It’s that time of the financial year again, where preparation for the annual audit should soon be underway. Prescribed Management Rule (“PMR”) 51(2) of Annexure 8 of the Regulations to the Sectional Titles Act 95 of 1986 (“the Act”) provides that unless otherwise determined at a general meeting, or by the trustees, the financial year of the body corporate shall run from the first day of March each year, to the last day of February the following year. PMR 51(1) provides that an annual general meeting (“AGM”) shall be held within four months of the end of the scheme’s financial year.
Unless special business is tabled at the AGM, at least fourteen days’ notice shall be given to all owners, in terms of PMR 54. The Act clearly sets out a list of prescribed agenda items to be tabled for consideration, amendment and approval by the members of the body corporate.
In terms of PMR 37 and PMR 56(a), the notice calling the AGM must include the audited financial statement of the body corporate, fairly presenting the state of affairs of the body corporate and its finances and transactions as at the end of the financial year, which statement further includes any information and notes pertaining to the proper financial management by the body corporate.
Furthermore, PMR 38 and PMR 56(a) provides that a Chairman’s report, reviewing the affairs of the body corporate during the past year, must be tabled for consideration by the members.
In terms of PMR 36, the trustees shall cause to be prepared, and shall lay before the AGM, for approval with or without amendment, in terms of PMR 56(b), an itemised estimate of the anticipated income and expenses (budget) of the body corporate for the ensuing financial year, along with the schedules of replacement values.
PMR 56 further provides that the members must confirm the appointment of an auditor or accounting officer for the body corporate. In this regard, should a scheme comprise of less than ten units, an accounting office, and not an auditor, may be appointed (PMR 40).
The number of trustees shall be determined from time to time by the members of the body corporate, as provided for in PMR 4(1). Such determination is made at the AGM in terms of PMR 56(e). PMR 6 provides for the election of trustees, which election takes place at the AGM in terms of PMR 56(d).
Should special business be tabled for member approval, in terms of PMR 56(f), such as those requiring a special or unanimous resolution, the meeting shall be called on a thirty days’ notice period, as provided for in PMR 54(7).
In terms of section 39(1) of the Act, the functions and powers of the body corporate shall, subject to the Act, the rules and any restriction imposed or direction given at a general meeting, be performed and exercised by the trustees. PMR 56(g) provides that at an AGM, the members may impose restrictions, effectively limiting the trustees’ powers and functions, and / or give directions to the trustees.
At the AGM, the members present in person or represented by proxy, in terms of PMR 56(h) must determine the domicilium citandi et executandi (service address) of the body corporate, which is more often than not, the physical address of the managing agent of the scheme.
Should any of the scheme’s registered rules have been amended, substituted, added to, and / or repealed during the course of the financial year, the auditor or accounting officer should confirm such amendment, substitution, addition and / or repeal at the AGM in terms of PMR 56(i).
Many bodies corporate include other items on their AGM agenda, which should form part of the standard agenda form, such as the welcome, quorum confirmation, approval of the minutes of the previous AGM, matters arising from the minutes of the previous AGM, and general matters for discussion.
Should you require any assistance in the preparation for your upcoming AGM, require our attendance at the meeting for purposes of providing legal advice or minute taking, or require an AGM venue, please contact us at Paddocks.
Article reference: Paddocks Press: Volume 11, Issue 01, Page 1.
Zerlinda van der Merwe has recently been admitted as an Attorney of the High Court. She is a specialist Sectional Title Attorney (BA LLB LLM) and soon to be qualified Conveyancer. Zerlinda forms part of the Paddocks Private Consulting Division and brings a wealth of experience and additional services. If you would like to schedule a consultation with Zerlinda, please contact Nicole on 021 686 3950 or firstname.lastname@example.org.
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