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8 Cards in this Set
- Front
- Back
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Voluntary Surrender |
* Must comply with prescribed formalities * Prove insolvent * Surrender must be to the advantage of the creditors * Sufficient assets to cover the cost of sequestration |
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Compulsory Sequestration |
Procedure for securing a compulsory sequestration:
• It happens where one or more of the creditors approach the court to obtain a sequestration order. • Before bringing the application to court the creditor has to notify any relevant trade union, employees, the SARS and, unless the court otherwise directs, the insolvent debtor, of the intended application. • A creditor with a liquidated claim of at least R100, or two or more creditors who together have liquidated claims of at least R200 against the insolvent, may bring such an application. • A claim is liquidated if its amount has been ascertained either by way of agreement or through a judgment of the court. |
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Requirements that must be proved by the applicant creditor:
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• That he or she has the necessary claim against the insolvent.
• That the insolvent is indeed insolvent, or that he or she has committed one or more of the acts of insolvency. • That there is reason to believe that the sequestration will be to the advantage of the creditors. |
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Effect of sequestration of the property of the insolvent:
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•Clothes and bedding and such portion of the household furniture, tools and other essential means of subsistence as is determined by the creditors or, if no creditors have proved claims, by the Master of the High Court. • Remuneration for work done by the insolvent after sequestration. The trustee may, however, lay claim to that part of the remuneration that is not needed for the support of the insolvent and his or her dependants. The trustee has to approach the Master to determine the amount of the remuneration to which the insolvent estate is entitled. • Any pension to which the insolvent is entitled for services rendered as well as pension moneys protected by other statutes. • Compensation for loss suffered in the insolvent’s personal capacity. Loss suffered in the insolvent’s personal capacity means loss as a result of bodily injury or infringement of his or personality, for example for pain and suffering or medical costs. It does not include damages awarded for loss or damage to the insolvent’s property. • The proceeds of the above exempt items or any property the insolvent has acquired with such proceeds. • Benefits paid or payable to the estate under certain long-term policies such as life or disability policies. The policy must have been in force for at least three years and the insolvent or his or her spouse must be the life insured under the policy. |
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Impeachable Disposition |
* Disposition not made for value * Voidable preferences *Undue preferences * Collusive disposition * Voidable transfer of business |
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Order of various claims |
. Funeral up to R300 . Cost of sequestration . Cost of execution . Preferent claims from employees for wages . Employees for leave pay . Payments to pension, provident & Medical funds . Workman's Comp . Taxes on income . General Notarial bonds . Creditors Composition - creditors agree to terms Rehabilitation applied or automatic with passing of time (10 years) |
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Voluntary Winding up of Companies |
Only if no creditors or creditors will be paid in full within 12 months |
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Compulsory winding-up: |
• The company or the corporation itself or one or more of its creditors or members can bring the application. • In certain circumstances, the Master may also apply. • Notice of application must be given to the company or corporation, unless the company or the corporation is the applicant; the SARS; the employees of the company or the corporation; and any registered union representing the employees. |
