In the absence of any differing provisions in the company’s Memorandum of Incorporation, a
shareholders’ meeting cannot commence until there are enough attendees present to exercise at
least 25% of all voting rights for at least one matter to be decided or presented by proxy. If a
company has more than two shareholders, at least three shareholders must be present and able to
exercise the required percentage of voting rights before a meeting can begin or a matter can be
discussed.
If a quorum is not present within an hour of the appointed time for a meeting, the meeting may be
postponed or adjourned for up to a week. At the postponed or adjourned meeting, those present in
person will be considered a quorum. Other matters on the agenda may be postponed to a later time
in the meeting without a vote.
Shareholders may adopt two types of resolutions in terms of section 60 of the Company’s Act: (a) an
ordinary resolution with the support of over 50% of the voting rights exercised in the resolution (or a
higher percentage as required by a company’s MOI), or (b) a special resolution with the support of at
least 75% of voting rights exercised or a higher or lower percentage as specified in the company’s
MOI- either at a shareholders’ meeting or by holders of the company’s securities acting other than at
the meeting. A difference of at least 10% points between the voting requirements must always be
maintained for any matter.
Application:
The MOI of Miracle-of-the-Earth (Pty) Ltd requires an ordinary resolution of the shareholders for the
company to enter into contracts for the purchase of sugar. The company has 10 shareholders, each
holding 10% of total voting power, making it necessary to exercise at least 25% of the voting rights at
the meeting. Only six shareholders were present at the meeting, which is sufficient to meet the
quorum requirement. However, only four voted in favour of adopting the resolution, which is less
than the required majority of more than 50% of the voting rights exercised in the resolution.
Therefore, the resolution taken at the meeting will not be valid since it did not meet the requirement
of for an ordinary resolution. As per section 60 of the Companies Act, a valid resolution can only be
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