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Forest Glade Estate - Draft Memorandum of Incorporation
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Forest Glade Estate - Draft Memorandum of Incorporation

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  • 1. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 1 MEMORANDUM OF INCORPORATION (20 pages) Registration No. of Company 1974/001627/08 The name of the Company is THE ONE HUNDRED AND THREE HOME OWNERS ASSOCIATION NPC, hereinafter referred to as “the Association” The shortened form of the name of the Company is THE 103 HOA
  • 2. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 2 INDEX Page DEFINITIONS AND SOLE OBJECT 3 POWERS EXCLUDED 3 ADDITIONAL POWERS . 4 CONDITIONS .. 4 GUARANTEE 5 MEMBERSHIP . 5 LEVIES . 6 THE COMMON AREA 8 BREACH 8 CESSATION OF MEMBERSHIP .. 9 APPOINTMENT, ROTATION AND REMOVAL OF DIRECTORS .. 9 OFFICES OF DIRECTORS .. 10 FUNCTION AND POWERS OF THE BOARD OF DIRECTORS 11 PROCEEDINGS OF DIRECTORS .. 12 GENERAL MEETINGS OF THE ASSOCIATION .. 13 NOTICES OF MEETINGS OF THE ASSOCIATION . 14 QUORUM . 15 AGENDA AT ANNUAL GENERAL MEETING 15 PROCEDURE AT GENERAL MEETINGS .. 15 PROXIES .. 16 VOTING . 16 OTHER CONTRACTORS, CONSULTANTS, ADVISORS AND OFFICERS 18 ACCOUNTS . 18 AUDIT 18 SERVICE OF NOTICE 18 INDEMNITY .. 19 PRIVILEGE IN RESPECT OF DEFAMATION 19 ARBITRATION . 20
  • 3. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 3 DEFINITIONS Chairman the Chairman of the Board of Directors of the Association. the common area the remainder of Erf 6231 (a portion of Erf 6229) and Erven 6232 to 6235 inclusive (portions of Erf 6230) and Erf 7295 Constantia. the Companies Act No.71 of 2008 the Local Authority the City of Cape Town or any other local authority having jurisdiction over the remainder of Erf 6231 (a portion of Erf 6229) and Erven 6232 to 6235 inclusive (portions of Erf 6230) and Erf 7295 Constantia member a member of the Association month calendar month the office the registered office of the Association the Private Erven the 206 cluster and garage erven resulting from the sub-division of Erven 6231 (a portion of Erf 6229) and 6232 to 6235 inclusive (portions of Erf 6230) and Erf 7295 Constantia and which are designated as such by His Honour the Administrator of the Province of the Cape of Good Hope in Executive Committee in terms of Section 9 of the Townships Ordinance No. 33 of 1934 as amended vice–chairman the vice-chairman of the board of directors of the Association year a calendar year, which shall also be the Association financial year. (i.e.1 January to 31 December) Unless the context otherwise requires, any words importing the singular number only shall include the plural number, and vice versa and words importing one gender only shall include the other gender SOLE OBJECT The sole object of the Association is to promote and manage the collective interests common to all of its members, which includes expenditure applicable to the common property of such members and the determination, application and collection of levies for which such members are liable. 1. POWERS EXCLUDED 1.1 amalgamate with other companies 1.2 take part in management, supervision and control of the business or operations of any other business or company and enter into partnerships 1.3 to distribute in specie or in kind any of its assets amongst its members 1.4 to borrow money 1.5 mortgaging or pledging of property or issue of any kind of debentures, with or without security 1.6 to enter into indemnities, guarantees and suretyships
  • 4. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 4 2. ADDITIONAL POWERS 2.1 To form and have an interest in any company or companies having the same or similar objects as the Association for the purpose of acquiring the undertaking or all or any of the assets or liabilities of the Association or for any other purpose which may seem directly or indirectly, calculated to benefit the Association, and to transfer to any such company or companies the undertaking or all or any of the assets or liabilities of the Association providing that company or those companies is or are also non-profit company(s) as defined. 2.2 To remunerate any person or persons in cash for services rendered. 2.3 To make donations to any non-profit company as defined 2.4 To pay gratuities and pensions and establish pension schemes in respect of its officers and employees. 2.5 To enter into contracts in the Republic and to execute any contracts, deeds and documents in the Republic. 3. CONDITIONS 3.1 The Association is not for profit. The income and property of the Association must be applied solely towards the promotion of its main object. No portion of it may be paid, or directly or indirectly transferred by any means to its members or to its holding or subsidiary companies, provided the foregoing may not prevent the payment in good faith of reasonable remuneration to any officer, servant of member of the Association, in return for services actually rendered to the Association. 3.2 The Association is not permitted to distribute its funds to any person other than to a similar association of persons whose primary object is operating not for profit. Upon winding up, de-registration or dissolution any surplus of assets over liabilities must be distributed to a similar association of persons, which is also exempt from income tax in terms of section 10(1)(e)(iii) of the Income Tax Act, such entity to be determined by the members of the Association at or before the time of its dissolution or, failing such determination, by the Court. 3.3 Funds available for investment may only be invested with a financial institution as defined in Section 1 of the Financial Services Board Act, 1990 (Act No.97 of 1990) and in securities listed on a stock exchange as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No 1 of 1985). 3.4 The Association shall be entitled to bind members to contribute by way of subscriptions and levies towards the funds of the Association and to enforce payment of, and to collect and receive from members such contributions and levies 3.5 The Association is not or was not knowingly a party to, or does not knowingly permit or has not knowingly permitted itself to be used as part of any transaction, operation or scheme of which the sole or main purpose is or was the reduction, postponement or avoidance of liability for any tax, duty or levy which, but for such transaction, operation or scheme, would have been or would have become payable by any person under the Income Tax Act or any other Act administered by the Commissioner for the South African Revenue Service.
