scholarly journals REPRESENTATION OF A COMPANY WHEN CONTRACTING WITH ANOTHER PERSON UNDER SOUTH AFRICAN COMPANY LAW Makate v Vodacom (Pty) Ltd [2016] ZACC 13

Obiter ◽  
2018 ◽  
Vol 39 (2) ◽  
Author(s):  
Vela Madlela ◽  
Palollo Michael Lehloenya
Keyword(s):  
Board Of Directors ◽  
South African ◽  
Company Law ◽  
Third Party ◽  
Constitutional Court ◽  
Legal Nature ◽  
The Board Of Directors ◽  
The Law ◽  
The Impact ◽  
A Company

A company is an artificial person and has no mind, will or hands of its own. It is, therefore, compelled to act through human agents. The board of directors is responsible for the management and direction of the business affairs of the company. Under South African company law the directors’ powers of management are statutorily entrenched (S 66(1) of the Companies Act 71 of 2008). The board of directors may, however, delegate its powers to an individual director (or individual directors), a committee of the board, a managing director or other officers of the company. Before an individual director or officer of the company can conclude a binding transaction on behalf of their company, they must have the authority to do so. In South Africa, the issue of authority to enter into a transaction or agreement on behalf of a company is dealt with using the principles of the law of agency.The crisp issue in this note relates to the circumstances in which an individual company director or officer who, when contracting with another person, purports to be acting on behalf of the company will bind the company. In the recent case of Makate v Vodacom (Pty) Ltd ([2016] ZACC 13 (hereinafter “Makate v Vodacom”)), which involved a claim for reasonable compensation by the inventor of the concept of “Please Call Me” against Vodacom (Pty) Limited (hereinafter “Vodacom”), the Constitutional Court dealt specifically with the authority of a director to conclude a contract with a third party on behalf of the company. This note discusses Makate v Vodacom and the approach of the court regarding when a company will be bound by contracts concluded by its director or another person purporting to represent the company in a transaction with a third party. It examines the main judgment of Jafta J and the concurring judgment of Wallis J in relation to the legal nature of ostensible authority in the absence of actual authority.The note further looks at the issue of prescription, which Vodacom in its defence raised against the claim for compensation brought by Mr Makate. It explores the circumstances in which prescription can be successfully invoked to deflect a contractual claim brought against a company, the impact of the Constitution in this area of the law and whether the claim lodged by Mr Makate amounted to a “debt” for purposes of the Prescription Act (68 of 1969). To this end, again, both the main judgment of Jafta J and the concurring judgment of Wallis J are examined. This is followed by critical insights on the implications of this case and some concluding remarks.

Finding Juridical Dispositions Germane to the Interpretative Context to be Attributed to ‘Reasonably’ under Section 4 of the Companies Act 71 of 2008

2020 ◽  
Vol 35 (1) ◽  
Author(s):  
Simphiwe Bidie
Keyword(s):  
Decision Making ◽  
Board Of Directors ◽  
South African ◽  
Legal Order ◽  
Company Law ◽  
Constitutional Court ◽  
Bill Of Rights ◽  
Principle Of Legality ◽  
A Company ◽  
Legal Meaning

This article takes the view that the inclusion of the term ‘reasonably’ under s 4 of the Companies Act 71 of 2008 has profound foundational importance. It satisfies an important constitutional mandate embodied in s 1(c) of the Constitution, 1996: that the principle of legality be observed in all decision-making. Because of this requirement, the actions of a company director are required to be scrutinised in the light of the Constitution. This may mean that the courts must determine decisions made by directors having regard for the country’s overall constitutional and economic objectives. Therefore, the inclusion of the term seems to be a validation, because the Constitutional Court has held in many cases that the principle of legality is fundamental to the South African constitutional legal order, as required by section 1(c) of the Constitution, 1996. Practically, as vanguards of the constitutional principles, the courts would be expected to infuse the principle of legality into their interpretative duties in order to instil in the company-law sphere an environment that will foster compliance with the Bill of Rights and ensure predictability and certainty. This article pertains specially to circumstances where a board of directors has erred in law by misdirecting itself or by falling short when considering and/or interpreting ‘reasonable circumstances’. This is particularly necessary since the legal meaning the Act contemplates by including the term ‘reasonably’ in s 4 requires urgent examination before directors proceed to distribute company money or property.

