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Companies Act 1955

NEW ZEALAND

COMPANIES ACT 1955

ANALYSIS

Title
1. Short Title, commencement, etc.

PART I
PRELIMINARY

2. Interpretation
3. Registrar of Companies
4. Deputy Registrar of Companies
5. District and Assistant Registrars of Companies
6. Official seals
7. Registers to be kept for purposes of this Act
8. Fees
9. Inspection, production, and evidence of documents kept by Registrar
10. Repealed.
11. Enforcement of duty of company to make returns to Registrar
12. Regulations

PART II
*INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO

*Memorandum of Association

13. Mode of forming company
14. Requirements with respect memorandum
15. Signature of memorandum, and exemption from stamp duty
16. Incidental and ancillary objects and powers
17. Restriction on alteration of memorandum
18. Mode in which and extent to which objects of company may be altered
19. Extending powers of dairy companies to engage in associated industries

*Articles of Association

20. Articles prescribing regulations for companies
21. Regulations required in case of unlimited company or company limited by guarantee
22. Adoption and application of Table A

23. Printing and signature of articles, and exemption from stamp duty 24. Alteration of articles by special resolution

Form of Memorandum and Articles

25. Statutory forms of memorandum and articles

Registration

26. Registration of memorandum and articles
27. Effect of registration
28. Power of company to hold lands
29. Conclusiveness of certificate of incorporation
30. Registration of unlimited company as limited

Provisions With Respect to Names of Companies

31. Restriction on registration of companies by certain names
32. Change of name
33. Power to dispense with "Limited"' in name of charitable and other companies

General Provisions With Respect to Memorandum and Articles

34. Effect of memorandum and articles
35. Provision as to memorandum and articles of companies limited by guarantee
36. Alterations in memorandum or articles increasing liability to contribute to share capital not

to bind existing members without consent
37. Copies of memorandum and articles to be given to members
38. Issued copies of memorandum or articles to embody alterations

Membership of Company

39. Definition of member
40. Membership of holding company

Reduction of Number of Members Below Legal Minimum

41. Prohibition of carrying on business with fewer than seven members
42. Form of contracts
43. Bills of exchange and promissory notes
44. Execution of instruments by attorney
45. Power for company to have official seal for use abroad

Authentication of Documents

46. Authentication of documents

PART III
SHARE CAPITAL AND DEBENTURES

47. Dating of prospectus
48. Matters to be stated and reports to be set out in prospectus

49. Restriction on statements in prospectus as to dealing in shares or debentures on stock exchange
50. Statement by expert in prospectus
51. Registration of prospectus
52. Restriction on alteration of terms mentioned in prospectus or statement in lieu of prospectus
53. Civil liability for misstatements in prospectus
54. Criminal liability for misstatements in prospectus
55. Document containing offer of shares or debentures for sale to be deemed prospectus
56. Interpretation of provisions relating to prospectuses

Allotment

57. Prohibition of allotment unless minimum subscription received

58. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar
59. Effect of irregular allotment
60. Return as to allotments

Commissions and Discounts

61. Power to pay certain commissions, and prohibition of payment of all other commissions, discounts, etc.

62. Prohibition of provision of financial assistance by company for purchase of or subscription for its own or its holding company's shares

Construction of References to Offering Shares or Debentures to the Public

63. Construction of references to offering shares or debentures to the public

Issue of Shares at Premium and Discount and Redeemable Preference Shares

64. Application of premiums received on issue of shares
65. Power to issue shares at a discount
66. Power to issue redeemable preference shares

Labour Shares

67. Power to issue labour shares

Miscellaneous Provisions as to Share Capital

68. Power of company to arrange for different amounts being paid on shares
69. Reserve liability of limited company
70. Power of company limited by shares to alter its share capital
71. Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc.
72. Notice of increase of share capital
73. Power of unlimited company to provide for reserve share capital on reregistration

Reduction of Share Capital

74. Power of company to pay interest out of capital in certain cases
75. Special resoluton for reduction of share capital

76. Application to Court for confirming order, objections by creditors, and settlement of list of objecting creditors
77. Order confirming reduction and powers of Court on making such order
78. Registration of order and minute of reduction
79. Liability of members in respect of reduced shares
80. Penalty for concealing name of creditor, etc.

Variation of Shareholders' Rights

81. Rights of holders of special classes of shares

Transfer of Shares and Debentures, Evidence of Title, etc.

82. Nature of shares
83. Numbering of shares
84. Transfer not to be registered except on production of instrument of transfer

85. Transfer by personal representative. Rights of personal representative or assignee in bankruptcy

86. Vesting shares or debentures of deceased holder without requiring probate or letters of administration
87. Registration of transfer at request of transferor
88. Notice of refusal to register transfer, and penalty for delay in registration
89. Certification of transfers
90. Duties of company with respect to issue of certificates. Form of share certificate
91. Certificate to be evidence of title
92. Evidence of grant of probate
93. Issue and effect of share warrants to bearer
94. Penalty for personation of shareholder

Special Provisions as to Debentures

95. Rights of inspection of register of debenture holders and to copies of register and trust deed
96. Liability of trustees for debenture holders
97. Perpetual debentures
98. Power to reissue redeemed debentures in certain cases
99. Saving, in case of reissued debentures, of rights of certain mortgagees
100. Specific performance of contracts to subscribe for debentures

101. Payment of certain debts out of assets subject to floating charge in priority to claims under the charge

PART IV
REGISTRATION OF CHARGES

Registration of Charges With Registrar of Companies

102. Registration of charges created by companies
103. Unregistered charges to be void in certain cases
104. Duty of company to register charges existing on property acquired
105. Register of charges to be kept by Registrar
106. Endorsement of certificate of registration on debentures
107. Entries of satisfaction and release of property from charge
108. Rectification of register of charges
109. Registration of enforcement of security

Provisions as to Company's Register of Charges and as to Copies of Instruments Creating Charges

110. Copies of instruments creating charges to be kept by company
111. Company's register of charges

112. Right to inspect copies of instruments creating charges and company's register of charges

Rights of the Crown

113. Application of this Part to charges in favour of Crown

Application of This Part to Overseas Companies

114. Application of this Part to charges created, and property subject to charge acquired, by overseas company

PART V
MANAGEMENT AND ADMINISTRATION

Registered Office and Name

115. Registered office of company
116. Publication of name by company

Restrictions on Commencement of Business

117. Restrictions on commencement of business

Register of Members

118. Register of members
119. Index of members of company
120. Provisions as to entries in register in relation to share warrants
121. Inspection of register and index and pending transfers

122. Consequences of failure to comply with requirements as to register owing to agent's default
123. Power to close register

124. Power of Court to rectify register

125. Trusts not to be entered on register

126. Register to be evidence

Branch Registers

127. Power for company to keep branch registers
128. Regulations as to branch registers
129. Provisions as to branch registers of Commonwealth companies kept in New Zealand
130. Annual return to be made by a company having a share capital
131. Annual return to be made by company not having a share capital
132. Time for completion of annual return
133. Documents to be annexed to annual return

Meetings and Proceedings

134. Statutory meeting and statutory report
135. Annual general meeting
136. Convening of extraordinary general meeting on requisition
137. Length of notice for calling meetings
138. General provisions as to meetings and votes
139. Power of Court to order meeting
140. Proxies
141. Right to demand a poll
142. Voting on a poll
143. Representation of corporations at meetings of companies and of creditors
144. Circulation of member's resolutions, etc.
145. Extraordinary and special resolutions
146. Resolutions requiring special notice
147. Registration and copies of certain resolutions and agreements
148. Resolutions passed at adjourned meetings
149. Minutes of proceedings of meetings of company and of directors and managers
150. Inspection of minute books

Accounts and Audit

151. Keeping of books of account
152. Profit and loss account and balance sheet
153. General provisions as to contents and form of accounts
154. Obligation to lay group accounts before holding company
155. Form of group accounts
156. Contents of group accounts
157. Financial year of holding company and subsidiary
158. Meaning of "holding company" and "subsidiary"
159. Signing of balance sheet
160. Accounts and auditors' report to be annexed to balance sheet
161. Directors' report to be attached to balance sheet
162. Right to receive copies of balance sheet and auditors' report
163. Appointment and remuneration of auditors
164. Provisions as to resolutions relating to appointment and removal of auditors
165. Disqualifications for appointment as auditor

166. Auditor's report and right of access to books and to attend and be heard at general meetings
167. Construction of references to documents annexed to accounts
168. Investigation of company's affairs on application of members
169. Investigation of company's affairs in other cases
170. Power of inspectors to carry investigation into affairs of related companies
171. Production of documents, and evidence, on investigation
172. Inspectors' report
173. Proceedings on inspectors' report
174. Expenses of investigation of company's affairs
175. Inspectors' report to be evidence
176. Appointment and powers of inspectors to investigate ownership of company
177. Power to require information as to persons interested in shares or debentures
178. Power to impose restrictions on shares or debentures
179. Saving for solicitors and bankers

Directors and Other Officers

180. Directors
181. Secretary
182. Avoidance o£ acts done by person in dual capacity as director and secretary
183. Validity of acts of directors
184. Restrictions on appointment or advertisement of director
185. Share qualifications of directors
186. Appointment of directors to be voted on individually
187. Removal of directors
188. Provisions as to undischarged bankrupts acting as directors
189. Power to restrain fraudulent persons from managing companies
190. Prohibition of loans to directors
191. Approval of company requisite for payment by it to director for loss of office, etc.

192. Approval of company requisite for any payment, in connection with transfer of its property, to director for loss of office, etc.

