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by on 05-11-2018 01:57AM in News from advertisers

Water is one of the most vital elements on earth. All plants and animals must have water to survive. If there was no water, there would be no life on earth. “Water is the driving force of all nature” (quote by Leonardo da Vinci).

We open the tap, and we expect clean drinking water to flow. In the past, “for many of us, clean water [was] so plentiful and readily available that we rarely, if ever, pause to consider what life would be like without it” (quote by Marcus Samuelsson).

Due to inadequate rainfall and declining dam levels, Western Cape has reached the most severe drought in all of its time. Cape Town’s damns are near to empty leaving water crises to rise. In February 2018, the City of Cape Town implemented Level 6 water restrictions in a means to prevent Day Zero. Day Zero is when the last drops of water in our reserves are completely depleted leaving our taps to run dry resulting if negative effects to our environment; health; economy and civil society.

We as residents have understood the water crisis and have lessened water use. However, usage is still high. Level 6 water restrictions is a result to water use levels not declining to adequate heights.

Whether we like it or not, Western Cape must acknowledge the danger it is now facing. We hear about the Water By-Law 2010 and Water Amendment By-Law 2017, but do
we really understand what it is about? To assist in understanding the legislation and consequences thereof, I have briefly set out my understanding of it below.


Level 6 restrictions are now in place which is stricter and manages those use more municipal drinking water more than the specified limits, which will be prioritised for enforcement. This enforcement will be through having water management devices installed.
The Water By-law allows the City of Cape Town, at the cost of the owner of the property, to install or require the installation of metering for any unit in the complex or property. This system will help the City of Cape Town’s customers to save water and to manage their monthly water bills as wells as help the City of Cape Town to manage debt.
This device will help owners of property to recognize any leakages and have them fixed, instead of ending up an enormous water bill and then being incapable to paying it.


2.1. LIMIT

A person, whether at work, home, school or elsewhere is limited to 50 litres or less per person.


Properties that have a higher number of tenants can justifiably use more water than properties with less occupants. For consideration for an increase in daily limit, household can apply for an increase the apportionment of water due to the number of tenants occupying the residential property.

Property owners of leased property are accountable for all water fixings on the property, while the tenant is responsible for any consumption or misuse of water.

Should there be a leak or any other problems involving the water usage or leaks, it is the owner’s obligation to hire the amenities of a registered plumbing servicer to attend to the problem, at the owner’s fee.


Unfortunately, although sectional title owners have made attempts to save water, they could still be penalised if other owners in their complex continue to be wasteful.

The City will monitor these residential complexes and will be information on the number of units in each complex which will be identified and prioritised for enforcement. Depending on the circumstances, this may include fines and/or the installation of a water management device at the cost of the account holder.

Cluster developments with units where the number of occupants necessitates higher usage are encouraged to apply for a quota increase.


Body corporates and homeowners’ associations has a duty to encourage water saving and, where necessary, take action against unit holders who misuse water. Where possible, submetering ought be fitted in order to monitor the usage of all distinct units.


Non-residence is to use less than 45% of their pre-drought billings. This usage will be equated to the equivalent period in 2015. Fines will be issued for every month that the 45% reduction is not achieved.


As business owners, businesses consumption could increase above the 45% threshold due to demand or increase of business relations as from 2015 and to expect to use less than 2015 usage could be unrealistic.
Should an increase be required, non-residential customers may motivate by means of an Affidavit to the City of Cape town for to increase their allocation beyond 45% reduction limits.


Businesses are not the only sector that will be affected. All agricultural users are to reduce usage by 60% equated with the equivalent period in 2015 (pre-drought).

“Water is a finite resource that is essential in the advancement of agriculture and is vital to human life” (quote by Jim Costa). The agriculture sector will affect all spheres of the non-residential and residential residents in that this is one of our primary sectors which fulfils our necessities of food source as well as sustains our economy.

Nevertheless, fines will not be dispensed founded on projected appraisals (only on actual readings) or where a problem arose with the meter.


Although water charges will increase in means to force consumers to use less water, one must ask if this will be enough to reduce consumption.

“[A] message has to be sent that if you commit a crime there [will] be punishment” (quote by Benigno Aquino III).

In order to ensure that we work together and forced to take the seriousness of water shortage, City of Cape Town has enforced fines to discourage misuse of water.

Spot fines can be up to R5 000 in terms of the Water By-law.

