THE NEW COMPANY'S ACT AND HOW IT AFFECTS YOU
As you no doubt have read, the above Act came into force at the beginning of the month.
There are some very serious implications for directors of companies, members of CCs, and the like.
If someone accuses a director of negligence or a failure to exercise their duties correctly, as with the new Consumer Protection Act, the Director is deemed to be negligent unless he can prove the contrary.
Parties who never had any claim against the company in the past, or could not bring an action, are now in a position to bring an action against the directors. For example, trades union can bring actions against employers, shareholders can, even customers or suppliers could. If you would like a summary of the implications, I can email it to you - I somehow cannot get links on here to work.
And you are deemed guilty unless you can prove the contrary!
This means that your personal, private assets are at risk, as the "distance" between the Company and its shareholders have been closed for matters of this nature.
And you could find yourself in for a large degree of legal expenses, even if you are subsequently proved innocent.
However, I have been offered a new Directors and Offices liability policy product, which can indemnify you against the above exposures. It is aimed at smaller companies, with assets of R50-million or less, at very low premiums and wide terms.
The maximum indemnity limit the scheme offers is R5 million, at an annual premium of R1,950. Premiums decrease for lower limits. Monthly premiums from R60 to R180 apply.
On top of the above limits, you have up to R250,000 legal expenses to assist in the early defence of any action, so that you can, hopefully, "kill it dead" before it becomes a major issue. And the result is that neither the company, nor your personal assets, are at risk.
If you would like to discuss this further, please contact me and I will be happy to advise.