Tutorial Letter 101/0/2024: Company Law 1

MCL5901/101/0/2024
Tutorial Letter 101/0/2024
COMPANY LAW 1
MCL5901
Year module
MERCANTILE LAW
This tutorial letter contains important information about your module.
BARCODE
MCL5901/101/0/2024
CONTENTS
Page
1 INTRODUCTION .......................................................................................................................... 4
2 PURPOSE AND OUTCOMES ...................................................................................................... 6
2.1 Purpose ........................................................................................................................................6
2.2 Outcomes ..................................................................................................................................... 6
3 CURRICULUM TRANSFORMATION ........................................................................................... 7
4 CONTACTING THE UNIVERSITY VIA EMAIL ............................................................................. 7
4.1 Lecturer(s) .................................................................................................................................... 8
4.2 Department ................................................................................................................................... 9
4.3 College of Law Information Centre ................................................................................................ 9
4.4 University ...................................................................................................................................... 9
5 RESOURCES ............................................................................................................................. 11
5.1 Prescribed book(s) ...................................................................................................................... 11
5.2 Recommended book(s) ............................................................................................................... 12
5.3 Electronic reserves (e-reserves) .................................................................................................. 12
6 STUDENT SUPPORT SERVICES .............................................................................................. 14
6.1 The Unisa First-Year Experience Programme ............................................................................. 14
6.2 Companies falsely advertising Unisa services............................................................................. 15
7 STUDY PLAN ............................................................................................................................. 16
8 PRACTICAL WORK ................................................................................................................... 16
9 ASSESSMENT ........................................................................................................................... 16
9.1 Assessment criteria..................................................................................................................... 16
9.2 Assessment plan ........................................................................................................................ 19
9.3 Assessment due dates ................................................................................................................ 19
9.4 Submission of assessments........................................................................................................ 19
9.4.1 Types of assignments and descriptions ......................................................................................... 20
9.5 The assessments ........................................................................................................................ 21
9.6 Other assessment methods ........................................................................................................ 23
9.7 The examination ......................................................................................................................... 23
9.7.1 Invigilation/proctoring .................................................................................................................. 23
10 ACADEMIC DISHONESTY ........................................................................................................ 24
10.1 Plagiarism ................................................................................................................................... 24
10.2 Cheating ..................................................................................................................................... 25
10.3 Academic and administrative matters.......................................................................................... 25
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10.3.1 Academic matters ....................................................................................................................... 25

10.3.2 Administrative matters ................................................................................................................ 25
11 STUDENTS LIVING WITH DISABILITIES .................................................................................. 26
12 FREQUENTLY ASKED QUESTIONS ........................................................................................ 26
13 SOURCES CONSULTED ........................................................................................................... 26
14 IN CLOSING ............................................................................................................................... 26
15 ADDENDUM ............................................................................................................................... 27
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Dear Student
1 INTRODUCTION
Welcome to the LLM (B Curriculum) and the module Company Law 1 (MCL5901). We hope that
you will find it both interesting and rewarding.
Unisa is a comprehensive open distance e-learning (CODeL) higher education institution.

The comprehensiveness of our curricula encapsulates a range of offerings, from strictly
vocational to strictly academic certificates, diplomas and degrees. Unisa's "openness" and its
distance eLearning character result in many students registering at Unisa who may not have
had an opportunity to enrol in higher education. Our CODeL character implies that our
programmes are carefully planned and structured to ensure success for students ranging
from the under-prepared but with potential to the sufficiently prepared.
Teaching and learning in a CODeL context involves multiple modes of delivery ranging from
blended learning to fully online. As a default position, all post graduate programmes are
offered fully online with no printed study materials, while undergraduate programmes are
offered in a blended mode of delivery where printed study materials are augmented with
online teaching and learning via the learner management system – myUnisa. In some
instances, undergraduate programmes are offered fully online as well.
Furthermore, our programmes are aligned with the vision, mission and values of the
University. Unisa's commitment to serve humanity and shape futures combined with a clear
appreciation of our location on the African continent, Unisa's graduates have distinctive
graduate qualities which include
• independent, resilient, responsible and caring citizens who are able to fulfil and serve
in multiple roles in their immediate and future local, national and global communities
• having a critical understanding of their location on the African continent with its
histories, challenges and potential in relation to globally diverse contexts
• the ability to critically analyse and evaluate the credibility and usefulness of
information and data from multiple sources in a globalised world with its ever-
increasing information and data flows and competing worldviews
• how to apply their discipline-specific knowledges competently, ethically and creatively

to solve real-life problems
• an awareness of their own learning and developmental needs and future potential
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MCL5901 is an online module.
Whether a module is offered either as blended (meaning that we use a combination of printed
and online material to engage with you) or online (all information is available via the internet),
we use myUnisa as our virtual campus. This is an online system that is used to administer,
document and deliver educational material to you and support engagement with you. Look
out for information from your lecturer as well as other Unisa platforms to determine how to
access the virtual myUnisa module site. Information on the tools that will be available to
engage with the lecturer and fellow students to support your learning will also be
communicated via various platforms.
You are encouraged to log into the module site on myUnisa regularly (that is, at least twice
per week).
We offer three modules dealing with company law, namely Company Law 1 (MCL5901),
Company Law 2 (MCL5902) and Corporate Insolvency Law (MCL5903). Students who do all
the modules will gain knowledge of and an insight into company law as a whole, at
postgraduate level.
The composition of the module is as follows:
LLM Company Law 1 (MCL5901)
 Introduction and background
 Legal personality and registration of companies
 Corporate finance
 Corporate capital
 Capacity and representation
 Corporate governance: shareholders
 Groups of companies
 Remedies and enforcement
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This tutorial letter applies only to MCL5901.
2 PURPOSE AND OUTCOMES

2.1 Purpose
The purpose of the module is for students to gain advanced knowledge, research skills, specific
skills, and applied competence with regard to the legal personality and registration of a
company, corporate finance; corporate capital; the capacity and representation of a company;
governance of a company by its shareholders; the concept of groups of companies; and the
remedies available to shareholders for sustained personal intellectual development, productive
economic activity, and valuable contributions to society.
2.2 Outcomes
A Master of Laws student is actively engaged in becoming a specialised professional in the
process of preparing for further, more specific and advanced knowledge in a specific field in the
work environment. As such he or she develops and holds certain values and integrates
knowledge and skills to achieve these purposes. The specific outcomes show how knowledge,
skills and values are integrated. Students must demonstrate their achievement of the outcomes
by means of activities in online study materials, formative and summative assessments.
The outcomes of this course are that students:
• Recognise and interpret issues regarding the legal personality and registration of a
company; corporate finance; corporate capital; the capacity and representation of a
company; governance of a company by its shareholders; the concept of groups of
companies; and the remedies available to shareholders by showing a comprehensive,
reasoned and critical understanding of the theory, authoritative sources of law, research
methodologies and techniques relevant to company law.
• Critique and evaluate research, authoritative sources of law and scholarly debates
regarding the legal personality and registration of a company; corporate finance;
corporate capital; the capacity and representation of a company; governance of a
company by its shareholders; the concepts of groups of companies; and the remedies
available to shareholders in order to make sound theoretical judgements.
• Recognise, identify, analyse and solve complex multifaceted legal situations and
problems relating to the legal personality and registration of a company; corporate
finance; corporate capital; the capacity and representation of a company; governance of
a company by its shareholders; the concept of groups of companies; and the remedies
available to shareholders.
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• Demonstrate comprehensive and systematic academic knowledge and skills to take a

leading role in legal practice, research and the shaping of the legal dispensation relating
to the legal personality and registration of a company; corporate finance; corporate
capital; the capacity and representation of a company; governance of a company by its
shareholders; the concept of groups of companies; and the remedies available to
shareholders.
3 CURRICULUM TRANSFORMATION
Unisa has implemented a transformation charter, in terms of which the university has placed
curriculum transformation high on the teaching and learning agenda. Curriculum
transformation includes student-centred scholarship, the pedagogical renewal of teaching
and assessment practices, the scholarship of teaching and learning, and the infusion of
African epistemologies and philosophies. All of these will be phased in at both programme
and module levels, and as a result of this you will notice a marked change in the teaching
and learning strategy implemented by Unisa, together with the way in which the content is
conceptualised in your modules. We encourage you to embrace these changes during your
studies at Unisa in a responsive way within the framework of transformation.
The values and beliefs that govern the running of business operations are based on
constitutional values and principles and often reflect African values that comprise amongst
others, the concept of ubuntu. Corporate law and the law regulating other forms of business
enterprises, at first glance is a technical commercial subject based mainly on statute. However,
upon scrutiny several transformation values are reflected in the course content. The
Constitution of the Republic of South Africa, 1996 and its values that also imbue values of
ubuntu play an important role, particularly in the interpretation of legislation. Promoting these
values in the development of the common law plays a pivotal role in ensuring that the law
adapts to suit the community it serves. This evolving nature of law is foundational to the
principle of transformative constitutionalism.
4 CONTACTING THE UNIVERSITY VIA EMAIL

