Background:

The South African Companies Act No. 71 of 2008 (“Companies Act”) grants shareholders statutory rights of access to certain company records and information, aimed at promoting transparency and good corporate governance within South African companies. These rights are especially important for shareholders to assess the performance of their investment and efficiency of company management.

Statutory Information Rights in terms of section 26:

Section 26(1) of the Companies Act provides that a shareholder has the right to inspect and copy the following company records:

1. the memorandum of incorporation of the company and rules made by the company;
2. the records relating to directors of the company, including their names, residential addresses, and other prescribed particulars;
3. the reports to annual meetings and annual financial statements of the company;
4. notices and minutes of annual meetings, notices and minutes of shareholder meetings, shareholder resolutions and written communications sent to shareholders; and
5. the securities register of the company.

Companies must within 14 (fourteen) business days comply with a shareholder’s request for any of the aforementioned information by providing the shareholder with the opportunity to inspect or copy the document or information concerned.

Contractual Information Rights:

While section 26 of the Companies Act ensures access to certain key information regarding the company, shareholders often seek broader information rights by contractual agreement with the company. These contractual rights are typically negotiated and recorded in shareholders’ agreements or the memorandum of incorporation of the company. Examples include:

1. regular (monthly or quarterly) access to management accounts;
2. annual budgets, cash flow forecasts, debtors age analysis and business plans;
3. board packs, board meeting agendas, notices of board meetings and board meeting minutes;
4. notices of company committee meetings and minutes of company committee meetings;
5. material agreements concluded by the company;
6. material litigation instituted by the company; and
7. any other relevant operational information regarding the company.

Conclusion:

Section 26 of the Companies Act provides shareholders with important statutory rights of access to key company records. However, these rights may not be sufficient for all shareholders. In such instances, shareholders should ensure that enhanced information rights are negotiated contractually and included in an agreement with the company, such as the shareholders’ agreement or the memorandum of incorporation of the company.

VDMA’s team of legal experts is available to assist with the drafting and negotiation of shareholders’ agreements, memorandum of incorporations and corporate governance frameworks tailored to the information needs of shareholders.

Published 19 June 2025