Corporate and business law zim

7/31/2019 Corporate and business law zim

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Paper 2.2(ZWE)

Corporate and Business

Law (Zimbabwe)

DECEMBER 2001 STUDY GUIDE

PROFESSIONAL EXAMINATION


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If you have any queries concerning the new study guide, please direct them

to:

Education Department

ACCA 29 Lincoln's Inn Fields London WC2A 3EE United Kingdom

tel: +44 (0)20 7396 5891 fax: +44 (0)20 7396 5858

e-mail: [email protected]

Additional information can be accessed on the ACCA website at:

www.accaglobal.com

The Association of Chartered Certified Accountants

June 2000

ISBN

ABOUT ACCA

The Association of Chartered

Certified Accountants (ACCA) is

the largest, fastest growing

international professional

accountancy body in the world.

We currently work with 250,000

ACCA students and members in

160 countries.

This booklet includes the syllabus and study guide for Paper 2.2(ZWE): Corporate and Business Law (Zimbabwe).

Introduction


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AIM

To develop knowledge and understanding

of the general legal framework within

which an accountant operates. To develop

an awareness of and an ability to

understand both common law and statute

in relationship to specific legal areas of

central importance to business.

OBJECTIVES

On completion of this paper students

should be able to:

analyse and evaluate situations from a

legal perspective

identify the essential elements of the

Zimbabwean legal system including the

main sources of law and explain its

operation

explain and demonstrate an ability to

use the essential principles relating to

the formation, content and remedies for

the breach of contracts

explain the rules of agency as they

apply to sole traders, partnerships and

companies

describe the different types of company

and explain the rules relating to the

formation, financing, management,

administration and regulation

explain the law relating to employment

relationships with particular regard to

unfair labour practices, fundamental

rights of employees.

Paper 2.2(ZWE)

Corporate and Business Law

(Zimbabwe)

POSITION OF THE PAPER IN THE

OVERALL SYLLABUS

There is no prerequisite knowledge for this

paper although the generic skills developed

in Part 1 will provide the basis for the

substantive study undertaken.

Although all of the work done in other

papers in Part 2 takes place within the

legal framework, legal regulation is

particularly relevant in Paper 2.1

Information Systems, Paper 2.3 Business

Taxation (UK) and Paper 2.6 Audit and

Internal Review. Questions in Paper 2.2

will not assume, or draw on, any

knowledge from these papers.

In Part 3, Paper 3.2 Advanced Taxation,

will require an ability to understand and

apply tax law. Paper 3.6 Advanced

Corporate Reporting will address the issue

of corporate insolvency.

SYLLABUS CONTENT

1 The Zimbabwean Legal System

This section provides an introduction to

some key features of the Zimbabwean

legal system and will facilitate

understanding of the sources of law,

how law is administered and how legal

rules emerge in the legal system.

a Court structure and the

administration of justice

b Sources of law

c Case law and legislation; statutory

instruments, statutory interpretation,

customary law

d Arbitration

e Human rights.

2 General principles of the Law of

Contract

This section deals with major features of

the formation, content and discharge of

a contract and will provide an

understanding of the basic nature of

contractual agreements.

a Formation. Essentials of a valid

contract, offer, acceptance, intention

to create legal relations.

b Contents: terms, exclusion clauses

and their control

c Contractual capacity

d Factors Vitiating Enforceability of

contracts, voidable and void abinitio

contracts.

e Breach of contract remedies for

breach of contract.

3 The Law of Sale

Major types of sales, risk, rights and

duties of buyer and seller, remedies for

breach of contract of sale.

4 Agency and Partnership

This section will familiarise the student

with those general rules of agency,

which find specific application in

relation to partnerships and companies.

It also examines the legal rules

governing the operation of partnerships.

a Creation of agency

b Types of agents


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Paper 2.3: Business Taxation (United Kingdom) (Continued)

c Principal and agent: reciprocal rights

and duties

d Relations between the agent and

third parties

e Termination of agency

f The distinction between partnerships

and other forms of business

association

g Internal regulation of Partnerships

h Partnerships and outsiders.

5 The Company Form

This section deals with the nature of

companies; both the private company

and the public limited company; in

comparison to the sole trader and the

partnership, co-operative and private

business organisations.

a The limited liability distinguished

from partnership

b The private company and public

limited liability company

c The meaning and consequences of

separate legal personality The rule

in Salomon v Salomon & Co and

how it operates in Zimbabwe.

6 The Formation and Constitution of the

Company

This section examines the legal

requirements controlling the setting up

of the company.

a The formalities involved in

registering a company

b Functions and Duties of the

Registrar's office

c The constitutional documents of the

company, memorandum and articles

of association

d The promoter functions and

obligations

e The contractual capacity of a

company

f Statutory books, records and returns.

7 Capital and Financing of Companies

This section deals in outline with the

capital and financing of companies,

covering share and loan-capital.

a Share capital: The various classes of

shares

b Loan capital: debentures and

company charges

c The prospectus

d Capital maintenance.