  • 5. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 5 3.6 Any amendments to the Memorandum of Incorporation, after having been approved by special resolution of the members, must be submitted to any entity, organization or office of government that legally requires lodgement of the amendment with that entity, organization or office of government. 3.7 Annual returns of income tax, together with any other required documentation, are to be submitted to the Tax Exemption Unit of the South African Revenue Service. 4. GUARANTEE 4.1 The liability of members is limited to the amount referred to in paragraph (2) below. 4.2 Each member undertakes to contribute to the assets of the Association in the event of it being wound-up while he is a member, or within twelve months afterwards, for payment of the debts and liabilities of the Association contracted before he ceases to be a member (and of the costs of winding up, etc) and for adjustment of the rights of contribution among themselves, the amount required but not exceeding an amount or R1,00 (ONE RAND) 5. MEMBERSHIP Membership of the Association shall be limited to the registered owners of the private erven provided that: 5.1 a person who is entitled to obtain a certificate of registered title to any such private erf shall for the purposes of the Memorandum of Incorporation be deemed to be the registered owner thereof; 5.2 where any such owner is more than one person, all the registered owners of that erf shall be deemed jointly and severally to be one member of the Association. 5.3 where any such owner is a Trust, a Company or a Close Corporation, the holding entity shall appoint one person, who need not be a member, to be their duly authorized proxy at any meeting of the Association. Such proxy, however, if not a beneficiary or a trustee of a trust, a member of a close corporation or a shareholder of a company which is the holding entity, will not be qualified to become a director of the Association. 5.4 the definitive date for becoming a member or for ceasing to be a member shall be the date upon which transfer of ownership of the relevant erf is registered in the relevant Deeds Office. 5.5 when a member ceases to be the registered owner of a private erf, he shall ipso facto cease to be a member of the Association. 5.6 a member shall not transfer a private erf unless it is a condition of the transfer that: i) the transferee binds himself, as a contract for the benefit of the Association, to become a member of the Association; ii) the registration of transfer of that private erf into the name of that transferee shall ipso facto constitute the transferee as a member of the Association iii) the registration of the transfer of the private erf shall not proceed until a certificate is issued which has been signed by a Director of the Association certifying that the member has at the date of transfer fulfilled all his financial obligations to the Association.
  • 6. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 6 5.7 the registered owner of a private erf may not resign as a member of the Association. 5.8 the Directors may, by regulation, provide for the issue of a membership certificate, which certificate shall be in such form as may be prescribed by the Directors. 5.9 the rights and obligations of a member shall not be transferable and every member shall: i) further to the best of his ability the objects and interests of the Association. ii) observe all by-laws, rules and regulations made by the Association or the Directors. iii) be bound by is Memorandum of Incorporation and all rules of the Association as approved by the members. 5.10 Nothing contained in this Memorandum of Incorporation shall prevent a member from ceding his rights in terms of this Memorandum of Incorporation as security to the Mortgagee of that member’s private erf. 6. LEVIES 6.1 The Directors shall from time to time make levies upon the members for the purpose of meeting the annual operating expenses of the Association including: i) all general expenses which the Association has incurred ii) all expenses which the Directors reasonably anticipate the Association will incur by way of maintenance, repair, improvement and keeping in good order and condition the common area iii) all expenses which the Directors reasonably anticipate the Association will incur by way of maintenance of the exteriors of any buildings, structures, erections or other improvements situate on the private erven iv) all expenses relating to any statutory charges, rates or levies charged to the Association by any Statutory Authority. In calculating levies the Directors shall take into account income, if any, earned by the Association. 6.2 The Directors shall estimate the amount required by the Association to meet its operating expenses during each year, together with any estimated deficiency/surplus as shall result from the preceding year. They shall then make a levy upon the members, equal as nearly as is reasonably practicable, to such estimated amount. The Directors may include in such levy an amount to be held in reserve to meet anticipated future operating expenditure not of an annual or recurring nature. Every such levy shall be recoverable from the members, in equal monthly payments, due in advance on the first day of each and every succeeding month of such year. Any levy not paid on due date shall carry interest at a rate as the Directors may decide.
