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The director in question must be a current director or within the 5 years immediately
preceding the application, have been a director of the company, and the Commission
must keep a register of all those persons declared delinquent or on probation.
A director may also face civil claims and potential criminal liability.
Grounds for Probation
■ Was present at a meeting and failed to vote against a resolution despite the inability
of the company to satisfy the solvency and liquidity test
■ Acted in a manner materially inconsistent with the duties of a director
■ Acted in or supported a decision of the company to act in a manner that was
oppressive or unfairly prejudicial
■ Within ten years after the effective date (1 May 2011), was a director of more
than one company or a managing member of more than one close corporation
(concurrently, sequentially or at unrelated times), and during that time two or more
of those companies or close corporations failed to fully pay all of their creditors
or meet all their obligations (except under a business rescue plan resulting from a
board resolution or a compromise with creditors).
Grounds for Delinquency
■ Acted as a director or prescribed officer whilst ineligible or disqualified by the Act or
by the Close Corporations Act
■ Acted as a director in a manner that contravened a probation order
■ Grossly abused the position of director
■ Took personal advantage of information or an opportunity, or intentionally or by gross
negligence inflicted harm on the company or a subsidiary of the company
■ Acted in a manner which reflects “wilful misconduct” or a “breach of trust” –
(unauthorised acts, reckless trading or fraud)
■ Was repeatedly subject to a compliance notice or similar enforcement mechanism
■ Was personally convicted, at least twice, of an offence or subjected to an
administrative fine or penalty in terms of any legislation
■ Within a period of five years, acted as a director of one or more companies or was
a managing member of one or more close corporations (CC’s), or controlled or
participated in the control of a juristic person (irrespective of whether concurrently,
sequentially or at unrelated times) that was convicted of an offence or subjected to
an administrative fine or similar penalty in terms of any legislation.
All references to director apply equally to members of CC’s who are participating in its
management regarding probation and delinquency, and all references to a company
applies equally to CC’s.

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