8 Management and Administration of a

Company

This section takes an overview of the

legal obligations of the management in

relation to the administration of the

company. The role of key personnel is

identified and the rights and obligations

they have, are explored.

a Directors: appointment, termination

of office and disqualification; duties

and functions both statutory and

under the common law

b Company secretary: appointment;

duties; powers

c Companies' books of accounts

d Auditors: appointment; removal

e Insider dealing.

9 Company meetings

This section deals with the function and

conduct of the company meeting.

a Types of meetings: statutory, annual

general meeting; and extraordinary

general meetings

b Types of resolutions: ordinary,

special and written resolutions.

10 Majority Control and Minority Protection

This section examines the way in which

potential abuse of majority power may

be prevented or remedied.

a The rule in Foss v Harbottle and

exceptions thereto, both statutory

and under the common law

b The rights, privileges and duties of

members.

11 Judicial Management

a Circumstances in which provisional

and final judicial management is

granted

b Application for a judicial

management order

c Appointment of a judicial manager

and his duties

d Voidable and undue preferences

e Termination of a Judicial

Management order.

12 Arrangements and Reconstruction

a Compromise arrangement and take-

over bids

b The role of the Stock Exchange and

requirements for listing a Public

Company on the Stock Exchange.

Corporate and Business Law (Zimbabwe)


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Paper 2.3: Business Taxation (United Kingdom) (Continued)

13 Winding-up of Companies

a Voluntary winding up

b Compulsory winding up (winding up

by the Court)

c The appointment of a liquidator,

duties and grounds for his removal

d Effects of winding up.

Contributories

Definition, preparation of lists of

contributories, the A and B lists and

liability of contributories.

14Insolvency

This section will introduce students to

the ways in which insolvent persons

may be dealt with.

a Voluntary surrender

b Compulsory sequestration

c Acts of Insolvency

d Consequences of sequestration and

the appointment of a Trustee

e Voidable and Undue Preferences

f Rehabilitation of the Insolvent

Person.

15Employment

This section focuses on the major

legislative and common law principles

which govern employment relationships.

a Fundamental rights of employees

b Unfair labour practices

c General conditions of employment

d Employment councils and Boards

and collective job action

e The Labour Relations Tribunal.

EXCLUDED TOPICS

The syllabus does not attempt to cover

every aspect of the various subject areas it

deals with. For example, Contract does not

cover misrepresentation or frustration.

KEY AREAS OF THE SYLLABUS

Company law, as set out in sections 4-10

above, is central to the syllabus and it will

provide a possible 50% of the total marks

allocated in any particular paper.

APPROACH TO EXAMINING THE

SYLLABUS

The examination is a three hour paper

divided into two sections. Section A will

contain short, knowledge-based questions.

Section B will be problem-based and will

test communication skills and the ability to

appraise and analyse information.

Number

of marks

Section A: Choice of 6 from 8

questions (10 marks each) 60

Section B: Choice of 2 from 4

questions (20 marks each) 40

100

ADDITIONAL INFORMATION

Knowledge of new legislation will not be

expected until at least six months after the

last day of the month in which the Royal

Assent (or similar procedure in other

countries) is given, or six months after the

specific provision comes into effect, which

ever is the later.

The Study Guide provides more detailed

guidance on the syllabus.

RECOMMENDED TEXT

There are a number of sources from which

you can obtain a series of materials written

for the ACCA examinations. These are

listed below:

AT Foulks Lynch ACCA's official

publisher

Contact number: +44 (0)20 8831 9990.

Website: www.foulkslynch.com

ATC International

Contact number: +44 (0)20 8943 1596.

Website: www.atc-int.com

BPP

Contact number: +44 (0)20 8740 2211.

Website: www.bpp.com

The Financial Training Company

Contact number: +44 (0)20 7407 5000.

Website: www.acca-ftc.com

Candidates may also find the following

texts useful:

Nkala and Nyapadi Company Law in

Zimbabwe ZEDCO Publishing House

(1995)

Christie, RH Business Law in Zimbabwe

Juta and Company (1995)

The Companies Act Chapter 24:03

The Labour Relations Act Chapter 28:01

The Insolvency Act Chapter 6:04



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The Zimbabwe Stock Exchange Act

Chapter 24:18.

Wider reading is also desirable, especially

regular study of relevant articles in the

Student Accountant.


STUDY GUIDE

1 ZIMBABWEAN LEGAL SYSTEM 1

Syllabus reference 1a

Court structure and administration of

justice

understand how different types of

cases are dealt with by different

courts

identify the major courts and their

relationship of seniority

explain how appeals go from one

court to another.


Syllabus reference 1b

explain what is meant by case law

and precedent within the context of

the hierarchy of the courts

explain legislation and evaluate

delegated legislation

illustrate the rules and presumptions

used by the courts in interpreting

statutes.


