Chapter 2: Formation, Administration and Dissolution of Companies
Part F: Governance of companies
s70: Vacancies on board
- (1) Subject to subsection (2), a person ceases to be a director, and a vacancy arises on the board of a company:
- (a) when the person's term of office as director expires, in the case of a company whose Memorandum of Incorporation provides for fixed terms, as contemplated in section 68(1); or
- (b) in any case, if the person:
- (i) resigns or dies;
- (ii) in the case of an ex officio director, ceases to hold the office, title, designation or similar status that entitled the person to be an ex officio director;
- (iii) becomes incapacitated to the extent that the person is unable to perform the functions of a director, and is unlikely to regain that capacity within a reasonable time, subject to section 71(3);
- (iv) is declared delinquent by a court, or placed on probation under conditions that are inconsistent with continuing to be a director of the company, in terms of section 162;
- (v) becomes ineligible or disqualified in terms of section 69, subject to section 71(3); or
- (vi) is removed:
- (aa) by resolution of the shareholders in terms of section 71(1);
- (bb) by resolution of the board in terms of section 71(3); or
- (cc) by order of the court in terms of section 71(5) or (6).
- (2) If, in terms of section 71(3), the board of a company has removed a director, a vacancy on the board does not arise until the later of:
- (a) the expiry of the time for filing an application for review in terms of section 71(5); or
- (b) the granting of an order by the court on such an application,
- but the director is suspended from office during that time.
- (3) If a vacancy arises on the board, other than as a result of an ex officio director ceasing to hold that office, it must be filled by:
- (a) a new appointment, if the director was appointed as contemplated in section 66(4)(a)(i); or
- (b) subject to subsection (4), by a new election conducted:
- (i) at the next annual general meeting of the company, if the company is required to hold such a meeting; or
- (ii) in any other case, within six months after the vacancy arose:
- (aa) at a shareholders meeting called for the purpose of electing the director; or
- (bb) by a poll of the persons entitled to exercise voting rights in an election of the director, as contemplated in section 60(3).
- (4) If, as a result of a vacancy arising on the board of a company there are no remaining directors of a company, any holder of voting rights entitled to be exercised in the election of a director may convene a meeting for the purpose of such an election.
- (5) A person contemplated in subsection (4) may apply to a court for relief, and the court may grant a supervisory order relating to a meeting convened in terms of that paragraph if the court is satisfied that such an order is required to prevent the oppression, or preserve the rights, of any shareholder.
- (6) Every company must file a notice within 10 business days after a person becomes or ceases to be a director of the company.
Related Sections
s60: Shareholders acting other than at meeting
s66: Board, directors and prescribed officers
s68: Election of directors of profit companies
s69: Ineligibility and disqualification of persons to be director or prescribed officer
s71: Removal of directors
s162: Application to declare director delinquent or under probation
Related Regulations
R39: Directors and register of persons disqualified from serving as director
Related Notes
Notice to Customers: Reactivation of customer verification
Practice Note: Valued Customer