Scribd
Upload
37 views3 pages

Ac 205 Sup 02 20

The document contains a level 2 semester 1 examination paper for a Bachelor of Commerce Honours Degree module in Company Law and Practice. It consists of 6 questions related to company law, including issues around restraint of trade agreements, duties of directors, auditors' liability to third parties, the treatment of companies as separate legal entities, protections for minority shareholders, and the liability of companies regarding inaccurate share certificates.

Uploaded by

tapiwanashejaka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
37 views3 pages

Ac 205 Sup 02 20

The document contains a level 2 semester 1 examination paper for a Bachelor of Commerce Honours Degree module in Company Law and Practice. It consists of 6 questions related to company law, including issues around restraint of trade agreements, duties of directors, auditors' liability to third parties, the treatment of companies as separate legal entities, protections for minority shareholders, and the liability of companies regarding inaccurate share certificates.

Uploaded by

tapiwanashejaka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

MUNHUMUTAPA SCHOOL OF COMMERCE

DEPARTMENT OF ACCOUNTING AND INFORMATION SYSTEMS

BACHELOR OF COMMERCE HONOURS DEGREE

LEVEL 2 SEMESTER 1

EXAMINATION QUESTION PAPER


MODULE CODE AC 205

MODULE NARRATION COMPANY LAW AND PRACTICE

DATE

DURATION 3 HOURS

INSTRUCTIONS TO CANDIDATES:
1. ANSWER ANY FOUR (4) QUESTIONS

2. START EACH ANSWER ON A FRESH PAGE

3. EACH QUESTION CARRIES 25 MARKS

4. CITE RELEVANT CASES WHERE APPROPRIATE


Question 1

Mrs Doubtfire worked for Zupco Chips (Pvt) Ltd, a company that produces chocolate chip
cookies. At the time of her employment with Zupco Chips (Pvt) Ltd, she signed a restraint of
trade agreement in her personal capacity not to compete with Zupco Chips (Pvt) Ltd. After
termination of her employment, Mrs Doubtfire subsequently formed a company, Chocoland
(Pvt) Ltd, of which she was the sole shareholder and director. Chocoland (Pvt) Ltd
commences producing chocolate chip cookies in competition with Zupco Chips (Pvt) Ltd.

Advise Zupco Chips (Pty) Ltd of any legal remedies that it may have. (25 marks)

Question 2

Sam and Susan form a company with the name ‘Purity Limited’ (‘Purity’). Purity’s sole
business is to develop and sell pieces of property that it owns. Susan owns 80 per cent of
the issued share capital of Purity and Sam holds 20 per cent. One day while on business for
Purity, Sam meets an old school friend who offers to sell to Sam a piece of property with
potential for development. The property is situated very near to the property owned by
Purity. Sam decides to take up this personal offer and purchases the property for himself.
Sam thereafter offers to sell the property to Purity but at twice the price that he paid for it.
When Susan discovers the facts, she is furious and threatens to sue Sam for not acquiring
the property for Purity in the first place.

Advise Sam of his legal position. (25 marks)

Question 3

If an auditor of a company has acted negligently it is more difficult for a third person to bring
an action successfully against the auditor than for the company to do so. Explain.

(25 marks)

Question 4

“……….it seems to me impossible to dispute that once the company is legally


incorporated it must be treated like any other independent person with its rights and
liabilities appropriate to itself, and the motives of those who took part in the promotion of
the company are absolutely irrelevant in discussing what those rights and liabilities are.” Per
Lord Halsbury in Salomon v Salomon [1897] AC 22 (House of Lords)

How far does the ghost of Salomon still rule us from the grave? (25 marks)
Question 5

Discuss company law provisions that are meant to protect minority shareholders from abuse
of power by majority shareholders. How is this legal dispensation reconciled with the
corporate law notion that companies are autonomous democracies? (25 marks)

Question 6

Share certificates are prima facie evidence of title of a shareholder and they create two
estoppels namely, estoppel as to title and estoppel as to payment (In re: The Bahia San
Francisco Railway Co Ltd). In this regard, explain the liability of a company to a third party
who in good faith relies on an inaccurate share certificate to his detriment.

(25 marks)

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy