AUE1601 Exam Pack 100% CORRECT Q AND A.

Question 1 1.1. Reference sec. 36 sec 38 (1) Board may shares of a company to the extent and within classes that have been authorized by the memorandum of corporation. The memorandum of incorporation sets out classes of shares and number of shares that the company is authorized to issue. Also specifies for each class distinguishing designation for that class and preference rights and limitations. The memorandum of incorporation may authorize a stated number of unclassified shares which are budget to classification by the board. Copter services limited all need to comply will all related details listed above in its memorandum of Incorporation. 1.2. sec 36 (2)  The authorization and classification of shares, the number rights and limitations associated with shares set put in the memorandum of incorporation may be changed only by amendment of memorandum of incorporation by board to the extent that the memorandum of incorporation provides.  The board may therefore increase or decrease number of authorized shares.  Computer services limited at the moment has fully worked its authorized shares of 100 000 and will need to amend the memorandum of incorporation or board may increase authorized shares to the extent provided in the memorandum of incorporation.  There is need to have increased number of authorized shares. 1.3. Board may issue shares but after a special resolution of shareholders as shares are being issued to directors. 1.4. Reference : sec : 40 Shares are to be issued at adequate consideration in terms of conversion rights associated with previous issued securities of the company. 3 Board must consider the consideration before issuing of shares. Shares issued to directors of computer services Ltd are to be issued at adequate consideration before issuing of shares. Shares issued to directors of computer service Ltd are to be issued at adequate consideration, preferably market value and not par value. 1.5. When some shares to be issued to directors there is need for shareholders’ approval by special resolution. 1.6. Reference : s 62 (1) The company must deliver a notice of each shareholders meeting in prescribed manner and form to all shareholders of the company as of record date of meeting at least.  15 days before meeting of a public or nonprofit company.  10 days before of othe