To assist Unisa to safeguard your personal information, please ensure that you only use your
myLife e-mail account when communicating with the university. We will not be responding
to any emails sent from private email addresses.
By using your myLife e-mail account, the university has a reasonable assurance that we are
communicating with you, as your e-mail address contains your student number and you use
your login credentials to access the account.
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Unisa may only communicate with a student using a private e-mail address under the
following circumstances:
• New applicants who are enquiring about information for the purpose of applying for
admission.
• New applicants who do not yet have a myLife e-mail account, because they have been
admitted but not yet registered.
• Where a student requires assistance in resolving myLife e-mail account access
problems.
Please be aware that any personal information you publish on public platforms, such as
social media platforms and WhatsApp groups, is not covered by the provisions of Protection
of Personal Information Act 4 of 2013. Any personal information published in the public
domain is not considered private and can, therefore be accessed by external parties with
access to such platforms.
4.1 Lecturer(s)
All queries that are not purely administrative, but are about the content of this module, should
be directed to your lecturers.
The names of your lecturers will be posted on the myModules system. In the meantime,
contact the department who will direct you to the relevant lecturers.
Please contact us if you have any queries about the actual content of this module – in other
words, if you have any academic queries. The lecturers will not entertain any queries
concerning tips and/or topics to be covered in the examination paper. Unfortunately, we cannot
help with administrative queries.
You are welcome to visit us to discuss any queries about or problems with the contents of this
module. However, please make an appointment beforehand, otherwise you run the risk of the
lecturer not being available to see you. Our offices are situated in the Cas van Vuuren
Building, Main Campus, Muckleneuk Ridge, Pretoria.
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PLEASE NOTE: Letters to lecturers may not be enclosed with or inserted into
assignments.
4.2 Department
The e-mail address for the Department of Mercantile Law is merclaw@unisa.ac.za. Please have
your tutorial material with you when you contact us.
4.3 College of Law Information Centre
For College-specific queries, please email lawdeanery@unisa.ac.za or

CLAWinquiries@unisa.ac.za. The college can also be contacted by phoning 012 429
4718/4860/6166/3253/4428.
Please send all e-mails from your myLife e-mail account. If you send an e-mail directly to
a Unisa e-mail address, include your student number in the subject line to ensure that your e-
mail is correctly routed for an advisor for processing.
4.4 University
To contact the university, please dial 080 000 1870. Remember to keep your student number
at hand when contacting the university. The Unisa Student Communication Service Centre
will be open weekdays from 08:00 – 16:00 (South African Standard Time).
Please send all e-mails from your myLife e-mail account. If you send an e-mail directly to
a Unisa e-mail address, include your student number in the subject line to ensure that your e-
mail is correctly routed for an advisor for processing. Please check the list carefully and
send an enquiry to one e-mail address only. This will ensure that there is no confusion as
to who must respond, thereby preventing unnecessary delays in the response or the email
portrayed as spam. Students should only forward enquiries to the Registrar and Deputy
Registrar in instances where those enquiries could not be resolved at other levels.
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TYPE OF QUERY EMAIL ADDRESS TELEPHONE NUMBER

ICT
myUnisa myUnisaHelp@unisa.ac.za 012 429 3111 (Option 2)
myLife myLifeHelp@unisa.ac.za 012 429 3111 (Option 2)
STUDENT ADMISSIONS AND REGISTRATIONS
General applications and registration
study-info@unisa.ac.za
queries
College of Law jus@unisa.ac.za
International students international@unisa.ac.za
Exemptions adhoccredits@unisa.ac.za
Access and matriculation exemption ame@unisa.ac.za
Re-admissions study-info@unisa.ac.za
STUDENT ASSESSMENT ADMINISTRATION
General assignment enquiries assign@unisa.ac.za
General exam queries exams@unisa.ac.za 012 429 8641
Aegrotat exams aegrotats@unisa.ac.za 012 429 8641
Exam arrangements for students with examdisabled@unisa.ac.za
012 429 8641
disabilities
Exam admission examadmission@unisa.ac.za 012 429 8641
International students examinternational@unisa.ac.za + 27 12 429 2268
Remarks remark@unisa.ac.za 012 429 8641
Purchase of an exam script purchasescript@unisa.ac.za 012 429 8641
FINANCE
Student account enquiries finan@unisa.ac.za 012 429 2441/4299
STUDENT FUNDING
General student funding enquiries letsomp@unisa.ac.za 012 441 5600
STUDY MATERIAL
Despatch enquiries despatch@unisa.ac.za
Contact addresses of the various administrative departments appear on the Unisa website:
http://www.unisa.ac.za/sites/corporate/default/Contact-us/Student-enquiries.
Please include the student number in all correspondence
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5 RESOURCES
5.1 Prescribed book(s)
The material for the various topics was drawn from several sources. As this module is
presented at postgraduate level, a high standard will be maintained. You will be expected to
work independently, and to appraise critically the various sources to which you are referred. A
proper grasp of the relevant principles and material is essential and is far more important than a
mere incoherent restatement of facts.
Knowledge of company law at LLB-level is assumed.
The work you must study for this module is set out in Appendix ‘A’ to this tutorial letter.
We have uploaded on myUnisa a Glossary of useful corporate law terms which are relevant to
MCL5901.The Glossary is available in English, Afrikaans and isiZulu. We have also uploaded a
note which deals with the impact of the Constitution of the Republic of South Africa, 1996 on
company law and the globalisation of company law. The note also deals with the principles of
Africanisation in company law.
The prescribed material for this module consists of the following:
(1) FHI Cassim, MF Cassim, R Cassim, R Jooste, J Shev and J Yeats Contemporary
Company Law (2021) 3 ed Juta, Claremont.
You must purchase the prescribed book, as it will not be available from the library, nor
will the library be able to provide you with photocopies or extracts from this book.
(2) Juta’s Pocket Statutes The Companies Act 71 of 2008 and Regulations 18th edition (or
later edition) (2023) Juta Cape Town or any later edition.
You are required to study certain sections of the Companies Act 71 of 2008 and the Close
Corporation Act 69 of 1984. We require you to acquire a copy of the Companies Act 71 of 2008.
You may purchase any edition of the Juta’s Pocket Statutes. Alternatively, you can download
the latest version of the Acts from www.gov.za. Choose the ‘Documents’ icon and then ‘Acts’.
Please refer to the list of official booksellers and their addresses in Study@Unisa brochure.
Prescribed books can be obtained from the University’s official booksellers. If you have difficulty
locating your book(s) at these booksellers, please contact the Prescribed Books Section at
(012) 429 4152 or e-mail vospresc@unisa.ac.za.
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5.2 Recommended book(s)

There are no recommended books for this module.
5.3 Electronic reserves (e-reserves)
The prescribed periodical articles and prescribed cases are listed under the appropriate
headings in Appendix ‘A’.
It is possible to obtain the prescribed periodical articles and prescribed cases in one of the
following two ways:
(a) Downloading these from the Electronic Reserves on the Unisa Library website; or
(b) Ordering photocopies from the library.
The articles and case law referred to in the reading list (Appendix ‘A’) are available in
electronic format on the Unisa Library website by following the link ‘Find course reading
material’ on the website.
Articles that are not available under ‘MCL5901 Electronic Reserves 2024’ under this link, are
available on the Unisa Library website by following the link ‘Find the OASIS catalogue’ on the
website and searching for the specific article by title or author.
You are encouraged to use this self-service option by downloading the material as this is the
quickest way of gaining access to the information resources.
The library’s postal request system remains available to students who do not have access to the
necessary facilities.
Please consult Study @Unisa for further information regarding the procedures you must follow.
E-reserves can be downloaded from the library webpage.

Find e-reserves. More information is available at: http://oasis.unisa.ac.za/search/r
From time to time your lecturers will post questions on the online discussion forums on
myModules. The questions will focus on the various topics dealt with in MCL5901. Please post
your suggested answer to the question on the discussion forum. We strongly encourage you to
participate in the online discussion forum questions as doing so will assist you with your exam
preparation.
Your lecturers will also post on myModules PowerPoint presentations on the various topics in
MCL5901. Please work through the presentations and listen to the audio clips in the
presentations after you have studied the work dealing with that specific topic.
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5.4 Library services and resources

