The shareholders of Tokologo (Pty) Ltd are dissatisfied with the manner in which the directors have been running the company. They have demanded that the board of directors calls a shareholders’ meeting so that they can address these matters with the board and pass certain resolutions. In aggregate, demands for this purpose have been made and signed by shareholders holding 12% of the voting rights entitled to be exercised in relation to the matters proposed to be considered at the meeting. The board of directors is reluctant to meet with the shareholders and it fails to convene this meeting. With reference to the Companies Act 71 of
2008 and relevant case law, advise the shareholders on their prospects of success if they apply to court to compel the board to call the shareholders’ meeting.

Answers to Above Questions on Company Law

Answer 1: There are certain rights available to shareholders according to Companies Act 71 of 2008 in South Africa and this includes the right to call for a shareholders’ meeting. In the given case scenario, the shareholders of Tokologo Pty Ltd have requested for a shareholders meeting to the board of directors, but the board is not ready to allow the meeting to be held. In this situation, the shareholders that are dissatisfied with this decision can apply to court and demand for a meeting with the shareholder from the board members of the company.