lOMoARcPSD|51776212
MRL2601 EXAM
2025 UPDATED QUESTIONS AND
ANSWERS.RECENT WITH MANY MORE
QUESTIONS TO STUDY ,WELL
EXPLAINED ANSWERS. WITH THE
CURRENT EXAM TOPICS ,SUMMARIES
AND
NOTES.2024,2023,2022,2021,2020………
summaries
Excellence Through Knowledge
A+ CONCEPTS
, lOMoARcPSD|51776212
MRL2601
ENTREPRENEURIAL LAW
EXAMINATION MAY/JUNE 2025
STUDENT NUMBER: 3689228
DUE DATE: 27 MAY 2025
Question 1
1.1 A share is one of the units into which the proprietary interest in a profit company
is divided.
1.2 A/an quorum for meetings requires at least 25% of shareholders present,
entitled to vote on at least one matter.
1.3 Public companies, state-owned enterprises, and certain private companies are
legally required to appoint an auditor at their annual general meeting.
1.4 A/an appraisal right enables a shareholder to request that the company buy
back their shares at fair value if specific actions are taken.
1.5 A statutory derivative action is an action by a member against other members
on behalf of the close corporation for liability against the close corporation.
1.1
✅ Correct statement:
A share is one of the units into which the proprietary interest in a profit company
is divided.
, lOMoARcPSD|51776212
Explanation:
Each share represents a portion of ownership in a company and gives the
shareholder certain rights, such as voting rights and entitlement to dividends.
1.2
✅ Correct statement:
A quorum for a shareholders’ meeting requires at least 25% of the voting
rights entitled to be exercised on at least one matter to be decided at the
meeting to be present.
Explanation:
This means that for a meeting to proceed, shareholders holding at least 25% of
the votes must be present (in person or by proxy).
1.3
✅ Correct statement:
Public companies, state-owned companies (SOCs), and certain private
companies (that are required by the Companies Act or their Memorandum of
Incorporation) must appoint an auditor at their annual general meeting (AGM).
Explanation:
This is in line with the Companies Act 71 of 2008, which requires independent
audits for companies of public interest or with specific thresholds.
1.4
✅ Correct statement:
An appraisal right allows a shareholder to require the company to buy back
their shares at fair value if the company undertakes certain actions that
materially and adversely affect the shareholder’s rights.
Example:
For instance, if a company amends its Memorandum of Incorporation or merges
with another company in a way that disadvantages minority shareholders.
1.5
✅ Correct statement (revised):
A statutory derivative action is a legal action brought by a shareholder or
member on behalf of the company to enforce a right or claim that the company
itself has against wrongdoers (such as directors or other members).
Correction:
It is not an action by a member against other members; it is an action on behalf
of the company to protect the company’s interests.
Question 2
Themba may rely on the remedy of dissenting shareholder’s rights which is an
"Appraisal Rights" as provided under the Companies Act 71 of 2008. This remedy
, lOMoARcPSD|51776212
allows a shareholder to dissent from certain decisions of corporate actions that
adversely affect their rights. Section 164 of the Act provides shareholders with the
right or object to demand the fair compensation for their shares at a fair value if they
disagree with certain decisions made by the company that affect their rights
materially.
Circumstances for Appraisal Rights
The appraisal rights remedy applies under four circumstances:
Alteration of Rights: When a company alters the rights attached to the class of
shares held by the shareholder, which in this case is the preference shares held by
Themba. This is a key activate the dissenting securities appraisal remedy, allowing
shareholders to object to such changes.
Special Resolution: alterations must be made by a special resolution passed by the
other shareholders, which Themba did not support. The Companies Act requires
special resolution that the support of majority at least 75% of the voting rights that
are exercised on the resolution.
Materially Adverse changes: if the alteration must be materially unfavourable to the
rights and interests of the shareholder. In this case if Themba feels adverse about
the changes, if it has a negatively impacted his rights as a preference shareholder,
he may have grounds to challenge the resolution. The appraisal remedy is
specifically designed to cover transactions that materially affect shareholder rights.
Notification: The shareholder must formally be notified of the resolution and express
their intention to exercise appraisal rights, typically within a specified time frame after
the resolution has been adopted. This involves sending a written objection to the
resolution, and the company must send a notice that the resolution has been
adopted to each security holder who filed an objection and has not withdrawn the
objection or voted in favour of the resolution.
Conclusion, Themba can intreat appraisal rights due to the alteration of shares'
terms, which he believes adversely affects his interests. This remedy allows him to
take proactive steps by demanding that the company pays him a fair value for his
shares if he disagrees with the resolution.
2.1.2 Appraisal Rights Remedy Procedure
Procedure which Themba must follow if he wishes to utilize the appraisal rights
remedy:
Understanding Appraisal Rights:
This remedy is inspired by American corporate law and provides a means for
shareholders to exit the company or challenge the adequacy of the consideration
they receive for their shares. It allows shareholders to demand a fair value for their
shares when they disagree with certain corporate actions, such as mergers or
acquisitions.
