Companies Act, 2008 Flashcards
Does the doctrine of constructive notice apply to companies?
S 19(4) states that a person must not be regarded has having received notice or knowledge of the contents of a document merely because it has been filed or is available for inspection. However S 19(5) states that a person may be regarded as having knowledge of any provision of the MOI that is a restricted provision or prohibits the amendment of provisions IF the company’s name includes “RF”. A person is also deemed to know that a directors of a personal liability company are jointly and severally liable
What are the solvency and liquidity test based on?
The financial information of the company so long as it is maintained and in accordance with S 28 & S 29!
Which section deals with reckless trading?
S 22 - Reckless trading is carrying on a business recklessly, with gross negligence or with an interest to defraud a person or for any fraudulent purpose.
This means, that a contravention of S 22 of the Companies Act could link to the Auditor issuing a Reportable Irregularity in terms of S 45 of the APA.
What are the record keeping requirements of the Companies Act?
Why do you need to know this?
S 24 states that the company must maintain:
- A copy of the MOI (including alterations)
- Record of all directors: both current directors and for past directors for up to 7 years. With their names, ID/DOB, etc
- Copies of all reports/material presented at AGM, AFS and accounting records for up to 7 years
- Copies of written communication issued to shareholders (for up to 7 years)
- Minutes of meetings and resolutions of the directors and committees (also for 7 years)
- A securities register
This is to ensure compliance with the companies act but it is also required so that the auditor knows what documents he can use when performing procedures
How long is a financial year?
Usually 12 months - the first year ends after incorporation and ends not more than 15 months afterwards. Thereafter it must end on the anniversary
