Lesedi and Siphiwe are the only members of Private Investigators CC. Upon formation of the

corporation they agreed that their respective membership contributions will consist of cash

only. Each member was required to contribute R100 000 and this was duly recorded in the

founding statement. Apart from the monetary contribution, Lesedi also entered into a lease

agreement in terms of which he is renting out a building he privately owns to Private

Investigators CC for use as an office. Siphiwe, who is a part-time student at UNISA, also

entered into an employment contract with Private Investigators CC. In terms of the

employment contract, he is required to be in the office to attend to the corporation's day-to-

day business.

At a meeting of the members, Lesedi and Siphiwe decide that due to a lack of profits generated

from sales, Private Investigators CC will repay each member 2% of their respective

contributions to enable them to provide for personal needs. They further agree that Private

Investigators CC will make some payments to them in terms of their respective rental and

employment contracts. Advise Lesedi and Siphiwe whether these payments meet the

requirements in terms of the Close Corporations Act 69 of 1984.