LML4806 - Company Law proven test bank
What info must be contained in a compromise proposal?
- any proposals made "informally" by a company creditor
- details of all assets and creditors
- treatment of ongoing contracts
- order of preference, proceeds apply
- conditions precedent
- number of employees
- t&c of employment
- projected balance sheet
- income and expenses for 3 years
- certificate by authorized director stating info is factual, accurate, up to date
When will compromise be adopted and binding
- S155(6) adopted if supported by a majority in number representing at least 75%
in value of creditors
- A company may apply to court for an order approving the proposal
- suggests it is not necessary for a company to obtain sanction of High Court before
a compromise becomes binding on dissenting creditors
Record date
- determines certain rights of shareholders
- S59(1) a company may set a record date for purpose of determining which
shareholders are entitled to receive the notice, vote etc
- latest date by which the company is required to give notice to SH of the meeting,
or date of action or event
- board fail to set date, date is last day on which notice should be given to SH of
SH meeting (public = 15 bdays; private = 10 bdays)
Compromise
- agreement or arrangement or restructuring of claims between a company and its
creditors in terms of which the creditors agree to accept less than their full claims
against the company
- binding on all companies creditors
Compromise proposal is divided into three parts
, - background
- the proposal itself
- assumptions and conditions
How is proposal of compromise effected?
- by delivery of a copy of the proposal
- and notice of a meeting to consider the proposal to the Companies Commission
and to every creditor of the company or every member of the relevant class of
creditors whose name and address is known or can reasonable be obtained by the
company
When is compromise proposal adopted
- when supported by a majority in number
- representing at least 75% in value of creditors present & voting (or proxy)
If a compromise is approved by court?
- company must file a copy of the order with Companies Commission within 5
business days
- copy must be attache to each copy of Company MOI
- order of court is final and binding on all creditors or class of creditors from the
date on which a copy of the order is filed
Company Secretary
- public & state owned company are obliged to appoint one
- company must maintain record of company secretaries
- secretary is chief administration officer
- should be someone with knowledge of and experience in relevant legislation
- accountable to board of directors
- duties - guide directors on duties; powers & responsibilities; make directors
aware of law
- board may adopt a resolution to remove company secretary
How do you hold a SH meeting w/o everyone present
PROXY
- S58
- appointment must be in writing & signed
- speak & vote on behalf of SH
What info must be contained in a compromise proposal?
- any proposals made "informally" by a company creditor
- details of all assets and creditors
- treatment of ongoing contracts
- order of preference, proceeds apply
- conditions precedent
- number of employees
- t&c of employment
- projected balance sheet
- income and expenses for 3 years
- certificate by authorized director stating info is factual, accurate, up to date
When will compromise be adopted and binding
- S155(6) adopted if supported by a majority in number representing at least 75%
in value of creditors
- A company may apply to court for an order approving the proposal
- suggests it is not necessary for a company to obtain sanction of High Court before
a compromise becomes binding on dissenting creditors
Record date
- determines certain rights of shareholders
- S59(1) a company may set a record date for purpose of determining which
shareholders are entitled to receive the notice, vote etc
- latest date by which the company is required to give notice to SH of the meeting,
or date of action or event
- board fail to set date, date is last day on which notice should be given to SH of
SH meeting (public = 15 bdays; private = 10 bdays)
Compromise
- agreement or arrangement or restructuring of claims between a company and its
creditors in terms of which the creditors agree to accept less than their full claims
against the company
- binding on all companies creditors
Compromise proposal is divided into three parts
, - background
- the proposal itself
- assumptions and conditions
How is proposal of compromise effected?
- by delivery of a copy of the proposal
- and notice of a meeting to consider the proposal to the Companies Commission
and to every creditor of the company or every member of the relevant class of
creditors whose name and address is known or can reasonable be obtained by the
company
When is compromise proposal adopted
- when supported by a majority in number
- representing at least 75% in value of creditors present & voting (or proxy)
If a compromise is approved by court?
- company must file a copy of the order with Companies Commission within 5
business days
- copy must be attache to each copy of Company MOI
- order of court is final and binding on all creditors or class of creditors from the
date on which a copy of the order is filed
Company Secretary
- public & state owned company are obliged to appoint one
- company must maintain record of company secretaries
- secretary is chief administration officer
- should be someone with knowledge of and experience in relevant legislation
- accountable to board of directors
- duties - guide directors on duties; powers & responsibilities; make directors
aware of law
- board may adopt a resolution to remove company secretary
How do you hold a SH meeting w/o everyone present
PROXY
- S58
- appointment must be in writing & signed
- speak & vote on behalf of SH
