asset of
the Company as security for his claim. A preferent creditor
(as defined in the Insolvency Act) is entitled to receive a
dividend from the proceeds of any unencumbered assets, which
were realised by the liquidator, and they rank before the
concurrent creditors. A concurrent creditor will only
receive a dividend from the proceeds of the unencumbered
assets after all preferent creditors have been paid in full.
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In certain instances the proceeds of the
sale of unencumbered assets of an estate are not sufficient
to cover the costs incurred by the liquidator in
administering the estate. In terms of the provisions of the
Insolvency Act, the liquidator may collect this shortfall
from creditors who proved concurrent claims against the
estate, pro rata to the extent of their claims. Such a
shortfall is referred to as a contribution.
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Summary of Section 98A of the Insolvency
Act 24 of 1936
This section applies
to all companies and close corporations liquidated on/ after
1 September 2000. This section replaces section 100 of the
Insolvency Act.
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Description |
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Preference |
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Salary for a
period of no longer than 3 months limited to |
R12 000.00 |
| (ii) |
Leave pay
limited to |
R 4 000.00 |
| (iii) |
Any form of
paid absence limited to |
R 4 000.00 |
| (iv) " |
Severance of
retrenchment" owing to the employee limited to
Calculation - 1 week salary for every completed year service |
R12 000.00 |
Section 98A(1)(a):
To any employee of the insolvent company:
Salary (i) has preference. (ii), (iii),
and (iv) rank together.
Section 98A(1)(b):
Any contribution that had to be made by
the employer on behalf of his employees. It has been
subtracted from their salaries but have not been paid over
1(b) "This is in respect of pension, provident, medical,
vacation, unemployment or educational funds.
R12 000.00
Further:
§ If a
employee was retrenched just before liquidation and there
was an agreement regarding his/her remuneration in this
regard, then that agreement is
the quantum of his/her retrenchment package for calculation
purposes.
If the employee had a contract
determining his/her retrenchment package, the contract
applies. If the employee's contract did not have
a retrenchment agreement, then section
197(or 198) of the Labour Relations Act applies, ie the
employeer is entitled to one week's pay for every year of
service.
Directors of companies and members of
close corporation are exempt from preference. They only have
a concurrent claim for the above against the company or
close corporation in liquidation.
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