The Unisa Library offers a range of information services and resources. The library has
created numerous library guides, available at http://libguides.unisa.ac.za
Recommended guides :
• For brief information on the library, go to https://www.unisa.ac.za/library/libatglance
• For more detailed library information, go to
http://www.unisa.ac.za/sites/corporate/default/Library
• Frequently Asked Questions,
visit https://www.unisa.ac.za/sites/corporate/default/Library/Frequently-Asked-Questions
• For research support and services such as the Personal Librarian service
visit http://www.unisa.ac.za/sites/corporate/default/Library/Library-services/Research-
support
• For research support and services such as the Information Search Librarian's Literature
Search Request (on your research topic) service,
visit http://www.unisa.ac.za/sites/corporate/default/Library/Library-services/Research-
support.
• For library training for undergraduate
students, visit https://www.unisa.ac.za/sites/corporate/default/Library/Library-
services/Training
• Lending Services https://www.unisa.ac.za/sites/corporate/default/Library/Library-
services/Lending-services
• Services for Postgraduate students -
https://www.unisa.ac.za/sites/corporate/default/Library/Services-for-Postgraduates
• Support and Services for students with disabilities -
https://www.unisa.ac.za/sites/corporate/default/Library/Services-for-students-with-
special-needs
• Library Technology Support -https://libguides.unisa.ac.za/techsupport
• Finding and using library resources and tools -
http://libguides.unisa.ac.za/Research_skills
• A–Z list of library databases – https://libguides.unisa.ac.za/az.php
Important contact information:
• Technical problems encountered in accessing library online services: Lib-

help@unisa.ac.za
• General library-related queries: Library-enquiries@unisa.ac.za
• Queries related to library fines and payments: Library-fines@unisa.ac.za
• Interlibrary loan service for postgraduate students: libr-ill@unisa.ac.za
• Literature Search Service: Lib-search@unisa.ac.za
• Social media channels: Facebook: UnisaLibrary and Twitter: @UnisaLibrary
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6 STUDENT SUPPORT SERVICES
The Study @ Unisa brochure is available on myUnisa: www.unisa.ac.za/brochures/studies
This brochure contains important information and guidelines for successful studies through
Unisa. If you need assistance with regard to the myModules system, you are welcome to use
the following contact details:
• Toll-free landline: 0800 00 1870 (Select option 07 for myModules)
• mymodule22@unisa.ac.za or myUnisaHelp@unisa.ac.za
You can access and view short videos on topics such as how to view your calendar, how to
access module content, how to view announcements for modules, how to submit assessment
and how to participate in forum activities via the following link:
https://dtls-qa.unisa.ac.za/course/view.php?id=32130
Registered Unisa students get a free myLife e-mail account. Important information, notices
and updates are sent exclusively to this account. Please note that it can take up to 24 hours
for your account to be activated after you have claimed it. Please do this immediately after
registering at Unisa, by following this link: myLifeHelp@unisa.ac.za
Your myLife account is the only e-mail account recognised by Unisa for official
correspondence with the university and will remain the official primary e-mail address on
record at Unisa. You remain responsible for the management of this e-mail account.
6.1 The Unisa First-Year Experience Programme
Many students find the transition from school education to tertiary education stressful. This is
also true in the case of students enrolling at Unisa for the first time. Unisa is a dedicated open
distance and e-learning institution, and it is very different from face-to-face/contact institutions. It
is a mega university, and all our programmes are offered through either blended learning or fully
online learning. It is for this reason that we thought it necessary to offer first-time students
additional/extended support to help them seamlessly navigate the Unisa teaching and learning
journey with little difficulty and few barriers. We therefore offer a specialised student support
programme to students enrolling at Unisa for the first time – this is Unisa’s First-Year
Experience (FYE) Programme, designed to provide you with prompt and helpful information
about services that the institution offers and how you can access information. The following FYE
services are currently offered:
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FYE Website Email Support
www.unisa.ac.za/FYE fye@unisa.ac.za
FYE1500
Post
myUnisa; Study
Registration
Referrals to Skills; Academic &
Orientation Digital Literacies;
other support
services i.e. etc
Counselling;
Reading & Writing
workshops
To ensure that you do not miss out on important academic and support communication
from the SRU, please check your myLife inbox regularly.
6.2 Companies falsely advertising Unisa services
Some companies and social media pages have been falsely advertising Unisa online
information and various services to assist Unisa students. In the process, companies either
solicit money fraudulently from students or make money through online advertising with no
benefit to students.
These companies are in no way associated or related to Unisa.
We request that students only use official Unisa sites and platforms as any other platforms
will provide you with incorrect information and/or act illegally which will be harmful to your
studies.
Unisa will always use official communication channels (eg Unisa website, myUnisa, Unisa
social media platforms, myLife e-mail) to communicate with students.
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Please use the following Unisa platforms for official Unisa information:
• www.unisa.ac.za
• https://my.unisa.ac.za
• https://www.facebook.com/UniversityOfSouthAfrica
• https://twitter.com/unisa
• https://www.linkedin.com/company/unisa
7 STUDY PLAN
Use your Study @Unisa brochure for general time management and planning skills.
8 PRACTICAL WORK
There are no practicals for this module.
9 ASSESSMENT
9.1 Assessment criteria
Outcome 1
Recognise and interpret issues regarding the legal personality and registration of a company;
corporate finance; corporate capital; the capacity and representation of a company; governance
of a company by its shareholders; the concept of groups of companies; and the remedies
available to shareholders by showing a comprehensive, reasoned and critical understanding of
the theory, authoritative sources of law, research methodologies and techniques relevant to
company law.
Assessment criteria:
• Complex, multifaceted issues relating to the legal personality and registration of a

companies; and the remedies available to shareholders are identified in real or simulated
fact scenarios.
• Daily occurrences of the acquisition of legal personality and registration of a company;
issues relating to corporate finance; issues relating to corporate capital; issues relating to
the capacity and representation of a company; issues relating to the governance of a
company by its shareholders; issues relating to the concept of groups of companies; and
the exercising of remedies available to shareholders are analysed, interpreted and
critiqued at an advanced level within a legal framework.
• Theory is applied to practice (and vice versa) in the context of the legal personality and
registration of a company; corporate finance; corporate capital; the capacity and
representation of a company; governance of a company by its shareholders; the concept
of groups of companies; and the remedies available to shareholders by means of
relevant case and literature studies.
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• Advanced information retrieval and processing skills are applied.

• Students play a leading role in developing company law within a national and global
context to cope with contemporary challenges and problems.
Outcome 2
Critique and evaluate research, authoritative sources of law and scholarly debates regarding the
legal personality and registration of a company; corporate finance; corporate capital; the
capacity and representation of a company; governance of a company by its shareholders; the
concepts of groups of companies; and the remedies available to shareholders in order to make
sound theoretical judgements.
• Complex problems relating to the legal personality and registration of a company;
corporate finance; corporate capital; the capacity and representation of a company;
governance of a company by its shareholders; the concept of groups of companies; and
the remedies available to shareholders are interpreted, analysed, and explained within
different contexts.
• Impartial and balanced perspectives are provided on complex, multi-dimensional
problems relating to the legal personality and registration of a company; corporate
finance; corporate capital; the capacity and representation of a company; governance of
a company by its shareholders; the concept of groups of companies; and the remedies
• Scholarly and judicial debates are considered and critically evaluated in terms of
students’ acquired knowledge base.
Outcome 3
Recognise, identify, analyse and solve complex multifaceted legal situations and problems
relating to the legal personality and registration of a company; corporate finance; corporate
capital; the capacity and representation of a company; governance of a company by its
shareholders; the concept of groups of companies; and the remedies available to shareholders.
• Engage with current research and scholarly or professional literature pertaining to the
legal personality and registration of a company; corporate finance; corporate capital; the
capacity and representation of a company; governance of a company by its
shareholders; the concept of groups of companies; and the remedies available to
shareholders.
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• The most appropriate and authoritative legal materials are selected to solve problems
relating to the legal personality and registration of a company; corporate finance;
company by its shareholders; the concept of groups of companies; and the remedies
• Different solutions to a problem relating to the legal personality and registration of a
companies; and the remedies available to shareholders are considered and critiqued,
and the consequences of each solution are contemplated for future legal development.
• Substantiated responses are provided, based on students’ accumulated advanced
knowledge base.
Outcome 4
Demonstrate comprehensive and systematic academic knowledge and skills to take a leading
role in legal practice, research and the shaping of the legal dispensation relating to the legal
personality and registration of a company; corporate finance; corporate capital; the capacity and
representation of a company; governance of a company by its shareholders; the concept of
groups of companies; and the remedies available to shareholders.
• Current research and scholarly or professional literature relating to the legal personality
and registration of a company; corporate finance; corporate capital; the capacity and
of groups of companies; and the remedies available to shareholders are used
independently.
• Legal text is read, understood and interpreted within a contextual framework.
• Views expressed are reflected upon and critically evaluated and debated.
• Legal text is used to support arguments and solutions related to the legal personality and
registration of a company; corporate finance; corporate capital; the capacity and
of groups of companies; and the remedies available to shareholders.
• Students use analytical skills to produce critical and well-founded legal arguments
relating to the legal personality and registration of a company; corporate finance;
company by its shareholders; the concept of groups of companies; and the remedies
available to shareholders with confidence, and to take full responsibility for their
arguments.
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9.2 Assessment plan
• To complete this module, you will be required to submit three assessments,

comprising Assignment 01, Assignment 01 and the Examination.
• All information about when and where to submit your assessments will be made
available to you via the myModules site for your module.
• Due dates for assessments, as well as the actual assessments are available on the
myModules site for this module.
• To gain admission to the examination, you will be required to submit two assignments.
• The marks obtained for the assignments will – provided you obtain an examination mark
of at least 40% – count 25% of your final mark. You need to obtain a subminimum of at
least 40% in the examination before your year mark will be taken into account.
• You will receive examination information via the myModules sites. Please watch out
for announcements on how examinations for the modules for which you are registered
will be conducted.
• The examination will count 75% towards the final module mark.
9.3 Assessment due dates
• There are no assignment due dates included in this tutorial letter.
• Assignment due dates will be made available to you on the myUnisa landing page for
this module. We envisage that the due dates will be available to you upon registration.
• Please start working on your assessments as soon as you register for the module.
• Log on to the myUnisa site for this module to obtain more information on the due dates
for the submission of the assessments.
9.4 Submission of assessments
• Unisa, as a comprehensive open distance e-learning institution (CODeL), is moving