  • 7. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 7 6.3 The levy shall not be implemented or become binding until approved by members at a General Meeting of the Association. Members shall be entitled to a full explanation, be able to raise questions and debate the matter prior to voting either for or against a resolution to implement such levy. In the event that approval of a proposed levy is denied then any and all existing levy or levies shall remain of full force and effect pending resolution of members’ objections and concerns and their approval of a new proposed levy. ` 6.4 In the event of the Association being unable to fulfill its objectives, from time to time, in respect of expenditure for: i) statutory Rates and Taxes ii) maintenance of the common area iii) any other obligation assumed by it in terms of an agreement with a Statutory Authority then the Directors may make special levies upon members, not exceeding the identified and certified amount in question, without the passing of a resolution at a General Meeting of the Association. The applicable levy may be made in sum total as a once-off charge or by a specified number of monthly payments and may bear interest at a rate upon which the Directors will decide. 6.5 Unforeseen circumstances may arise from time to time that may necessitate the creation and imposition of a specific additional levy, other than for structural changes to buildings on private erven, on the members. In such event, the Directors will motivate a detailed proposal for consideration and voting upon at a General Meeting to be called for such ` purpose. 6.6 No specific additional levies will be raised for structural changes to the buildings and/or facilities on the private erven unless such levy be agreed to and approved, by special resolution, at a General Meeting to be called for such purpose. 6.7 Any amount due by a member by way of a levy and interest shall be a debt due by him to the Association. The obligation of a member to pay an ongoing levy and interest shall cease upon the date on which his membership terminates without prejudice to the Association’s right to recover any outstanding arrear levies and interest. No levies or interest paid by a member shall, under any circumstances, be repayable by the Association upon his ceasing to be a member. A member’s successor in title to a private erf shall be liable as from the date upon which he becomes a member pursuant to the transfer of that erf, to pay the levy and interest thereon attributable to that erf. 6.8 The levy payable by a member shall bear the same proportion to the total levy imposed on members, as the number of residential plus garage erven registered in the name of that member bears to the aggregate number of all the residential plus garage erven. 6.9 No member shall be entitled to any of the privileges of membership until he shall have paid every levy, interest thereon and other sum (if any) which shall be due and payable to the Association in respect of his membership thereof.
  • 8. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 8 7. THE COMMON AREA 7.1 Neither the whole or any portion of the common area shall be: i) sold, let alienated, otherwise disposed of, subdivided or transferred ii) mortgaged iii) subjected to any rights, whether registered in a Deeds Registry or not, of use, occupation or servitude (save those enjoyed by the members in terms hereof) without the sanction of a Special Resolution of the Association. 7.2 The Directors may, from time to time propose regulations governing, inter-alia; i) members rights of use, occupation and enjoyment of the common area ii) definition and stipulation of what maintenance services will be provided by the Association to the common area. Such proposed amendments to the regulations are to be approved by a special resolution of the members in general meeting prior to taking effect. 7.3 The Board of Directors may, in its absolute and unfettered discretion, sanction or decline applications by members relating to private use of portions of the common area, adjacent to their private erven, as provided for in this Memorandum of Incorporation and the Rules of the Association; provided always that such use will not be inconsistent with the conditions of use imposed on the common area by any Statutory Authorities (e.g. The City of Cape Town); provided also that sanctioned use by a member confers on such member no title of any nature whatsoever, be they plantings, paving, fencing or constructions and that ownership thereof shall vest in the Association without reimbursement of any costs or expenditure relating thereto to such owner(s); provided further that such improvements or use of the common area do not exclude the use of, or access to, or access through the common area by any members or staff of the association. 7.4 The Board may enter into Agreements with Local or other Statutory Authorities relating to the common area as well as any other incidental matters. 7.5 Each member undertakes to the Association that he shall comply with: i) any regulations made relating to the common area ii) any Agreements entered into relating to the common area in so far as those Agreements may directly or indirectly impose obligations on him. 8. BREACH 8.1 Any member who fails to make payment to the Association on due date of any monthly subscription or other amount payable by such member, or who otherwise breaches or fails in the observance of any of the provisions of the Memorandum of Incorporation may, if so determined by a resolution passed by not less than 5 (five) of the Directors present at a meeting of the Directors, i) be fined by the Association in such amount as shall be determined by the Directors and /or
  • 9. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 9 ii) be ordered to pay to the Association or any member or other person aggrieved by the breach or failure in question, such sum in compensation as in each case shall have been determined at such meeting of the Directors. 8.2 The member concerned shall be provided with a summary of the allegations brought against him and be invited to attend such meeting of Directors, by notice in writing delivered to such member not less than 7 (seven) days prior to the holding thereof. Such member shall be given the right to speak and to be represented thereat by any other member of the Association but not to be present at the voting or to take part in the proceedings, other than as allowed by the Chairman of such meeting. 9. CESSATION OF MEMBERSHIP No member who ceases to be a member of the Association for any reason shall, (nor shall any such member’s executors, curators, trustees or liquidators) have any claim upon or interest in the funds or other property of the Association. This clause shall, however, be without prejudice to the rights of the Association to claim from such member or his estate any levy, arrears of levy and interest or any other outstanding sums due by him to the Association at the time of his ceasing to be a member. 