MRL2601 ENTREPRENEURIAL LAW
Assignment 2 Semester 1: Year 2025
, Question 1
As the company secretary of Cool Coals (Pty) Ltd, I advised the board on whether
issuing university bursaries to local Grade 12 learners aligns with good corporate
governance. Some directors believed the company should prioritize shareholder profits,
but I argued that businesses have a broader social responsibility (King IV Report, 2016).
Drawing from Ubuntu, a principle highlighted by Justice Madala in S v Makwanyane
(1995), I explained that companies should foster community well-being alongside
profitability. Investing in education benefits both society and the business by building
goodwill and long-term sustainability (Freeman et al., 2020). Additionally, the
Companies Act 71 of 2008 encourages directors to act in the best interests of all
stakeholders, not just shareholders.
I concluded that funding bursaries aligns with ethical business practice and modern
corporate governance. It would strengthen the company’s reputation, foster community
support, and ensure long-term success.
Question 2
The Legal Consequences of a Company’s Separate Legal Personality
The concept of separate legal personality is one of the most significant principles in
company law, establishing that a registered company exists as an independent legal
entity distinct from its owners, shareholders, and directors. This principle was firmly
established in the landmark case of Salomon v A Salomon & Co Ltd [1897] AC 22 (HL),
where the court held that once a company is incorporated, it acquires its own legal
identity, separate from the individuals who manage or own it. This has several important
legal consequences that affect how companies operate and interact with the law.
One of the most critical consequences of separate legal personality is limited liability.
This means that shareholders are not personally responsible for the company’s debts
beyond the value of their shares. For example, if a company becomes insolvent,
Assignment 2 Semester 1: Year 2025
, Question 1
As the company secretary of Cool Coals (Pty) Ltd, I advised the board on whether
issuing university bursaries to local Grade 12 learners aligns with good corporate
governance. Some directors believed the company should prioritize shareholder profits,
but I argued that businesses have a broader social responsibility (King IV Report, 2016).
Drawing from Ubuntu, a principle highlighted by Justice Madala in S v Makwanyane
(1995), I explained that companies should foster community well-being alongside
profitability. Investing in education benefits both society and the business by building
goodwill and long-term sustainability (Freeman et al., 2020). Additionally, the
Companies Act 71 of 2008 encourages directors to act in the best interests of all
stakeholders, not just shareholders.
I concluded that funding bursaries aligns with ethical business practice and modern
corporate governance. It would strengthen the company’s reputation, foster community
support, and ensure long-term success.
Question 2
The Legal Consequences of a Company’s Separate Legal Personality
The concept of separate legal personality is one of the most significant principles in
company law, establishing that a registered company exists as an independent legal
entity distinct from its owners, shareholders, and directors. This principle was firmly
established in the landmark case of Salomon v A Salomon & Co Ltd [1897] AC 22 (HL),
where the court held that once a company is incorporated, it acquires its own legal
identity, separate from the individuals who manage or own it. This has several important
legal consequences that affect how companies operate and interact with the law.
One of the most critical consequences of separate legal personality is limited liability.
This means that shareholders are not personally responsible for the company’s debts
beyond the value of their shares. For example, if a company becomes insolvent,
