Mercantile Law SG May-June 2009 ENG MEMO | Partnership | Lease

SENIOR CERTIFICATE EXAMINATION – 2009

MERCANTILE LAW STANDARD GRADE MAY/JUNE 2009 MEMORANDUM

MARKS: 300

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2 Senior Certificate Examination – Memorandum

DoE/May-June/2009

QUESTION 1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 Drawer Payee Drawee Crossed Dishonouring Refer to drawer (R/D)

(5 x 2)

(10)

1.2

1.2.1

Material alteration - Alteration on a cheque that changes the essential instruction on the cheque - E.g. Amount/name of payee that is changed - Banks do not allow any changes on cheques any more (Any 2 x 2) Immaterial alteration - Alteration that has no influence on the validity of the cheque - E.g. Crossing of cheque (2 x 2)

(4)

(4) (2) (2) (2) (2) (2) (10) (2) (2) (2) (2) (2) (10)

1.3

1.3.1 1.3.2 1.3.3 1.3.4 1.3.5

Pledge Mortgages Mortgage Mortgage Pledge

1.4

1.4.1 1.4.2 1.4.3 1.4.4 1.4.5

False True False True False

1.5

Rights of mortgagee - Obtains real right over bonded property - Insolvency of mortgagor – has preferential right over other creditors - Mortgagor fails to pay debt; can sell property for outstanding debt - Right extends over appendages - Expenses incurred for maintenance may be compensated (Any 3 x 2)

(6)

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1.6

Mortgage terminated by - Order of the court - Agreement between parties - Alienation of the property - Discharge principal debt - Merger of mortgagor and mortgagee - Prescription / Effluxion of time - Extinction of mortgagor’s title - By renunciation of rights - Destruction of mortgaged property (Any 3 x 2) (6) [50]

QUESTION 2 2.1 2.1.1 2.1.2 2.1.3 2.1.4 A D B C

(4 x 2)

(8)

2.2

Aspects in written partnership agreement - Period for which entered into - Nature of business - Contribution of each partner - Authorised withdrawals - Interest on capital and interest charged on drawings - Division of profits and losses - Salaries and/or bonuses to partners - Control and authority of partners - Rights and duties of partners - Procedure when partner dies or retires - Settlement of disputes between partners (Any 4 x 2) (8)

2.3

Circumstances when member of CC loses protection – limited liability - Where transactions are entered into on behalf of the CC without using the letters “CC” - If the number of members exceeds the number of 10 for a period of longer than six months - If a member is allowed to participate in management while he is incapable of doing so - If the business is managed in a negligent and reckless manner - If the CC is deregistered whilst it still has outstanding obligations (Any 4 x 2)

(8)

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2.4

2.4.1 2.4.2 2.4.3 2.4.4 2.4.5 2.4.6 2.4.7 2.4.8 2.4.9 2.4.10

True False False True True True False False False True

(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (20)

2.5

Requirements to accept contract entered into before incorporation - Contract must be in writing - Entered into by a person declaring that he is an agent of the company - Memorandum of company must state its objective to accept and ratify this contract - Two certified copies must be sent to the registrar together with the articles and memorandum (Any 3 x 2)

(6) [50]

QUESTION 3 3.1 3.1.1 3.1.2 3.1.3 3.1.4 3.2.1 3.2.2 3.2.3 3.3.1 3.3.2 3.3.3 3.3.4 3.4.1 3.4.2 3.4.3 3.4.4 3.4.5 D B A C B A D True False False True Sequestration order Master Satement of affairs Curator Liquidation and distribution account

(4 x 2)

(8)

3.2

(3 x 2)

(6)

3.3

(4 x 2)

(8) (2) (2) (2) (2) (2) (10)

3.4

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3.5

General rules for meetings of creditors - All meetings of creditors must be held at a time and place which are regarded as the most convenient for all the parties concerned. - The Master (or an official in the public service who has been appointed by him in general or specially for this purpose) presides as chairman at all meetings in districts with a Master’s office. - The chairman must keep minutes of the proceedings and, if he is not the Master, must send to the master, at the end of the proceedings, a certified copy of the minutes. - The chairman in outlying districts, who is not the magistrate, must indicate in his minutes the reasons for the absence of the magistrate. - The chairman at such a meeting has the right to adjourn the meeting from time to time. - The place at which a meeting is held must be accessible to the public, and the announcement of a statement is protected to the same extent as the announcement of a declaration made in a court of law. - The chairman has the right to summon any person who can provide information of importance to appear at such a meeting and/or submit books or documents which bear on the insolvent estate and contain information thereon. (Any 5 x 2) When a trustee can be dismissed - If he accepts any benefit in connection with the estate - If he wrongfully omits a creditors name or adds it to the records - If any person is given any consideration - If he offers not to investigate previous transactions of the insolvent - If claims are divided in order to increase the number of votes (Any 4 x 2)

