LML4806 EXAM PACK 2024

Types and Forms of Companies - Correct Answer 1. Profit Company 2. Non - profit company Profit companies 4 tipes - Correct Answer 1. Sate owned - schedule 2/3 of PFMA -Municipality - National government business 2. Public - can sell shares to public & freely transferable -Can be listed on JSE 3. Personal - Professional association e.g Attorneys - Directer jointly and severely liable 4. Private - Cant sell shares to public MOI forbids it. - Not freely transferable - Fudtrust matter. Section 66: Board, directors and prescribed officers - Correct Answer - S 66(1): business of a company must be managed by or under direction of its board - directors have a duty to manage the company but shareholders retain control over the directors by their power to appoint and remove directors - before certain transactions can take place, such transactions must be approved by shareholders, either by way of special or ordinary resolution - a company's own MOI can restrict the powers of directors or others to act i.r.o a particular matter - MOI can provide that certain transactions have to be pre-approved by shareholders - shareholder: holder of share issued by a company and who is entered as such in the certificated or uncertificated securities register of the company - for purposes of part F of Ch 2 person who is entitled to exercise any voting rights in relation to a company, irrespective of the form, title or nature of the securities to which those voting rights are attached - share: one of the units into which the proprietary interest in a profit company is divided - shareholders meeting: meeting of those holders of a company's issued securities who are entitled to exercise voting rights in relation to that matter Important principles - Correct Answer - meeting must be properly called and convened - properly convened if the prescribed notice for convening the meeting was given by authorised - notice must be given to all persons who are entitled - meeting must be convened for a time, date and place that is accessible to shareholders - meeting may only commence if a quorum is present - quorum is minimum number of members who have to be present at meeting before it can begin Record date S 59 - Correct Answer S 59. Record date for determining shareholder rights - record date: NB because it's the date that determines shareholder rights, e.g. right to vote at meeting - board of directors may set a record date for determining which shareholders are entitled to: o receive notice of shareholders' meeting o participate in and vote at a shareholders' meeting o decide any matter by written consent or electronic communication - record date may not be earlier than date on which it is determined or more than 10 business days before date on which event or action is scheduled to occur - must be published to shareholders in manner that satisfies requirements - where board doesn't determine record date, unless the MOI or rules of company