Meetings of Members Ordered by the Court

2020 ◽  
Author(s):  
Leslie Kosmin ◽  
Catherine Roberts
Keyword(s):  
Board Of Directors ◽  
General Meeting ◽  
Financial Statements ◽  
Company Law ◽  
Constitutional Rights ◽  
Share Capital ◽  
The Board Of Directors ◽  
A Company

The two key organs of a company are the board of directors and the members of the company exercising their constitutional rights in a general meeting. Company law attaches great significance to the due convening of general meetings of shareholders. The general meeting is the forum for considering many of the essential matters relating to the company’s affairs including increasing or reducing the share capital of the company, changes to the memorandum or articles of association, alterations to the composition of the board of directors, considering the content of the company’s financial statements and approving dividends.

scholarly journals The Different Impact of Top Executives’ Turnover on Healthy and Restructured Companies

2021 ◽  
Vol 17 (1) ◽  
pp. 17
Author(s):  
Carla Morrone ◽  
Alberto Tron ◽  
Federico Colantoni ◽  
Salvatore Ferri
Keyword(s):  
Quantitative Analysis ◽  
Board Of Directors ◽  
Logit Model ◽  
Top Executives ◽  
Distressed Firms ◽  
The Board Of Directors ◽  
Management Changes ◽  
The Impact ◽  
A Company

The aim of this paper is to investigate if top executives’ turnover affects the performance of a company and if it differently impacts the performances of a healthy and a restructured company. In order to investigate the impact of the renewal of both members of the board of directors and CEO impacts on company profitability, we performed a quantitative analysis based on a sample of 144 Italian companies using a logit model. The findings show that management changes influence the performance of a company. However, the results show a different impact for healthy and restructured companies. The renewal of the board of directors negatively affects the performances of a healthy company while influences positively the probability of a future increase in performances for restructured companies, suggesting useful implications for scholars and practitioners. This analysis confirms that the renewal of top executives can affect the probability of an increase of company performances, especially for distressed firms, contributing to existing literature which is still limited and focused only on few countries.

Protection of shareholders class rights in company law

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anthony Nwafor
Keyword(s):  
South African ◽  
Case Law ◽  
Company Law ◽  
The South ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
Class Rights ◽  
A Company ◽  
Business Challenges

Purpose A company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company’s organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights. Design/methodology/approach A doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law. Findings The findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights. Practical implications The paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company. Originality/value The paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights.

scholarly journals PERLUASAN PENGATURAN PENGURUSAN PERSEROAN TERBATAS DALAM PEMBAHARUAN HUKUM PERSEROAN TERBATAS

2020 ◽  
Vol 8 (10) ◽  
pp. 1495
Author(s):  
Pande Putu Indahyani Lestari ◽  
I Gede Agus Kurniawan
Keyword(s):  
Board Of Directors ◽  
Research Method ◽  
Limited Liability ◽  
Company Law ◽  
Legal Research ◽  
Legal Entity ◽  
Study Results ◽  
The Board Of Directors ◽  
A Company

Tujuan studi ini untuk mengkaji perluasan pengaturan pengurusan perseroan terbatas dalam pembaharuan hukum Perseroan Terbatas. Dalam UUPT menyebutkan bahwa Direksi berwenang dan bertanggung jawab penuh untuk menjalankan pengurusan Perseroan. Studi ini menggunakan metode penelitian hukum normatif, yakni suatu penelitian menggunakan berdasarkan dengan pendekatan bahan hukum, baik hukum primer dan hukum sekunder. Hasil studi menunjukkan bahwa Direksi sebagai organ perseroan bertanggung jawab atas kepentingan Perseroan, apabila dalam suatu Perseroan tidak memiliki Direksi maka Perseroan tidak akan bisa berjalan atau beroperasional dengan baik selayaknya sebuah badan hukum. Kemudian dalam hal ini ketika masa jabatan Direksi sudah habis mengakibatkan terjadinya kekosongan kepengurusan Direksi, di dalam UUPT tidak ada yang mengatur manakala suatu Perseroan sudah tidak memiliki Direksi. The purpose of this study is to examine the expansion of management arrangements for limited liability companies in the legal renewal of Limited Liability Companies. The UUPT states that the Directors are authorized and fully responsible for carrying out the management of the Company. This study uses a normative legal research method, which is a research using based on the approach of legal materials, both primary and secondary law. The study results show that the Board of Directors as a corporate organ is responsible for the interests of the Company, if in a Company does not have a Board of Directors, the Company will not be able to operate or operate properly as a legal entity. Then in this case when the term of office of the Board of Directors has expired resulting in a vacancy in the management of the Board of Directors, in the Company Law no one regulates when a Company does not have a Board of Directors.

scholarly journals The board of directors in South Africa: Its role in corporate strategic planning

1986 ◽  
Vol 17 (4) ◽  
pp. 215-219
Author(s):  
J. Viljoen
Keyword(s):  
South Africa ◽  
Strategic Planning ◽  
Board Of Directors ◽  
South African ◽  
Corporate Strategy ◽  
Company Law ◽  
Strategy Evaluation ◽  
Strategic Plans ◽  
Legitimate Concern ◽  
The Board Of Directors

There is a considerable degree of uncertainty regarding the precise role of the board of directors in corporate strategic planning. With reference to the South African Company Law and practice the objectives of this paper are (i) to isolate and categorize possible alternative relationships between top management and the board of directors in matters of corporate strategy; (ii) to identify the level at which the board should become involved in corporate strategy; (iii) to suggest which elements of strategy should be the legitimate concern of the board; (iv) to propose procedural guidelines which will facilitate optimal board involvement in corporate strategy. The author concludes that the board of directors, in terms of its mandate, should not only become involved in strategy evaluation but also in the formulation and implementation of strategic plans. This is particularly true within the context of the current socio-economic and political environment in South Africa. The implications of this conclusion for the composition of the board and for the conducting of board affairs are discussed.

