MRL2601 Assignment 2 Semester 2 2024 | Due 20 September 2024

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MRL2601 Assignment 2 Semester 2 2024 | Due 20 September 2024. All questions were answered with references.

QUESTION 1

Johannes, Phineas and Beauty are Mnandi CC’s members. Beauty has discovered that Phineas concluded a contract on behalf of Mnandi CC for the purchase of a yacht without consent of any of the other members. She is of the opinion that Mnandi CC should not be bound to the contract because the corporation’s main business is catering. In addition, she shows you the association agreement which stipulates that only Johannes is authorised to conclude contracts on behalf of Mnandi CC. Advise Beauty whether or not Mnandi CC is bound to the contract concluded by Phineas. Refer to relevant case law in your answer.

QUESTION 2

The main object of ABC (Pty) Ltd is manufacturing furniture. The Memorandum of Incorporation provides that the board of directors may appoint a managing director who will be authorised to enter into contracts on behalf of the company. Should the contract, however, exceed the amount of R150 000, prior consent of the general meeting is required. Godfried, one of the directors, buys a beach house for R350 000 from Nomagugu on behalf of ABC (Pty) Ltd. Explain whether or not ABC (Pty) Ltd can raise the restrictions to its capacity as contained in its Memorandum of Incorporation as grounds to avoid being bound to the contract. (5)

QUESTION 3

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. QUESTION 4 Helmut is a member of Belvue CC. He is the oldest of all the members and is concerned about his deteriorating health. He does not want to sell his member’s interest since the corporation’s business is doing very well. Advise Helmut whether or not he can bequeath his interest in the close corporation to his daughter. In addition, advise him whether or not effect will be given to his wishes if he makes provision in his will for the transfer of his interest to his daughter.