towards becoming an online institution. You will therefore see that all your study
material, assessments and engagements with your lecturer and fellow students will
take place online. We use myUnisa as our virtual campus.
• The myUnisa virtual campus will offer students access to the myModules site, where
learning material will be available online and where assessments should be
completed. This is an online system that is used to administer, document, and deliver
educational material to students and support engagement between academics and
students.
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• The myUnisa platform can be accessed via https://my.unisa.ac.za. Click on the

myModules 2024 button to access the online sites for the modules that you are
registered for.
• The university undertakes to communicate clearly and as frequently as is necessary to

ensure that you obtain the greatest benefit from the use of the myModules learning
management system. Please access the announcements on your myModules site
regularly, as this is where your lecturer will post important information to be shared
with you.
• When you access your myModules site for the module/s you are registered for, you
will see a welcome message posted by your lecturer. Below the welcome message
you will see the assessment shells for the assessments that you need to complete.
Some assessments may be multiple choice, some tests, others written assessments,
some forum discussions, and so on. All assessments must be completed on the
assessment shells available on the respective module platforms.
• For written assessments, please note the due date by which the assessment must be
submitted. Ensure that you follow the guidelines given by your lecturer to complete the
assessment. Click on the submission button on the relevant assessment shell on
myModules. You will then be able to upload your written assessment on the
myModules site of the modules that you are registered for. Before you finalise the
upload, double check that you have selected the correct file for upload. Remember, no
marks can be allocated for incorrectly submitted assessments.
9.4.1 Types of assignments and descriptions

Both Assignment 01 and Assignment 01 are compulsory assignments, which means that if not
submitted, the result on the student’s academic record will be absent.
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9.5 The assessments

As indicated in section 9.2, you need to complete three assessments for this module,
comprising Assignment 01, Assignment 01 and the Examination. There are no assignments
included in this tutorial letter. Assignments and due dates will be made available to you on
myModules for this module. We envisage that the due dates will be available to you upon
registration.
The assignments are an extremely important part of this module. In an assignment you must
prove your ability to deal with the subject matter. The purpose of the assignments is:
• To help you work through the study material;
• To teach you to make a synthesis from various sources; to gather material and
present it in a logical, ordered fashion and with convincing arguments (merely
copying the study material is not acceptable; and
• To allow you to accumulate marks during the course of the year towards your final
mark for the module.
At postgraduate level you probably do not require much guidance in completing an assignment.
However, the following guidelines may be of assistance, especially to those students who have
not previously studied through Unisa:
Students normally complain that they find it difficult to rewrite the study material in their own
words. You have to master this skill as merely copying the study material is not acceptable at
postgraduate level. However, there are three easy steps to accomplish this:
(1) Study the relevant study material until you understand it. While you are reading the
particular section, chapter, article or case make notes or lists of the key words and
concepts.
(2) Summarise that material in your own words by using your notes and list of key
words.
(3) Use the study material to finalise your summary with references to case law and
other relevant authority.
At postgraduate level, it is of utmost importance that you demonstrate the ability to integrate
various sources, analyse them critically, and formulate an answer that addresses the pertinent
issues raised by the question.
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You are expected to consult textbooks, prescribed articles and cases when answering an
assignment and examination question and to then cite these materials as authority in your
answer. Case law must be cited in full when used for the first time in the text (eg Kanhym Bpk v
Oudsthoorn Munisipaliteit 1990 (3) SA 252 (C)); thereafter an abbreviated reference is sufficient
(e.g. Kanhym). Textbooks can be referred to in your answer by merely giving the author’s name
and page number (e.g. Snyman 20). Articles are referred to by citing the author’s name, the
journal (or its abbreviation like SALJ for South African Law Journal) and the page number (e.g.
Whiting 1986 SALJ 38). The full bibliographical details are then supplied in a bibliography at the
end of your assignment (e.g. Snyman CR Criminal Law (1995) Butterworths; Whiting R ‘Joining
in’ 1986 SALJ 38).
Do not refer to sources you have not personally consulted. Remember that failure to
acknowledge a source that you have used in an assignment or examination constitutes
plagiarism and will be penalised.
• Note that you should use footnotes in your assignment answers and not endnotes.
• Direct quotations from case law and other sources should be avoided in so far as it is
possible. We can only establish whether you understand a principle or issue if you
describe or explain it in your own words. Long verbatim quotations will not earn you the
marks that your own (correct) explanation would have earned. If you do quote directly,
the quotation must be short, accurate and acknowledged fully.
• Names of cases and Latin expressions must be typed in italics.
• Neatness is a prerequisite. Plan your answers in advance. For essay-type answers you
should do rough drafts before you write the final answer.
• We restrict the length of assignment answers to teach you to write concise and logical
legal arguments. It is very easy to write long, rambling answers but such answers do not
earn good marks. You must learn to summarise your material so that you can answer a
question in a factually correct, concise and logical manner. This will teach you to give
similar answers in an examination. A student whose assignment exceeds the permissible
length will be penalised.
• The page restrictions regarding the length of your assignments are guidance on the
maximum number of pages that you may write. Please also be guided by the mark
allocation for each question.
• Please ensure that your name and address, student number, subject and module, and
assignment number are written clearly on the assignment cover. This information must
be correct.
• Submit each assignment separately.
• Often students lose marks because they do not approach problem-type questions
correctly. When answering such questions, it is important to first clarify for yourself the
area of work where the answer must be sought. Once you have done this, set out the
relevant legal principles. Deal only with those principles that relate to the given facts.
Next, APPLY these principles to the facts. This is where a number of students lose
marks - they set out the law in some detail, but then do not illustrate how it applies to the
factual situation they have been asked to solve. Finally, state your conclusion.
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Although students may work together when preparing assignments, each student
must write and submit his or her own individual assignment. In other words, each
student must submit his or her own work. It is unacceptable for students to submit
identical assignments on the basis that they worked together. That will amount to
plagiarism and none of these assignments will be marked. Furthermore, these
students may be penalised or subjected to disciplinary proceedings of the
University.
9.6 Other assessment methods

There are no other assessment methods for this module.
9.7 The examination
Examination information and details on the format of the examination will be made available
to you online via the myUnisa site. Look out for information that will be shared with you by
your lecturers and for communication from the university.
Please note that if you wish to defer your studies you may only do so until the last day of
registration.
9.7.1 Invigilation/proctoring
Since 2020 Unisa conducts all its assessments online. Given stringent requirements from
professional bodies and increased solicitations of Unisa’s students by third parties to unlawfully
assist them with the completion of assignments and examinations, the University is obliged to
assure its assessment integrity through the utilisation of various proctoring tools: Turnitin,
Moodle Proctoring, the Invigilator App and IRIS. These tools will authenticate the student’s
identity and flag suspicious behaviour to assure credibility of students’ responses during
assessments. The description below is for your benefit as you may encounter any or all of these
in your registered modules:
Turnitin is a plagiarism software that facilitates checks for originality in students’ submissions
against internal and external sources. Turnitin assists in identifying academic fraud and ghost
writing. Students are expected to submit typed responses for utilisation of the Turnitin software.
The Moodle Proctoring tool is a facial recognition software that authenticates students’ identity
during their Quiz assessments. This tool requires access to a student’s mobile or laptop
camera. Students must ensure their camera is activated in their browser settings prior to their
assessments.
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The Invigilator “mobile application-based service does verification” of the identity of an

assessment participant. The Invigilator Mobile Application detects student dishonesty-by-proxy
and ensures that the assessment participant is the registered student. This invigilation tool
requires students to download the app from their Play Store (Google, Huawei and Apple) on
their mobile devices (camera enabled) prior to their assessment.
IRIS Invigilation software verifies the identity of a student during assessment and provides for
both manual and automated facial verification. It has the ability to record and review a student’s
assessment session. It flags suspicious behaviour by the students for review by an academic
administrator. IRIS software requires installation on students’ laptop devices that are enabled
with a webcam.
Students who are identified and flagged for suspicious dishonest behaviour arising from the
invigilation and proctoring reports are referred to the disciplinary office for formal proceeding.
Please note:
Students must refer to their module assessment information on their myModule sites to
determine which proctoring or invigilation tool will be utilised for their formative and summative
assessments.
Turnitin will be used for purposes of Assignment 02 in MCL5901.
10 ACADEMIC DISHONESTY
10.1 Plagiarism
Plagiarism is the act of taking the words, ideas and thoughts of others and presenting them
as your own. It is a form of theft. Plagiarism includes the following forms of academic
dishonesty:
• Copying and pasting from any source without acknowledging the source.
• Not including references or deliberately inserting incorrect bibliographic information.
• Paraphrasing without acknowledging the original source of the information.
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10.2 Cheating
Cheating includes, but is not limited to, the following:
• Completing assessments on behalf of another student, copying the work of another

student during an assessment, or allowing another student to copy your work.
• Using social media (e.g. WhatsApp, Telegram) or other platforms to disseminate

assessment information.
• Submitting corrupt or irrelevant files, this forms part of examination guidelines
• Buying completed answers from so-called “tutors” or internet sites (contract cheating).
For more information about plagiarism, follow the link below:
https://www.unisa.ac.za/sites/myunisa/default/Study-@-Unisa/Student-values-and-rules
10.3 Academic and administrative matters

