How long is a proxy valid for?

“I was recently appointed as a proxy to represent a shareholder at an upcoming shareholders meeting. Unfortunately, the meeting has been rescheduled two months later, and I was wondering if the proxy will still be valid then or would I need to have a new proxy issued by the shareholder for the meeting?”

It is common practice for shareholders to appoint a proxy to represent them when they, as shareholders, are not available, able or inclined to attend a shareholders’ meeting themselves. On receiving notice of a shareholders meeting, a shareholder can then decide how they want to exercise their voting rights at the upcoming meeting and appoint a proxy to attend the meeting and vote for them according to their instructions. 

Section 58 of the Companies Act 71 of 2008 (“Companies Act”) regulates the right of a shareholder to appoint a person to act as a proxy. It is important to note that section 58(1) specifically states that a shareholder of a company is entitled to “at any time” appoint any individual as a proxy to participate in and speak and vote at a shareholders meeting on behalf of that shareholder. Our courts have also confirmed that these provisions are unalterable and may not even be altered in the Memorandum of Incorporation of a company.

Section 58 of the Companies Act does however impose some time limitations on the validity of a proxy appointment:

  1. A proxy will fall away when it is revoked by the shareholder who gave it, either by sending a document revoking it to the company and the proxy, or by appointing someone else as proxy in the place of the first proxy.
  2. The proxy instrument itself may indicate how long it is valid for.
  3. If a proxy instrument is completed for a specific meeting, or if it invites shareholders to appoint a particular person as proxy, the proxy instrument signed and delivered by a shareholder in those circumstances will only be valid until the end of the meeting at which it was used.
  4. In all other cases, the proxy instrument is valid for one year from date of signature.

In your situation, it will be important that you assess the proxy instrument and determine whether there is any time limitation and/or whether the proxy has been provided for the specific shareholders meeting. If there is no time limitation or if the proxy is for the specific shareholders meeting that has been postponed, the proxy will in all probability not need to be replaced for the meeting. 

However, if in doubt, it may be prudent to obtain a new proxy from the shareholder confirming your status to act as proxy at the upcoming meeting rather than risk the proxy having lapsed.

September 14, 2021
Navigating financial emigration

Navigating financial emigration

In recent years, South Africa has seen a notable rise in financial emigration. This shift comes with significant tax implications, as individuals who cease to be tax residents must navigate complex regulations and financial considerations. Understanding these implications is crucial for anyone considering this move. Financial emigration refers to the formal process by which South African taxpayers alter their tax residency status, change their status with the South African Reserve Bank (SARB) for exchange control purposes and relocate their financial assets to other countries. This often involves transferring wealth, investments, and retirement funds offshore. The South African Revenue Services now mainly oversees this process, allowing individuals to terminate their tax residency in South Africa while effectively transferring their finances overseas.

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