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.
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