Newsletter 44 (Apr 2020)
The national lockdown due to COVID-19 has disrupted the normal flow of business since 27 March 2020. For us at Efficient Board of Executors, it is still business as usual, except for some service delivery aspects dependent on the Master’s office, the deeds office and other businesses which are not fully operational yet. The Master’s office only offers limited services during the lockdown period. President Ramaphosa announced that the country is moving up to level 4 on the 1st of May resulting in the opening of other business sectors as well. Some of EFBOE’s personnel will still be operating remotely.
We are still dedicated to delivering excellent service to you, no matter the extraordinary circumstances we are facing.
You can reach us at:
JHB: 010 210 5200 / 086 172 2626
CPT: 021 914 0835
#StayHome. #StaySafe. #StayHealthy. #FlattenTheCurve
A Will should be duly signed by the testator and two independent witnesses. However, in abnormal circumstances like the national lockdown due to COVID-19, it will depend on a court to declare the Will valid or not, should it not meet the normal requirements. During this time, keep the signed Will in safe custody until our offices are open again and then ensure that the original is couriered or delivered for safe keeping.
Should you need funds for a funeral, contact the deceased’s bank and request them to release funds for the funeral in terms of section 7(b)(1) and 11(1)(b) of the Estates Administration Act 66 of 1965. Should they refuse, contact your nearest Master’s office.
If you can imagine it, you can achieve it.
If you can dream it, you can become it.
William Arthur Ward
A dream doesn’t become reality
through magic; it take sweat,
determination and hard work.
Albert Einstein said that a true sign of intelligence is not knowledge but imagination. Imagination in turn opens a door to the entire world and gives one wings, while knowledge is limited to all that is known and understood.
Everything that is real, was imagined first. After all, someone imagined the light bulb, flying in in planes, computers and cell phones long before anyone thought these things were possible. Numerous technological advances were science fiction before they became everyday items.
Amidst this national lockdown due to the prevalent COVID-19 pandemic, the invisible enemy that brought the whole world to its knees, it is a good time to re-evaluate priorities. This situation just emphasizes that we are not masters of our own tomorrow. But we can choose to make wise and good decisions to plan for the unknown future. Life is short, plan as if you will live forever, but be ready to depart this world any day.
AMENDING A WILL AFTER A DIVORCE
Read more about this in the next edition.
WHAT HAPPENS TO COMPANY SHARES IN A PRIVATE COMPANY WHEN A SHAREHOLDER DIES
An estate consists of various assets, which includes a shareholder’s shares and loan account in a private company.
When a shareholder dies, the right to his/her interest in the shares, will pass over to whoever inherits them under his/her Will or intestacy. This may sometimes not be to the best advantage of the remaining shareholders of the company. It is therefore wise to make plans before the death of a shareholder to prevent uncertainty and the risk to the business arising upon the death of a shareholder. It is not something that grieving relatives or co-directors should have to deal with after death.
Generally, the law determines that shares should be transferred to the heirs of the deceased, but this can have unintended consequences. There are a few possibilities when heirs inherit shares:
The heirs may have no interest in the business or even hold shares in the company;
Heirs might not be interested in running the company; or
Heirs might be interested in running the company, but do not hold the necessary qualifications or have the experience to do so.
The remaining shareholders could also end up with unplanned and unwanted shareholders and this could affect the future productive operation of a successful business or even result in the dissolving of the company
It is common practice that the remaining shareholders buy out the shares of the deceased. But this also present its’ own set of problems and unwanted consequences and complications.
Remaining shareholders could lack the funds for a buy-out, or
The heirs may be unwilling to sell, leaving the remaining heirs as successors in title to the shares, with the possibility of a sell-out to third parties.
Corporate governance determines a company should be governed, accountability and preparing for the future. A corporate governance plan should also determine how shares will be disposed of in the event of the death of a shareholder. A written shareholders’ agreement is imperative and should contain all the necessary provisions relating to the disposition of shares in the event of death. It should also include methods for the valuation and sale of such shares, pre-emptive rights between the shareholders, the procedure to be followed upon the death of a shareholder and even provisions regarding policies on the lives of the shareholders. This is the first step to a smooth transition with minimal disruption to the normal operation of a business. A commercial attorney will be able to draft this type of agreement.
Source: Tonkin Clacey Inc.
MY CREDO OF LIFE
Let me live within the moment.
Let me feel all that I can.
Let me cherish life for all it’s worth,
With everything I am.
May I wake each day with gratitude,
For all my life may be.
And always feel that wonderment
At the world surrounding me.
For the moment now is everything,
Nothing matters but today.
So I’ll willingly embrace it
And not let it slip away.
For it passes all so quickly,
And one chance is all we get.
And a life of wasted moments.
Is a life filled with regrets.
Like a Will, the shareholders’ agreement should be regularly updated. It should be reviewed to ensure that it is still relevant and holding up to the changing circumstances in a company. Especially when there is a change in shareholding, as well as to ensure that it is compliant with the latest laws and company’s memorandum of incorporation.
The worst possible case is for this situation to be unresolved upon the death of a shareholder. Care should be taken that the provisions in the Will relating to the bequest of the shares should not conflict with the company documents or agreements.
Extracts from Pat A. Fleming’s poem: My Credo of life.
Read full poem at https://www.familyfriendpoems.com/poem/my-credo-of-life
Until next time!
The “Let’s Talk EFBOE” Team