193. Duty of director to disclose payment for loss of office etc., made in connection with transfer of shares in company
194. Provisions supplementary to last three sections
195. Register of directors' shareholdings, etc.
196. Statement as to remuneration of directors to be furnished to shareholders
197. Particulars in accounts of loans to officers and remuneration of directors
198. General duty to make disclosure for purposes of last three sections
199. Disclosure by directors of interests in contracts
200. Register of directors and secretaries
201. Limited company may have directors with unlimited liability
202. Special resolution of limited company making liability of directors unlimited
203. Provisions as to assignment of office by directors

Avoidance of Provisions in Articles or Contracts Relieving Officers from Liability

204. Provisions as to liability of officers and auditors

Arrangements and Reconstructions

205. Power to compromise with creditors and members
206. Information as to compromises with creditors and members
207. Provisions for facilitating reconstruction and amalgamation of companies

208. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority

Minorities

209. Remedy in cases of oppression

Alteration of memorandum or articles

PART VI
WINDING UP

(i) PRELIMINARY

Modes of Winding Up

210. Modes of winding up
211. Liability as contributories of present and past members
212. Definition of contributory
213. Nature of liability of contributory
214. Contributories in case of death of member
215. Contributories in case of bankruptcy of member
216. Provisions as to married women

(ii) WINDING UP BY THE COURT

Cases in Which Company May be Wound Up by Court

217. Circumstances in which company may be wound up by Court
218. Definition of inability to pay debts

Petition for Winding Up and Effects Thereof

219. Provisions as to applications for winding up
220. Powers of Court on hearing petition
221. Power to stay or restrain proceedings against company
222. Avoidance of dispositions of property, etc., after commencement of winding up
223. Avoidance of attachments, etc.

Commencement of Winding Up

224. Commencement of winding up by the Court

Consequences of Winding-up Order

225. Copy of order to be forwarded to Registrar
226. Actions stayed on winding-up order
227. Effect of winding-up order

Official Assignee in Winding Up

228. Official Assignee in Bankruptcy to be Official Assignee for winding-up purposes
229. Appointment of Official Assignee by Court in certain cases
230. Deputy Official Assignees
231. Statement of company's affairs to be submitted to Official Assignee
232. Report by Official Assignee

Liquidators

233. Power of Court to appoint liquidators
234. Appointment and powers of provisional liquidator
235. Appointment, style, etc., of liquidators
236. Provisions where person other than Official Assignee is appointed liquidator
237. General provisions as to liquidators
238. Custody of company's property
239. Vesting of property of company in liquidator
240. Powers of liquidator
241. Exercise and control of liquidator's powers
242. Books to be kept by liquidator
243. Payments of liquidator into bank
244. Audit of liquidator's accounts
245. Control of Minister of Justice over liquidators
246. Release of liquidators

Committees of Inspection

247. Meetings of creditors and contributories to determine whether committee of inspection shall
be appointed
248. Constitution and proceedings of committee of inspection
249. Powers of Court where no committee of inspection

General Powers of Court in Case of Winding Up by Court

250. Power to stay winding up
251. Settlement of list of contributories and application of assets
252. Delivery of property to liquidator
253. Payment of debts due by contributory to company and extent to which set-off allowed
254. Power of Court to make calls
255. Payment into bank of money due to company
256. Order on contributory conclusive evidence
257. Appointment of special manager
258. Power to exclude creditors not proving in time
259. Adjustment of rights of contributories
260. Inspection of books by creditors and contributories
261. Power to order costs of winding up to be paid out of assets
262. Power to summon persons suspected of having property of company
263. Power to order public examination of promoters and officers
264. Power to arrest absconding contributory
265. Powers of Court cumulative
266. Delegation to liquidator of certain powers of Court
267. Dissolution of company

(iii) VOLUNTARY WINDING UP

Resolutions for and Commencement of Voluntary Winding Up

268. Circumstances in which company may be wound up voluntarily

269. Notice of resolution to wind up voluntarily
270. Commencement of voluntary winding up

Consequences of Voluntary Winding Up

271. Effect of voluntary winding up on business and status of company
272. Avoidance of transfers, etc., after commencement of voluntary winding up
273. Stay of proceedings on commencement of voluntary winding up

Declaration of Solvency

274. Statutory declaration of solvency in case of proposal to wind up voluntarily

Provisions Applicable to a Members' Voluntary Winding Up

275. Provisions applicable to a members' winding up
276. Power of company to appoint and fix remuneration of liquidators
277. Power to fill vacancy in office of liquidator
278. Power of liquidator to accept shares, etc., as consideration for sale of property of company
279. Duty of liquidator to call creditors' meeting in case of insolvency
280. Duty of liquidator to call general meeting at end of each year
281. Final meeting and dissolution
282. Alternative provisions as to annual and final meetings in case of insolvency

Provisions Applicable to a Creditors' Voluntary Winding Up

283. Provisions applicable to a creditors' winding up
284. Meeting of creditors
285. Appointment of liquidator
286. Appointment of committee of inspection
287. Fixing of liquidators' remuneration and cesser of directors' powers
288. Power to fill vacancy in office of liquidator
289. Application of section 278 to a creditors’ voluntary winding up
290. Duty of liquidator to call members of company and of creditors at end of each year
291. Final meetings and dissolution

Provisions Applicable to Every Voluntary Winding Up

292. Provisions applicable to every voluntary winding up
293. Distribution of property of company
294. Powers and duties of liquidator in voluntary winding up
295. Power of Court to appoint and remove liquidator in voluntary winding up
296. Notice by liquidator of his appointment
297. Arrangement when binding on creditors
298. Power to apply to Court to have questions determined or powers exercised
299. Costs of voluntary winding up
300. Saving for rights of creditors and contributories

(IV) WINDING UP SUBJECT TO SUPERVISION OF COURT

301. Power to order winding up subject to supervision
302. Effect of petition for winding up subject to supervision
303. Application of sections 222 and 223 to winding up subject to supervision
304. Power of Court to appoint or remove liquidators
305. Effect of supervision order

(V) PROVISIONS APPLICABLE TO EVERY MODE OF WINDING UP

Proof and Ranking of Claims

306. Debts of all descriptions may be proved
307. Application of bankruptcy rules in winding up of insolvent companies
308. Preferential payments

Effect of Winding Up on Antecedent and Other Transactions

309. Fraudulent preference
310. Liabilities and rights of certain fraudulently preferred persons
311. Effect of floating charge
312. Disclaimer of onerous property
313. Liability for rentcharge on company's land after disclaimer
314. Restriction of rights of creditor as to execution or attachment
315. Duties of Sheriff as to goods taken in execution

Offences Antecedent to or in Course of Winding Up

316. Offences by officers of companies in liquidation
317. Penalty for falsification of books
318. Frauds by officers of companies which have gone into liquidation
319. Liability where proper accounts not kept
320. Responsibility for fraudulent trading of persons concerned
321. Power of Court to assess damages against delinquent directors, etc.
322. Prosecution of delinquent officers and members of company

Supplementary Provisions as to Winding Up

323. Disqualification of body corporate for appointment as liquidator
324. Corrupt inducement affecting appointment as liquidator
325. Enforcement of duty of liquidator to make returns
326. Notification that a company is in liquidation
327. Books of company to be evidence
328. Disposal of books and papers of company
329. Information as to pending liquidations
330. Unclaimed assets may be paid to Public Account as unclaimed moneys after six months
331. Resolutions passed at adjourned meetings of creditors and contributories

Supplementary Powers of Court

332. Meetings to ascertain wishes of creditors or contributories
333. Affidavits, etc., in New Zealand and elsewhere

Rights of the Crown

334. Certain provisions of this Part bind the Crown

Provisions as to Dissolution

335. Power of Court to declare dissolution of company void.
336. Registrar may strike defunct company off register
337. Property of dissolved company to be bona vacantia
338. Power of Crown to disclaim title to property vesting under preceding section
339. Liability for rent charge on company's land after dissolution

Officers of Court

340. Returns by officers

Rules and Fees

341. General rules and fees for winding up

PART VII
RECEIVERS AND MANAGERS

342. Disqualification of body corporate for appointment as receiver
343. Disqualification of undischarged bankrupt from acting as receiver or manager
344. Power to appoint Official Assignee as receiver for debenture holders or creditors
345. Receivers and managers' appointed out of Court
346. Notification that receiver or manager appointed
347. Power of Court to fix remuneration on application of liquidator
348. Provisions as to information where receiver or manager appointed
349. Special provisions as to statement submitted to receiver
350. Delivery to Registrar of accounts of receivers and managers
351. Enforcement of duty of receivers and managers to make returns, etc.
352. Construction of references to receivers and managers

PART VII
PRIVATE COMPANIES

353. Formation of private companies
354. Application of Act to private companies
355. Prohibition of certain persons being sole director or secretary
356. Memorandum of association
357. Certificate of incorporation
358. Registration of articles by companies existing on 1 April 1934
359. Prohibition of increasing membership beyond twenty-five
360. Prohibition of issue of share prospectus; and certificate to accompany annual return
361. Increased capital to be fully subscribed for
362. Passing of resolutions by entries in minute book. Registration and copies of certain resolutions. Special provisions as to a creditors' voluntary winding up
363. Right to receive copies of balance sheets and auditors' reports
364. Additional powers of Court on winding up
365. Reregistration of public companies as private companies
366. Reregistration of private companies as public companies

PART IX
APPLICATION OF ACT TO COMPANIES FORMED OR REGISTERED UNDER FORMER ACTS

367. Application of Act to companies formed and registered under former Companies Acts
368. Application of Act to companies registered but not formed under former Companies Acts
369. Application of Act to companies reregistered under former Companies Acts
370. Provision as to companies registered under the joint Stock Companies Act