Reviewing Corporate Documents:
The appraisal remedy applies not only in the context of a merger transaction but also
in a scheme of arrangement, a disposal of the greater part of the assets or
MRL2601 EXAM
2025 UPDATED QUESTIONS AND
ANSWERS.RECENT WITH MANY MORE
QUESTIONS TO STUDY ,WELL
EXPLAINED ANSWERS. WITH THE
CURRENT EXAM TOPICS ,SUMMARIES
AND
NOTES.2024,2023,2022,2021,2020………
summaries
Excellence Through Knowledge
A+ CONCEPTS
, lOMoARcPSD|51776212
MRL2601
ENTREPRENEURIAL LAW
EXAMINATION MAY/JUNE 2025
STUDENT NUMBER: 3689228
DUE DATE: 27 MAY 2025
Question 1
1.1 A share is one of the units into which the proprietary interest in a profit company
is divided.
1.2 A/an quorum for meetings requires at least 25% of shareholders present,
entitled to vote on at least one matter.
1.3 Public companies, state-owned enterprises, and certain private companies are
legally required to appoint an auditor at their annual general meeting.
1.4 A/an appraisal right enables a shareholder to request that the company buy
back their shares at fair value if specific actions are taken.
1.5 A statutory derivative action is an action by a member against other members
on behalf of the close corporation for liability against the close corporation.
1.1
✅ Correct statement:
A share is one of the units into which the proprietary interest in a profit company
is divided.
, lOMoARcPSD|51776212
Explanation:
Each share represents a portion of ownership in a company and gives the
shareholder certain rights, such as voting rights and entitlement to dividends.
1.2
✅ Correct statement:
A quorum for a shareholders’ meeting requires at least 25% of the voting
rights entitled to be exercised on at least one matter to be decided at the
meeting to be present.
Explanation:
This means that for a meeting to proceed, shareholders holding at least 25% of
the votes must be present (in person or by proxy).
1.3
✅ Correct statement:
Public companies, state-owned companies (SOCs), and certain private
companies (that are required by the Companies Act or their Memorandum of
Incorporation) must appoint an auditor at their annual general meeting (AGM).
Explanation:
This is in line with the Companies Act 71 of 2008, which requires independent
audits for companies of public interest or with specific thresholds.
1.4
✅ Correct statement:
An appraisal right allows a shareholder to require the company to buy back
their shares at fair value if the company undertakes certain actions that
materially and adversely affect the shareholder’s rights.
Example:
For instance, if a company amends its Memorandum of Incorporation or merges
with another company in a way that disadvantages minority shareholders.
1.5
✅ Correct statement (revised):
A statutory derivative action is a legal action brought by a shareholder or
member on behalf of the company to enforce a right or claim that the company
itself has against wrongdoers (such as directors or other members).
Correction:
It is not an action by a member against other members; it is an action on behalf
of the company to protect the company’s interests.
Question 2
Themba may rely on the remedy of dissenting shareholder’s rights which is an
"Appraisal Rights" as provided under the Companies Act 71 of 2008. This remedy
, lOMoARcPSD|51776212
allows a shareholder to dissent from certain decisions of corporate actions that
adversely affect their rights. Section 164 of the Act provides shareholders with the
right or object to demand the fair compensation for their shares at a fair value if they
disagree with certain decisions made by the company that affect their rights
materially.
Circumstances for Appraisal Rights
The appraisal rights remedy applies under four circumstances:
Alteration of Rights: When a company alters the rights attached to the class of
shares held by the shareholder, which in this case is the preference shares held by
Themba. This is a key activate the dissenting securities appraisal remedy, allowing
shareholders to object to such changes.
Special Resolution: alterations must be made by a special resolution passed by the
other shareholders, which Themba did not support. The Companies Act requires
special resolution that the support of majority at least 75% of the voting rights that
are exercised on the resolution.
Materially Adverse changes: if the alteration must be materially unfavourable to the
rights and interests of the shareholder. In this case if Themba feels adverse about
the changes, if it has a negatively impacted his rights as a preference shareholder,
he may have grounds to challenge the resolution. The appraisal remedy is
specifically designed to cover transactions that materially affect shareholder rights.
Notification: The shareholder must formally be notified of the resolution and express
their intention to exercise appraisal rights, typically within a specified time frame after
the resolution has been adopted. This involves sending a written objection to the
resolution, and the company must send a notice that the resolution has been
adopted to each security holder who filed an objection and has not withdrawn the
objection or voted in favour of the resolution.
Conclusion, Themba can intreat appraisal rights due to the alteration of shares'
terms, which he believes adversely affects his interests. This remedy allows him to
take proactive steps by demanding that the company pays him a fair value for his
shares if he disagrees with the resolution.
2.1.2 Appraisal Rights Remedy Procedure
Procedure which Themba must follow if he wishes to utilize the appraisal rights
remedy:
Understanding Appraisal Rights:
This remedy is inspired by American corporate law and provides a means for
shareholders to exit the company or challenge the adequacy of the consideration
they receive for their shares. It allows shareholders to demand a fair value for their
shares when they disagree with certain corporate actions, such as mergers or
acquisitions.
Reviewing Corporate Documents:
The appraisal remedy applies not only in the context of a merger transaction but also
in a scheme of arrangement, a disposal of the greater part of the assets or