Homes using more than the usage limit of water per month and exceed their usage limits of water will be issued firstly with a warning letter which will inform them that they are contravening the Level 6 water restrictions. Thereafter an inquiry will be done and then the owners of the property can be summonsed to appear in court which may lead to a fine, and/or have a water management device connected. This fee of the meter will be payable by the owners of municipal account.

Fines can be recirculated if the usage remains more than 10 500 litres of water per month.



Irrigation or watering with municipal drinking water is illegal. Usage for irrigation purposes will be limited to an all-out of one hour only on Tuesdays and Saturdays before 09:00 and after 18:00. Though, please note that use of hoses and irrigation systems linked to another water sources (such as grey water systems and rainwater tanks) is permissible.


Outdoor usage of boreholes is discouraged for outside purposes as this is to reserve groundwater resources. There is no charge for using borehole or Wellpoint water.

Borehole or Wellpoint water use must be metered and all users are required to keep records and have these available for inspection.

If you wish to sink in a new borehole or Wellpoint, you will need to apply and obtain permission from the national Department of Water and Sanitation. Regardless of whether you wish to sell or buy a borehole or Wellpoint water, you or your contractor will still need to apply. As soon as connected, the borehole or Wellpoint must be registered and the sign should be displayed with the obtained registration number.

Wellpoints and Boreholes must be registered. The registration is free and signage is provided free on registration.


No one may use municipal drinking water to hose down paved surfaces or hire power washing driveways companies. The Municipalities uses non-drinking water for Municipal street-cleaning.


This applies to private washing, as well as formal and informal car washdowns. Cars must be washed with non-drinking water’ cleaned with waterless products or dry steam cleaning processes. Washing down petrol station forecourts is not allowed with municipal drinking water.

Yes, as frustrating as it is to drive a dirty car, this is unfortunately what we must sacrifice. You will get the odd person who then says, well then “Can I pull my vehicle along the side of a river and wash it with bucket water on the river bank”. The answer is simple – NO!. “It not only pollution that's harming the environment. It's the impurities in our air and water that are doing it” (quote by Dan Quayle). The impact of using the river banks to wash anything would impend on the environmental life of our ecosystem. Rivers are considered part of a stormwater system, so uproar of the river banks are acts in direct violation of the Stormwater Management By-law.


Swimming pools may not be full or topped up with municipal drinking water - even if fitted with a pool cover. This includes filling new pools; portable pools or refilling an existing pool after a repair.

A chemical/liquid pool cover may be used to aid limit evaporation from the pool. However, this type of pool cover may not be as operative as a conservative pool cover, particularly in blowy areas.


Spray parks and sprinkler systems are not allowed to operate under Level 6 restrictions


Using fire hydrants, by anyone, for anything other than their intended purpose without permission is an illegal act (refer to section 55 of the Water By-law) so is water wastage (refer to section 37 of the Water Bylaw) and such contraventions will be dealt with in accordance with existing legal processes in terms of section 64 of the Water By-law.


Grey water is relatively clean waste water from baths, sinks, washing machines, and other kitchen appliances.
There are no restrictions on watering times when using grey water. However, you must show visible signage averring that you are using nondrinking water to water your garden. This must be clearly visible from a public street.


No irrigation or watering using municipal drinking water is permitted. This also applies to vegetable gardens and agricultural within the Cape Town area.

I have just briefly outlined some of the points in the Water-by law (“Act”). This Act aim is to help prevent Day Zero, which will ensure that we have water until the drought ends. Remember “You are 60% water. Save 60% of YOURSELF.” (quote by Ban Kimoon).
(NOTE: this article is for information purposes only. Each case depends on merits of matter and should be consulted with an attorney)

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Dr. Brian Cox Dentistry

by on 04-02-2018 11:52PM in News from advertisers

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Medical professionals may consult with you over the phone if you're trying to find a new primary care dentist. By staying calm and asking the right questions, you could determine whether or not you've found the right dentist for you. It's usually possible to get a phone consultation with a dentist via calling their front desk. This is one of the very best ways to gain a lot of practical info about the new medical professional and his/her personnel.

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Empire Club

by on 04-01-2018 09:35PM in News from advertisers

Are you in need of expert advice on matters concerning the real estate of Canada? Here at Empire Club, our team takes a specialization in the real estate of Canada. Hence, visitors to our site are guaranteed to find everything that they need to know about the real estate of Canada. In addition, it is worth noting that our site contains tons of information that is relevant to the homes in Toronto. Visit us daily to make use of the information.