PART X
COMPANIES NOT FORMED UNDER THIS ACT AUTHORISED TO REGISTER UNDER THIS ACT

371. Companies capable of being registered
372. Definition of joint stock company
373. Requirements for registration by joint stock companies
374. Requirements for registration by other than joint stock companies
375. Authentication of statements of existing companies
376. Registrar may require evidence as to nature of company
377. Change of name for purposes of registration
378. Addition of "Limited" to name
379. Certificate of registration of existing companies
380. Vesting of property on registration
381. Saving for existing rights and liabilities
382. Continuation of existing actions
383. Effect of registration under Part X
384. Power to substitute memorandum and articles for deed of settlement
385. Power of Court to stay or restrain proceedings
386. Actions stayed on winding-up order

PART XI
WINDING UP OF UNREGISTERED COMPANIES

387. Meaning of unregistered company
388. Winding up of unregistered companies
389. Overseas company may be wound up, although dissolved
390. Contributories in winding up of unregistered company
391. Power of Court to stay or restrain proceedings
392. Actions stayed on winding-up order
393. Provisions of this Part cumulative
394. Saving for enactments providing for winding up under former Companies Acts

PART XII
OVERSEAS COMPANIES

395. Interpretation of this Part

Provisions as to Establishment of Place of Business in New Zealand

396. Application of sections 397 to 406
397. Documents, etc., to be delivered to Registrar by overseas companies carrying on business in New Zealand
398. Evidence of incorporation of overseas company
399. Powers of attorney
400. Power of overseas company to hold lands
401. Return to be delivered to Registrar by overseas company where documents, etc., altered
402. Accounts of overseas company
403. Obligation to state name of overseas company, whether limited, and country where incorporated
404. Service on overseas company
405. Notice of ceasing to carry on business
406. Penalties
407. Dating of prospectus and particulars to be contained therein
408. Provisions as to expert's consent, and dealing on stock exchange
409. Registration of prospectus

410. Penalty for contravention of sections 407 to 409. Civil liability for misstatements in prospectus
411. Interpretation of provisions as to prospectuses

Calls on Shares

412. Material misrepresentation to be a defence to actions for calls on shares

PART XIII
INSURANCE COMPANIES

GENERAL

413. Application for membership of a company not to be contained in a proposal for insurance

COMPANIES CARRYING ON INSURANCE BUSINESS OTHER THAN LIFE INSURANCE

414. Interpretation and application of sections 414 to 419

Local Companies

415. Minimum capital required before limited companies commence insurance business
416. Failure to keep capital intact
417. Penalty
418. Insurance companies to publish periodical statement

Overseas Companies

419. Capital required by overseas limited insurance companies

Winding Up of Insurance Companies

420. Interpretation
421. Minister of justice may petition on ground of insolvency
422. Investigation of insurance companies of doubtful solvency
423. Supplemental provisions

PART XIV
MINING COMPANIES

424. Interpretation
425. Registration of mining companies
426. Provisions applied to mining companies
427. All mining companies deemed to be registered under this Act
428. Varieties of mining companies
429. Power to hold mining privileges

Transfer of Shares

430. Special provisions as to transfer of shares
431. Trust on fraudulent transfer incapable of being enforced

Recovery of Calls and Forfeiture of Shares

432. Proceedings for the recovery of unpaid calls
433. Forfeiture o£ shares for non-payment of calls
434. When holder of share subject to section 211
435. Notice of forfeiture to be given
436. Forfeited shares to be sold by auction
437. Application of proceeds and recovery of balance
438. Disposal of unsold shares
439. Redemption of forfeited shares
440. Office to be open the day before sale
441. Extraordinary meeting to be convened when one-third of shares in company forfeited

Dividends

442. Unpaid calls to be deducted from dividends Accounts

Accounts

443. Books to be open to inspection

Overseas Mining Companies

444. Provisions relating to overseas mining companies

General

445. Agreements with Maoris not to be affected

PART XV
ANNUAL LICENCES

446. Interpretation
447. Company not to carry on business without annual licence
448. Licence fee
449. Recovery of licence fee
450. Penalty for carrying on business without licence. Company ceasing to carry on business to notify Registrar
451. Rates of licence fees
452. Exemption of mining companies from licence fees
453. Licence fees payable by Government Life Insurance and State Fire Insurance Departments
454. Licence fees payable by overseas insurer
455. Refund of licence fees paid in error or in excess

PART XVI
MISCELLANEOUS

Prohibition of Partnerships With More Than Twenty-five Members

456. Prohibition of partnerships with more than twenty-five members

Restrictions on Offering of Shares or Debentures

457. Restrictions on offering of shares or debentures for subscription or sale

Provisions Relating to Banks

458. Limited application of Act to banks

Form of Registers, Minute Books, etc.

459. Form of registers, minute books, etc.

Service of Documents

460. Service of documents on accompany

Offences

461. Penalty for false statements
462. Penalty for improper use of word "Limited"
463. Provision with respect to default fines and meaning of "officer in default"
464. Production and inspection of books where offence suspected
465. Summary proceedings
466. Saving for privileged communications

Legal Proceedings

467. Costs in actions by certain limited companies
468. Power of Court to grant relief in certain cases
469. Power to enforce orders

Tables and Forms, and Requirements as to Accounts

470. Power to alter tables and forms, and requirements as to accounts

Relief for Unusually Large Companies

471. Power to modify certain provisions for companies with unusually large number of shareholders

Advisory Committee

472. Power to appoint advisory committee
473. Effect of section 267 of Companies Act 1933 as to keeping books of account

Repeals and Savings

474. Repeals and savings
475. Provisions as to winding-up proceedings commenced before 1 April 1934
Schedules

------------------------------------------------

THE COMPANIES ACT 1955

1955, No. 63

An Act to consolidate and amend the law relating to companies

[25 October 1955

1. Short Title, commencement, etc. - (1) This Act may be cited as the Companies Act 1955, and shall come into force on the first day of January, nineteen hundred and fifty-seven.

(2) This Act is divided into Parts, as follows:

PART I- Preliminary. (Sections 2 to 12.)

PART II- Incorporation of Companies and Matters Incidental Thereto. (Sections 13 to 46.)

PART III- Share Capital and Debentures. (Sections 47 to 101.)

PART IV- Registration of Charges. (Sections 102 to 114.)

PART V- Management and Administration. (Sections 115 to 209.)

PART VI- Winding Up. (Sections 210 to 341.)

PART VII- Receivers and Managers. (Sections 342 to 352.)

PART VIII- Private Companies. (Sections 353 to 366.)

PART IX- Application of Act to Companies Formed or Registered Under Former Acts. (Sections 367 to 370.)

PART X- Companies Not Formed Under This Act Authorised to Register Under This Act. (Sections 371 to 386.)

PART XI- Winding Up of Unregistered Companies. (Sections 387 to 394.)

PART XII- Overseas Companies. (Sections 395 to 412.)

PART XIII- Insurance Companies. (Sections 413 to 423.)

PART XIV- Mining Companies. (Sections 424 to 445.)

PART XV- Annual Licences. (Sections 446 to 455.)

PART XVI- Miscellaneous. (Sections 456 to 475.)

PART I
PRELIMINARY

2. Interpretation - (1) In this Act, unless the context otherwise requires,-

"Accounts" includes a company's group accounts, whether prepared in the form of accounts or not:

"Agent" does not include a person's counsel acting as such:

"Annual return" means the return required to be made, in the case of a company having a share capital, under section one hundred and thirty, and, in the case of a company not having a share capital, under section one hundred and thirty-one of this Act:

"Articles" means the articles of association of a company, as originally framed or as altered by special resolution, including, so far as they apply to the company, the regulations contained (as the case may be) in Table B in the Schedule to the joint Stock Companies Act 1860, or in Table A in the First Schedule to the Companies Act 1882, or in Table A in the First Schedule to the Companies Act 1903, or in Table A in the Second Schedule to the Companies Act 1908, or in Table A in the Second Schedule to the Companies Act 1933, or in Table A in the Third Schedule to this Act:

"Book and paper" and "book or paper" include accounts, deeds, writings, and documents:

"Branch register" has the meaning assigned to it by subsection one of section one hundred and twenty-seven of this Act:

"Commonwealth" means the British Commonwealth of Nations; and includes every territory for whose international relations the Government of any country of the Commonwealth is responsible

"Company" means a company formed and registered under this Act, or an existing company as hereinafter defined:

"Company limited by guarantee" and "company limited by shares" have the meanings assigned to them respectively by subsection two of section thirteen of this Act:

"Contributory" has the meaning assigned to it by section two hundred and twelve of this Act:

"Court" means the Supreme Court, and includes a judge thereof:

"Creditors' voluntary winding up" has the meaning assigned to it by subsection four of section two hundred and seventy-four of this Act:

"Debenture" includes debenture stock, bonds, and any other securities of a company, whether constituting a charge on the assets of the company or not:

"Default fine" means a fine as provided for in section four hundred and sixty-three of this Act:

"Director" includes any person occupying the position of director, by whatever name called:

"Document" includes summons, notice, order, and other legal process, and registers:

"Existing company" means a company formed and registered under the joint Stock Companies Act 1860, the Companies Act 1882, the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933:

"Extraordinary resolution" has the meaning assigned to it by subsection one of section one hundred and forty-five of this Act:

"Financial year", in relation to any body corporate, means the period in respect of which any profit and loss account of the body corporate laid before it in general meeting is made up, whether that period is a year or not:

"Gazette" means the New Zealand Gazette:

"General rules" means general rules made under section three hundred and forty-one of this Act, and includes forms:

