,LML4806 Assignment 1 (COMPLETE ANSWERS)
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
South African Corporate Law Assignment
Question 1.1: Group of Companies
Do the companies constitute a group of companies?
Yes. According to section 1 of the Companies Act 71 of 2008, a
"group of companies" refers to a holding company and all of
its subsidiaries. In this scenario:
Consolidated Investments Ltd holds 100% of Reef Iron
Ore Ltd → direct control (subsidiary).
Consolidated Investments Ltd holds 58% of Creek Gold
(Pty) Ltd → majority control (subsidiary).
Consolidated Investments Ltd holds 30% of Millenium
Platinum Ltd, and Creek Gold (Pty) Ltd holds the
remaining 70% → indirect control through a subsidiary.
Conclusion: All three companies are subsidiaries of
Consolidated Investments Ltd. Therefore, they constitute a
group of companies under the Companies Act.
Consequences of a Group of Companies:
, 1. Consolidated Financial Statements: Required to reflect
group performance.
2. Audit Requirements: If one is audited, group compliance
might be triggered.
3. Disclosure of Related Party Transactions: Enhanced
reporting obligations.
4. Intra-group Transactions: May be scrutinised for fairness
and legality.
5. Liability and Risk Spread: Business rescue and liquidation
actions may implicate the entire group.
Question 1.1.2: Quorum at Shareholders' Meetings
If there is no quorum within one hour of the scheduled time
(s64 of the Companies Act):
1. The meeting must be postponed to the same day and
time the following week (or otherwise as determined).
2. If at the reconvened meeting there is still no quorum, the
shareholders present constitute a quorum.
3. The chairperson may adjourn or reconvene the meeting
based on practical circumstances.
Question 1.2.1: Issue of Shares to Varsha
Semester 2 2025 - DUE August 2025; 100%
TRUSTED Complete, trusted solutions and
explanations.
South African Corporate Law Assignment
Question 1.1: Group of Companies
Do the companies constitute a group of companies?
Yes. According to section 1 of the Companies Act 71 of 2008, a
"group of companies" refers to a holding company and all of
its subsidiaries. In this scenario:
Consolidated Investments Ltd holds 100% of Reef Iron
Ore Ltd → direct control (subsidiary).
Consolidated Investments Ltd holds 58% of Creek Gold
(Pty) Ltd → majority control (subsidiary).
Consolidated Investments Ltd holds 30% of Millenium
Platinum Ltd, and Creek Gold (Pty) Ltd holds the
remaining 70% → indirect control through a subsidiary.
Conclusion: All three companies are subsidiaries of
Consolidated Investments Ltd. Therefore, they constitute a
group of companies under the Companies Act.
Consequences of a Group of Companies:
, 1. Consolidated Financial Statements: Required to reflect
group performance.
2. Audit Requirements: If one is audited, group compliance
might be triggered.
3. Disclosure of Related Party Transactions: Enhanced
reporting obligations.
4. Intra-group Transactions: May be scrutinised for fairness
and legality.
5. Liability and Risk Spread: Business rescue and liquidation
actions may implicate the entire group.
Question 1.1.2: Quorum at Shareholders' Meetings
If there is no quorum within one hour of the scheduled time
(s64 of the Companies Act):
1. The meeting must be postponed to the same day and
time the following week (or otherwise as determined).
2. If at the reconvened meeting there is still no quorum, the
shareholders present constitute a quorum.
3. The chairperson may adjourn or reconvene the meeting
based on practical circumstances.
Question 1.2.1: Issue of Shares to Varsha
