We are 2 Directors in our Close Corporation Company with a 60% / 40% share split.   May the director with the 60% shares purchase a vehicle without the other parties signature and or approval.   

A vehile was purchased by the 60% director.  He signed the forms as well as suretyship on my private dwelling which was no longer in my possesion because I have sold the property in November 2024. The registration is now in process.

The dealership released the vehicle without my signature but they requested me to sign the paperwork via e-mail.  I immediately send them an email to cancel the deal due to the fact that I did not sign the contract which include the suretyship section.

Their first response to me  stated that the deal cannot be cancelled because it was ALREADY SENT  to the Finance company who apparently informed them that both signatures was not needed on the forms. 

 I then insturcted them NOT PROCEED with this purchase.   They then replied that they DO NEED my signature for surityship on the deal otherwise the deal could not be finalised and the fiance company will not release the funds witout my signature?.  This is totally to the contrary of what they said with regards to the signing rights being 60/40%.  I once again informed them that I will not sign the contract or suretyship on this vehicle and that we wish to return the vehicle. 

They then responded that they will then have to buy back the vehicle from us with a depreciation of 12% because the vehicle is now deemed 2d hand.  How can they buy back the vehicle from us if it is not even registered in our company name and without having the correctly signed documentation as well as us having a complete signed contract with our company in place.

They requested us to bring the vehicle in for inspection and listed repairs to be done to the vehicle of R14445.09.  We have taken photos of the vehicle prior to the inspection and we agree to the damage to the back bumper but can not see any damage/s to the front of the vehicle.  I jave requested their Insurance Assessor's report as proof of the claim. 

I then requested them to send me the figures should they "buy back" the vehicle from us. 

According to their calculations the depreciation amounts to  R64583.31 plus repairs claim submitted by them of R14445.09 totalling R79038.40 (this figure does not add up).   

I do not know how they came to this amount because the purchase price of the vehicle excluding v.a.t. is R406952.17 and the extras charged for including a 2 year Maintenance Plan amounts to R19811.85 excl. v.a.t , total purchase price R426764.02 excl. x 12% =R51211.68. Should I add the repairs of R14445.09 (see below) the total claim should be R65656.77  Their total claim amount is R79038.40 - difference according to my calculations of RR13381.63

We however installed a towbar to the vehicle for the amount of R9400.00. Should we not be refunded for that?   We also installed and Tracker Unit to this vehicle.

The Consumers Protection Act Section 56 (2)  states that the consumer has the right to return a vehicle to the seller within a              6 month period.   Under what circumstances may we return a vehicle to the dealership taking into account that they did not have the documentation properly signed to complete the deal.

Can you please inform if We and the Business will be protected under this act seeing that paperwork was not signed properly on the day the vehicle was released and the fact that I will not sign surerity ship on the debt.

Your urgent advise will be apprecaited.

Regards Riana Brooks 083 297 8608

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship. 

I assume that the vehicle was purchased in the name of the close corporation, because otherwise why would the dealership require you to sign anything? 

The 60% member has sufficient voting rights in the close corporation to enter into the sale agreement and the finance agreement. However, you could frustrate the process by refusing to sign a personal suretyship. 

The 60% member can't bind you with a suretyship. Only you can bind yourself with a suretyship - by signing personally. 

If you frustrate the sale, the finance company could elect to waive your suretyship and release the funds based on the 60% member's suretyship.  The dealer, once paid, could also release the vehicle to the 60% member - without you signing anything further. 

Purchasing a vehicle and having the vehicle registered in your close corporation's name are two separate things. Legally, the close corporation is the owner of the vehicle. But the vehicle has not yet been registered in the close corporation's name.

The Consumers Protection Act Section 56 (2)  states that the consumer has the right to return a vehicle to the seller within a 6 month period. --> Only if the vehicle is defective, and only if the dealer is first given an opportunity to fix the vehicle. Therefore, I don't think that this section applies to you. 

In my opinion, you should sign the suretyship agreement, get the financing released, register the vehicle in the close corporation's name, and then move on with your life. Possibly sell the vehicle in a few months time, without losing money on the depreciation. The dealer is trying to take you for a ride!