OH 22 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

OH 23 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

OH 24 Criteria (Continued) 1.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

OH 25 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

OH 26 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

OH 27 Company as a Legal Entity A registered Company is a separate legal entity A Company can enter into contracts in its own name A Company can acquire rights and duties in its own name, for example acquire assets, conclude contracts, sue and be sued The Company Estate is assessed separately from the estates of the individual Members Changes in the Membership of a Company does not affect its continued existence Shares in a Company is transferable

OH 28 Formation of a Company Seven or more persons may form a Public Company One person may form a Private Company or a Company limited by guarantee A Company may only commence business when the Registrar has issued a Certificate to Commence Business The Constitution of a Company has to be registered, comprises of: The Memorandum of Association The Articles of Association

OH 29 Types of Companies There are 2 types of Companies, namely: Companies with a share capital Companies without share capital Companies with a share capital could either be a: A Public Company, or A Private Company Companies without share capital could either be a: Company Limited by Guarantee Section 21 Company

OH 30 Accounting records The Companies Act requires a Company to prepare Annual Financial Statements. These must include: A Balance Sheet An Income Statement A Director’s Report An Auditor’s Report A Cash Flow Statement A Change in Equity Statement Relevant Notes

OH 31 Public Company

OH 32 Private Company

OH 33 Limitations of the Companies Act Transactions have to be allowable in terms of the Act Important Sections of the Act are: Section 37 Section 38 Section 226 The above Sections deal with Holding and Subsidiary Companies