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LML4806 FI CONCESSION EXAM ANSWERS DUE 25 AUGUST 2023
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THIS DOCUMENT CONTAINS SOLUTIONS FOR COMPANY LAW FI CONCESSION PORTFOLIO SEMESTER 2- 2023
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NAME:STUDENT NUMBER:
SUBJECT: COMPANY LAW
MODULE CODE: LML4806
ASSESSMENT TYPE: FI CONCESSION TAKE HOME EXAMINATION
DATE: 25 AUGUST 2023
, QUESTION 1
1.1
1.1.1 Section 19(1) provides that the company has all the legal capacity and powers of
a natural person as far as it can be applied.
The purposes and powers of the company may be limited, restricted or qualified in the
Memorandum of Incorporation.
However, such a restriction, limitation or qualification on the powers of the company will
not invalidate a contract when concluded with a third party.
The contract between Furniture Ltd and World of Electronics (PTY) Ltd is legally binding
and enforceable.
It is irrelevant for purposes of this contract that the contract falls beyond the objects of
the company.
1.2.2 Section 20(6) provides that a shareholder of the company has a claim for
damages against any person who intentionally, fraudulently or due to gross negligence
causes the company to do anything inconsistent with the Act or a limitation, restriction
or qualification contemplated in section 20.
When directors act beyond the scope of a company’s capacity they are in breach of
their fiduciary duties. A director who is in breach of his fiduciary duties may be held
personally liable for any damages or costs suffered by the company.
The liability of the directors in this case is provided for in section 77(3)(a) of the Act.
Yes, the directors can be held personally liable by the shareholders in terms of section
20(6) and by the company in terms of section 77.
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