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by BUSINESS ENTITIES AND COMPANY LAW – THE BASICS! on 03-13-2018 08:38AM in News from advertisers

“No individual or company, no matter how large or how profitable, is above the law” (quote by Eric Holder).
Company law in South Africa has not been comprehensively arranged in a decree. Accordingly, the two pivotal fundamentals of South African company law are the Companies Act of 2008 (“Act”) and the common law as developed by the courts. South African company law is that body of rules which regulates corporations formed under the Companies Act.
However, there are also numerous other sources of rules related to companies. The Constitution of the Republic of South Africa affords that a company is enabled to the rights in the Bill of Rights to the degree essential by the nature of the company and the nature of the right concerned. More pointedly, the Bill of Rights is binding on a juristic person if and to the degree that it is pertinent considering the nature of the right and the nature of any obligation imposed by it.
Since 1 May 2011, the Companies and Intellectual Property Registration Office (CIPRO) ceased to exist and was replaced by the Companies and Intellectual Property Commission (CIPC). The New Companies Act came into being at the same time, changing the way business owners register their companies.

The Act is a modern piece of work which is aligned to the South African Constitution.
Below are a few points on the prominent ideologies and distinctive features of the Act.
1.1. The Act affords for what is basically a gliding measure of directives. As a all-purpose opinion, smaller originalities are subject to smaller directives while more substantial originalities are indebted to fulfil with fairly a number of governing requirements which seem to be intended at safeguarding their societal responsibility.
1.2. The Act requires companies to commit time and capitals to nursing their amenability with other governmental necessities and intercontinental ideals, also seemingly in an determination to protect the societal responsibility and sustainability of bigger originalities. 1.3. The Act shortens supremacy for companies, by providing precisely for the holding of board and shareholder conferences by automated communication and for the transient of board and shareholder resolves and the appointment of directors by way of inscribed determination even when undisputed agreement is not attained. 1.4. The right of access to information is stretched outside the directors and shareholders of the company. Although their rights of access are rooted in the Act, in addition creditors and trade unions on behalf of employees of companies are assumed specific discussion and access to economic reports. 1.5. The Act requires the complete and itemised exposé of salary remunerated to directors, in reviewed economic reports. Payments paid to directors for presence at conferences and other such amenities may be remunerated solitary in agreement with the sums pre-approved by shareholders. 1.6. The supremacies of directors are significantly heightened. The right to manage the company and exercise its powers is bestowed in the board, subject only to prohibitions in the Act or the memorandum. 1.7. The Act is not directly troubled with the conservation of investment progressive by shareholders. Rather it entails that the company calculate its vision of continual creditworthiness and liquidness subsequently the incurrence of specific responsibilities.

“Beware of any enterprise requiring new clothes” (quote by Henry Thoreau). Although above is not exhaustive, one should keep in mind new legislation and amendments that shall inevitably change corporate governance in the future.

Companies are juristic persons. The common law also recognises as juristic persons associations formed for purposes other than that of making a profit such as clubs and societies. “Corporation: An ingenious device for obtaining profit without individual responsibility (quote by Ambrose Bierce).


2.1.1. The company is separate from its employees, shareholders or members. If a company is liquidated, its shareholders will lose their shares and such liquidation would prevent its creditors from chasing the shareholders for fulfilment of the its arrears. It is important to note that in some cases juristic personality may be ignored in terms of the Act while the so-called
corporate veil may also sometimes be pierced in accordance with the common law. Piercing the corporate veil would be enforceable when it is evident that the shareholders “used” the resources of the company as a veil to protect themselves from being held personally liable. 2.1.2. It has continued existence of the person which does not depend on the continued membership of any member. 2.1.3. It has limited liability. For example, such a person will acquire its own rights and liabilities 2.1.4. A company exists independently of its members


The most essential difference in the Act is between profit companies and nonprofit companies. Profit companies are unified for the determination of monetary gain for their shareholders.


This is a company incorporated for public profit or another object relating to one or more cultural or social activities, or communal or group interests, the income and property of which are not distributable to its incorporators, members, directors, officers or persons related to any of them except as barely tolerable in terms of Schedule 1.

