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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.