Alright guys, so just so that we're all aware, we are recording. No one can see you, but your voice will be on it if you make a sound. This doesn't go anywhere. I'm going to upload it to my private YouTube page, which no one can see.
You will only be. able to watch the video if I send you the link. Okay, so I don't want this online as much as you don't want it online, so I promise it's not going anywhere.
Okay, because my other ASML video starts at the top of the questions, I'd like to start from the very bottom and work our way up so that we will meet in the middle and the whole document will be covered. Okay. Can you guys hear me over there? Right.
Beautiful. All right. Question five. I will try for the exams to be more prepared to make you an actual document that looks like one long test that follows numbers.
But for now, you just have screenshots. Okay. Ramesh Loh wants to start a business that he wants to call Rameez Pty Ltd. He is the sole director of the company. Ramesh approaches Bengu, Bernardo and Bahari Inc., the firm that you work for to assist with the registration of the company and later to deal with other matters.
Question 5.1. Question 5.1. The law of persons has an impact on business.
Discuss the impact of the law of persons on Ramesh and the company that he wishes to incorporate. Okay? Feel the panic.
Right. Is the blue dark enough? Should I maybe write in a darker... I'll write in black and I'll make the writing slightly thicker. Maybe we'll be able to see better.
I think that's better. Yes. Okay. 5.1. I hope you can all see.
I'm trying here. All right, how does the law of persons affect business? So first and foremost, what does the law of persons do? It determines who or what is a person. That's its first function.
It also determines... A person's contractual capacity, i.e. what they may and may not do. Next up, we have two parties we have to deal with.
The first one is Ramesh. Ramesh is a natural person, obviously. The company... Once incorporated, because it's not yet incorporated, he just is thinking about opening a company, would be a juristic person.
Ramesh and the company. Are both legal subjects? Try to think back to ASPL or FSAL or whichever one last semester you did Law of Persons. Try and think about, it's about how you become a person. Okay?
So, both are legal subjects. What does it mean if you are a legal subject? You are a bearer. of rights and duties as opposed to if you are a legal object in which case you are the subject of or you are the object of performance or you are a right or a duty to a legal subject Lastly, we need to decide what is Ramesh and the company's situation in law currently. And because there's nothing stopping either of them, both of them will have full contractual capacity.
That's much more than four marks. That's about one, two, three, four, five, six, seven, eight. It's about eight marks. So you don't need this much of an answer, but that's all of the options for what this answer could possibly be. No one in horrible disagreement with me?
Excellent. Question 5.2. The notice of incorporation and the memorandum of incorporation were filed with CIPSI and a registration number was issued. Does Rami's Logistics have legal personality?
You need to answer yes or no and then provide an answer. You get a mark for saying yes or for saying no. So I noticed I'm moderating your... CCCP papers and I noticed that one of the questions they asked was a yes or no question. Can you claim interest or something like that?
And a lot of you forgot to actually say either yes or no because you were so focused on going into the answer of the content of the answer, forgot to actually answer the question which was a yes or a no. So you'd get... Four of the marks out of five, but you missed a fifth mark for no reason because you literally just want to say yes or no Okay, so 5.2. Okay, the question is Does Rami's logistics have legal personality Okay, the answer is yes.
It does have legal personality It is a private company that is duly incorporated. That's it. Okay?
That's what gives it legal personality. It's a private company, it's duly incorporated, and therefore, is a full legal person. Okay. 5.3 Rami's Logistics Pty Ltd wants to sue their client Becky Naidu, a sole proprietor.
Becky calls her business Sorry guys, I love when there's spelling errors in the test. Becky calls her business Becky's Bunny Chow and she lives at 59 Circuit Road, Unit 7, Chatsworth. How will you cite Becky Naidoo as a sole proprietor when you type the summons?
Write down the necessary description and make up any other details that are necessary. Okay, you will find these in your reader. Okay, they are in my slides, but they come from the reader.
So if you can't find it in the textbook, that's why. Okay, so this is a... Okay. It says a summons.
So we know that because it's a summons, it's an action. Okay? So we know it's going to be, Becky will be the defendant, not the respondent. So the defendant is Becky Maidu, common adult female.
So, rise up. conducting a business name and style of Becky's bunny ciao Residing, technically I should say currently residing at, but we're not told. The person who drafted this libel residing at 59 Circuit Road, Unit 7. Chatsworth And this isn't in your memo, but technically after the sentence you would always write the full and further particulars of the defendant are Unknown to the plaintiff. Okay, that's not in your memo, but that is what you add at the end of every one of your citations. Okay.
And I've seen an example like this in the... that's exactly where you get it from. Yes.
Sorry, blind. Yeah, this is exactly it. Perfect.
So, in the reader, this tells you all the different kinds, but then in the reader where... Yes, yes, yes, yes, yes, yes. Yes, this is exactly it, okay? So then, at the end of unit 3... Yeah, citation of a partnership, partners, trustee, company.
