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Under which circumstances may a company secretary be deemed to be a prescribed officer of a company?

Chapter 3 – Question 31

Written by Dr. Adv. Leigh Hefer & Jayne Hunter-Rhys. COMPANY SECRETARY’S HANDBOOK (2021). Published by Genesis Corporate Services.

  1. A prescribed officer means a person who within a company, performs any function which has been designated by the Minister in terms of section 66(10).
  2. Section 66(10) provides that the Minister may make regulations designating any specific function(s) within a company to constitute a prescribed office for the purposes of the Act.
  3. Companies regulation 38 provides that despite not being a director of a particular company, a person is a prescribed officer of the company for all purposes of the Act if that person:
    • 3.1 exercises general executive control over and management of the whole, or a significant portion, of the business and activities of the company;
    • 3.2 regularly participates to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company.
  4. Regulation 38 applies to a person irrespective of any particular title given by the company to an office held by the person in the company, or a function performed by the person for the company.
  5. Therefore, in the event that a company secretary exercises the extent of management or control that the definition of a prescribed officer requires, the company secretary would be a prescribed officer.
  6. Prescribed officers have exactly the same fiduciary duties and duties of care, skill, and diligence as directors.
  7. In addition, the Act’s provisions on ineligibility, disqualification (section 69); disclosure of interests (section 75); standards of conduct (section 76); liability (section 77); indemnification and insurance (section 78) apply to prescribed officers.
    Source: Section 1 of Companies Act 71 of 2008 as substituted by section 1(1)(x) of Act 3 of 2011; sections 66(10), 69, 75, 76, 77, 78 of Companies Act 71 of 2008; Companies Regulation 38

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