LML4806 EXAM PACK. This is an all-inclusive guide to LML4806 COMPANY LAW.
Section 61(8) states that the following matters must be discussed at an
annual general meeting:1
a. Presentation of director’s report, audited financial statements for
immediately preceding financial year and audited co...
EXAMINATION PACK
COMPANY LAW
LML4806
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LML4806 – COMPANY LAW
MAY/JUNE 2020
QUESTION 1
1.1. Section 61(8) states that the following matters must be discussed at an
annual general meeting:1
a. Presentation of director’s report, audited financial statements for
immediately preceding financial year and audited committee report
b. Election of directors to the extend required by the Act or the company’s
Memorandum of Incorporation
c. Appointment of auditor for ensuing financial year and appointment of
audit committee and
d. Any matters raised by shareholders, with or without advance notice to
the company.
1.2. In terms of s62 of the Companies Act a public company should issue a notice
of a meeting within 15 business days before date of meeting. Also provisions
of MOI may prescribe longer minimum notice. The notice must be in writing
and including date, time, place and the record date if set. It should include a
general purpose of the meeting.2
In instances where a company has failed to give notice or if there has been a
defect in giving of the notice, it may proceed if persons entitled to voting rights
in respect of any item on the meeting agenda is present at the meeting (in
person or proxy) and votes to approve the ratification of the defective notice.3
If material defect relates only to one or more particular matters, any such
matter may be taken off the agenda and notice will remain valid for remaining
matters, shareholder who is present at a meeting is deemed to have received
or waived notice of the meeting.4
1
Companies Act 71 of 2008 section 61(8).
2
Companies Act 71 of 2008 section 62(8).
3
Cassim HI The law of Business Structures (JUTA 2012).
4
Cassim HI The law of Business Structures (JUTA 2012).
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Scarrow Iron Ltd is a public company: Therefore section 62(1)(a) will apply
which stipulates that a public company must deliver notice within 15 business
days before the meeting begin and the MOI of the company can prescribe a
longer or shorter period.
Scarrow Ltd’s notice does not inform the shareholders of the purpose of the
meeting, the notice will remain valid only if the persons entitled to vote are
present at the meeting, acknowledge actual receipt of notice and votes to
approve the ratification of the defective notice.
1.3.
1.3.1. In terms of section 19(1)(b) of the companies Act, a company has the legal
capacity and the powers of a natural person, except to the extent that a juristic
person in incapable of exercising any such power, or the company’s
Memorandum of Incorporation provides otherwise.5
Therefore, the capacity of a company is no longer limited by its main or
ancillary objects or business. A transaction is not void merely because it is
prohibited or restricted in terms of its Memorandum of Incorporation.
The fact that the MOI of Educat Group Ltd states that the main business of
the company is the development, acquisition and management of
independent schools and tertiary education institutions is irrelevant.
Therefore, the contract for the yatch is valid and can be enforceable.
1.3.2. Doctrine of constructive notice:
The doctrine of constructive notice provides that third parties dealing with the
company are deemed to be fully acquainted with the contents of the public
documents of the company. Section 19(4) of the Act partly abolishes this
doctrine. Thus, third parties contracting with the company will no longer be
5
Companies Act 71 of 2008 section 19(1)(b).
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