Equal Shareholders

Jed, Thalia and Erin are young entrepreneurs who are all directors and equal shareholders in Rush (Pty) Ltd (‘Rush’), a company specialising in the retail of sports equipment such as trick bicycles, skateboards and abseiling gear. To date, they have sourced their equipment from within South Africa.

They have just returned from an exciting international skateboarding expo in Brazil where they saw one model of board in particular that got their adrenalin pumping. They chatted with the board’s Spanish manufacturer who advised them that the board is being sold throughout Europe at present. It’s only been released onto the European market fairly recently (April 2018) and is already hugely popular because of the board’s unique, aerodynamic shape.

The Rush directors are convinced that the South Africa skateboarding scene is crying out for the board and they want to start importing and selling to local skate and sports shops immediately.

They’re due to meet formally with the Spanish manufacturers in mid-October to finalise the deal. Luckily, they thought to contact you before they fly out. They’re keen to find out what arrangement might suit their intended plans in a way that will maximise their entrepreneurial spirit yet keep risks low.


Having regard to your clients’ instructions, advise your client on:

1. The legal structure or arrangement you would recommend they use to achieve their objectives and address any particular issues or concerns they have raised with you, and why you consider it to be the best choice for them.

2. Any issues that they have not mentioned to you expressly but which you think they ought to consider before proceeding (up to a maximum of 3 issues) and explain why they are important matters to consider in relation to the proposed structure or arrangement.

3. Whether there is any further information you require in order to finalise your advices and prepare the necessary documentation and explain why you need it and why it is significant. (You might not require any such further information but if you do, limit this to the 3 issues that you consider to be the most important.)

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