JUSTICE TRAINING CENTRE — 2019 MID-TERM EXAMINATION SUBJECT: Commercial Transactions and Drafting of Contracts DATE: Tuesday, 27 August 2019 TOTAL MARKS: 100 LECTURERS: Ms. Mia Kellermen (mia@esinamibia.com) Dr. Meyer van den Berg (meyer@koep,com.na) INSTRUCTIONS TO CANDIDATES: (1) Allquestions must be answered. (2) Please write legibly. (3) Bad spelling and grammar and sloppy work will count against you. (4) With the exception of the true / false questions, do NOT answer questions with ‘one-word responses only. Use full, logical, well-constructed sentences. Responses not containing at least a verb will not be marked, (5) Refer to relevant Acts / Rogulations / Rules where applicable, (6) Where a question requires you to discuss a relevant provision or principle, itis not enough just to identify that provision or principle. You need to show that you understand the provision or principle:nae PART A: BUSINESS ENTITIES 1 Be expe ‘Question 1; + lesteteuisn eNunbo, paticponte, . hnieremou # partepants © Pret, ‘a te roi mete: wae ‘emarke} Namo five factors you need to consist wien determining what business entity willbe @ppropriate for you / your client. runes f peg Question 2; a Se “roadie [6 marks] Briefly list three pros and three cons ofthe sole proprietorship ese Ly to sepetuad Bucasdet weston 3 aol Haas [8 marks] What are the three essentala of a partnership agreement? wayyy wn @ WesNESD eeetto, * Bet + eases Question 4: oe » kave ged tp [6 marks] A partnership is dissolved by the sequestration of the estate of the partnership, and by the sequestration ofthe private estate Name six other instances when partnership will dissolve. © Mredsent » Seok, o Nato, i »Qluxton gh tire ‘Suestion 5: ees @ nto raasuschap [4 marks] AA partnership does not have separate legal identity. There are, however, some exceptions where a partnership is treated as a separate person. Briefly discuss two of these exceptions. Question 6: [6 marks] Briefly list six rights of shareholders in a company.VV communi divicundd: weed 00 ctoln diem @ Pusrerhip esta ‘Question 7: {20 marks] Bolow are twenty statements. Indicate whether each stalement is true arfelse. YOu need to answer with “rue” or false" only, 7.1. Assole traders taxed lke @ company. 7.2, The actlo pro socio is used to claim a division of the partnership asset. 1 ipasen se 8 Ly eat iy a paar agains cer pats. “iP Rais auucy # =, 7.3. Private companies must have a minimum of one sharaholder. ‘Sear ny ‘od minkstenie 7.4. Acclose corporation can hold member's interest in enother close corporation. 7.8. Application for a defensive name is made on Form CC4. T 7.6. Apartnership agreement can be verbal or in writing. T 7.7, tis possible to have a partnership agreement where one or more partner does not share in the profits ofthe partnership.’ 7.8 Under rule 42(2) ofthe High Court Rules, a partnership may sue or be sued in * its own name. T 7.9. Pre-incorporation contracts entered info on behalf of a glose corporation to be formed must be ratified or adopted after incorporation jn writing by @ majority of 7.10. Every close corporation must appoint an accounting officer. F pcregens 7.11, ineGommandterian partnership, the business of the partnership is carried on the name of the commanditarian partner. 7.12. Close corporations are taxed at the same rate as companies. |”7.13. A company’s name can only be changed with unanimous resolution of all ho shareholders, % false mehiabs 7.14, sre aris otesoctin fe canpany dot win oc z 00 company. ¥ 7.18. Despite the provisions of the Close Corporations Act, 1988 dealing with the names of close comorations, the common low of passing of stl applies to corporation names. 746. snoaronstrenton taronpnysobosared0 PeCeeON ofthe shareholders. THAT. Directors aro the uate owners ofa company- ¥ can at members itrot in acoso comoraon. F empowered to do whatever is masonshiy rant of the company’s business. 