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LML4806 - COMPANY LAW QUESTIONS
AND ANSWERS 2025
What info must be contained in a compromise proposal? -
correct answer- - 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 - correct
answer- - 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
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Record date - correct answer- - 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 - correct answer- - 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 - correct
answer- - background
- the proposal itself
- assumptions and conditions
How is proposal of compromise effected? - correct answer- - by
delivery of a copy of the proposal
LML4806 - COMPANY LAW QUESTIONS
AND ANSWERS 2025
What info must be contained in a compromise proposal? -
correct answer- - 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 - correct
answer- - 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
, 2 | Page
Record date - correct answer- - 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 - correct answer- - 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 - correct
answer- - background
- the proposal itself
- assumptions and conditions
How is proposal of compromise effected? - correct answer- - by
delivery of a copy of the proposal
