MAY JUNE 2021 unanswered
QUESTION 1 [20]
1.1TMT Group Limited will be holding its tenth annual general meeting
(AGM) next month. The board of directors is concerned that it will not be
possible to hold a traditional venue-based AGM where the directors, board
committee members, auditors, shareholders and shareholder proxies can all
attend in person and participate at the meeting. This is due to the evolving
COVID-19 outbreak and the related measures to prevent its spread,
including the requirements for stringent social distancing, the need for
people to avoid large public gatherings and the banning of all non-essential
travel, which have all impacted the manner in which traditional meetings
are held.
With reference to the Companies Act 71 of 2008, advise the board of
directors regarding a possible alternative(s) to holding a traditional venue-
based annual general meeting in this case and indicate whether there are
any requirements that must be complied with. (5)
1.2 The board of directors of
Thorstein Retail Group Ltd, a recently incorporated company, is looking for
ways through which the company can raise funds to finance its business
activities. Advise the directors of Thorstein Retail Group Ltd on the two
sources through which a company’s business activities can be financed.
Also briefly explain how the monies are raised from each source. (6)
1.3Paint Your House (Pty) Ltd has four directors: Samson, Marianne, Adriana
and Tumelo. All of them also hold shares in the company. The Memorandum
of Incorporation of Paint Your House (Pty) Ltd states that the main object of
the company is to buy and sell paint. Despite Tumelo’s objection, the board
of directors of Paint Your House Ltd has entered into a contract to purchase
,luxury hotel apartments on behalf of the company from VIP Living & Luxury
(Pty) Ltd for an amount of R50 million.
,1.3.1 With reference to the
Companies Act 71 of 2008, advise the board of directors whether the
contract to purchase the hotel apartments is a valid transaction that can be
legally enforced by VIP Living & Luxury (Pty) Ltd. (5)
1.3.2 In
the event that the transaction is found to be beyond the company’s main
object, advise Tumelo on the remedies that would be available to her and to
Paint Your House Ltd in terms of the Companies Act 71 of 2008 against the
directors who caused the company to enter into the transaction. (4)
QUESTION 2 [26]
2.1Hamba Kahle Ltd has made significant profits in the past financial year.
The board of directors is considering whether the company, and the
subsidiaries of the company, may acquire (repurchase) up to three percent
of the shares issued by the company for a consideration of R250 per
ordinary share. The shares are to be acquired from the ordinary
shareholders as well as from some of the directors of the company.
With reference to the Companies Act 71 of 2008, advise the board of
directors on the following:
2.1.1 The formalities
and the procedures that must be followed before Hamba Kahle Ltd and any
of its subsidiaries may acquire the shares in this case. (12)
2.1.2 The implications for Hamba Kahle Ltd, its shareholders and its
directors if the company acquires the shares contrary to the required
, formalities and procedures. (5)
QUESTION 1 [20]
1.1TMT Group Limited will be holding its tenth annual general meeting
(AGM) next month. The board of directors is concerned that it will not be
possible to hold a traditional venue-based AGM where the directors, board
committee members, auditors, shareholders and shareholder proxies can all
attend in person and participate at the meeting. This is due to the evolving
COVID-19 outbreak and the related measures to prevent its spread,
including the requirements for stringent social distancing, the need for
people to avoid large public gatherings and the banning of all non-essential
travel, which have all impacted the manner in which traditional meetings
are held.
With reference to the Companies Act 71 of 2008, advise the board of
directors regarding a possible alternative(s) to holding a traditional venue-
based annual general meeting in this case and indicate whether there are
any requirements that must be complied with. (5)
1.2 The board of directors of
Thorstein Retail Group Ltd, a recently incorporated company, is looking for
ways through which the company can raise funds to finance its business
activities. Advise the directors of Thorstein Retail Group Ltd on the two
sources through which a company’s business activities can be financed.
Also briefly explain how the monies are raised from each source. (6)
1.3Paint Your House (Pty) Ltd has four directors: Samson, Marianne, Adriana
and Tumelo. All of them also hold shares in the company. The Memorandum
of Incorporation of Paint Your House (Pty) Ltd states that the main object of
the company is to buy and sell paint. Despite Tumelo’s objection, the board
of directors of Paint Your House Ltd has entered into a contract to purchase
,luxury hotel apartments on behalf of the company from VIP Living & Luxury
(Pty) Ltd for an amount of R50 million.
,1.3.1 With reference to the
Companies Act 71 of 2008, advise the board of directors whether the
contract to purchase the hotel apartments is a valid transaction that can be
legally enforced by VIP Living & Luxury (Pty) Ltd. (5)
1.3.2 In
the event that the transaction is found to be beyond the company’s main
object, advise Tumelo on the remedies that would be available to her and to
Paint Your House Ltd in terms of the Companies Act 71 of 2008 against the
directors who caused the company to enter into the transaction. (4)
QUESTION 2 [26]
2.1Hamba Kahle Ltd has made significant profits in the past financial year.
The board of directors is considering whether the company, and the
subsidiaries of the company, may acquire (repurchase) up to three percent
of the shares issued by the company for a consideration of R250 per
ordinary share. The shares are to be acquired from the ordinary
shareholders as well as from some of the directors of the company.
With reference to the Companies Act 71 of 2008, advise the board of
directors on the following:
2.1.1 The formalities
and the procedures that must be followed before Hamba Kahle Ltd and any
of its subsidiaries may acquire the shares in this case. (12)
2.1.2 The implications for Hamba Kahle Ltd, its shareholders and its
directors if the company acquires the shares contrary to the required
, formalities and procedures. (5)
