During the financial year under review, the board of Suit-up Ltd approved an interest free, unsecured...
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During the financial year under review, the board of Suit-up Ltd approved an interest free, unsecured loan in the amount of R7m to Jane Spector, the wife of the company's chief executive officer (CEO), Harvey Spector. You inspected the minutes of all the directors' and shareholders' meetings and concluded that no other authorisation was obtained to approve the loan. Suit- up Ltd's financial records indicate that the company, although solvent and liquid, was under severe financial strain before and after the loan was granted. Discuss the requirements of the Companies Act with regards to the loan granted to Jane Spector and conclude on the legality thereof. You should also make mention of the possible consequences for the directors who authorised the loan. www During the financial year under review, the board of Suit-up Ltd approved an interest free, unsecured loan in the amount of R7m to Jane Spector, the wife of the company's chief executive officer (CEO), Harvey Spector. You inspected the minutes of all the directors' and shareholders' meetings and concluded that no other authorisation was obtained to approve the loan. Suit- up Ltd's financial records indicate that the company, although solvent and liquid, was under severe financial strain before and after the loan was granted. Discuss the requirements of the Companies Act with regards to the loan granted to Jane Spector and conclude on the legality thereof. You should also make mention of the possible consequences for the directors who authorised the loan. www
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The requirements as per the Companies act for approval of an unsecured loan with a board resolution ... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0133125689
15th edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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