10. APPOINTMENT, ROTATION AND REMOVAL OF DIRECTORS 10.1 There shall be a Board of Directors of the Association which shall consist of a minimum of 3 (three) members and a maximum of 7 (seven) members. 10.2 A Director shall be an individual and must either be the owner - or the duly recognised partner of such owner - of a private erf. However, if the erf is owned by a trust or by a close corporation or by a company, then representation shall be by a trustee or beneficiary of such trust, by a member of such close corporation or by a shareholder of such company. A Director, by accepting his appointment to office as such, shall be deemed to have agreed to be bound by all the provisions of the Memorandum of Incorporation. 10.3 Save as set forth the circumstances where a Director is deemed to have vacated his office, each Director shall continue to hold office from the date of his appointment to office until the conclusion of the Annual General Meeting next following his appointment. At such Annual General Meeting each Director shall be deemed to have retired from office as such, but will be eligible for re-election to the Board of Directors at the meeting. 10.4 Prior to an Annual General Meeting and should they so desire, at the AGM, members have the right to nominate new Directors. Nomination forms will be provided and will have space to reflect the name and signature of the proposer and the seconder as well as the full names and acceptance signature of the nominee. The proposer and seconder must in all respects comply with the requirements of membership and nominee must, in all respects, comply with the requirements to be appointed Director. 10.5 If, at the Annual General Meeting, the number of nominees together with the previous directors who have made themselves available for re-election exceeds seven, then a secret ballot must be held to elect seven directors. Should the number of candidates be less than seven, then those candidates available for election automatically become Directors and they shall be entitled to appoint, as Directors, the requisite number of members to achieve the stipulated total.
  • 10. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 10 10.6 A Director shall be deemed to have vacated his office as such upon: i) cessation of membership (i.e. sale of the Unit by which such director qualified) ii) his/her resigning from such Office, in writing, delivered to the Secretary iii) his/her death iv) his/her being removed from Office as provided for in Section 71 of the Companies Act v) in the event that he/she is the duly recognized spouse or partner of a member, on divorce or separation from or sequestration of or death of such member vi) being a juristic person (eg. a company, a close corporation, a trust) vii) being a minor or under legal disability viii) being a person declared a delinquent or court has prohibited person from being a director ix) being an unrehabilitated insolvent x) being prohibited in terms of public regulation from being a director xi) being a person removed from office of trust for misconduct involving dishonesty xii) being any person convicted of offences involving fraud, theft, forgery, perjury or an offence involving fraud, misrepresentation or dishonesty. 10.7 Provided that anything done in the capacity of a Director in good faith, by a person who ceases to be a Director, shall not retain any liability attached to any action taken in good faith from: i) the date upon which his written resignation is received by the Secretary of the Association ii) the date upon which he was removed from office. 10.8 Upon any vacancy occurring on the Board of Directors prior to the next Annual General Meeting, the vacancy in question shall be filled by a person nominated, from amongst the members or their recognised partners, by those remaining for the time being of the Board of Directors. Should such nominee decline his/her appointment to the Board, then the Board shall continue to function, in all respects, with the remaining directors until such time as the vacancy is filled. 11. OFFICES OF DIRECTORS 11.1 Within seven (7) days of the holding of an Annual General Meeting, the Board of Directors shall meet and shall elect from its own number the Chairman and Vice- Chairman. They shall hold their respective offices until the Annual General Meeting held next after their said appointments, provided that the office of the Chairman or Vice- Chairman shall ipso facto be vacated by the Director holding such office upon his ceasing to be a Director for any reason. No one Director shall be appointed to more than one of the aforesaid offices. In the event of any vacancy occurring in any of the aforesaid offices at any time, the Board of Directors shall meet as soon as is reasonably possible to appoint one of their number as a replacement in such office. Such appointment of a
  • 11. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 11 director by the Board of Directors must be approved by the members at the next general meeting or AGM 11.2 Save as otherwise provided in the Memorandum of Incorporation, the Chairman shall preside at all meetings of the Board of Directors, and at all general meetings of members. He shall perform all duties incidental to the office of Chairman and such other duties as may be prescribed by the Board of Directors. He may allow or refuse to permit invitees to speak at any meetings, provided however, that any such invitees shall not be entitled to vote at any such meetings. 11.3 The Vice-Chairman shall assume the powers and duties of the Chairman in the absence of the Chairman, or on his inability or refusal to act as Chairman. He shall perform such other duties as may from time to time be assigned to him by the Chairman or the Board of Directors. 11.4 Directors shall be entitled to be repaid all reasonable and bona fide expenses incurred by them respectively in or about the performance of their duties as Directors and/or Chairman and/or Vice-Chairman as the case may be. Save as aforesaid, however, they shall not be entitled to any other remuneration, fees or salary in respect of the performance of such duties. 12. FUNCTIONS AND POWERS OF THE BOARD OF DIRECTORS 12.1 Subject to the express provisions of these presents, the Board of Directors shall manage and control the business and affairs of the Association. They shall have full powers in the management and direction of such business and affairs, and save as may be expressly provided in the Memorandum of Incorporation, may exercise all such powers of the Association. They may perform any and all acts, for and on behalf of the Association, which acts may or may not be required by the Companies Act or by the Memorandum of Incorporation, subject always to any provisions of the Companies Act, and to such regulations as may be prescribed by the Association, in general meeting, from time to time. No regulation made by the Association in general meeting, however, shall invalidate any prior act of the Board of Directors which would have been valid if such regulation had not been made. 12.2 The Board of Directors shall have the right to vary, cancel or modify any of its decisions and resolutions, from time to time. 12.3 The Board of Directors may, should it so decide, investigate any suspected or alleged breach by any member or Director of the Memorandum of Incorporation, in such reasonable manner as it shall decide from time to time. 12.4. The Board of Directors may make rules not inconsistent with the Memorandum of Incorporation, or any regulations or by-laws prescribed by any Act or by the Association in general meeting, as to: i) disputes and arbitrations generally ii) the furtherance and promotion of any of the objects of the Association iii) the better management of the affairs of the Association iv) the advancement of the interests of members
