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[F.A.Q.]
Kiribati Consolidated Legislation |
LAWS OF THE REPUBLIC OF KIRIBATI
REVISED EDITION 1998
CHAPTER 10A
COMPANIES
(Incorporating
amendments up to 1 September 1998)
ARRANGEMENT OF SECTIONS
Section
PART
I
PRELIMINARY
AND OFFICIAL ADMINISTRATION
1.
Short title and
commencement
2.
Interpretation
3.
Extent of application of the
Ordinance
4.
Limitation of partnerships
etc.
5.
Registrar
6.
Maintenance of register for each company and filing of
documents
7.
Late filing
fees
8.
Regulations
PART
II
FORMATION
OF
COMPANIES
AND
MATTERS INCIDENTAL THERETO
9.
Procedure for
incorporation
10.
Type of
companies
11.
Duties of
promoters
12.
Pre-incorporation
contracts
13.
Articles of
companies
14.
The name of a
company
15.
Publication and use of the name of the
company
16.
Registered
office
17.
Objects and powers of
companies
18.
Alteration of
objects
19.
Form of Rules forming part of the Articles of a
company
20.
Alteration of
Articles
21.
Minimum paid up share
capital
22.
Commencement and continuation of
business
23.
Membership of
companies
24.
Register of
members
25.
Companies ceasing to have
members
26.
Missing members
SHARES AND SHARE CAPITAL
27.
Nature of shares and transfer of
shares
28.
Certification of
transfers
29.
Company's lien on
shares
30.
Numbering of
shares
31.
Issue and effect of share
certificates
32.
Classification of
shares
33.
Variation of class
rights
34.
Voting
rights
35.
Canons of construction of class
rights
36.
Allotment of equity
shares
37.
Issue of shares at a
discount
38.
Prohibition of financial assistance for acquisition of
shares
39.
Loans to and acquisition of shares in holding
company
40.
Commission on
shares
41.
Share
capital
42.
Alteration of
capital
43.
Registration of resolution altering
capital
44.
Premiums on
shares
45.
Redeemable
shares
46.
Reduction of
capital
47.
Share warrants to bearer or bearer shares
MORTGAGES AND DEBENTURES
48.
Borrowing by
companies
49.
Issue of
debentures
50.
Trustees for debenture
holders
51.
Registration of
charges
52.
Transfers and transmission of debentures
RECEIVERS AND MANAGERS
53.
Qualification
54.
Powers and
duties
55.
Receiver appointed by
Court
56.
Receiver appointed out of
Court
57.
Liability of
receiver
58.
Notification of
appointment
59.
Accounts of
receiver
60.
Enforcement of receiver's duties
OFFERS OF SECURITIES TO THE PUBLIC
61.
Prospectuses and public offers
ANNUAL RETURNS, ACCOUNTS, AUDITORS AND DIVIDENDS
62.
Annual
returns
63.
Accounts
64.
Appointment and removal of
auditors
65.
Duties and powers of
auditors
66.
Dividends
ACTS BY OR ON BEHALF OF THE COMPANY
67.
Functions of general meetings, directors and
agents
68.
Contracts
69.
Seal of a company
MEETINGS AND RESOLUTIONS
70.
Meetings
71.
Notice of
meetings
72.
Service of
notices
73.
Circulation of members'
resolution
74.
Circulation of members'
circulars
75.
General provisions affecting sections 73 and
74
76.
Power of Registrar to order a
meeting
77.
Requisition of
meetings
78.
Quorum
79.
Chairman for
meetings
80.
Proxies
81.
Corporations - representation at
meetings
82.
Resolutions and
voting
83.
Voting by joint
holders
84.
Votes by persons of unsound
mind
85.
Adjournment
86.
Application to class
meetings
87.
Registration of
resolutions
88.
Minutes
89.
Written resolution
DIRECTORS
90.
Definition
91.
Number and
appointment
92.
Directors' share
qualifications
93.
Removal and vacation of office of
directors
94.
Executive
directors
95.
Managing
directors
96.
Directors'
remuneration
97.
Loans to
directors
98.
Management
agreements
99.
Limitation on powers of
directors
100.
Conflicts of duty and
interest
101.
Duties of
directors
102.
Contracts in which directors are
interested
103.
Compensation for loss of
office
104.
Payments to directors in connection with take-over
bids
105.
Provisions supplemental to sections 103 and
104
106.
Duties of director on sale or purchase of
securities
107.
Civil liability for breach of
duty
108.
Register of directors'
interests
109.
Alternate
directors
110.
Representative
Directors
111.
Assignment of
office
112.
Proceedings of
directors
113.
Minutes of directors'
meetings
114.
The
secretary
115.
Register of directors and
secretary
116.
Registration of particulars of director and
secretaries
117.
Publication of names of directors and
secretary
118.
Disqualification of persons guilty of misconduct
PROTECTION AGAINST ILLEGAL OR OPPRESSIVE ACTION
119.
Injunction or declaration in the event of illegal or irregular
activity
120.
Remedy against
oppression
121.
Enquiries by the
Registrar
122.
Appointment of
Inspector
123.
Expenses of
investigation
124.
Proceedings after
investigations
125.
Procedure and general
provisions
126.
Cancelling
dissolution
127.
Distribution without full winding
up
128.
Vesting
order
129.
Winding up by order of the Court (official winding up)
PART
III
PRIVATE
COMPANIES
130.
Basic
conditions
131.
Directors
132.
Transfer of
shares
133.
Written resolutions and
meetings
134.
Share
capital
135.
Auditors
136.
Annual returns
PART
IV
CONVERSION
OF ONE TYPE OF COMPANY
INTO
ANOTHER
TYPE OF COMPANY
137.
Conversion of private company into a public
company
138.
Conversion of public company into a private
company
139.
Effect of change of status
PART
V
PROVISIONS
APPLICABLE TO NON-KIRIBATI COMPANIES
140.
External companies
PART
VI
SUPPLEMENTARY
141.
Service of documents by
company
142.
Service of documents on
company
143.
Books and
registers
144.
Miscellaneous
offences
145.
Publication of capital to contain particulars of
capital
146.
Legal
proceedings
147.
Security for costs against a
company
148.
Rights of
contribution
149.
Relief from
liability
150.
Companies formed for special
purposes
151.
General authority of court
SCHEDULES
----------------------------------------------------
An
Ordinance to regulate the conduct of business by companies; to provide for a
companies register, the establishment of a companies
registrar and for purposes
connected therewith
Commencement:
PART
I
PRELIMINARY
AND OFFICIAL ADMINISTRATION
Short
title and
commencement
1.
(1) This Ordinance may be cited as the Companies Ordinance, and shall come into
operation on such date or dates as the Minister may by order
provide.
(2)
Different parts of this Ordinance may be brought into force on different
dates.
Interpretation
Schedule
2
2.
In this Ordinance unless the context otherwise requires the expressions defined
in Schedule 2 have the meanings assigned to them
in that
Schedule.
Extent
of application of the
Ordinance
3.
(1) Except where otherwise provided the provisions of this Ordinance shall apply
to all companies registered or registrable in Kiribati
whether before or after
the commencement of this Ordinance, under any earlier Companies Ordinance or
this Ordinance.
(2) The provisions of Part III apply to private companies, and the provisions of Part V apply to external companies.
(3) Nothing in this Ordinance shall affect the validity of anything done before the date on which this Ordinance comes into operation.
Limitation
of partnerships
etc.
4.
