MRL2601
Assignment 2 Semester 2 2026
Unique number:
Due date: 24 August 2026
Question 1
Abahlali (Pty) Ltd cannot avoid the contract merely because buying a beach house
falls outside its furniture manufacturing object. Under sections 19(1) and 20(1) of the
Companies Act 71 of 2008, a company has the legal capacity of an individual,
although its MOI may restrict its purposes, powers or activities. 1 An act is not void
only because the company lacked capacity under its MOI or because directors
lacked authority resulting from that restriction.1 Therefore, the object clause does not
make the purchase invalid.
Assignment 2 Semester 2 2026
Unique number:
Due date: 24 August 2026
Question 1
Abahlali (Pty) Ltd cannot avoid the contract merely because buying a beach house
falls outside its furniture manufacturing object. Under sections 19(1) and 20(1) of the
Companies Act 71 of 2008, a company has the legal capacity of an individual,
although its MOI may restrict its purposes, powers or activities. 1 An act is not void
only because the company lacked capacity under its MOI or because directors
lacked authority resulting from that restriction.1 Therefore, the object clause does not
make the purchase invalid.
