Good dayI need some assistance with a le...

Asked by Vivian on 29-09-2022 13:45:11
Question posted in the General Law category relating to Western Cape

Good day

I need some assistance with a legal/admin matter

I do admin/accounts for a private company that has 4x shareholders, of which only 3 are the directors. One of the Directors are the chairman of the board of directors

They now appointed an external person to be the ‘chairman of the company’ to oversee company operations, basic business matters etc etc

Not actively involved in running of company but just basically overlooking things

Question is: do I need to do a resolution as ‘Shareholders Resolution’ that appoints this person, or is it a ‘Directors Resolution’ that appoints

Then – can you supply me with a basic template for whichever it is please?

I need to do it properly and professionally and looking for legal guidance to have it done correctly

They also need this done quite urgently. But i want to do this right and dont have relevant knowledge so please asking for any assistance in getting this resolution typed properly and send to either directors/shareholders to sign



Message from the Lawyer

Posted by Att. Patrick on 29-09-2022 15:10:40

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship. 

Message from the Lawyer

Posted by Att. Patrick on 29-09-2022 15:12:56

Directors are appointed by the shareholders, so you would need to do a shareholders resolution to appoint this person as a director for the company. There are, in addition to the resolution, also CIPC documents which will need to be completed and signed in order to get him on CIPC as a director for the company. 

I've uploaded some templates here for you:

Message from the client

Hi Patrick

Thanks for this, but dont need to appoint a director. That is easy to do

We appointing a chairman to the company, that is not a director, that going to oversee the running of the company

Question is as per my original question about the resolution - is it a shareholders resolution needed or a directors resolution to appoint the external chairman to oversee the running of the company. He is not appointed a director or anything else, other than just chairman of the company

And then if you have a template i can edit please to complete with all the relevant info

Main question i have is basically is it the shareholders or the directors that need to sign the resolution to appoint this person

Message from the Lawyer

Posted by Att. Patrick on 29-09-2022 15:39:14

A chairman is just a name for one of the directors who is going to chair the board meetings. There is no special appointment needed. The directors will just appoint the chairman at the start of board meetings. 

I've never seen a chairman of a board of directors who is not also a director of the company. 

Message from the client

this chairman we appointing has nothing to do with the directors or board of directors etc
He will not be a director

he is chairman of company - almost like a CEO

need to do a resolution passed by either the directors or shareholders that appoints this person in this important position

Message from the Lawyer

Posted by Att. Patrick on 29-09-2022 15:52:30

Then you should pass a shareholders resolution. Definitely. 

Message from the client

Ok thanks. Do you maybe have a shareholders resolution template i can use please?

Message from the Lawyer

Posted by Att. Patrick on 29-09-2022 16:58:47

You should be able to use one of these [] and adjust them slightly to refer to the right CEO position

Message from the client

Thanks, but none of those are shareholders resolution templates or even close to what i need?
Anything else you can maybe share in regard to shareholding resolution?

Message from the Lawyer

Posted by Att. Patrick on 30-09-2022 09:51:06

You can use the Board Resolution document and just change the heading to "meeting of the shareholders", then adjust the wording to refer to shareholders instead of directors. 

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