Notes: Confusion in the removal of directors by shareholders under the Companies Act 71 of 2008: Miller v Natmed Defence (Pty) Ltd

Abstract

This note critically analyses the judgment in Miller v Natmed Defence (Pty) Ltd 2022 (2) SA 554 (GJ), in which the court ruled on the validity of the removal of a director by the company’s sole shareholder. Three issues were in contention: whether a shareholder must furnish the director with reasons for the proposed resolution to remove a director from office under s 71 of the Companies Act 71 of 2008; whether a shorter notice period for the shareholders’ meeting was legally acceptable; and whether the meeting that was held telephonically was valid. The court ruled that the director’s removal from office was valid and dismissed his request to be reinstated as a director. This note critically analyses the judgment and argues that the court misinterpreted some aspects of s 71 of the Act.