Here's the defendant's citation of all of them, sole proprietor. So yeah, all of those, you just have to know which one they're asking and then give that example. But yes, that's exactly where it comes from, the reader.
All right. Where am I? Question 5.4. Ramesh, on behalf of Rami's Logistics, borrows 3 million money.
3 million rand. From Mercantile Bank, Ramesh uses the money to travel overseas on holiday and buys a car and other expensive items for himself. Rami's Logistics cannot pay the debt owed and the bank decides to sue Ramesh instead.
Explain the concept of why piercing the corporate veil is appropriate in these circumstances. If Lara's and Shakira are we fine there? If we're not fine, what are we looking for? I'm just going to keep checking just in case. Okay.
So. First and foremost, okay, the question that they're asking you is not for you to go directly and explain what piercing the corporate veil is, okay? You have to assume that I...
I am stupid and I don't know anything. So I don't know why we would even be able to pierce the corporate veil. So I don't start at the corporate veil. You need to start off as, firstly, Rami's, it's obviously Rami's logistics, but I'm not writing that out, has a separate legal personality. Therefore can sue and be sued.
In. Own. Name.
You know that the three dots means therefore, right? It still means that in maths. I haven't done maths in like 20 years, guys.
Things could have changed. And I didn't do well in maths at the time. Right, so now you've explained why you would be able to apply piercing the corporate veil because Rammies has separate legal personality, they would sue and be sued in their own name.
Piercing the corporate veil, however, means court... will ignore the company's juristic personality. If you say... Limited liability or separate legal liability instead of juristic personality, same thing, same answer.
So it will ignore the company's juristic personality and hold the directors personally. Certain conditions are met. I had this yesterday with my other kids and I know that I said this on Wednesday quite a bit. But please guys, when you are going to, when they ask you a question about directors and how they've acted or whatever.
please make sure your brain doesn't automatically go to piercing the corporate veil read the scenario very carefully because if they acted in good faith but the company suffered directors will have a defense in terms of the business judgment rule. If they were not acting in good faith and the company suffered harm, then you would pierce the corporate veil and hold the directors personally liable. It will literally, the scenario will... will rely on one word it will either say good faith or bad faith or it will very obviously give you circumstances that show that it's good faith like you took reasonable steps and whatever so read the question questions carefully.
I know you've only got 60 minutes, but for the ones where you know there might be iffy, read those ones slowly. Go over them. Make sure you know that you're answering the right question.
when you guys read the question wrong and then you give me a beautiful answer but it's not the answer to the question that they were asking and then I have to give you naught even though clearly studied we just didn't read the question properly okay and that really bothers me so if certain conditions are met so e.g. the creditors can show that the separate personality was abused okay or there was no substantial separation between the company and the directors okay so in other words the company is the alter ego of the director okay and this resulted In misconduct and abuse of... Alright, so obviously that one is piercing the corporate veil because he very clearly did not act in good faith and also they told you that it was piercing the corporate veil. So you didn't really have to think there. Okay, I've put in all the answers for the multiple choice ones.
So let's get to, I mean it's question one, but it's on page... Oh, yeah, sorry, in other words. That's why I like to have the recording as well, so then you can hear, and what I'll do is, I'm hoping that the recording will be able to be turned into a transcript, so that you won't even have to then go and listen to the whole thing, you can just control F and find what you're looking for. Okay. Oh.
It's recording. Never mind. Okay.
I'll be happy. All right. Okay.
So it is question one, but it's on page 21. Okay. I know 21 is not exactly the best one. It starts off, all companies are legally obliged in terms of the Companies Act to appoint a company secretary.
The true and false question and then the last one says anyone having the right qualifications can become a secretary. This is a duplication of questions. I know that in some circumstances I've asked, I've given you like... multiple choice questions or true and false and they're exactly the same as old papers doesn't matter do them twice do them three times do this document 10 times so you remember it off the heart that's why i don't delete the repeats so that you're forced to do them again okay um tend to write here okay Remember what I said about company secretaries and secretaries? That there is a difference, and I will strangle anybody who tries to tell me that there is not a difference, and that a company secretary is somebody who sits in the front of the company and answers the phone and whatnot.
Okay? Right. True or false?
All companies are legally obliged in terms of the Companies Act to appoint a company secretary? That is false. It is only a public company and an SOE. This is a must.
And the public company can be listed. or unlisted. You can be a public company and not be listed on the JSE.
You still fall under the requirements of a public company. There is no difference between a company secretary and an ordinary secretary. Obviously, that's false.
All you need to say is that a company secretary is the chief administrative exactly officer. Okay? That's all I care. You don't have to write anything else.
They are the chief administrative officer of that specific company. Directors require guidance in the performance of their duties. That is true.
