MRL2601/01/2024

Assignment 2

ENTREPRENEURIAL LAW
MRL2601

Semester 1

Department of Mercantile Law

 CONTENTS
Page

1 INSTRUCTIONS ON COMPLETING THE ASSIGNMENT QUESTIONS .........................................3

2 Assignment due date ........................................................................................................................3
3 Assignment 2....................................................................................................................................4

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 MRL2601/01/2/2024

Dear Student

1 INSTRUCTIONS ON COMPLETING THE ASSIGNMENT QUESTIONS

There are TWO assignments in this module. Both assignments are compulsory. Both Assignments
01 and 02 contribute to your year mark. Remember that your assignment must be numbered number 01
or 02.

You should also provide the unique number for Assignment 01 and Assignment 02. State the
module code and assignment number in all enquiries about assignments.

If you do not submit either Assignment 01 or Assignment 02 before the relevant date, your
registration will be cancelled, and you will not be admitted to the examination in MRL2601.

No extension: No extension for submission of the assignment will be granted under any
circumstances. Assignments received after the due date will be returned unmarked.

Please read this information very carefully before you start with the assignment.

• Assignment 02 is a written assignment consisting of longer type questions. The assignment

counts a total of 20 marks.
• Neatness is essential. Plan your answers in advance.
• Assignment 02 contains the type of longer questions that you can expect in the examination. You
should try to answer them under examination conditions. Had the assignment been examination
questions together counting 20 marks, you would have been given 60 minutes to complete them.
This means that you cannot write an answer that is several pages long for a 5-mark question.
• The questions in Assignment 02 are set on the law relating to Companies and Close
Corporations. You write your exam on these components of the work. You will be examined only
on Companies and Close Corporations.
• Please ensure that you submit the correct assignment to be marked.

2 Assignment due date

The closing date for the submission of the assignment is:

Assignment number Closing date

Assignment 01: 15 April 2024 at 23h00

(Unique number: 347800) (the submission link will be

open from 15 February 2024 at
08h00)
 3 Assignment 2

This is an ordinary written or typed assignment. Do not use a mark-reading card.

Answering this question gives you practice in answering the type of problem- or
discuss-type questions that you may expect in the examination. Your answer per
question should not exceed one page. You may reference your sources as you wish, i.e.
in-text, or in footnotes. A bibliography is not needed but remember to include your
Honesty Declaration Form.
Question 1

1.1 Lesedi and Simphiwe registered Furnmax (Pty) Ltd, a company that sells office
equipment. The Memorandum of Incorporation of Furnmax (Pty) Ltd indicates that
the board of directors, consisting of Lesedi, Simphiwe, Carol and Precious, can
appoint a managing director who would be authorised to contract on the company’s
behalf. However, the board has never formally appointed a managing director.
Nevertheless, Lesedi, with the full knowledge of the other directors, has contracted
with Office Supplies Ltd for the supply of office equipment to Furnmax (Pty) Ltd on
two occasions. On the third occasion that Lesedi contracted with Office Supplies Ltd,
Furnmax (Pty) Ltd denied liability for the payment for the equipment based on the fact
that Lesedi was never appointed as the managing director. Upon being sued by
Office Supplies Ltd, Furnmax (Pty) Ltd opposed the claim for payment in terms of the
agreement based on the fact that Lesedi was not authorised to contract on the
company’s behalf.

Explain with reference to relevant case law what Office Supplies Ltd would have to
prove in order to rely upon the doctrine of estoppel. (5)

1.2 Green Developments (Pty) Ltd (‘the company’) was incorporated and registered on 2
January 2024. According to its Memorandum of Incorporation the main purpose of
the company is property development. The company’s board consists of five directors
namely, Tanya, Johan, Moses, Samson and James.

Prior to the incorporation of the company, Tanya concluded a written contract with
Joe Foster in the name of the then to be incorporated company for the purchase of a
fixed property in Midrand (‘the Midrand property’) at a price of R1 million.

Since the company’s incorporation and registration, the company did not take any
action in relation to the contract concluded by Tanya for the Midrand property. With
reference to the Companies Act 71 of 2008 advise on the statutory requirements that
must be met for the contract concluded by Tanya and Joe Foster to be binding on the
company. (5)

Question 2

2.1 Puseletso has recently bought the member’s interest in Gangnam’s Tile CC. She
does not have experience of close corporations and approaches you for information
on the important characteristics of a member’s interest in a close corporation. Advise
Puseletso. (5)

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2.2 Puseletso is experiencing financial problems, and it appears that she will be
sequestrated. The other members of Gangnam’s Tile CC, who are aware of the
situation, are concerned about what effect this will have on the continued existence
of Gangnam’s Tile CC. With reference to the Close Corporations Act 69 of 1984
explain whether the continuation of the business will be affected by Puseletso’s
sequestration and what happens to the member’s interest of a member of a close
corporation when she is sequestrated. (5)

TOTAL: 20 marks