2.4 Marianne and Jane each currently hold 50% of the shares in a law firm, Muller Inc. In an effort to raise more capital in order to purchase a property for the law firm offices, they decide to authorise the issue of more shares for this purpose. Marianne, who founded the company, wants to issue the newly authorised shares to her niece Linda, who has just been admitted as an attorney. However, Jane is concerned that this will dilute her shareholding. Explain to Marianne the mechanism that is provided for in the Companies Act 71 of 2008 that is aimed at avoiding dilution of shareholding of the existing shareholders.

(6)

2.5 Vigor Ltd wishes to decrease its issued share capital through a repurchase of its own shares. Advise the board of directors of Vigor Ltd of the requirements that they must comply with before they may proceed with the transaction.

(4)