LML4801 EXAM PACK.

MEETINGS QUESTION 1: You are the company secretary of Best Life ltd. Advise Best life ltd on the correct procedure of holding a general meeting in terms of the companies act of 2008.Pay specific attention in your answer to the following matter: -the provisions as to notice of meetings (7 marks) Notice of meetings: S62: 1. Must be in writing. 2. Include the date, time and place of the meeting. 3. Where the company set a record date for a meeting 4. The notice should explain the general purpose of the meeting 5. In a public company and a non-profit company that has voting members, notice of a shareholder meeting should be given 15 business days before the date of the meeting. In any other company the notice, convening the meeting must be sent ten business days before the date of the meeting. The provisions of the memorandum of Incorporation may prescribe longer minimum notice. 6. A copy of any proposed resolution received by the company, which is to be considered at the meeting, must accompany the notice convening the meeting. 7. The notice must indicate the percentage of voting rights required for the resolution to be adopted. 8. A notice convening the AGM of a company must contain a summary of the financial statements that will be tabled at the meeting. 9. A notice convening a meeting must contain a statement that a shareholder is entitled to appoint a proxy 10. The notice should indicate that meeting participants will be required to provide satisfactory proof of identity at the meeting. Where the company has failed to give proper notice of the meeting or there has been a defect in the giving of the notice, the meeting may proceed if the persons who are entitled to vote in respect of each item on the agenda are present at the meeting and acknowledge actual receipt of the notice and agree to waive notice of the meeting or in the case of a material defect, ratify the defective notice. LML4801 EXAM PACK. 2 QUESTION 2: The shareholders meeting of Best Life ltd is attended by Ms Modiba who holds 10% of the voting rights, MS Masuku who holds 5% of the voting rights and Mr Lehloenya who holds 20% of the voting rights in the company. Advise whether a quorum has been met to allow the meeting to begin in terms of the company’s act of 2008. (5 marks) Quorum A shareholders meeting may not begin until sufficient people are present, in aggregate, exercise at least 25% of the voting rights that are entitled to be exercised in respect of at least one matter to be decided. A company’s Memorandum of incorporation may specify a lower or higher percentage than the 25%. If a company has more than two shareholders and only two are present, a meeting may not begin until at least three shareholders are present. YES there is more than 2 shareholders holding more than 25% of the share capital QUESTION 3: Basil and Stephen were the only directors and shareholders of Umgeni (pty) ltd. The memo of incorp of Umgeni (pty) ltd provided that the remuneration of directors should be determined from time to time by the company in a general meeting. No resolution was ever passed authorizing the directors to receive any remuneration. They withdrew money from the company’s account and recorded that as director’s salaries. When the company was wound up, the liquidator sought to recover from the two directors the money paid to them. Explain with reference to case law whether Basil and Stephen will be liable to effect any repayments to the company. (10 marks) Shareholders acting other than at a meeting Act without holding a meeting B4: don’t need to hold an AGM if all the members entitled to attend consent in writing Common law: unanimous assent: Some decisions are valid without having a meeting if all the members know of the facts and have assented to it Gohlke: shareholders appointed a director without a formal meeting if they have unanimous assent