Study unit 2 - LML with complete solution

Legal position of a company director and board of directors? This is a controversial question because the first thing to take note of is that the relationship between director and company is analogous to that of an agent, directors act like agents for the company. The position of a director is also similar to that of a trustee. However, both these analogies are not appropriate or sufficient descriptions of a directors legal position in South Africa. The legal position of a director is sui generis because it stands on its own. Therefore the legal position of a director is determined by reference to a set of facts of each individual case. An ex officio director ▪ holds office solely as a result of that person holding another office or title or status ▪ not appointed by shareholders ▪ all the powers and functions of any other director, except to the extent MOI restricts them ▪ has all the duties of and subject to the same liabilities as any other director An MOI-appointed director ▪ doesn't have to be appointed by shareholders ▪ MOI can specify how and/or by whom such a director is appointed An alternate director ▪ definition of director specifically includes alternate director ▪ may be appointed or elected depending on MOI ▪ defined as a person elected/appointed to serve, as occasion requires, as a member of the board in substitution for a particular elected/appointed director ▪ s 66(4)(a)(iii) provides that MOI can provide for the appointment/election of one or more persons as alternate directors ▪ in the case of a profit company ⇨ at least 50% of alternate directors must be elected by shareholders An elected director ▪ in the case of a profit company⇨ at least 50% of directors must be elected by shareholders A temporary director who is appointed to fill a vacancy ▪ MOI can provide for appointment ▪ Unless MOI provides otherwise, directors may appoint a temporary director