7.18, Acompany 7.19. Under common law, the rectors are “necessary end incidentl ote ma 7.20. The powers of the directors can te limited by the shareholders. T ws q nagoutin + oxi q OssouoxHpyar + Siete, von cles Merice PART B: DRAFTING OF CONTRACTS Diana Mbinda’is the Human Resources Manager of a newly incorporated entity In Namibia. The entity has been duly registered and incorporated as a private company / in terms of the applicable laws of Namibia, as ‘NamExplo Investments (Proprietary) Limited" ("Company"), with registration number 6881/2019! The Company Is the registered holder ofa mining claim, sued to it in terms of sation 27 of he Minerals ! (Prospecting and Mining) Act 33 of 1992,("Mining Claim”), in terms of which it may conduet mining operations for copper (“Project”). Diana approached your firm to advise the Company employment in Namibia and to ot Project Coordinator which the Company intends to employ with regards to the Project. Your instructions are that «a. the Project Manager wil form pert of te service level staf and he will not bey appointed to @ management position; b. the contract of employment should be for @ fixed period of 3 vears {which is the duration of the Mining Claim); and @. any possible extension or renewal'of the, contract must be in the sole’ and absoluto discretion of the Company (which shell only be valid and enforceable if notice of renewal is given by the ‘Company 1,(one) month prior fo the expliny-+ ofthe fixed torr and the exension or renewal (as the case may be) is recorded: in writing and signed by both the Company and the employee: [where further information is required, the Candidate may use his/her discretion in inserting relevant information] Teele pYomose tlause faninotion tOuseJUSTICE TRAINING CENTRE - 2019 END-OF-YEAR EXAMINATION SUBJECT: Commercial Transactions and Drafting of Contracts DATE: Friday, 06 December 2019 TOTAL MARKS: 100 LECTURERS: —Ms. Mia Kellerman (mia@esinamibis.com) Dr. Meyer van den Berg (mever@ m.na) INSTRUCTIONS TO CANDIDATES: (1) 6) All questions must be answered, Please write legibly. Bad spelling and grammar and sloppy work will count against you. With the exception of the true / false questions, do NOT answer questions with one-word responses only. Use full, logical, well-constructed sentences. Responses not containing at least a verb will not be marked. Refer to relevant Acts / Regulations / Rules where applicable, Where a question requires you to discuss a relevant provision or principle, it is not enough just to identify that provision or principle. You need to show that you understand the provision or principle.PART A: BUSINESS ENTITIES Question 4: [2 marks} Briefly explain the difference between the actio pro socio and the actio communi dividundo. Question 2: (2 marks} Briefly list two instances where a close corporation is deemed unable to pay its debts. Question 3: [4 marks} Section 63 of the Close Corporations Act 26 of 1988 lists several instances where the members of a close corporation will be jointly and severally liable with the corporation for the debts of the corporation. So, for example, where the name of the corporation is in any way used without the abbreviation “CC”, any member of the corporation who is responsible for, or who authorised or knowingly permits the omission of such abbreviation, shall be so liable to any person who enters into any transaction with the corporation from which a debt accrues for the corporation while he or she, in consequence of such omission, is not aware that he or she is dealing with a corporation. Briefly mention four other instances where a member of a close corporation will be jointly and severally liable with the corporation for the debts of the corporation. y f Question 4: [3 marks] When can @ member of a close corporation institute action on behalf of the close corporation against the other members? »[8 marks] Discuss the difference between ordinary shares and preference shares. Question 6: [3 marks} What is a company's memorandum and how do you change this document? nosak ‘ Question 7: (10 marks] Discuss the powers and duties of directors of a company. In your response, you must address at least the following points: () the general authority of directors; (i) limitations on the powers of directors; (il) to whom directors owe their duties; and (iv) the main duties of directors in respect of the company on whose board they serve. Question 8: [20 marks] Below are twenty statements. Indicate whether each statement is true or false. You need fo answer with “true” or “false” only. 8.1. Sole traders are never liable to pay value-added tax. 8.2. A partnership agreement can be written or verbal. A societas leonina is allowed in Namibia, 8.4) The sequestration of the estate of a partner does not necessarily mean that the estate of the partnership has to be sequestrated. 