LML4806 Assignment 2 Semester 1 2026 (Answer Guide) - DUE 2026
VERIFIED AND CERTIFIED ANSWERS. WRITTEN IN REQUIRED FORMAT AND WITHIN
GIVEN GUIDELINES. IT IS GOOD TO USE AS A GUIDE AND FOR REFERENCE, NEVER
PLAGARIZE. Thank you and success in your academics.
UNISA, 2025
Contents
QUESTION 1 .............................................................................................................................................. 2
Introduction ........................................................................................................................................... 2
1.1 Whether there is a valid basis to remove Peter as a director ............................................ 2
Legal framework ............................................................................................................................... 2
Application to the facts .................................................................................................................. 3
Conclusion ......................................................................................................................................... 3
1.2 Procedure and rights applicable to Peter if Mashudu decides to remove him ............. 3
Legal framework ............................................................................................................................... 3
(a) Authority to remove Peter........................................................................................................ 4
(b) Notice requirements .................................................................................................................. 4
(c) Right to be heard ........................................................................................................................ 4
(d) Decision and resolution ........................................................................................................... 5
(e) Effect on Peter’s employment contract................................................................................ 5
(f) Peter’s remedies ......................................................................................................................... 5
Conclusion ......................................................................................................................................... 6
QUESTION 2 .............................................................................................................................................. 6
Introduction ........................................................................................................................................... 6
Grounds to remove Ntando as business rescue practitioner .................................................. 7
Legal framework ............................................................................................................................... 7
Application to the facts .................................................................................................................. 7
Conclusion on removal .................................................................................................................. 8
Whether Springbok Finance (Pty) Ltd may appoint Andile as replacement ........................ 8
Legal framework ............................................................................................................................... 8
Application to the facts .................................................................................................................. 8
Conclusion on replacement .......................................................................................................... 9
Overall conclusion ............................................................................................................................... 9
References ............................................................................................................................................. 9
, QUESTION 1
Introduction
Mashudu and Peter are the only directors of Star Engineering (Pty) Ltd. Peter is an
executive director, appointed under a five-year contract of employment. Mashudu is
concerned that Peter has, over the past two financial years, failed to ensure the timely
preparation and submission of annual financial statements (AFS) and failed to
sign the AFS as the authorised director, as required by law. Mashudu seeks legal
advice on whether Peter can be removed as a director and the procedure that must be
followed.
The removal of directors is regulated primarily by sections 71 and 76 of the
Companies Act 71 of 2008.
1.1 Whether there is a valid basis to remove Peter as a director
(3 marks)
Legal framework
In terms of section 71(3) of the Companies Act, a director may be removed by the
board of directors if the director:
has become ineligible or disqualified;
is incapacitated; or
has neglected, or been derelict in the performance of, the functions of a
director.¹
Directors also owe statutory duties under section 76, including the duty to act:
in good faith and for a proper purpose; and
VERIFIED AND CERTIFIED ANSWERS. WRITTEN IN REQUIRED FORMAT AND WITHIN
GIVEN GUIDELINES. IT IS GOOD TO USE AS A GUIDE AND FOR REFERENCE, NEVER
PLAGARIZE. Thank you and success in your academics.
UNISA, 2025
Contents
QUESTION 1 .............................................................................................................................................. 2
Introduction ........................................................................................................................................... 2
1.1 Whether there is a valid basis to remove Peter as a director ............................................ 2
Legal framework ............................................................................................................................... 2
Application to the facts .................................................................................................................. 3
Conclusion ......................................................................................................................................... 3
1.2 Procedure and rights applicable to Peter if Mashudu decides to remove him ............. 3
Legal framework ............................................................................................................................... 3
(a) Authority to remove Peter........................................................................................................ 4
(b) Notice requirements .................................................................................................................. 4
(c) Right to be heard ........................................................................................................................ 4
(d) Decision and resolution ........................................................................................................... 5
(e) Effect on Peter’s employment contract................................................................................ 5
(f) Peter’s remedies ......................................................................................................................... 5
Conclusion ......................................................................................................................................... 6
QUESTION 2 .............................................................................................................................................. 6
Introduction ........................................................................................................................................... 6
Grounds to remove Ntando as business rescue practitioner .................................................. 7
Legal framework ............................................................................................................................... 7
Application to the facts .................................................................................................................. 7
Conclusion on removal .................................................................................................................. 8
Whether Springbok Finance (Pty) Ltd may appoint Andile as replacement ........................ 8
Legal framework ............................................................................................................................... 8
Application to the facts .................................................................................................................. 8
Conclusion on replacement .......................................................................................................... 9
Overall conclusion ............................................................................................................................... 9
References ............................................................................................................................................. 9
, QUESTION 1
Introduction
Mashudu and Peter are the only directors of Star Engineering (Pty) Ltd. Peter is an
executive director, appointed under a five-year contract of employment. Mashudu is
concerned that Peter has, over the past two financial years, failed to ensure the timely
preparation and submission of annual financial statements (AFS) and failed to
sign the AFS as the authorised director, as required by law. Mashudu seeks legal
advice on whether Peter can be removed as a director and the procedure that must be
followed.
The removal of directors is regulated primarily by sections 71 and 76 of the
Companies Act 71 of 2008.
1.1 Whether there is a valid basis to remove Peter as a director
(3 marks)
Legal framework
In terms of section 71(3) of the Companies Act, a director may be removed by the
board of directors if the director:
has become ineligible or disqualified;
is incapacitated; or
has neglected, or been derelict in the performance of, the functions of a
director.¹
Directors also owe statutory duties under section 76, including the duty to act:
in good faith and for a proper purpose; and
