LML4806 EXAM PACK 2023 QUESTIONS AND 100% VERIFIED ANSWERS CORRECT GRADE A+

LML4806 EXAM PACK 2023 QUESTIONS AND 100% VERIFIED ANSWERS CORRECT GRADE A+ QUESTION 1 1.1 Exclusive Properties (Pty) Ltd (the company) has four shareholders, each holding 25% of the voting rights in the company. All of the shareholders are also directors of the company. The Memorandum of Incorporation of the company has not changed the default position in terms of the Companies Act 71 of 2008 regarding the threshold required to pass ordinary resolutions. The company held a board meeting at which three directors were present. Some of the decisions taken by the board of directors related to matters that were required to be referred to the shareholders for approval by an ordinary resolution. Without issuing a notice of a shareholders’ meeting or convening a shareholders’ meeting, the board meeting proceeded to consider the proposed ordinary resolutions. All the directors who were present at the meeting voted on the proposed ordinary resolutions in their capacity as shareholders. Oliver, a director and shareholder of the company who was not present at the meeting, objects to the passing of the ordinary resolutions at the meeting in this manner. He argues that (i) the voting on the ordinary resolutions was invalid as no notice of a shareholders’ meeting was properly given, (ii) the quorum requirements for a shareholders’ meeting were not satisfied, and (iii) the threshold required for the approval of the ordinary resolutions was not satisfied. With reference to the Companies Act 71 of 2008 and the facts provided, advise Oliver whether his arguments hold merit, and whether the ordinary resolutions were validly passed at the meeting. (12) 1.2 The Memorandum of Incorporation of Generators Unlimited (Pty) Ltd provides that only the board of directors, or any director authorised by the board, has the power to conclude contracts on behalf of the company. It also states that any transaction that exceeds R10 million must first be authorised by the company’s shareholders at a general meeting by way of an ordinary resolution. One of the directors, Nthabiseng, is authorised by the board of directors to conclude contracts on behalf of the company. Nthabiseng enters into a contact with Matthews for the purchase of power distribution transformers to the value of R15 million, without first obtaining the authorisation for the purchase by the company’s shareholders at a general meeting. Matthews is aware of the provision in the Memorandum of Incorporation requiring shareholder approval because he has dealt with the company on previous occasions. However, he does not know that the purchase in fact has not been authorised by an ordinary resolution of the company’s shareholders. With reference to appropriate authority and the facts provided, discuss whether Generators Unlimited (Pty) Ltd is bound by the contract concluded by Nthabiseng and Matthews. (10) QUESTION 2 [16] 2.1 Jaydin, a shareholder of Thaba Indle Ltd, approaches you for legal advice. He tells you that the board of directors of Thaba Indle Ltd recently resolved to issue, and subsequently issued, a specific number of the company’s authorised ordinary shares to the following persons: Nathi, who is a non-executive director of Thaba Indle Ltd. Mario, who has agreed to become a director and chief executive officer of Thaba Indle Ltd when the term of the company’s current chief executive officer comes to an end in eight months’ time. Certain employees of Thaba Indle Ltd in terms of the company’s employee share scheme. Jaydin is convinced that there is something wrong with the action taken by the board of directors of Thaba Indle Ltd as the board did not seek and obtain the approval of the company’s shareholders prior to issuing the shares. However, the board is adamant that the Companies Act 71 of 2008 regards the decision to issue shares as a management decision with the consequence that the board can resolve to issue the company’s authorised shares at any time without having to first obtain the approval of the company’s shareholders. The board further draws Jaydin’s attention to the fact that the company’s Memorandum of Incorporation does not contain any special requirements regarding the board’s power to issue shares. Explain to Jaydin whether the board of directors of Thaba Indle Ltd contravened the provisions of the Companies Act 71 of 2008 in the following circumstances: 2.1.1 When the board issued the ordinary shares to Nathi. (3) 2.1.2 When the board issued the ordinary shares to Mario. (3) 2.1.3 When the board issued the ordinary shares to the employees of Thaba Indle Ltd. (3) 2.2 Mandy is a director of Global Textiles Ltd. Global Textiles Ltd needed to appoint a marketing agent to market and advertise its products in South Africa. At a meeting of the board of directors, Mandy persuaded the board to appoint Premium Brands (Pty) Ltd by convincing the board that this company would be ideal for this task