"Group accounts" has the meaning assigned to it by sub-section one of section one hundred and fifty-four of this Act:

"Holding company" means a holding company as defined by section one hundred and fifty-eight of this Act:

"Labour share" means a special share (not being a share in the capital of a company) issued in accordance with section sixty-seven of this Act:

"Members' voluntary winding up" has the meaning assigned to it by subsection four of section two hundred and seventy-four of this Act:

"Memorandum" means the memorandum of association of a company, as originally framed or as altered in pursuance of any enactment:

"Minimum subscription" has the meaning assigned to it by subsection two of section fifty-seven o£ this Act:

"Minister" means the Minister of Justice:

"Officer", in relation to a body corporate, includes a director, manager, or secretary:

"Officer who is in default" has the meaning assigned to it by subsection two of section four hundred and sixty-three of this Act:

"Official Assignee" has the meaning assigned to it by section two hundred and twenty-eight of this Act:

"Overseas company" means a company incorporated outside New Zealand:

"Prescribed" means prescribed by this Act or by general rules or regulations under this Act:

"Printed or typewritten" means printed, or typewritten, or, in the case of a copy of a document, reproduced in such other manner and form as may be prescribed either generally or particularly:

"Private company" means a company formed and registered under Part VIII of this Act, or under Part VIII of the Companies Act 1933, or under Part V of the Companies Act 1908, or under Part IV of the Companies Act 1903:

"Prospectus" means any prospectus, notice, circular, advertisement, or other invitation offering to the public for subscription or purchase any shares or debentures of a company:

"Registrar" means the Registrar of Companies, and includes the Deputy Registrar, "Deputy Registrar" means the Deputy Registrar of Companies, "District Registrar" means a District Registrar of Companies, and "Assistant Registrar" means an Assistant Registrar of Companies under this Act

"Resolution for reducing share capital" has the meaning assigned to it by subsection two of section seventy-five of this Act:

"Resolution for voluntary winding up" has the meaning assigned to it by subsection two of section two hundred and sixty-eight of this Act:

"Share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied, but does not include a labour share as hereinbefore defined:

"Share warrant" has the meaning assigned to it by subsection two of section ninety-three of this Act:

"Special notice" has the meaning assigned to it by section one hundred and forty-six of this Act:

"Special resolution" has the meaning assigned to it by subsection two of section one hundred and forty-five of this Act:

"Statutory meeting" means the meeting required to be held by subsection one of section one hundred and thirty-four of this Act:

"Statutory report" has the meaning assigned to it by subsection two of section one hundred and thirty-four of this Act:

"Subsidiary" means a subsidiary as defined by section one hundred and fifty-eight of this Act:

"Table A" means Table A in the Third Schedule to this Act:

"Unlimited company" has the meaning assigned to it by subsection two of section thirteen of this Act.

(2) A person shall not be deemed to be within the meaning of any provision in this Act a person in accordance with whose directions or instructions the directors of a company are accustomed to act, by reason only that the directors of the company act on advice given by him in a professional capacity.

(3} References in this Act to a body corporate or to a corporation shall be construed as not including a corporation sole but as including a company incorporated outside New Zealand.

(4) Any provision of this Act overriding or interpreting a company's articles shall, except as provided by this Act, apply in relation to articles in force at the commencement of this Act, as well as to articles coming into force thereafter, and shall apply also in relation to a company's memorandum as it applies in relation to its articles.

Cf. 1933, No. 29, s. 3; Companies Act 1948, s. 455 (U.K.)

3. Registrar of Companies - For the purposes of this Act there shall from time to time be appointed under the Public Service Act 1912 a Registrar of Companies.

Cf. 1933, No. 29, s. 4

4. Deputy Registrar of Companies - (1) There shall also from time to time be appointed under the Public Service Act 1912 a Deputy Registrar of Companies, who shall, under the control of the Registrar, perform such general official duties as he is called upon to perform by the Registrar.

(2) On the occurrence from any cause of a vacancy in the office of Registrar (whether by reason o£ death, resignation, or otherwise), and in case of the absence from duty of the Registrar (from whatever cause arising), and so long as any such vacancy or absence continues, the Deputy Registrar shall have and may exercise all the powers, duties, and functions of the Registrar.

(3) The fact that the Deputy Registrar exercises any power, duty, or function as aforesaid shall be conclusive evidence of his authority to do so, and no person shall be concerned to inquire whether the occasion has arisen requiring or authorising him to do so.

Cf. 1933, No. 29, s. 5

5. District and Assistant Registrars of Companies - (1) There shall also from time to time be appointed under the Public Service Act 1912 as many District Registrars of Companies and Assistant Registrars of Companies as may be found necessary for the purposes of this Act.

(2) Subject to the control of the Registrar, every District Registrar shall have and may exercise all the duties and powers of the Registrar. Subject to the control of the Registrar and of the District Registrar, every Assistant Registrar shall have and may exercise all the duties and powers of the Registrar. The fact that a District Registrar or an Assistant Registrar exercises any powers or functions conferred by this Act on the Registrar shall be conclusive evidence of his authority to do so.

Cf. 1933, No. 29, s. 6

6. Official seals - There shall be an official seal in the custody of the .Registrar, and there shall also be an official seal in the custody of each District Registrar.

Cf. 1933, No. 29, s. 7

7. Registers to be kept for purposes of this Act - (1) The Registrar shall cause to be kept in the office of each District Registrar such registers as he considers necessary, in which shall be recorded all matters required by this Act or by rules or regulations under this Act to be recorded by the Registrar.

(2) All such matters relating to any overseas company shall be recorded in the office of the District Registrar at Wellington, and shall at all times be retained in that office.

(3) Subject to the provisions of subsection two of this section, the Registrar may in his discretion direct the transfer of any register from the office of any District Registrar to any other such office, and may also direct that the records relating to any company be transferred from any such office to any other such office

Provided that the memorandum of association and all other records relating to any company shall at all times be kept recorded in the same office.

(4) Forthwith after the transfer of any register or of the records relating to any company pursuant to this section the Registrar shall give notice thereof in the Gazette.

(5) Whenever any act is by this Act or by rules or regulations under this Act directed to be done to or by the Registrar in respect of any company (whether incorporated in New Zealand or elsewhere) it shall, unless the context otherwise requires, be done to or by the District Registrar in whose office the records relating to that company are kept, or to or by an Assistant Registrar in that office.

Cf. 1933, No. 29, s. 8

8. Fees - (1) There shall be paid to the Registrar, in respect of the several matters mentioned in the table set out in the First Schedule to this Act, the several fees therein specified:

Provided that no fees shall be charged in respect of the registration in pursuance of Part X of this Act of a company if it is not registered as a limited company, or if before its registration as a limited company the liability of the shareholders was limited by some Act of the United Kingdom Parliament or of the General Assembly (other than this Act) or by letters patent.

(2) Where the Registrar or any other officer is empowered by this Act to do any act for which a fee is payable, he may refuse to do that act until the fee is paid.

(3) All fees paid to the Registrar under this Act shall be paid into the Public Account, and shall form part of the Consolidated Fund.

Cf. 1933, No. 29, ss. 9, 315; 1948 U.K. Act, s. 425

9. Inspection, production, and evidence of documents kept by Registrar - (1) Any person may inspect the documents kept by the Registrar or any District Registrar on payment of such fees as may be prescribed.

(2) Any person may, on payment of the prescribed fee, require a certificate of the incorporation of any company, or a copy of or extract from any other document or any part of any other document, to be given or certified by the Registrar or a District Registrar or an Assistant Registrar respectively under his hand and seal.

(3) No process for compelling the production of any document kept by the Registrar or a District Registrar shall issue from any Court, except with the leave of that Court, and any such process if issued shall bear thereon a statement that it is issued with the leave of the Court.

(4) A copy of or extract from any document kept and registered at the office of the Registrar or of any District Registrar, certified to be a true copy under the hand and seal of the Registrar or District Registrar or an Assistant Registrar (whose official position and signature it shall not be necessary to prove), shall in all legal proceedings be admissible in evidence as of equal validity with the original document.

Cf. 1933, No. 29, ss. 10, 276 (2); 1948 U.K. Act, s. 426

10. Repealed by s. 26 (1) (c) of the Archives Act 1957.

11. Enforcement of duty of company to make returns to Registrar - (1) If a company, having made default in complying with any provision of this Act which requires it to file with, deliver, or send to the Registrar any return, account, or other document, or to give notice to him of any matter, fails to make good the default within fourteen days after the service of a notice on the company requiring it to do so, the Court may, on an application made to the Court by any member or creditor of the company or by the Registrar, make an order directing the company and any officer thereof to make good the default within such time as may be specified in the order.

(2) Any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of the company responsible for the default.

(3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a company or its officers in respect of any such default as aforesaid.

Cf. 1933, No. 29, s. 11; 1948 U.K. Act, s. 428

12. Regulations - The Governor-General may from time to time, by Order in Council, make regulations for the due administration of this Act and for the conduct of all persons concerned in that administration.

Cf. 1933, No. 29, s. 12

PART II
INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO

Memorandum of Association

13. Mode of forming company - (1) Any seven or more persons associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company, with or without limited liability.

(2) Such a company may be-

(a) A company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed "a company limited by shares"); or

(b) A company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee") ; or

Cf. 1933, No. 29, s. 13; 1948 U.K. Act, s. 1

As to private companies, see s. 353.

14. Requirements with respect to memorandum - (1) The memorandum of every company must state-

(a) The name of the company, with "Limited" as the last word of the name in the case of a company limited by shares or by guarantee; and

(b) The objects of the company.

