Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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. (6 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Linear Algebra A Modern Introduction

Authors: David Poole

3rd edition

9781133169574 , 978-0538735452

Students also viewed these Law questions