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Summary Exam questions with answers - long questions
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- University Of South Africa (Unisa)
Exam questions with answers - long questions
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GENERAL MEETINGS1. Kinds of member meetings
S 179
a. Class meetings
• Meeting for holders of special classes of shares re matters that concern only holders
of those classes of shares.
• “Outsiders” only if members approved
• E.g. to change rights attached to shares – need to amend articles – General meeting
• Quorum – per articles- e.g. 2 persons representing at least ⅓ of shares in that class.
b. General meetings
• All meetings of the general body of shareholders.
c. Annual General Meeting
• General meeting subject to subject to number of specific provisions – Act &
Articles
• When?
o First – within 18 months after incorporation
o Subsequent
▪ Not later than 9 months after financial year end
▪ Within 15 months of date of previous AGM
o Extension – apply to Registrar & pay prescribed fee – 3 months
o No need for AGM if all members entitled to attend meeting
▪ Agree in writing thereto
▪ Dispose of matters required to be dealt with at AGM
▪ Signed by all members
▪ Before expiration of period in which meeting has to be held.
▪ Deemed to be resolution passed at AGM on date of last signature.
o Fails to comply – company & directors & officers knowingly party to
failure - guilty of offense
2. Voting rights
S 193 – 195
a. Equal voting rights
• General – every member of company may vote
• Share capital – vote iro each share
, o Public company - Par value – votes in same proportion to total votes as
nominal value of shares bears to nominal value of all shares.
o No par value – 1 vote per share
• Limited by guarantee – each member 1 vote
• Articles can provide otherwise
b. Exceptions to equal voting rights
The following exceptions can be contained in articles
• Private company – determined by articles, provided each share must carry right
to vote – can be disproportionally
• Chairman – casting/second vote
• Slide scale for voting rights
• Pref shares – no voting rights unless
o Redemption payments in arrears & unpaid
o Resolution directly affecting rights attached to shares
• Existing companies with existing non-voting shares
c. Pender v Lushington
➢ Chairman at general meeting, in breach of articles, rejected certain votes as
invalid
➢ Action brought by shareholder whose vote was rejected
➢ Grounds:
o Proposed policy was adverse to interest of company (rejected)
o Votes were improperly rejected by chairman (accepted)
➢ People can vote any way they please, even for personal gain
➢ No obligation on shareholders to vote in best interest of company at large
➢ Shareholders have the right to have their votes recorded.
3. Voting procedures
S 197 – 198
a. Voting procedures
• Show of hands – 1 vote per member
• Poll – general rule - votes in proportion to shares held
Can demand poll if:
• 5 members having right to vote;
• Members representing at least 10% of voting rights; or
• Members holding at least 10% of issued share capital.
b. Voting agreements
• Shareholders at liberty to enter into voting agreements - enforceable
4. Resolutions
Formal decisions of a company at general meeting.
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, a. Simple majority
In general – resolution passed by simple majority of members present and entitled
to vote, provided quorum requirements were met.
Simple majority – ordinary resolution – effective from date of adoption unless
other date was specifed.
b. Special resolutions
• Converting one type of company into another
• Change of name
• Alteration of objects and powers
• Alteration, removal or incorporation of conditions in the memorandum
• Alteration of articles
• Alteration of share capital
• Authorising payment of interest on share out of capital
• Authorising issue of par value shares at a discount
• Authorisation of nor par value below book value
• Acquisition of own shares
• Conversion of shares into stock & vice versa
• Approval of share option scheme for directors
• Making a loan to a director
• Approval of payments to directors for loss of office or in connection with
schemes, arrangements or take-overs
• Getting inspectors appointed by Minister to investigate company affairs
• Winding up by the court and voluntary winding-up
• Sanctioning agreement between solvent company & creditors
• Sanctioning acceptance of shares in another company in exchange for assets
of company wound up voluntarily
• Disposal of records of company wound up voluntarily by members.
c. Special resolution – requirements
Effective from date of registration
• The notice convening the meeting must:
o Give 21 clear days notice in writing
o State intention to propose resolution as a special resolution, terms and
effect of resolution and reasons for the resolution
• Members holding at least ¼ of total votes were present or by proxy
• ¾ of votes present or by proxy vote inn favour of resolution.
d. Special resolution – notice
Any departure other than an immaterial correction of
• Clerical, or
• Grammatical nature
is not permissible.
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