10.3.1 Academic matters
All module content-related enquiries must first be addressed to the relevant module lecturers.
As already indicated above, all such enquiries must be made from your mylife@unisa.ac.za
email account. Where your module lecturer(s) is unable to assist, such enquiries can be
escalated to the Chair of the Department in which your module is located. The Chair of the
Department is the one with the power to resolve issues, is authorised to make such
interventions, and has the final say in matters relating to the administration of a module. Such
escalation must be done via the departmental administrative staff.
Contact information for all the departmental administrative staff in the department is captured
below.
Name Email address

Department of Mercantile Law merclaw@unisa.ac.za
Ms S Mothibedi mothims@unisa.ac.za
10.3.2 Administrative matters
The contact information for all administrative departments is included on pages 8, 9, 11, 12
and 22 of this Tutorial Letter. Please address any administrative issues (for example,
registration issues, finance-related issues, graduation issues, auditing of a qualification, etc)
with the relevant support department and not the college.
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11 STUDENTS LIVING WITH DISABILITIES
The Advocacy and Resource Centre for Students with Disabilities (ARCSWiD) provides an
opportunity for staff to interact with first-time and returning students with disabilities.
If you are a student with a disability and would like additional support or need additional time
for assessments, you are invited to contact Prof R Cassim (cassir@unisa.ac.za) to discuss
the assistance that you need.
12 FREQUENTLY ASKED QUESTIONS
Please see Study @Unisa brochure.
13 SOURCES CONSULTED
Please refer to the addendum.
14 IN CLOSING
We trust that you will enjoy studying this module and that you will find the knowledge you gain in
the process to be of great value. We wish you all the best with your studies.
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15 ADDENDUM
PRESCRIBED READING LIST
This appendix contains the prescribed reading material for MCL5901. You will note that there is
some overlapping between different sections of the prescribed reading list.
Should it be necessary, you will be sent further tutorial letters to keep you informed of
developments pertaining to the module. Also look out for announcements on myUnisa.
(I) INTRODUCTION AND BACKGROUND
(a) Cassim Contemporary Company Law, chapter 1.

(b) Companies Act 71 of 2008, sections 1 and 223-225; schedule 5.
(II) LEGAL PERSONALITY AND REGISTRATION OF COMPANIES
(a) Cassim Contemporary Company Law, chapter 2; discussion on non-profit companies in

chapter 3; discussion on company names in chapter 4, discussion on pre-incorporation
contracts in chapter 4.
(b) Companies Act 71 of 2008, sections 7-21, 23 and 160; schedules 1 (item 1) and 5 (item 5).
(c) Close Corporations Act 69 of 1984, section 65.
(d) READ Companies Act 71 of 2008, sections 185-195; schedules 2 and 4.
Legal personality and registration of companies
(e) CMC Di Ravenna SC and Others v Companies and Intellectual Property Commission and
Others 2020 (2) SA 109 (GP) paras 24-40, confirmed in Cooperativa Muratori and
Cementisti and Others v Companies and Intellectual Property Commission and Others
2021 (3) SA 393 (SCA) paras 5-12.
The court held that the definition of a ‘company’ in section 1 did not expressly include external
companies. This meant that the legislature intended to exclude external companies from the
definition of a ‘company’. This interpretation is fortified by the fact that there is a specific
legislative intent in the Companies Act 71 of 2008 to reduce the regulation of external
companies to promote investment in the South African markets. You should understand the
difference between a foreign company, an external company, and a domesticated company
under the Companies Act 71 of 2008.
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(f) Director: Mineral Development, Gauteng Region v Save the Vaal Environment 1999 (2) SA
709 (SCA).
► This case deals, inter alia, with the provisions of section 30(1) of the Companies Act 61 of
1973 that any company, association, syndicate, or partnership having the acquisition of gain as
its object, may not have more than twenty (20) members unless it is registered as a company.
The court had to decide whether an organisation that seeks to protect the environment and
thereby the value of the properties of its members, was carrying on a business with the object of
acquisition of gain. The Companies Act 71 of 2008 contains no provision similar to section 30(1)
of the Companies Act 61 of 1973, which means that there is no longer any limit on, for example,
the number of partners that a partnership may have. However, the provision contained in
section 31 of the Companies Act 61 of 1973 that no association of persons formed for the
purpose of carrying on business for the acquisition of gain will be a body corporate (i.e. have
legal personality), unless it is registered as a company or registered in terms of another law, is
repeated in section 8(3) of the Companies Act 71 of 2008. A partnership, for example, will
therefore still not be regarded as a separate juristic person.
► A specific exception to the separate legal existence of a company is found in section 19(3) of
the Companies Act 71 of 2008 that provides for the joint and several liability of directors and
past directors of a personal liability company (the new version of what used to be a section
53(b) company under the Companies Act 61 of 1973) for debts of the company contracted
during their period of office.
► Take note that the Companies Act 71 of 2008 contains a provision in section 20(9) which is
almost the same as the one in section 65 of the Close Corporations Act 69 of 1984, providing
that ‘[i]f, on application by an interested person or in any proceedings in which a company is
involved, a court finds that the incorporation of the company, any use of the company, or any
act by or on behalf of the company, constitutes an unconscionable abuse of the juristic
personality of the company as a separate entity, the court may ... (a) declare that the company
is to be deemed not to be a juristic person in respect of any right, obligation or liability of the
company or of a shareholder of the company or, in the case of a non-profit company, a member
of the company, or of another person specified in the declaration; and ... (b) make any further
order the court considers appropriate to give effect to a declaration contemplated in paragraph
(a).’ Section 65 of the Close Corporations Act refers to a ‘gross’ abuse, but the drafters of the
Companies Act 71 of 2008 preferred the word ‘unconscionable’ which is derived from the
decision of the court in Botha v Van Niekerk although this was described as ‘too rigid’ by the
Supreme Court of Appeal in Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd (Pty)
Ltd and Others [1995] 2 All SA 543 (A).
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(g) Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others [1995] 2 All SA 543
(A).
(h) Hülse-Reutter and others v Gödde 2001 (4) SA 1336 (SCA).
► This case refers to the situation under the Companies Act 61 of 1973. In this case the court
once again had to decide whether or not to pierce the corporate veil. The issue before the court
was whether property of the appellants had been validly attached to confirm jurisdiction. The
outcome depended, inter alia, on whether the separate juristic personality of a company of
which appellants were the sole shareholders should in the circumstances be ignored. It was
alleged that the appellants had used the company to perpetrate a fraud. Scott JA stated that the
circumstances in which a court will pierce the corporate veil were far from settled in our law. He
then formulated the following test (at 1346C): ‘… as a matter of principle in a case such as the
present there must at least be some misuse or abuse of the distinction between the corporate
entity and those who control it which results in an unfair advantage being afforded to the latter.’
(i) Ex parte Gore NO and Others [2013] 2 All SA 437 (WCC).
► Consider the differences between the requirements in the test formulated by Scott JA in the
Hülse-Reutter case and the requirement provided for in section 20(9) of the Companies Act 71
of 2008. Also consider whether the court has a general discretion to disregard a company’s
separate legal personality under section 20(9) of the Companies Act 71 of 2008 – unlike what
was held regarding piercing the veil in the Amlin case.
(j) Cassim R ‘Piercing the veil under section 20(9) of the Companies Act 71 of 2008: A new
direction’ (2014) 26(2) SA Merc LJ 307-337.
(k) The Rt Hon Lady Justice Arden DBE ‘Piercing the Corporate Veil – old metaphor, modern
practice?’ (2017) 1 JCCL & P 1-16.
Non-profit companies
(l) Cuninghame v First Ready Development 249 [2010] 1 All SA 473 (SCA).
(m) Mongalo TH ‘Must a section 21 non-profit company be concerned only with charitable,
benevolent or philanthropic activities?: A closer look at the SCA judgment in Cuninghame
v First Ready Development 249’ (2010) 127 SALJ 195-207.
(n) Cassim MF ‘The contours of profit-making activities of non-profit companies: An analysis

