FACULTY OF COMMERCE AND LAW

DEPARTMENT OF ACCOUNTING AND AUDITING

BACC 205: BUSINESS LAW I1
SEMESTER 1, 2021 ASSIGNMENT 2: INTAKE 34

Instructions
1. All assignments must be typed using New Times Roman font size 12, 1.5-line spacing,
justified both sides, include a standardized cover page and uploaded as a single
MICROSOFT WORD file. [DO NOT SUBMIT ASSIGNMENTS IN PDF
FORMAT]
2. It is the responsibility of the student to upload their assignments in time to avoid
inconveniences due to internet failure, system failure, power outages, or any other
unforeseen circumstances. NO submission extensions will be granted by the Department
after the deadline.
3. All queries for this assignment must be directed to the Course Leader whose contact
details are on the List of Course Leaders available on MyVista.

4. Referencing should be in strict accordance with the 6th Edition APA Guidelines.
TAKE NOTE that plagiarism is a serious academic offence and you will be penalised for
it.

5. Credit will be given for well-written and referenced assignments. Please refer to the
Tutorial Letter and other resources for more information on academic writing.
TOTAL MARKS: 50

ANSWER ALL QUESTIONS

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QUESTION 1
Identify and discuss the functions of any two-sub-committees that a company’s board of
directors may set up for the efficient management of the company. In your answer illustrate how
each committee will help the board to be more effective. [20
marks]
QUESTION 2
(a) Tapiwa and Tinashe are the respective managing and finance directors of Future-Tech Apps
(Pvt) Ltd an android app developer based in Harare. Future-Tech entered into negotiations
to acquire licensing for an app developer software from Spaceage Apps (Pvt) Ltd. The
negotiations lasted for some six months but eventually faltered. Both Tapiwa and Tinashe
were active participants in the negotiations. A month after the collapse of the negotiations,
Tapiwa and Tinashe resigned from Future-Tech and formed a new company, ZimApps,
which in three months after its incorporation managed to acquire the licensing of the app
developer software from Spaceage.
The new managing director of Future-Tech Apps is aggrieved by this development and has
approached for advice if the company has any remedies from Tapiwa and Tinashe. Advise
him.
[10 marks]
(b) Zim Cigars Ltd and Gonarezhou Tobacco Ltd are desirous of merging. They have engaged
an audit and accounting firm and a financial consultancy firm to conduct a due diligence
exercise to determine the soundness of their respective financial positions. The results
indicate that they are both in sound financial positions. Following the encouraging results of
the due diligence exercise, both companies are eager to conclude the merger transaction.
You have been requested by your CEO to draft a concise brief covering all the required
procedural steps that the companies are required to follow to successfully conclude the
merger transaction in terms of the Companies and other Business Entities Act [Chapter
24:31].
[10 marks]

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(c) The operations of ABC (Pvt) Ltd suffered a severe contraction during 2021 due to the
impact of the Sars-Cov 2 pandemic and its related lockdowns. As a result, it started
experiencing debilitating cash flow problems in the last quarter of 2020. The company’s
cash flow problems have only worsened in 2021 and it is experiencing challenges with
servicing its debts and liabilities in the ordinary course of business so severe that it is now
on the brink of insolvency. The company is desperate to restructure its finances to avoid
liquidation. The company’s Finance Director (‘FD’) has recently learnt that there is new
insolvency legislation ( Insolvency Act [Chapter 6:07]) which replaced judicial
management with corporate rescue proceedings. You have been approached by the FD
seeking advice on how can corporate rescue proceedings help XYZ (Pvt) Ltd reorganize its
finances? [10 marks]

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