Exam (elaborations)
Exam (elaborations) Forms of Business Enterprise
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Forms of Business Enterprise (past paper).
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Khethiwe Madidimalo6875778
Forms of Business Enterprise (FBE2604)
QUESTION 1
1.1 Globalization
1.2 Incorporation
1.3 Secretary
1.4 State-owned company
1.5 Estoppel
1.6 Debenture
1.7 Quorum
1.8 Ex officio director
1.9 Amended funding statement
1.10 Accounting officer
QUESTION 2
2.1 In terms of section 21 of the Companies Act the formal requirements to have a
binding contract upon a company are as follows:
The contract was concluded in writing
The board of the company does not reject the contract within three months.
The board does nothing to either reject it or ratify the contract the contract
will become binding.
2.2 section 76(4) of the Companies Act introduced the business judgment rule
which means a director has acted in the best interest of a company he/she was
not biased had taken time to think about the question and had no personal
interest.
The director took steps to be informed about the matter
The director made or supported a decision believing that it was in the best
interest of the company.
The director had no financial or personal gain on the decision, he/she did
not even know anyone who would gain financial, or disclose his/her
interests.
Directors can use the business judgment rule as a defence mechanism where a
claim is brought in terms of section 77 of the Companies Act.
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