MRL2601 Assignment 2 (DETAILED ANSWERS) Semester 1 2024 (347800) - DISTINCTION GUARANTEED

MRL2601 Assignment 2 (DETAILED ANSWERS) Semester 1 2024 (347800) - DISTINCTION GUARANTEED Answers, guidelines, workings and references..... Question 1 1.1 Lesedi and Simphiwe registered Furnmax (Pty) Ltd, a company that sells office equipment. The Memorandum of Incorporation of Furnmax (Pty) Ltd indicates that the board of directors, consisting of Lesedi, Simphiwe, Carol and Precious, can appoint a managing director who would be authorised to contract on the company’s behalf. However, the board has never formally appointed a managing director. Nevertheless, Lesedi, with the full knowledge of the other directors, has contracted with Office Supplies Ltd for the supply of office equipment to Furnmax (Pty) Ltd on two occasions. On the third occasion that Lesedi contracted with Office Supplies Ltd, Furnmax (Pty) Ltd denied liability for the payment for the equipment based on the fact that Lesedi was never appointed as the managing director. Upon being sued by Office Supplies Ltd, Furnmax (Pty) Ltd opposed the claim for payment in terms of the agreement based on the fact that Lesedi was not authorised to contract on the company’s behalf. Explain with reference to relevant case law what Office Supplies Ltd would have to prove in order to rely upon the doctrine of estoppel. (5) 1.2 Green Developments (Pty) Ltd (‘the company’) was incorporated and registered on 2 January 2024. According to its Memorandum of Incorporation the main purpose of the company is property development. The company’s board consists of five directors namely, Tanya, Johan, Moses, Samson and James. Prior to the incorporation of the company, Tanya concluded a written contract with Joe Foster in the name of the then to be incorporated company for the purchase of a fixed property in Midrand (‘the Midrand property’) at a price of R1 million. Since the company’s incorporation and registration, the company did not take any action in relation to the contract concluded by Tanya for the Midrand property. With reference to the Companies Act 71 of 2008 advise on the statutory requirements that must be met for the contract concluded by Tanya and Joe Foster to be binding on the company. (5) Question 2 2.1 Puseletso has recently bought the member’s interest in Gangnam’s Tile CC. She does not have experience of close corporations and approaches you for information on the important characteristics of a member’s interest in a close corporation. Advise Puseletso. (5) 4 2.2 Puseletso is experiencing financial problems, and it appears that she will be sequestrated. The other members of Gangnam’s Tile CC, who are aware of the situation, are concerned about what effect this will have on the continued existence of Gangnam’s Tile CC. With reference to the Close Corporations Act 69 of 1984 explain whether the continuation of the business will be affected by Puseletso’s sequestration and what happens to the member’s interest of a member of a close corporation when she is sequestrated. (5)