(2) The memorandum of a company limited by shares or by guarantee must also state that the liability of its members is limited.

(3) The memorandum of a company limited by guarantee must also state that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges, and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

(4) In the case of a company having a share capital-

(a) The memorandum must also, unless the company is an unlimited company, state the amount of share capital with which the company proposes to be registered, and the division thereof into shares of a fixed amount

(b) No subscriber of the memorandum may take less than one share:

Cf. 1933, No. 29, s. 14 (1)-(4); 1948 U.K. Act, s. 2

As to private companies, see s. 356.

As to the power to dispense with "Limited" in the names of charitable and other companies, see s. 33.

15. Signature of memorandum, and exemption from stamp duty - (1) The memorandum of every company must be signed by each subscriber, or his agent authorised in writing, in the presence of at least one witness, who must attest the signature, and must add to his signature his description and address.

(2) In any case where a corporation, whether a company within the meaning of this Act or not, is a subscriber of the memorandum of a company, the memorandum may be signed on behalf of the corporation by any person or persons acting under its authority expressed in writing, and it shall not be necessary in any such case for the seal of the corporation to be affixed to the memorandum.

(3) The memorandum shall be exempt from stamp duty.

Cf. 1933, No. 29, ss. 14 (5), (6), 15; 1948 U.K. Act, s. 3

16. Incidental and ancillary objects and powers - (1) Every company registered after the commencement of this Act shall have as incidental and ancillary to the objects specified in its memorandum the objects and powers set forth in the Second Schedule to this Act, and those objects and powers shall be implied in the memorandum accordingly, except in so far as they are expressly excluded or modified by the memorandum.

(2) This section is in addition to and not in derogation of section nineteen of this Act.

17. Restriction on alteration of memorandum - A company may not alter the conditions expressed or implied in its memorandum except in the cases, in the mode, and to the extent for which express provision is made in this Act.

Cf. 1933, No. 29, s. 16; 1948 U.K. Act, s. 4

As to the effect of alterations increasing the liability to contribute for shares, see s. 36.

18. Mode in which and extent to which objects of company may be altered - (1) Subject to the provisions of this section, a company may, by special resolution, alter the provisions expressed or implied in its memorandum with respect to the objects of the company so far as may be required to enable it-

(a) To carry on its business more economically or more efficiently; or

(b) To attain any of its objects by new or improved means; or

(d) To carry on some business (whether related to its existing business or not) which under existing circumstances may conveniently or advantageously be combined with the business of the company; or

(e) To restrict or abandon any of the objects or powers expressed or implied in the memorandum; or

(f) To exclude or modify any of the objects or powers set forth in the Second Schedule to this Act, or to revoke or vary any such exclusion or modification; or

(g) To sell or dispose of the whole or any part of the undertaking of the company; or

(h) To amalgamate with any other company or body of persons.

(2) The alteration shall not take effect until, and except in so far as, it is confirmed by the Court.

(3) Before confirming the alteration the Court must be satisfied-

(a) That sufficient notice has been given to every holder of debentures of the company, and to any persons or class of persons whose interests will, in the opinion of the Court, be affected by the alteration; and

(b) That, with respect to every creditor who in the opinion of the Court is entitled to object and who signifies his objection in manner directed by the Court, either his consent to the alteration has been obtained, or his debt or claim has been discharged or has determined, or has been secured to the satisfaction of the Court:

Provided that the Court may, in the case of any person or class, for special reasons, dispense with the notice required by this section.

(4) The Court may make an order confirming the alteration either wholly or in part, and on such terms and conditions as it thinks fit.

(5) The Court shall, in exercising its discretion under this section, have regard to the rights and interests of the members of the company or of any class of them, as well as to the rights and interests of the creditors, and may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase of the interests of dissentient members, and may give such directions and make such orders as it may think expedient for facilitating or carrying into effect any such arrangement:

Provided that no part of the capital of the company shall be expended in any such purchase.

(6) A sealed copy of the order confirming the alteration, together with a printed or typewritten copy of the memorandum as altered, shall, within fifteen days from the date of the order, be delivered by the company to the Registrar, and he shall register the copy so delivered and shall certify the registration under his hand and seal, and the certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the confirmation thereof have been complied with, and henceforth the memorandum as so altered shall be the memorandum of the company. The Court may by order at any time extend the time for the delivery of documents to the Registrar under this section for such period as the Court may think proper.

(7) If a company makes default in delivering to the Registrar any document required by this section to be delivered to him, the company and every officer of the company who is in default shall be liable to a default fine of ten pounds.

Cf. 1933, No. 29, s. 17; 1948 U.K. Act, s. 5

As to the inclusion of mining purposes in the objects of a company that is not a mining company, see s. 428 (2).

19. Extending powers of dairy companies to engage in associated industries - (1) Notwithstanding anything to the contrary in this Act, or in the memorandum or articles of any company having for its object or for one of its objects the manufacture of butter or of cheese, it shall be lawful for any such company, without complying with the provisions of this Act relating to the alteration of the memorandum or articles of companies, to do all or any of the following things, that is to say:

(a) To carry on the business of the manufacture of rennet, casein, dried milk, condensed milk, sugar of milk, or other milk products; or of butter boxes or cheese crates; or of any other article or product connected with or required for the dairying industry:

(b) To maintain a veterinary service for the benefit of the members of the company; or to expend any part of the funds of the company in or towards the maintenance of any veterinary service which may be of benefit to the members of the company:

(c) To acquire shares in, or to guarantee the obligations of, or otherwise to assist or promote, any other company, or any company proposed to be formed under this Act, having for its object or for one of its objects-

(i) The manufacture of any article or product as aforesaid; or

(ii) The exporting, marketing, and disposal of any primary products; or

(iii) The erection and building of cool stores and freezing works; or

(iv) The purchase of any machinery and plant in connection with any cool stores or freezing works; or

(v) The carrying on of the business of cool storage and refrigerating; or

(vi) The carrying on of the business of insurance or guarantee against loss, damage, or risk of any kind whatever, except life insurance; or

(vii) The manufacture of fertilisers.

(2) This section is in addition to and not in derogation of section sixteen of this Act.

Cf. 1933, No. 29, s. 18; 1945, No. 40, s. 11

Articles o f Association

20. Articles prescribing regulations for companies - There may in the case of a company limited by shares, and there shall in the case of a company limited by guarantee or unlimited, be registered with the memorandum articles of association signed by the subscribers of the memorandum and prescribing regulations for the company.

Cf. 1933, No. 29, s. 19; 1948, U.K. Act, s. 6

21. Regulations required in case of unlimited company or company limited by guarantee - (1) In the case of an unlimited company the articles, if the company has a share capital, must state the amount of share capital with which the company proposes to be registered.

(2) In the case of an unlimited company or a company limited by guarantee, the articles, if the company has not a share capital, must state the number of members with which the company proposes to be registered.

(3) Where a company not having a share capital has increased the number of its members beyond the registered number, it shall, within fifteen days after the increase was resolved on or took place, give to the Registrar notice of the increase, and the Registrar shall record the increase. If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 20; 1948, U.K. Act, s. 7

22. Adoption and application of Table A - (1) Articles of association may adopt all or any of the regulations contained in Table A.

(2) In the case of a company limited by shares and registered after the commencement of this Act, if articles are not registered, or, if articles are registered, in so far as the articles do not exclude or modify the regulations contained in Table A, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.

Cf. 1933, No. 29, s. 21; 1948 U.K. Act, s. 8

23. Printing and signature of articles, and exemption from stamp duty - (l) Articles must -

(a) Be printed or typewritten:

(b) Be divided into paragraphs numbered consecutively

(c) Be signed by each subscriber of the memorandum, or his agent authorised in writing, in the presence of at least one witness, who must attest the signature, and must add to his signature his description and address.

(2) Articles shall be exempt from stamp duty.

Cf. 1933, No. 29, s. 22; 1948 U.K. Act, s. 9

24. Alteration of articles by special resolution - (1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may by special resolution alter or add to its articles.

(2) Any alteration or addition so made in the articles shall, subject to the provisions of this Act, be as valid as if originally contained therein, and be subject in like manner to alteration by special resolution.

Cf. 1933, No. 29, s. 23; 1948 U.K. Act, s. 10

As to the effect of alterations increasing the liability to contribute for share capital, see s. 36.

Form of Memorandum and Articles

25. Statutory forms of memorandum and articles - The form of-

(a) The memorandum of association of a company limited by shares;

(b) The memorandum and articles of association of a company limited by guarantee and not having a share capital;

(d) The memorandum and articles of association of an unlimited company having a share capital-

shall be respectively in accordance with the forms set out in Tables B, C, D, and E in the Third Schedule to this Act, or as near thereto as circumstances admit.

Cf. 1933, No. 29, s. 24; 1948 U.K. Act, s. 11

Registration

26. Registration of memorandum and articles - The memorandum and the articles, if any, shall be delivered to the Registrar, who shall retain and register them.

Cf. 1933, No. 29, s. 25; 1948 U.K. Act, s. 12

27. Effect of registration - (1) On the registration of the memorandum of a company the Registrar shall certify under his hand and seal that the company is incorporated, and, in the case of a limited company, that the company is limited.

(2) In the case of a company within the meaning of the Life Insurance Act 1908, the Registrar shall not issue a certificate of incorporation unless the deposit referred to in section ten of that Act has been made.

(3) From the date of incorporation mentioned in the certificate of incorporation, the subscribers of the memorandum, 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 memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.

Cf. 1933, No. 29, s. 26; 1948 U.K. Act, s. 13

As to the registration of companies as cooperative dairy companies; see s. 4 of the Cooperative Dairy Companies Act 1949.

