Under which circumstances may a company secretary be deemed to be a prescribed officer of a company?
Written by Dr. Adv. Leigh Hefer & Jayne Hunter-Rhys. COMPANY SECRETARY’S HANDBOOK (2021). Published by Genesis Corporate Services.
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).
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.
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.
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.
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.
Prescribed officers have exactly the same fiduciary duties and duties of care, skill, and diligence as directors.
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) of Act 3 of 2011; sections 66(10), 69, 75, 76, 77, 78 of Companies Act 71 of 2008; Companies Regulation 38
Hard copy and E-Book Publications for the Professionals, Company Secretaries, Company Directors and Prescribed Officers, Members of CCs, Business Owners, Lecturers and Students on various business, compliance and legislative topics.
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).
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.
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.
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.
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.
Prescribed officers have exactly the same fiduciary duties and duties of care, skill, and diligence as directors.
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) of Act 3 of 2011; sections 66(10), 69, 75, 76, 77, 78 of Companies Act 71 of 2008; Companies Regulation 38
Hard copy and E-Book Publications for the Professionals, Company Secretaries, Company Directors and Prescribed Officers, Members of CCs, Business Owners, Lecturers and Students on various business, compliance and legislative topics.
Updated on: 12/12/2024
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