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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Exemption from liability under section 247 of the Companies Act: to what extent does 'the prohibition' in this section apply in the South African context?
Author:Spisto, MichaelISNI
Year:1997
Periodical:The Comparative and International Law Journal of Southern Africa
Volume:30
Issue:1
Pages:60-75
Language:English
Geographic term:South Africa
Subjects:liability
commercial law
Abstract:This article considers various viewpoints on the controversial nature of section 247 of South Africa's Companies Act 61 of 1973. Section 247 provides that 'Any provision, whether contained in the articles of a company or in any other contract with the company, and whether express or implied, which purports to exempt any director or officer or the auditor of the company from any liability which by law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company, or to indemnify him against any such liability, is void'. Whether this provision prohibits exemption from liability only, or also invalidates provisions in the articles which, being consistent with the general law, reduce or abrogate any duty of a director or other officer, is controversial. The author asks to what extent section 247 of the Companies Act may be modified by the notion of corporate governance. The controversial sections of the Act, specifically section 247, should not be used by directors as a mechanism to infringe the rights and benefits of other stakeholders in the company. Ref. (Also published in: Annual Conference / African Society of International and Comparative Law, [vol.] 8 (1996), p. 235-251, with discussion, p. 252-253.)
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