Acts Online
GT Shield

Companies Act, 1973 (Act No. 61 of 1973)

Chapter VIII: Directors

Interests of Directors and Officers in Contracts

234. Duty of director or officer to disclose interest in contracts

 

 

1) A director of a company who is in any way, whether directly or indirectly, materially interested in a contract or proposed contract referred to in subsection (2), which has been or is to be entered into by the company or who so becomes interested in any such contract after it has been entered into, shall declare his interest and full particulars thereof as provided in this Act.

 

2) The provisions of subsection (1) shall apply to any contract or proposed contract which is of significance in relation to a company's business and which is entered into or to be entered into-
a) in pursuance of a resolution taken or to be taken at a meeting of directors of a company; or
b) by a director or officer of the company who either alone or together with others has been authorised by the directors of the company to enter into such contract or any contract of a similar nature.

 

3)
a) For the purposes of subsection (1) a general notice in writing given to the directors of a company by a director thereof to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may after the date of the notice and before the date of its expiry be made with that company or firm, shall be deemed to be a sufficient declaration of interest in relation to any contract or proposed contract so made or to be made, if-
i) the nature and extent of the interest of the said director in such company or firm is indicated in the said notice; and
ii) at the time the question of confirming or entering into the contract in question is first considered or at the time such director becomes interested in a contract after it has been entered into, the extent of his interest in such company or firm is not greater than is stated in the notice.
b) A general notice under paragraph (a) may from time to time be amended and shall not be effective beyond the end of the financial year of the company but may from time to time be renewed.

 

3A) For the purposes of subsection (3) 'firm' means a corporation as defined in section 1 of the Close Corporations Act, 1984 (Act No. 69 of 1984), or any other body corporate, association, syndicate, partnership or trust that has as its object the acquisition of gain.

 

4) Any director or officer of a company who fails to comply with any provision of this section, shall be guilty of an offence.

 

5) Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company.