FAC2601 Assignment 1 Semester 1 2026
Financial Accounting for Companies | University of South Africa (UNISA)
150 Questions & Verified Answers | Complete Assignment Preparation
SECTION 1: COMPANIES ACT & CORPORATE GOVERNANCE
Questions 1–25
Question 1
According to the South African Companies Act 71 of 2008, what is the minimum number of
directors required for a private company?
A) One director
B) Two directors
C) Three directors
D) No minimum requirement
Correct answer: A
Rationale: The Companies Act 71 of 2008 requires a private company to have at least one
director. This is a change from the previous Act which required two directors. A public company
must have at least three directors .
Question 2
What is the minimum number of directors required for a public company under the Companies
Act 71 of 2008?
A) One director
B) Two directors
C) Three directors
D) Four directors
Correct answer: C
,Rationale: The Companies Act 71 of 2008 requires a public company to have at least three
directors. This ensures adequate oversight and governance for companies that raise capital
from the public .
Question 3
Which of the following is NOT a requirement for a company to be considered a "public
company"?
A) Minimum of three directors
B) Shares are offered to the public
C) Company name ends with "(RF)"
D) Subject to more stringent reporting requirements
Correct answer: C
Rationale: The designation "(RF)" indicates a Ring Fenced company, not a public company.
Public companies end with "Ltd" and have specific requirements regarding share offering to the
public .
Question 4
The King IV Report on Corporate Governance applies to:
A) Public companies only
B) Private companies only
C) All companies and other entities
D) Only listed companies
Correct answer: C
Rationale: King IV applies to all companies and other entities, including public, private,
non-profit, and state-owned entities. It promotes an integrated approach to governance across
all sectors .
Question 5
Which of the following is a fundamental concept of the Companies Act 71 of 2008?
, A) Shareholder primacy
B) Stakeholder inclusivity
C) Profit maximization only
D) Limited liability for all directors
Correct answer: B
Rationale: The Companies Act emphasizes stakeholder inclusivity, meaning companies should
consider the interests of all stakeholders (employees, customers, suppliers, community) not just
shareholders .
Question 6
True or False: A person can be a director of a company even if they have been declared unfit by
a court.
A) True
B) False
Correct answer: B
Rationale: According to the Companies Act, a person who has been declared unfit by a court
cannot serve as a director. This disqualification is intended to protect companies from unfit
individuals .
Question 7
What is the "business judgment rule" under the Companies Act?
A) Directors must make unanimous decisions
B) Directors are protected from liability if they made informed, good-faith decisions with
reasonable grounds
C) Directors cannot be held liable for any decision
D) All business decisions must be approved by shareholders
Correct answer: B
Financial Accounting for Companies | University of South Africa (UNISA)
150 Questions & Verified Answers | Complete Assignment Preparation
SECTION 1: COMPANIES ACT & CORPORATE GOVERNANCE
Questions 1–25
Question 1
According to the South African Companies Act 71 of 2008, what is the minimum number of
directors required for a private company?
A) One director
B) Two directors
C) Three directors
D) No minimum requirement
Correct answer: A
Rationale: The Companies Act 71 of 2008 requires a private company to have at least one
director. This is a change from the previous Act which required two directors. A public company
must have at least three directors .
Question 2
What is the minimum number of directors required for a public company under the Companies
Act 71 of 2008?
A) One director
B) Two directors
C) Three directors
D) Four directors
Correct answer: C
,Rationale: The Companies Act 71 of 2008 requires a public company to have at least three
directors. This ensures adequate oversight and governance for companies that raise capital
from the public .
Question 3
Which of the following is NOT a requirement for a company to be considered a "public
company"?
A) Minimum of three directors
B) Shares are offered to the public
C) Company name ends with "(RF)"
D) Subject to more stringent reporting requirements
Correct answer: C
Rationale: The designation "(RF)" indicates a Ring Fenced company, not a public company.
Public companies end with "Ltd" and have specific requirements regarding share offering to the
public .
Question 4
The King IV Report on Corporate Governance applies to:
A) Public companies only
B) Private companies only
C) All companies and other entities
D) Only listed companies
Correct answer: C
Rationale: King IV applies to all companies and other entities, including public, private,
non-profit, and state-owned entities. It promotes an integrated approach to governance across
all sectors .
Question 5
Which of the following is a fundamental concept of the Companies Act 71 of 2008?
, A) Shareholder primacy
B) Stakeholder inclusivity
C) Profit maximization only
D) Limited liability for all directors
Correct answer: B
Rationale: The Companies Act emphasizes stakeholder inclusivity, meaning companies should
consider the interests of all stakeholders (employees, customers, suppliers, community) not just
shareholders .
Question 6
True or False: A person can be a director of a company even if they have been declared unfit by
a court.
A) True
B) False
Correct answer: B
Rationale: According to the Companies Act, a person who has been declared unfit by a court
cannot serve as a director. This disqualification is intended to protect companies from unfit
individuals .
Question 7
What is the "business judgment rule" under the Companies Act?
A) Directors must make unanimous decisions
B) Directors are protected from liability if they made informed, good-faith decisions with
reasonable grounds
C) Directors cannot be held liable for any decision
D) All business decisions must be approved by shareholders
Correct answer: B