  • 12. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 12 v) the occupancy, administration, external appearance and maintenance of the private erven and the buildings erected thereon, the modification, additions and improvements to such buildings as well as the general and maintenance services provided to the private erven vi) all aspects of the management and administration of the common erven covered by the Memorandum of Incorporation vii) all things necessary to assist the Board in administering and governing its activities generally such regulations and by-laws to be equally binding on owners, tenants, guests and visitors. 12.5 The Board of Directors shall be entitled to create new and to cancel, vary or modify any of the matters listed in 12.4 as they, from time to time, deem to be desirable or requisite. Proposed changes shall be communicated to members for comment and if within 14 days of such notice having been sent no more than 50% plus 1 of all members have objected to such change this new/changed rule/s shall become effective and subject to confirmation at the next General or Annual General meeting. 13 PROCEEDINGS OF DIRECTORS 13.1 The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit, subject to any provisions of The Companies Act. 13.2 A director may call a board meeting and a board meeting is obligatory if called by at least 2 (two) of the directors. 13.3 One or more directors may participate in meetings by electronic communications, on condition that the methods employed allow all persons to simultaneously communicate with each other without an intermediary and to participate effectively in that meeting 13.4 Each director has one vote on a resolution and a majority of votes will carry that resolution. In the case of a tied vote the chair may cast a deciding vote if he has not previously voted. In all other instances the motion is not carried and the matter shall be deferred for reconsideration at the next meeting. If the votes then be tied again, the proposed resolution shall be deemed to be rejected and it will be dropped. 13.5 Despite anything to the contrary in rules or any other agreement, the members may by ordinary resolution remove a director provided that i) the director has been given notice of the resolution ii) has been afforded a reasonable opportunity to make a presentation in person or through a representative to the meeting before the resolution is put to the vote. 13.6 A director is required to disclose his personal financial interest in respect of a matter to be considered at a meeting of the board (this is also applicable to a related person to him). He must disclose the interest before the matter is considered by the board and must recuse himself without taking part in the discussion. 13.7 Meetings of the Directors shall be held on at least one occasion every quarter, provided that if all the Directors shall in writing have waived the above requirement in respect of a particular quarter, then no meeting of the Directors need be held for that quarter.
  • 13. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 13 13.8 The quorum necessary for the holding of any meeting of the Directors shall be a majority of directors then in office present personally. If there is no quorum present, the meeting shall be cancelled. 13.9 A majority of the directors must be present in person or by electronic communication before a vote may be called at a meeting. 13.10 The Chairman shall preside as such at all meetings of the Directors provided that should at any meeting of the Directors the Chairman not be present within five (5) minutes after the time appointed for the holding thereof, then the Vice-Chairman shall act as Chairman. Provided further that should the Vice-Chairman also not be present within five (5) minutes of the time appointed for the holding of such meeting, those Directors present shall, from amongst themselves, appoint a Chairman for the meeting. Such Chairman shall thereupon exercise all the powers and duties of the absent Chairman in relation to such meeting provided that a valid quorum exists. 13.11 The Directors shall cause minutes to be taken of every Directors meeting, although not necessarily verbatim, which minutes shall be reduced to writing without undue delay after the meeting will have closed and shall then be promptly circulated to all Directors, irrespective of whether they were present or not. The minutes will be certified correct by the directors who were present at the recorded meeting, at their next meeting. All minutes of Directors meetings shall after certification as aforesaid be placed in a Directors Minute Book to be kept in accordance with the provisions of the Companies Act relating to the keeping of minutes of meetings of Directors of Companies. The Directors Minute Book shall be open for inspection at all reasonable times by a Director, the Auditors, and members. 13.12 All competent resolutions recorded in the minutes of any Directors meeting shall be valid and of full force and effect as therein recorded, with effect from the passing of such resolutions, and shall remain so until varied or rescinded. However, no resolution or purported resolution of the Directors shall be of any force or effect, nor shall it be binding upon the members or any of the Directors, unless such resolution is competent within the powers of the Directors. 13.13 Save as otherwise provided for in the Memorandum of Incorporation, the proceedings at any Directors meeting shall be conducted in such reasonable manner and form as the Chairman of the meeting shall decide. 13.14 A resolution signed by all the Directors shall be valid in all respects as if it had been duly passed at a meeting of the Board of Directors duly convened. Such resolution must, however, be pasted into the official Minute Book. 14. GENERAL MEETINGS OF THE ASSOCIATION 14.1 The Association shall, within 9 (nine) months of the Association year end, hold a general meeting as its Annual General Meeting, in addition to any other general meetings during that year, and shall specify the meeting as such in the notices, in terms of clause 15.1 hereof, calling such meeting. 14.2 The Annual General Meeting shall be held at such time and in such place as the Directors shall, from time to time, decide subject to the foregoing provisions 14.3 All meetings other than Annual General Meetings shall be called general meetings. 14.4 The Directors, may, whenever they think fit, convene a general meeting.
