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XYZ (Pty) Ltd was incorporated in 2011. The company has three directors, namely X, Y and Z and five shareholders, namely X, K, L, M

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XYZ (Pty) Ltd was incorporated in 2011. The company has three directors, namely X, Y and Z and five shareholders, namely X, K, L, M and O. In August 2019, K decides to sell her shares in the company. She first offered her shares to the existing shareholders, who did not want to acquire further shares. She then, with the permission of the existing shareholders, offered her shares to A, who was eager to become a shareholder in the company. However, A does not have the necessary means to acquire the shares and banks do not want to extent credit to Awho cannot offer security. The board proposes that XYZ (Pty) Ltd sign surety for a loan thatAwiIi apply for at BB Bank Ltd. Advise the board

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