(1) No company, association, syndicate or partnership consisting of more than 20
persons shall be permitted or formed in Kiribati
for the purpose of carrying on
any business that has for its object the acquisition of gain by the company,
association, syndicate
or partnership or by the individual members thereof
unless it is registered as a company under this Ordinance.
(2) The provisions of subsection (1) shall not apply with reference to the formation by persons qualified to carry on any organised and recognised profession which is designated in any order made by the Minister under this Ordinance as an exempted profession, of any association, syndicate or partnership for the purpose of carrying on such exempted profession.
(3) The provisions of this Ordinance shall not apply to a society which has as its object the promotion of the economic interests of its members in accordance with co-operative principles, and which is registered under the Co-operative Societies Ordinance, unless application for incorporation shall have been made to and accepted by the Registrar.
Registrar
5.
(1) Subject to section 99 of the Constitution, there shall be a Registrar who
shall be appointed by the Minister upon the recommendation
of the Public Service
Commission.
(2) No liability shall attach to the Registrar in respect of any breach of a duty imposed on him by this Ordinance (other than in respect of any improper disclosure of information obtained confidentially) and no liability shall attach to the Republic for any such breach.
(3) In exercising any function under this Ordinance whereunder the Registrar may exercise a discretion in the interests of Kiribati the Registrar shall have regard to any directions from time to time given to him by the Minister but without prejudice to his right at any time to apply to the Court for directions as to the manner in which he should exercise his duties and functions under this Ordinance.
Maintenance
of register for each company and filing of
documents
6.
(1) The Registrar shall maintain a separate and distinct register in respect of
every company incorporated under this Ordinance and
in such register shall be
placed all documents delivered to him in accordance with this Ordinance in
respect of every such company
and the Registrar shall maintain a like register
in respect of every external company.
(2) The regulations shall make provision for the inspection of the registers kept by the Registrar under this section and prescribe fees to be payable for such inspection and the supply by the Registrar of copies of any documents registered in respect of any company.
(3)
A copy of or extract from any document registered by the Registrar certified to
be a true copy under the hand of the Registrar
shall in all legal proceedings be
admissible in evidence as of equal validity with the original
document.
(4)
All documents purporting to be orders, certificates, licences, approvals or
revocations thereof made or issued by the Registrar
for the purposes of this
Ordinance, and purporting to be signed by him, shall be received in evidence as
such without further proof
of validity-unless the contrary is
shown.
(5)
For the purposes of any provision of this Ordinance, no document or particulars
shall be deemed to have been delivered to the
Registrar for registration until
the appropriate registration fee and any late fee has been paid to the
Registrar.
(6)
If the Registrar is of opinion that any documents or particulars delivered to
him for registration-
(a) contain matter contrary to law; or
(b) by reason of any error, omission or misdescription have not been duly completed; or
(c) otherwise do not comply with the requirements of this Ordinance; or
(d) contain any error,
he
may direct that the document or particulars be appropriately amended or
completed and re-submitted and may refuse to register the
document or
particulars until appropriately amended or completed; and in that event the
document or particulars shall not be deemed
to have been delivered for
registration until resubmitted appropriately amended or
completed.
(7) If a body corporate or any
officer or liquidator of a body corporate, having made default in complying with
any provision of this
Ordinance which requires it to deliver any return,
account, or other document, or to give notice of any matter, fails to end the
default within 28 days after the service of a notice on the body corporate or
the officer or liquidator requiring it or him to do
so, the Court may, on an
application made to the Court by the Registrar or by any member or creditor of
the body corporate, make
an order directing the body corporate and any officer
thereof or the liquidator to make good the default within such time as may
be
specified in the order; and may provide in addition to any penalty or late fee
which may be imposed under this Ordinance that
all costs of and incidental to
the application shall be borne by the body corporate or by any officer or
liquidator of the body corporate
responsible for the default.
Late
filing
fees
7.
(1) Without prejudice to any provision in this Ordinance whereby the failure to
deliver any document to the Registrar for fees registration
may affect the
validity of the document or of the matter to which it relates, the Registrar
shall only be empowered to accept any
such document upon payment of a late fee
which, save as regards the additional fee payable for late registration of a
certified copy
of a resolution under section 87 of this Ordinance shall be $150
for every month or part thereof by which it is late and shall be
additional to
the fee which may be prescribed for the registration of the
document.
(S.7(1)
amended by No. 6 of 1986, S.2)
(2) The directors of the company in default under subsection (1) shall jointly and severally be liable to pay such late fee and shall have no right to be indemnified by the company in respect thereof.
(S.7(2)
substituted by No. 6 of 1986,
S.2)
(3)
This section shall not apply to Part V of this
Ordinance.
(S.7(3)
inserted by No. 6 of 1986
S.2)
Regulations
8.
The Beretitenti, acting in accordance with the advice of the Cabinet, may make
regulations for the purpose of carrying this Ordinance
into effect and for
providing for the forms or fees to be prescribed or for any other matter which
under this Ordinance is to be
prescribed or which relate to any procedures under
this Ordinance and the regulations may provide for a variation of any monetary
limit specified in any section of this Ordinance.
PART
II
FORMATION
OF
COMPANIES
AND
MATTERS INCIDENTAL THERETO
Procedure
for
incorporation
9.
(1) Subject to the provisions of this Ordinance, application may he made to the
Registrar by any person for any lawful purpose to
incorporate a company under
this Ordinance.
(2)
An application to incorporate a company under this Ordinance shall be delivered
to the Registrar and shall be in such form and
shall contain such particulars as
may be prescribed and shall be accompanied by a remittance for all fees and
other sums prescribed
as payable in respect of the application, the Articles of
the company and such other documents, duly subscribed, as are required
to be
delivered with such application under this Ordinance or any order or regulation
made thereunder and such application shall
be considered by the
Registrar.
(3)
Before reaching a decision upon any application for permission to incorporate a
company the Registrar may require the incorporators
to provide such further
information relating to themselves or to the company or to other persons having
an interest or intending
to have an interest therein as the Registrar may
specify and, unless satisfied with the information so provided, the Registrar
shall
without prejudice to his powers under subsection (5) refuse to proceed
further with the
application.
(4)
Any information provided by or on behalf of the applicants shall be treated as
confidential by the Registrar and all public officers
having access
thereto.
(5)
The Registrar may, in his absolute discretion and without assigning any reason,
decline to grant permission to incorporate a company
under this Ordinance if he
considers it is in the interest of Kiribati to so
decline.
(6)
If the Registrar is satisfied that on the information submitted to him pursuant
to this section it is appropriate for the Registrar
to consent to an application
to incorporate a company under this Ordinance, a memorandum of consent on behalf
of the Registrar shall
be endorsed on the application if he is satisfied that it
is in accordance with the Ordinance and that the name of the company is
not
undesirable and he shall enter the name of the company in the Register of
Companies and shall issue a Certificate of Incorporation
bearing the name of the
company and the date of incorporation and the registered number of the
company.
(7) From the date of incorporation specified in the Certificate of Incorporation the persons who have subscribed to the Articles as the proposed members of the company together with such other persons as may from time to time become members of the company shall be a body corporate by the name contained in the Certificate of Incorporation capable forthwith of exercising all the functions of an incorporated company according to this Ordinance.
(8)
No defect in the formalities leading to the incorporation of a company or in any
document submitted with the application for incorporation
shall affect the
validity of its incorporation and its Certificate of Incorporation shall be
conclusive evidence of the due incorporation
of the company and the date of its
incorporation by
registration.
