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LML ⋆
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LML4806: COMPANY LAW
Comprehensive Exam Revision Guide
May/June 2024 & May/June 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
UNISA School of Law – Mercantile Law
Exam Revision Guide
LML4806
Module Code:
Company Law
Module Name:
May/June 2024 & May/June 2025
Papers:
80 marks per paper (4-hour exam)
Total Marks:
Companies Act 71 of 2008
Act:
Study this guide thoroughly. Focus on applying legal principles to given facts – the
examiner rewards application, not mere recitation.
Exam Revision Notes | LML4806 | 2024–2025
,LML4806 | Exam Revision Company Law – May/June 2024 & 2025
PART A: MAY/JUNE 2024 EXAMINATION PAPER
Key Concept
The 2024 May/June paper carries 80 marks and is a 4-hour take-home portfolio ex-
amination. It covers core topics: corporate social responsibility (CSR), shareholder
meetings and voting, directors’ duties and personal liability, share issues, and business
rescue. All questions must be answered with reference to the Companies Act 71 of
2008 and relevant case law.
Page 2 of 32
,LML4806 | Exam Revision Company Law – May/June 2024 & 2025
Question 1 (2024) – Corporate Social Responsibility [20 marks]
(1.1) [10 marks]
Question: Milton Friedman famously stated that “there is one and only one social re-
sponsibility of business – to use its resources and engage in activities designed to increase
its profits.” With reference to the principle of corporate social responsibility (CSR), dis-
cuss the meaning of CSR and evaluate whether this view is consistent with the approach
adopted in the Companies Act 71 of 2008.
Answer: Definition of Corporate Social Responsibility (CSR):
Corporate Social Responsibility refers to a voluntary commitment by companies
to manage their role within society responsibly and to contribute to sustainable devel-
opment through co-operation with their stakeholders. CSR is generally understood to
mean integrating economic, social, and environmental imperatives into the company’s
activities, while simultaneously addressing shareholder and stakeholder expectations.
CSR is premised on the idea that the modern company has a wide and diverse range of
stakeholders – both business and socio-economic – and that companies are responsible
members of the community, not merely profit-maximising entities.
Friedman’s View:
Friedman’s classical shareholder-primacy theory holds that the sole obligation of business
is to maximise returns to shareholders. Under this view, spending company resources
on social causes is a form of taxation without representation, imposed by managers on
shareholders.
The Companies Act 71 of 2008 approach:
The Act explicitly incorporates stakeholder and social considerations:
• Section 7(b)(iii): One purpose of the Act is to promote the development of the
South African economy by encouraging transparency and high standards of corpo-
rate governance, given the significant role of enterprises in the social and economic
life of the nation.
• Section 7(d): The Act seeks to reaffirm the concept of the company as a means of
achieving economic and social benefits.
• Section 72(4) and the Companies Regulations 2011: Certain companies are re-
quired to appoint a social and ethics committee to monitor the company’s
activities regarding social and economic development, good corporate citizenship,
Page 3 of 32
, LML4806 | Exam Revision Company Law – May/June 2024 & 2025
the environment, health and public safety, consumer relationships, and labour and
employment.
• The Act’s objects in s 7 reflect the Ubuntu philosophy and broad stake-
holder accountability, which fundamentally differs from Friedman’s narrow profit-
maximisation view.
Evaluation:
Friedman’s view is inconsistent with the approach of the Companies Act. The Act
deliberately moves beyond shareholder primacy by mandating mechanisms (such as the
social and ethics committee) and embedding social development goals within the very
purposes of company regulation. South African company law thus adopts a stakeholder
model rather than the purely profit-driven shareholder model.
Exam Tip
Always connect your CSR answer to specific sections of the Act (s 7, s 72, Reg
43). The examiner expects you to demonstrate that the Act legislatively incorpo-
rates social responsibility rather than leaving it entirely voluntary.
(1.2) [10 marks]
Question: The Memorandum of Incorporation (MOI) of CH Adventures (Pty) Ltd con-
tains a clause that prohibits shareholders from appointing proxies. A shareholder, unable
to attend the AGM, wishes to exercise her rights through another person. With reference
to the Companies Act 71 of 2008, advise whether the MOI clause is valid and whether the
shareholder can appoint a proxy.
Answer: The Right to Appoint a Proxy:
Section 58(1) of the Companies Act provides that a shareholder of a company may
appoint any individual, including a non-shareholder, as their proxy to participate in,
speak, and vote at a shareholders’ meeting. This right is conferred on the shareholder by
statute.
Validity of the MOI Clause:
The Companies Act distinguishes between alterable and unalterable provisions:
• Unalterable provisions may not be amended by the MOI, even if the MOI pur-
ports to do so (s 15(2)).
