Tag Archives: Business

Is your Business POPI Compliant?

POPI refers to South Africa’s Protection of Personal Information Act which seeks to regulate the Processing of Personal Information.

What is Personal Information?

Means any information relating to an identifiable, living natural person or juristic person (companies, CC’s etc.) and includes, but is not limited to:

  • Contact details: email, telephone, address etc.
  • Demographic information: age, sex, race, birth date, ethnicity etc.
  • History: employment, financial, educational, criminal, medical history
  • Biometric information: blood type etc.
  • Opinions of and about the person
  • Private correspondence etc.

What is Processing?

Processing broadly means anything done with someone’s personal Information, including collection, usage, storage, dissemination, modification or destruction (whether such processing is automated or not).

Some of the obligations under POPI:

  • Only collect information that you need for a specific purpose.
  • Apply reasonable security measures to protect it.
  • Ensure it is relevant and up to date.
  • Only hold as much as you need, and only for as long as you need it.
  • Allow the subject of the information to see it upon request.

Does POPI really apply to me or my business?

POPI applies to every South African based public and/or private body who, either alone, or in conjunction with others, determines the purpose of or means for processing personal information in South Africa.

There are cases where POPI does not apply. Exclusions include: Section 6:

  • purely household or personal activity.
  • sufficiently de-identified information.
  • some state functions including criminal prosecutions, national security etc.
  • journalism under a code of ethics.
  • judiciary functions etc.

Why should I comply with POPI?

POPI promotes transparency with regard to what information is collected and how it is to be processed. Openness increases customer trust in the organisation.

Non-compliance with the Act could expose the Responsible Party to a penalty of a fine and/or imprisonment of up to 12 months. In certain cases, the penalty for non-compliance could be a fine and/or imprisonment of up 10 years.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What’s the buzz about business rescue?

If a company/close corporation is in financial trouble and all possible avenues to save the business have been exhausted, there is one last option available to save the business: it can lodge an application for business rescue at the CIPC. In order to qualify for business rescue proceedings, the business must satisfy the requirements as set out in the next paragraph.

                                                                                                                            A company/close corporation will only be considered as a business rescue candidate if all three of the following requirements are met:

1. The decision to start business rescue proceedings must be taken before any liquidation proceedings have been instituted against the business.
2. The business is financially distressed.
3. A business is seen as financially distressed if:

  • It seems reasonably unlikely that the business can pay its debts in the normal course of   business for the next six months, or
  • It seems reasonably likely that the business will be insolvent in the next six months.
  • There seems to be a reasonable chance of rescuing the business.

What is the aim of a business rescue plan?

The aim of placing a company/close corporation under business rescue is to give the business some breathing space to implement the business rescue plan and give the business a fair chance to become a going concern again.

Alternatively, if the business is liquidated despite the business rescue proceedings, the aim is to hopefully have a higher return available for the creditors and shareholders than would have been the case if the business was liquidated before undertaking any business rescue proceedings.

To give a business the maximum chance of recovering its finances and to continue operating as a solvent enterprise, the business rescue plan normally restructures a business’ assets, liabilities and equity, as well as its way of doing business.

Who can be appointed as a business rescue practitioner?

There is a list of licensed business rescue practitioners available on the CIPC’s website.

What does a business rescue practitioner do?

The appointed business rescue practitioner will investigate the business’ situation and propose a business rescue plan. After the business rescue plan has been approved by the creditors and shareholders, the business rescue practitioner will implement the plan. The reason why the creditors and shareholders must approve the business rescue plan is that they will withhold their rights against the business to claim payment as long as the business is operating under the business rescue plan.

After implementing the business rescue plan, the business rescue practitioner will temporarily oversee and manage the business together with the current management.

The business rescue practitioner also takes over dealing with the creditors and shareholders. In addition, the business rescue practitioner will communicate with registered trade unions which represent employees of the business. If there are employees who are not members of any registered trade union, the business rescue practitioner will deal with these employees or their representatives as well.

The first step to start with a business rescue is for a business to file a notice with the CIPC that it wants to start with business rescue proceedings. The rest of the business rescue process and the business rescue documents which are required to be submitted to the CIPC, is set out on the CIPC’s website.

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This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)