The repairs and moodley wiii allow the business to

the repairs and Moodley wiII allow the business to operate rent-free from premises
which he owns. Soekie will be employed as a receptionist in the business at a salary
of R1 500 per month and agrees not to draw her salary until the business makes a
profit. As soon as the business makes a profit she will receive her salary plus any
arrears. Ramgobin will contribute R5 000 to the business but it is agreed that R2 500
must be repaid to him after the business has been operational for one year,
irrespective of whether the business is profitable or not.
Which ONE of the following statements is the MOST CORRECT?
1. A valid partnership agreement has not been concluded between the
parties because Soekie has not made, or has not agreed to make, a
contribution to the business. (ANSWER 1)
2. A valid partnership agreement has not been concluded between the parties
because Moodley has not made, or has not agreed to make, a contribution to the
business.
3. A valid partnership agreement has not been concluded between the parties
because Tristam has not made, or has not agreed to make, a contribution to the
business.
4. A valid partnership agreement has not been concluded between the parties
because Ramgobin has not made, or has not agreed to make, a contribution to the
business.
QUESTION 20
Selomo and Lesley, two labour law practitioners, decide to register their consultation
business as a close corporation.
Which ONE of the following statements is CORRECT?
1. Selomo and Lesley cannot both be agents of the close corporation in relation
to third parties.
2. Selomo and Lesley's rights with regard to the management of the business
will be determined by the contribution each one of them made for the formation of
the corporation.
3. Selomo and Lesley must each contribute money, property or services to
start the business. (ANSWER 3)
4. Selomo and Lesley must add the abbreviation "(Proprietary) Limited" to the
name of their close corporation.
QUESTION 21
Timothy and Philly want to start a business and have to decide which form of
business enterprise to adopt. They feel that the chosen enterprise should have the
following characteristics:
- it should have the benefit of limited liability
- legal and natural persons should be eligible for membership
- the number of its beneficiaries should not be limited

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Which ONE of the following forms of business enterprise would best suit their
needs?
1. a partnership
2. a business trust
3. a close corporation
4. a private company (ANSWER 4)
QUESTION 22
Mabitsi and six of his friends decide to start a company. The business of the
company will be to build houses and sell them. In the articles of association they
incorporate a clause which requires a director to get approval from the board of
directors before concluding a contract which exceeds R50 000. Mabitsi, one of the
directors, buys a hotel from Maele for RI00 000 without prior approval, but tells
Maele that, because of time constraints he could not wait for approval from the
board. A contract of sale is concluded.