17.2.4 MEMBERSHIP OF A NONPROFIT COMPANY
An NPC may have members but this is not a necessity. A member of an NPC is a person who holds membership in and specified rights in respect of that NPC as set out in Schedule 1. The Incorporators of an NPC are its first members if its MOI provides for the NPC to have members. It is most important that the MOI sets out the fact that there must be members. Where the MOI provides for the NPC to have members there can only be two classes of members namely members with voting rights and non-voting right members.
· If an NPC MOI provides for members its MOI must not restrict or regulate or provide for any restriction or regulation of that membership in a manner that it may amount to unfair discrimination in terms of Section 9 of the constitution.
· The MOI must not presume the membership of any person, deem a person to be a member or provide for the member to automatic or ex-officio membership of any person, except for lifetime membership awarded to a person for services to the company or to its or to its public benefit objects as it is set out in its MOI, and with that person’s consent.
· The MOI must set out the qualifications for membership, the process for applying for membership, any initial or periodic cost of membership, the rights and obligations (if any) of memberships in any class and the grounds in which membership will be suspended or lost.
Juristic persons including profit companies may be members of an NPC if it’s MOI so allows. As a rule, each voting member has one vote and each member’s vote is equal to each other member unless the MOI provides otherwise. The MOI can provide for certain members to have different or leader voting rights than others. Where an NPC has members then it must produce a register of membership.
An incorporator or member or director must not be paid directly or indirectly or receives any portion of its income or take transfer of any of its assets regardless of how the income or assets was derived except;
a. As reasonable remuneration where goods are delivered or services are rendered.
b. Reimbursement for cost may be made.
c. As a payment of an amount due and payable by the NPC in terms of a bona fide agreement between the NPC and that person or another.
d. As payment in respect of any rights of that person to that extent that such rights are ministered by the NPC in order to advance the stated object of the NPC or;
e. In respect of legal obligation binding on a non-profit company.