| (1) |
In this section, "director" includes a former director and an alternate director, and— |
| (a) |
a prescribed officer; or |
irrespective of whether or not the person is also a member of the company’s board.
| (2) |
Subject to subsections (4) to (6), any provision of an agreement, the Memorandum of Incorporation or rules of a company, or a resolution adopted by a company, whether express or implied, is void to the extent that it directly or indirectly purports to— |
| (a) |
relieve a director of— |
| (b) |
negate, limit or restrict any legal consequences arising from an act or omission that constitutes willful misconduct or willful breach of trust on the part of the director. |
| (3) |
Subject to subsection (3A), a company may not directly or indirectly pay any fine that may be imposed on a director of the company, or on a director of a related company, as a consequence of that director having been convicted of an offence, unless the conviction was based on strict liability. |
| (3A) |
Subsection (3) does not apply to a private or personal liability company if- |
| (a) |
a single individual is the sole shareholder and sole director of that company; or |
| (b) |
two or more related individuals are the only shareholders of that company, and there are no directors of the company other than one or more of those individuals |
| (4) |
Except to the extent that a company’s Memorandum of Incorporation provides otherwise, the company— |
| (a) |
may advance expenses to a director to defend litigation in any proceedings arising out of the director’s service to the company; and |
| (b) |
may directly or indirectly indemnify a director for expenses contemplated in paragraph (a), irrespective of whether it has advanced those expenses, if the proceedings— |
| (i) |
are abandoned or exculpate the director; or |
| (ii) |
arise in respect of any liability for which the company may indemnify the director, in terms of subsections (5) and (6). |
| (5) |
Except to the extent that the Memorandum of Incorporation of a company provides otherwise, a company may indemnify a director in respect of any liability arising other than as contemplated in subsection (6). |
| (6) |
A company may not indemnify a director in respect of— |
| (a) |
any liability arising— |
| (i) |
in terms of section 77(3)(a), (b) or (c); or |
| (ii) |
from wilful misconduct or wilful breach of trust on the part of the director; or |
| (b) |
any fine contemplated in subsection (3). |
| (7) |
Except to the extent that the Memorandum of Incorporation of a company provides otherwise, a company may purchase insurance to protect— |
| (a) |
a director against any liability or expenses for which the company is permitted to indemnify a director in accordance with subsection (5); or |
| (b) |
the company against any contingency including, but not limited to— |
| (aa) |
that the company is permitted to advance in accordance with subsection (4)(a); or |
| (bb) |
for which the company is permitted to indemnify a director in accordance with subsection (4)(b); or |
| (ii) |
any liability for which the company is permitted to indemnify a director in accordance with subsection (5). |
| (8) |
A company is entitled to claim restitution from a director of the company or of a related company for any money paid directly or indirectly by the company to or on behalf of that director in any manner inconsistent with this section. |
Stamp Duties Act, 1968 (Act 77 of 1968)