And the person who provides them with guidance is the company secretary. If you look in your notes about company secretaries, you'll see that they are the ones who have to make sure that you are in line with all the regulations, and you're keeping with the law, and things are filed on time. So the company secretary obviously guides the directors. They report, she or he reports to the board about the administrative affairs of the company. Although companies employ specific staff and tax consultants to deal with tax-related matters, the company secretary holds equal responsibility with regards to the company's tax obligations to SOX.
I know this is also another weird one. It's true, and it's just because the company secretary is responsible for the e-submission of the returns. Okay, you can say electronic submission, you can say e-submission, and it's of the annual returns. Okay, and then lastly, and this was very controversial when you watched my other... When you watch my other lecture, you'll see that there was quite a debate about the difference between ineligible and disqualified.
I'm going to explain the difference now. Right, so the answer is false and I will explain why. Anyone who made the right qualifications can become the company's secretary. Oh, I'm looking at the wrong question. Okay, well it's fine.
This is false. You can just squalor. ...side, i.e. a delinquent......diagnostic. Sorry, I went on a tangent there for no reason. The difference between...
Oh, it's not on that side. Sorry. So...
The reason that I desperately need to draw the difference between ineligible and disqualified is because they're going to ask you at the beginning of the questions you'll see there's like a question where they say that this person is are they ineligible or are they disqualified and that means I'm just going to put a note here. Ineligible. Ineligible.
If you are ineligible, you never have an Never can be a director. At no point in time will you ever be able to change that status. So if you are mentally ill, or you lack capacity, or you are a minor, There is no way to make yourself eligible if you are one of those things.
You are by that fact not allowed to be a director ever. Hilarious because it had this exact discussion in the other class. So how I see it is there's nothing that you can do to change your ineligibility while you are a minor.
You can't become a major. So as long as you are a minor, you will never ever be able to be eligible. You only become eligible once you are no longer a minor. So you don't, it's not that you are gaining the possibility, it's that you were under one status and then you became under another status completely separately. For all of the other ones, okay, even for mentally ill, you can have periods of lucidity, okay, but you're not going to have someone as a director of your company who's mentally ill so that every decision that you, that they take, you now have to prove whether or not they were in a moment of lucidity.
Unless it was like they were going through, um, if they were... They were in a coma for a specific amount of time. Then they would be disqualified because they would have been able to be a director but they're only incapacitated for a specific period of time. If you're mentally ill and you don't actually have the capacity to understand, there's nothing that you can do that can then make you eligible.
Whereas when you are disqualified, you were originally... Eligible to be a director and then you did something and now you can no longer be a director. But you can fix being disqualified.
So like, if you are declared insolvent, you could... be declared insolvent for a long time. You could also be disqualified forever, but you can apply to the court and ask them to declare you as a rehabilitated insolvent, and then you will no longer be disqualified.
but you were at one point qualified does that differentiation someone exact same question about age and it's literally you just have to accept that there's nothing you can do while you are a minor to be a director only once you have become a major it's not like in a contract you will gain contractual capacity when you get married and you are minor because you get the status of major if you get married at 16 even though you have the status of major, you still can't be a director. You have to be 18. So there's no fixable way to make. That's how I distinguish it in my brain.
Can I fix it or can't I? So disqualified means at one point or other was qualified. And through own actions was disqualified.
Can I pursue? There's something I wanted to compare this to. Oh, okay. It's like a void and voidable contract. Ineligible is, it is void.
Ab initio. There is nothing you can do to fix it. Whereas, if you are disqualified, there was a contract, something's wrong with it, you can decide to fix it, or you can't.
It's up to you, but it can be fixed. Is that okay? Sometimes I'm like, does it make sense in my brain?
Is it making sense in your brain? I'm glad we, there was a whole debate about this yesterday. Okay, I have given all of these answers.
I'm hoping guys, if you get a question like this. The first time they ever gave a question like this, they didn't give the words that they were looking for. So you had to, from your brain, figure out what random five words they were trying to get you to ask. When they gave the test the second time, they gave you a list of words.
If they give you this question and they don't give you a list of words, I will be very lenient based on what you write because it could be anything. Okay. I just want to...
want to make sure I'm not missing anything else and I just want to make sure that we go through these questions and you haven't so I added this section at the bottom here it won't be on I don't think it'll be on ...pages you printed before when I sent it first, but it's in the one that I sent yesterday, but I'm going to send another one now because I need an update of more. It asked for the requirements for... Question number three, it asks for the requirements in section 77. So I gave, one of my slides had a couple of the requirements in section 77, so I just put them at the bottom there to draw your attention.
Okay. That, don't worry about that, that's just because a company is always 07, and this person should know that because they're the one drafting this. Do you want to answer this question?
Are we done? Have I answered? The ones that I haven't answered are because I've answered them somewhere else, but we can go over them again if you want to, but the answers are there. So if you are ready to be done and proceed with studying this weekend, you are more than welcome to.
Do we have any specific questions that you don't understand? A section that you don't understand? I'm going to pause the recording and look through the questions, see if there is anything that you are missing.