Syllabus reference 1c, d

Customary Law

explain the system of dualism in

relation to the position of customary

law in the legal system

Human Rights and the Constitution

arbitration

evaluate arbitration as an alternative

to the court structure in business

relationships.

4 GENERAL PRINCIPLES OF THE LAW

OF CONTRACT 1


Formation

analyse the nature of a simple

contract

distinguish the legal requirements for

the creation of a contract

explain the meaning of offer and

distinguish it from invitations to treat

explain the meaning and

consequence of acceptance.


OF CONTRACT 2


Formation

explain the doctrine of quasi mutual

assent

consider the doctrine of privity of

contract

distinguish the presumptions relating

to intention to create legal relations.


OF CONTRACT 3


distinguish terms from mere

representations

define the various contractual terms

explain the effect of exclusive

clauses and evaluate their control.


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OF CONTRACT 4

Syllabus reference 2c

Breach of contract and remedies

describe the procedure for registering

companies, both public and private

detail the statutory books, records

and returns that companies must

keep or make

explain the controls over the names

that companies may or must use.

16 COMPANY LAW 4

Syllabus reference 5b, c

The constitution of the company

detail the content and effect of the

memorandum of association

describe the contents of Table A

articles of association

analyse the effect of a company's

constitutional documents

explain how articles of association

can be changed.

17 COMPANY LAW 5


Share Capital

explain the different meanings of

capital

illustrate the difference between

various classes of shares

explain the procedure for altering

class rights.

18 COMPANY LAW 6


Loan capital

define the companies borrowing

powers

explain the meaning of debenture

distinguish loan capital from share

capital

explain the concept of a company

charge and distinguish between

fixed and floating charges

detail the need and the procedure

for registering company charges.

19 COMPANY LAW 7

Syllabus reference 6c

Capital maintenance and dividend law

explain the doctrine of capital

maintenance

examine the effect of issuing shares

at either discount or premium

explain the rules governing the

distribution of dividends in both

private and public companies.

20 COMPANY LAW 8


Directors 1

explain the role of directors in the

operation of a company

detail the ways in which directors are

appointed, can lose their office or be

subject to a disqualification order

distinguish between the powers of

the board of directors, the managing

director and individual directors to

bind their company.

21 COMPANY LAW 9


Directors 2

explain the duties that directors owe

to their companies

demonstrate an understanding of

some of the ways in which the

companies' legislation has attempted

to control directors

distinguish between fraudulent and

wrongful trading

insider dealing.

22 COMPANY LAW 10

Syllabus reference 7b, c

Other company officers

detail the appointment procedure

relating to, and the duties and

powers of, a company secretary

detail the appointment procedure

relating to, and the duties and

powers of, company auditors.

23 COMPANY LAW 11

Syllabus reference 8a, b

Company meetings and resolutions

distinguish between types of

meetings: ordinary and extraordinary

general meetings and class meetings

explain the procedure for calling

such meetings

detail the procedure for conducting

company meetings

distinguish between types of

resolutions: ordinary, special and

written.


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24 COMPANY LAW 12

Syllabus reference 9a, b, c

Majority control and minority

protection

explain the normal rule of majority

control as expressed in Foss v

Harbottle

consider the common law exceptions

to Foss v Harbottle

evaluate the just and equitable

winding up procedure as a means of

protecting minority rights

discuss the statutory protection

relating to unfairly prejudicial

conduct under the companies

legislation as an alternative to

winding up.

25 COMPANY WINDING-UP 13

Syllabus reference 10a, b, c

explain the meaning of an procedure

involved in voluntary liquidation

explain the meaning of and

procedure involved in compulsory

liquidation

consider judicial management as an

alternative to winding-up

explain the circumstances in which

provisional and final judicial

management order are granted

discuss the duties of a judicial

manager and the termination of a

judicial management order

consider compromise arrangements,

takeover bids and schemes of

reconstruction

explain the requirements for the

listing for the listing of a Public

Company on the Zimbabwe Stock

Exchange.

26 INSOLVENCY

Syllabus reference 14

explain what is meant by voluntary

surrender

explain what is meant by

compulsory sequestration

discuss the various possibilities

which constitute acts of insolvency

explain the concept of voidable and

undue preferences

discuss the rehabilitation of an

insolvent person.

27 EMPLOYMENT LAW 1


Contracts of service and for services

distinguish between employees and

the self employed

explain why such a distinction is

important

explain the nature of the contract of

employment and give examples of

the main duties placed on the

parties to such a contract.

explain the nature of the employer's

vacarious liability for delicts/torts

committed by the employee.

28 EMPLOYMENT LAW 2


Dismissal and redundancy

distinguish between wrongful and

unfair dismissal including

constructive dismissal

detail the remedies available to

employees who have been subject to

unfair dismissal or redundancy

discuss the concept of unfair labour

practices

discuss the powers and functions of

the Labour relations Tribunal as a

Labour Court.

Documents

Corporate and business law zim