LML4806
Assignment 1 Semester 2 – 2023
Unique Number: NA
Question: 1
Shareholders’ resolutions must usually be voted on at properly constituted
meetings of the company’s shareholders. However, the Companies Act 71 of
2008 provides for an exception to this general rule. Explain what this exception
under the Companies Act 71 of 2008 entails. (5)
Common law
In terms of the common law shareholders’ resolutions can be adopted without holding
a general meeting.
This can be done by unanimous assent provided that: - all shareholders are fully aware
of the facts – all shareholders assented to.
Gohlke and Schneider v Westies Minerals (Pty) Ltd 1970 (2) SA 685 (A). the court held
that members may validly appoint a director to the board without any formal meeting
having been held if there is evidence of their unanimous consent. In re Duomatic Ltd
[1969] 1 All ER 161 (ch). held that the unanimous approval of directors’ remuneration
by the two directors holding all the voting shares in a company could be regarded as
a resolution of a general meeting approving the payment.
Section 60 of the Companies Act 71 of 2008 (round robin or written resolutions)
Section 60 of the Companies Act 71 of 2008 is an alternative to the doctrine of
unanimous assent to validly pass a resolution of shareholders outside a properly
constituted meeting provided that certain formalities have been complied with.
, In terms of section 60:
• A resolution may be submitted to shareholders in writing.
• The resolution must be adopted in writing by the required majority to pass the
particular type of resolution.
• If a resolution is passed in this manner, it has the same effect as a resolution
adopted at a duly convened meeting.
• However, any matters that in terms of the Companies Act 71 of 2008 or the
Memorandum of Incorporation of a company must be dealt with at the annual
general meeting of a company, may not be dealt with in terms of the procedures
set out in section 60.
Question: 2
David is a non-executive director and chairperson of Free State Airlines SOC
Ltd, a company that operates commercial flights between Johannesburg and
Bloemfontein. David is also one of the major shareholders of Aerial Lease (Pty)
Ltd, an aircraft leasing company. In a meeting chaired by David, and by a
resolution proposed and supported by David, the board of directors of Free
State Airlines SOC Ltd decides to lease three commercial aircrafts from Aerial
Lease (Pty) Ltd. David does not inform the other directors of Free State Airlines
SOC Ltd about his existing shareholding in Aerial Lease (Pty) Ltd. The entire
board of directors of Free State Airlines SOC Ltd considers and approves the
relevant lease agreement with Aerial Lease (Pty) Ltd. However, the other
directors of Free State Airlines SOC Ltd subsequently become aware of David’s
shareholding in Aerial Lease (Pty) Ltd and they now want to retract the lease
agreement.
With reference to the relevant provisions of the Companies Act 71 of 2008,
advise the board of directors of Free State Airlines SOC Ltd on the following
matters:
2.1 Whether David has breached any specific duty that he owes to Free State
Airlines SOC Ltd by not informing the board of directors about his
shareholding in Aerial Lease (Pty) Ltd. (10)
Assignment 1 Semester 2 – 2023
Unique Number: NA
Question: 1
Shareholders’ resolutions must usually be voted on at properly constituted
meetings of the company’s shareholders. However, the Companies Act 71 of
2008 provides for an exception to this general rule. Explain what this exception
under the Companies Act 71 of 2008 entails. (5)
Common law
In terms of the common law shareholders’ resolutions can be adopted without holding
a general meeting.
This can be done by unanimous assent provided that: - all shareholders are fully aware
of the facts – all shareholders assented to.
Gohlke and Schneider v Westies Minerals (Pty) Ltd 1970 (2) SA 685 (A). the court held
that members may validly appoint a director to the board without any formal meeting
having been held if there is evidence of their unanimous consent. In re Duomatic Ltd
[1969] 1 All ER 161 (ch). held that the unanimous approval of directors’ remuneration
by the two directors holding all the voting shares in a company could be regarded as
a resolution of a general meeting approving the payment.
Section 60 of the Companies Act 71 of 2008 (round robin or written resolutions)
Section 60 of the Companies Act 71 of 2008 is an alternative to the doctrine of
unanimous assent to validly pass a resolution of shareholders outside a properly
constituted meeting provided that certain formalities have been complied with.
, In terms of section 60:
• A resolution may be submitted to shareholders in writing.
• The resolution must be adopted in writing by the required majority to pass the
particular type of resolution.
• If a resolution is passed in this manner, it has the same effect as a resolution
adopted at a duly convened meeting.
• However, any matters that in terms of the Companies Act 71 of 2008 or the
Memorandum of Incorporation of a company must be dealt with at the annual
general meeting of a company, may not be dealt with in terms of the procedures
set out in section 60.
Question: 2
David is a non-executive director and chairperson of Free State Airlines SOC
Ltd, a company that operates commercial flights between Johannesburg and
Bloemfontein. David is also one of the major shareholders of Aerial Lease (Pty)
Ltd, an aircraft leasing company. In a meeting chaired by David, and by a
resolution proposed and supported by David, the board of directors of Free
State Airlines SOC Ltd decides to lease three commercial aircrafts from Aerial
Lease (Pty) Ltd. David does not inform the other directors of Free State Airlines
SOC Ltd about his existing shareholding in Aerial Lease (Pty) Ltd. The entire
board of directors of Free State Airlines SOC Ltd considers and approves the
relevant lease agreement with Aerial Lease (Pty) Ltd. However, the other
directors of Free State Airlines SOC Ltd subsequently become aware of David’s
shareholding in Aerial Lease (Pty) Ltd and they now want to retract the lease
agreement.
With reference to the relevant provisions of the Companies Act 71 of 2008,
advise the board of directors of Free State Airlines SOC Ltd on the following
matters:
2.1 Whether David has breached any specific duty that he owes to Free State
Airlines SOC Ltd by not informing the board of directors about his
shareholding in Aerial Lease (Pty) Ltd. (10)
