Contracts and Agreements, Protecting Your Business Interests

A shareholders’ agreement is not legally required, but it is strongly recommended for any company with more than one shareholder. It sets out how the business will be managed, how decisions are made, how profits are distributed and what happens if a shareholder wants to exit, becomes incapacitated or a dispute arises.

Without this agreement, shareholders must rely solely on the Companies Act, which may not address the practical and commercial realities of your business. A well-drafted shareholders’ agreement gives clarity, reduces conflict and protects every shareholder’s rights. CVN Attorneys can assist you in assessing your needs, and prepare a tailored shareholders’ agreement that suits your situation.

Yes, every company registered in South Africa must have a Memorandum of Incorporation (MOI). The MOI sets out the company’s governance rules, the powers and duties of directors, the rights of shareholders and how decisions must be made. While CIPC provides a standard MOI, many companies require a customised version to address their specific operational and commercial needs.

A tailored MOI can override default provisions of the Companies Act and prevent future disputes by providing clarity on roles, voting requirements and limitations. CVN Attorneys can review your business structure and prepare an MOI that is compliant, practical and suited to your company.

A Service Level Agreement (SLA) is a contract that sets out the expectations, standards and responsibilities between a service provider and a client. It defines the services to be delivered, performance levels, timelines, fees, reporting obligations and what happens if the agreed standards are not met.

It also protects both parties if a dispute arises, as it clearly records what was agreed from the outset. CVN Attorneys can draft or review your SLA to ensure it is clear, enforceable and aligned with your business needs.

Yes, commercial contracts can contain provisions that limit or exclude certain forms of liability. However, the enforceability and scope of such provisions will depend on the wording of the agreement, the circumstances and applicable law.

It is important to understand what risks your contract actually allocates. Consult with a commercial attorney before relying on a limitation or exclusion clause.

Not necessarily. Whether an agreement must be in writing will depend on the nature of the agreement and the applicable legal requirements.

However, written agreements provide greater certainty about the parties’ respective rights and obligations and can help prevent disputes about what was agreed. Consult with a commercial attorney to ensure your agreements are properly documented.

A legally binding contract generally requires agreement between the parties, an intention to create legal obligations, and compliance with any applicable legal formalities.

The specific requirements may differ depending on the nature of the transaction and the parties involved. Before entering into an important commercial agreement, consult with an attorney to ensure your interests are adequately protected.

The process will depend on the company’s governing documents, including its MOI and any shareholders’ agreement, as well as the circumstances of the shareholder’s departure.

There may be provisions regulating the transfer or sale of shares, valuation and the rights of the remaining shareholders. Consult with a commercial attorney before taking steps to exit or transfer shares.

Yes. A commercial dispute does not necessarily mean that the underlying business relationship must end.

Depending on the circumstances, negotiation, mediation or other dispute-resolution mechanisms may allow the parties to resolve their differences while continuing their commercial relationship. The appropriate approach will depend on the nature of the dispute. Consult with a commercial attorney to assess your options.