Son (15 y.o.) and I are to act as Pty (Ltd) directors....

Son (15 y.o.) and I are to act as Pty (Ltd) directors. What is the PKs directorship relationship with regard to remuneration? Do we need to register as employees? How can a teen get his profit share?

SHARE

Firstly, appointing such a young and inexperienced person as a director may be unwise in light of the directors duties listed in terms of the Companies Act (see our website for more details in this regard.)

The Companies Act does not make any distinction between executive and non-executive directors (directors who are also employees of the company and those who are not), it does however generally entitle directors to remuneration. The Act further allows for certain guidelines to be observed (specifically the King III report on corporate governance) in respect of determining the rate and payment of directors remuneration. For more information please see our website.

Finally, there is a distinction between a director (appointed management) and shareholder (owner) and depending on the exact office held by the minor, the reason why and the terms contained in the company’s documents (memorandum of incorporation) he may be able to receive remuneration. It would be advisable to seek legal counsel (legal advice) about this.

Please note that links above are provided for information and guidance only and therefore do not constitute legal advice or a substitute for legal advice.

Nicolene Schoeman-Louw
Nicolene Schoeman – Louw is an admitted attorney of the High Court of South Africa, as well as being a Conveyancer, Notary Public and Mediator. She is the Managing Director of Schoemanlaw Inc Attorneys, Conveyancers and Notaries Public (Schoemanlaw Inc Attorneys) in Cape Town. Visit www.schoemanlaw.co.za for more information or email enquiries@schoemanlaw.co.za