COMPANY LAW
DISTINCTION GAURANTEED!!!
PASS FIRST TIME!!
2021
LML 4806 PORTFOLIO 2021
BUBBLEGUMLAW
LLB
10/20/2021
, QUESTION 1.1
If every shareholder of a company (other than a state-owned company) is
also a director of the company, any matter that is required to be referred by
the board to the shareholders for decision may be dealt with in terms of
section 57(4) of the Companies Act. The effect of this section is that a matter
may be referred by the board to the shareholders without notice or
compliance with any internal formalities. However, this is subject to the
Memorandum of Incorporation which may provide otherwise.
Therefore, as all the shareholders of Exclusive Properties (Pty) Ltd are directors of the
company, section 57(4) of the Companies Act 71 of 2008 would be applicable, unless
the Memorandum of Incorporation provides otherwise.
Section 57(4) requires the following:
• Every person must be present at the board meeting when the matter was
referred to them in their capacity as shareholders.
• A sufficient number of persons must be present in their capacity as
shareholders to satisfy the quorum requirements as set out in section 64 of the
Companies Act.
• A resolution adopted by the shareholders be supported by shareholders
holding at least the percentage of shares required for adopting an ordinary
resolution at a properly constituted shareholders‟ meeting.
In this case, Oliver was not present at the meeting. Therefore, the first proviso is not
satisfied because not every person was present at the board meeting when the matter
was referred to them in their capacity as shareholders.
The default position for a quorum to be satisfied is that at least 25% of all the voting
rights eligible to be exercised in respect of at least one matter to be decided at the
meeting must be present before the meeting may start. Since three out of four
shareholders were present at the meeting, the quorum requirements for the meeting
were satisfied. The default position for the support of an ordinary resolution is that
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