Exam (elaborations)
LML4806 Exam pack 2024(Question and answers)
- Course
- LML4806
- Institution
- University Of South Africa
LML4806 Exam pack 2024(Question and answers) With accurate answers and assurance that they are in the exam.
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NAME: TASKEENSURNAME: KADER
STUDENT NUMBER: 67396844
LML4806-COMPANY LAW
OCTOBER\NOVEMBER EXAMINATIONS 2021
1
,QUESTION ONE
1.1.
Issue
The issue of the case is to determine whether the ordinary resolutions were
validly passed at the meeting seeing as though Oliver(a director and
shareholder) was not present at the meeting and there was no notice given for
the meeting.
Relevant law
In terms of section 64 of the Companies Act 71 of 2008 (‘the Act’), a
shareholders’ meeting may not begin until sufficient persons are present at
the meeting to exercise in aggregate at least 25% of all the voting rights that
are entitled to be exercised in respect of at least one matter to be decided at
the meeting. This is subject to the Memorandum of Incorporation of the
company which may specify a higher or a lower percentage instead of the
25% requirement.
In companies with more than two shareholders, at least three shareholders
are required to be present and the 25% requirement (or a different
requirement if stated in the Memorandum of Incorporation) must also be
satisfied.
Section 64(4) of the Act provides that if, within an hour after the scheduled
time for the meeting to commence, the quorum is not met, the meeting may
be postponed without motion, vote or further notice for one week.
In terms of s71(2), the notice of a shareholders’ meeting to remove a director,
and the resolution, must be given to the director prior to considering the
resolution to remove the director. The period of notice that should be given is
equivalent to that which a shareholder is entitled to receive when convening a
meeting. The director must be allowed the reasonable opportunity to make a
presentation, in person or through a representative, to the meeting, before the
resolution is put to a vote.
2
, However, 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 71 of 2008. 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. This is subject to
the Memorandum of Incorporation which may provide otherwise.
Therefore, since 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.
Application
In this case, Oliver was not present at the meeting. Therefore, the first
provision 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 that are entitled to be exercised in respect of at
least one matter to be decided at the meeting must be present before the
3
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