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lOMoARcPSD|10435457BEL Revision Questions
Business enterprise law (University of Johannesburg)
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Downloaded by Gontse Michelle (gontsemichelle5@gmail.com)
, lOMoARcPSD|10435457
Business Enterprise Law Revision Questions
Question 1
• The directors of Galaxy (Pty) Ltd have proposed that the company should
amend its memorandum. At the general meeting convened to adopt the special
resolution, only four of the twenty shareholders are present. They are Lerato,
who holds 15% of the votes, Cindy, who holds 5% of the votes, Tsepo, who
holds 4% of the votes, and Ismael, who holds 1% of the votes. Lerato and
Tsepo exercise their votes in favour of the special resolution. Has the special
resolution been adopted validly? Assume the memorandum of Galaxy (Pty) Ltd
does not prescribe different percentages than the Act for the passing of
resolutions. (5)
ANSWER
Section 63(1) of the Companies Act states that a matter may not be decided without at least
25% of all shareholders with voting rights that are entitled to exercise it in respect of at least
one matter .This they will need a quorum which is 25%. If the company has 3 or more
shareholders, then at least 3 shareholders must be present. They must have at least a 75%
approval of power at the meeting. Both these requirements must be met. This special
resolution can be passed because between Lerato and Tsepho, they do have 75% voting
power. The MOI can be amended as they have 76% voting power.
Question 2
• Tshepo is a director of Power Ltd, the holding company of Flowers (Pty) Ltd,
but she is not a director of Flowers (Pty) Ltd. She is also a member of Trees CC
which has made a profit arising from a contract between itself and Flowers (Pty)
Ltd. Consider whether Tshepo has to disclose her interest in this contract to
Flowers (Pty) Ltd. (5)
ANSWER
Deals with Section 75 (Disclosure of personal financial interest). Section 75(5) states If a
director of a company, other than a company contemplated in subsection (2)(b) or (3), has a
personal financial interest in respect of a matter to be considered at a meeting of the board,
or knows that a related person has a personal financial interest in the matter, the director-
must disclose that information to the board. Must look if parties are related. She is indeed
related to Trees CC due to being director and holding of Flowers. She must disclose this
personal financial interest.
Question 3
• Terry is a director of Goforit (Pty) Ltd. The company recently got a new
shareholder who wants to get rid of Terry as a director. Terry has now received
a notice informing her that the company will consider a proposal to remove her
as director at a meeting. Terry is most upset, as she has not done anything
wrong and her recent performance assessment has been extremely positive.
• Explain whether Terry can be removed from office and if so, describe the
requirements and procedures that have to be followed. Explain whether Terry
can take any steps to avoid being removed from office. (5)
Downloaded by Gontse Michelle (gontsemichelle5@gmail.com)
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