As to the registration of cooperative companies under the Cooperative Companies Act 1956, see s. 3 of that Act.

28. Power of company to hold lands - A company incorporated under this Act shall have power to hold lands:

Provided that a company formed for the purposes of promoting art, science, religion, charity, or any other like object not involving the acquisition of gain by the company or by its individual members shall not, without the licence of the Governor-General in Council, hold more than two acres of land; but the Governor-General in Council may by licence empower any such company to hold lands in such quantity and subject to such conditions as he thinks fit.

Cf. 1933, No. 29, s. 27 1948 U.K. Act, s. 14

29. Conclusiveness of certificate of incorporation - (1) A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with and that the association is a company authorised to be registered and duly registered under this Act.

(2) A statutory declaration by a solicitor of the Supreme Court engaged in the formation of the company, or by a person named in the articles as a director or secretary of the company, of compliance with all or any of the said requirements shall be produced to the Registrar, and the Registrar may accept such a declaration as sufficient evidence of compliance.

Cf. 1933, No. 29, s. 28; 1948 U.K. Act, s. 15

As to the penalty for false statements, see 461 and the 13th Sched.

30. Registration of unlimited company as limited - (1) Subject to the provisions of this section, a company registered as unlimited may register under this Act as limited, or a company already registered as a limited company may reregister, under this Act, but the registration of an unlimited company as a limited company shall not affect the rights or liabilities of. the company in respect of any debt or obligation incurred, or any contract entered into by, to, with, or on behalf of the company before the registration, and those rights or liabilities may be enforced in manner provided by Part X of this Act in the case of a company registered in pursuance of that Part.

(2) On registration in pursuance of this section the Registrar shall close the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company, but save as aforesaid the registration shall take place in the same manner and shall have effect as if it were the first registration of the company.

(3) Notice of the registration of any unlimited company as a limited company shall be forthwith published by the Registrar in the Gazette, at the expense of the company.

Cf. 1933, No. 29, s. 29; 1948 U.K. Act, s. 16

Provisions With Respect to Names of Companies

31. Restriction on registration of companies by certain names - (1) No company shall be registered by a name which -

(a) Is identical with that of a company carrying on business in New Zealand (whether registered in New Zealand or not), or of any other body corporate registered in New Zealand under any Act, or so nearly resembles that name as to be calculated to deceive, except where that company or other body corporate, as the case may be, signifies its consent in such manner as the Registrar requires, and the Registrar is satisfied that registration of the company by the proposed name will not be contrary to the public interest; or

(b) Contains the words "Chamber of Commerce", unless the company is a company which is to be registered under a licence granted in pursuance of section thirty-three of this Act without the addition of the word "Limited" to its name; or

(d) Contains the word "Anzac" or the words "United Nations".

(2) Except with the consent of the Governor-General in Council or as expressly provided in any Act other than this Act, no company shall be registered by a name which-

(a) Contains the word "Royal" or "Imperial", or "Parliament", or "National", or "State", or any word which in the opinion of the Registrar suggests, or is calculated to suggest, the patronage of Her Majesty or of any member of the Royal Family or of the Governor-General, or connection with Parliament or with Her Majesty's Government or any Department thereof; or

(b) Contains the word "Municipal" or "Chartered" or in the opinion of the Registrar suggests; or is calculated to suggest, connection with any municipality or other local authority, or with any society or body incorporated by Royal Charter; or

(c) Contains the word "Bank", "Bankers", "Banking", "Cooperative", "Trust", or "Trustee", or the words "Stock Exchange"; or

(d) Contains the word "Standard".

(3) The Registrar may refuse to register a company by a name which contains a trade mark registered under the Trade Marks Act 1953, or any word or words which in the opinion of the Registrar so nearly resemble any such trade mark as to be calculated to deceive or to cause confusion.

(4) Except with the consent of the Court, no company shall be registered by a name which, in the opinion of the Registrar, is undesirable.

Cf. 1933, No. 29, s. 30; 1948 U.K. Act, s. 17

As to companies with names including the word "Cooperative", see ss. 5 and 25 of the Cooperative Dairy Companies Act 1949 and s. 11 of the Cooperative Companies Act 1956.

As to companies with names resembling that of the Tourist Hotel Corporation of New Zealand, see s: 35 of the Tourist Hotel Corporation Act 1955.

32. Change of name - (1) A company may, by special resolution and with the, approval of the Registrar signified in writing, change its name.

(2) If, through inadvertence or otherwise, a company on its first registration, or on its registration by a new name, is registered by a name which-

(a) Is in contravention of section thirty-one of this Act; or

(b) Contains a trade mark previously registered under the Trade Marks Act 1953, or any word or words which in the opinion of the Registrar so nearly resemble any such trade mark as to be calculated to deceive or to cause confusion,-

the company shall, within a period of six weeks from the date of its being required by the Registrar to do so, or such longer period as the Registrar may think fit to allow, change its name by resolution to a name approved by the Registrar in writing, having regard to the provisions of section thirty-one of this Act.

(3) If a company makes default in complying with the requirements of subsection two of this section, it shall be liable to a fine not exceeding five pounds for every day during which the default continues.

(4) Every document required for the purposes of any change of name under subsection two of this section shall be exempt from stamp duty, and no fee shall be payable to the Registrar in respect of any such change of name or in respect of any document required for the purposes of or, by reason of any such change of name.

(5) Where a company changes its name under this section, the Registrar shall enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case. The Registrar shall forthwith after the alteration of the register publish in the Gazette, at the expense of the company, a notice of the change of its name, and that notice shall be conclusive evidence of the change to which it relates.

(6) A change of name by a company under this section 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.

(7) Where the Registrar requires, or refuses to require, a company to change its name under paragraph (b) of sub-section two of this section, the company or, as the case may be, the proprietor of the trade mark concerned may appeal to the Court against the decision of the Registrar at any time within twenty-one days after the date of the requirement or refusal. The decision of the Court on any such appeal shall be final.

Cf. 1933, No. 29, s. 32; 1948 U.K. Act, s. 18

Subss. (4), (5), and (6) of this section are applied by subss. (2) and (7) (b) of s. 33.

See also s. 5 (2) of the Cooperative Dairy Companies Act 1949 and s. 11 (2) of the Cooperative Companies Act 1956.

33. Power to dispense with "Limited" in name of charitable and other companies - (1) Where it is proved to the satisfaction of the Governor-General that an association about to be formed as a limited company is to be formed for promoting commerce, art, science, religion, charity, or any other object useful to the community, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Governor-General may by Order in Council direct that the association may be registered as a company with limited liability, without the addition of the word "Limited" to its name, and the association may be registered accordingly, and shall, on registration, enjoy all the privileges and (subject to the provisions of the section) be subject to all the obligations of limited companies.

(2) Where it is proved to the satisfaction of the Governor-General-

(a) That the objects of a company registered under this Act as a limited company are restricted to those specified in subsection one of this section and to objects incidental or conducive thereto; and

(b) That by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members,-

the Governor-General may by Order in Council authorise the company to change its name by resolution to a name which does not contain the word "Limited", being a name approved by the Registrar in writing, having regard to the provisions of section thirty-one of this Act, and subsections four, five, and six of section thirty-two of this Act shall apply to a change of name under this subsection as they apply to a change of name under that section.

(3) An Order in Council under this section may be issued on such conditions and subject to such regulations as the Governor-General in Council thinks fit, and those conditions and regulations shall be binding on the body in respect of which the Order in Council is issued, and (where it is issued under subsection one of this section) shall, if the Governor-General in Council so directs, be inserted in the memorandum and articles, or in one of those documents.

(4) A body in respect of which an Order in Council is issued under this section shall be excepted from the provisions of this Act relating to the use of the word "Limited" as any part of its name, the publishing of its name, and the sending of lists of members to the Registrar.

(5) An Order in Council issued under this section may at any time be in like manner revoked, and upon revocation the Registrar shall enter the word "Limited" at the end of the name upon the register of the body in respect of which the Order in Council was issued, and the body shall cease to enjoy the exemptions and privileges or, as the case may be, the exemptions granted by this section:

Provided that, before an Order in Council is so revoked notice in writing of intention to revoke the Order in Council shall be given by the Registrar to the body, and it shall be afforded an opportunity of submitting to the Registrar its objections to the revocation, and the Registrar shall, before the revocation of the Order in Council, forward the objections, with his report thereon, to the Minister.

(6) Where a body in respect of which an Order in Council under this section is in force alters the provisions of its memorandum with respect to its objects, the Governor-General may (unless he sees fit to revoke the Order in Council) vary the Order in Council by making it subject to such conditions and regulations as he thinks fit, instead of or in addition, to the conditions and regulations, if any; to which the Order in Council was formerly subject.

(7) Where an Order in Council issued under this ,section in respect of a body the name of which contains the words "Chamber of Commerce" is revoked, the body shall, within a period of six weeks from the date of the revocation, or such longer period as the Governor-General in Council may think fit to allow, change its name by resolution to a name which does not contain those words, being a name approved by the Registrar in writing, having regard to the provisions of section thirty-one of this Act; and-

(a) The notice to be given under the proviso to subsection five of this section to that body shall include a statement to the effect of the foregoing provisions of this subsection; and

(b) Subsections four, five, and six of section thirty-two of this Act shall apply to a change of name under this subsection.

(8) If a body makes default in complying with the requirements of subsection seven of this section, it shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, ss. 31, 32 (3); 1948 U.K. Act; s. 19

General Provisions With Respect to Memorandum and Articles

34. Effect of memorandum and articles - (1) Subject to the provisions of this Act, the memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been executed as a deed by each member and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles.