(9)
No person who is an infant or of unsound mind, or under any other disability
from time to time imposed by or pursuant to this
Ordinance or by or pursuant to
any other law of Kiribati, shall be a subscriber, member, director or secretary
of a company.
Type
of companies
10.
(1) A company may be formed and incorporated under this Ordinance provided it is
a company limited by shares being a company in respect
of which the liability of
every member is limited to the amount paid up on each share of which he is the
holder (in this Ordinance
termed "a limited
company").
(2)
A limited company may be a public company or a private
company.
Duties
of
promoters
11.
(1) Any person who is or has been engaged or interested Duties of in the
formation of a company is a promoter of that
company:
Provided
that a person acting in a professional capacity for persons engaged in procuring
the formation of the company shall not thereby
be deemed to be a
promoter.
(2)
Until the formation of the company is complete the promoter stands in fiduciary
relationship to the company and shall observe
the utmost good faith towards the
company in any transaction with it or on its behalf and shall compensate the
company for any loss
suffered by it by reason of his failure so to
do.
(3)
A promoter who acquires any property or information in circumstances in which it
was his duty as a promoter to acquire it on behalf
of the company shall account
to the company for such property or
information.
(4)
Any transaction between a promoter and the company may be rescinded by the
company unless, after full disclosure of all material
facts known to the
promoter, such transaction shall have been entered into by or ratified on behalf
of the company-
(a) if all the company's directors are independent of the promoter, by the board of directors; or
(b) by all the members of the company; or
(c) by the company at a general meeting at which neither the promoter nor the holder of any shares in which he is beneficially interested shall have voted on the resolution to enter into or ratify that transaction.
(5)
No period of limitation shall apply to any proceedings brought by the company to
enforce any of its rights under this section
but in any such proceedings the
Court may relieve a promoter in whole or in part, and on such terms as it thinks
fit, from liability
hereunder if in all the circumstances, including lapse of
time, the Court thinks it equitable to do
so.
Pre-incorporation
contracts
12.
(1) Any contract or other transaction purporting to be entered into by the
company prior to its formation or by any person on behalf
of the company prior
to its formation may be ratified by the company after its formation and
thereupon the company shall become bound
by and entitled to the benefit thereof
as if it had been in existence at the date of such contract or other transaction
and had been
a party
thereto.
(2)
Prior to ratification by the company the person or persons who purported to act
in the name or on behalf of the company shall,
in the absence of express
agreement to the contrary, be personally bound by the contract or other
transaction and in the case of
2 or more persons jointly and severally, and
entitled to the benefit
thereof.
Articles
of
companies
13.
(1) The Articles of every company shall be printed or in such other durable form
as the Registrar shall approve and shall be divided
into paragraphs,
namely-
(a) Paragraph 1 - the Name Section- which must state the precise name of the company with the abbreviation "LTD." as the last suffix of the name.
(b) Paragraph 2 - the Domicile Section- which must state that the registered office of the company is in Kiribati.
(c) Paragraph 3 - the Objects Section- which shall either state the nature of the business initially to be carried on by the company and that the objects of the company are unrestricted, or shall specify the nature of the business initially to be carried on by the company and any other types of business which the company is to be authorised to carry on or any restrictions attached to the objects of the company or types of business to be carried on by the company and shall further state that the company shall by virtue of this Ordinance be deemed to have all the lawful powers of a natural person requisite for the furtherance of its unrestricted or specified objects or businesses save as the Articles shall in the Objects Section otherwise specifically provide:
Provided that no company shall be entitled to carry on or to state in its Objects Section that it is to be entitled to carry on the business of banking or insurance, or such other business as may from time to time be prescribed as requiring a licence of the Minister, save with the sanction of the Registrar evidenced by the issue of a licensee.
(d) Paragraph 4 - the Capital Section- which must state the amount of the authorised share capital and its division into shares of fixed amount or if the company is to have shares of no par value that the capital is divided into a specified number of shares of no fixed amount or such Section may provide for a combination of shares of fixed amount and shares of no par value:
Provided that all the shares of the same class shall consist of shares of fixed amount or of shares of no par value.
(e) Paragraph 5 - the Share Rights Section- which must state either that all shares of the company rank equally in every respect or, if the share capital consists of shares conferring any special or particular rights or consists of more than one class of shares, must state any special or particular rights or restrictions as to voting, dividends, participation in assets on a winding up, transferability or appointment of directors attaching to any shares or to any class of shares.
(f) Paragraph 6 - the Officers Section- which must state the names of the directors, the secretary and the auditors of the company (if any) and, in the case of a public company, that the powers of the directors are limited in accordance with section 99.
(g) Paragraph 7 - the Rules Section- which must state the rules as to membership and provide for the administration and internal constitution of the company.
(h) Paragraphs 3, 5, 6 and 7 of the Articles may be subdivided into, 2 or more subsections.
(2)
The Articles must be signed at the end thereof by each of t he persons named in
the Articles as directors and secretary and the
incorporators or the duly
appointed attorneys of any such persons.
The
name of a company
14.
(1) No company shall be registered by, or change its name to, a name which in
the opinion of the Registrar is misleading or undesirable.
(3) If through inadvertence or otherwise a company on its first registration, or on the registration by a new name, is registered by a name which in the opinion of the Registrar is misleading or undesirable the company shall, if directed by the Registrar within 6 months office being registered by that name, change its name to a name approved by the Registrar within 6 weeks from the date of the direction made by the Registrar.
(4)
At any time within 12 months of the coming into operation of this Ordinance the
Registrar may direct any company to change its
name if, in his opinion, such
name is misleading or undesirable and the company shall so change its name
within 6 weeks of such direction
unless within 14 days of such direction it
shall have lodged an appeal to the Court against such
direction.
(5)
If the Registrar is of the opinion that by reason of any change in the objects
of or the nature of the business carried on by
a company, or of any change in
membership of the company, the name under which it is registered is misleading
or undesirable, the
Registrar may direct the company to change its name to a
name approved by the Registrar and the company shall so change its name
within 6
weeks of such direction unless, within 14 days of such direction, it shall have
lodged an appeal to the Court against such
direction.
(6)
For the purpose of enabling the Registrar to determine whether or not he shall
make such a direction as is specified in subsections
(3), (4) and (5) the
directors of every company, including an existing company, shall furnish the
Registrar with such information
as he may from time to time
require.
(7)
The Court shall on the hearing of such appeal as is referred to in subsections
(4) and (5) make such order as it thinks proper
and, if the Court shall order
the company to change its name, the company shall change its name to a new name
approved by the Registrar
within 6 weeks of the date of the order of the
Court.
(8)
If default is made in complying with any direction made by the Registrar or the
Court under this section the Registrar shall,
at the expiration of the period of
6 weeks of any such direction or order being made, save where an appeal has been
made to the Court
as provided in subsection (4) or (5), declare the company
dissolved and the assets of the company shall vest in a Custodian Manager
who
shall deal with the same and with the affairs of the company as if a Protection
Order had been made in respect of the company
pursuant to section 25 and the
directors of the company shall be jointly and severally liable for the expenses
incurred by the Custodian
Manager in administering the affairs of the company to
such extent as the Court shall consider
reasonable.
(9)
A change of name of a company shall not affect any rights or obligations of the
company or render defective any legal proceedings
by or against the company, and
any legal proceedings that might have been continued or commenced against it by
its former name may
be continued or commenced against it by its new name, and
for a period of 6 months after any such change of name has been effected
wherever the new name of the company is used there shall also appear a reference
to its former
name.
