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SUEJECT: eomrfi*rcial Transacilons anci D;'afting of eoniracis

*ATE: 'A/ecinescia,ri, T Sepier,r ber 2A22

T'GT.&L MARKS: 100

tEeTURERS: Ms.MiaKe!lerman(rnia@esinamibia.com)
D.r. fMeyer van den Berg Lhvandenberg@unaLr"na)

EFJ $T RU CTiEFJ 5 TE EAFJ S EDAT ES :

(1) A!l quesiiorrs rnusi be answei'ed.

(2) Please urrite legibly.

(3) Bad spelling and grammar anci sloppy r,vork v'.rill couniagainstyr6u.

(4) With the exception of the irue / false questlons, do NOlanswerquesiionswiflr

one-word responses only. Use full, logical, well-constructed sentences.
Respcnses not eontaining at least a verb wlll not be marked.

(5) Referto relevantActsi Regulations/Ruleswhereapplicable.

(6) Where a quesiion requires you to dise uss a relevantprovision or principle, itis
not enough .justto identify that provision or principle. You need to show that
you understand the provision or principle.
 = -:ii iG :1il i-i*.liTr: +':]T::-
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A*thony iMenciez repr*ssniing HoLrsing Soiuiions [{ar-r:lbia (Fry/) Ltc! ("Prc.!ect

i,rir
eon.:pany"), approached Easy Bank t-irrrlted foi'a !ca.n in the arnount of
N$150 000 000, ihe pr-oceeds of whien is to be used foi" ihe ejevelopment, design, and
eonstruction of i 00 iov.r cosis resideniial i.rniis in Okahandja, rt*n:ibia ("P:-oject").

Easy Bank Limitec! agreed to exiend the loan on the following terrns:

interesi: prirne i'ate

i n te rest P a.-1,;11s6 1=' nron th !_v wiih effeci f rc;-n ih e s i g n aiu re d ate

Teirn: 'iB nronlhs ii-oi'ii the cjaie af conipieiion oi consil"*ciicn ci,-rniis

Pui-pose:the Project
Security: pleclge of i00% of ih+ shares netl oy irrir r\vlenci=z !n ihe Pi'o.jeci
Companyto ih e ien clei', plecige cf ihe Project Co*pun,r'. barik accot-t nth eid
with the lender("Pr-ojeci A.ccouni")urhich slrallalso include an unciertaking
that all proceeds of the Proleci shall be paid inio such ProjectAccount, and
a cessiorr oi th e receivables paid into th e Projeci A.ceou ni, from th e sale of
the residentialunits.

You act for the lenderand have been requested to draft the requisite agreement
governing the terms and conditions of the loan.

[50 marks]

5
 J

cii isiai": ,-iing del"ris i]i th= eo.!:;a:l\,r.

ir.';+" Both iaciual ir:soirrenc)r d ccn:*:er;i=i !;196!r.rg61 iir ;1.=, ;)-,J,)3," "=sfs ic
=;-;
deie i"i"i-t;ne ',,irj1 gii:cr-= coa. :le -1/ is ., 'lal e te ?4!l lis ,--ei:is.

i1.i5" Lic:i.iiciation of a ca;-::=an)1 eoes iTc; aL;ieiilai:eaiiy !E;-ii-riijEi= 3nl=:c).iiilei: i

con.[r'acis.

4.1 5. Th e d i i"ectofs of a ccrnoa'l)/ su ilei-vise ih e ju ci i cia I rran ag+men t pi-ocess.

4.i7 " Sharehoiders ercihe uliirnaie owners of a compa;ly.

4.o,8. A c.-:inpany can be vvound up blrspeciai resolu'iion cf the ciiiecto;-s.

4.19" A deregisiered companycan be i-esioi-ed.

4.20. Private companies do not have to be audited.

-
 :';-t'L - -"
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tj.: j ::, j.._ r

:1':3;1r.7 Al3 i,,/C,li.-\/ SIC:.3i,-:3,'r,S. .;lC'Xe,.3 r;.ii] ':i;1 ;IeE.::;-a Sta-"3,i]e : i: i,L, i C, fa:S; '..:
j:. :rjaii: '';-- --.: ll-a*i ,. ti - l!ilr :!
iir'!i .- ail "l .l i.::i: ill
- il:i\+-

!. . .4 s;i: ;: o;i;ie :c" 'g i1; ie).i' .

,.',.?-" -l-iie rig:rl of ? Jat-,'rei;o pari,e!paie i:': i:''le rre,-:agii'i'ie i-:ioi :i:: :iai'i:ie:"S:r;il i;]ay
i:e limited by ihe pai-inei"sh;p eg;"eer-n*nt"

4.3" Pannersh!p ag:-eei-neiris rilust ce irr wr"iting.

4"4. The assets of a parineishio vssi in the partilers.

4.5. Tie actio cominuni dirriiLrt-16, is used b!, a partner againsi anoiher pa:inei- to
claimcompensationforiosses, paymeniof profitswithheld,deliverycf pt"operiy
to partnership or rendering of acccuntby administrative paftner.

4.6. The sole trustee of a trust may a!so be a beneficiary.

4.7 . The assets of a trust vesi in the trustees.

4.8. ln Stryciom v Courtega 1979 (2) SA20 (TPD), the courlstated ihata partnership
has separate legal personaliiy.

4.9. Oniy naturalperscns can l^rold shares in private companies.

4.10. Court sanction is required to iqsue shares at a discount.

4.11. As part of the requiremenisto set up a trust, each beneficiarymustsign an

acceptance of trust.

4.12. Directorscannevei-beci-iininali),1!ab!efci-acispeiroiiaedintheircapac;tiesas
directcrs.
Question ,i:
.
ttr* marksj
Yourctient, Jack Ha,rkness, app;-eaches yoi: for ad'.rice. 5-{e and his friends, [Micke5r
Smith and HarolciSay.on, ri.,entio stari a eonsuliancybus!ness. They have eieciieej
ihai the most appi-opriaie "oi"m oI business entity fcg' ther-n w!t! be a partnei"ship.
HolaJer/er, they harre variours questions on partnei"ships and ha',te asked for your
adviee. ln preparatibn far iheir first meeting with yor-r, ihey e-rnail you varicuts
qu esiions for you r.in pui.

1.1. What are the requiremenis for a vaiic! partnership agreement?

[3 r-naiksj

I "2. Does each purin=r ha,,re io conti-ibute i-noney, ci- can ilre.rr gsililltute sometliing
else? if the iatter, whaiwiilconstitute a valid conti-ibuiion?

[3 marks]

1.3. Do they have to agree on a particular partnership interest raiios (ie hor.,r pi'ofits
and losses v,rill be distribuied)? Are there any resirictions on whatthey can
agree on? lf they do not agree on such a ratio, hov,rwill profit and losses be
distributed?
[4 marks]

Question 2:
[10 marks]
Define the concepi of share capital and brieflv diseuss the four rules of capiial
maintenance.

Question 3:
[10 rnarks]
Discuss the *:;wers and dUlieF of d of a conrpanSr. !n your response, you
must address at least the following points: (i) ihe generai auihoi1t-v ef direciors;
(ii) lirnitations on tire powers of ciiieciors; (iii)io whoiii ciii-eciois owe their duties; ar:d
iirr) ihe main duties of ciirectars in respeci of the cornpanyon wi'lose boara tirey serve.