(2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company of the nature of a liability under a deed.

(3) No lender or other person dealing with the company shall be concerned to see or inquire whether any limit on borrowing imposed by the memorandum or articles is observed. No debt incurred or security given in excess of any such limit shall be invalid or ineffectual, except in the case of express notice to the lender or the recipient of the security at the time when the debt was incurred or the security was given that the limit had been or was thereby exceeded.

Cf. 1933, No. 29, s. 33; 1948 U.K. Act, s. 20

Subs. (3) is not restricted by s. 4 (4) (h) of the Trustee Act 1956, which limits the amount of borrowing by a dairy finance company on debentures which are authorised trustee investments; see the proviso to s. 4 (4) (h).

35. Provision as to memorandum and articles of companies limited by guarantee - (1) In the case of a company limited by guarantee and not having a share capital every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void, but nothing herein shall affect the power of a company to issue debentures carrying a rate of interest varying with the profits.

(2) For the purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles, or in any resolution, of a company limited by guarantee, purporting to divide the undertaking of the company into shares or interests shall, be treated as a provision for a share capital, notwithstanding, that the nominal amount or number of the shares or interests as not specified thereby.

Cf. 1933, No. 29, s. 34; 1948 U.K. Act, s. 21

36. Alterations in memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent - Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date to contribute to the share capital of, or otherwise to pay money to, the company:

Provided that this section shall not apply in any case where the member agrees in writing, either before or after the alteration is made, to be bound thereby.

Cf. 1933, No. 29, s. 35; 1948 U.K. Act, s. 22

As to the exclusion of this section in certain cases, see ss. 8, 8A, and 25 of the Cooperative Dairy Companies Act 1949.

37. Copies of memorandum and articles to be given to members - (1) A company shall, on being so required by any member, forthwith deliver or send to him a copy of the memorandum and of the articles, if any, and a copy of any Act of Parliament which alters the memorandum, subject to payment, in the case of a copy of the memorandum and of the articles, of five shillings or such less sum as the company may prescribe, and, in the case of a copy of an Act, of such sum not exceeding the published price thereof as the company may require.

(2) If a company makes default in complying with this section, the company and every officer of the company who is in default shall be liable for each offence to a fine not exceeding five pounds.

Cf. 1933, No. 29, s. 36; 1948 U.K. Act, s. 24

38. Issued copies of memorandum or articles to embody alterations - (1) Where an alteration is made in the memorandum or articles of a company, every copy of the memorandum or articles issued after the date of the alterations shall be in accordance with the alteration.

(2) If, where any such alteration has been made, the company at any time after the date, of the alteration issues any copies of the memorandum or articles which are not in accordance with the alteration, it shall be liable to a fine not exceeding one pound for each copy so issued, and every officer of the company who is in default shall be liable to the like penalty.

Cf. 1933, No. 29, 37; 1948 U.K. Act, s. 25

As to the substitution of a minute of reduction of share capital for part of the memorandum, see s. 78(6)

Membership of Company

39. Definition of member - (1) The subscribers, of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.

(2) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.

Cf. 1933, No. 29, s. 38; 1948 U.K. Act, s. 26

40. Membership of holding company - (1) Except in the cases hereafter in this section mentioned, a body corporate cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.

(2) Nothing in this section shall apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

(3) This section shall not prevent a subsidiary which is, at the commencement of this Act, a member of its holding company from continuing to be a member, but, subject to subsection two of this section, the subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof.

(4) Subject to subsection two of this section, subsections one and three thereof shall apply in relation to a nominee for a body corporate which is a subsidiary as if references in the said subsections one and three to such a body corporate included references to a nominee for it.

(5) In relation to a company limited by guarantee or unlimited which is a holding company, the reference in this section to shares, whether or not it has a share capital, shall be construed as including a reference to the interest of its members as such, whatever the form of that interest.

Cf. 1948 U.K. Act, 27

Reduction of Number of Members Below Legal Minimum

41. Prohibition of carrying on business with fewer than seven members - If at any time the members of a company is reduced below seven, and it carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with fewer than seven members shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

Cf. 1933, No. 29, s. 39; 1948 U.K. Act, s. 31

In the case of private companies the minimum number of members is two; see s. 354 (2) (a)

The holding of labour shares does not make a person a member of the company for the purposes of this section; see s.67(7).

Contracts, etc.

42. Form of contracts - (1) Contracts on behalf of a company may be made as follows:

(a) A contract which if made between private persons would be by law required to be by deed may be made on behalf of the company in writing under the common seal of the company:

(b) A contract which if made between private persons would be by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied:

(c) A contract which if made between private persons would by law be valid although made by parol only, and not reduced into writing, may be made by parol on behalf of the company by any person acting under its authority, express or implied.

(2) A contract made according to this section shall be effectual in law, and shall bind the company and its successors and all other parties thereto.

(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorised by this section to be made.

Cf. 1933, No. 29, s. 40; 1948 U.K. Act, s. 32

43. Bills of exchange and promissory notes - A bill of exchange or promissory note shall be deemed to have been, made, accepted, or endorsed on behalf of a company if ,made, accepted, or endorsed in the name of, or by or on behalf or oh account of, the company by any person acting under its authority.

Cf. 1933, No. 29, s. 41; 1948 U.K. Act, s. 33

See also ss. 22 and 90 of the Bills of Exchange Act 1908.

44. Execution of instruments by attorney - (1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute instruments on its behalf in any place in or outside New Zealand.

(2) An instrument executed by such an attorney on behalf of the company shall bind the company, and if executed as a deed shall have the same effect as if it were under the common seal of the company.

(3) The provisions of Part XII of the Property Law Act 1952 shall, with the necessary modifications, apply with respect to any power of attorney executed by a company to the same extent as if the company were a person and as if the commencement of the winding up of the company were the death of a person within the meaning of the said Part XII.

Cf. 1933, No. 29, s. 42; 1948 U.K. Act, s. 34

45. Power for company to have official seal for use abroad - (1) A company whose objects require or comprise the transaction of business outside New Zealand may, if authorised by its articles, have for use in any territory, district, or place not situate in New Zealand an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of the territory, district, or place where it is to be used.

(2) A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.

(3) A company having an official seal for use in any such territory, district, or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory, district, or place to affix the official seal to any deed or other document to which the company is party in that territory, district, or place.

(4) The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is the mentioned, then until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.

(5) The person affixing any such official seal shall, by writing under his hand, certify on the deed or other instrument to which the seal is affixed the date on which and the place at which it is affixed.

Cf. 1933, No. 29, s. 43; 1948 U.K. Act, s. 35

Authentication o f Documents

46. Authentication of documents - A document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be under its common seal.

Cf. 1933, No. 29, s. 44; 1948 U.K. Act, s. 36

PART III

SHARE CAPITAL AND DEBENTURES

Prospectus

47. Dating of prospectus - A prospectus issued by or on behalf of a company or in relation to an intended company shall be dated, and that date shall, unless the contrary is proved, be taken as the date of publication of the prospectus.

Cf. 1933, No. 29, s. 45 (1); 1948 U.K. Act, s. 37

48. Matters to be stated and reports to be set out in prospectus - (1) Every prospectus issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company, must state the matters specified in Part I of the Fourth Schedule to this Act and set out the reports specified in Part II of that Schedule, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.

(2) A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void.

(3) It shall not be lawful to issue any form of application for shares in or debentures of a company unless the form is issued with a prospectus which complies with the requirements of this section:

Provided that this subsection shall not apply if it is shown that the form of application was issued either -

(a) In connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures; or

(b) In relation to shares or debentures which were not offered to the public.

(4) If any person acts in contravention of the provisions of subsection three of this section he shall be liable to a fine not exceeding five hundred pounds.

(5) In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention, if-

(a) As regards any matter not disclosed, he proves that he was not cognisant thereof; or

(b) He proves that the non-compliance or contravention arose from a honest mistake of fact on his part; or

(c) The non-compliance or contravention was in respect of matters which in the opinion of the Court dealing with the case were immaterial, or was otherwise such as ought, in the opinion of that Court, having regard to all the circumstances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph fifteen of the Fourth Schedule to this Act, no director or other person shall incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed.

(6) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons; but, subject as aforesaid, this section shall apply to a prospectus or a form of application whether issued on or with reference to the formation of a company any or subsequently.

(7) Nothing in this section shall limit or diminish any liability which any person may incur lender the general law or this Act apart from this section.

Cf. 1933, No. 29,s. 46; 1948 U.K. Act, s. 38

As to the penalty for false statements, see s. 461 and the 13th ached.

49. Restriction on statements in prospectus as to dealing in shares or debentures on stock exchanges - (1) Except as provided in subsection two of this section, a prospectus inviting persons to subscribe for shares in or debentures of a company shall not be issued if it includes-

(a) Any statement that permission has been granted for those shares or debentures to be dealt in or quoted or listed on any stock exchange; or

(b) Any statement in any way referring to any such permission or to any application or intended application for any such permission, or to dealing in or quoting or listing the shares or debentures on any stock exchange, or to any requirements of a stock exchange.

