Structuring Transactions: A Void Credit Agreement Or Avoid A Credit Agreement?

Reviewing the available options for Structuring Transactions

In commercial practice, structuring transactions to achieve a specific legal or tax outcome is not only commonplace but often necessary. This is especially true when parties wish to avoid the regulatory burdens of certain legislation such as the National Credit Act 34 of 2005 (NCA). In doing so it is vital to ensure that the form of the transaction aligns with its purpose, while remaining lawful. A recent Supreme Court of Appeal (SCA) decision in Uys NO and others v National Credit Regulator and another sheds light on how certain arrangements can be lawfully structured to avoid being classified as credit agreements, without constituting void credit agreements under the NCA.