LJU4802 Assignment 1 Semester 1 2023{Distinction A+} Questions and Answer

Pre-incorporation contract - -A written agreement concluded on behalf of a company before its formation with the intention that the company will be bound by it -Ring-fenced company - -A company that has an express limitation on its capacity -A share - -One of the units into which the propriety interest in a profit company is divided -Ultra vires contract - -A contract that does not appear to promote the main objective of the company in any way -Notice of incorporation - -A document that has to be lodged in order to register a company -Founding statement - -The sole registration document for a close corporation -Fiduciary duty - -Owed to the close corporation by a member, but not to other members in a close corporation -Distribution - -A payment that is made by a company to a shareholder in his capacity as a shareholder in terms of section 46 of the Companies Act 71 of 2008 -Juristic Personality - -A legal fiction that recognizes a company and a close corporation as bearer of its own rights and duties -Duty of care, skill and diligence - -An objective and subjective test is used to establish liability -The doctrine of constructive notice has been abolished completely in terms of the Companies Act 71 of 2008. - -FALSE -Members of a close corporation, as a general rule, are jointly and severally liable for all debts of the corporation. (2) - -FALSE -A restriction is placed on the number of members of a close corporation, and on the number of shareholders in a private company. (2) - -FALSE -Capital is raised by close corporations through the issue of shares. (2) - -FALSE -It is no longer possible to conclude a pre-incorporation contract in terms of section 53 of the Close Corporations Act 69 of 1984. (2) - -TRUE -Who must appoint a company secretary? - -public company and state owned enterprises