  • 14. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 14 14.5 Members holding at least 10% of the voting rights may call a general meeting. If the directors within 14 days of the lodgement do not issue notice of a general meeting then the requisitionists may do so themselves. 15. NOTICES OF MEETINGS OF THE ASSOCIATION 15.1 An Annual General Meeting and/or a general meeting called for the passing of a special resolution, shall be called by at least 21 (twenty-one) clear days notice in writing. A general meeting, other than one called for the passing of a special resolution, shall be called by at least 14 (fourteen) days notice in writing. In each case the notice shall be exclusive of the day on which it is given, and shall specify i) the place, the day and the hour of the meeting ii) in the case of special business, in addition to any other requirements contained in these presents, the general nature of that business, and iii) in the case of a special resolution, the terms and effect of the resolution and the reasons for it shall be given in the manner hereinafter mentioned or in such other manner, if any, as the Directors may prescribe to such persons as are under these presents entitled to receive such notices from the Association. 15.2 An Annual General Meeting or a general meeting of the Association shall, notwithstanding that it is called by shorter notice than that specified in these presents, be deemed to have been duly called if it is so agreed before or at the meeting by a majority in number of the members having the right to attend and vote at the meeting who hold not less than 95% of the total voting rights. A meeting for which a shorter period of notice than in clause 15.1 hereof has been given will be regarded as having been duly called, and if it is agreed in writing by all members present before or at the meeting, no notice need be given at all. 15.3 Failure to give required notice or a defect in the notice of an Annual General Meeting or a general meeting may be condoned if 1. all members entitled to vote acknowledge actual receipt of the notice AND 2. are present at the meeting AND 3. waive notice of the meeting OR 4. in the case of a material defect in the manner and form of the notice, ratify the defective notice. 15.4 The business that may be dealt with at an AGM of the Association includes any resolutions of which notice has been given under this section. For this purpose notice must be regarded as given despite accidental omission to give notice to one or more members. 15.5 Failure of any director or officer to authorise or knowingly permit failure to comply with this section shall be an offence. 15.6. All Meetings of the Association shall take place at such place/s and times as shall be determined by the Directors from time to time.
  • 15. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 15 16. QUORUM 16.1 Subject to the provisions of section 190 of the Act, no business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business. The quorum necessary for the holding of any general meeting shall be such of the members (or their proxies) entitled to vote, as together for the time being, represent one- quarter of the total votes of all members of the Association entitled to vote. 16.2 If within half an hour from the time appointed for the holding of a general meeting a quorum is not present, the meeting, i) if convened on the requisition of members, shall be dissolved ii) in any other case it shall stand adjourned to the same day in the next week, at the same place and time, or at such other place as the Chairman of the meeting shall appoint. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall be a quorum. 17 AGENDA AT ANNUAL GENERAL MEETINGS In addition to any other matters required by the Act or these presents to be dealt with at an Annual General Meeting, the following matters shall be dealt with at every Annual General Meeting: 17.1 consideration of the Chairman’s report to the members 17.2 election of Directors 17.3 consideration of any other matters raised at the meeting including any resolutions proposed for adoption by such meeting, and the voting upon any such resolutions. No special resolutions, as defined by the Companies Act, which were not included in the Agenda for the meeting, may be raised or voted upon. 17.4 consideration and approval of the income and expenditure statement and the balance sheet of the Association for the last financial year of the Association preceding the date of such meeting 17.5 consideration and approval of the report of the Auditors 17.6 consideration and approval of the levy as referred to in Article 4 of these presents 17.7 consideration and approval of the proposed budget for the ensuing year 17.8 consideration and fixing of the remuneration of the auditors for the financial year of the Association preceding the Annual General Meeting. 18 PROCEDURE AT GENERAL MEETINGS 18.1 The Chairman shall preside as such at all general meetings, provided that should he not be present within five minutes after the time appointed for the holding thereof, then the Vice-Chairman, shall act as Chairman at such meeting; provided further that should the
  • 16. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 16 Vice-Chairman also not be present within five minutes of the time appointed for the holding of such meeting, then the members present at such meeting and entitled to vote thereat, shall appoint a Chairman for the meeting. Such Chairman shall thereupon exercise all the powers and duties of the Chairman in relation to such meeting. 18.2 The Chairman may, with the consent of any general meeting at which a quorum is present (and if so directed by the meeting) adjourn a meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than business which might have been transacted at the meeting from which the adjournment took place. Whenever a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given in the same manner as of an original meeting. Save as aforesaid, the members shall not be entitled to any notice of adjournment, or of the business to be transacted at an adjourned meeting. 19 PROXIES 19.1 A member may be represented at a general meeting or at an Annual General meeting by a proxy, who need not be a member of the Association. The instrument appointing a proxy shall be in writing and signed by the member concerned or his duly authorized agent, but need not be in any particular form, provided that i) where a member is more than one person, any one of those persons may sign the instrument appointing a proxy on such members’ behalf ii) where a member is a company the instrument may be signed by the Chairman of the Board of Directors of the Association or by its secretary iii) where the member is an association of persons, by the secretary thereof iv) where the member is a trust, by a trustee. 19.2 The instrument appointing a proxy and the Power of Attorney, Resolution or other authority (if any) under which it is signed, or a notarially certified copy thereof, shall be deposited with the Secretary or any Director at any time before the time appointed for the commencement of the meeting, or adjourned meeting, at which the person named in the instrument proposed to vote. No instrument appointing a proxy shall be valid after the expiration of twelve (12) months from the date of its execution. 