XYZ Innovations $($Pty$)$ Ltd$.$ is a tech startup founded by John and Sarah, who are childhood

friends. The company specializes in developing cutting$-$edge software solutions for various

industries. Over the years, the company has grown rapidly and attracted investors due to its

innovative products. However, recently, XYZ Innovations $($Pty$)$ Ltd$.$ has been facing financial

difficulties, and there have been disagreements between the founders regarding the

company's future.

$1\mathrm{.}1$ Explore the legal implications of XYZ Innovations' financial struggles. What legal

options and obligations exist for the company when dealing with financial difficulties?

How can the founders protect themselves and the company's stakeholders? $(10)$

$1\mathrm{.}2$ Write a short note identifying the type of company XYZ $($Pty$)$ Ltd is and set out $4$

$($four$)$ characteristics that are specific to this type of company. $(10)$

$1\mathrm{.}3$ Given the company's financial difficulties, John and Sarah are concerned about their

personal liability. They want to understand how limited liability and the concept of

separate legal personality, as provided by the Companies Act $71$ of $2008$

operate. $(10)$

$1\mathrm{.}4$ Assess whether John and Sarah$$s personal assets are at risk due to the company's

financial troubles and if they can be held personally liable for its debts. $(10)$