of the new South African Companies Act’ (2012) 56(2) Journal of African Law 243-267.
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Similar names
(o) Peregrine Group (Pty) Ltd v Peregrine Holdings Ltd 2000 (1) SA 187 (W).
(p) Peregrine Group (Pty) Ltd v Peregrine Holdings Ltd 2001 (3) SA 1268 (SCA).
► The two cases deal with section 45 of the Companies Act 61 of 1973 and the circumstances
under which a company should be ordered to change its name. The meaning of ‘undesirability’
(which was not defined in the Act) is discussed. Compare the reasons given by the Supreme
Court of Appeal to those of the court a quo. Note that section 11 of the Companies Act of 2008
now provides specific criteria for the names of companies and no longer refers to
‘undesirability’. However, the prescribed cases can be useful in helping to determine the
circumstances upon which a name might be ‘confusingly similar’ (as referred to in s 11(2)(b) of
the Companies Act of 2008) and therefore not acceptable.
(q) Polaris Capital (Pty) Ltd v Registrar of Companies and Another 2009 (3) SA 207 (CPD).
► The appellant, a South African registered company formerly known as African Harvest
Growth Asset Managers (Pty) Ltd, by special resolution changed its name to Polaris Capital
(Pty) Ltd. The Registrar of Companies, the first respondent, registered the name change, but
the second respondent, Polaris Capital Management Inc, a corporation incorporated in the USA,
objected to the name change. The registrar upheld the objection and ordered the appellant to
change its name within 60 days. The appellant thereupon applied to the CPD for the setting-
aside of the registrar's order. The CPD dismissed the application but granted leave to the
appellant to appeal. Amongst other things, the court dealt with the nature of proceedings
brought in terms of section 48, as well as the issue of locus standi in terms of section 45(2) of
the Companies Act 61 of 1973.
(r) Polaris Capital (Pty) Ltd v Registrar of Companies and Another 2010 (2) SA 274 (SCA).
► The SCA concluded that the CPD correctly dismissed the appellant's application.
(s) Azisa (Pty) Ltd v Azisa Media CC 2002 (4) SA 366 (W).
► This case deals with similar names, specifically regarding close corporations. Compare this
case with the cases dealing with similar company names.
► In general, you should note the difference that the Companies Act 71 of 2008 effects in
respect of company names and the criteria which are now stipulated in the Act itself (section
11). Section 160(1) of the Companies Act 71 of 2008 makes provision for an application to the
Companies Tribunal for a determination whether a name satisfies the requirements of the Act.
Section 160(3) then refers to the Tribunal’s rights and duties regarding such application.
► Keep in mind that according to section 160(4), the court can be approached to review a
decision of the Tribunal regarding the name of a company and further in accordance with
sections 16(1)(a) and 16(4), the court can require a company to amend its Memorandum of
Incorporation, which amendment can obviously include a name change.
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Pre-incorporation contracts
(t) Cassim MF ‘Some difficult aspects of pre-incorporation contracts in South African law and
other jurisdictions’ (2012) 13(1) Business Law International 5-26.
(III) CORPORATE FINANCE
(a) Companies Act 71 of 2008, sections 35-43, 49-56 and 95-111; schedule 5 (item 6).
(b) Cassim Contemporary Company Law, chapter 8 and chapter 14.
Shares
► Take note that the Companies Act 71 of 2008 no longer allows a company to be registered
with par-value shares (section 35(2)) but provision is made for par value shares of a pre-existing
company. Also take note that the Companies Act 71 of 2008 refers to ‘debt instruments’ rather
than ‘debentures’, which is dealt with under section 43, dealing with ‘securities other than
shares’.
(c) Hlumisa Investment Holdings RF Ltd and Another v Kirkinis and Others 2020 (5) SCA 419
(SCA).
► The question before the court was whether a shareholder could claim damages against the
directors on the ground that their shares had declined in value due to losses sustained by the
company as a result of the directors’ conduct. The court held that the diminution in share value
merely reflected the loss suffered by the companies, and that such a claim for reflective loss is
not sustainable in South African law.
(d) Reezen Ltd v Excellerate Holdings Ltd & Others 2018 (6) SA 571 (GJ).
►This case dealt with the power of directors to issue shares. In particular, the court discussed
section 41(3) of the Companies Act 71 of 2008. This section gives boards the power to issue
shares without shareholder approval up to a maximum of 30% of the voting power of all shares
in a class. The court noted that section 41(3) protects shareholders against excessive or
impermissible dilution of their shareholding in the company. It held that if the 30% limit is
exceeded and consent is not given by the shareholders, then the transaction will be void, even if
the board acted in good faith and the shares were sold for a reasonable consideration.
Pre-emptive rights
Do not confuse the rights of pre-emption in section 8(2)(b) of the Companies Act 71 of 2008
(that the securities of a private company must be restricted from free transferability) with the
pre-emptive rights that shareholders in a private company enjoy under section 39. Section 39
confers on shareholders of a private company a pre-emptive right to be offered a percentage
equal to the shareholders’ general voting power immediately before the offer is made of any
new shares that the company proposes to issue, before those shares may be offered to a third
party. Section 39 deals with the issue of shares while section 8(2)(b) deals with the transfer of
shares. See further Cassim Contemporary Company Law, chapter 3, para 3.4.3 (c).
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Security offers
(e) Gold Fields Ltd and another v Harmony Gold Mining Co Ltd and others 2005 (2) SA 506
(SCA).
► This case dealt with the meaning of two concepts, namely an offer for ‘subscription’ and an
offer to the ‘public’ as they appeared in section 145 of the Companies Act 61 of 1973. The facts
related to an attempted takeover where Harmony offered to acquire shares from Gold Fields
Ltd’s shareholders in exchange for shares in Harmony. The court held that an undertaking to
take up shares in exchange for other shares (or any other consideration) qualified as a
subscription, thus rejecting the finding of the court a quo that the term ‘subscription’ was limited
to undertakings to take up shares for cash. Take note that section 99(2) of the Companies Act
71 of 2008 now refers to ‘an initial public offering’ and does not use the term ‘subscription’.
Section 95 does not mention the term ‘subscription’ either and refers merely to an ‘offer of
securities’. As regards the meaning of the term ‘public’, the court explained that the
shareholders of Gold Fields Ltd were not selected as members of the public at large, because
they were the owners of specific private property (shares in Gold Fields Ltd) that Harmony
wanted to acquire. This decision has been subject to academic criticism. Section 95(1)(h)(i) of
the Companies Act 71 of 2008 now includes a definition of ‘offer to the public’ as including offers
of securities to be issued by a company to any section of the public whether selected as, inter
alia, the holders of any particular class of property or in any other manner. This definition has
the effect of overruling the decision in Gold Fields v Harmony and clarifies the legal position in
this regard.
(f) MF Cassim ‘Gold Fields v Harmony: A lost opportunity to clarify section 145 of the
Companies Act’ (2005) 122 SALJ 269.
(IV) CORPORATE CAPITAL
(a) Companies Act 71 of 2008, sections 1, 4 and 44-48.
(b) Cassim Contemporary Company Law, chapter 8.
Financial assistance
(c) Gradwell (Pty) Ltd v Rostra Printers Ltd 1959 (4) SA 419 (A) and Lipschitz NO v UDC
Bank Ltd 1979 (1) SA 789 (A).
► The tests applied in these decisions are still relevant to determine whether financial
assistance for the acquisition of shares is being given, in which case section 44 will apply.
► Note that section 45 is very similar to section 44 but only applies to loans or other financial
assistance for any purpose to a director or to a related or inter-related company or
corporation or its directors or members (in spite of the heading that refers only to directors).
Company distributions
► Section 1 of the Companies Act 71 of 2008 contains a detailed definition of the term
‘distribution’. In short, a distribution refers to payments to shareholders either as a return on
share capital or as a return of share capital.
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Acquisition of shares
(d) Capital Appreciation Ltd v First National Nominees (Pty) Ltd and Others 2022 (6) SA 67 (SC
A)
A decision by a company’s board to acquire its own shares is subject to the requirements of
sections 114 and 115 of the Companies Act 71 of 2008 if, considered alone, or together with
other transactions in an integrated series of transactions, it involves the acquisition by the
company of more than 5% of the issued shares of any particular class of the company’s shares.
This case deals with the interpretation and application of section 48(8)(b) of the Companies Act
71 of 2008, in relation to sections 114 and 115, and section 164 of the Companies Act 71 of
2008. The court held that section 48(8)(b) is linked by way of sections 114 and 115 to the
appraisal rights in section 164 of the Companies Act 71 of 2008.
► A company acquiring its own shares must comply with section 48 of the Companies Act 71 of
2008. When shareholders exercise their appraisal rights and the company makes a payment to
the shareholders, this is not treated as an acquisition by a company of its own shares requiring
compliance with the requirements of section 48. The redemption by the company of any
redeemable shares is also not treated as an acquisition in terms of section 48. Refer to section
48(2) for the requirements to be satisfied when the board of a subsidiary company acquires
shares of its holding company. See further Cassim Contemporary Company Law, chapter 8,
para 8.2.3.
(V) CAPACITY AND REPRESENTATION

(a) Companies Act 71 of 2008, sections 15-20, 66 and 69; schedule 1 (item 1(1)(a)).
(b) Close Corporations Act 69 of 1984, section 2(4).
(c) Cassim Contemporary Company Law, chapter 5; discussion on the Memorandum of

