News & Resources

I serve as a director on the boards of a number of private companies. Unfortunately, for health reasons I won’t be able to attend upcoming board meetings at some of the companies. Can I appoint a proxy to represent me and exercise my voting rights?

I am a director of a computer hardware company. Sales have been going steadily down the last few months, and we are concerned about whether we can pay our suppliers and staff. I’m not sure whether this situation will change, and rather expect it to worsen, but it could change. What are my responsibilities towards the business and our shareholders under these circumstances?

I’m the only shareholder in my company, a cleaning products business. I have two directors who run the business for me. I’ve been building up the business over the years with a view to selling it as my retirement plan. However, the auditors have just informed me that the shares, in my mind worth about R10 million are now worth no more than about R3 million because of reckless management by the directors, selling of assets and even falsifying financial information and accounts. The nest egg I’ve been building is now nearly worthless because of their conduct. Can I recover what my company is worth less from them?

My brother, sister and I are the directors of our family company. My brother has never been one to live frugally and is continually spending the company’s funds and using company property for his personal benefit. It’s gotten so bad lately that we may lose the company if my sister and I don’t put a stop to it. We’ve discussed it with him, but all he says is that he is also a director and entitled to do what he is doing. What can we do to stop him?

I’m a director in a local design company. I’m also a shareholder in the company and have an employment contract. Lately, I’ve been at loggerheads with my co-directors about the direction of the business. I just feel we want different things. I’ve now decided to rather head out on my own and start my own design company. But I want to make sure I can do this?

A friend of mine has a good business concept and he has asked me to come on board as a partner. He wants to set up a company and make both of us directors in the company. I want to be part of the business but I’m not sure about being a director and what my liability may be?

My wife and I are the sole shareholders and directors of our family company. We’ve had a few good years, but with the current economic times, despite our best efforts to keep the company afloat, it doesn’t look like the company is going to make it. For the first time this reality has hit us and we are both worried that the company’s creditors will come after us and take our home and savings. Can they do this?

We Build It (Pty) Ltd is a construction company managed and operated by its directors. The nature of the company’s business frequently requires that its construction projects be well advanced before receipt of payment for services rendered. With subcontractors and suppliers to be paid, the company often finds itself in a situation where its debts could potentially not be paid if payment from a major client is delayed.

Should such a scenario arise, the business can be at risk of falling foul of the compliance requirements of the Companies Act, 2008 (the Companies Act) by not being able to pass the solvency and liquidity test prescribed by the Companies Act. As the business is being run by its directors, the following question then arises: If the company cannot pass the solvency and liquidity test, to what extent may the directors of the company incur liability for this situation?