Nsele Business & Corporate Advisers

Nsele Business & Corporate Advisers We are headed by Shaun Nel (B.A. (Natal) LLB (WITS), 1983). Our mission statement is -

"INTEGRITY, INNOVATION, TENACITY"

Shaun has more than 3 decades legal and business experience,

being our platform for successful business turnaround strategies.

21/04/2020

BUSINESS MANAGEMENT [THREE]
1) Set a realistic business plan (i.e. financial and growth goals) for your business for 2 years, 5 years and 7years.
2) Revisit your business plan quarterly to assess compliance with it and decide whether it requires tweaking or major changes and make them timely – there are two types of businessmen, the quick or the dead.
3) Daily or weekly consider your bank statement, debtors and creditors lists and stockholdings – watching for early warning signs of any loss, theft or, decay in your business – set systems (e.g. written reports) in place to assist you with these tasks and have an effective and efficient system of communication with your staff.
4) Meet regularly on an informal basis with all your staff to gather their insight into the wellbeing of your business and listen to their complaints and suggestions, then consider and determine what is useful and what can be discarded, making your own decision on it.
5) Meet once a month with collective management and individually to assess their effectiveness and usefulness to your business, also absorbing their suggestions and insights into your business.

19/04/2020

Labour Tenants:

The Land Claims Court (“Court”) dealt with the claim of a “labour tenant” in the case of Kubheka v Adendorf and Others [2019] 3 All SA 566 – Kubheka, the plaintiff, a pensioner residing on a farm owned by the defendant, sought an order from the Court (a declaratory order) declaring that he was a labour tenant, as well as an award of land in terms of s 16 of the Land Reform (Labour Tenants) Act 3 of 1996 (the Act). Section 1 of the Act defines a labour tenant as, (a) a person who is residing or has the right to reside on a farm; (b) who has or has had the right to use cropping or grazing land on the farm in exchange for providing labour to the owner or lessee and, (c) whose parent or grandparent resided or resides on a farm and had the use of cropping or grazing land on such farm or another farm of the owner in exchange for providing labour to the owner or lessee.
The plaintiff had resided on the farm since 1975 with cropping and grazing rights, providing labour to successive owners of the farm. The defendant argued that from 1986 to 1995, the plaintiff worked for a person who was neither the owner nor the lessee of the farm and, thus he did not comply with para (b) of the definition during that period and was, therefore, not a labour tenant. The main problem with that argument was that it failed to adopt a holistic and continuous approach to the definition of labour tenant. The plaintiff provided labour to the other owners and lessees of the farm for a cumulative period of 18 years. On a holistic and continuous interpretation of the labour tenant definition, that constituted compliance with para (b). The evidence further established that the plaintiff complied with the third part of the definition as his parents lived on the farm, had cropping and grazing rights on the farm and provided labour to the owner. Furthermore, it was not proven that the plaintiff was a farm worker.
In terms of s 16 of the Act, a labour tenant may apply before the cut-off date for the award of land, which he was entitled to occupy in terms of s 3.
The court was satisfied that the plaintiff had made a valid application for the award of land and was thus entitled to the award of the land he was using and occupying as at 2 June 1995.

19/04/2020

BUSINESS MANAGEMENT [TWO]
1) Correctly pricing your services/products is fundamental to make profit – remember a good service/product deserves to be charged at a higher rate, so that your business works for you, as opposed to you working for your business, but never neglect your family for the sake of your business.
2) Important factors determining price is Cost, Demand and Competition.
3) Determine, using research, the most appropriate pricing formula for your services/products.
4) Determine the role of various types of discounts/cash settlements to drive sales.
5) Determine the need and functionality of marketing, but measure it against the cost of it – remember your most effective marketing is for you (i.e. the individual) to be visible to your client on a regular basis, without offending your customer.
6) Remember, it most important to have fun building and managing your business!

16/04/2020

BUSINESS MANAGEMENT [ONE]
1) Always be honest with yourself about the state of your business, good or bad and do honourable business, avoiding dishonourable people – they will cause you problems and cost you money
2) Do not try every suggestion to assist your business. Choose, at most two suggestions and concentrate on implementing them.
3) Don’t move ahead without proper investigation and research of all applicable matters; check affordability, including your own needs – “don’t run before you can walk”; manage your business and cash flow closely (keeping good records) and set in place management tools and habits; at the right time employ good people.
4) Like a surgeon cut out non-productive employees/consultants/professionals.
5) Swallow your pride, do not burn any bridges, and learn from your mistakes.
6) Making a sustainable profit is always the aim.

08/04/2020

Section 133(1) of the Companies Act, 71 of 2008 (“Act”) provides that during business rescue proceedings no legal proceeding, including enforcement action, against a company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum subject to certain exceptions, for example, where a business rescue practitioner has not suspended the obligations of the tenant under a lease (in terms of s 136(2)(a) of the Act, and the landlord has validly cancelled the lease due to non-payment, the landlord can bring ejectment proceedings to evict the tenant, despite being in business rescue, as the tenant is an unlawful occupier.