Page 4 of 32
LML ⋆
]]
LML4806: COMPANY LAW
Comprehensive Exam Revision Guide
May/June 2024 & May/June 2025
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
UNISA School of Law – Mercantile Law
Exam Revision Guide
LML4806
Module Code:
Company Law
Module Name:
May/June 2024 & May/June 2025
Papers:
80 marks per paper (4-hour exam)
Total Marks:
Companies Act 71 of 2008
Act:
Study this guide thoroughly. Focus on applying legal principles to given facts – the
examiner rewards application, not mere recitation.
Exam Revision Notes | LML4806 | 2024–2025
,LML4806 | Exam Revision Company Law – May/June 2024 & 2025
PART A: MAY/JUNE 2024 EXAMINATION PAPER
Key Concept
The 2024 May/June paper carries 80 marks and is a 4-hour take-home portfolio ex-
amination. It covers core topics: corporate social responsibility (CSR), shareholder
meetings and voting, directors’ duties and personal liability, share issues, and business
rescue. All questions must be answered with reference to the Companies Act 71 of
2008 and relevant case law.
Page 2 of 32
,LML4806 | Exam Revision Company Law – May/June 2024 & 2025
Question 1 (2024) – Corporate Social Responsibility [20 marks]
(1.1) [10 marks]
Question: Milton Friedman famously stated that “there is one and only one social re-
sponsibility of business – to use its resources and engage in activities designed to increase
its profits.” With reference to the principle of corporate social responsibility (CSR), dis-
cuss the meaning of CSR and evaluate whether this view is consistent with the approach
adopted in the Companies Act 71 of 2008.
Answer: Definition of Corporate Social Responsibility (CSR):
Corporate Social Responsibility refers to a voluntary commitment by companies
to manage their role within society responsibly and to contribute to sustainable devel-
opment through co-operation with their stakeholders. CSR is generally understood to
mean integrating economic, social, and environmental imperatives into the company’s
activities, while simultaneously addressing shareholder and stakeholder expectations.
CSR is premised on the idea that the modern company has a wide and diverse range of
stakeholders – both business and socio-economic – and that companies are responsible
members of the community, not merely profit-maximising entities.
Friedman’s View:
Friedman’s classical shareholder-primacy theory holds that the sole obligation of business
is to maximise returns to shareholders. Under this view, spending company resources
on social causes is a form of taxation without representation, imposed by managers on
shareholders.
The Companies Act 71 of 2008 approach:
The Act explicitly incorporates stakeholder and social considerations:
• Section 7(b)(iii): One purpose of the Act is to promote the development of the
South African economy by encouraging transparency and high standards of corpo-
rate governance, given the significant role of enterprises in the social and economic
life of the nation.
• Section 7(d): The Act seeks to reaffirm the concept of the company as a means of
achieving economic and social benefits.
• Section 72(4) and the Companies Regulations 2011: Certain companies are re-
quired to appoint a social and ethics committee to monitor the company’s
activities regarding social and economic development, good corporate citizenship,
Page 3 of 32
, LML4806 | Exam Revision Company Law – May/June 2024 & 2025
the environment, health and public safety, consumer relationships, and labour and
employment.
• The Act’s objects in s 7 reflect the Ubuntu philosophy and broad stake-
holder accountability, which fundamentally differs from Friedman’s narrow profit-
maximisation view.
Evaluation:
Friedman’s view is inconsistent with the approach of the Companies Act. The Act
deliberately moves beyond shareholder primacy by mandating mechanisms (such as the
social and ethics committee) and embedding social development goals within the very
purposes of company regulation. South African company law thus adopts a stakeholder
model rather than the purely profit-driven shareholder model.
Exam Tip
Always connect your CSR answer to specific sections of the Act (s 7, s 72, Reg
43). The examiner expects you to demonstrate that the Act legislatively incorpo-
rates social responsibility rather than leaving it entirely voluntary.
(1.2) [10 marks]
Question: The Memorandum of Incorporation (MOI) of CH Adventures (Pty) Ltd con-
tains a clause that prohibits shareholders from appointing proxies. A shareholder, unable
to attend the AGM, wishes to exercise her rights through another person. With reference
to the Companies Act 71 of 2008, advise whether the MOI clause is valid and whether the
shareholder can appoint a proxy.
Answer: The Right to Appoint a Proxy:
Section 58(1) of the Companies Act provides that a shareholder of a company may
appoint any individual, including a non-shareholder, as their proxy to participate in,
speak, and vote at a shareholders’ meeting. This right is conferred on the shareholder by
statute.
Validity of the MOI Clause:
The Companies Act distinguishes between alterable and unalterable provisions:
• Unalterable provisions may not be amended by the MOI, even if the MOI pur-
ports to do so (s 15(2)).
Page 4 of 32