Incorporation in chapter 4.
Capacity of a company
► Unlike section 33(1) of the Companies Act 61 of 1973 which provided that ‘[a]ny company
formed … shall have the capacity determined by the main object stated in its memorandum and
there shall be included in its capacity unlimited objects ancillary to the said main object except
such specific ancillary objects as are expressly excluded in its memorandum …’ and schedule 2
which set out the common powers of companies, section 19(1)(b) of the Companies Act 71 of
2008 provides that a company is a juristic person from the date of registration of its
Memorandum of Incorporation and has all the legal powers and capacity of a natural person,
except those that a juristic person cannot exercise or that are excluded by the company’s
Memorandum of Incorporation. This provision is similar to the one in section 2(4) of the Close
Corporations Act 69 of 1984 which states that ‘[a] corporation shall have the capacity and
powers of a natural person of full capacity in so far as a juristic person is capable of having such
capacity or of exercising such powers.’ It is clear from the wording of section 19(1)(b) of the
Companies Act 71 of 2008 that a company’s Memorandum of Incorporation may provide
otherwise – in other words a company’s Memorandum of Incorporation may limit, restrict or
qualify the purposes, powers or activities of that company. However, note the provisions of
section 20(1) of the Companies Act 71 of 2008. This provision serves the same purpose as the
provision regarding ultra vires acts in section 36 of the Companies Act 61 of 1973.
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Doctrine of constructive notice
► The doctrine of disclosure and the doctrine of constructive notice are effectively repealed by
the Companies Act 71 of 2008 in section 19(4). According to this section, '... a person must not
be regarded as having received notice or knowledge of the contents of any document relating to
the company merely because the document ... has been filed; or ... is accessible for inspection
at an office of the company.' An exception is contained in section 19(5). The exception pertains
to where the Memorandum of Incorporation contains any restrictive conditions applicable to the
company combined with any requirement for the amendment of such a condition in addition to
the requirements of section 16 (in terms of section 15(2)(b)) or where it prohibits the
amendment of any of its particular provisions (in terms of section 15(2)(c)). This is subject to the
condition that the company's name includes the element ‘(RF)’ (as contemplated in section
11(3)(b)) and the company's Notice of Incorporation or a subsequent Notice of Amendment has
drawn attention to the relevant provision (as contemplated in section 13(3)). A second exception
where the doctrine of constructive notice applies is in the case of a personal liability company.
Persons dealing with personal liability companies are deemed to be aware of the effect of the
directors and former directors joint and several liability for debts and liabilities of the company
contracted during their periods of office.
Representation
► Section 66(1) of the Companies Act 71 of 2008 provides that ‘[t]he business and affairs of a
company must be managed by or under the direction of its board, which has the authority to
exercise all of the powers and perform any of the functions of the company, except to the extent
that this Act or the company’s Memorandum of Incorporation provides otherwise.’
The Turquand rule
► Section 20(7) provides that a person, other than a director, shareholder or prescribed officer,
dealing with a company in good faith, is entitled to presume that the company in making any
decision in the exercise of its powers, has complied with all the formal and procedural
requirements in terms of the Act, the Memorandum of Incorporation and any rules of the
company, unless the person knew or reasonably ought to have known that the company failed
to do so. Although this provision is interpreted by some to be a codification of the Turquand rule,
this is probably not correct since the Turquand rule applies only where the authority of a director
or the board to act on behalf of the company is subject to an internal formality. Section 20(7)
applies to any decision or exercise of a company’s power and in respect of any formal or
procedural requirement.
As the Companies Act 71 of 2008 gives no indication of what would be regarded as a formal or
procedural (as opposed to a substantive) requirement, it is not clear under what circumstances
it would apply. Section 20(8) then goes on to state that section 20(7) must be construed
concurrently with, and not in substitution for, any relevant common law principle relating to the
presumed validity of a company’s actions. This would presumably include both the Turquand
rule and the doctrine of estoppel.
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(d) Farren v Sun Service SA Photo Trip Management 2003 (2) All SA 406 (C).
► In this case the court was faced with the apparent conflict that existed between the provisions
of section 228 of the Companies Act 61 of 1973 that required approval by an ordinary resolution
(subsequently amended to require a special resolution) of the shareholders of the company for
a sale of the whole or greater part of the undertaking or assets of the company, and the
Turquand rule. The court in this case decided that the object of the legislature in section 228
was to protect the shareholders and that effect must therefore be given to that intention. The
application of the Turquand rule would result in a failure to protect the shareholders and thus
the provisions of section 228 should prevail over the Turquand rule. Perhaps the courts will use
the same test for purposes of section 20(7) to decide whether a requirement is merely formal
and procedural, or whether it is substantive and must therefore be complied with.
(e) Stand 242 Hendrik Potgieter Road Ruimsig and another v Göbel NO and others 2011 (5)
SA 1 (SCA).
► The Supreme Court of Appeal confirmed the principle as held in the Farren case.
(f) One Stop Financial Services (Pty) Ltd v Neffensaan Ontwikkelings (Pty) Ltd & another
(20028/14) [2015] ZAWCHC.
(g) Blue IQ Investment Holdings v Douglas Southgate (JA28/13) [2014] ZALAC 21; (2014) 35
ILJ 3326.
(h) Makate v Vodacom Ltd 2016 (4) SA 121 (CC).
►The Constitutional Court discussed the concepts of ostensible authority and estoppel, and
whether ostensible authority is distinct from estoppel.
(i) FHI Cassim and MF Cassim ‘The authority of company representatives and the Turquand
Rule revisited’ (2017) 134(3) SALJ 639-664.
►This article analyses the judgment of the Constitutional Court in Makate v Vodacom Ltd 2016
(4) SA 121 (CC) and discusses the concepts of ostensible authority and estoppel, and the
Turquand Rule. Do you think that ostensible authority and estoppel are synonymous? Also
consider whether the Turquand rule forms part of the doctrine of estoppel or whether the
Turquand rule and estoppel are separate, independent rules.
(j) V Madlela and PM Lehloenya ‘Representation of a company when contracting with another
person under South African company law: Makate v Vodacom (Pty) Ltd [2016] ZACC 13 (2018)’
(2018) 39(2) Obiter 547-560.
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MCL5901/101/0/2024
(VI) CORPORATE GOVERNANCE: SHAREHOLDERS
(a) Companies Act 71 of 2008, sections 1, 26, 35, 41, 50-52, 57-65 and 146; schedule 1 (item
4).
(c) Letseng Diamonds Ltd v JCI Ltd and Others; Trinity Asset Management (Pty) Ltd and
Others v Investec Bank Ltd and Others 2007 (5) SA 564 (W).
(d) Letseng Diamonds Ltd v JCI Ltd and Others 2009 (4) SA 58 (SCA).
(e) Trinity Asset Management (Pty) Ltd and others v Investec Bank Ltd and others 2009 4 SA
89 (SCA).
(f) Barry v Clearwater Estates NPC and Others 2017 (3) SA 364 (SCA).
► Before shareholders can decide whether to attend a meeting to vote for or against
resolutions, they need to have sufficient information to be able to come to an intelligent
conclusion on the matter on which they are asked to vote. A shareholder has the right to insist
that he or she and his or her fellow shareholders do not receive information which is inaccurate
and to enforce such right by applying for an interdict to prevent a meeting from proceeding.
Notwithstanding that a company and a third party with whom it entered into an agreement have,
at all times, considered themselves to be bound by the agreement, an individual shareholder in
the company has locus standi to approach the court regarding the validity of the agreement.
► Note the definitions of ‘shareholder’, ‘securities’ and ‘member’ in section 1 of the Companies
Act 71 of 2008.
(g) Madlela V ‘The appointment of a proxy “at any time” in terms of section 58 of the Companies
Act 71 of 2008: Richard Du Plessis Barry v Clearwater Estates NPC [2017] ZASCA 11’
(2019) 22 PER/PELJ 1-27.
(h) Cassim MF ‘Enhancing corporate democracy by the use of shareholder proxies’ (2019) 40(1)
Obiter 47-60.
(i) CDH Invest NV v Petrotank South Africa (Pty) Ltd 2018 (3) SA 157 (GJ) paras 79-84.
►This case dealt with an application to court in terms of section 61(12) of the Companies Act
71 of 2008, for a court order requiring a company to convene a meeting. The court held that it
would not readily intervene. Unless special circumstances require otherwise, a court must be
satisfied that calling a shareholders’ meeting was bona fide intended, with a legitimate purpose,
and in the company’s best interests.
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MCL5901/101/0/2024
(VII) GROUPS OF COMPANIES
(a) Companies Act 71 of 2008, sections 1 (specifically the definitions of ‘group of companies’,
‘holding company’, ‘distribution’, ‘financial statement’, ‘inter-related’, ‘related’, ‘relationship’,
‘subsidiary’ and ‘wholly-owned subsidiary’), 2-4, 11(2), 12(7) and (8), 30(3) and (5), 41(1)
and (4), 43(5), 44(2), 45(2), 48, 56(2)(d), 76(2), 77(3)(e)(vii), 78(3) and (8), 93(1)(b), 94(2),
(4), (7) and (8), 95(1), 96(1), 112(1), 113(1), 115(2) and (4), 117(1) and (2), 118(1), 123(2),
124(1) and (4), 125(1), (2) and (3), 128(1) and (2), 162(5), 163(1), 165(2) and 206(1).
(c) Ex parte Gore NO and Others NNO (in their capacities as the liquidators of 41 companies
comprising King Financial Holdings Ltd (in liquidation) and its subsidiaries) [2013] 2 All SA
437 (WCC)
►The relief that had been asked for entailed selectively disregarding the separate personalities
of a number of companies in a group of companies and treating their residual assets (that is the
assets remaining after the payment of the secured creditors and ‘trade creditors’ of each
company) as the assets of the holding company for the purposes of settling what had been
described as the ‘investors’ claims’. The essential basis for the application was the allegation
that the relevant business of the group was conducted through the holding company with little or
no regard to the distinction between that company’s legal personality and that of its subsidiaries.
(d) Cassim R ‘Hiding behind the Veil’ De Rebus October 2013 34-37.
(e) Cassim R ‘Piercing the veil under section 20(9) of the Companies Act 71 of 2008: A new
direction’ (2014) 26(2) SA Merc LJ 307-337.
Reference should be made to the discussion of the concept of company groups.
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MCL5901/101/0/2024
(VIII) REMEDIES AND ENFORCEMENT
(a) Companies Act 71 of 2008, sections 20(4)-(6), 22, 156-158, 161-168, 190, 218(2)
Declarations of delinquency (section 162)
(c) Kukama v Lobelo 2012 JDR 0663 (GSJ).
(d) Lobelo v Kukama 2013 JDR 1434 (GSJ).
(e) Gihwala and Others v Grancy Property Ltd and Others 2017 (2) SA 337 (SCA).
(f) Organisation Undoing Tax Abuse and Another v Myeni and Others [2020] 3 All SA 578 (GP)
(g) Cassim R ‘Delinquent Directors under the Companies Act 71 of 2008: Gihwala v Grancy
Property Limited 2016 ZASCA 35’ (2016) 19 PER/PELJ 1-28.
(h) Du Plessis J and Delport P ‘“Delinquent Directors” and “Directors under Probation”: A
Unique South African Approach Regarding Disqualification of Company Directors’ (2017)
134(2) SALJ 274-295.
(i) Cassim R ‘Declaring Directors of State-Owned Entities Delinquent: Organisation Undoing

