Commercial Law > QUESTIONS and ANSWERS > LML4806 Assignment 2 (ANSWERS) Semester 2 2023 - GUARANTEED DISTINCTION Good grades. (All)

LML4806 Assignment 2 (ANSWERS) Semester 2 2023 - GUARANTEED DISTINCTION Good grades.

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Question: 1 Shareholders’ resolutions must usually be voted on at properly constituted meetings of the company’s shareholders. However, the Companies Act 71 of 2008 provides for an exception to ... this general rule. Explain what this exception under the Companies Act 71 of 2008 entails. (5) Under the Companies Act 71 of 2008 (South Africa), there is an exception to the general rule that shareholders' resolutions must be voted on at properly constituted meetings of the company's shareholders. This exception is commonly referred to as the "unanimous written consent" provision. According to this exception, shareholders can pass a resolution without the need for an actual meeting as long as all the shareholders entitled to vote on that resolution provide their written consent or approval. In other words, if all shareholders (or all shareholders of a particular class, if applicable) sign a written document expressing their agreement to a specific resolution, the resolution is considered valid and effective. Key points about the unanimous written consent provision: 1. Unanimity: For this exception to apply, every shareholder with voting rights on that particular resolution must give their consent. Even if a single shareholder dissents or does not provide written consent, this exception cannot be used. 2. Written consent: The consent must be in writing, signed by each shareholder who agrees with the resolution. Typically, this can be in the form of physical paper documents or electronic signatures, depending on the company's adopted procedures. 3. Specificity: The written consent must be clear and unambiguous about the resolution being approved. It should state the exact content of the resolution to avoid any confusion. 4. Record-keeping: The company is responsible for keeping a record of the unanimous written consent, as it serves as evidence that the resolution was properly passed without a physical meeting. 5. Timeframe: The Act does not specify any time constraints for obtaining unanimous written consent. However, it is prudent to obtain the consent in a reasonable timeframe and without undue delay to ensure the validity of the resolution. [Show More]

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