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Commercial Law Assignment 1-1

This assignment explores key legal concepts under the Companies Act 71 of 2008, including company types, liability, suretyship rights, and the passing of ownership in movable property, with practical application to corporate and contract scenarios.

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    R E G E N T p US 1N ESS SC H O O l Assignment cover /meet Programme Bcom in Supply Chain Management Module Name Commercial Law Assignment Number 01 Surname Mndzebele First Name/S Luyanda Student Number 22236960 Date Submitted 28/09/2024 Postal Address Kwaluseni P.O. Box 181 E-MAIL myregent email address ... 22236960@myregent.ac.za E-Mail Mavegemabuza21@gmail.com (alternate email address) Contact Numbers Cell: 76910271 Home : 79115579 Work : Alternate contact : Name: Nikiwe Mabuza Relationship: Parent Contact number: 76151265 I Luyanda Mndzebele _______ ID/PassDort No. 0002047100116 hereby confirm that the assignment submitted herein is my own original work. Date: 28/09/2024 FOR OFFICE USE ONLY Marks per question (Q) Qi Q2 Q10

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    QUESTION ONE 1.1 The Companies Act 71 of 2008 is a key piece of legislation that aims to ensure a fair and efficient corporate environment while also ensuring that shareholders' interests are safeguarded. The Companies Act 71 of 2008 since its enactment has greatly impacted the corporate governance and business practices in number of ways, here there are; firstly, stakeholder's inclusion, the act has promoted that all stakeholders are included, recognized in the corporate governance and business practices. In way that they interests are well taken care of and guarantee given. Secondly ensuring facilitation of business rescue, mechanism rescue has been implemented in corporate governance and business practices for all South African companies that are facing financial difficulties to be able to restructure and continue operations other than facing liquidation. To dive deep there are driving forces behind the implementation of this Companies Act 71 of 2008, it is that they were barriers to entrepreneurship. The was a lot of red tape in the formation and operation of companies, in way that some companies stopped operating because of these regulations, others couldn't even commence. Unethical corporate governance also caused the implementation of the act, the were no stricter governance standards in the companies, transparency was not highly emphasized, neither accountability and ethical conduct. Both stakeholders and companies had their way in the corporate world. The was a lack of global standards, in that the South African practices did not align with the international corporate governance practices. Leading to South African companies been been unable compete with international companies. In summary, I say the Companies Act 71 of 2008 has greatly impacted the corporate governance and business practices in South Africa by promoting recognition of all stakeholders and the introduction of rescue schemes for financially straggling companies in the corporate environment , and banders to entrepreneurship, unethical corporate governance causing an increase in corruption and need to align with global standards , for international recognition been the driving force to the implementation of the act.

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    1.2 XYZ Innovations (Pty) Ltd is a private company, as its name ends with (Pty) Ltd which stands for (Proprietary) Limited, which all private companies' names must end with as by the Companies Act 71 of 2008. In addition, private companies have number of characteristics that are specific to them as by the Companies act 71 of 2008. 1 will shortly name four, the first one been not to solicit share subscriptions to the public, which clarifies that company shares are not to be sold to the public but to existing shareholders of the entity. Secondly the company is not obliged to share certain information to the public, this is to say the entity may not share its financial records to the public, if it wishes not to do so, unlike public companies. Thirdly private companies are limited to a maximum of fifty shareholders and minimum of one, this briefly entails that private companies are not to have more than fifty shareholders or members, surpassing that it no longer a private company. The fourth characteristic is that the is a restriction on the transfer of shares, this implies that shareholders cannot sell shares to the public but can only sell them to the company's other shareholders and cannot be done without proper informing all the shareholders. 1.3 According to the Companies Act 71 of 2008 personal liability means that the directors or director is held personally responsible for any loss incurred by the company. In a private company limited liability means the liability of shareholders is limited to the amount they have invested in the entity. This states that any obligation that the company enters into will be settled by the company. By this law the personal assets of the shareholders and founders are protected in case of liquidation or the entity failures to meet its obligations. Also in the case of liquidation the amount the shareholders can lose is the money they have only invested in the business. Although this law can be bypassed if the shareholders or owners make their personal assets as securities when acquiring for a loan for the company to bank or other financial institutions. Furthermore, separate legal personality is a concept that state a registered company is a distinct legal person that is separated from its shareholders and directors. This concept according to the Companies Act 71 of 2008 states the entity can enter into contract, can own property, can sue and can be sued without the any involvement of the shareholders, completely making the business a legal person. This also protects the shareholders and their personal assets from creditors of the entity and when the company goes under liquidation. It goes to the extent that the existence of the company continues even when the shareholders are no longer there.

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