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COMPANY LAW / LML4806 ASSIGNMENT 01 ANSWERS SEM 1- 2023
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THIS DOCUMENT CONTAINS SOLUTIONS FOR LML4806/ COMPANY LAW ASSIGNMENT 01 SEMESTER 01-2023
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NAME: XXXXXXXXXXSTUDENT NUMBER: XXXXXXXX
SUBJECT: COMPANY LAW
MODULE CODE: LML4806
UNIVERSITY: UNIVERSITY OF SOUTH AFRICA
ASSIGNMENT NO: 01
DUE DATE: 17 MARCH 2023
ACADEMIC DECLARATION
1. I know that plagiarism means taking and using the ideas, writings, works or
inventions of another as if they were one’s own. I know that plagiarism not only
includes verbatim copying, but also the extensive use of another person’s ideas
without proper acknowledgement (which includes the proper use of quotation
marks). I know that plagiarism covers the use of material found in textual sources
and from the Internet.
2. I acknowledge and understand that plagiarism is wrong.
,3. I understand that my assignment must be accurately referenced.
4. This assignment is my own work. I acknowledge that copying someone else’s
ideas, or part of it, is wrong and that submitting identical work to others
constitutes a form of plagiarism.
5. I have not allowed, nor will I in the future allow anyone to copy my work with
the intention of passing it off as their own work.
6. I confirm that I have read and understood UNISA’s Policy for Copyright and
Plagiarism
FULL NAME: XXXXXXXXXXX
STUDENT NO: XXXXXXXXXXX
Musa, Amos, Sipho and Jimmy are directors of Khubo Limited. Jimmy was
appointed as an executive director of Khubo Limited three years ago under a five-
year contract of employment with the company. Musa has expressed his
concerns to the board of directors that for the past two financial years Jimmy has
been failing to ensure the timely preparation and submission of the company’s
annual financial statements, and that Jimmy omitted to sign the annual financial
statements for the previous financial year as the authorised director, as required.
Musa has also informed the board of directors that, after joining Khubo Limited,
Jimmy was removed as chairperson of the board of trustees of the JF Pension
Fund after he forged some documents and withdrew R2 million from the JF
Pension Fund’s bank account for his personal use. Advise Jimmy on the
following:
, QUESTION 1
(1.1) Whether under the circumstances of this case the board of directors of
Khubo Limited will have valid grounds to remove him (Jimmy) as a director
of the company.
The board of directors may remove a director if a company has more than two
directors and: a shareholder or director alleges that a director has become
ineligible or disqualified in terms of the Act to be a director; a shareholder or
director alleges that a director has become incapacitated to the extent that he or
she is unable to perform his or her functions, and is unlikely to regain that
capacity within a reasonable time; or a shareholder or director alleges that a
director has neglected or has been derelict in the performance of his or her
functions. Where the board of directors wishes to remove a director, one of the
above stated grounds must apply.1
In terms of s 71(3), should a director or shareholder allege that one of the above
grounds is applicable, the board must determine the matter by resolution, and
may remove a director whom it has determined to be ineligible, disqualified,
incapacitated, negligent or derelict, as the case may be. Section 71(3) does not
provide that the allegation must be made in writing, and presumably the
allegation could be made verbally, for example at a board meeting or a
shareholders’ meeting. The board of directors may remove a director only where
the company has at least three directors.
1
Cassim F, Cassim R, Jooste R, Shev J and Yeats J, ‘The Law of Business Structures’ (2nd edn, 2012
Juta) 318.
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