One of the documents that a company is required to maintain in terms of the Companies Act 71 of 2008 (“the Act”) is a record of the directors of the company.
Whilst reviewing the statutory records of companies over the years, we have often been presented with a Companies and Intellectual Property Commission (“CIPC”) report as being the record of the directors or, alternatively, the latest copy of the registered CoR39. These documents do not comply with Section 24(3)(b)(i) and (ii) and 24(5) of the Act, as they do not reflect the history of the past directors, which must be maintained for a period of 7 years after retirement, nor do they include the information as required by S24(5).
Section 24(3)(ii) of the Act states that every company must maintain a record of its directors including, with respect to each past director, the information required in terms of Section 24(5) which must be retained for seven years after a past director retired from the company.
Section 24(5) of the Act requires that the company’s record of directors must include the following information of each director:
- Full name as well as any former names;
- identity number, or failing that the date of birth;
- nationality and passport number of all directors who are not South Africans;
- date of the most recent election or appointment as a director of the company;
- name and registration number of every other company or foreign company of which the person is a director. In the case of the foreign company, the nationality of that company; and
- any other prescribed information.
Regulation 23 requires that in addition to the information above, the record of directors must also include the address for services for that director, as well as for those companies who are required to have an audit committee, any qualifications and experience of the director.
This document must be accessible at the company’s registered office, or if held at another location, at the registers address. A person who holds or has a beneficial interest in any securities issued by the company has a right to inspect the register of directors at no charge. Any other person which includes creditors, may also inspect the register for a charge of no more than R100.
In terms of Section 26(9)(a) of the Act, it is an offence for a company to fail to accommodate any reasonable request for access to such document.
Directors can be held liable for loss, damages or costs which the company may incur for a breach of their fiduciary duty if they do not comply with any provisions listed in the Act or provisions mentioned in the MOI of the company. All companies are managed by or under the direction of the board, except when the Act and the Memorandum of Incorporation (“MOI”) provides otherwise. The directors can be held liable jointly and severally if they are non-compliant with the Act.
This means the directors can be personally liable for any non-compliance, including something like not keeping records of directors as prescribed.
Corporate Statutory Audit, Johannesburg