Non-profit companies either have members and directors or just directors. Members may either be voting members and non-voting members. The memorandum of a non-profit company will determine whether the company is one with or without members and if there are to be members it will regulate the credentials for membership, the procedure for applying for membership, the price of membership, the rights and responsibilities of members in voting or non-voting member category as well as the requirements on which membership may or will be lost or deferred.

Since a non-profit company has no share capital, members are not owners of the company as with a profit company. Their rights are as set out in the memorandum of the non-profit company. Given the absence of a share capital, the requirements of the Act dealing with capitalisation of profit companies, securities registration and transfer and public offerings of securities do not apply to non-profit companies at all. Nevertheless, the necessities of the Act amendable to shareholders assemblies apply to non-profit companies with voting members, read with the needed changes.

Possibly the most significant delivery in the memorandum of a non-profit company is the statement of its object. The stated object must be a public benefit object or an object relating to one or more cultural or social activities, or communal or group interests and, if the incorporators wish the company to be approved as a public benefit organisation with tax exemption, the stated object must be a public benefit activity listed in Part I of the Ninth Schedule to the Income Tax Act. If, in addition, the incorporators wish to be able to issue certificates to donors for the reduction of their taxable income in terms of section 18A of the Income Tax Act, the stated object must also be a public benefit activity listed in Part II of the Ninth Schedule to the Income Tax Act.

Schedule 1 to the Act includes provisions to guard the assets of nonprofit companies for the stated object. A non-profit company must apply all of its assets and income, however derived, to advance its stated objects. A non-profit company must not pay any portion of its income or transfer any of its assets to any person who is or was an incorporator, member or director of the company, or a person appointing a director of the company, except in the limited instances contemplated in Schedule 1.11.

On the winding up or dissolution of a non-profit company the entire net value of the company must be distributed to one or more non-profit companies, voluntary associations or non-profit trusts with similar objects to the company’s main object.

The memorandum of a non-profit company seeking approval as a public benefit organisation in terms of the Income Tax Act must be aligned to the requirements of section 30 of the Income Tax Act in addition to those of Schedule 1 to the Act.


Profit companies are stated as companies without limitations on the transferability of their shares and that do not forbid offers to the public (such as bigger public companies), and companies that do contain limitations on the transferability of their shares and that forbid offers to the public (such as smaller private companies).

3.2.1. Types of Profit Companies Personal Liability Companies

i. The directors and past directors are jointly accountable with the company for any debts and liabilities arising during their periods in office. ii. The company name ends with the word ‘incorporated’. iii. Several professional control bodies, such as those for attorneys and auditors, only allow firms of their members to incorporate if those professionals remain personally liable for the debts of the company. iv. A personal liability company must expressly provide in its memorandum that it is a personal liability company. v. The memorandum should also provide that the directors will be liable jointly and severally with the company for debts and liabilities of the company that are or were contracted by the company during their respective periods of office. State-Owned Companies

i. This is a company defined as a ‘state-owned enterprise’ or a company owned by a municipality. ii. The names of a state-owned company must end with the expression ‘SOE Ltd’. iii. A state-owned company is an initiative that is listed in terms of the Act as a company, and either is listed as a public entity in Schedule 2 or 3 of the Public Finance Management Act, or is maintained by a municipality as intended in the Local Government: Municipal Systems Act and is otherwise parallel to a public entity listed in Schedule 2 or 3 of the Public Finance Management Act. iv. State-owned companies are preserved as public companies under the Act and are consequently subject to more rigorous directorial and responsibility necessities. v. The credentials to this are that the Minister may exempted a state-owned company from the submission of the Act on request by the relevant cabinet minister and furthermore the Public Finance Management Act and the Local Government: Municipal Finance Management Act will overcome in governing a state-owned
company in the event of an discrepancy with the Act which cannot be acquiescent. Public Companies

i. The explanation of a public company is principally unaffected. The only alteration is that a public company now only necessitates one member for incorporation compared to seven members in the past. ii. Public companies are proposed to be utilised by larger connotations where there is a difference between management and membership whereas private companies are predestined to be used where fewer members are involved and there is no clear difference between the membership and those who manage the company in question. iii. Last word(s) of the name of the company for public company is Limited or Ltd. iv. Minimum number of members is one and the maximum is unlimited. Private Companies

i. While analogous to private companies under the old Act, these are parallel to former close corporations. ii. Some of the deviations made to private companies comprise fewer revelation and transparency necessities, no longer being limited to 50 shareholders, and a board that must include at least one director. iii. The name of a private company must end with the expression ‘Proprietary Limited’ or ‘(Pty) Ltd’. iv. Minimum number of members is one and the maximum is unlimited.


