LML4806
Assignment 1 Semester 1 2025
Detailed Solutions, References & Explanations
Unique number:
Due Date: March 2025
QUESTION 1 (2 ANSWERS PROVIDED)
Companies Act 71 of 2008, section 58 shareholders are entitled to appoint a proxy to
represent them at a shareholders' meeting if they are unable to attend. This right allows a
shareholder to delegate their rights to another person who may attend, speak, and vote on
their behalf.
Section 58(1) of the Companies Act expressly states that a shareholder may appoint another
person as their proxy to participate in, speak, and vote at a shareholders’ meeting. The proxy
does not have to be a shareholder of the company. This means that Busi can appoint any
person she chooses to act on her behalf at the annual general meeting (AGM) of Strada (Pty)
Ltd.
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QUESTION 1 (2 ANSWERS PROVIDED)
Companies Act 71 of 2008, section 58 shareholders are entitled to appoint a proxy
to represent them at a shareholders' meeting if they are unable to attend. This right
allows a shareholder to delegate their rights to another person who may attend,
speak, and vote on their behalf.
Section 58(1) of the Companies Act expressly states that a shareholder may appoint
another person as their proxy to participate in, speak, and vote at a shareholders’
meeting. The proxy does not have to be a shareholder of the company. This means
that Busi can appoint any person she chooses to act on her behalf at the annual
general meeting (AGM) of Strada (Pty) Ltd.
The requirements for a valid proxy appointment under section 58(2) are:
1. The appointment must be in writing, dated, and signed by the shareholder.
2. The appointment remains valid for one year, unless a shorter period is
stipulated.
3. The proxy must be delivered to the company before the proxy exercises any
rights at the meeting.
As long as Busi meets these requirements, she can validly appoint a proxy to vote
and express her views at the AGM. Given that there is still two hours before the
meeting, she has enough time to draft and submit a written and signed proxy
appointment to the company.
Clause 10.3 of the Memorandum of Incorporation
The Memorandum of Incorporation (MOI) of Strada (Pty) Ltd governs the company's
internal affairs and may alter certain rights of shareholders, provided that such
modifications are consistent with the Companies Act. However, section 58(1) of the
Companies Act states that the right to appoint a proxy may not be limited or
restricted in any way by the MOI. This means that if clause 10.3 attempts to impose
restrictions on a shareholder’s right to appoint a proxy, such as requiring board
approval or limiting who may be appointed as a proxy, it would be inconsistent with
the Companies Act and therefore invalid.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
