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Can directors be held personally liable to shareholders in the context of South African law
Mini Dissertation (LLM (Corporate Law))--University of Pretoria, 2019.
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| Format: | Thesis |
| Language: | English |
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University of Pretoria
2020
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| _version_ | 1867613548822134784 |
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| access_status_str | Open Access |
| author2 | Delport, P.A. (Piet A.) |
| author_browse | Delport, P.A. (Piet A.) |
| author_facet | Delport, P.A. (Piet A.) |
| collection | Thesis |
| dc_rights_str_mv | © 2019 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. |
| description | Mini Dissertation (LLM (Corporate Law))--University of Pretoria, 2019. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/73595 |
| institution | University of Pretoria (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:37:54.123Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2020 |
| publishDateRange | 2020 |
| publishDateSort | 2020 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/73595 Can directors be held personally liable to shareholders in the context of South African law Delport, P.A. (Piet A.) lauren.sparis@gmail.com Sparis, Lauren Cheryl UCTD Directors' liability directors' liability to shareholders separate legal personality nature of a company Mini Dissertation (LLM (Corporate Law))--University of Pretoria, 2019. Considering the recent corporate scandals over the past couple years – VBS Mutual Bank, McKinsey & Trillian, Steinhoff, EOH and possibly Tongaat Hulett to name but a few – many shareholders may seek to hold the directors and management of such entities personally liable for their involvement or negligence. Especially where their actions were tantamount to fraud, they benefited in some way and or as a result the company, and possibly the shareholders, suffered damages. This is especially true when a company as consequence is liquidated and cannot institute action on its behalf. It is submitted that directors are rarely held personally liable for failing to fulfill their duties, let alone liable to the shareholders. The risk of failing to monitor internal controls or business risks, and to hold those acting on behalf of the company responsible and accountable for their actions, is dangerous due to the significant effect that such failure could have on the economy, for example the economic collapse with respect to the recent Steinhoff debacle. Whereas the earlier Companies Act 61 of 1973 did not necessarily ‘spell out’ directors’ duties in detail, the Companies 71 of 2008 comprehensibly records their statutory and common law duties. To this extent the board is held accountable and can ensure proper governance in the company’s internal affairs. Shareholders expect management to maximise the value of a company for the benefit of the shareholders and to act in their best interest. In achieving this, directors are required to act in the best interests of the company. However, directors may use their elevated position for their own personal gain and self-interests. Thus, in which circumstances will courts pierce the corporate veil, stepping aside from a company’s unique legal personality, to impute liability to the wrongdoers lurking behind? The relationship between directors, a company and its shareholders is a fiduciary one which imposes certain duties upon directors. However, it is well established in law that directors’ duties are owed to the company itself. Thus, considering common and statutory law, on what legal basis would shareholders be able to bring a claim against directors for the loss or damage they suffered due to an act of the directors? Considering the above, this paper seeks to explore directors’ liability to shareholders within South Africa’s common and statutory law, bearing in mind entrenched legal principles, such as the argument that fiduciary duties are duties owed to the company and not to individual shareholders; and that as a result only the company can impose liability on its directors. Mercantile Law LLM (Corporate Law) Unrestricted 2020-02-28T06:56:11Z 2020-02-28T06:56:11Z 2020-04 2019 Mini Dissertation Sparis, LC 2019, Can directors be held personally liable to shareholders in the context of South African law, LLM thesis, University of Pretoria, Pretoria, viewed yymmdd http://hdl.handle.net/2263/73595 A2021 http://hdl.handle.net/2263/73595 en © 2019 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. application/pdf University of Pretoria |
| spellingShingle | UCTD Directors' liability directors' liability to shareholders separate legal personality nature of a company Can directors be held personally liable to shareholders in the context of South African law |
| title | Can directors be held personally liable to shareholders in the context of South African law |
| title_full | Can directors be held personally liable to shareholders in the context of South African law |
| title_fullStr | Can directors be held personally liable to shareholders in the context of South African law |
| title_full_unstemmed | Can directors be held personally liable to shareholders in the context of South African law |
| title_short | Can directors be held personally liable to shareholders in the context of South African law |
| title_sort | can directors be held personally liable to shareholders in the context of south african law |
| topic | UCTD Directors' liability directors' liability to shareholders separate legal personality nature of a company |
| url | http://hdl.handle.net/2263/73595 |