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Company Law - Assignment 02 2025 - Answer 01

To remove a director from Star Engineering, a board resolution must be passed, followed by a special notice to shareholders and a shareholders' meeting where a 75% majority is required for removal. Peter, the director, has rights including access to company records, the right to be heard at the meeting, and the option to seek legal recourse if he feels the removal is unjust. Compliance with the Companies Act is crucial to avoid legal issues during this process.

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Philani Mweli
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20 views1 page

Company Law - Assignment 02 2025 - Answer 01

To remove a director from Star Engineering, a board resolution must be passed, followed by a special notice to shareholders and a shareholders' meeting where a 75% majority is required for removal. Peter, the director, has rights including access to company records, the right to be heard at the meeting, and the option to seek legal recourse if he feels the removal is unjust. Compliance with the Companies Act is crucial to avoid legal issues during this process.

Uploaded by

Philani Mweli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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LML – 4806

Question 1 – answer 1

Procedure for Removal of a Company Director

To remove Peter as a director of Star Engineering (Pty) Ltd, Mashudu must follow the
procedure outlined in the Companies Act 71 of 2008. The steps are as follows:

1. Board Resolution: The board of directors must pass a resolution to remove Peter as
a director. This requires a majority vote by the directors.

2. Special Notice: After the board resolution, a special notice must be sent to all
shareholders and Peter, informing them of the intention to pass a resolution for
Peter's removal at a shareholders' meeting.

3. Shareholders' Meeting: A shareholders' meeting must be held, and the resolution


to remove Peter must be passed by at least 75% of the voting rights exercised on the
resolution.

4. Notice to CIPC: Within 10 business days of Peter's removal, a notice of his removal
must be filed with the Companies and Intellectual Property Commission (CIPC).

Rights of Peter in Terms of the Companies Act 71 of 2008

In terms of the Companies Act, Peter has the following rights:

1. Access to Information: Peter has the right to access the company's records and
financial statements, as well as to be provided with all relevant information
regarding the resolution for his removal.

2. Right to be Heard: Peter must be given the opportunity to make representations at


the shareholders' meeting before the resolution for his removal is passed.

3. Legal Recourse: If Peter believes that his removal was unfair or prejudicial, he may
apply to the court for relief.

It's important for Mashudu to ensure that the removal process complies with the
Companies Act and that Peter's rights are respected to avoid potential legal challenges.

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