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
126 [email protected] 081 438 7509/ 061 429 0222/ 078 548 0303 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.
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- Fall '17
- Financial Accounting, CLA1503, Correct Answer, following statements, Johnny