(10)
The Registrar on written application, and on payment of the prescribed fee, may
reserve a name which has been approved by him
pending registration of a company
or a change of name by a company. Such reservation shall be for a period not
exceeding 3 months
and, during the period of reservation, no other company shall
be registered under the reserved name or under any other name which
in the
opinion of the Registrar is similar to the reserved
name.
(11)
Where a company changes its name the Registrar shall enter the new name in the
Register of Companies and shall replace the Certificate
of Incorporation with a
new Certificate of Incorporation altered to record the change of name and the
change of name shall take effect
from the date recorded in such new Certificate
of
Incorporation.
(12)
Within 7 days of the issue by the Registrar of the new Certificate of
Incorporation the Registrar shall advertise in the
Gazette
and in the
"Atoll Pioneer" details of the change of name.
Publication
and use of the name of the company
15.
(1) Every company shall-
(a) display its name in prominent manner on the outside of, or name of the in the entrance hall of, its registered office, and every place in which its business is carried on, in letters easily legible; and
(b) have its name and registered number engraved in legible characters on its seal, if any; and
(c) save as provided by subsection (4), have its name and registered number accurately mentioned in legible characters at the head of all business letters,; order forms, invoices, receipts, notices, advertisements, or other publications of the company, and in all negotiable instruments or orders for money, goods or services purposing to be signed or endorsed by or on behalf of the company, and also refer to its incorporation in Kiribati and its registered office or post office box number:
Provided that paragraph (a) shall be deemed to be complied with as regards display of the name of a company at its registered office if, at the office or place which is its registered office, such office or place is the registered office of more than one company and there is available for public inspection during the normal business hours at its registered office a register listing every company which has its registered office at such address and there is designated in its notice of registered office delivered to the Registrar the name of an individual, firm or company having an office at such address who has custody of such register to whom application should be made for such inspection and there is displayed on the outside of, or in the entrance hall of, every such office a plaque or sign indicating that a register of registered offices is available for inspection at such office.
(2) No company shall carry on business in a business name other than its full corporate name unless it shall have first obtained the approval of the Registrar to the use of such business name and shall have delivered to the Registrar such information as he may require.
(3)
The Registrar may in his absolute discretion and without assigning any reason
decline to approve the use by a company of any business
name other than its
corporate name, and the provision of section 14 (5) to (8) (inclusive) shall
mutatis
mutandis
apply in
relation to the use by a company (including an existing company) of a business
name.
(4) Where a company with the approval of the Registrar uses a business name other than its corporate name it shall display in prominent manner on any publications mentioned in subsection (1) (c) (save only as regards advertisements which do not contain an order form) in which such business name appears reference to the company in its corporate name (and with its registration number and reference to its incorporation in Kiribati) as being the proprietor of the business name.
(5) Where a company ceases to use a business name it shall within 7 days after such cessation notify the Registrar.
(6) Where any company contravenes the provisions of this section the Registrar may give notice to the company of its default and if the company shall continue in default after the expiration of the period specified in such notice the Registrar may forthwith declare the company dissolved, and the same results shall follow as in the case of a company declared dissolved pursuant to section 14 (8).
(7)
Save as regards the particulars of the name of the company required to be
engraved on its common seal, if any, the abbreviation
"Co." may be used for the
word "Company" in the name of a company, and the ampersand "&" may be used
for the word "and" in the
name of a company, but any other abbreviations in the
name of a company shall be deemed to constitute a business name requiring
registration
under subsection
(2).
(8)
In addition to the powers conferred on the Registrar by subsection (6), if any
director or officer of a company or any person
on its behalf-
(a) uses or authorises the use of any seal purporting to be a seal of the company whereon its name and registered number is not so engraved as aforesaid; or
(b) issues or authorises the issue of any notice of other official publication of the company or signs or authorises to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money, goods or services, wherein its name and registered number and the fact of its incorporation in Kiribati is not mentioned in manner aforesaid; or
(c) issues or authorises the issue of any letter, delivery note, invoice, receipt or letter of credit of the company or advertisement wherein its name and registered number and the fact of its incorporation in Kiribati and the address of its registered office or post office box number is not mentioned in manner aforesaid,
he
shall be guilty of an offence and shall further be personally liable to the
holder of the bill of exchange, promissory note, cheque
or order for money,
goods or services for the amount of value thereof unless such bill, promissory
note, cheque or order for money
is paid or the goods or services are provided by
the
company.
(9)
In addition to the provisions of subsections (6) and (8), where any offence is
committed under this section the company and every
director, officer or other
person in default shall be liable to a default fine for each day on which the
offence is shown to have
been
committed.
(10)
Any person or persons trading or carrying on business under a name or title
which implies that the person or persons is or are
duly incorporated under this
Ordinance, or any repealed Ordinance relating to the incorporation of companies,
shall be liable to
a fine of $1,000 if not thus incorporated, and the Court may
direct that in addition the person or persons who have so offended shall
be
prohibited from being members or directors of any company registered or to be
registered under this Ordinance or of any existing
company for such period as
the Court may think then existing company the Court may make such order as it
thinks
fit in
relation to any such directorship or membership with power to order that any
shares of such member in any existing company
shall be forfeited to the
Republic.
(11)
In the case of an existing company the requirement as to the engraving of ,its
registered number on its seal need not be complied
wish until the expiration-of
1 year after the date of commencement of this Ordinance if the document to which
the seal is affixed
where it refers to the name of the company also refers to
its registered
number.
Registered
office
16.
(1) Every company shall have in Kiribati and shall
notify
the
Registrar of an office to which all communications and notices may be addressed
and at which all process may be served and
at
which the
statutory) registers shall be kept and be available for inspection in accordance
with this
Ordinance,
shall be
known as the "registered" office of the company and shall be open for receipt of
communications or notices or service
and
inspection
of the statutory registers during the usual business hours on each working day
of every
year:
Provided
that, in addition to the address of the office at which the statutory registers
are kept, the company may have a post office
box number to which all
communications and notices
may
be
addressed, and particulars of such post office box number shall be included in
the particulars required to be delivered to the
Registrar.
(2)
Any change in the registered office
of
a company
may only be effected by resolution of the directors and any such resolution
shall take effect only on completion of the
registration of particulars of the
change at the Companies Registry in the prescribed
form.
(3)
Where any such registered office is the address of a person, firm or company to
whom the company has given custody of its statutory
registers and on whom
process may be served any notice or other document publicising such address
shall specify the person, firm
or company having such custody as aforesaid and
particulars of such person, firm or company shall be included in the details of
the
registered office delivered to the
Registrar.
(4)
Any notice, order or other document which by this Ordinance or any other
Ordinance or by any rule of the Court may be or is required
to be served upon
any company, including an external company, may be served by delivering it at or
sending it to the address of its
registered office or the address so recorded of
the person, firm or company on whom process may be served recorded at the
Companies
Registry, and the service on a company at the address or post office
box number so recorded on the file of the company at the Companies
Registry
shall be effective, even though such address is not its registered office or the
address of the registered office has been
changed, and the sending of any
notice, order or other document to any post office box number recorded on the
file of the company
in the particulars delivered of its registered office shall
be effective service of such notice, order or other document.
Objects
and powers of companies
17.
