Director removals under the Companies Act 71 of 2008
Description
In this CDH Conversations episode, Belinda Scriba, Claudia Grobler, Professional Support Lawyer Roxanne Bain, and Candidate Attorney, Azola Ndongeni unpack the legal and procedural rules for removing company directors a process that can quickly become contentious if not handled correctly.
They explore the two legal routes available under the Companies Act: removal by shareholders in terms of Section 71(1) and removal by the board in terms of Section 71(3). Each route has its own requirements, from notice periods to specific grounds for removal.
The discussion also covers the director’s right to be informed and to address the meeting before a decision is made, as well as the ongoing “reasons” debate. While the Act doesn’t always require reasons for removal, the CIPC still expects them before processing a change, making it best practice to include them.
The team highlights common procedural pitfalls, such as giving insufficient notice, skipping key steps, or attempting “round robin” removals all of which can result in the process being declared invalid. They also note that reinstatement is rare if a removal is challenged, with damages often being the only remedy.
United States
