Complying with Changes in Legislation

Shareholder resolutions (Section 65)

Every resolution of shareholders is either an ordinary resolution or a special resolution.

For an ordinary resolution to be approved, it must be supported by more than 50% of the voting rights. 

Except for an ordinary resolution for the removal of a director, the MOI may require a higher percentage of voting rights to approve an ordinary resolution, provided that there must at all times be a margin of at least 10 percentage points between the approval of an ordinary resolution, and a special resolution.

For a special resolution to be approved, it must be supported by at least 75% of the voting rights.

The MOI may permit a lower percentage of voting rights to approve any special resolution provided that there must at all times be a margin of at least 10 percentage points between the approval of an ordinary resolution, and a special resolution.

 A special resolution is required to:

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  Amend the MOI;
  
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  Approve the voluntary winding-up of the company;
  
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  Approve any proposed fundamental transaction.
  

Board, directors and prescribed officers (Section 66)

 The board must comprise:

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  In the case of a private company, or a company, of at least one director; or
  
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  In the case of a public company, or a non-profit company, of at least three directors.
  

 The MOI may specify a higher number.

The MOI in the case of a profit company other than a state-owned company, must provide for the election by shareholders of at least 50% of the directors, and 50% of any alternate directors.

A person may not serve or continue to serve as an ex officio director of a company, despite holding the relevant office, title, designation or similar status, if that person is or becomes ineligible or disqualified.

The election or appointment of a person as a director is a nullity if, at the time of the election or appointment, that person is ineligible or disqualified.

Except to the extent that the MOI provides otherwise, the company may pay remuneration to its directors for their service as directors.

Remuneration may be paid only in accordance with a special resolution approved by the shareholders within the previous two years.

Election of directors (Section 68)

Each director of a company, other than the first directors, must be elected by the persons entitled to exercise voting rights in such an election, to serve for an indefinite term, or for a term as set out in MOI.

Unless the MOI provides otherwise the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the board at that time have been filled.

Ineligibility and disqualification of persons to be director or prescribed officer (Section 69)

 In this section, ‘‘director’’ includes an alternate director, and:

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  A prescribed officer; or
  
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  A person who is a member of a committee of a board, or of the audit committee, irrespective of whether or not the person is also a member of the company’s board.

  A person who is ineligible or disqualified must not:

  
  
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  Be appointed or elected as a director, or consent to being appointed or elected as a director; or
  
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  Act as a director of a company.
  

A person who becomes ineligible or disqualified while serving as a director of a company ceases to be a director immediately.

A person, who has been placed under probation by a court, must not serve as a director except to the extent permitted by the order of probation.

A person is ineligible to be a director if the person:

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  Is a juristic person;
  
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  Is an unemancipated minor, or is under a similar legal disability; or
  
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  Does not satisfy any qualification set out in the MOI.
  

 A person is disqualified to be a director if:

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  A court has prohibited that person to be a director, or declared the person to be delinquent;
  
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  Is an unrehabilitated insolvent;
  
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  Is prohibited in terms of any public regulation to be a director;
  
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  Has been removed from an office of trust, on the grounds of misconduct involving dishonesty; or
  
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  Has been convicted, in the Republic or elsewhere, and imprisoned without the option of a fine, or fined more than the prescribed amount, for theft, fraud, forgery, perjury or an offence:
  
  • 
     involving fraud, misrepresentation or dishonesty;
    
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    in connection with the promotion, formation or management of a company;
    
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    under this Act, the Insolvency Act, the Close Corporations Act, the Competition Act, the Financial Intelligence Centre Act, the Securities Services Act, or Chapter 2 of the Prevention and Combating of Corruption Activities Act.
    

A disqualification ends at the later of 5 years after the date of removal from office, or the completion of the sentence imposed for the relevant offence.

Despite being disqualified a person may act as a director of a private company if all of the shares of that company are held by that disqualified person alone, or by persons related to that disqualified person, and each such person has consented in writing to that person being a director of the company.

The Commission must establish and maintain a public register of persons who are disqualified from serving as a director, or who are subject to an order of probation as a director.

Board committees (Section 72)

Except to the extent that the MOI provides otherwise, the board may:

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  Appoint any number of committees of directors; and
  
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  Delegate to any committee any of the authority of the board.
  

 Except to the extent that the MOI, or a resolution establishing a committee, provides otherwise, the committee:

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  May include persons who are not directors of the company, but:
  
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    any such person must not be ineligible or disqualified to be a director; and
    
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    no such person has a vote on a matter to be decided by the committee;
    
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    may consult with or receive advice from any person; and
    
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    has the full authority of the board in respect of a matter referred to it.