Introduction A company, as was observed earlier on is a legal persona with a distinct personality from its members. It is by legal fict...
Introduction
A company, as was observed earlier on is a legal persona with a distinct personality from its members. It is by legal fiction, supposed to run its own affairs without looking up to any person to help it do so.
However, a company is in reality only an abstraction wit no physical existence. It can only function if there are officers of the company who have to run it and conduct its business activities. The people are the company directors.
Shareholders theoretically are not interested in the day to day running of the business of the company but are interested only in their return on investment. Directors therefore are the stewards who are entrusted with running the company.
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| Company Management (The Introduction) |
DIRECTORS
Directors once appointed do so at their own peril and must undertake the obligations imposed on them by the Act and the articles, and the common law. It is not enough, neither is it a defence for a director to sy that he was appointed only as formality to fulfill the legal requirements.
Every company must have not less than two directors, other than alternate directors, at least one of whom shall be ordinarily resident in Zimbabwe. See Section 169(1)
Section 2 defines a director as including any person occupying the position of director, alternate director of a company by whatever name he may be called. This means that, any person whose functions are effectively those of directing a company is a director, even though he can be called, for instance, the chief executive officer, manager, official or superintendent.
In addition, every person signing the memorandum of the company is deemed to be a director of the company until other directors have been appointed.
APPOINTMENT OF DIRECTORS
The articles of association usually provide for the appointment of directors. The shareholders exercise the power to appoint directors in a general meeting. It is also possible for the articles to give the power to appoint directors to the directors themselves.
Subscribers to the memorandum, or a majority of them appoint the first directors and determine their number, which in any case may not be less than two. This will be set out in the document submitted to the Registrar in terms of section 171(4). These people will hold office until the appointment of directors in a general meeting. The general meeting will decide what will happen to the first directors, that is, whether they will retire or continue to hold office.
Table A of the first Schedule, Articles 74-108 deals with directors. Article 90 deals with the rotation of directors and provides that at the meeting, that is, the first annual general meeting of the company, all the directors shall retire from office.
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