Unit 14 - Corporate governance (shareholders)

Question 1

Discuss the formality compliance of shareholders.

Answer 1

• One Shareholder in a profit company means that formality compliance is not required.
• If all the Shareholders in the company are also directors, formality compliance is not required.
• A profit company with only one director, formality compliance is not required.

Question 2

Discuss the compulsory AGM of a public company.

Answer 2

• The first AGM of a company must take place within 18 months after incorporation.
• Thereafter an AGM must be held every year within 15 months of the last AGM.

Question 3

Who may call a shareholder meeting ?

Answer 3

• Board.
• Any other person specified in the MOI or rules of company.

Question 4

Who can convene a meeting if there are no directors or directors are incapacitated ?

Answer 4

• Other person authorized by MOI can convene the meeting.
• Nobody is authorized, the shareholder may approach the Tribunal for an administrative order to allow the Shareholders to convene a meeting at a date and time that the Tribunal considers appropriate.

Question 5

Discuss the form and content of a notice of meetings.

Answer 5

• It must be in writing.
• Set out date, time, place, record date, general purpose of meeting and specific purpose, if any.
• Must include copy of the proposed resolution and percentage of voting rights.
• Proxy.
• Satisfactory identification.

Question 6

What is the notice period ?

Answer 6

Company is required to deliver notice to all its shareholders within 15 business days for public companies and NPCs with members;
10 business days for any other company.

Question 7

What is quorum ?

Answer 7

The minimum number of members of an
assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.

Question 8

What are the quorum requirements ?

Answer 8

• Holders of 25% of all shareholders entitled to vote (either personally or by proxy).
• 25% of voting rights must be present.
• If more than 2 shareholders, must meet person quorum which is 3 people or more.

Question 9

What happens if the quorum isn’t met within one hour ?

Answer 9

• Meeting must be postponed by one week.
• If there is still no quorum at the subsequent postponed meeting, the Shareholders present will constitute a quorum.

Question 10

In which ways can voting occur ?

Answer 10

• Can occur by poll, where shareholders are entitled to exercise all voting rights attached to the shares held by such person.
• Show of hands, one vote regardless of number of shares.
• If demanded by at least 5 people who have a voting right or by those entitled to exercise at least 10% of the voting rights on the matter th vote must take place as a poll.

Question 11

Can a company require that a proxy be lodged before a specific time for it to be
valid ?

Answer 11

• The SCA agreed with the conclusion of the court a quo that section 58(1) is unalterable.
• A share holder of the company may appoint a proxy at any time anyone that is not a shareholder in the company.
• Provided that the proxy provides an instrument confirming their appointment.

Clearwater Estates case.