Summary AUE1601 EXAM PACK WITH SHORT _NOTES_F.pdf

Legal aspects in Accountancy AUE1601 OBJECTIVE The aim of this module is to enable learners to gain insight into aspects of the Companies Act 71 of 2008, as amended by the Companies Amendment Act 3 of 2011, the Companies Regulations, 2011, Close Corporations Act 69 of 1984, as amended, and other legislation of importance to accountants. THE COMPANIES ACT Questions in the examination will require application of knowledge. The majority of the marks will be awarded for the application of knowledge. However, in order to build a logical argument in any question, it is necessary to start with basic theory and definitions,whether recalled from memory or accessed from a prescribed textbook. You need to be able to identify and resolve the key issues relating to the Companies Act. The above statements necessitate not only an awareness of the content of the relevant legislation, but also an explanation of where to find the applicable requirements in the Act. Important!! You must be able to apply the following Companies Act sections and related Regulations on level 2 (except for sections 49–56 and 95–97, 99–111 which are on level 1) and be prepared to be examined on them. Multiple-choice questions 1. Which one of the following statements is not true in terms of the Companies Act? (a) The Act provides for the formation and incorporation of profit companies and non profit companies. (b) A "profit company" refers to a company incorporated for the purpose of financial gain for its shareholders. 2 (c) A "nonprofit company" is allowed to distribute its income to its incorporators, members, directors, officers or persons related to any of them, with no requirements to be met. (d) The Memorandum of Incorporation of a private company prohibits it from offering any shares to the public. 2. Which one of the following does not form part of the company records that must be maintained by a company in terms of the Companies Act? (a) A copy of the Memorandum of Incorporation of the company, any amendments or alterations to it, and any rules of the company. (b) Copies of annual financial statements and accounting records. (c) Copies of all reports presented at annual general meetings. (d) Copies of the auditor's report. 3. Which one of the following statement