Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Introduction to Law 1B > Coporate Law > Flashcards

Coporate Law Flashcards

You may prefer our related Brainscape-certified flashcards:
Civil Procedure 1L flashcards MBE flashcards MPRE flashcards
1
Q

How is the owner litigated in a sole proprietorship and are they liable for the debts of their business?

A
  • They are sued within their own personal capacity
  • They are liable for the debts acquired by the business
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Name the business entity which is separate from its members

A
  • Company
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

In a company, who appoints the directors to manage the affairs of the business?

A
  • The shareholders
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

True or False:
With a sole proprietorship, legal personality between the business and the owner is separate

A

False, they are not separate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Other than members of a company, who are these people also regarded as?

A
  • Shareholders
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

True or False:
Sole proprietorships are registered with the Companies and Intellectual Property Comission (CIPC)

A

False, not registered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What does the owner face should the business not be able to pay its debt?

A
  • Sequestration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In a partnership type business, who remains liable for debts and claims acquired by the business?

A
  • The partners
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is required to be drafted in order to create a company?

A
  • A memorandum of incorporation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which type of business shares profits and losses between the individuals who have contributed towards the business?

A
  • Partnership
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Explain what happens to the personal liability of members when a company becomes insolvent.

A
  • Members/Shareholders only risk the amount which they originally contributed but are not liable for the debts acquired by the company
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Name the type of business which can no longer be registered under the Companies Act 71 of 2008

A
  • A Close Corporation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Name the document required to register a company.

A
  • Memorandum of Incorporation (MOI)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Which business entities are not registered with the Companies and Intellectual Property Commission?

A
  • A Sole Proprietorship
  • A Partnership
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

True or False:
A company is recognised as a juristic person

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is required for a company to be recognised as a juristic person?

A
  • The Companies Intellectual Commission would have to issue the company with a Certificate of Incorporation.
15
Q

Name the Act which regulates companies

A
  • Companies’ Act 71 of 2008 (as amended in May 2011)
16
Q

Where is the capital for companies sourced?

A
  • From the shareholders
17
Q

True or False:
Companies are only managed by shareholders.

A
  • False, the staff and directors are also involved in managing companies
18
Q

List the four different types of profit companies:

A
  • Private Company
    (Pty) Ltd
  • Personal Liability Company
    Inc/Incorporated
  • Public Company
    Ltd
  • State-Owned Company
    (SOC) Limited
19
Q

Which Act allowed for the establishment of the Close Corporations?

A
  • The Close Corporations Act 69 of 1984
20
Q

Where would a CC be registered?

A
  • At the Companies and Intellectual Commission
21
Q

Why were Close Corporations initially established?

A
  • These were created through legislation to cater for small enterprises
22
Q

When did the establishment of new Close Corporations stop?

A
  • 2008
23
Q

True or False:
Close Corporation members shared a legal personality with the entity.

A

False, Close Corporations had their own separate legal personality.

24
Q

Where was capital for CCs acquired from?

A
  • Shareholders and investors
25
Q

Determine the risks of CCs.

A
  • Due to the business entity having separate legal personality, members had no personal liability towards the failure of the CC to pay its debts.
  • The risk which the members were inclined to the entity, are the contributions towards the business
26
Q

Define what profits are in the business.

A
  • The leftover income after paying expenses
27
Q

True or False:
Profits generated in the business may be utilised to pay for the personal expenses of directors.

A

False.

28
Q

What is profit retention?

A
  • The reinvestment of profits in the business
29
Q

What is the ethical duty of a business towards society and the environment referred to as?

A
  • Corporate social responsibility
30
Q

How can a business promote the well-being of society and the environment?

A
  • By adopting sustainable practices
31
Q

How do shareholders benefit in a business?

A
  • Through the distribution of dividends
32
Q

How are dividends distributed among the shareholders?

A
  • In accordance with their shareholders
33
Q

List how business profits may be utilised:

A
  • Paying off debts
  • Reinvesting
  • Promoting social responsibility
  • Distributing dividends

Introduction to Law 1B (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions