Coporate Law Flashcards
How is the owner litigated in a sole proprietorship and are they liable for the debts of their business?
- They are sued within their own personal capacity
- They are liable for the debts acquired by the business
Name the business entity which is separate from its members
- Company
In a company, who appoints the directors to manage the affairs of the business?
- The shareholders
True or False:
With a sole proprietorship, legal personality between the business and the owner is separate
False, they are not separate
Other than members of a company, who are these people also regarded as?
- Shareholders
True or False:
Sole proprietorships are registered with the Companies and Intellectual Property Comission (CIPC)
False, not registered
What does the owner face should the business not be able to pay its debt?
- Sequestration
In a partnership type business, who remains liable for debts and claims acquired by the business?
- The partners
What is required to be drafted in order to create a company?
- A memorandum of incorporation
Which type of business shares profits and losses between the individuals who have contributed towards the business?
- Partnership
Explain what happens to the personal liability of members when a company becomes insolvent.
- Members/Shareholders only risk the amount which they originally contributed but are not liable for the debts acquired by the company
Name the type of business which can no longer be registered under the Companies Act 71 of 2008
- A Close Corporation
Name the document required to register a company.
- Memorandum of Incorporation (MOI)
Which business entities are not registered with the Companies and Intellectual Property Commission?
- A Sole Proprietorship
- A Partnership
True or False:
A company is recognised as a juristic person
True
What is required for a company to be recognised as a juristic person?
- The Companies Intellectual Commission would have to issue the company with a Certificate of Incorporation.
Name the Act which regulates companies
- Companies’ Act 71 of 2008 (as amended in May 2011)
Where is the capital for companies sourced?
- From the shareholders
True or False:
Companies are only managed by shareholders.
- False, the staff and directors are also involved in managing companies
List the four different types of profit companies:
- Private Company
(Pty) Ltd - Personal Liability Company
Inc/Incorporated - Public Company
Ltd - State-Owned Company
(SOC) Limited
Which Act allowed for the establishment of the Close Corporations?
- The Close Corporations Act 69 of 1984
Where would a CC be registered?
- At the Companies and Intellectual Commission
Why were Close Corporations initially established?
- These were created through legislation to cater for small enterprises
When did the establishment of new Close Corporations stop?
- 2008
