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Question 1
1. You are approached by Stefan, the chairperson of the board of directors of JP Textiles Ltd
for legal advice. He informs you that JP Textiles Ltd will be holding its fifth annual general
meeting (AGM) next month at its registered office in Johannesburg. He further informs you that
the board of directors is concerned that a significant number of the company’s shareholders and
shareholder proxies who are based outside Johannesburg and overseas will not be able to travel
to Johannesburg to attend the AGM in-person (physically) at the company’s registered office.
Advise Stefan on what the company could do to ensure that it provides a reasonable opportunity
for all the shareholders and shareholder proxies to attend and participate at its fifth AGM.
To ensure that all shareholders and shareholder proxies have a reasonable opportunity to attend and
participate in its fifth Annual General Meeting (AGM), JP Textiles Ltd should leverage electronic
communication options and clearly communicate these to its shareholders.
Firstly, as a public company, JP Textiles Ltd is legally required to hold an AGM annually, no more
than 15 months after the previous meeting, or within an extended timeframe granted by the
Companies Tribunal (Companies Act, 2008). This meeting must address key matters such as the
presentation of the directors' report, financial statements, the election of directors, and the
appointment of auditors (Companies Act, 2008).
To facilitate remote participation, it is essential that JP Textiles Ltd provides for electronic
participation in the AGM. This requirement ensures that all shareholders, regardless of their location,
have the opportunity to participate in the meeting. The notice of the AGM must clearly inform
shareholders about the availability of electronic participation and provide them with the necessary
information to access the communication medium (Companies Act, 2008). For this to be effective,
the electronic platform must allow shareholders to communicate with each other in real-time and
participate actively in the meeting (Cassim et al., 2021). Shareholders must also bear the cost of
accessing the electronic medium unless the company decides otherwise (Companies Act, 2008).
Additionally, shareholders have the right to appoint a proxy to attend, participate, speak, and vote at
the AGM on their behalf. The proxy appointment must be in writing, dated, and signed by the
shareholder (Companies Act, 2008). The company should provide a proxy form that includes a
summary of the shareholders' rights and space to specify voting preferences (Cassim et al., 2021). A
proxy does not need to be a shareholder, and the appointment remains valid for one year unless
revoked (Companies Act, 2008).
The company's Memorandum of Incorporation may also grant flexibility in the location of the AGM,
allowing the board of directors to choose a location within South Africa or even abroad. This
flexibility, combined with electronic participation, would enable JP Textiles Ltd to accommodate
shareholders from different locations (Cassim et al., 2021).
Lastly, regardless of whether shareholders attend in person or electronically, they must present
satisfactory identification to verify their participation (Companies Act, 2008). This ensures that all
participants, including proxies, are properly authenticated to take part in the AGM.
Question 1
1. You are approached by Stefan, the chairperson of the board of directors of JP Textiles Ltd
for legal advice. He informs you that JP Textiles Ltd will be holding its fifth annual general
meeting (AGM) next month at its registered office in Johannesburg. He further informs you that
the board of directors is concerned that a significant number of the company’s shareholders and
shareholder proxies who are based outside Johannesburg and overseas will not be able to travel
to Johannesburg to attend the AGM in-person (physically) at the company’s registered office.
Advise Stefan on what the company could do to ensure that it provides a reasonable opportunity
for all the shareholders and shareholder proxies to attend and participate at its fifth AGM.
To ensure that all shareholders and shareholder proxies have a reasonable opportunity to attend and
participate in its fifth Annual General Meeting (AGM), JP Textiles Ltd should leverage electronic
communication options and clearly communicate these to its shareholders.
Firstly, as a public company, JP Textiles Ltd is legally required to hold an AGM annually, no more
than 15 months after the previous meeting, or within an extended timeframe granted by the
Companies Tribunal (Companies Act, 2008). This meeting must address key matters such as the
presentation of the directors' report, financial statements, the election of directors, and the
appointment of auditors (Companies Act, 2008).
To facilitate remote participation, it is essential that JP Textiles Ltd provides for electronic
participation in the AGM. This requirement ensures that all shareholders, regardless of their location,
have the opportunity to participate in the meeting. The notice of the AGM must clearly inform
shareholders about the availability of electronic participation and provide them with the necessary
information to access the communication medium (Companies Act, 2008). For this to be effective,
the electronic platform must allow shareholders to communicate with each other in real-time and
participate actively in the meeting (Cassim et al., 2021). Shareholders must also bear the cost of
accessing the electronic medium unless the company decides otherwise (Companies Act, 2008).
Additionally, shareholders have the right to appoint a proxy to attend, participate, speak, and vote at
the AGM on their behalf. The proxy appointment must be in writing, dated, and signed by the
shareholder (Companies Act, 2008). The company should provide a proxy form that includes a
summary of the shareholders' rights and space to specify voting preferences (Cassim et al., 2021). A
proxy does not need to be a shareholder, and the appointment remains valid for one year unless
revoked (Companies Act, 2008).
The company's Memorandum of Incorporation may also grant flexibility in the location of the AGM,
allowing the board of directors to choose a location within South Africa or even abroad. This
flexibility, combined with electronic participation, would enable JP Textiles Ltd to accommodate
shareholders from different locations (Cassim et al., 2021).
Lastly, regardless of whether shareholders attend in person or electronically, they must present
satisfactory identification to verify their participation (Companies Act, 2008). This ensures that all
participants, including proxies, are properly authenticated to take part in the AGM.
