Mrl3701 - Study Unit 16 - Transfer Of Business Without Prescribed Notice | Questions And
Answers Latest {2024- 2025} A+ Graded | 100% Verified
TRANSFER OF BUSINESS WITHOUT PRESCRIBED NOTICE - I.t.o Section 34(1) of the Insolvency Act if a
trader without giving notice as prescribed by the Act, transfers in terms of a contract a business
belonging to him, or its goodwill, or any goods or property forming part of it, the transfer is void as
against his creditors for six months thereafter, and it is void against his trustee if his estates is
sequestrated at any time within the period.
TRANSFER FOR THESE PURPOSES INCLUDES - 1. Transfer of possession, actual or constructive - trader
does not actually have to transfer ownership to the other party.
NOTICE REFERRED TO - Publication of a notice of intended transfer in the Government Gazette and two
issues of an Afrikaans newspaper and to issues of an English newspaper circulating in the district in
which that business is carried on
Publication mus appear not less than 30 days and not more than 60 days before the date of the transfer.
Must provide accurate information regarding the transfer, if for example it states the incorrect date it is
invalid.
Publication is required even if the trader's creditors know about the intended transfer.
THE FOLLOWING SHOULD BE NOTED WITH REGARD TO THE SCOPE AND EFFECT OF S34(1) - 1. the
section is designed to protect the creditors of a business.
2. the section applies only to traders
3. This section applies to the transfer of part of a business, in particular, the transfer of the goodwill of
the business, or goods or property forming part of the business.
4. This section does not apply to the transfer of goods or property of a business if the transfer is "in the
ordinary course of that business"
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