Swapping Directors in South Africa? Don’t Miss These Steps

A change in company leadership can signal growth, strategy shifts, or simply a new chapter. But in South Africa, replacing or appointing a director is not just a boardroom decision, it’s a legal process wrapped in timelines, filings, and governance rules. Whether you’re saying goodbye to a long-time board member or bringing in a new face, here’s what the law, and good practice, expect from your company.

Know the Rules: Start with the MOI and the Companies Act

Before anything else, check your company’s Memorandum of Incorporation (MOI). Some companies require shareholder approval for director changes; others let the board handle it. Understanding your internal governance framework is key, especially if the MOI sets conditions on board composition or decision-making thresholds.

The Companies Act of 2008 outlines who qualifies to serve as a director and how changes must be recorded. For example, a company cannot appoint someone who is disqualified due to insolvency or a past conviction for dishonesty. It’s also essential to confirm there are no pending disputes or obligations involving the outgoing director before proceeding.

Making It Official: Approvals, Meetings, and Resolutions

Whether a new director is being appointed or an existing one is stepping down, the company needs a formal resolution. This typically happens during a board or shareholders’ meeting, whichever is authorised under the MOI.

Board meetings must follow clear procedures. At least two directors can call a meeting (or 25% if the board has 12 or more members), and notice must be given to all participants. The resolution must pass by the required majority and be documented in the minutes. These internal records, along with any written resignation letters, form part of the compliance trail.

The CoR39 Form: Filing Within 10 Business Days

Once the decision is made, companies have a strict 10-business-day deadline to report the change to the Companies and Intellectual Property Commission (CIPC) using the CoR39 form. This applies whether you’re appointing a director, removing one, or recording a resignation.

Details to be filed include:

• Full legal name, date of birth, and residential address
• Nationality and ID or passport number
• Occupation and contact details
• Appointment or resignation date
• Name of the outgoing director, if applicable

Failure to meet this deadline could result in late filing penalties and trigger non-compliance notices that tarnish your public record.

Foreign Nationals: Can They Be Directors?

Yes — and without extra bureaucracy. The Companies Act does not require directors to reside in South Africa. However, if a foreign national plans to work from within the country, a valid visa (such as a business or work visa) may be necessary. Otherwise, if they operate remotely, no specific residency or visa status is required for their appointment.

As always, the individual must still meet South African legal and qualification standards for directorship.

What About MOI Amendments?

Appointing a new director usually doesn’t change your MOI — unless the appointment alters the number of directors, introduces new responsibilities, or affects existing board structures defined in the document.

If the MOI needs to be updated, this will require a special resolution from shareholders. It’s also a good time to review any shareholders’ agreements that may reference board structure or voting rights.

UBO and Beyond: Other Registers and Notices

A director change could affect your company’s Ultimate Beneficial Owner (UBO) register, especially if the new appointment shifts control or ownership dynamics. UBO declarations must always be accurate and up to date to comply with South Africa’s anti-money laundering laws.

Even though there’s no requirement to announce the change in an official gazette, the CIPC’s public records automatically reflect the update once CoR39 is filed. Companies may still choose to notify stakeholders, clients, or financial institutions where the change impacts relationships or authority.

What the Outgoing Director Must Do

Directors stepping down should handle the transition with care. This includes:

• Providing a formal resignation letter.
• Handing over key documents and digital access.
• Returning company property.
• Preparing a handover report outlining current matters and upcoming obligations.

While the Companies Act doesn’t specify a handover process, fiduciary responsibilities apply until the very end. A careless exit could expose the outgoing director to liability if the company suffers due to a botched transition.

Governance Varies by Industry and Structure

South Africa’s director rules apply across all companies, but their impact depends on company size and sector. Public and listed companies face more detailed compliance demands, including JSE disclosure requirements. Regulated sectors like finance, healthcare, or mining may need to notify or seek approval from their respective authorities before the change is finalised.

In a multinational setup, a South African director change could require updates in other jurisdictions too, especially if the role affects cross-border contracts, tax reporting, or group-level governance.

What’s next?

Updating your board is a sign of growth, but it’s also a moment that tests your governance processes. Filing late, skipping internal approvals, or overlooking UBO changes can lead to more than administrative hassle. For more insights into processes in other jurisdictions, explore our article, Managing Director Changes in Mexico.

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