MRL2601 MAY/JUNE 2023 Exam Answers Included,
Long Questions with Answers, Tutorials, Activities and Notes
All you need to get distinction is all in here!!
MRL2601
Entrepreneurial Law Latest EXAM PACK June 2023
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, MRL2601 MAY/JUNE 2023 Exam
Answers Included,
Long Questions with Answers,
Tutorials, Activities and Notes
From 1999 to 2023
UNIVERSITY EXAMINATIONS
2022
Entrepreneurial Law
100 Marks
Duration 24 Hours
First examiner: Prof J
Second examiner: Dr V
MARKING INSTRUCTIONS
(1) Mark all the questions and always note the maximum mark allocations
(2) No half marks must be awarded! Please award a full mark if you feel that the
student has earned it
(4) Be lenient. Do not miss marks indicated on the memorandum.
(5) In case of uncertainty, phone me (Judith) at 0836502352 without delay or email
me at geldej@unisa.ac.za.
QUESTION 1 6 MARKS
Zingapi is a minority shareholder in Telemark (Pty) Ltd. In spite of good business the
company’s profits are not increasing. Zingapi suspects that the directors, who are also
majority shareholders are wasting the company’s money on unnecessary business
trips and luxuries for themselves. Zingapi is concerned about the costs that she would
incur in a court action. Advise her of the steps she should take in order to institute a
derivative action on behalf of Telemark (Pty) Ltd. (6)
Section 165 of the Companies Act 71 of 2008 (1)
Zingapi must in writing request that the company institute legal action to protect
the interests of the company. (1)
An independent person or committee must be appointed to investigate the claim
(1)
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, The independent person or committee must then report to the board of directors.
(1)
The company must within 60 days from receipt of the written request institute the
legal action or serve a reason for not doing so on Zingapi. (1)
Zingapi can then approach the court to continue with the legal action or institute
the claim. (1)
QUESTION 2 6 MARKS
Sarah is a shareholder in ABC (Pty) Ltd. She will be abroad for business when the
annual general meeting of shareholders of ABC (Pty) Ltd takes place. Sarah
approaches you for legal advice as she wants her brother John to attend the meeting
on her behalf to vote on several important matters that will be discussed and voted
upon at the meeting. Explain how this is possible in terms of the Companies Act 71 of
2008 and advise Sarah on the steps she must take in order to achieve this. (6)
MAX 6 marks
Section 58 of the Companies Act 71 of 2008 (1)
Sarah can appoint John as her proxy (1)
The appointment must be in writing (1)
Will be valid for one year (1)
Or for a specified period of time (1)
The same person may be appointed as a proxy for more than one shareholder
(1)
The proxy can delegate the authority to act on the shareholder’s behalf to
someone else. (1)
A copy of the appointment instrument must be available/ presented at the
meeting. (1)
A shareholder can cancel a proxy in writing or withdraw the appointment in
writing. (1)
QUESTION 3 12 MARKS
Themba, who was a manager of the Men’s Club, approached the Commission for
Conciliation, Mediation and Arbitration (the CCMA) seeking severance pay after he
was retrenched. The trade union that he belongs to was informed that he was not
employed by the Men’s Club, but that he was in fact employed by a company named
Bad Boys (Pty) Ltd. The trade union duly cited Bad Boys (Pty) Ltd as the respondent
in a referral to the CCMA. The sole director and shareholder of Bad Boys (Pty) Ltd,
Tendai Munyai, during conciliation indicated that the Men’s Club was insolvent and
that Themba had been dismissed for operational reasons. The commissioner advised
Themba to refer an unfair dismissal dispute. When the matter was referred for
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, arbitration, both the Men’s Club and Bad Boys (Pty) Ltd were cited as respondents.
After hearing the matter, the commissioner ordered Bad Boys (Pty) Ltd to pay Themba
an amount of R250 000 for his unfair dismissal. However, it was discovered that Bad
Boys (Pty) Ltd had no assets. In fact, Tendai Munyai who also participated in the
running of the business had provided financial assistance to Bad Boys (Pty) Ltd and
he had secured claims against the company for repayment of the loan amounts.
Themba intends to seek an order from the Labour Court to the effect that Tendai
Munyai was his true employer and that he must pay him the amount of R250 000. With
reference to the relevant legislation and case law, indicate what Themba would have
to prove in order to hold Tendai Munyai liable. ……(12)
MAX 12 marks
The separate juristic/legal personality of a company can be ignored in certain
circumstances. It is referred to as the lifting or piercing the corporate veil. (1)
The common-law principle of the lifting or piercing of the corporate veil developed
in case law. (1) There are not strict rules when a court will lift the corporate veil.
However, the following principles have developed in case law:
Botha v Van Niekerk & another 1983 (3) SA 513 (1)
A party must have suffered an “unconscionable injustice” before the court could
lift the veil. (1)
Cape Pacific v Lubner Controlling Investments (Pty) Ltd and others 1995 (4) SA
790 (A)
o The court confirmed that it has no general discretion simply to disregard a
company’s separate legal personality. (1)
o The court held that the separate legal personality of a company should not be
easily ignored. (1)
o However, circumstances do exist for example fraud, dishonesty or other improper
conduct where it would be justifiable to pierce the corporate veil. (1)
o The court held further that Botha v Van Niekerk was too rigid. (1)
o The court indicated that it would adopt a more flexible approach namely of taking
all the facts of each case into consideration when determining if the veil should
be pierced. (1)
o A balance must be struck between the need to persevere the separate legal
identity of the company against policy considerations in favour of piercing the
corporate veil. (1)
o The veil could also be pierced in relation to a specific transaction. (1)
Hülse-Reutter v Gödde 2001 (4) SA 1336 (SCA): (1)
o The court agreed that it has no general discretion simply to disregard a
company’s separate legal personality. (1)
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