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Summary Mercantile Law 292 notes 1st and 2nd term $5.69   Add to cart

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Summary Mercantile Law 292 notes 1st and 2nd term

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In-depth MercLaw 292 summary notes on Topic 1-Topic 6. Tutorials with solutions and past paper questions included for each section. Topics: Introduction, Trusts, Partnerships, Types of Companies, Pre-incorporation Contracts, Incorporation of Companies and Company Management (board of directors & sh...

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  • June 3, 2020
  • June 9, 2020
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Available practice questions

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Some examples from this set of practice questions

1.

Under South African law pertaining to private business trusts: (a) (the income beneficiary obtains enforceable rights as soon as the founder concludes the trust agreement with the first trustees); (b) the beneficiary may institute a representative action on behalf of the trust against the trustees to recover damages for mismanagement (c) the beneficiary obtains personal right against the trustees); (d) the beneficiary may freely transfer his rights as a beneficiary to an outsider

Answer: B&C

2.

The duties of the trustee of a private business trust to act with care and to avoid a conflict of interests (a) can be excluded in the trust deed (b) also exist under the common law (c) are not owed to capital beneficiaries (d) may be breached even if the trustee did not act fraudulently

Answer: C&D

3.

(a) The Companies Tribunal may, on application, exempt a company from compliance with a non-alterable provision of the Companies Act of 2008, if the Companies Tribunal is satisfied that the exemption will be reasonable and justifiable.) (b) In terms of the definition in the Companies Act of 2008, a holding company in relation to a subsidiary is a registered company which controls that subsidiary. (c) For purposes of the Companies Act of 2008 a trust in terms of the definition of a juristic person, read with that of a holding company, qualifies as a holding company, if it controls a subsidiary.) (d) In terms of section 218 of the Companies Act of 2008, a provision in a company’s Memorandum of Incorporation which conflicts with an unalterable provision of the Act is automatically void.

Answer: A&C

4.

(a) The Companies Act of 2008 gives the court a new statutory power to pierce the corporate veil to avoid unfair consequences. (b) Reckless trading by directors who were knowingly a party to such conduct is still a criminal offence under the Companies Act of 2008. (c) A person who receives a compliance notice from the Commission can raise an objection to the notice either with the Companies Tribunal or with the court. (d) If the addressee ignores a compliance notice the Commission may impose an administrative penalty.

Answer: B&C

5.

a) If a provision of the Companies Act of 2008 is inconsistent with a provision of the Share Blocks Control Act, the provision of the latter statute will prevail. (b) Solvency and liquidity have replaced capital maintenance in the Companies Act of 2008 to promote corporate efficiency.) (c) Due to the ineffectiveness of criminal sanctions under the Companies Act of 1973, the Companies Act of 2008 does not make provision for criminal sanctions. (d) The primary objective of the statutory provisions on the new system of business rescue is to increase the protection for existing creditors.)

Answer: A&B

6.

(a) A private company is only required to deliver notice of a shareholders meeting to shareholders who are entitled to vote at the meeting. (b) A company who wants to hold a director liable for using his position (as a director) for personal gain, does not have to prove intention or negligence on the part of the director. (c) If someone voted against a resolution to dispose of the greater part of a company’s assets and the court grants leave to that person to apply for review, the company must bear the costs of that application. (d) There are no valid policy reasons for the automatic ratification of a statutory pre-incorporation contract as a result of inaction by the company. (e) (a) en/and (c) (f) (a) en/and (b) (g) (c) en/and (d) (h) (b) en/and (d)

Answer: H

7.

(a) If the board of a company adopts a resolution to lend money to one of the directors and the value of the loan is 0,2% of the company’s net worth, the shareholders must receive written notice of this resolution within 10 business days after the end of the financial year. (b) The stipulatio alteri can be contractually altered to have retrospective effect. (c) Shareholders do not have the automatic right to participate in the management of a company. (d) If a director is incapacitated it is not necessary to provide notice of board meetings to that director. (e) (a) en/and (b) (f) (b) en/and (c) (g) (c) en/and (d) (h) (a) en/and (d)

Answer: F

8.

(a) The person concluding a statutory pre-incorporation contract on behalf of the company must either be an incorporator or a future shareholder of the company . (b) When shareholders are required to elect directors to fill vacancies on the board, each shareholder may only vote once. (c) If there are no directors remaining to call a shareholders’ meeting and no one else has been authorised in terms of the Memorandum of Incorporation to convene shareholders meetings, a shareholder may approach the Tribunal to convene the meeting. (d) The stipulans does not necessarily acquire the same rights as the third party against the promittens from the stipulatio alteri. (e) (a) en/and (b) (f) (a) en/and (d) (g) (b) en/and (c) (h) (c) en/and (d)

Answer: H

9.

(a) The board of a company may delegate its powers, but the directors may not delegate their directors’ duties. (b) A person who does not satisfy the requirements in a company’s Memorandum of Incorporation is only allowed to be appointed as a director in certain circumstances. (c) If a company chooses to substitute a statutory pre-incorporation contract, such an agreement must be with the same person as the previous agreement, as well as on the same terms. (d) A director whose personal financial interests conflicts with those of the company, is never allowed to execute documents relating to the matter. (e) (a) en/and (b) (f) (a) en/and (c) (g) (b) en/and (d) (h) (c) en/and (d)

Answer: F

10.

1. Partnerships en commandite and silent partnerships have the following similarities: (a) An extraordinary partner is not liable for partnership debts to creditors of the partnership, but only to their co-partners (b) An extraordinary partner may not participate actively in the business of the partnership; (c) There must be at least one other ordinary partner with the extraordinary partner; (d) An extraordinary partner is liable to his partners for his pro rata share of all partnership debts

Answer: A,B&C

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