,# 2010 University of South Africa
All rights reserved
Printed and published by the
University of South Africa
Muckleneuk, Pretoria
3B2
MRL2601/1/2011
98616331
3B2
MRL-style
, CONTENTS
Study unit Page
INTRODUCTION (iv)
1 LEGAL PERSONALITY 1
2 TYPES OF COMPANIES 7
3 COMPANY FORMATION 12
4 CAPACITY AND REPRESENTATION OF A COMPANY 35
5 CORPORATE FINANCE: SHARES, DEBENTURES AND DISTRIBUTIONS 43
6 SHAREHOLDERS AND COMPANY MEETINGS 56
7 DIRECTORS AND BOARD COMMITTEES 67
8 AUDITORS AND THE COMPANY SECRETARY 90
9 REMEDIES, ENFORCEMENT AGENCIES AND ALTERNATIVE DISPUTE
RESOLUTION (ADR) 103
10 PARTNERSHIPS 110
11 CLOSE CORPORATIONS 125
12 TRUSTS 146
(iii)
, INTRODUCTION
(Header indicating unit number on each page)
DEAR STUDENT
This study guide supplements your prescribed textbook, Companies and
other business structures in South Africa by Dennis Davis, Farouk Cassim
et al (2009) Oxford University Press Southern Africa. Hence, whenever we
refer to the prescribed textbook in this study guide, we are referring to the
above book. Further details about your prescribed study material, including
the textbook, are provided in Tutorial Letter 101 for this module.
It is imperative that you use this study guide when working through the
textbook because the study guide
. tells you exactly which chapters and parts of chapters in the textbook are
prescribed for this module, as well as any additional cases you will need
to study from the prescribed casebook
. contains additional information which you also have to study for the
examinations
. explains a number of difficult concepts in more detail
. sometimes gives you a different perspective from the one adopted in the
textbook
Bear in mind therefore that the study guide also forms part of your study
material although the textbook is the primary source.
WHAT ENTREPRENEURIAL LAW IS ALL ABOUT
In this module we will teach you about the main business forms, namely
companies, close corporations, partnerships and trusts. You will see that
each business form has its own particular requirements in terms of
membership and the way in which it is constituted. There are also specific
consequences attached to each business form. For example, a partnership
does not enjoy separate legal personality.
This means that every partner is liable, in his or her personal capacity, for
the partnership's debts. In other business forms this is not the case. In this
module you will learn which business forms have the advantage of limited
liability.
Every would-be entrepreneur needs to consider the advantages and
disadvantages of the various business forms in order to decide which one
(iv)
All rights reserved
Printed and published by the
University of South Africa
Muckleneuk, Pretoria
3B2
MRL2601/1/2011
98616331
3B2
MRL-style
, CONTENTS
Study unit Page
INTRODUCTION (iv)
1 LEGAL PERSONALITY 1
2 TYPES OF COMPANIES 7
3 COMPANY FORMATION 12
4 CAPACITY AND REPRESENTATION OF A COMPANY 35
5 CORPORATE FINANCE: SHARES, DEBENTURES AND DISTRIBUTIONS 43
6 SHAREHOLDERS AND COMPANY MEETINGS 56
7 DIRECTORS AND BOARD COMMITTEES 67
8 AUDITORS AND THE COMPANY SECRETARY 90
9 REMEDIES, ENFORCEMENT AGENCIES AND ALTERNATIVE DISPUTE
RESOLUTION (ADR) 103
10 PARTNERSHIPS 110
11 CLOSE CORPORATIONS 125
12 TRUSTS 146
(iii)
, INTRODUCTION
(Header indicating unit number on each page)
DEAR STUDENT
This study guide supplements your prescribed textbook, Companies and
other business structures in South Africa by Dennis Davis, Farouk Cassim
et al (2009) Oxford University Press Southern Africa. Hence, whenever we
refer to the prescribed textbook in this study guide, we are referring to the
above book. Further details about your prescribed study material, including
the textbook, are provided in Tutorial Letter 101 for this module.
It is imperative that you use this study guide when working through the
textbook because the study guide
. tells you exactly which chapters and parts of chapters in the textbook are
prescribed for this module, as well as any additional cases you will need
to study from the prescribed casebook
. contains additional information which you also have to study for the
examinations
. explains a number of difficult concepts in more detail
. sometimes gives you a different perspective from the one adopted in the
textbook
Bear in mind therefore that the study guide also forms part of your study
material although the textbook is the primary source.
WHAT ENTREPRENEURIAL LAW IS ALL ABOUT
In this module we will teach you about the main business forms, namely
companies, close corporations, partnerships and trusts. You will see that
each business form has its own particular requirements in terms of
membership and the way in which it is constituted. There are also specific
consequences attached to each business form. For example, a partnership
does not enjoy separate legal personality.
This means that every partner is liable, in his or her personal capacity, for
the partnership's debts. In other business forms this is not the case. In this
module you will learn which business forms have the advantage of limited
liability.
Every would-be entrepreneur needs to consider the advantages and
disadvantages of the various business forms in order to decide which one
(iv)
