9.4 SPECIAL RESOLUTION REQUIRED FOR SPECIFIED PURPOSES
S 65 (11) deals with all the cases where a special resolution is required. We will not deal with all of them in these notes. I have explained some of the subsections below.
a. Refers to the amendment of a company’s MOI to the extent required by s16(1)(c) and 36(2)(a). S16(1)(c) says that a company’s MOI may be amended at any time if a special resolution to amend it is proposed.
S36(2) deals with the authorisation and the classification of shares and indicates what the directors may do subject to exceptions in the MOI. If there are any changes to the MOI then a special resolution is required and the amendment notice CoR 15.2 must be filed with the CIPC.
b. S65(11) (b) deals with the ratification of a consolidated revision of the MOI as specified in Section 18(1)(b) which basically deals with the authenticity of the consolidated version. It is good idea when doing a consolidated version of a MOI that it is ratified by special resolution. If there is a dispute and the consolidation is not passed by special resolution then the unconsolidated resolution will take preference. In certain cases, the CIPC will send out a notice requesting a consolidation of the MOI.
c. S65(11) (c) requires a special resolution to ratify actions by the company if the directors act in excess of their authority as indicated in s20 (2) which basically deals with certain limitations that the directors may have. A special resolution can ratify these acts of the directors. An example of this is if the directors did not have authority to issue shares, the issue of shares in excess of their authority may stand provided a special resolution is passed to this effect. A special resolution cannot ratify anything in conflict with the companies act.
S65 (11) details other situations where special resolutions are required which I am not going to detail here, please refer directly to Section 65(11).
There are also other special resolutions required not mentioned in this section. E.g. for Directors remuneration see s66 (8) and (9) which requires a special resolution to be approved for the remuneration to directors.
Section 65(11) of the Companies Act specifies the instances where a special resolution is required under this Act:
1. Amend the Memorandum of Incorporation:
- Changes to a company's Memorandum of Incorporation as contemplated in section 16(1)(c) and section 36(2)(a).
2. Ratification of a Consolidated Revision of the MOI:
- Approval of a consolidated revision of the Memorandum of Incorporation as contemplated in section 18(1)(b).
3. Ratification of Actions Beyond Authority:
- Ratifying actions by the company or directors that exceed their authority as contemplated in section 20(2).
4. Approval of Share Issues:
- Approval of specific share issues as contemplated in sections 41(1) and 41(3).
5. Financial Assistance:
- Authorization for the company to provide financial assistance in accordance with sections 44(3)(a)(ii) or 45(3)(a)(ii).
6. Reacquisition of Shares:
- Approval for the company to reacquire shares as specified in section 48(8).
7. Directors' Remuneration:
- Matters regarding directors' remuneration according to section 66(9).
8. Winding Up of the Company:
- Decisions to voluntarily wind up the company as contemplated in sections 80(1) and 81(1).
9. Transfer of Company Registration to Foreign Jurisdiction:
- Approval as contemplated in section 82(5).
10. Fundamental Transactions:
- Approval of any proposed fundamental transaction as determined by Part A of Chapter 5.