FAC2601 ASSIGNMENT 1 SEMESTER 1

FAC2601 ASSIGNMENT 1 SEMESTER 1 2 1. Which one of the following statements with regards to the Companies Act 71 of 2008 is incorrect? 1. Share certificates are non-negotiable documents and the shareholder has no power to sell his or her rights to additional shareholders; 2. The capital of a company is not divisible, and it is therefore impractical to open a capital account for each member; 3. A company is a legal entity that is incorporated in terms of the Companies Act 71 of 2008 and it exists independent of its owners; 4. Public companies may be listed on the Johannesburg Stock Exchange which promote the marketability of their shares. A share certificate serves as evidence of a person's interest in a company. Share certificates are negotiable documents and the shareholder has the power to sell all his or her shares or to purchase additional shares. Each shareholder's interest and rights to vote are determined by the number of shares he or she owns. The right to vote gives the shareholder the voice to appoint directors and determines the objectives of the company