(1) If a company by its Articles states that its objects are unrestricted it
shall have authority to carry on any lawful business
companies and, except to
the extent that the company's Articles or the provisions of this Ordinance
otherwise specifically provide,
every company shall have, for furtherance of its
objects and of any duly authorised business carried on by it, all the powers and
discretions of a natural person of full
capacity.
(2)
As regards any person dealing with the company (not being a member of the
company) any act of a company and any conveyance or
transfer of property to or
by a company shall not be invalid by reason only of the fact that such act,
conveyance
or
transfer
was not made for the furtherance of any of the authorised businesses of the
company in the Objects Section of its Articles
or that the company was otherwise
exceeding its objects or
powers.
(3)
On the application of-
(a) any member of a private company, or members of a public company holding not less than 5 per cent of the issued share capital, or where the company has more than one class of share capital not less than 5 per cent of the issued shares of any class; or
(b) any holder of any debenture secured by a floating charge over all or any of the company's property, or by the trustee for the holders of any such debentures,
the
Court may prohibit by injunction the doing of any act or the conveyance or
transfer of any property if the Court is satisfied
that any act or conveyance or
transfer is in contravention of the specified objects of the company or is in
excess of its powers
or may make such other order as it thinks
proper.
(4)
If the transactions sought to be prohibited in any proceedings under subsection
(3) are being or are to be performed or made pursuant
to a contract to which the
company is a party, the Court., if it deems the same to be equitable and if all
the parties to the contract
are parties to the proceedings, may set aside and
prohibit the performance of such contract and may allow to the company or to the
other parties to the contract compensation for any loss or damage sustained by
reason of the setting aside and prohibition of the
performance of such contract
but not compensation for loss of anticipated profits to be derived from the
performance of such
contract.
(5)
Where any compensation is awarded pursuant to subsection (4) the directors of
the company at the date of such contract shall be
jointly and severally liable
for payment of such compensation, unless the Court having regard to the
circumstances and in its absolute
discretion directs that such compensation be
paid in whole or in part out of the funds or other assets of the
company.
Alteration
of
objects
18.
(1) A company may by special resolution alter its Articles with respect to its
unrestricted or specified
objects:
Provided
that, if an application is made to the Court in accordance with this section for
the alteration to be annulled, the alteration
shall not have effect except in so
far as it is confirmed by the
Court.
(2)
Within 21 days of the passing of any such resolution application may be made to
the Court for an order annulling the resolution
by-
(a) any member of a private company or, in the case of a public company, by the holders of not less than 5 per cent in the aggregate of the company's issued shares or any class thereof; or
(b) by the trustees for holders of any debentures secured by a floating charge over all or any of the company's property; or
(c) the holder of any debenture secured by a floating charge over all or any of the company's property.
(3)
Where any application is made to the Court pursuant to subsection (2) a copy of
such application shall be delivered to the Registrar
and to the company at the
same time as the application is lodged with the Registrar of the
Court.
(4) The application to the Court pursuant to subsection (2) shall be signed by the applicant or applicants, shall contain such information about the company's share or loan capital as makes it apparent that the applicant or applicants are duly qualified to make the application, and shall also state the reasons for objection to the passing of the resolution, and if the application is made by a member who voted in favour of the special resolution the application shall state his reasons why he no longer consents to the passing of the special resolution.
(5)
On an application under this section the Court may make an order confirming the
alteration in whole or in part and on such terms
and conditions as it thinks fit
and may adjourn the proceedings in order that an arrangement may be made to the
satisfaction of the
Court for the purchase of the interests of dissentients, and
may give such directions and make such orders as it may think expedient
for
facilitating and carrying into effect any such arrangement. If the Court shall
refuse to confirm the alteration in whole or in
part it shall make an order
annulling the
alteration.
(6)
A copy of the order of the Court made pursuant to subsection (5) shall be
delivered to the Registrar and placed on the official
file of the
company.
(7)
If no application is made to the Court pursuant to this section a special
resolution altering the Articles of a company as provided
in subsection (1)
shall take effect at the expiration of the said period of 21 days or, in the
case of a private company, shall take
effect on the registration of the special
resolution if there be delivered with a copy of such resolution the consents in
writing
of each member and any holder of debentures conferring a floating charge
or of trustees for such
holders.
(8)
If an application is made to the Court pursuant to this section the Court in
making any order of total or partial confirmation
shall specify in such order
the date on which the alteration is to become
effective.
(9)
Where it is shown to the satisfaction of the Court that any person including the
company, has suffered any loss or damage in consequence
of any transaction
entered into by the company in reliance of authority conferred on the company by
the passing of a special resolution
which is annulled or partially confirmed
pursuant to subsection (5) the directors of the company at the date on which
such transaction
is first entered into shall be jointly and severally liable for
such loss or damage unless the Court shall direct that any such loss
or damage
shall be discharged in whole or in part out of the funds or other assets of the
company.
Form
of Rules forming part of the Articles of a company
19.
(1) In the case of a company registered after the commencement of this
Ordinance, for the purposes of compliance with section 13
(1) (h) as to
paragraph 7 of the Articles of a company the form of the Rules Section of the
Articles of-
(a) a public limited company; and
(b) a private limited company,
shall
be respectively in accordance substantially with the forms set out in Table A
and Table B in Schedule 1 to this Ordinance, or
as near thereto as circumstances
may admit.
(2) The Articles may as regards the Rules Section thereof (namely paragraph 7) adopt by reference such of the provisions of the appropriate Table as are not required to be specifically stated in the Articles, and in so far as the Articles do not specifically replace or modify those provisions the said provisions of the relevant Table shall so far as applicable be part of the Articles of the company and paragraph 7 of the Articles delivered to the Registrar shall so state.
(3)
The Rules shall be printed or in some other legible and durable form acceptable
to the Registrar.
(4) Every existing company shall, within 2 years of the commencement of this Ordinance, by special resolution adopt in place of and in substitution for its existing Memorandum and Articles, Articles in the form prescribed by section 13 adapted as near thereto to meet the circumstances of the company and in default, at the expiration of the said period of 2 years, the Registrar may at any time thereafter, upon not less than 3 months' notice in writing to the company, declare the company dissolved, and the same results shall follow as in the case of a company declared dissolved pursuant to section 14 (8).
(5)
Pending the adoption by an existing company of Articles as provided by
subsection (4) any reference in this Ordinance to the Articles
of a company
shall, in the case of an existing company, be deemed to refer to its Memorandum
and Articles of Association and to the
appropriate clauses therein which
correspond to the Articles referred to in section 13, with the addition that,
within 15 days of
the date of the commencement of this Ordinance, an existing
company if it has not done so shall give to the Registrar in the prescribed
form
details of its registered office and particulars of its directors, secretary and
auditor, if any, and in default the company
shall be dissolved at
the
expiration
of the
said
period of
15 days in similar manner to dissolution under section 14
(8).
(6)
Where the Articles of any company adopt by reference any of the provisions of
the relevant
Table
set out in
Schedule 1 an official printed copy of such Table shall be attached to every
copy of the Articles issued by the
company.
(7)
On admission of a
person
to
membership of a private company the company shall provide him with a copy of the
Articles of the company free of any charge and
on the occasion of any change in
any of the Articles of a private company the company shall send to each of its
members free of any
charge a true copy of the resolution effecting such change,
or if complete new Articles or Rules are adopted a copy of such new Articles
or
Rules. If any member of a public company requires a copy of the Articles of the
company or any alterations thereto, or if any
member of a private company
requires additional copies of the Articles of the company or any alteration
thereto, he shall be entitled
to obtain the same from the company on payment of
such charge as the auditors of the company shall certify represent the
appropriate
cost for printing such copy but so that any company may provide such
copy or additional copy free of
charge.
