Acts Online
GT Shield

Companies Act, 2008 (Act No. 71 of 2008)

Chapter 2 : Formation, Administration and Dissolution of Companies

Part F : Governance of companies

70. Vacancies on board

 

(1) Subject to subsection (2), a person ceases to be a director, and a vacancy arises on the board of a company—
(a) when the person’s term of office as director expires, in the case of a company whose Memorandum of Incorporation provides for fixed terms, as contemplated in section 68(1); or
(b) in any case, if the person—
(i) resigns or dies;
(ii) in the case of an ex offıcio director, ceases to hold the office, title, designation or similar status that entitled the person to be an ex officio director;
(iii) becomes incapacitated to the extent that the person is unable to perform the functions of a director, and is unlikely to regain that capacity within a reasonable time, subject to section 71(3);
(iv) is declared delinquent by a court, or placed on probation under conditions that are inconsistent with continuing to be a director of the company, in terms of section 162;
(v) becomes ineligible or disqualified in terms of section 69, subject to section 71(3); or
(vi) is removed—
(aa) by resolution of the shareholders in terms of section 71(1);
(bb) by resolution of the board in terms of section 71(3); or
(cc) by order of the court in terms of section 71(5) or (6).

 

(2) If, in terms of section 71(3), the board of a company has removed a director, a vacancy on the board does not arise until the later of—
(a) the expiry of the time for filing an application for review in terms of section 71(5); or
(b) the granting of an order by the court on such an application,

but the director is suspended from office during that time.

 

(3) If a vacancy arises on the board, other than as a result of an ex officio director ceasing to hold that office, it must be filled by—
(a) a new appointment, if the director was appointed as contemplated in section 66(4)(a)(i); or
(b) subject to subsection (4), by a new election conducted—
(i) at the next annual general meeting of the company, if the company is required to hold such a meeting; or
(ii) in any other case, within six months after the vacancy arose—
(aa) at a shareholders meeting called for the purpose of electing the director; or
(bb) by a poll of the persons entitled to exercise voting rights in an election of the director, as contemplated in section 60(3).

 

(4) If, as a result of a vacancy arising on the board of a company there are no remaining directors of a company, any holder of voting rights entitled to be exercised in the election of a director may convene a meeting for the purpose of such an election.

 

(5) A person contemplated in subsection (4) may apply to a court for relief, and the court may grant a supervisory order relating to a meeting convened in terms of that paragraph if the court is satisfied that such an order is required to prevent the oppression, or preserve the rights, of any shareholder.

 

(6) Every company must file a notice within 10 business days after a person becomes or ceases to be a director of the company.