17. Company Law II Company Officers and Liabilities

2017 ◽  
Author(s):  
Lucy Jones
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Company Law ◽  
The Board Of Directors ◽  
A Company

This chapter discusses the rules relating to the officers of a company. It considers the meaning of ‘director’ and the position of the Board of Directors. It examines the appointment, retirement, and removal of directors and considers the powers of directors and their authority to act on behalf of the company. The chapter examines the general duties of directors, including the codified duties under the Companies Act 2006, and considers the effect of a breach of those duties. The appointment and the role of a company secretary and company auditors are examined. The chapter concludes with a discussion of the meaning of corporate governance.

scholarly journals Pertanggungjawaban Direktur atas Kewenangan Mewakili Perseroan Terbatas yang telah Habis Masa Kepengurusannya

2019 ◽  
Vol 8 (1) ◽  
pp. 67-80
Author(s):  
Eduard Rudy Suharto
Keyword(s):  
Board Of Directors ◽  
Limited Liability ◽  
Limited Liability Company ◽  
The Board Of Directors ◽  
The Law ◽  
A Company ◽  
Goals And Objectives

The Board of Directors is the only organ of the company that has power, authority and is fullyresponsible for managing the company solely for the interests of a company, in accordancewith the company's goals and objectives, and has the power, authority and responsibility torepresent the company both inside and outside the court with the provisions of the articles ofassociation that have been made. Directors in the Company have a term of office as stated inthe Deed of Establishment of a Limited Liability Company. If the term of office of the Board ofDirectors is exhausted, then it must be done by the GMS. If the Board of Directors does nothold a GMS, then the position of the Board of Directors is not valid before the Law and doesnot have an interest in representing the Company either inside or outside the Court.Keywords : Directors, RUPS, Court

17. Company Law II

2019 ◽  
pp. 479-506
Author(s):  
Lucy Jones
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Company Law ◽  
The Board Of Directors ◽  
A Company

This chapter discusses the rules relating to the officers of a company. It considers the meaning of ‘director’ and the position of the Board of Directors. It examines the appointment, retirement, and removal of directors and considers the powers of directors and their authority to act on behalf of the company. The chapter examines the general duties of directors, including the codified duties under the Companies Act 2006, and considers the effect of a breach of those duties. The appointment and the role of a company secretary and company auditors are examined. The chapter concludes with a discussion of the meaning of corporate governance.

scholarly journals Restructuring Insurance Policy as an Ultra Vires Action Based on Limited Liability Company Law

2021 ◽  
Vol 04 (07) ◽  
Author(s):  
Handoyo Prasetyo ◽  
Keyword(s):  
Board Of Directors ◽  
Limited Liability ◽  
Pension Funds ◽  
The State ◽  
Company Law ◽  
Insurance Policy ◽  
The Board Of Directors ◽  
The Law ◽  
The Republic ◽  
The Right

As mentioned in the Constitution of the Republic of Indonesia of 1945, everyone has the right to live and the right to defend his life. All citizens are equally in the law and must uphold the law without exception. These rights and obligations also apply to workers who after devoting their lives for decades to the state through the company in which they work, entering retirement age and subsequently starting a new life as a retiree. There is a belief that State-Owned Enterprises (it is called as BUMN) is unlikely to go bankrupt because it is owned by the State, becomes the main choice of retirees to entrust the management of their pension funds to PT Asuransi Jiwasraya (Persero). The problem arises when Jiwasraya plans a restructuring program of all Jiwasraya insurance policy, including an annuity policies owned by millions of retirees as a result of the losses suffered by Jiwasraya due to mismanagement and corruptive behavior of former The Board of Directors of Jiwasraya. Pensioners strongly object to the restructuring plan because it has the effect of reducing monthly pensioner benefits by up to 40% (forty percent), a very large amount that means for retirees who rely heavily on monthly money from pension funds, especially during the Covid-19 pandemic health and life costs are also increasing. This study will analyze whether the actions of The Board of Directors of Jiwasraya who restructure insurance policies fall into the category of ultra vires (actions outside the the board of directors authority), which to answer it researchers will use normative juridical research methods. From the results of this study, it was concluded that the insurance policy restructuring program is an ultra vires action, therefore it must be null and void.

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