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Contractual Capacity of

Business Entities

Introduction

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• Name

• Position

• Experience with regard to Credit

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1. Analyse the Rules Pertaining to a Company

2. Analyse the Rules Pertaining to a Close Corporation

3. Analyse the Rules Pertaining to a Co-operative

4. Analyse the Rules Pertaining to a Trust

5. Analyse the Rules Pertaining to an Informal and a Governing Body

Learning Outcomes

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Learning Objectives

1. Analysing the Rules Pertaining to a Company by:• Comprehending the legal nature of a Company• Interpreting the formation of a Company• Comprehending the types of Companies• Comprehending Company communication,

officers and capital• Interpreting the advantages and disadvantages

of a Company• Examining accounting and taxation

requirements of a Company• Examining the limitations of the Act and the

Banking requirements of a Company

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Learning Objectives (Continued)

2. Analysing the Rules Pertaining to a Close Corporation by:• Comprehending the legal nature of a Close

Corporation• Interpreting the formation, membership and

capital of a Close Corporation• Interpreting the advantages and disadvantages

of a Close Corporation• Examining accounting and taxation

requirements of a Close Corporation• Examining the limitations of the Close

Corporations Act and the Banking requirements of a Close Corporation

OH 6 OH 6

Learning Objectives (Continued)

3. Analysing the Rules Pertaining to a Co-operative by:• Comprehending the legal nature of a Co-

operative• Interpreting the formation, membership and

capital of a Co-operative• Interpreting the advantages and disadvantages

of a Co-operative• Examining accounting and taxation

requirements of a Co-operative• Examining the limitations of the Co-operatives

Act and the Banking requirements of a Co-operative

Learning Objectives (Continued)

4. Analysing the Rules Pertaining to a Trust by:• Comprehending the legal nature of a Trust• Interpreting the formation, documentation and

membership of a Trust• Interpreting the advantages and disadvantages

of a Trust• Examining accounting and taxation

requirements of a Trust• Examining the Banking requirements of a Trust

OH 7OH 7

OH 8OH 8

Learning Objectives (Continued)

5. Analysing the Rules Pertaining to an Informal and a Governing Body by:• Comprehending the types of Informal Bodies• Examining the Banking requirements of an

Informal Body• Examining the Banking requirements of a

Governing Body of a Sectional Title

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Criteria

1. Analyse the Rules Pertaining to a Company

• Define a Company• Describe a Company as a legal entity• Describe the formation of a Company• Define the Memorandum of Association• List the contents of the Memorandum of

Association• Define the Articles of Association• List the contents of the Articles of Association• Define share capital

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Criteria (Continued)

3. Analyse the Rules Pertaining to a Company

• Differentiate between a Public Company with share capital and a Private Company with share capital

• List the criteria for a Company Limited by Guarantee

• List the criteria for a Section 21 Company

• List the responsibilities of a Company Secretary

• Define the role of a Director of a Company

• List the obligations of a Director of a Company

• List the individuals who may not be appointed as a Director of a Company

• Describe the capital of a Private Company

• Describe the capital of a Public Company

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Criteria (Continued)

1. Analyse the Rules Pertaining to a Company• List the advantages of a Company• List the disadvantages of a Company• List the contents of the annual financial statements of a

Company• Describe the taxation of a Company• Describe the liability of the members of a Company • Describe the powers of a Company if they have accepted

Section 34 and Schedule 2 of the Act without amendments

• Describe the relationship between:• A Holding Company• A Subsidiary Company• A Co-subsidiary• A Sub-subsidiary

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Criteria (Continued)

1. Analyse the Rules Pertaining to a Company

• Describe Section 37 of the Act

• Describe the prohibition of Section 38 of the Act

• List the implications of Section 38 for the Bank

• Describe the purpose of Section 226 of the Act

• List the transactions which are in terms of Section 226 of the Act:

• Absolutely prohibited

• Conditionally permissible

• Unconditionally permissible

• Judge the contractual capacity of a Company

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Criteria (Continued)

2. Analyse the Rules Pertaining to a Close Corporation• Define a Close Corporation• Describe a Close Corporation as a legal entity• Describe the winding-up of a Close Corporation in terms

of Sections 68 and 69 of the Act• List the registration requirements of a Close Corporation• List the contents of the Founding Statement of the

Corporation• List the requirements of the members of a Close

Corporation• Describe the liability of the members of a Close

Corporation• List the individuals who may not participate in the

management of a Close Corporation• Describe the capital of a Close Corporation

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Criteria (Continued)

2. Analyse the Rules Pertaining to a Close Corporation• List the advantages of a Close Corporation• List the disadvantages of a Close Corporation• List the records and registers to be kept and maintained

by a Close Corporation• Describe the taxation of a Close Corporation• Describe the limitations of the Close Corporations Act

with regard to:• Section 40• Section 52• Section 55

• Judge the contractual capacity of a Close Corporation

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Criteria (Continued)

2. Analyse the Rules Pertaining to a Co-operative• Define a Co-operative• Describe a Co-operative as a legal entity• Describe the winding-up of a Co-operative• Describe the formation of a Co-operative• Differentiate between the membership of the

three types of Co-operatives• Describe the liability of the members of a Co-

operative• List the advantages of a Co-operative

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Criteria (Continued)

3. Analyse the Rules Pertaining to a Co-operative

• List the records and registers to be kept and maintained by a Co-operative

• Describe the taxation of a Co-operative

• Describe the liability of the members of a Co-operative

• Describe the limitations of the Co-operatives Act with regard to:

• Section 49

• Section 52

• Section 53

• Judge the contractual capacity of a Co-operative

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Criteria (Continued)

4. Analyse the Rules Pertaining to a Trust• Define a Trust• Describe a Trust as a legal entity• List the requirements for a valid trust• Describe the Trust Instrument• Describe the parties and their respective roles

in a Trust• List the two main types of Trusts• Define a Business Trust

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Criteria (Continued)

1. Analyse the Rules Pertaining to a Trust• List the advantages of a Trust• List the disadvantages of a Trust• List the accounting records to be kept by a

Trust• Describe the taxation of a Trust• Describe the liability of the members of a Trust• Judge the contractual capacity of a Trust

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Criteria (Continued)

5. Analyse the Rules Pertaining to an Informal and a Governing Body• Define an Informal Body• List the types of Informal Bodies• Describe the contractual capacity of an

Informal Body• Define a Governing Body of a Sectional Title• Describe the Contractual Capacity of a

Governing Body

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AssessmentAssessment Type & Definition

Formative Assessment:

These assessments will include the assessment of some aspects/ components of a learning process and are linked to specific learning outcomes. It will also include feedback to the learner in preparation for a summative assessment.

Summative Assessment:

This assessment will incorporate the assessment of all aspects / components to conclude the learning process, with the understanding that the learner is ready to be assessed. It is also linked to specific learning outcomes.

Methods to be used

Exercises/Activities in your Learner Guide – or E-learning

• Discussions with your coach

Discussions with your

fellow learners / colleagues

Performed by Trained Assessors

When

During the learning process

As per your assessment plan

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Symbols Used