07/04/2020

Registration as a Credit Provider: Du Bruyn NO, the Supreme Court of Appeal (SCA)
The court was tasked to decide whether a credit provider to a once-off credit transaction and who is not a regular participant in the credit industry is obliged to register as a credit provider in terms of the National Credit Act 34 of 2005 (the NCA).
In 2013, the seller sold his interest in three corporate entities by way of three sale agreements for an aggregate price of R 2 million. The same terms of payment were applicable to all three agreements: the purchasers had to pay a deposit of R 500 000, with instalments of R 30 000 to be paid on a monthly basis, subject to identical amortisation table for a period of five years and interest to be levied on the deferred amount. At the date of conclusion of the sale agreements, the seller was not registered as a credit provider, albeit he was successfully registered some months later. The purchasers ultimately defaulted on the instalment payments, and the seller successfully applied to the High Court for payment of the balance of the purchase price. The purchasers appealed this decision, which came before the SCA. It is common cause that the three sale agreements were agreements in terms of s 8 of the NCA and fell within the ambit of application of the NCA. The issue before the SCA was whether the seller was obliged to register as a credit provider in terms of the NCA in light of the fact that he was not a regular participant in the credit industry and that the agreements in question constituted a once-off transaction. Section 40(1) of the NCA provides that ‘[a] person must apply to be registered as a credit provider if the total principal debt owed to that credit provider under all outstanding credit agreements, other than incidental credit agreements, exceeds the threshold prescribed in terms of section 42(1)’. The SCA held that to conclude that the NCA did not apply to a once-off transaction or to those who were not regular participants in the credit industry conflicts with a plain reading of the text of the statute. The SCA held that the only possible conclusion, which could be drawn is that the requirement to register as a credit provider is applicable to all credit agreements once the prescribed threshold is reached, irrespective of whether the credit provider is involved in the credit industry and irrespective of whether the credit agreement is a once-off transaction. At the time of conclusion of the agreement, the applicable threshold in terms of s 42(1) of the NCA was R 500 000. The amount in terms of the credit agreements exceeded the prescribed threshold, and the respondent was, therefore, obliged to be registered as a credit provider at the time of conclusion of the agreements. Due to the respondent’s non-compliance with the NCA’s requirement to register, the agreements were null and void, and the appeal succeeded. Note: as of 11 November 2016, the threshold prescribed by the Minister of Trade and Industry in terms of s 42(1) is nil. This means that currently every person who provides credit in terms of a credit agreement, which is not excluded from the application of the NCA by any other provisions thereof, must register as a credit provider.

01/11/2017

Most small and medium business owners are skilled in managing and growing their business, but for various reasons, the business often does not realise its full potential – even losing ground or, worse, finding itself in financial difficulties or being liquidated. Nsele can help you avoid this.

Nsele’s services include undertaking a full review of the business, bringing into play many business skills, including production and factory floor protocols, cashflow analyses and disciplines, front-and-back-office administration protocols, including debtor management and staff and customer management protocols. This may include assigning an Nsele person to the business, for a limited period.

Nsele prides itself at being tenacious, innovative and transparent, treating your business as we treat our own business.

24/10/2017

Deadlock - Buying-out a Shareholder to Resolve a Deadlock:

Section 163(1) of the Companies Act and ss 36 and 49 of the Close Corporations Act confers on the court a wide discretion to compel a transfer of shares or member’s interest to deal with prejudicial, oppressive, unjust and inequitable conduct by a company, director, shareholder or member against other members. See the case of De Klerk v Ferreira and Others 2017 (3) SA 502 (GP) - the defendant was a co-member of a CC and co-shareholder in a company and a director. His co-member and co-shareholder complained (as plaintiff) that the defendant had breached the trust owed to the plaintiff by committing serious acts of financial irregularities. The court agreed and granted the plaintiff an order authorising the plaintiff to acquire the defendant’s membership interest in the corporation, his shareholding in the company, both with proper compensation, and terminating the defendant’s directorship of the company.

Protection when Business Rescue Practitioner disposes of property: Section 134(3) of the Companies Act provides that if ...
16/10/2017

Protection when Business Rescue Practitioner disposes of property:

Section 134(3) of the Companies Act provides that if during business rescue proceedings the company wishes to dispose of any property over which another person (“security holder”) has any interest or title therein, the company must obtain the prior consent of that person, unless the proceeds of the disposal would be sufficient to fully discharge the indebtedness and promptly and pay to the security holder the sale proceeds attributable to that property up to the amount of the company’s indebtedness to the security holder or provide security for the amount of those proceeds to the reasonable satisfaction of the security holder. See Energydrive Systems (Pty) Ltd v Tin Can Man (Pty) Ltd and Others 2017 (3) SA 539 (GJ) where Energydrive was the owner of certain equipment, which it leased to Winplas, subject to a reservation-of-ownership clause. When Winplas went into business rescue proceedings, the business rescue practitioner sold and delivered the equipment to Tin Can Man, without obtaining the prior consent of Energydrive, without paying Energydrive to discharge the company’s indebtedness to it regarding its security or title interest in the equipment or providing security to its reasonable satisfaction. The judge held, one, that s 134(3) allowed a company under business rescue to dispose of property, which was subject to security or a reservation of ownership clause without the consent of the creditor concerned, only if the proceeds of the disposal would be sufficient to fully discharge the indebtedness protected by the security and that the obligation to promptly pay or secure the debt was a requirement for a valid transfer of ownership by the practitioner by way of a sale and delivery in terms of the section if there was no consent on the part of the creditor and, two, the rights of the creditor would only be terminated on payment or the provision of other security. In this matter the practitioner did not pay or secure the debt due to Energydrive. It followed, therefore, that the practitioner did not validly destroy Energydrive’s right of ownership, who remained the owner of the equipment.

Address

Unit G01, 15 Gardner Williams Avenue, Paardevlei
Somerset West
7139

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Monday 08:00 - 17:00
Tuesday 08:00 - 17:00
Wednesday 08:00 - 17:00
Thursday 08:00 - 17:00
Friday 08:00 - 17:00

Telephone

083 414 6581

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