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NON-ELIGIBLE AND DISQUALIFIED DIRECTORS

Section 69 states that a person who is ineligible or disqualified, must not be appointed
or elected as a director of a company, or consent thereto, or act as such. The election
or appointment is a nullity if, at the time of the election or appointment, that person
is ineligible or disqualified. A company may, in its MOI, impose additional grounds of
ineligibility or disqualification, and set out minimum qualifications to be met by directors
of the company. A company must not knowingly permit an ineligible or disqualified
person to serve or act as a director, and the Commission must maintain a public register
of persons who are disqualified. A person who becomes ineligible or disqualified while
serving as a director of a company ceases to be entitled to continue to act as a director
immediately, subject to Section 70(2).
A person is ineligible if the person is a juristic person, an unemancipated minor or under
similar legal disability, or does not satisfy any qualification set out in the MOI.
The Act Sets Out Disqualifications as Follows:
Section 69(8)(a): a court has prohibited that person to be a director, or declared the
person to be delinquent (Section 162). A person under probation cannot serve as a
director for the period of probation.
Section 69(8)(b):
(i) An unrehabilitated insolvent (ii) a person prohibited in terms of any public regulation
(iii) any person removed from an office of trust due to dishonesty, or (iv) any person
convicted of offences in the Republic or elsewhere and imprisoned without the option
of a fine, or fined more than the prescribed amount, for fraud, theft, forgery, perjury or
a specific offence involving fraud, misrepresentation or dishonesty, or in regard to the
forming or managing of a company, or in terms of the Companies Act, Insolvency Act, or
Financial Intelligence Centre Act.

Where a director is disqualified in terms of (iii) and (iv) above, he may nevertheless
act as a director of a private company if he is the sole shareholder or the shares are
held by a person/s related to that disqualified person, and each such person has
consented in writing to that disqualified person being a director of the company.
In addition, Section 69(9) provides that such a person’s disqualification will end
after five years under certain circumstances set out in that Section, and that the
court may also, in certain circumstances extend the disqualification time frame of
disqualification of such a person if it is necessary to protect the public, having regard
to the conduct of the disqualified person up to the time of the application.

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