LML4806 COMPANY LAW ASSIGNMENT 1 COMPLETE EXAM SEMESTER 2 2026 - 256940
DUE 18 AUGUST 2026
SECTION A: SHAREHOLDER MEETINGS AND PROXY APPOINTMENTS
1. A shareholder wishes to appoint a proxy to attend an AGM but only has two hours before
the meeting commences. The MOI requires proxy instruments to be submitted 48 hours
before the meeting. Can the shareholder validly appoint a proxy?
A. Yes, because Section 57(4) of the Companies Act allows proxy appointments at any
reasonable time before the meeting
B. Yes, because the shareholder has a statutory right to appoint a proxy regardless of MOI
provisions
C. No, because the MOI's 48-hour requirement is valid and enforceable if reasonable
D. No, because proxies cannot be appointed for AGMs
Answer: C. No, because the MOI's 48-hour requirement is valid and enforceable if
reasonable
Rationale: Section 57(4) of the Companies Act 71 of 2008 permits a company to determine
the timeframe for proxy appointments in its MOI, provided the timeframe is reasonable. A
48-hour notice requirement has been established as reasonable and enforceable. The
shareholder's late appointment falls outside this timeframe and would not be valid.
2. According to the Companies Act 71 of 2008, what is the primary purpose of a record
date?
A. To determine which shareholders are entitled to receive dividends
B. To determine which shareholders are entitled to receive notice, vote, or exercise other
rights
C. To establish the date of incorporation of the company
D. To determine the financial year-end of the company
Answer: B. To determine which shareholders are entitled to receive notice, vote, or
exercise other rights
,Rationale: Section 59(1) of the Companies Act provides that a company may set a record
date for the purpose of determining which shareholders are entitled to receive notice of a
meeting, vote at a meeting, or exercise any other rights.
3. If the board fails to set a record date for a shareholders' meeting, what date serves as the
default record date?
A. The date the notice of meeting is sent to shareholders
B. The date of the shareholders' meeting
C. The last day on which notice should be given to shareholders of the meeting (15
business days for public companies, 10 for private companies)
D. The date the company was incorporated
Answer: C. The last day on which notice should be given to shareholders of the
meeting
Rationale: Where the board fails to set a record date, the record date is the last day on
which notice should be given to shareholders of the shareholders' meeting—15 business
days for public companies and 10 business days for private companies.
4. What is the minimum voting rights required for a shareholders' meeting to commence,
unless the MOI provides otherwise?
A. 10% of all voting rights
B. 25% of all voting rights
C. 50% of all voting rights
D. 75% of all voting rights
Answer: B. 25% of all voting rights
Rationale: Section 64 of the Companies Act provides that a meeting may not begin until at
least 25% of all voting rights that are entitled to be exercised on at least one matter to be
decided at the meeting are present (subject to the company's MOI).
5. If a quorum is not present within one hour of the scheduled time for a shareholders'
meeting to commence, what action may be taken?
A. The meeting may proceed without a quorum
B. The meeting may be postponed without a motion, vote, or further notice for one week
C. The meeting must be cancelled entirely
D. The meeting may proceed if a simple majority of shareholders present agree
Answer: B. The meeting may be postponed without a motion, vote, or further notice for
one week
,Rationale: Section 64(4) of the Companies Act provides that if within one hour after the
time scheduled for a meeting to commence, a quorum is not present, the meeting may be
postponed without a motion, vote, or further notice for one week.
6. In what circumstances may the one-hour waiting period for quorum be extended for a
reasonable period?
A. If the chairperson deems it necessary
B. If exceptional circumstances such as weather, transport, or electronic communication
impediments exist
C. If a majority of shareholders present request an extension
D. If the company's auditors request an extension
Answer: B. If exceptional circumstances such as weather, transport, or electronic
communication impediments exist
Rationale: Section 64(5) provides that the one-hour period may be extended for a
reasonable period if exceptional circumstances exist such as weather, transport, or
electronic communication impediments that have hindered the ability of shareholders to
be present, provided the delayed shareholders have communicated their intention to
attend and would satisfy quorum requirements.
