Summary - Shareholder Participation and Company Meetings

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STUDY UNIT: SHAREHOLDER PARTICIPATION AND COMPANY MEETINGS
DESCRIPTION
Introduction and overview
This study unit deals with provisions of the Companies Act 71 of 2008 (hereinafter
referred to as “the Companies Act”) relating to the types and convening of meetings,
voting rights, and the resolutions of meetings of shareholders. It examines the meaning
of these concepts by looking at their relevance and execution in company law.
Learning outcomes
At the end of this study unit you should be able to do the following:
• Assess the meaning of a record date

• Reflect on the circumstances in which a company can hold meetings
• Analyse the requirements for a valid notice of meeting
• Evaluate the process and/or procedures on how company meetings are
convened
• Reflect on the matters that must be dealt with at an annual general meeting of a
public company
• Examine how meetings must be conducted, including the conducting of
meetings by electronic communication and voting on particular matters
• Access the meaning of a proxy and examine the procedure in appointing a proxy
• Reflect on the decisions that require a special resolution
• Examine how shareholders can exercise their voting rights.
Key concepts
• Company meetings
• Record date
• Proxy
• Special resolution
• Voting rights
Record date for determining shareholder rights
A record date refers to the date established under section 59, on which a company
determines the identity of its shareholders and their shareholdings, for the purposes of
the Companies Act. The board of directors must set a record date for the following
purposes:
• Receiving a notice of a shareholders’ meeting

• Participating in and voting at a shareholders’ meeting
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• Deciding any matter by written consent or electronic communication

• Exercising pre-emptive rights
• Receiving contributions
• To be allotted or to exercise other rights
(i)
Click on the link to read the case Van Zyl v Nuco Chrome Bophuthatswana
(Pty) Ltd 2013 JRD 0453 (GSJ).
Van Zyl v Nuco Chrome Bophuthatswana (Pty) Ltd 2013 JRD 0453 (GSJ)
This case discusses the importance and requirements of a record date.
Proxies
The appointment of a proxy is subject to the following conditions:
• The appointment must be in writing, and signed by the shareholder.

• It is valid for one year.
• A proxy may be appointed for a specific period of time.
• The appointment may be for two or more persons concurrently exercising voting
rights for different shares.
• A proxy may delegate authority to act on behalf of the shareholder to another person.
• A copy of the proxy appointment form must be delivered to the company before the
shareholders’ meeting.
• A shareholder is not compelled to make an irrevocable proxy appointment. A
shareholder may alter the proxy appointment by cancelling it in writing, appointing
another proxy, and delivering a copy of the revocation to the proxy and the company.
For a better understanding of proxy appointments and the Richard Du Plessis Barry v
Clearwater Estates NPC case, read the following materials.
Read the article below, Madlela V "The Appointment of a Proxy ′At Any Time′
in Terms of Section 58 of the Companies Act 71 of 2008: Richard Du Plessis
Barry v Clearwater Estates NPC [2017] ZASCA 11" PER / PELJ 2019(22).
Madlela
V_Appointment of a Proxy.pdf
This article discusses the appointment of a proxy at any time and articulates the
difference between an alterable and unalterable provision, by analysing the Richard Du
Plessis Barry v Clearwater Estates NPC [2017] ZASCA 11 case.
Click on this link to read the case of Richard Du Plessis Barry v Clearwater
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Estates NPC [2017] ZASCA 11

https://www.saflii.org/za/cases/ZASCA/2017/11.html
This case heard the application and interpretation of section 58(1) of the Companies
Act regarding a shareholder appointing a proxy at any time.
Convening a shareholders’ meeting
Click on this link to read the case of Heatherview Estate Extension 24

Homeowners Association v Mahlatse Trading Enterprise CC and Others
(226162019) [2019] ZAGPPHC 180
Heatherview Estate Extension 24 Homeowners Association v Mahlatse Trading

Enterprise CC and Others (226162019) [2019] ZAGPPHC 180
In this case, the court reaffirmed the exceptional circumstances in which a shareholder
may confront the court to convene a shareholders’ meeting in terms of section 61(12)
of the Companies Act.
Shareholder resolutions
Shareholder resolutions are either an ordinary resolution or a special resolution.
Ordinary resolution Special resolution
50% + 1 for approval 75% for approval

Memorandum of incorporation (MoI) may require
a higher percentile for voting rights on both
ordinary and special resolutions.
Activity 2.1
Question 1
The shareholders of Injabulo (Pty) Ltd are scheduled to hold a shareholders’ meeting
at 09:00 at the company’s head office. Injabulo (Pty) Ltd has 20 shareholders. At 10:00,
11 shareholders are present at the meeting. They are able to exercise in aggregate 24
per cent of all the voting rights that are entitled to be exercised in respect of the matters
to be decided at the meeting.
Two of the shareholders of the company have indicated to the chairperson that they will
attend the meeting, but are delayed in traffic due to bad weather. These two
shareholders each hold two per cent of the voting rights in Injabulo (Pty) Ltd.
The chairperson of the board of directors approaches you, as the secretary of the
company, for legal advice on whether the shareholders’ meeting may proceed. With
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reference to appropriate authority, advise the chairperson of the board of directors, and
indicate the options available to him in these circumstances.
Reflection activity
• Evaluate the significance of a record date.

• Reflect on the requirements for convening a shareholders’ meeting.
• Evaluate the contents of the MoI relating to convening a shareholders’ meeting.
• Evaluate the circumstances and conditions for the appointment of a proxy in
terms of the Companies Act.
• Reflect on the matters that must be dealt with at an annual general meeting of a
public company.
• Reflect on the circumstances and conditions for conducting a shareholders’
meeting by electronic communication.
• Reflect on the differences between an ordinary resolution and a special
resolution.

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Page 1 of 4

STUDY UNIT: SHAREHOLDER PARTICIPATION AND COMPANY MEETINGS

Introduction and overview

• Assess the meaning of a record date

Record date for determining shareholder rights

• Receiving a notice of a shareholders’ meeting

• Deciding any matter by written consent or electronic communication

This case discusses the importance and requirements of a record date.

The appointment of a proxy is subject to the following conditions:

• The appointment must be in writing, and signed by the shareholder.

Estates NPC [2017] ZASCA 11

Convening a shareholders’ meeting

Click on this link to read the case of Heatherview Estate Extension 24

Heatherview Estate Extension 24 Homeowners Association v Mahlatse Trading

Shareholder resolutions are either an ordinary resolution or a special resolution.

Ordinary resolution Special resolution

50% + 1 for approval 75% for approval

• Evaluate the significance of a record date.

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