Blue Square Advisory Services (Pty) Ltd v Mandingoane and Another

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Page 22 papers must nevertheless show that a resolution was validly passed at the meeting which was properly held. The members who passed the resolution [45] In order for the company to pass a valid resolution in terms of section 220 of the 1973 Act, it must be carried by a majority of votes of the members, either present in person or by proxy or, in the case of a body corporate represented in terms of section 188. In the present case the question arises who was the member that passed the resolution. In this enquiry the provisions of sections 103 and 104 of the 1973 Act, must be read in the light of the relevant provisions of sections, 32, 52, 54, 60 and 65 of the 1973 Act. The relevant parts of which (with emphasis added) read as follows: “32 Any seven or more persons or, where the company to be formed is a private company, any two or more persons associated for any lawful purpose or, where the company to be formed is to be a private company with a single member, any one person for any lawful purpose, may form a company having a share capital or a company limited by guarantee and secure its incorporation by complying with the requirements of this Act in respect of the registration of the memorandum and articles. 52 . . . (2) If the company is to have a share capital, the memorandum shall state- (a) (i) the amount of the share capital with which it is proposed to be registered and the division thereof into shares of a fixed amount; or (ii) the number of shares if the company is to have shares of no par value; (b) the number of shares which each subscriber undertakes to take up, stated in words opposite his name: Provided that no subscriber may take less than one share. . . . 54 (1) The memorandum shall be and be completed in the form prescribed. (2) The memorandum of a public company shall be signed by not less than seven subscribers and of a private company by one or more subscribers, stating their full names, occupations and residential, business and postal addresses, and each subscriber shall sign the memorandum in the presence of at least one witness who shall attest the signature and state his residential, business and postal address.
Page 23 60 (1) The articles shall be and be completed in the form prescribed. (2) The articles shall be signed by each subscriber of the memorandum stating his full name, occupation and residential, business and postal address, in the presence of at least one witness who shall attest the signature and state his residential, business and postal address. 65 (1) From the date of incorporation stated in the certificate of incorporation, the subscribers of the memorandum together with such other persons as may from time to time become members of the company, shall be a body corporate with the name stated in the memorandum, capable of exercising all the functions of an incorporated company, and having perpetual succession, but with such liability (if any) on the part of the members to contribute to the assets of the company in the event of its being wound up as provided by this Act. (2) The memorandum and articles shall bind the company and the members thereof to the same extent as if they respectively had been signed by each member, to observe all the provisions of the memorandum and of the articles, subject to the provisions of this Act.” [46] Thus company may be formed by one or more persons, section 32. Those persons are the subscribers to the memorandum who are required to sign the memorandum, section 54(2) and articles of association, section 60(1). The shares taken up by each subscriber are recorded next to the name of each subscriber in the memorandum, section 52(2)(b). Upon incorporation the persons who were the subscribers form the body corporate with juristic personality, together with such other persons who become members of the company, section 65. The persons who were the subscribers to the memorandum are deemed to be the first members of the company and are required to be entered forthwith in the register of members, section 103(1). Every other person who agrees to become a member of a company and whose name is entered in its register of members, becomes a member of the company, section 103(2). [47] Accordingly a member must be a person whose name is entered in the company’s register. The family trust is named in the register as the member holding the entire share capital of the company. Mrs Louw requisitioned the general meeting, on behalf of the family trust, purporting to act in terms of a resolution of the trustees dated 12 November 2002 which empowered each of
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Blue Square Advisory Services (Pty) Ltd v Mandingoane and Another

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