KVV Inc. Attorneys

Business Rescue: Are Your Suretyships Enforceable? A R5.5m Lesson for Directors and Creditors

KVV Inc Attorneys

Published on: 04/03/2025

When a company in business rescue can't pay its debts, creditors often lose out. However, personal suretyships from directors offer a lifeline. Even if a business rescue plan releases the company from its debt, directors may still be liable under their suretyship. A recent case confirmed this, highlighting that a surety's obligation remains unless the rescue plan specifically addresses it. Creditors should ensure suretyships cover all business failure scenarios and rescue plans protect their rights against sureties. Directors should carefully consider the implications of personal suretyships and manage their potential liability during business rescue.

Business

Lending Money Repayable “On Demand”: Beware Prescription!

KVV Inc Attorneys

Published on: 04/03/2025

"On demand" loans, often used for family or business lending, can be tricky when it comes to prescription (the time limit for claiming debt). A recent Constitutional Court case clarified that unless otherwise agreed, these loans are "due and payable" the moment the money is advanced, not when you demand repayment. This means prescription starts ticking immediately, not years later when you decide to call in the loan. To avoid losing your money, clearly specify in your loan agreement what "on demand" means and when the debt becomes due.

Bank And Financial

Lending to a Friend or Relative – When Must You Register as a Credit Provider?

KVV Inc Attorneys

Published on: 04/03/2025

Lending money to friends or family can be risky. While it seems natural, if the loan isn't "at arm's length" (a formal business arrangement) it may not fall under the National Credit Act (NCA). A recent case highlighted this, where a R15m informal loan between friends was deemed outside the NCA, saving the lender. However, relying on informal agreements is dangerous.

Credit Law

KVV Inc. Attorneys: Celebrating 10 Years of Excellence in Property Law and Conveyancing.

Fostering Partnerships, Driving Results.

KVV Inc. Attorneys: Celebrating 10 Years of Excellence in Property Law and Conveyancing.

Fostering Partnerships,

Driving Results.