Category: Commercial law

Lease Agreements

Posted by nnlaw on

LEASE AGREEMENT

This is an agreement between two parties (the “lessor” and “lessee”) that regulates their relationship in relation to the property that is being let out and highlights the obligations of both parties premised on the lessor allowing the lessee use and enjoy their property in exchange for a certain sum of money (rentals). Leases relate to the occupation of property (immovable) and can be for either residential or commercial premises. For commercial lease agreements that extend for a period of more than 10 years there is a requirement that they be registered in accordance with the provisions of the Deeds Registries Act.

A lease agreement can be in writing or verbal, although you it is advisable to have a lease agreement that is in writing. It is difficult to prove the obligations of the parties basing on a verbal lease agreement, a written contract makes it easier for both parties. The lease agreement must capture the following details:

  • Name, surname and identity details of the lessor and lessee;
  • Property description (address, extent);
  • Rental sum;
  • Deposit / security
  • Duration of the lease agreement;
  • Amendment of the agreement;
  • Terms and conditions on cancellation and breach of the agreement be either party;
  • Duties and obligations of both parties;
  • Notice period;
  • Termination of the agreement;
  • Dispute resolution

FAILURE TO PAY RENTALS

Where a party is failing to pay rentals the lessor may exercise their right to terminate the agreement by virtue of breach of the material terms of the agreement. In the event that the lessee remains in occupation of the premises after the lapse of the notice period the Lessor is entitled to claim holding over damages, legal costs and any other costs depending on the agreement between the parties. Where the tenant won’t leave the premises after such termination the Lessor may approach the courts for relief (eviction of the tenant). Summons may be issued for the eviction of the lessee and all those claiming occupation through the lessee.

Get in touch with our team for comprehensive assistance with your leases.

This is for general information purposes only – consult an Attorney 

 

BREACH OF CONTRACT

Posted by nnlaw on with 0 Comment

A contract put simply is a legally enforceable agreement between parties. A contract can be either written or verbal. it is always advisable to enter into a written contract so as to make their life easier in the unfortunate event of breach or dispute. A written contract clearly sets out the roles and obligations of the parties and its existence is easy to prove.

There are some formalities that have to be complied with to ensure that a contract is valid, including;

  • A valid offer by one party and acceptance by the other party;
  • There must be meeting a of the minds (consensus ad idem);
  • The contract must be clear (in terms of obligations amongst other factors, parties must not be left to deduce what is being communicated in terms of the agreement;
  • Must comply with the provisions of the law;
  • Performance must be possible;
  • Parties must intend to be bound in terms of the agreement;

At times a contract is not performed according to the expectations set out, and breach occurs. When this happens there are options of recourse available to the aggrieved party. Remedies available can either have the contract fulfilled or cancelled resulting in parties returning to the status quo ante (the position they were in prior to the contract).

SPECIFIC PERFORMANCE

This is the process whereby the breaching party is called upon to perform their obligations in terms of the contract as had been agreed to in terms of the agreement by the aggrieved party.

CANCELLATION

Parties may choose to cancel the contract and opt to have each of them restored to the position that they were in prior to the contract (status quo ante). Cancellation results in the restoration of any performance that was done by either party and does away with or extinguishes any present or future obligations in terms of the contract.

INTERDICT

The aggrieved party can make an application in the courts for a mandatory interdict that then compels the other party to perform their obligations in terms of the contract or a prohibitory interdict that prohibits a party from disposing of or doing certain acts until the matter has been resolved.

DAMAGES

These can be claimed by the aggrieved party so that they are placed in the position that they would have been in had the contact been concluded. Damages are financial in nature. damages can be claimed over with any of the other remedies.

Has a party you entered into a contract with breached the terms of your agreement. Do you want to conduct business and want to reduce the agreement into writing? If the answer is yes, then contact our team of attorneys that will assist you.

This article is for general information purposes only – seek the advice of an attorney. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company Formation

Company Formation

Posted by nnlaw on with 0 Comment

A company is defined as a legal entity formed by a group of individuals to engage in and operate a business. A company may be organised in various ways for tax and financial liability purposes depending on the laws of the country. It is important to register a company on order to formalise its running and avoid paying hefty penalties. Registering a company has its perks such as being able to bid for tenders in the public sector and easier access to loans. A company is a legal entity that can sue or be sued.

TYPES OF COMPANIES

The type of company that one registers depends on the amount and source of capital available amongst other factors. The types of companies are as follows:-

1. Private Business Corporation

Such a company is meant to cater to the smaller companies with a few members. Such a company is suitable for sole traders. The members of such a company are actively involved in the day to day running of the business. An advantage of registering such a business is that the company can start operating as soon as it is registered unlike a public company.

2. Private Limited Company

This is a company which if formally registered, with a requirement of directorship. You can have a minimum of two (2) directors and a maximum of twenty (20), who must have attained the age of majority. This company has a separate legal persona from its directors, and is capable of entering into contracts, suing and being sued. There are tax and financial obligations that are expected from this entity.  

3. Public Company

Such a company is suitable for a medium to large enterprise as it has no limit to the number of members. It is open to being listed on the Stock Exchange for trading, and members of the public may also invest in its shares.

4. Company Limited by Guarantee

Such a company is created for charitable purposes. The liability of members of such company boils down to the amounts that they had promised to contribute upon the dissolution of the company.

5. Co-operative Company

Where one produces or markets agricultural produce and or livestock they should register such a company. Such a company regulates the number of shares that one can own. An example of such is Seedco and Farm and City amongst others.

6. REGISTRATION PROCEDURE

The first step is to choose whether you want to register a public or a private enterprise. First of all you fill in and file your CR21 form. A party registering a public company must file such form in duplicate. This form is used to do a name search to see that the company name that you have provided has not been used by any other company. The applicant in this case must provide at least four possible names for the company. Once such name search is done, a CRV4 form is issued from the Registrar’s office (Registrar of Companies) rejecting or confirming the company name. Upon receipt of such form the applicant may now go ahead and draft their Memorandum and Articles of association in duplicate alongside their CR14 AND CR6 forms outlining the directorship and physical address of such respectively. The registrar when noting everything to be in order will issue a certificate of incorporation. The author highlights that all documentation submitted to the Registrar’s office must be submitted in duplicate. When registering a private business corporation applicant must fill and file a PBC1 form in duplicate for a name search and a CV4 form is issued. The form will highlight whether the company name proffered was accepted or rejected. Applicant must file PBC2 in duplicate which sets out the business address members and contributions amongst other factors and CV4 form in duplicate which outlines the approved name with the Registrar’s office. In the event that the Registrar does not have any queries the company is registered.