LML4807 EXAM PACK 2021

MAY JUNE 2021 unanswered QUESTION 1 [20] 1.1 TMT Group Limited will be holding its tenth annual general meeting (AGM) next month. The board of directors is concerned that it will not be possible to hold a traditional venue-based AGM where the directors, board committee members, auditors, shareholders and shareholder proxies can all attend in person and participate at the meeting. This is due to the evolving COVID-19 outbreak and the related measures to prevent its spread, including the requirements for stringent social distancing, the need for people to avoid large public gatherings and the banning of all non-essential travel, which have all impacted the manner in which traditional meetings are held. With reference to the Companies Act 71 of 2008, advise the board of directors regarding a possible alternative(s) to holding a traditional venue-based annual general meeting in this case and indicate whether there are any requirements that must be complied with. (5) 1.2 The board of directors of Thorstein Retail Group Ltd, a recently incorporated company, is looking for ways through which the company can raise funds to finance its business activities. Advise the directors of Thorstein Retail Group Ltd on the two sources through which a company’s business activities can be financed. Also briefly explain how the monies are raised from each source. (6) 1.3 Paint Your House (Pty) Ltd has four directors: Samson, Marianne, Adriana and Tumelo. All of them also hold shares in the company. The Memorandum of Incorporation of Paint Your House (Pty) Ltd states that the main object of the company is to buy and sell paint. Despite Tumelo’s objection, the board of directors of Paint Your House Ltd has entered into a contract to purchase luxury hotel apartments on behalf of the company from VIP Living & Luxury (Pty) Ltd for an amount of R50 million. 1.3.1 With reference to the Companies Act 71 of 2008, advise the board of directors whether the contract to purchase the hotel apartments is a valid transaction that can be legally enforced by VIP Living & Luxury (Pty) Ltd. (5) 1.3.2 In the event that the transaction is found to be beyond the company’s main object, advise Tumelo on the remedies that would be available to her and to Paint Your House Ltd in terms of the Companies Act 71 of 2008 against the directors who caused the company to enter into the transaction. ....................................................continued.................................................