Contact

Director removals under the Companies Act 71 of 2008

Back to top

Director removals under the Companies Act 71 of 2008

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.

19 Aug 2025 09:42 Minutes Podcast
Director removals under the Companies Act 71 of 2008

Director removals under the Companies Act 71 of 2008

Podcast

Director removals under the Companies Act 71 of 2008

Podcast

00:00 00:00
Download MP3

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.

Click here to listen.

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2025 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.

You might also be interested in

17 Jun 2025

by Joe Whittle, Kananelo Sikhakhane and Khutso Mongadi

Unconscionability as a defence to on-demand guarantees

On-demand performance guarantees are a staple in construction and engineering projects due to their commercial function of ‘as good as cash’ security, providing employers with prompt and reliable security if contractors fail to meet their obligations. Demand guarantees are designed to be autonomous instruments. The guarantor’s obligation to pay arises upon presentation of a demand that complies with the guarantee’s terms, regardless of disputes under the underlying contract (the independence principle). The independence principle is the main charm of demand guarantees, as the South African courts have consistently upheld the independence of these guarantees, with fraud by the beneficiary being the only recognised exception to payment.

Construction & Engineering

5 min read

11 Jun 2025

by Yaniv Kleitman and Menachem Gudelsky

Courts not so unanimous about unanimous assent

In the recent case of Cowan and Others v Norton and Others (2024/090281) ZAGPJHC 358 (25 March 2025) the Johannesburg High Court considered the validity of company actions ratified by the unanimous assent of the shareholders, without (at the outset) passing resolutions at a shareholders’ meeting or in writing by way of a section 60round-robin. 

Corporate & Commercial Law

4 min read

7 May 2025

by Tim Fletcher and Timothy Smit

Trumped up charges

The levy imposed by the Trump administration on goods imported into the US from South Africa is impacting both South African and US businesses, whether supply agreements are already concluded or are being negotiated (particularly where significant minimum supply quantities are an issue), as parties try and deal with an overnight 31% increase in the landed price of goods in the US.

Dispute Resolution

2 min read

27 Aug 2024

by Joe Whittle, Zodwa Malinga, Kananelo Sikhakhane and Marco Neto

The issue of procedural rights and settlement agreements in the adjudication of the defence of fraud against the enforcement of a performance guarantee

The parties to a construction contract often agree to the conclusion of separate financial arrangements with third parties for the purposes of ensuring financial security and project success. Where such an agreement is in place, the contractor procures an undertaking furnished by a guarantor, who is an authorised financial services provider, to pay a specified amount to the employer where the contractor (or subcontractor) fails to perform in terms of the contract. This undertaking is known as a performance guarantee.

Dispute Resolution

7 min read

21 May 2025

by Simone Dickson, Sadia Rizvi and Pebetsi Letsoalo

Important POPIA amendments to note

Significant amendments have been made to the Regulations issued under the Protection of Personal Information Act 4 of 2013 (POPIA). These changes appear to be aimed at providing data subjects with more options to enforce theirrights. 

Technology & Communications

1 min read

5 Dec 2024

by Alex Kanyi

How can tax policy formulation help address issues affecting African women directly?

In the latest episode of our CDH Conversations Empowerment Podcast Series, Lena and Alex, explore how tax policies can address economic and social challenges affecting African women.

Tax & Exchange Control

13:31 Minutes

This website uses cookies to enhance the browsing experience. For more information, please see our Cookie Policy.

Accept Decline