LML4806 Final PACK.
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TABLE OF CONTENTS
Q: PAPER(S)
MAY/JUNE 2021
OCT/NOV 2020
MAY/JUN 2020
OCT/NOV 2019
MAY/JUNE 2019
OCT/NOV 2018
MAY/JUNE 2018
OCT/NOV 2017
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LML4806 – COMPANY LAW
JUNE/JULY EXA...
1.1. In terms of section 63(2) of the Companies aAct,
company may provide for a
shareholders meeting to be conducted by electronic communication,
unless
this is prohibited by its Memorandum of Incorporation. Therefore,
TMT Group
Ltd may conduct the shareholders’ meeting by video conference.
A meeting by electronic communication may be conducted provided that the
notice of the meeting sent out by TMT Group Ltd informs shareholders of the
availability of participating in the meeting by electronic communication.
The
notice must also provide any necessary information to enable shareholders or
their proxies to access the means of electronic communication.The
electronic communication used must enablepersons
all participating in that
meeting to communicate concurrently with each other without an
intermediary and to participate reasonably effectively in the meeting. Access
to the means of electronic communicationis at the expense of the
shareholders, except to the extent that the company determines otherwise.
Therefore,the shareholders willbe liable for the costs of accessing the
meeting by video conference unless TMT Group Ltd decides otherwise.
1.2. It should be noted that a company obtains the funds it needs for its business
by two possible means, namely equity financing and debt financing.
Equity financing entails the issuance of
shares in return formoney,which
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makes up the share capital
of a company.It should also be noted that the
providers of equity financing are the shareholders of
the company.They
receive a return on their investment in the form of dividends.
Debt financing takes the form of loans,
which could either be loans by a bank
or debt securities issued in a similar manner to shares. The providers of loan
capital are creditors of the company. The return on their investment is interest
and the principal amount of the loan must be paid back by a specific time.
1.3.
1.3.1. In terms of section 19(1)(b) of the companies Act,
a company has the legal
capacity and the powers ofa natural person,exceptto the extentthat a
juristic person in incapable of exercising any such power,
or the company’s
Memorandum of Incorporation provides otherwise.
Therefore,the capacity ofa company is no longerlimited by its main or
ancillary objects or business.
A transaction is not void merely because it is
prohibited or restricted in terms of its Memorandum of Incorporation.
The fact that the MOI of Paint Your House (Pty) Ltd states thatthe main
object business of the company is to buy and sell paint is irrelevant. Therefore,
the contract for the purchase of luxury hotel
apartments is valid and can be
enforceable.
1.3.2. Section 20(6) of the Companies Act
provides thateach shareholderhas a
claim for damages against any person who intentionally,
fraudulently,
or due
to gross negligence,
causes the company to do anything inconsistent with the
Companies Act or a limitation,
restriction or qualification on the powers of the
company as stated in its Memorandum of Incorporation,
unless that action
has been ratified by special resolution in terms of section 20(2).
The purchase of the luxury hotel apartments is in contravention ofthe
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