A foreign company may transfer its registration to South Africa. A company must be deregistered in one country and reregistered in another. The requirements for a foreign company to be eligible to transfer its registration to South Africa is that the company is not allowed to issue
and has not issued bearer shares, it is in good financial standing, the majority or all of its assets and undertaking are within South Africa, the majority of its shareholders are resident in South Africa and the majority of its directors are or will be South African citizens.

A foreign company intending to transfer its registration to South Africa must satisfy the necessities of the laws in the jurisdiction of its incorporation for the transfer and pass a resolution equivalent to a special resolution of the shareholders in terms of the Act, if this is not done to satisfy the requirements of the foreign laws.


A sole proprietorship does not have to be formed; it comes into being when a person begins a business.

A partnership is founded on a agreement between the parties and entails nothing just an agreement.

A business trust is also formed by agreement though the trustees may not undertake control of the trust property pending the lodgement of a copy of the trust deed with the Master of the High Court and have attained from him approval of their appointment as trustees in the form of “Letters of Authority”.

As of 1 May 2011, it is no longer possible to incorporate a new close corporation,3 although existing close corporations may continue to exist indefinitely.

Persons who propose to integrate a company must lodge numerous documents with the Commission.


A sole proprietorship, partnership and business trust have no communal personality whereas companies and close corporations are juristic persons.
The veil of juristic personality may be pierced in accord with the common law and legislature. Moreover, creditors often necessitate adherents of juristic persons to give personal security for the arrears of the juristic person.
A partnership is occasionally treated as a distinct entity at liquidation and for the resolve of litigation.
A business entity that does not have juristic personality does not have continuous sequence but a trust deed of a business trust may regulate that the trust will remain notwithstanding variations in trustees or recipients.


In a company management and membership are at least tentatively distinct. A prescribed construction for administration is arranged and set down by the law.

Partnerships entitle all partners to share in administration of a partnership and the law does very little to regulate it. However, the parties may modify this by agreement.

In trusts, separation between beneficiaries and trustees exists. The assets of a business trust must be managed by the trustee in accordance with the trust deed.

A sole proprietor may manage his business as he sees fit.


Companies are obligated by legislature to retain appropriate monetary chronicles.

State-owned Company, Public Company and certain Private Companies, Personal Liability Companies and Non-profit Companies, a complete legislative audit must be essentially be done by an independent auditor.

All other companies, except for Owner-managed Companies, must have their annual financial statements independently reviewed. An independent review does not have to be carried out by a registered auditor.

Companies which are obliged to have their annual financial statements audited must also file a duplicate of their annual financial statements with the Commission with their annual returns.

Partners may agree that certain accounting ethics should be upheld, and they are obligated to account to the partnership for their management of it and formal accounts must be purified annually or at other appropriate intervals even in the absence of agreement.

The Master of the High Court may necessitate a trustee to retain specific records and to account to the Master for his management of trust property.

In any event, each tax-paying business entity is obliged to retain such records, books of account and documents as are needed to enable it to comply with applicable tax legislation and to enable the South African Revenue Service to be satisfied that the person has complied with applicable tax legislation.


“Most large companies structure their affairs so that they minimize their tax payments. As long as you do it within the law, it's OK" (quote by Chuck Feeney).
A company, close corporation or business trust is a distinct tax entity for income tax purposes but then partnerships and sole proprietorships are not.
Tax will be paid by the partners or sole proprietors. This has several inferences, namely:
8.1. For tax purposes:
8.1.1. Companies pay tax at a flat rate of 28% (although dividends tax will also be payable in some cases). There are also considerable tax benefits for companies that fall inside the classification of “small business corporation”. It is advised that persons with small businesses ought to conduct their businesses as companies or close corporations if they fall within these provisions.
8.1.2. Sole proprietors pay tax at the rates applicable to natural persons. The applicable tax rate of a partner will depend on whether he is a natural person or not.
8.1.3. Trusts are taxed at a flat rate of 40%.6

8.2. Tax year end
8.2.1. coincides with financial year for company’s tax year.
8.2.2. for a partner who is a natural person, a trust and a sole proprietor is the end of February.

8.3. Income of
8.3.1. a company may be paid to the members if a dividend is declared.
i. Tax is payable on these amounts in the hands of the member. ii. The tax is imposed on members at a rate of 15% on receipt of dividends but is withheld from the dividend and paid over to the South African Revenue Service by the company or corporation.

