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Business testament smooths succession

Business testament smooths succession

Only a sole proprietor is allowed by law to bequeath his or her assets to a beneficiary as stipulated in that person’s testament. All other commercial assets have to be dealt with in a succession document fulfilling the same function as a private testament.
Most people should, and hopefully do, have a personal will and testament, especially if there are assets and children involved. “But have you ever sat back and thought about your assets and everything as a business person, and what should happen with your business interest upon your demise?” asked Lukas Kotze Head of FNB Trust Services.
Kotze said that unless you are a sole proprietor you cannot deal with the assets of your company or CC in your will or testament. “You can only deal with the shares in your company or your membership interest in your CC.”
A buy-and-sell agreement is an agreement between shareholders or co-members enabling the other shareholders or members to purchase the shareholding of the deceased from the estate. It is backed up with life cover on the lives of the partners giving the financial means to purchase the business interest from the estate of the first deceased partner.
“If you have a buy-and-sell agreement in place, this will become the primary option and even without it, surviving shareholders or co-owners have the first right to buy your shares” he said adding that this agreement should be updated regularly to ensure that the increased value of the business is taken into consideration.
About family trusts where the trust deed determines what happens to the assets and not the will, he said “Assets in a discretionary trust are also not personal assets and do not form part of your estate. You should, however, in your Will nominate a trustee to succeed you in case of your death. Also make sure that you do not have all the control in your trust deed as this might lead to other problem areas.”
“Other aspects that need careful consideration are for example any personal guarantees you might still have with the bank since this is a liability in your personal estate. If you are married in community of property, your spouse owns 50% of your assets which includes your business interest. Furthermore, arrears in taxes or outstanding tax returns are winning recipes for delays in the finalization of your estate.”
“Try and make sure there is sufficient cash to cure most problems. Rather plan for every case scenario and ensure at least once a year that everything is still up-to-date,” recommended Kotze while advising that FNB Trust Services is equipped to advise business owners on matters of succession.

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.