(10)

3.6

(8) [50]

QUESTION 4 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.2 4.2.1 4.2.2 share capital promote culture, welfare, religion, art same task, promotion of business bonuses and dividends transferred to another article 21 company with similar aims A B C D F E H G (5 x 2) (4 x 2) (4 x 2) (10) (8) (8) (16)

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4.3

Matters in Articles - Shares and share certificates - Divisible profits and dividends - Meetings - Directors

(4 x 2)

(8)

4.4

Documents needed to register memorandum and articles - Original memorandum of association - Original articles of association in the prescribed form - Notice of physical and postal address of the office - Written consent in prescribed form to act as director - Written consent to act as auditor - Proof of payment of registration fee - Proof of payment of annual subscription - If one of the signatories of the memorandum does not present the documents to the registrar himself, power of attorney must be issued to a lawyer (Any 4 x 2) Restrictions to choice of name of company - Name may not be the same or nearly the same as that of company already registered - Name may not mislead the public - Must consist of at least three letters of the alphabet - If name does not form pronounceable word, name must be followed by word describing the main business of the enterprise - Words like “Government”, “State” may not be used without the permission of the State President - Words like “Bank” may not be used without the permission of the Minister of Finance - “Hotel”, “Motel” or “Botel” may not be used unless the property is used for that purpose. - Private company ends in (Pty.) Ltd - Public company ends in Ltd - Company limited by guarantee ends in “Limited” (limited by guarantee) OR “association incorporated under Section 21” (Any 4 x 2)

(8)

4.5

(8) [50]

QUESTION 5 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 Money / labour Debtor and creditor Enrichment lien Improvement Salvage (2) (2) (2) (2) (2) (10)

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5.2

5.2.1 5.2.2 5.2.3 5.2.4 5.2.5

Debtor and creditor lien Salvage lien Improvement lien Salvage lien Salvage lien

(2) (2) (2) (2) (2) (10)

5.3

Reasons for dissolution of partnership - Mutual agreement - Lapse of time for which the partnership was formed - If purpose of partnership has been fulfilled - Death of one of the partners - Change in membership of the partnership - Sequestration of one of the member’s estate or that of the partnership - One of the partners gives notice that he wants to retire (dissolution) - Order of the court - Exceeding the maximum number of members - If war breaks out and one of the partners is in enemy territory (Any 5 x 2) Mutual obligation to contribute something to partnership - Each partner must contribute something - Contributions form the basis of the partnership property - Contributions can consist of money, property, labour, etc. - Contributions form common stock and is jointly owned by partners - That which partner contributes, is to be separated from his private estate - Partner cannot deal with joint property on his own, unless it has been authorised - No partner may be excluded from control of the joint property - Contributions made unconditionally; subjected to risks of the partnership - Money contributed to the partnership on condition that it is paid back, is a loan; partner is not a partner, but a creditor - Property transferred to partnership as follows: movable (joint ownership by operation of law) immovable (registration in deeds office) incorporeal (cession of rights) - On dissolution the joint property is returned to the partners in the proportion in which it was contributed - If value of contribution cannot easily be determined, the share of the partner is determined according to his share in the profits (Any 5 x 2)

(10)

5.4

(10)

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5.5

5.5.1

(a) Tenant (b) Landlord Contract of lease Worse Remuneration

(2) (2) (2) (2) (2) (10) [50]

5.5.2 5.5.3 5.5.4

QUESTION 6 6.1 6.1.1 6.1.2 6.1.3 6.1.4 6.1.5 6.1.6 6.1.7 6.1.8 6.1.9 6.1.10 D A B C E F F A D E (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (20) (2) (2) (2) (2) (2) (10)

6.2

6.2.1 6.2.2 6.2.3 6.2.4 6.2.5

B A D E C

6.3

6.3.1

Definition voluntary surrender - The debtor himself/herself applies to have his/her estate sequestrated - In order to relieve the pressure - Placed upon him/her by the creditors. (Any 2 x 2) Requirements: voluntary surrender - The statutory formalities must have been carried out - The debtor must have enough assets to cover the costs - The debtor is insolvent - Sequestration must be to the advantage of the creditors (3 x 2)

(4)

6.3.2

(6)

