Company Management: Director, Secretary & External Auditor Flashcards
What are the qualifications director?
1) Not be a minor, insolvent or prohibited from being one.
2) Not convicted of theft, fraud or having received a fine of P5K and above
3) Not have been removed from office due to misconduct.
4) Not be of unsound mind
What does section 154 state about directors?
If a transaction is done by an unqualified director, then that transaction is still valid.
How is a director appointed?
1) First directors are done in the application of registration.
2) Others are done over the AGM
3) While the MD/ CEO is appointed by BOD
4) Alternate Directors may be appointed by a director in their absence
5) Exceptions can be made by the const
What are the statutory duties of a director?
Under section 130, these are:
1) Excercise power within co’s act
2) Care, Skill & diligence (even in delegation)
3) NDA, NCA
4) Attend meetings & Act in good faith
What are the common law duties(Acts) ?
1) No conflict of interest
2) Not exceed power/ limit their powers
3) Excercise unfetted discretion
How does a director cease to hold office?
1) End of employment through AGM
2) Special meeting
3) Resign/ Disqualified/ Dies
What are the qualifications of a Secretary?
They shouldn’t be:
1) An undischarged bankrupt
2) A sole director of co
3) Auditor of co
While for a public & non exempt co they should be a member of BICA of SAICA.
What are the duties of a secretary?
1) Have apparent ostensible authority
2) Responsible to BOD in prep & filings of returns to registrar & maintaining share registry and debenture holders
3) Issue of notices
4) Keep accounting records
How is an external auditor appointed?
1) First auditor is brought in before the AGM or at first ever AGM.
2) After that, every public and non exempt private co will need to appoint or reappoint one at every AGM
What makes for a qualified auditor and how do they become disqualified?
Under section 194, a qualified auditor is:
1) Registered under BICA and BAOA
2) Be ordinary resident of Botswana
Disqualifications include:
1) If they’re a director, partner/ employee of direct or co.
2) Debtor who’s owed more the P5k
Duties of an auditor include?
1) Under section 199, they should avoid conflicts of interest
2) Audit financial statements and report to the BOD and or BICA for irregularities
Powers of an auditer are?
1) Access to accounting records
2) Required info from employees and directors
What are the conditions for an auditor to be removed or replaced?
1) If they’re no longer qualified
2) Special meeting to appoint a new
3) Exempt private co passes special resolution to not need an auditor
4) Under section 198(1) were they give a notice of resignation either at a special meeting or AGM.