7. Which type of company is obliged to appoint a company secretary?
A. Private companies only
B. Public companies and state-owned companies
C. All companies regardless of type
D. Non-profit companies only
Answer: B. Public companies and state-owned companies
Rationale: The Companies Act requires public companies and state-owned companies to
appoint a company secretary. Private companies are not obliged to do so, though they may
choose to appoint one.
8. To whom is the company secretary accountable?
A. The shareholders
B. The board of directors
C. The company's auditors
D. The Companies Commission
Answer: B. The board of directors
, Rationale: The company secretary is accountable to the board of directors and serves as
the chief administration officer, guiding directors on their duties, powers, and
responsibilities, and making them aware of relevant legislation.
9. A shareholder's right to vote is classified as:
A. A personal right
B. A proprietary right
C. A contractual right
D. A statutory right only
Answer: B. A proprietary right
Rationale: A shareholder's right to vote is a proprietary right, and a shareholder has the
right to exercise their vote in their own interest, provided they do not oppressively and
fraudulently use their votes to defraud a minority.
10. Which of the following is NOT an instance where compliance with formalities for
shareholders' meetings is not required?
A. Unanimous assent at common law
B. Where every shareholder is also a director
C. Where the meeting is held by electronic communication
D. Where shareholders waive notice requirements
Answer: C. Where the meeting is held by electronic communication
Rationale: Instances where compliance with formalities is not required include unanimous
assent at common law and situations where every shareholder is also a director. Meetings
held by electronic communication still require compliance with formalities unless
otherwise provided.
11. What is the maximum period within which shareholders must vote on a written
resolution after it has been submitted to them?
A. 10 business days
B. 15 business days
C. 20 business days
D. 30 business days
Answer: C. 20 business days
Rationale: Section 60 of the Companies Act requires that shareholders must vote on a
written resolution within 20 business days after the resolution was submitted to them.
DUE 18 AUGUST 2026
SECTION A: SHAREHOLDER MEETINGS AND PROXY APPOINTMENTS
1. A shareholder wishes to appoint a proxy to attend an AGM but only has two hours before
the meeting commences. The MOI requires proxy instruments to be submitted 48 hours
before the meeting. Can the shareholder validly appoint a proxy?
A. Yes, because Section 57(4) of the Companies Act allows proxy appointments at any
reasonable time before the meeting
B. Yes, because the shareholder has a statutory right to appoint a proxy regardless of MOI
provisions
C. No, because the MOI's 48-hour requirement is valid and enforceable if reasonable
D. No, because proxies cannot be appointed for AGMs
Answer: C. No, because the MOI's 48-hour requirement is valid and enforceable if
reasonable
Rationale: Section 57(4) of the Companies Act 71 of 2008 permits a company to determine
the timeframe for proxy appointments in its MOI, provided the timeframe is reasonable. A
48-hour notice requirement has been established as reasonable and enforceable. The
shareholder's late appointment falls outside this timeframe and would not be valid.
2. According to the Companies Act 71 of 2008, what is the primary purpose of a record
date?
A. To determine which shareholders are entitled to receive dividends
B. To determine which shareholders are entitled to receive notice, vote, or exercise other
rights
C. To establish the date of incorporation of the company
D. To determine the financial year-end of the company
Answer: B. To determine which shareholders are entitled to receive notice, vote, or
exercise other rights
,Rationale: Section 59(1) of the Companies Act provides that a company may set a record
date for the purpose of determining which shareholders are entitled to receive notice of a
meeting, vote at a meeting, or exercise any other rights.
3. If the board fails to set a record date for a shareholders' meeting, what date serves as the
default record date?