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6.4

Persons disqualified to be a trustee - An insolvent - Relative of the insolvent within the third degree - Minors or other persons under disability - Persons not resident in SA - Persons with interests which conflict with the interests of the creditors - Rehabilitated insolvent who, when his estate was sequestrated, owed money which he misappropriated as trustee of another estate - Person declared incapable by the court because he has received or given an unlawful remuneration in respect of a matter connected with an insolvent estate - Corporate bodies - Person sentenced to imprisonment without the option of a fine - Person who tried to induce a creditor to vote for him as trustee - Person who at any time acted as bookkeeper, accountant or auditor for the insolvent for the period of twelve months before the sequestration - Agents who act or vote for and on behalf of a creditor at a meeting of the estate concerned (Any 5 x 2)

(10) [50]

QUESTION 7 7.1 Negotiorum gestor - Acts on behalf of person who is not present - Without his authority - To protect the property of the absent person - Actions of the NG must be reasonable and in good faith - NG may claim all his expenses from the owner - NG may not claim for his services - If NG spent more money than the amount by which the owner has been enriched, he may not recover the extra costs - NG cannot create any legal obligation between the principle and the third party (Any 5 x 2) 7.2.1 7.2.2 7.2.3 7.2.4 7.2.5 7.3.1 7.3.2 7.3.3 7.3.4 7.3.5 Auctioneer Licence Commission Reserve price Highest Factor Broker Factor Broker Del credere

(10)

7.2

(5 x 2)

(10)

7.3

(5 x 2)

(10)

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7.4

7.4.1 7.4.2 7.4.3 7.4.4 7.4.5

True True False True True

(2) (2) (2) (2) (2) (10)

7.5

Duty to pay agent’s remuneration - Principal must pay agent promised commission as agreed or as is the custom - If there is no agreement, then the agent is entitled to reasonable commission - Agent may only receive commission if he performed his task - If the agent performed, the principal must pay the commission, even if he did not benefit from it or if he withdrew his instruction - Estate agents are only entitled to commission if a certain event occurred, for example the principal and the third party are bound by the negotiations (5 x 2)

(10) [50]

QUESTION 8 8.1 8.1.1 8.1.2 8.1.3 8.1.4 8.1.5 True True False True False (2) (2) (2) (2) (2) (10)

8.2

“Huur gaat voor koop” - If the landlord of a property sells that property, the tenant may not be prejudiced - The buyer cannot evict the tenant as long as he pays rent - The new buyer can also not be bound by responsibilities the seller still has toward the tenant - The buyer becomes the new landlord as from the date he becomes the new owner of the property - The buyer had to be aware of the contract of lease or the contract had to be registered in the case of a long-term contract - The buyer had to be aware of the contract of lease in the case of a short-term contract (especially if the tenant occupied the property during the sale transaction) (Any 5 x 2)

(10)

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8.3

8.3.1 8.3.2 8.3.3 8.3.4 8.3.5 8.3.6 8.3.7 8.3.8 8.3.9

Tenant Damages Damages Events that cannot be controlled by the tenant Useful Luxurious Landlord Necessary Necessary

(2) (2) (2) (2) (2) (2) (2) (2) (2) (18)

8.4

Aspects to be agreed before contract of lease - The specific property - The duration of lease - The rent (amount)

(3 x 2)

(6)

8.5

Termination of lease - By the expiry of time - By notice - By mutual agreement - By merger of the tenant and the landlord - By the insolvency of the tenant - By the destruction of the property not due to the fault of the tenant or landlord - By cancellation by either one of the two parties - By the death of any one of the two parties (Any 3 x 2)

(6) [50]

QUESTION 9 9.1 Formalities to make a will - Must be in writing - Must be signed at the end thereof - Testator must personally sign or nominee must sign in his presence - Testator or nominee must sign in presence of two competent witnesses and they must be present at the same time - Witnesses sign in each other's presence and in front of the testator - Each page of will must be signed separately - If testator signs with a mark, a magistrate or notary must certify it at the end thereof that he has satisfied himself regarding the identity of the testator and that it is his will (Any 5 x 2)

(10)

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9.2

9.2.1

(a) (b) (c) (d)

Unilateral Declaration of will Legal Estate / Assets

(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (20)

9.2.2 9.2.3 9.2.4 9.2.5 9.2.6 9.2.7

Nominee 16 14 Master Codisil Intestate succession

9.3

Importance of office of executor - Must account to master for carrying out prescribed duties - If adhered to directives, considered an offence; is punishable - Always act in best interest of heirs - Must carry out instructions as stipulated, not own free will - If attorney is appointed, still fully responsible for actions of attorney - Estate distributed incorrectly, personally held liable to heirs - Position of good faith, may not misuse position - Negligent in execution of duties, liable to be punished (Any 5 x 2) 9.4.1 9.4.2 9.4.3 9.4.4 9.4.5 False False True True False

(10) (2) (2) (2) (2) (2) (10) [50]

9.4

TOTAL:

300

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