19.3 A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death of the principal or revocation of the proxy, provided that no intimation in writing of the death or revocation shall have been received by the Directors at least one hour before the time fixed for the holding of the meeting. 20 VOTING 20.1 At every general meeting every member in person or by proxy and entitled to vote shall have one vote for each private residential erf registered in his name, provided that if a private erf is registered in more than one person’s name, or that of a Trust, Company or Close Corporation then they shall jointly have one vote. 20.2 Save as expressly provided for in these presents, no person other than a member duly registered, and who shall have paid every levy and other sum (if any) which shall be due and payable to the Association in respect of or arising out of his membership, and who is not under suspension, shall be entitled to be present or to vote on any question, either personally or by proxy, at any general meeting.
  • 17. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 17 20.3 Unless the Chairman of the meeting directs otherwise, all voting shall be in writing by way of a secret poll, which shall be taken during the course of the meeting, in such manner as the Chairman of the meeting shall direct. 20.4 Notwithstanding the provisions of clause 20.3 aforesaid, voting on the election of a Chairman of a general meeting (if necessary) or on any question of adjournment, shall be decided on a show of hands by a majority of the members present in person or by proxy, and entitled to vote. 20.5 Every resolution and every amendment of a resolution proposed for adoption by a general meeting shall be seconded at the meeting and, if not seconded, shall be deemed not to have been proposed. 20.6 An ordinary resolution (that is a resolution other than a special resolution) or the amendment of an ordinary resolution, shall be carried on a majority of not less than 50% plus 1 of all the votes cast thereon by the members present and entitled to vote, and an abstention shall not be counted as a vote for or against the resolution in question. In the case of an equality of votes for and against any resolution, the matter shall be dropped. 20.7 A special resolution shall be carried on a majority of not less than 75% of all the votes cast thereon by the members present and entitled to vote, and an abstention shall not be counted as a vote for or against the resolution in question. In the case of an equality of votes for and against any resolution, the matter shall be dropped. A special resolution is required to: Amend the company’s Memorandum of Incorporation; Ratify a consolidated revision of a company’s Memorandum of Incorporation; Approve the voluntary winding up of the company; Approve any proposed fundamental transaction (amalgamation, merger or disposal of the greater part of the assets), and Take any other decision specified in the company’s Memorandum of Incorporation 20.8 Unless any member present at a general meeting, whether in person or by proxy and prior to the closure of the meeting, shall have objected to any declaration made by the chairman regarding the result of any voting at such meeting, be it by show of hands or by poll, or to the propriety or validity of the procedure at such meeting, then the declaration by the Chairman shall be deemed to be a true and correct result of the voting. The meeting shall in all respects be deemed to have been properly and validly constituted and conducted. An entry in the minutes of the meeting, to the effect that any motion has been carried or lost, with or without a record of the number of votes recorded in favour of or against such motion, shall be conclusive evidence of the vote so recorded if such entry conforms with the declaration made by the Chairman of the meeting pertaining to the result of any voting thereat. 20.9
  • 18. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 18 21 OTHER CONTRACTORS, CONSULTANTS, ADVISORS & OFFICERS Save as specifically provided otherwise in this Memorandum of Incorporation the Directors shall at all times have the right to engage, on behalf of the Association, the services of Accountants, Auditors, Attorneys, Advocates, Architects, Builders, Consultants, Engineers and any other person, company, contractor or firm and/or any other employee/s whatsoever, for any reasons thought necessary by the Directors and on such terms and conditions as the Directors shall decide, subject to any of the provisions of these presents. 22 ACCOUNTS 22.1 The Association in general meeting, or the Directors, may from time to time make reasonable conditions and regulations pertaining to the procedure(s) to be followed should members desire to examine the accounts and books of the Association. Subject to such conditions and regulations, the accounts and books of the Association shall be made available for inspection by members at all reasonable times during business hours. 22.2 At each Annual General Meeting the Directors shall lay before the Association the annual finance statements of the Association for the previous financial year. There shall be attached to the notice sent to members convening each Annual General Meeting, as set forth in clause 15 hereof, copies of such annual financial statements and any other documents required by law to accompany the same. 22.3 Financial statements must satisfy the prescribed financial reporting standards. 22.4 The Association is required to produce financial statements within 6 months of financial year end. 22.5 The annual financial statements must include a report of directors with respect to the state of affairs, the business and profit or loss of the company, including any matter considered material in enabling the members to appreciate the company’s state of affairs. 23 AUDIT 23.1 Once at least in every year the accounts of the Association shall be examined and the correctness of the income and expenditure account and balance sheets ascertained by the Auditors. 23.2 The duties of the Auditors shall be regulated in accordance with the provisions of the Companies Act. 24 SERVICE OF NOTICE 24.1 The Association shall serve a notice upon any member, either personally or by sending it by prepaid registered post, addressed to such member at the address of the Private Erf owned by him or to such other address as he may have advised the Association. 24.2 Any notice, if served by registered post, shall be deemed to be served on the member on the fifth working day following that on which the envelope containing the notice is put into the post. In proving such service, production of the Registration Slip issued by the Post Office shall suffice. 24.3 Any notice shall be deemed to have been served on the member if the notice is transmitted electronically directly to that person in a manner or form such that the notice can be printed by the person within reasonable time and at a reasonable cost.
