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Homework answers / question archive / The members of Anchor (Pty) Limited are dissatisfied with the manner in which the affairs of the company are being conducted by the directors

The members of Anchor (Pty) Limited are dissatisfied with the manner in which the affairs of the company are being conducted by the directors

Accounting

The members of Anchor (Pty) Limited are dissatisfied with the manner in which the affairs of the company are being conducted by the directors. Two directors are therefore removed from office. The directors maintain that their removal is invalid, since the Articles provide that directors hold office for a period of five years and they were removed after only two years. They also contend that the appointment of the new directors is invalid, since the requirements of section 211 of the Companies Act were not complied with. These two directors approach you for legal advice.

Advise them on the procedures and requirements applicable to the appointment of new directors and the consequences if these requirements are not complied with.

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As per section 169 of companies act directors can be removed before expiry of their tenure provided an ordinary resolution has been passed followed by a special notice.and the director should given a reasonable opportunity of being heard..the removed directors contention that the removal before expiry is invalid as per articles of association is purely invalid  

The vacancy arised by removing a director shall be considered as casual vacancy and new directors shall be appointed by passing a resolution at the board meeting and circulation is not needed, and the appointed director shall hold office till the expiry of tenure remains of the removed director

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