COMPANY LAW LML4806
ASSIGNMENT 01
UNIQUE NUMBER: 868503
QUESTION ONE
A quorum is the minimum number of qualified persons whose presence at a meeting is necessary
before any business may be validly transacted at the meeting. A quorum is an internal formality
requirement in a company. According to section 64(1) (a) and (b), a shareholders meeting may not
begin until sufficient persons are present at the meeting to exercise, in aggregate, at least 25 per cent
of all the voting rights that are entitles to be exercised in respect of at least one matter to be decided
at the meeting. In addition, a matter to be decided at the meeting to exercise, in aggregate, at least
25 per cent of all voting rights that are entitles to be exercised on the matter at the time the matter is
called on the agenda. Section 64(2) states that, a company’s memorandum of incorporation may
specify a lower or higher percentage than 25 per cent in both these respects. Furthermore, according
to section 64(3), if a company has more than two shareholders, a meeting may not begin, or a matter
to be debated, unless at least three shareholders are present at the meeting, provided the quorum
requirements for a meeting to begin and a matter to be debated as specified in the companies act or
the memorandum of incorporation are satisfied. Once the quorum requirements have been satisfied,
should shareholders leave the meeting, resulting in the number of shareholders present being below
the quorum requirements, the meeting may continue and a matter may nevertheless be considered
at the meeting as long as at least one shareholder with voting rights is still present at the meeting.
This may mean that one shareholder could make a decision that would bind the company and all
other shareholders, but the company’s memorandum of incorporation maintains flexibility in the
sense that the rules may provide that the requisite quorum must be present throughput the meeting
in order for the meeting to continue or for a matter to be considered at the meeting. According to
section 64(4) if within one hour after the appointed time for a meeting to begin, the requirements
mentioned above, if applicable, for that meeting to begin have not been satisfied, the meeting is
postponed without motion, vote of further notice, for one week, secondly, for consideration of a
particular matter to begin have not been satisfied, if there is other business on the agenda of the
meeting, consideration of that matter may be postponed to a later time in the meeting without
motion or vote, or if there is no other business on the agenda of the meeting, the meeting is
adjourned for one week, without motion or vote. 12
In the light of the above mentioned provisions, codex(pyt) ltd quorum requirement for the meeting
has not been met and the meeting may not go on, although the meeting can, after one hour, be
postponed for one week without motion or vote of further notice.
1
The companies act 71 of 2008
2
Farouk HI Cassim, Maleka Femida Cassim, Richard Jooste, Rehana Cassim and Jacqueline Yeats, The Law Of
Business Structures (JUTA 2012).
ASSIGNMENT 01
UNIQUE NUMBER: 868503
QUESTION ONE
A quorum is the minimum number of qualified persons whose presence at a meeting is necessary
before any business may be validly transacted at the meeting. A quorum is an internal formality
requirement in a company. According to section 64(1) (a) and (b), a shareholders meeting may not
begin until sufficient persons are present at the meeting to exercise, in aggregate, at least 25 per cent
of all the voting rights that are entitles to be exercised in respect of at least one matter to be decided
at the meeting. In addition, a matter to be decided at the meeting to exercise, in aggregate, at least
25 per cent of all voting rights that are entitles to be exercised on the matter at the time the matter is
called on the agenda. Section 64(2) states that, a company’s memorandum of incorporation may
specify a lower or higher percentage than 25 per cent in both these respects. Furthermore, according
to section 64(3), if a company has more than two shareholders, a meeting may not begin, or a matter
to be debated, unless at least three shareholders are present at the meeting, provided the quorum
requirements for a meeting to begin and a matter to be debated as specified in the companies act or
the memorandum of incorporation are satisfied. Once the quorum requirements have been satisfied,
should shareholders leave the meeting, resulting in the number of shareholders present being below
the quorum requirements, the meeting may continue and a matter may nevertheless be considered
at the meeting as long as at least one shareholder with voting rights is still present at the meeting.
This may mean that one shareholder could make a decision that would bind the company and all
other shareholders, but the company’s memorandum of incorporation maintains flexibility in the
sense that the rules may provide that the requisite quorum must be present throughput the meeting
in order for the meeting to continue or for a matter to be considered at the meeting. According to
section 64(4) if within one hour after the appointed time for a meeting to begin, the requirements
mentioned above, if applicable, for that meeting to begin have not been satisfied, the meeting is
postponed without motion, vote of further notice, for one week, secondly, for consideration of a
particular matter to begin have not been satisfied, if there is other business on the agenda of the
meeting, consideration of that matter may be postponed to a later time in the meeting without
motion or vote, or if there is no other business on the agenda of the meeting, the meeting is
adjourned for one week, without motion or vote. 12
In the light of the above mentioned provisions, codex(pyt) ltd quorum requirement for the meeting
has not been met and the meeting may not go on, although the meeting can, after one hour, be
postponed for one week without motion or vote of further notice.
1
The companies act 71 of 2008
2
Farouk HI Cassim, Maleka Femida Cassim, Richard Jooste, Rehana Cassim and Jacqueline Yeats, The Law Of
Business Structures (JUTA 2012).