8.5. In Strydom v Courtega 1979 (2) SA 20 (TPD). the court stated that a partnership is full, separate legal entity,ca St 28. 8.9. 6.10. an 8.12. 8.13. 8.14. 8.15. 8.16. 8.17. The common law of passing of stil! applies tc . 'ose corporation nar , despite the Close Corporations Act dealing with names of corporations. A close corporation may acquire the member's iniersst of a member, but may not own it. The right of a member of a close corporation to call a meeting may be limited by the Association Agreement. Before directors can issue new shares, control over the unissued share capital of the company must first be transferred to the directors by means of a special resolution of the shareholders. Court sanation is required to issue shares at a discount. ‘Shareholders can never be liable for the debts of a company. ‘A company must appoint an individual person as auditor. Deregistration brings an end to the juristic personality of a company, but not the outstanding debts of the company. Both factual insolvency and commercial insolvency are proper tests to determine whether a company is unable to pay its debts Liquidation of @ company does not automatically terminate employment contracts. The directors of a company supervise the judicial management process. Shareholders are the ultimate owners of a company.fia, A company can be wourd up by speciel resolution of the directors 2.19. Aderegistered company can be restored. 8.20. Private companies do not have to be audited.PART 8: DRAFTING OF CONTRACTS “Mr Graag den Boer (“Seller”) is the owner of: Certain: Farm Droogtesonderend No. 1010 Situate: Registration Division K Khomas Region Measuring: 2 500 hectares Held by: Deed of Transfer No. 2020/2000 (and all improvements of a permanent nature thereon) (“Farm”), the Farm being agricultural land as defined in the Agricultural (Commercial) Land Reform Act 6 of 1995. ‘Mr den Boer engaged Ms Sarah QuickSeller of BestEver Estate Agents (“Agent”) to market the Farm to potential purchasers and agreed with the Agent thal she will be entitled to agent's commission in an amount equal to 5% of the purchase price at Which the Farm is sofd. The Agent secured a purchaser for the Farm, being Mr Michael Risktaker (“Purchaser”), who agreed to purchase the farm for an amount of NAD 8 Million (Eight Million Namibia Dollars) (“Purchase Price"). The Purchase Price excludes the costs of transfer and the Agent's commission, all of which shall be payable by the Purchaser. The Purchaser indicated that he would require financing to pay the Purchase Price and as such, requested that the sale agreement be made subject to such financing having been obtained by himThe Setter nominered “@P-iaw firm to attend to the drafting of ihe sele agreemant to govern the sale of the Farm as well as to attend to the transfer of the Farm into the name of the Purchaser. Please draft the applicable sale agreement and make provision ‘or the applicable ‘Sus pensive conditions.” [where further information is required, the Candidate may use his/her discretion in inserting relevant information} {50 marks]JUSTICE TRAINING CENTRE ~ 2019 SECOND EXAMINATION SUBJECT: Commercial Transactions and Drafting of Contracts DATE: Wednesday, 10 June 2020 TOTAL MARKS: 100 LECTURERS: —_ Ms. Mia Kellerman (mia@esinamibia.com) Dr. Meyer van den Berg (meyer@koep.com.na) INSTRUCTIONS TO CANDIDATES: (1) All questions must be answered, (2) Please write legibly. (3) Bad spelling and grammar and sloppy work will count.against you. (4) With the exception of the true / false questions, do NOT answer questions with one-word responses only. Use full, logical, well-constructed sentences. Responses not containing at least a verb will not be marked. (5) _ Refer to relevant Acts / Regulations / Rules where applicable. (6) Where a question requires you to discuss a relevant provision or principle, itis not enough just to identify that provision or principle. You need to show that you understand the provision or principle.PART A: BUSINESS ENTITIES {0 marks} {6 marks] yrtners in a partnership. fal esos § Briefly list three right and three obligatio! 