Study guides, Class notes & Summaries

Company Law Question and Answer 100% Correct Sole Trader Advantages - ⟨ No filing requirements; fees or professional advice needed for set up ⟨ One person, thus a complex organizational structure is not needed. Sole Trader Disadvantages - ⟨ Not a particularly useful business form for raising capital (finding investors) -money is usually from bank loans or savings ⟨ Unlimited liability: if business fails creditors can come after your personal assets, ie., no difference from the t...

MCL5902 COMPANY LAW

Question: 1 Shareholders’ resolutions must usually be voted on at properly constituted meetings of the company’s shareholders. However, the Companies Act 71 of 2008 provides for an exception to this general rule. Explain what this exception under the Companies Act 71 of 2008 entails. (5) Under the Companies Act 71 of 2008 (South Africa), there is an exception to the general rule that shareholders' resolutions must be voted on at properly constituted meetings of the company's sharehol...

Company Formation stimulates... Correct Answer commercial activity and development of the economy and facilitates access to capital Approach of the Act is that the Act should... Correct Answer Facilitate efficient investment and growth by making it easier to form companies s13(1) of the Act (profit company) Correct Answer Enables single-member profit companies to be formed by one or more persons. s13(1) of the Act (non-profit) Correct Answer Enables three or more persons acting in conce...

Sole Trader Advantages Correct Answer ⟨ No filing requirements; fees or professional advice needed for set up ⟨ One person, thus a complex organizational structure is not needed. Sole Trader Disadvantages Correct Answer ⟨ Not a particularly useful business form for raising capital (finding investors) -money is usually from bank loans or savings ⟨ Unlimited liability: if business fails creditors can come after your personal assets, ie., no difference from the trader and the busines...

Companies Act 2006 Correct Answer What are the advantages of a company? Correct Answer 1) Separate personality 2) separation of ownership and control 3) Transferable shares 4) Can select a type of company that best suits the needs of the members. 5) Flexible structure Disadvantages Correct Answer 1) Formalities of incorporation 2) There remains the need to hold meetings and pass resolutions. 3) Time and cost involved in complying with the rules of company law 4) Tax Structure ...

Directors INTRODUCTION Correct Answer (1) EXECUTIVE DIRECTORS Engaged in day-to-day management - *Automatic Self-Cleansing Filter* Receive remuneration. (2) NON-EXECUTIVE DIRECTORS (NEDs) Not employees Receive fees for attending board meetings Advisory role WHO IS A DIRECTOR "Any person occupying the position by whatever name called" (*Companies Act 2006, s250*) - Anyone expressly appointed as a director in accordance with the articles regardless of title Must be transparen...

Companies Act Correct Answer 2004 came into effect in 2005 The Review committee was chaired by Correct Answer Dr Kenneth Rattray, OJ, QC Reforms recommendation Correct Answer - the simplification of the process that would provide for one man companies. - the abolition of the Memorandum of Association as one of the required documents. -the abolition of certain doctrines (the ultra vires and the constructive notice doctrines) which tended to restrict the powers of a company. Reforms con...