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Companies Act, 2008 (Act No. 71 of 2008)

Schedule 1 : Provisions concerning non-profit companies

5. Directors


(1) If a non-profit company has members, the Memorandum of Incorporation must—
(a) set out the basis on which the members choose the directors of the company; and
(b) if any directors are to be elected by the voting members, provide for the election each year of at least one-third of those elected directors.


(2) If a non-profit company has no members, the Memorandum of Incorporation must set out the basis on which directors are to be appointed by its board, or other persons.


(3) A non-profit company must not provide a loan to, secure a debt or obligation of, or otherwise provide direct or indirect financial assistance to, a director of the company or of a related or inter-related company, or to a person related to any such director.


(4) Subitem (3) does not prohibit a transaction if it—
(a) is in the ordinary course of the company’s business and for fair value;
(b) constitutes an accountable advance to meet—
(i) legal expenses in relation to a matter concerning the company; or
(ii) anticipated expenses to be incurred by the person on behalf of the company;
(c) is to defray the person’s expenses for removal at the company’s request; or
(d) is in terms of an employee benefit scheme generally available to all employees or a specific class of employees.