1 + wos t Joie Question’: $ te imwoly Yiobe a ee | ‘e, 5 {5 marks] What are the essentialia of a business trust? ewouial Question 4: {4 marks] What are the requirements under section 39 of the Close Corporations Act 26 of 1988 for a close corporation to acquire its own members’ interest? ~ Question 5: . [5 marks} List five duties of directors of companies. ofan faith : Wee “botwent 23 + aan ¢ "eal Question 6: (20 marks] Below are twenty statements. Indicate whether each statement is true or false. You need to answer with “true” or “false” only. - 8:4. Court sanction is required to issue shores ata discount. © By tw 8.2. Directors are responsible for the general management of the company. T 8.3. Directors can only resign at the Annual General Meeting. F *! ssc +q 8.4. A firm cannot be appointed as auditors for a company. TW | 85: The appointment of a company secretary is not expressly required under the Companies Act 28 of 2004, Tojaa 8.6, General meetings of shareholders require 16 days’ notice. | Te-w Fey, 8.7. The minimum number of directors for private companies is two. \ Tuy, 4 @ = 8.8." The right ofa member of a close corporation to call a meeting cannot be limited by the Association Agreement. 8.9, Before directors can Goue new shares ait over tho unissued share capt of the company must fist be transferred to the directors by means of an ordinary resolution of the shareholders. fut uty F Makje m sexe te me 8.10. Deregistration brings an end to all outstanding debts of a company. FOlS@ 8.11. A company itself can bring an application for a company to be placed under Judioiél management.” \\ tau 8.12. A company’s name can be changed by ordinary resolton ofthe shareholders. Fay ~ Mgerrasion Mumbo emains {to Some —b (op jie chaye He Name We 8.13. The common law of passing off stil applies to the names of companies. [uz : think th {iy mail 8.14. Once deregistered, a close corporation cannot be restored. || Tae tae 8.15. The liquidation of a company automatically terminates employment contracts. [ 8.16. Piercing of the corporate veil does not apply to close comorations. 8.47." Shareholders aré theultimate owners‘of a company. “Te:8.18. A company can be wound up by special resolution of the directors. The ‘0 pop 8.19. In respect ¢ of close corporations; the ratification / adoption at pre incorporation contracts requires the consent of all members. , True. 8.20. Private companies do not have to be audited. ise wtiwdsPART B: DRAFTING OF CONTRACTS Faith Shavuka has successfully operated a beauty salon in Windhoek for the fast 18 years. Unfortunately, given the current COVID-19, pandemic and State of Emergency OVID = 19 Regulations promulgated by the President ofthe Republic of Namibia, she has been unable fo conduct her business as usual and 28 such, suffered immense loss of income. In rr to keep hor business runing and hopeful eco¥er from the unfortunate consequences ofthe pandemic, she approached one of her close friends, with whom she grew up and who recent inherited mons of doles, for @ loan. Ws nda Kamar aed der NAD 00 000 oon NaS : Dollars). Because the near futuro of Fit’ business's uncertain, Asra agreed that veoh eat opaying te lon oy ater 12h frome dt te amount is advanced and then in monthly Installments of NADI0 ‘000.00.’ No interest. will accrue on the loan amount. “Although Faith and Asta have been fends for years, Asra wants the terms of the loan vob tray recorded in a writonegoemen and roqustd that Fath at 095 Poy forthe costs having such agreement crafted and executed between then She also sid that Fath should pay the stamp cy payable onthe agreement Faith agreed to this. “Asra accordingly approached your fr fo draw up the loan agreement. ots 1 Duties, if Kindly draft the loan agreement. 2 3} 2 rae Ivhere futher infomation is require, the Candide may use hisher discretion in inserting relevant information] Han byeoenb . | pote §— 1. | Bayo. Kumar Hy Oat bowen kan oat t Fe) {50 marks] Residrcr rddees . loetnivon ¢ Taeepelll - at udsacuio Il HO Omtunt ig Bay Sanda” Donitiviumy este . aun cis 13 «028 680 Aprypens —br ®, Monell + Mines co eundats