QUESTION 1 (9 marks)

List the nine chapters that make up the structure of the Companies Act 71 of 2008.

QUESTION 2 (11 marks)

Discuss what a “group of companies” is by drawing a distinction between a ‘juristic entity’ and an ‘economic entity’.

QUESTION 3 (9 marks)

Roger and James have both bought 200 preference shares each in an investment company called Marine Investments Ltd. Marine Investments issued the 200 preference shares to both Roger and James in their respective names but did not issue them any share certificates. Marine Investments issued the securities to Roger and James electronically and they hold the securities electronically as well.


Determine whether Roger and James have uncertificated securities or certificated securities. Provide reason(s) for your answer. (3 marks)

Discuss where Marine Investments Ltd keeps record of all the uncertificated securities that they issue its shareholders. Also, in your answer, briefly discuss the licensee that holds the uncertificated securities. (6 marks)

QUESTION 4 (14 marks)

Mark Wellington is a director of Agri Tech (Pty) Ltd. Agri Tech (Pty) Ltd has developed a revolutionary new fertilizer which is good for the environment and very nutritious for the soil. This new fertilizer is going to become very popular within the agricultural industry. Mark Wellington wilfully decides to give the fertilizer formula to a competing company in exchange for a payment of R2 million, which Mark personally pocketed. This has caused Agri Tech (Pty) Ltd. a loss of millions of rands due to the fact that the competing company now had the formula and could reproduce the revolutionary fertilizer and sell it under their own brand. Mark Wellington’s misconduct has completely breached the trust of all Agri Tech (Pty) Ltd board members.

Discuss whether Agri Tech (Pty) Ltd can take Mark Wellington to court to be declared a delinquent director based on the applicable ground (if any). Refer to relevant case law and legislation to justify your answer.

Question 5:

Dream Corporations (Pty) Ltd. is holding an annual general meeting (AGM) in Cape Town. Mr Smith who is a shareholder of Dream Corporations, resides in London and is unable to attend the AGM in person due to prior commitments. However, he wants to exercise his voting rights and participate in the decision making process. Mr Smith also wishes to vote against certain resolutions which the company proposes to pass.
Mr Smith decides to appoint his trusted friend, Sally Jones, who is not a shareholder, to attend the meeting in Cape Town and to represent and vote on his behalf.


Determine whether Sally Jones is allowed to represent Mr Smith and vote on his behalf in the AGM in Cape Town? (8 marks)
Note to student: Try to mention only the relevant information. Scenario questions require you to apply the legal principles where applicable.

Mr Smith also informs Sally Jones that he wants her to be his proxy for five years. Mr Smith has not put anything in to writing. Determine whether Sally Jones was validly appointed as a proxy. (11 marks)

Question 6:

“Investors in South Africa’s cash-strapped power utility are on high alert for Finance Minister Enoch Godongwana’s plan to reorganize its mountain of debt. Between one- and two-thirds of Eskom Holdings SOC Ltd.’s liabilities of about 400 billion rand ($22 billion) are expected to be transferred to the state’s balance sheet, with the amount and some of the transfer terms likely to be announced in the national budget on Wednesday.”
Source: Bloomberg. South Africa to Map Out Plan for Eskom’s $22 Billion Debt Pile in Budget. Retrieved from: for-eskom-s-22-billion-debt-pile-in-budget?leadSource=uverify%20wall [Accessed 10 October 2023].

Read the extract above:

Identify the type of company that is highlighted in bold letters and indicate why you have identified it as such. (2 marks)

Provide a description of the type of company you have identified in question 6.1. (7 marks)

Question 7:

Maxwell Investments Ltd., is a finance and investment public company, and is experiencing a significant financial downturn. The board of directors believes that a shareholder meeting is necessary to address the company’s financial challenges and to propose a restructuring plan. The board calls for a special shareholder meeting to discuss these matters and sends out a notice of meeting to convene the meeting to all shareholders. The shareholders meeting is proposed to convene on the 30th of October 2023 at 11h00 at the Maxwell Investment Headquarters in Sandton.
The notice of the shareholders meeting was sent in writing 8 business days before the meeting date. Also, the notice of meeting did not include a clear and comprehensive general purpose outlining the matters to be discussed at the meeting. The notice did not include the proposed resolution that is supposed to accompany the notice of meeting.


A concerned shareholder approaches you to find out whether the board of directors of Maxwell Investments Ltd. sent a proper notice of meeting to the shareholders. Set out what should be included in a notice of meeting. (12 marks)

In terms of the requirements for a proper notice of meeting, discuss whether enough time was given to the shareholders to notify them of the meeting. (5 marks)

Assume that the notice of meeting that Maxwell Investments Ltd. sent contains a defect. Discuss whether Maxwell Investments Ltd. shareholders may proceed with the meeting? (4 marks)

Question 8

Cruella De Villiers is a shareholder at Wembley Logistics Limited (Wembley Logistics Ltd.). Wembley Logistics Ltd. is proposing to issue shares. Cruella De Villiers is excited about this news and strongly believes that she as a shareholder has the automatic right to issued shares first before anyone else who is not a shareholder of Wembley Logistics Ltd.


Name the right being illustrated in the scenario above. (2 marks)

The Companies Act 71 of 2008 draws a distinction between a public company and a private company with regard to the right you have mentioned in question 8.1. Explain whether Cruella De Villiers is correct in believing that she as a shareholder has an automatic right to be issued shares before anyone else. (6 marks)

Answers to Above Questions on Company Law

Answer 1: The nine chapters that make up the structure of the Companies Act 71 of 2008 are interpretation and application, corporate rules and other related matters,formation, administration and dissolution of companies, securities regulation and company ownership.


Get completed answers on the questions above on company law from Student Life Saviour South Africa experts.

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