8.3.2. a business trust will be regarded as having accrued to the beneficiaries of the trust if they have a vested right to it.

i. Income will then be taxed in their hands and they may subtract all deductions that apply to such income. The income does not have to be distributed. ii. It is sufficient if the beneficiary has a right to it. If not, the income will accrue to the trust and will be taxed there. iii. Income will be taxed in the hands of the beneficiary if the trustees have a discretion to vest income in a beneficiary and they exercise this discretion in favour of a beneficiary. iv. In a trust, tax will only be paid by the person to whom it accrues originally. If the income is taxed in the trust then the beneficiaries will not pay tax on it when it is distributed to them at a later stage.

8.3.3. in partnerships distribution is irrelevant as income already accrues to partners when it is earned. Income splitting to reduce tax is therefore possible in some partnership and business trust situations.

8.4. Salaries paid
8.4.1. by Company may be deducted from income on which tax is paid, providing the salaries are realistic for services rendered in the production of income. i. If shareholders are employed by the company this will be the most tax efficient technique for distributing income of the company to the shareholders. ii. Such an amount is, of course, taxable in the hands of the person who receives the salary. iii. On the whole, it will be only be more tax efficient if the person to whom it is paid pays tax at a relatively lower rate than the company (and the amount of dividends tax payable must also be included in this calculation), which will often not be the case. 8.4.2. to a partner is merely an advance payment of partnership profits and it cannot be subtracted from tax. 8.4.3. to beneficiaries of a trust are tax deductible.

8.5. If there is a loss in a particular year, then that assessed loss normally may be set off against profits in later years. 8.5.1. Assessed tax losses of a company may only be deducted from trade profits on which tax is paid in the hands of the company and it may only be carried forward to the following tax years if the company does not cease to trade for a whole financial year. 8.5.2. A natural person, like a sole proprietor, may deduct an assessed loss from any income he receives from whatever source. It will be carried over from one year to the next even if that person ceases trading. 8.5.3. An assessed loss of a partnership will be deductible by each partner from any income that has accrued to him. If the partner is a natural person, tax losses will be carried forward to the following tax years regardless of whether he is trading. 8.5.4. If the partner is a company as defined in the Income Tax Act 58 of 1962, losses may only be carried over by that company if it has not ceased trading for an entire financial year. 8.5.5. An assessed loss of a business trust, which accrues to the business trust, is deductible in the trust, and it will not be lost if the trust does not trade. i. If the loss is allocated to a beneficiary then he will be able to deduct it.
“Ideas are easy. Implementation is hard” (quote by Guy Kawasaki). Ensure that once you decide on a business entity that all requirements related to the structure and implementation is done correctly. Ensure you understand which business structure you fall under and which business structure fits your idea best.

(NOTE: this article is for information purposes only. Each case depends on merits of matter and should be consulted with an attorney)

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“[Know what happens when an individual declares bankruptcy and how it affects his or her life” – quote by Marilyn vos Savant] Bad things occur to decent people. It is imperative to comprehend at what time it is worth still fighting, and when it is time to make a new start. In life we walk around with a misconstrued discernment and baggage that we carry along with us. We contemplate that we warrant to ache for the rest of our lives. For example, where people in the position of losing their property or about to lose their property and is still left with a deficit. No ordinary person can recuperate from such a loss, and still having to rent to pay. Another example is where people have lost their car or about to have it attached and removed. In such situations people normally have a deficit on the vehicle sold at auction and therefore with such deficit, they are unable to purchase another mode of transport.

“Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt” (quote by Henrik Ibsen). It is clear from above that the debt state is just such that one will be paying for the rest of one’s life and cannot ever be able to purchase anything again.

Sequestration in a process that people have that assists in dealing with individual debts which one has no hope of recompensing in a sensible period. “Bankruptcy is a serious decision that people have to make” – quote by Herb Kohl.

Insolvency in South African law refers to a status of weakened legal capacity executed by the courts on persons who are incapable to recompense their debts or those people whose accountabilities surpass their possessions.