(8)
The Articles when registered shall have the effect of a contract between the
company and its members and officers and between
the members and officers
themselves whereby they respectively agree to observe and perform and be bound
by the provisions of the
Articles, as duly altered from time to time, in so far
as they relate to the company, its members or officers as
such.
(9)
Where the Articles empower any person to appoint or remove any director or other
officer of the company such power shall be enforceable
by that person
notwithstanding that he is not a member of the
company.
(10)
In any action by a member or officer to enforce any obligation owed under the
Articles to him and any other member or officer
such member or officer shall, if
any other member
or
officer is
affected by the alleged breach of such obligation, sue in a representative
capacity on behalf of himself and all other
members or officers who may be
affected, other than any who are defendants, and the result of such action shall
bind all such
other
members or
officers.
Alteration
of
Articles
20.
A company may by special resolution alter or add to its Articles or adopt new
Articles:
Provided
that-
(a) the name of the company shall not be altered except with the consent of the Registrar in accordance with section 14; and
(b) the registered office of the company shall not be altered except by following the procedure specified in section 16; and
(c) the objects may only be altered or added to or replaced by a new paragraph by adopting the procedure specified in section 18; and
(d) the capital may be altered only in manner provided by section 42; and
(e) any changes in the officers of the company specified in paragraph 6 of the Articles may only be effected in manner provided by the Articles of the company or this Ordinance; and
(f) where the share capital of the company consists of shares of different classes the rights attached to any class may be altered in manner provided by section 33 and not otherwise; and
(g) no alteration may be made to the Articles of a company which result in the omission from the Articles of any provision which under this Ordinance is required to be stated in the Articles and no new Articles may be adopted unless they contain all matters which under this Ordinance are required to be stated in the Articles; and
(h) no member of the company shall be bound by an alteration made in the Articles after the date on which he becomes a member if and so far as the alteration requires him to acquire more shares than the number of shares held by him on the date on which the alteration is made or in any way obliges him to pay money or transfer property to the company or which increases or imposes restrictions on the right to transfer the shares held by him at the date of the alteration unless he agrees in writing either before or after the alteration is made to be bound thereby; and
(i) no alteration shall be made which would have the effect of converting a company of one kind into a company of a different kind save by adopting the procedure specified in sections 136 and 137; and
(j) any alteration may be restrained or cancelled by the Court in accordance with section 118.
Minimum
paid up share
capital
21.
(1) The minimum paid up share capital of the types of companies incorporated
under this Ordinance shall be as follows:-
(a) public limited company - $20,000;
(b) private limited company - $500.
(2)
If the annual accounts of a company disclose that the minimum paid up share
capital of a company is not fully represented by assets
(other than goodwill)
the company shall within 3 months thereafter issue sufficient share capital to
restore the paid up capital
to the relevant minimum paid up capital and in
default the directors of the company shall be jointly and severally liable for
all
debts and obligations of the company incurred since the date up to which the
said accounts are made
up.
Commencement
and continuation of
business
22.
(1) A company registered after the commencement of this Ordinance may commence
business immediately on the issue of the Certificate
of
Incorporation.
(2)
An existing company having a share capital may not continue in business after
the expiration of 6 months from the commencement
of this Ordinance, unless there
has been delivered to the Registrar a certificate signed by the auditors (if
any) and each director
of the company to the effect that the paid up share
capital is at the date of such certificate not less than the prescribed minimum
share capital and that such share capital is fully represented by assets of the
company (excluding
goodwill).
(3)
If an existing company makes default in delivering a certificate pursuant to
subsection (2), upon the expiration of the said period
of 6 months the company
shall be dissolved and the same results shall follow as if an order had been
made against the company pursuant
to section 14
(8).
(4)
If a certificate is duly delivered to the Registrar pursuant to subsection (2)
or on any application to incorporate a company
under this Ordinance and a
Protection Order is made against the company within 12 months of the date on
which such certificate was
so delivered, the directors of the company throughout
the period from the commencement of this Ordinance or the incorporation of
the
company, in the case of a company which is not an existing company, to the date
of the Protection Order shall be jointly and
severally liable for all the
liabilities of the company outstanding at the date of the Protection Order if
the Court, on application
being made by the Registrar, is satisfied that such
certificate was not correct, unless the Court having regard to all relevant
circumstances
shall consider it appropriate to grant relief.
(5) If the Registrar has
reasonable grounds to believe that a company has ceased to carry on business for
a period exceeding 12 months,
the Registrar may publish the name of the company
in the "Gazette" and in a newspaper circulating in Kiribati or over the radio,
and as from 2 months from such publication the company shall be dissolved and
struck off the Registrar unless prior thereto the company
shall have provided an
explanation satisfactory to the Registrar as to why it had not been carrying on
business during such period
or proved to the satisfaction of the Registrar that
the company had been carrying on business during that period; and the directors
of the company at the date of dissolution and any persons who were directors
during the preceding 24 months shall on demand account
to the Registrar for the
manner in which the assets of the company were disposed of during such period
and shall be jointly and severally
liable for the discharge of all liabilities
outstanding at the date of
dissolution.
(S.22(5) inserted by No. 6 of
1986, S.3)
Membership
of companies
23.
(1) The subscribers to the Articles as incorporators of the company shall be
deemed to be members of the company and on its registration
shall be entered as
members in the register of members of the
company.
(2)
Every other person who agrees with the company to become a member of the company
and whose name is entered in the register of
members shall be a member of the
company.
(3)
Every member shall have such rights, duties and liabilities as are by this
Ordinance and the Articles of the company conferred
and imposed upon
members.
(4)
Every member shall be a shareholder of the company and shall hold at least 1
share, and every holder of a share shall be a member
of the company.
(5) Membership of a company shall continue until a valid transfer of all the shares held by the member is registered by the company, or until all such shares are transmitted by operation of law to another person or forfeited or cancelled under a provision in this Ordinance or in the Articles or until the member dies when the rights and obligations attached to membership shall attach to his estate.
Register
of members
24.
(1) Every company shall keep at its registered office a register of members in
which shall be entered the following particulars:-
(a) the names and residential or corporate addresses or post office box number of each member; and
(b) particulars of the number of shares acquired by each member and details of the consideration received by the company for such shares; and
(c) the date on which the particulars in respect of each member were entered in the register of members; and
(d) the date on which any person ceased to be a member with a notification of the reasons for such cessation of membership.
(2)
Where a company has more than 20 members the register shall contain an index of
the names of members in such a form as to enable
each member to be readily
ascertained.
(3)
Before entry into the register of members of particulars of membership the
directors of the company shall be personally responsible
for satisfying
themselves that the company shall have received all moneys or other
consideration payable to or receivable by the
company as a condition precedent
to admission to
membership.
(4)
The register of members shall be open to inspection by any member of the company
or the Registrar without charge, or to any other
person on payment of such fee
as may be prescribed, during the usual business hours save where the register of
a public company is
closed as provided in subsection
(8).
(5)
Any member or other person who is entitled to inspect the register of members
may require a copy of the register or any part thereof
on payment of such fee as
may be prescribed and any such copy shall be supplied by the company within 10
days of any such request
being received by the company and such copy shall
include all particulars recorded in the register on the date on which the copy
is so
supplied.
(6)
If any inspection under this section is refused, or if any copy required under
this section is not sent within the prescribed
period, the company and every
officer of the company in default shall be liable to a default
fine.
