In terms of section 34 of the Insolvency Act , if anyone transfers any business that belongs to them in terms of an agreement, or even the goodwill of such business, or any of the business’ goods or property and the business owner neglects to publish a notice of the transfer in the Government Gazette, in two issues of an English newspaper and two issues of an Afrikaans newspaper that circulate in the area in which the business was carried on, within the prescribed period, the subsequent transfer shall be void as against creditors for a period of six months after the transfer has taken place.
Furthermore it shall be void against the trustee of his estate, if his estate is sequestrated at any time within the period.
As soon as any such notice is published, every liquidated liability of the trader in connection with the business, which would become due at some future date, shall fall due, if the creditor concerned demands payment of such liability, provided that if such liability bears no interest, the amount of such liability which would have been payable at such future date if such demand had not been made, shall be reduced at the rate of eight per cent per annum of that amount, over the period between the date when payment is made and that future date.
If any person who has any claim against the trader in connection with the business, has before such transfer, for the purpose of enforcing his claim, instituted proceedings against the trader :
(a) in any court of law, and the person to whom the business was transferred knew at the time of the transfer that those proceedings had been instituted; or
(b) in a Division of the Supreme Court having jurisdiction in the district in which the business is carried on or in the magistrate’s court of that district,
the transfer shall be void as against him for the purpose of such enforcement.
For the purposes of this section “transfer” includes actual or constructive transfer of possession.
Written and prepared by
BOUWER KOBELI MORABE
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