GUIDE TO THE MEMORANDUM OF INCORPORATION

OR it may limit or restrict the company’s authority in regard to (a) to (c) above– which limitations or restrictions would be set out in Part J of Schedule 5 ofthe MOI.Some further notes relating to Section 78 and Indemnification ofdirectors[*director in this section refers to a former director, alternate director,prescribed officer or a person who is a member of a committee of a boardof a company, or of the audit committee of a company, irrespective ofwhether or not the person is also a member of the company’s board];Section 78(2): Director may not be relieved of liability●●Any agreement, provision in the MOI, resolution is void if it directly orindirectly purports to:(a) relieve a director of liability in regard to the duties contemplatedin sections 75 (personal financial interests) and 76 (codifiedregime of directors duties) and liability contemplated insection 77;(b) negate limit or restrict any legal consequences arising from anact or omission that constitutes wilful misconduct or wilful breachof trust on the part of the director;Section 78(3) – as amended by the Amendment Act – Payment of finefor directorSubject to Subsection (3A) – A company may not indirectly or directlypay any fine that may be imposed on the director or a director of arelated company who has been convicted of an offence in terms ofnational legislation.S78(3A) – inserted by Amendment ActSubsection (3 (above) does not apply to a private or personal liabilitycompany if:a) a single individual is the sole shareholder and sole director of thatcompany orb) two or more related individuals are the only shareholders of thatcompany and there are no directors of the company other than one ormore of those individuals.Section 78(6) A company may not so indemnify the director if:(i) the director has had proceedings instituted against him/her regardingSections 77(3)(a) to (c) – i.e:Acted in the name of the company, signed anything on behalf of thecompany or purported to bind the company or authorise the taking ofany action by or on behalf of the company despite knowing that thedirector lacked authority to do so;Acquiesced in the carrying on of the company’s business despiteknowing that it was being conducted in a manner prohibited bySection 22(1);Been a party to an act or omission by the company despite knowingthat the act or omission was calculated to defraud a creditor,employee or shareholder of the company or had another fraudulentpurpose;34