(7)
In addition to payment of any fine pursuant to subsection (6), the Court may by
order compel an immediate production of the register
and delivery of copies
under penalty of sentence by the Court for contempt of Court and order the
company to be officially wound
up.
(8)
A public company may, on giving notice by advertisement in the
Gazette
and in the
"Atoll Pioneer", or such other newspaper as the Registrar having regard to the
membership of the company directs, close
the register of members, or that part
thereof relating to any class of members, for any time or times not exceeding 14
days on any
one occasion or not exceeding in the whole 30 days in each
year.
(9)
If-
(a) the name of any person is without sufficient cause entered in or omitted from the register of members; or
(b) default is made in entering in the register any of the particulars required under this section,
the
person aggrieved or any member of the company or the directors may apply to the
Registrar for an order for rectification of the
register.
(10)
Where any order is made by the Registrar for rectification the Registrar may
order the company or the officer who is in default
to compensate the party
aggrieved for any loss
sustained.
(11)
On any application under this section the Registrar may decide any question
necessary or expedient to be decided for rectification
of the
register.
(12)
The directors may without application to the Registrar
at
any time
rectify any error or omission but such rectification shall only be made with
consent of the parties affected
thereby.
(13)
The register of members shall
be
prima facie
evidence of
any matters by this Ordinance directed or authorised to be recorded
therein.
Companies
ceasing to have members
25.
(1) If at any time a public company ceases to have less than 10 members or a
private company ceases to have at least 2 members and
it carries on business for
more than 3 months without at least 10 members or 2 members (as the case may
be), unless in the case of
a public company it is duly converted into private
company within such period, every person who is a director or member of such
company
during the time that it so carries on business after the expiration of
the said period of 3 months shall be jointly and severally
liable for the
payment of all debts and liabilities of the company incurred after the
expiration of the said period, and the Registrar
may at any time after the
expiration of the said period of 3 months make a Protection Order against the
company unless the company's
membership is restored to its appropriate minimum
number prior to the making of the Protection
Order.
(2)
Where a Protection Order is made against the company the Registrar shall appoint
a Custodian Manager of the company to manage
the affairs of the company and the
powers of the directors of the company shall thereupon cease and all the assets
of the company
shall thereupon vest in the Custodian Manager, who may continue
all or any of the businesses carried on by the company with a view
to the sale
of the company as a going concern or, in his absolute discretion, may on behalf
of the company pass a resolution to wind
up the company and dispose of its
assets, and in either case any assets remaining after satisfaction of all
liabilities (other than
share capital) shall be transferred to the Republic for
its benefit and any interest of shareholders therein (or any person claiming
through a shareholder) shall be forfeited to the Republic unless the Court, on
application made to it by any person who satisfies
the Court that he has a
proper claim thereto and that he in no manner contributed to the default, shall
order the transfer to such
person of all or part of such assets on such terms as
it may think proper including retention of part of such assets to
compensate
the
Republic for its custodian management of the company.
(3) Where a Protection Order has been made pursuant to this section the Custodian Manager may execute transfers of all the shares of the company to give effect to the sale of the company as a going concern and upon such transfers being completed the Protection Order shall cease and the proceeds of sale shall be dealt with in a similar manner to the disposal of surplus assets on a winding up under the provisions of subsection (2) of this section.
(4) Where a Protection Order has been made against a company those persons who were directors of the company at any time during the period when membership of the company was reduced below the minimum number stated in subsection (1) shall account to the Custodian Manager in respect of all their acts as directors of the company and their conduct of the company’s business.
(5) Where membership of a company has been reduced below the said minimum number, not later than 2 months after the happening of the event which caused such reduction the directors of the company shall notify the Registrar of the fact that membership has been so reduced, unless membership has been restored to the said minimum number, and in default the liability of the directors for the debts of the company as provided in subsection (1) shall extend to all debts incurred by the company after the date on which membership was so reduced.
(6) For the purpose of this section a deceased person shall be deemed to be a member until the legal personal representatives of the deceased themselves become members in respect of his shares or transfer the shares to some other person and where a number of persons hold shares as joint holders membership of the company shall be counted per capita and not by reference to groups of shareholdings.
(7)
The Registrar may at any time prior to the passing of any resolution by the
Custodian Manager to wind up the company pursuant
to subsection (2) revoke the
Protection Order if he is satisfied that the company's membership has been
restored to the said minimum
number, and for this purpose the Registrar shall
authorise the Custodian Manager to take all necessary steps to
ensure
that upon
such restoration effective management of the company is appointed with provision
for the members of the company to confirm
such appointments or to substitute new
management.
Missing
members
26.
(1) Where a company has sent a notice prominently marked to a member to the
address of such member as shown in the register of members
requiring such member
to confirm
that
such
address is correct and such notice is either returned by the Post Office as
undelivered or no reply is received to such notice
within 3 months after its
dispatch, the directors of the company may resolve that the shares in the
company held by such member shall
be
cancelled
and such resolution shall take effect at
the
expiration
of 14 days after notice thereof has been published by the company in the
Gazette
and in the
"Atoll
Pioneer".
(2)
Upon any cancellation of shares of a missing member pursuant to this section the
share capital of the company shall be reduced
and details of the reduction shall
be delivered to the Registrar in the prescribed form and the amount certified by
the auditors
of the company (or if the company has no auditor by an accountant
in Kiribati qualified for appointment as auditor of the company)
shall be paid
by the company to its bankers into a separate deposit account in the name of the
company for the benefit of the missing
member.
(3) If any person shall satisfy the Registrar that he is the person entitled to the benefit of the moneys deposited under the provisions of subsection (2) the Registrar shall authorise in writing the said bankers to release the sums then standing to the credit of the said deposit account:
Provided
that no claim to any such deposit account may be made after the expiration of 6
years from its creation and at the expiration
of such period the said bankers
shall pay the sums then standing to the credit of the said deposit account to
the Registrar for the
benefit of the Republic.
SHARES AND SHARE CAPITAL
Nature
of shares and transfer of
shares
27.
(1) The rights and liabilities attaching to a share in a company shall be
determined by the terms of issue and of the Articles of
the company as amended
from time to time so far as they are consistent with this
Ordinance.
(2)
Shares in a company shall be deemed for all purposes to be movable or personal
estate transferable by instrument in writing in
common form under the hand of
the transferor and naming the transferee, save that a bearer share shall be a
negotiable instrument
transferable by delivery as provided in section 46, and
any person who is entitled to a share by operation of law may have his right
to
the share recorded in the register of members on production to the company of
the order of the court or other official evidence
of title which vests him with
the title of the original holder of the share and any person so entitled may
execute a transfer of
the share notwithstanding that he is not entered in the
register of members as the holder of the share subject to any provision in
the
Rules of a company restricting or regulating the right to transfer a
share.
(3)
The beneficial ownership of a share shall pass to the transferee on the delivery
to him of the transfer signed by the transferor
together with the transferor's
share certificate or on the delivery to him of a certificated transfer pursuant
to section 28.
(4) Notwithstanding the provisions of subsection (2), no notice of any trust, express, implied or constructive shall be required to be entered on the register of members and, subject as herein provided, the company shall not be bound by or be compelled in any way to recognise any other rights in respect of a share except the absolute right to entire ownership thereof of the registered holder:
Provided
that the company shall be bound to comply with the provisions of subsection (11)
as to receipt of notice of a mortgage, charge
or pledge of any of he shares of
the company and the company may, with the consent of the shareholder, note on
the register of members
any capacity in which the shareholder is the holder of
the
shares.