Tax Abuse v Myeni’ (2021) 138(1) SALJ 1-20.
Oppressive or prejudicial conduct (section 163)
(j) Louw and Others v Nel 2011 (2) SA 172 (SCA).
(k) Count Gotthard SA Pilati v Witfontein Game Farm (Pty) Ltd (16803A/2011) [2013]
ZAGPPHC.
(l) Grancy Property Limited v Manala (665/12) [2013] ZASCA 57.
(m) Off-beat Holiday Club and Another v Sanbonani Holiday Spa Shareblock Ltd and Others
2017 (5) SA 9 (CC).
(n) De Sousa and Another v Technology Corporate Management (Pty) Ltd and Others 2017
(5) SA 577 (GJ).
(o) Geffen and Others v Martin and Others [2018] 1 All SA 21 (WCC).
(p) Lehloenya M and Kgarabjang T ‘Defining the limits of the ‘oppression remedy’ in the wake
of sec 163 of the Companies Act 71 of 2008 - Grancy Properties Limited v Manala’ [2013]
3 All SA 111 (SCA) (2015) 2 Obiter 511-518.
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MCL5901/101/0/2024
Dissenting shareholders' appraisal rights (section 164)
(q) Juspoint Nominees (Pty) Ltd and Others v Sovereign Food Investments Limited and Others
(878/16) ZAECPEHC 15 (26 April 2016).
(r) BNS Nominees (RF) (Pty) Ltd and Another v Arrowhead Properties Ltd and Another
2023 (1) SA 478 (GJ).
This case dealt with the meaning of ‘fair value’’ in the context of the appraisal rights.
(s) Cilliers v La Concorde Holdings Ltd and Others 2018 (6) SA 97 (WCC).
►The court in this case held that the appraisal right in section 164 of the Companies Act 71 of
2008 extends to dissenting minority shareholders of a holding company in circumstances
contemplated in section 115(2)(b) of the Companies Act, that is, where a subsidiary company
has implemented a transaction disposing of all or the greater part of its assets or undertaking
that constitutes at the same time a disposal of all or the greater part of the assets or undertaking
of the holding company.
(t) Cassim MF ‘The appraisal remedy and the oppression remedy under the Companies Act of
2008, and the overlap between them’ (2017) 29(2) SA Merc LJ 305-323.
Derivative actions (section 165)

(u) Lewis Group Limited v Woollam 2017 (2) SA 547 (WCC).
►The main question before the court was whether, Woollam, a minority shareholder in the
company, could use the derivative action in section 165 of the Companies Act 71 of 2008 to
compel Lewis Group to have four of its directors declared delinquent under section 162 of the
Companies Act. Lewis Group Limited argued that this amounted to vexatious litigation since the
proceedings under section 162 were available to Woollam personally and asked the court to set
aside Woollam’s demand under section 165. The court had to decide whether delinquency
proceedings could be instituted by a shareholder using the derivative action.
(v) Cassim R ‘The launching of delinquency proceedings under the Companies Act 71 of 2008
by means of the derivative action: Lewis Group Limited v Woollam 2017 (2) SA 547 (WCC)
(2017)’ 38(3) Obiter 673-688.
(w) Mbethe v United Manganese of Kalahari (Pty) Ltd 2017 (6) SA 409 (SCA).
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MCL5901/101/0/2024
► Under section 165(5)(b)(i) a court must be satisfied that the applicant in derivative action
proceedings is acting in good faith. The issue before the SCA was whether, in terms of
section 165(5) of the Companies Act 71 of 2008, an applicant is required to establish lack
of ulterior purpose as an element of good faith. The SCA examined the meaning of the
requirement that an applicant must act ‘in good faith’.
(x) Cassim MF ‘The statutory derivative action under the Companies Act of 2008: The role of
good faith’ (2013) 130(3) SALJ 496-526.
(y) Cassim MF ‘Costs orders, obstacles and barriers to the derivative action under section 165
of the Companies Act 71 of 2008 (Part 1)’ (2014) 26(1) SA Merc LJ 1-23.
(z) Hamadziripi F ‘Judicial construction of the requirement of good faith in section 165(5)(b) of
the Companies Act 71 of 2008: Mbethe v United Manganese of Kalahari’ (2018) 4.2
JCCLP 74-87.
Please contact any of your lecturers if anything in this letter is unclear.
Good luck with your studies.
YOUR LECTURERS
©
Unisa 2024
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MCL5901/101/0/2024

Tutorial Letter 101/0/2024

This tutorial letter contains important information about your module.

10.3.1 Academic matters ....................................................................................................................... 25

Unisa is a comprehensive open distance e-learning (CODeL) higher education institution.

• how to apply their discipline-specific knowledges competently, ethically and creatively

MCL5901 is an online module.

The composition of the module is as follows:

LLM Company Law 1 (MCL5901)

 Introduction and background

 Legal personality and registration of companies

 Capacity and representation

 Corporate governance: shareholders

 Remedies and enforcement

This tutorial letter applies only to MCL5901.

2 PURPOSE AND OUTCOMES

The outcomes of this course are that students:

• Demonstrate comprehensive and systematic academic knowledge and skills to take a

4 CONTACTING THE UNIVERSITY VIA EMAIL

4.3 College of Law Information Centre

For College-specific queries, please email lawdeanery@unisa.ac.za or

TYPE OF QUERY EMAIL ADDRESS TELEPHONE NUMBER

Please include the student number in all correspondence

Knowledge of company law at LLB-level is assumed.

5.2 Recommended book(s)

5.3 Electronic reserves (e-reserves)

(b) Ordering photocopies from the library.

E-reserves can be downloaded from the library webpage.

5.4 Library services and resources

Important contact information:

• Technical problems encountered in accessing library online services: Lib-

• General library-related queries: Library-enquiries@unisa.ac.za

• Queries related to library fines and payments: Library-fines@unisa.ac.za

• Interlibrary loan service for postgraduate students: libr-ill@unisa.ac.za

• Literature Search Service: Lib-search@unisa.ac.za

• Social media channels: Facebook: UnisaLibrary and Twitter: @UnisaLibrary

6 STUDENT SUPPORT SERVICES

The Study @ Unisa brochure is available on myUnisa: www.unisa.ac.za/brochures/studies

• Toll-free landline: 0800 00 1870 (Select option 07 for myModules)

6.1 The Unisa First-Year Experience Programme

FYE Website Email Support

These companies are in no way associated or related to Unisa.

• Complex, multifaceted issues relating to the legal personality and registration of a

• Advanced information retrieval and processing skills are applied.

9.2 Assessment plan

• To complete this module, you will be required to submit three assessments,

9.3 Assessment due dates

• There are no assignment due dates included in this tutorial letter.

9.4 Submission of assessments

• Unisa, as a comprehensive open distance e-learning institution (CODeL), is moving

• The myUnisa platform can be accessed via https://my.unisa.ac.za. Click on the

• The university undertakes to communicate clearly and as frequently as is necessary to

9.4.1 Types of assignments and descriptions

9.5 The assessments

• To help you work through the study material;

9.6 Other assessment methods

9.7 The examination

The Invigilator “mobile application-based service does verification” of the identity of an