topic 7: shareholder's meeting Flashcards
organs of a company?
- shareholder’s meeting
- board of directors
- managing director
- committees of the board
board of directors (sec 66 (1))?
- business affairs of the company must be managed by or under the directionof its board
- only board may exercise management function, shareholders may not usurp
- certain significant decisions regarding management must be taken by shareholders’ meeting to appoint, remove directors, amend MOI and shareholders’ approval needed for certain actions by board
non-compliance of formalities?
resolution may not be valid
certain instances where formalities are not required?
- unanimous assent
- company with only one shareholder
- company where every shareholder is also a director
- written resolution
instances where formalities not required
unanimous assent?
- prescribed by the common law
- shareholders can take decisions without formal meeting/ without having to observe all formalities
- all sharehodlers are fully aware of what is being done and all assent
- irrelevant whether all shareholders assent at same time and manner
- if htere is uncertainty must use a special resolution
instances where formalities not required
company with only one shareholder?
- must be profit company not state-owned companies
- shareholder may exercise voting right at any time iro any matter without notice/ compliance with internal formalities (unless MOI provides otherwise)
instances where formalities not required
company where every shareholder is also a director?
- not applicaton to SOC
- if a matter must be referred by the board to the stakeholders, then shareholders may decide on the matter at any time after referral without notice/ compliance with internal formalities
instances where formalities not required
written resolution?
- resolution that could be voted on by shareholders’ meeting may be submitted for consideration to shareholders
- shareholders may vote in writing
- within 20 business days after resolution was submitted to them
- resolution adopted if supported by sufficient % voting rights
- if adopted: same effect as if approved by voting at meeting
- results of voitng must be delivered to shareholders within 10 business days
proxies sec 58?
- proxy requirements
- special rules
proxies
proxy requirements?
- shareholders not obliged to attend shareholders’ meeting personally and to personally vote
- may appoint individual as representative/ proxy ( to participate/ speak/vote at SHM on behalf of shareholder, give consent to a sec 60 decision)
- appointment must be in writing, dated and signed by shareholder
- prxy may vote as thinks fit unless: MOI provides otherwise, instrument indicates how proxy should vote
proxies
special rules sec 58 (8)?
(a) an invitation myst be sent to every shareholder that is entitled to notice of the meeting at which the proxy will be exercised
(b) invitation/ intrument supplied by company for appointing the proxy must
- contain reasonably prominent summary of the rights established by the section
- contain adequate blank space immediately before the names of any person named
- provide adequte space for the shareholder to indicate whether proxy should vote in favour of, for or against
(c) company may not require that proxy appointment be made irrevocable
(d) proxy appointment remains valid only until the end of the meeting at which it was intended to be used
shareholders’ meetings?
to provide shareholders the opportunity to debate and vote on matters affecting the company
sec 1 definition
AGM public company?
- must hold AGM
- initially no more than 18 months after the incorporation and
- after that every calendar year, but no more htan 15v months after the last AGM
business to be transacted at AGM
- presentation of director’s report, audited financials for preceding financial year and audit committee report
- election of directors
- appointment of auditor and audit committee
- matters raised by shareholders (w or w/out advance notice)
who can call a shareholder’s meeting?
board/ any other person specified in MOI may call shareholders’ meeting at any time
when must company call SHM?
subject to sec 60 a company must hold a SHM
- when required by the Act of MOI to refer a matter to the shareho0lders to decide
- when required by sec 70 to fulfil a vacancy on the board and
- when otherwise required by ss 3 or 7 or by MOI
consequences for failing to have SHM?
ss 3
- written and signed demands for meeting are delivered to the company and
- each demand describes a specific purpose and
- shareholder have at least 10% voting rights in aggregate for the same matter being exercised
s 11
s 12
s 13
notice of shareholders’ meetings?
- company must give notice to all shareholders in prescribed manner and form
- notice must be delivered 15 days (ltd and NPC with voting members) or 10 (all other cases) before meeting
- MOI may prescribe longer/ shorter period by giving notice
business day calculation (sec 5(3))
calculated by:
- excluding day on which first such event occurs
- including day on/ by which second event is to occur and
- excluding any public holiday, Sat/ Sun that falls on/ between the days contemplated in par a and par b respectively
notice requirements?
s62(3)
- must be in writing and contain the following information: date, time and place, general purpose, copy of proposed resolution for which company received notice
- in case of AGM: financial statements are prenumbered/ summarised form and directions to obtain copy of complete set of annual financial for preceding year
- reasonably prominent statement that shareholders is entitled to attend & vote and to appoint a proxy
material defect in notice?
meeting may only proceed if:
- every person that may vote in present and
- agrees to ratify defective notice
conduct of shareholders’ meeting?
- place
- attending and participating
- electronic communication
- electronic communication: public companies
conduct of shareholders’ meeting
place?
- board may determine (unless MOI requires otherwise)
- can be in RSA or abroad
conduct of shareholders’ meeting
attending and participating?
before a person can do so the following is required:
- present reasonably identification
- the chairperson must be reasonably satisfied that right of person to participate and vote reasonably verified