(5)
The Articles of a private company shall restrict the right of a member to
transfer his shares but, save as in this section
provided,
shares in a
public company shall be freely transferable and any provision in the Articles of
a public company which purports to restrict
the transfer of its shares shall be
void:
Provided
that the Registrar may specifically consent in writing to any restriction on
transfers of shares of a public
company.
(6)
Notwithstanding the provisions of subsection (5), no share shall be transferred
to any person who at the date of the transfer
is an infant or to any person who
at such date is a person found by the Court to be of unsound mind or to a person
who under this
Ordinance or any other law is prohibited from being a member of a
company.
(7)
Notwithstanding any provisions contained in the Articles of
a
company,
and save where a transfer of a share arises by way of operation of law, it shall
not be lawful for any company to register
a transfer of its shares unless an
instrument of transfer
duly
executed
and stamped (if chargeable to duty) has been delivered to the company, and every
officer of a company who has assented to
the registration of a transfer in
contravention of this provision shall be liable on conviction to a fine not
exceeding
$1,000.
(8)
Transfers may be lodged for registration by the transferor or
the
transferee,
and if the company refuses to register a transfer it must notify the person
lodging the transfer of its refusal within
28 days after lodgement of the
transfer and deliver to such person a statement in writing setting out the facts
which it considers
justify its
refusal.
(9)
If default is made in complying with subsection (8) every officer of the company
in default shall be liable to a fine not exceeding
$1,000 and any transferee
named in a transfer registration of which has been refused or in respect of
which default under this section
has been made may apply to the Registrar to
order the company to register the transfer to him and the Registrar may make
such order
as to registration as he thinks proper and such order shall be deemed
to be an order of the Court.
(10)
If the Registrar pursuant to subsection (9) makes an order requiring the company
to register a transfer the company shall comply
with such order within 14 days
of delivery by the Registrar to the company of a copy of the order, and if the
company shall fail
to comply with such order every officer of the company (other
than an officer who proves that he did not assent to the failure) shall
be
liable to a fine not exceeding
$5,000.
(11)
Any person who is interested in any share as mortgagee, chargee or pledgee may
protect his interest by serving on the company
concerned a notice confirming
that the certificate for the share is in the possession of such person, and
setting out the extent
and term of the interest of such
person.
(12)
Notwithstanding the provisions of subsection (4), the company shall enter a note
of the interest of any person who has served
the company with a notice under
subsection (11) in the register of members and, during the currency of such
notice, no transfer of
any share affected by such notice shall be registered
without the consent of the person named in such notice as being entitled to
protect his interest, and if any transfer is registered in contravention of this
section the directors of the company shall be liable
jointly and severally to
compensate the person affected by such
registration.
(13)
Where a person who has served the company with a notice pursuant to subsection
(11) ceases to be entitled to protect his interest
in a share he shall notify
the company of the cessation of his interest and the entry thereof shall be
deleted from the register
of members and in default of any such notification the
holder of the shares concerned may apply to the Registrar to make an order
authorising the company to make such deletion, and the company shall act on any
order so made by the Registrar upon his being satisfied
that the interest of the
person who served the notice has
ceased.
(14)
Notwithstanding the foregoing provisions, the regulations may provide that
shares, or the beneficial ownership of shares, of
companies generally or any
particular class or type of companies or of companies carrying on such class of
business as shall be prescribed
shall not be transferable unless the transfer is
executed by the transferee and is accompanied by such statutory declarations
containing
such information on such matters as are prescribed and that such
declarations shall be registered with the Registrar, or that any
such shares
shall only be transferable with the consent of the Minister, and any transfer or
arrangement made to transfer beneficial
ownership of any share of a company made
in contravention of this section shall be void and each of the directors of the
company
who consented to the transfer shall be liable to a fine not exceeding
$10,000.
(15)
In the case of the death of a shareholder or debenture holder the survivor or
survivors where the deceased was a joint holder,
and the legal personal
representatives of the deceased where he was a sole holder or last survivor of
joint holders, shall hue the
only persons recognised by the company as
shareholders or debenture
holders.
(16)
A person upon whom the ownership of a share or debenture devolves by reason of
his being the legal personal representative, receiver,
or trustee in bankruptcy
of the holder, or
by
operation
of
law may,
upon such evidence being produced as the
company
may
properly require, be registered as the holder of the
share
or
debenture or transfer the same to some other person
and
such
transfer shall be as valid as if he had
been
registered
as
a
holder at
the time of execution of the
transfer:
Provided
that the company shall have the same right (if any) to decline registration of a
transfer by such person as it would have
had in the case of a transfer by the
registered holder but shall have no right to refuse registration of the person
himself.
(17)
A person upon whom the ownership of a share or debenture devolves by reason of
his being the legal personal representative, receiver,
or trustee in bankruptcy
of the holder, or by operation of law shall, prior to registration of himself or
a transferee,
be
entitled to
the same dividends, interest and other advantages as if he were the registered
holder and, in the case of a share, the
same
rights and
remedies as if he were a member of the company, except that he shall not, before
being registered as a member in respect
of the share, be entitled to attend and
vote at any meeting of the
company:
Provided
that-
(a) the company may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share or debenture and if the notice is not complied with within 90 days the company may thereafter suspend payment of all dividends, interest or other moneys payable in respect of the share or debenture until the requirements of the notice have been complied with; and
(b) the administrator of the estate of the deceased holder may exercise the voting rights formerly exercisable by the deceased on delivering to the company in the form prescribed a certificate as to his capacity to vote under this section.
Certification
of transfers
28.
(1) When the holder of any shares or of debenture stock wishes to transfer to
any person part only of the shares or stock represented
by 1 or more
certificates, the instrument of transfer together with the relative certificates
may be delivered to the company or
to the registration officer of the company
with a request to certificate the instrument of
transfer.
(2)
If a company or its registration officer endorses on an instrument of transfer
the words "certificate lodged", or words to the
like effect, this shall be taken
as a representation to anyone acting on the faith of the certification that
there has been produced
to, and retained by, the company or the registration
officer such certificates as show a
prima
facie title
to the shares or stock in the transferor named in the instrument of transfer but
not as a representation that the certificates
are genuine or that the transferor
has any title to the shares of stock.
(3) Where any person acts on the faith of a false certification made by the company, the company shall be liable to compensate such person for any loss suffered as a result of so acting.
(4)
Where any person acts on the faith of a false certification made by the
registration officer, the company and the registration
officer shall be jointly
and severally liable to compensate such person for any loss suffered as a result
of so acting but the company
shall be entitled to be indemnified by the
registration
officer.
(5)
The certification shall be deemed to be made by the company if it bears the
signature of any of its officers or of any person
authorised to certificate
transfers on behalf of the
company.
(6)
The certification shall be deemed to be made by the registration officer if it
bears the signature, whether handwritten or not,
of the registration officer or
of any officer or agent having his authority to certificate transfers of the
company's shares or debenture
stock.
(7)
For the purposes of subsections (5) and (6), the certification shall be deemed
to be issued by any person if the instrument of
transfer bearing the
certification is delivered or sent by him to the transferor, transferee or any
other person named in the request
for
certification.
Company’s
lien on
shares
29.
It shall not be lawful to provide in the Articles of a company that the company
shall have a lien on any of its shares.
Numbering
of
shares
30.
Shares need not be distin