One can only sequestrate, in terms of the Insolvency Act, if individual possesses valuable assets to sell or if one has cash. If one does not own property and if one does not have a certain amount of cash, then
one cannot sequestrate. In terms of the Insolvency Act, when one sequestrates it is essential that there must be an advantage to creditors. If one cannot make out a benefit to creditors, the Court cannot grant the order. Many have filed for sequestration, but they are not informed correctly of the process or implications thereof. “This filing spike is a result of bad information being pushed on people, and then they file for bankruptcy out of fear” – quote by Steve Bartlett. Below is a brief explanation of sequestration to guide one who intends to apply for sequestration.

1. WHAT IS SEQUESTRATION: As stated above briefly, Sequestration is well-defined as the surrender of an individual’s financial estate to the High Court under the governance of the Insolvency Act.

“Debt is one person's liability, but another person's asset” (quote by Paul Krugman).

There are two types of Sequestration: a) Compulsory Sequestration applies to debtors that cannot pay off debts, therefore resulting in credit providers applying to have the debtor’s estate sequestrated or b) Voluntary sequestration (also known as friendly sequestration) refers to debtors who willingly apply to the High Court for sequestration.


1.1.1. CHARACTERISTICS OF COMPULSORY SEQUESTRATION In terms of the Insolvency Act 1936, section 9 (1), a sequestration order grants creditor the right to apply to the court for the sequestration of a debtor. Although the aim of the creditor is to recover monies due to them, the dual purpose of this sequestration order is to wind up an insolvent estate in methodical means while in the process shielding all creditors on an identical basis.
To determine if Compulsory Sequestration is applicable, there are four characteristics to consider when determining whether this form of sequestration is possible. WHO MAY BRING THE APPLICATION? To bring this application, any of the creditors or their agents with a claim of not less than R 100,00 may bring an application for sequestration. The claim must be that of a monetary claim. It is possible for a claim for
damages, but this application is not proposed for the retrieval of a sensibly undecided liability. WHICH COURT MAY HEAR THE APPLICATION? The High Court has authority to deal with sequestration applications. To determine which High Court, one must approach the High Court in which the debtor is located or has been within twelve months before the application or has own or has immovable property. WHEN MAY CREDITOR LAUNCH THE APPLICATION? There are various grounds upon which a creditor may launch a sequestration application.
If any of the grounds listed in Section 8 of the Insolvency Act 24 of 1936 applies or if the debtor is verified to be truly insolvent. While there are eight likely grounds listed in section 8 of the Insolvency Act, three of the sections that are most frequently resorted to, are:
i. Where the applicant relies on a nulla bona return (Section 8(b)). This is where the debtor is served with a Write of Execution by the Sheriff but fails to have sufficient disposable assets to satisfy the debt or where the Sheriff could not affect personal service and was unable to find sufficient disposable property; ii. Where the debtor gives notice in writing to the applicant that he is unable or unwilling to settle the debt (Section 8(g)). iii. Where the creditors attempt to make arrangements with another creditor to release the debtor absolutely or moderately from the debt (Section 8(e)). THERE MUST BE AN ADVANTAGE TO CREDITORS It must be revealed by the applicant that he is certain that the sequestration will be to the advantage of creditors. This involves the consideration that there will be a financial advantage for all creditors.


This form of sequestration is an application which is brought through the cooperation of a creditor and a debtor.
To determine if Friendly Sequestration / Voluntary Surrender is applicable, there are three characteristics to consider when determining whether this form of sequestration is possible. WHO MAY BRING THE APPLICATION? The following persons may apply to sequestrate their estates:
i. An insolvent individual or his agent; ii. The executor of a deceased insolvent estate; iii. An insolvent debtor who has been determined unable of managing his own affairs in terms of the High Court Rules (HCR); iv. The associates in a partnership.
Where an application is made to surrender a combined estate of spouses, where such spouses are married in community of property, the application must be completed by both spouses. WHICH COURT MAY HEAR THE APPLICATION? The High Court has authority to hear the matter, if on the date of the application, the applicant is:
i. lives in the specific High Court jurisdiction; or ii. owns property; or iii. is permitted to property within the court’s jurisdiction; or iv. at any time within twelve months prior to the application being launched, the applicant ordinarily resided or carried on business within the jurisdiction. PRACTICAL REQUIREMENTS The applicant (debtor) must show that he is insolvent, but that he owns enough property to cover the costs of the sequestration, and that an order of sequestration would be to the advantage of his or her creditors.
Factual Solvency Test is where one must establish whether liabilities exceed assets. To determine for what value, one can realise one’s assets, if at all, one must determine if there is enough equity in an asset that one can sell to recuperate debts. If so, then this test is applicable. However, if one does not have any assets or equity in an asset that one can realise, then one will need to contemplate if one’s income exceeds
one’s expenses to such a degree that one can in due course is able to get out of debt.
Commercial Solvency Test is where on must establish whether one’s expenses exceed one’s income. If one’s expenses is more than one’s income, then one will fall further into debt. Some sequestrate because of sureties that were signed or because one’s income has been reduces or one lost their job and cannot repay creditors.
The test for insolvency in the circumstances of Friendly Sequestration/Voluntary Surrender is actual insolvency, as opposed to commercial insolvency.


