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VHD 320: Revision questions and answers of theme 2 (unit 3 & 4)
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Revision questions and answers as discussed in class Theme 2: Unit 3 & 4
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VHD 320: REVISION QUESTIONS (THEME 2:STUDY UNIT 3 & 4)
Question 1 [5]
NEW OFFICE (Pty) Ltd is a company which manufactures and sells office furniture. NEW OFFICE
pays all accounts by cheque and is a client of ABBA Bank, Lynnwood. In January 2019 it was
decided that the company’s accountant, Andy Abbott (A), and the company director, Benny Botha
(B) must co-sign all company cheques. The required signature on one of the company’s cheques,
made payable to Cassim Dealers (C) appears as follows:
- DRAWER’S SIGNATURE ON THE CHEQUE.
- NAME OF THE COMPANY IS STATED.
- COMPANY’S ACCOUNTANT & B BOTHA SIGNED THE DOCUMENT.
- THRE ARE NOT WORDS INDICATING THAT THEY HAVE SIGNED IN A REPRESENTATIVE
CAPACITY (RELEVANCE OF THIS?)
(a) The cheque is dishonoured upon presentation since NEW OFFICE (Pty) Ltd was liquidated.
Explain to C whether she can, in these circumstances, hold A and B personally liable on the
cheque. (4)
S24 of Bills of Exchange act
This is an amended section in terms of which the words indicating that they have
signed in a representative capacity is not required any longer.
The only requirement is that the signatures must appear together with the name of
the principal (company).
(b) What would your answer in (a) have been if the name and registration number of NEW
OFFICE did not appear on the cheque? (1)
S32 of the Companies Act applies
In terms of the new section it will only be an offence, they will not be personally
liable as was the position previously.
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