  • 19. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 19 25 INDEMNITY 25.1 All Directors, and the Auditors, shall be indemnified out of the funds of the Association against any liabilities bona fide incurred by them in their respective said capacities, and in the case of a Director, in his capacity as Chairman or Vice-Chairman, whether defending any proceedings, civil, criminal or otherwise in which relief is granted to any such person/s by the Court. The Association may advance expenses to a director to defend litigation in any proceedings arising out of his service and indemnify the director for those expenses. 25.2 Every Director, every servant, agent and employee of the Association, and the Auditors, shall be indemnified by the Association against (and it shall be the duty of the Directors out of the funds of the Association to pay) all costs, losses and expenses (including travelling expenses) which such person or persons may incur or become liable for by reason of any contract entered into, or any act or deed done, by such person or persons in the discharge of any of his/their respective duties, including in the case of a Director, his duties as Chairman or Vice-Chairman. Without prejudice to the generality of the above, the Association shall specifically indemnify every such person against all losses of whatsoever nature incurred arising out of any bona fide act, deed or letter done or written by him jointly or severally in connection with the discharge of his duties, provided that any such act, deed or letter has been done or written in good faith. 25.3 A Director shall not be liable for the acts, receipts, neglects or defaults of the Auditors or of any of the other Directors, whether in their capacities as Directors or as Chairman or Vice-Chairman or for any loss or expense sustained or incurred by the Association through the insufficiency or deficiency of title to any property acquired by the Directors for or on behalf of the Association or for the insufficiency or deficiency of any security in or upon which any of the monies of the Association shall be invested, or for any loss or damage arising from the insolvency or tortuous act of any person with whom any monies, securities or effects shall be deposited or for any loss or damage occasioned by any error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of any of the duties of his office/s or in relation thereto, where the director has exercised the powers and performed the functions of director in good faith and for proper purpose, in the best interests of the Association and with a degree of care, skill and diligence that may be reasonably expected of such a person. The directors judgment as to whether an action or decision is in the best interests of the Association is reasonable if i) the director has taken diligent steps to become informed about the subject matter of the decision ii) the director does not have a material financial interest in the subject matter of the decision. 26 PRIVILEGE IN RESPECT OF DEFAMATION Every member of the Association and every Director shall be deemed by virtue of his membership or, as the case may be, his holding office as a Director, to have waived as against every other member, the Directors, the Chairman, or Vice-Chairman, every other Director, the Auditors and everybody else engaged to perform any function or duty on behalf of or for the benefit of the Association, or the Directors, or any sub-committee, all claims and rights of action which such member or Director might otherwise have had in law arising as a result of any
  • 20. DRAFT 27 APRIL 2013 FOR APPROVAL BY MEMBERS Page 20 statement, report, complaint or notice of or concerning such member or Director, or any reference to such member or Director, made at any Directors meeting, or otherwise in the performance or exercise of any right, function, duty, power or trust, within the ambit of these presents being a statement, report, complaint, notice or reference defamatory of such member or Director, or otherwise injurious to the dignity, reputation, business or financial interest of such member or Director, whether such statement be true or false. 27. ARBITRATION In the event of a dispute between any of the members or between a member and the Directors, that dispute shall be resolved by arbitration. The arbitrator shall be an independent person agreed upon between the parties and failing agreement nominated by the President for the time being of the Law Society of the Cape of Good Hope. The arbitrator shall be entitled to resolve the dispute according to what he regards as being just and equitable and in accordance with the spirit and the objects of this and he shall therefore not be bound by the strict rules of law. The decision of the Arbitrator shall be final and binding on the parties.