A. The date the notice of meeting is sent to shareholders
B. The date of the shareholders' meeting
C. The last day on which notice should be given to shareholders of the meeting (15
business days for public companies, 10 for private companies)
D. The date the company was incorporated
Answer: C. The last day on which notice should be given to shareholders of the
meeting
Rationale: Where the board fails to set a record date, the record date is the last day on
which notice should be given to shareholders of the shareholders' meeting—15 business
days for public companies and 10 business days for private companies.
4. What is the minimum voting rights required for a shareholders' meeting to commence,
unless the MOI provides otherwise?
A. 10% of all voting rights
B. 25% of all voting rights
C. 50% of all voting rights
D. 75% of all voting rights
Answer: B. 25% of all voting rights
Rationale: Section 64 of the Companies Act provides that a meeting may not begin until at
least 25% of all voting rights that are entitled to be exercised on at least one matter to be
decided at the meeting are present (subject to the company's MOI).
5. If a quorum is not present within one hour of the scheduled time for a shareholders'
meeting to commence, what action may be taken?
A. The meeting may proceed without a quorum
B. The meeting may be postponed without a motion, vote, or further notice for one week
C. The meeting must be cancelled entirely
D. The meeting may proceed if a simple majority of shareholders present agree
Answer: B. The meeting may be postponed without a motion, vote, or further notice for
one week
,Rationale: Section 64(4) of the Companies Act provides that if within one hour after the
time scheduled for a meeting to commence, a quorum is not present, the meeting may be
postponed without a motion, vote, or further notice for one week.
6. In what circumstances may the one-hour waiting period for quorum be extended for a
reasonable period?
A. If the chairperson deems it necessary
B. If exceptional circumstances such as weather, transport, or electronic communication
impediments exist
C. If a majority of shareholders present request an extension
D. If the company's auditors request an extension
Answer: B. If exceptional circumstances such as weather, transport, or electronic
communication impediments exist
Rationale: Section 64(5) provides that the one-hour period may be extended for a
reasonable period if exceptional circumstances exist such as weather, transport, or
electronic communication impediments that have hindered the ability of shareholders to
be present, provided the delayed shareholders have communicated their intention to
attend and would satisfy quorum requirements.
7. Which type of company is obliged to appoint a company secretary?
A. Private companies only
B. Public companies and state-owned companies
C. All companies regardless of type
D. Non-profit companies only
Answer: B. Public companies and state-owned companies
Rationale: The Companies Act requires public companies and state-owned companies to
appoint a company secretary. Private companies are not obliged to do so, though they may
choose to appoint one.
8. To whom is the company secretary accountable?
A. The shareholders
B. The board of directors
C. The company's auditors
D. The Companies Commission
Answer: B. The board of directors
, Rationale: The company secretary is accountable to the board of directors and serves as
the chief administration officer, guiding directors on their duties, powers, and
responsibilities, and making them aware of relevant legislation.
9. A shareholder's right to vote is classified as:
A. A personal right
B. A proprietary right
C. A contractual right
D. A statutory right only
Answer: B. A proprietary right
Rationale: A shareholder's right to vote is a proprietary right, and a shareholder has the
right to exercise their vote in their own interest, provided they do not oppressively and
fraudulently use their votes to defraud a minority.
10. Which of the following is NOT an instance where compliance with formalities for
shareholders' meetings is not required?
A. Unanimous assent at common law
B. Where every shareholder is also a director
C. Where the meeting is held by electronic communication
D. Where shareholders waive notice requirements
Answer: C. Where the meeting is held by electronic communication
Rationale: Instances where compliance with formalities is not required include unanimous
assent at common law and situations where every shareholder is also a director. Meetings
held by electronic communication still require compliance with formalities unless
otherwise provided.
11. What is the maximum period within which shareholders must vote on a written
resolution after it has been submitted to them?
A. 10 business days
B. 15 business days
C. 20 business days
D. 30 business days
Answer: C. 20 business days
Rationale: Section 60 of the Companies Act requires that shareholders must vote on a
written resolution within 20 business days after the resolution was submitted to them.