The following steps is legal procedure of sequestration, namely:
i. An advertisement gets printed in the Government Gazette and the local newspaper in the area in which the Debtor is situated or resides. This step will avert additional legal action taking place against the debtor. ii. A Statement of affairs is drafted that one must sign before a Commissioner of Oath. This document is succumbed for review at the Master of the High Court for 14 days or with the local Magistrate. iii. Afterwards a registered letter is sent to all credit providers as notice of the yielding of one’s estate. iv. SARS will also be informed. v. At the day of the Court proceedings an Advocate or attorney with right of appearance will represent the debtor. vi. Afterward the application has been accepted and approved in Court, a Curator is chosen to handle all financial matters on one’s behalf. vii. The Court Rules determine that you pay between 20c and 22c in a rand benefit to your creditors. The advantage of this method is that the reimbursement amount does not accumulate interest viii. The debtor receives a document to list all household items. This document gets sent to the valuator to determine the worth of the items. Debtor’s assets will be appraised at a market related price.

i. Sequestrated Debtor will be bankrupt for at least the next 2 to 4 years. ii. Sequestrated Debtor can apply for rehabilitation after 18 months, but this is an exception rather than the rule. iii. Sequestrated Debtor may not have a cheque account or credit card facility. iv. Sequestrated Debtor may not engage in any debt arrangements. v. All assets in the insolvent estate is vested in the insolvent estate and not personally in the Debtor’s hands. vi. In terms of the Companies Act, the sequestrated debtor is also barred from acting as a member of a Closed Corporation Company or being the director of a company. vii. The sequestration will be listed on credit bureaus and as such you, the Sequestrated Debtor, will not be creditworthy. This will prevent a debtor from obtaining any further credit, until such a time as the debtor has become rehabilitated viii. Sequestrated Debtor, may obtain credit during the sequestration period if the credit giver knows that you have been sequestrated.
ix. Sequestrated Debtor can be removed from being recorded as being sequestrated. There is an end made to the sequestration by way of a second application to court for a Rehabilitation order


i. Sequestrated Debtor wages and other income is still his own and he does not have to pay any creditor. ii. The sequestrated debtor will have had up to at least 80% of the debt written off. iii. Only sequestrated debtor creditors are informed of the procedure and not sequestrated debtor’s boss or any other person. sequestrated debtor cannot be fired or removed from work because of it. iv. Sequestrated debtor will not have to appear in Court. v. Sequestrated debtor’s curator can organize with the sequestrated debtor’s financial institution to keep their vehicle and if their instalments are up to date vi. All creditors’ claims, preceding to date of sequestration, lays in the insolvent estate and viewed as settled at date of rehabilitation. vii. In terms of Sections 20(1)(b), all legal action by or against the sequestrated debtor in terms of the insolvency act is stopped. viii. In terms of Section 23(5) read with 23(9) & Section 23(7), the sequestrated debtor’s income or salary is protected together with any pension benefits that the insolvent debtor may obtain. This therefore protects the sequestrated debtor’s income from creditors who wish to attach the debtor’s salary by way of a garnishee order, amongst others. ix. During the application for voluntary sequestration, sequestrated debtor refers all creditors to curator who will then correspond with them. This will minimize of harassment by creditors. x. The amounts the sequestrated debtor will save on not repaying creditors can go toward the sequestrated debtor living expenses and other necessities.

Sequestration is a process not to be entered into informally and should be an road worth investigating if your financial conditions require it. It is important to note that a man in debt is a slave to his own pocket. “Today, certain people file for bankruptcy, businesses and individuals, and it no longer has the stigma it once had. Now it's almost considered wise, a way to regroup and come back again” (quote by David Dinkins).

(NOTE: this article is for information purposes only. Each case depends on merits of matter and should be consulted with an attorney)

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