(2) Where, on or before the date of the publication, of any such prospectus, there has been delivered to the Registrar for registration an undertaking, signed by every person who is named in the prospectus as a director or proposed director of the company or by his agent authorised in writing,-

(a) That the company will apply to the Stock Exchange Association of New Zealand not later than three months after the date of the first allotment of any of the shares or debentures for permission to quote the shares or debentures on the official list or, as the case may be, that such an application has been made; and

(b) That all the requirements of the Stock Exchange Association for the quoting of the shares or debentures that are existing at the date of the undertaking and can be complied with on or before the publication of the prospectus have been duly complied with and will at all times continue to be complied with; and

(c) That as far as practicable all the other requirements of the Stock Exchange Association for the quoting of the shares or debentures that are existing at the date of the undertaking will be complied with by the company within three months after the date of the first allotment of any of the shares or debentures and will at all times continue to be complied with,-

the prospectus may include a statement in the terms of the undertaking if the prospectus bears prominently on its face the following statement:

"Application will be (or, as the case may be, has been) made to the Stock Exchange Association of New Zealand for permission to quote the shares (or debentures) on the official list, but there is no guarantee that permission will be granted, and the Stock Exchange Association accepts no responsibility for any statement in this prospectus."

(3) If any prospectus is issued in contravention of this section, the company and every person who is knowingly a party to the issue thereof shall be liable to a fine not exceeding five hundred pounds.

(4) For the purposes of section fifty-three of this Act (which relates to civil liability for misstatements in a prospectus) every statement, whether in fact or intention, in any such undertaking as aforesaid shall be deemed to be a statement included in the prospectus, and where default is made in complying with any such statement the statement shall be deemed to be untrue.

(5) For the purposes of section fifty-four of this Act (which relates to criminal liability for misstatements in a prospectus) every statement of fact in any such undertaking as aforesaid shall be deemed to be a statement included in the prospectus.

(6) If default is made in complying with any statement of intention in any such undertaking as aforesaid, the company and every officer of the company who is in default shall be liable to a default fine of one hundred pounds.

Cf. 1948 U.K. Act, s. 51

50. Statement by expert in prospectus - (1) A prospectus inviting persons to subscribe for shares in or debentures of a company and including a statement purporting to be made by any expert shall not be issued unless-

(a) He has given and has not, before delivery of a copy of the prospectus for registration, withdrawn his written consent to the issue thereof with the statement included in the form and context in which it is included; and

(b) A statement that he has given and has not withdrawn his consent as aforesaid appears in the prospectus; and

(d) A statement appears in the prospectus as to whether or not he is or is intended to be an officer or servant of the company or of the company's subsidiary or holding company or of a subsidiary of the company's holding company; and

(e) If the statement by the expert was made more than one year before the date of delivery of a copy of the prospectus for registration, a supplementary statement on the same matter made by the same or another expert less than one year before that date appears in the prospectus.

(2) If any prospectus is issued in contravention of this section, the company and every person who is knowingly a party to the issue thereof shall be liable to a fine not exceeding five hundred pounds.

(3) In this section the expression "expert" includes an engineer, valuer, accountant, and any other person whose profession or calling gives authority to a statement made by him.

Cf. 1948 U.K. Act, s.40

51. Registration of prospectus – (1) No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof signed by every person who is named therein as a director or proposed director of the company, or by his agent authorised in writing, and having endorsed thereon or attached thereto-

(a) Any consent to the issue of the prospectus required by section fifty of this Act from any person as an expert; and

(b) In the case of a prospectus issued to persons who are not existing members or debenture holders of the company, also -

(i) A copy of any contract required by paragraph thirteen of the Fourth Schedule to this Act to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars thereof; and

(ii) Where the persons making any report required by Part II of that Schedule have made therein, or have, without giving the reasons, indicated therein, any such adjustments as are mentioned in paragraph twenty-eight of that Schedule, a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

(2) The references in subparagraph (i) of paragraph (b) of subsection one of this section to the copy of a contract required thereby to be endorsed on or attached to a copy of the prospectus shall, in the case of a contract wholly or partly in a foreign language, be taken as references to a copy of a translation in English or a copy embodying a translation in English of the parts in a foreign language, as the case may be, being a translation certified in the prescribed manner to be a correct translation.

(3) Every prospectus shall, on the face of it,-

(a) State that a copy has been delivered for registration as required by this section; and

(b) Specify, or refer to statements included in the prospectus which specify, any documents required by this section to be endorsed on or attached to the copy so delivered; and

(4) The Registrar shall not register a prospectus unless-

(a) It is dated; and

(b) The copy thereof is signed in manner required by this section; and

(d) The statements (if any) required by section fifty of this Act appear in it and are set out or referred to on its face as aforesaid; and

(e) It complies with section forty-nine of this Act.

(5) If a prospectus is issued without a copy thereof being delivered under this section to the Registrar or without the copy so delivered having endorsed thereon or attached thereto the required documents, the company, and every person who is knowingly a party to the issue of the prospectus, shall be liable to a fine not exceeding five pounds for every day from the date of the issue of the prospectus until a copy thereof is so delivered with the required documents endorsed thereon or attached thereto.

Cf. 1933, No. 29, s. 45 (2) - (5); 1948 U.K. Act, s.41

52. Restriction on alteration of terms mentioned in prospectus or statement in lieu of prospectus - A company limited by shares or a company limited by guarantee and having a share capital shall not previously to the statutory meeting vary the terms of a contract referred to in the prospectus, or statement in lieu of prospectus, except subject to the approval of the statutory meeting.

Cf. 1933, No. 29, s. 47; 1948 U.K. Act, s.42

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

53. Civil liability for misstatements in prospectus - (1) Subject to the provisions of this section, where a prospectus invites persons to subscribe for shares in or debentures of a company, the following persons shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement included therein, that is to say:

(a) Every person who is a director of the company at the time of the issue of the prospectus;

(b) Every person who has authorised himself to be named and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time;

d) Every person who has authorised the issue of the prospectus:

Provided that where, under section fifty of this Act, the consent of a person is required to the issue of a prospectus and he has given that consent, he shall not by reason of his having given it be liable under this subsection as a person who has authorised the issue of the prospectus except in respect of an untrue statement purporting to be made by him as an expert.

(2) No person shall be liable under subsection one of this section if he proves -

(a) That, having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent; or

(b) That the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge; or consent; or

(c) That, after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto and gave reasonable public notice of the withdrawal and of the reason therefor; or

(d) That, as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, believe that he statement was true; and

(e) That, as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert,-

(i) It fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation; and

(ii) He had reasonable ground to believe and did up to the time of the issue of the prospectus believe that the person making the statement was competent to make it; and

(iii) That person had given the consent required by section fifty of this Act to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant's knowledge, before allotment thereunder; and

(f) That, as regards every untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document:

Provided that this subsection shall not apply in the case of a person liable, by reason of his having given a consent required of him by the said section fifty, as a person who has authorised the issue of the prospectus in respect of an untrue statement purporting to be made by him, as an expert.

(3) A person who, apart from this subsection, would under subsection one of this section be liable, by reason of his having given a consent required of him by section fifty of this Act, as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert shall not be so liable if he proves -

(a) That, having given his consent under the said section fifty to the issue of the prospectus, he withdrew it in writing before delivery of a copy of the prospectus for registration; or

(b) That, after delivery of a copy of the prospectus for registration and before allotment thereunder, he, on becoming aware of the untrue, statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason therefor; or

(c) That he was competent to make the statement and that he had reasonable ground to believe and did up to the time of the allotment of the shares or debentures, as the case may be, believe, that the statement was true.

(4) Where -

(a) The prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to the issue thereof; or

(b) The consent of a person is required under section fifty of this Act to the issue of the prospectus and he either has not given that consent or has withdrawn it before the issue of the prospectus,-

the directors of the company, except any without whose knowledge or consent the prospectus was issued, and any other person who authorised the issue thereof shall be liable to indemnify the person named as aforesaid or whose consent was required as aforesaid, as the case may be, against all damages, costs, and expenses to which he may be made liable by reason of his name having been inserted in the prospectus or of the inclusion therein of a statement purporting, to be made by him as an expert, as the case may be, or in defending himself against any action or legal proceeding brought against him in respect thereof:

Provided that a person shall not be deemed for the purposes of this subsection to have authorised the issue of a prospectus by reason only of his having given the consent required by section fifty of this Act to the inclusion therein of a statement purporting to be made by him as an expert.

(5) For the purposes of this section -

(a) The expression "promoter" means a promoter who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement, but does not include any person by reason, of his acting in a professional capacity for persons engaged in procuring the formation of the company; and

(b) The expression "expert" has the same meaning as in section fifty of this Act.

Cf. 1933, No. 29, s. 48; 1948 U.K. Act, s. 43

54. Criminal liability for misstatements in prospectus - (1) Where a prospectus issued after the commencement of this Act includes any untrue statement, any person who authorised the issue of the prospectus shall be liable-

(a) On conviction on indictment, to imprisonment for a term not exceeding two years or a fine not exceeding five hundred pounds, or both; or

(b) On summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding one hundred pounds, or both,-

unless he proves either that the statement was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe that the statement was true.

(2) A person shall not be deemed for the purposes of this section to have authorised the issue of prospectus by reason only of his having given the consent required by section fifty of this Act to the inclusion therein of a statement purporting to be made by him as an expert.

(3) This section is in addition to and not in derogation of section two hundred and fifty-seven of the Crimes Act 1908.

Cf. 1948 U.K. Act, s. 44

55. Document containing offer of shares or debentures for sale to be deemed prospectus - (1) Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the company, and all enactments and rules of law as to the contents of prospectuses, and to liability in respect of statements in an omissions from prospectuses, or otherwise relating to prospectuses, shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shapes or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of misstatements contained in the document or otherwise in respect thereof.

(2) For the purposes of this Act it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, shares or debentures was made with a view to the shares or debentures being offered for sale to the public if it is shown-

(a) That an offer of the shares or debentures or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or

(b) That at the date when the offer was made the whole consideration to be received by the company in respect of the shares or debentures had not been so received.

(3) Section forty-eight of this Act as applied by this section shall have effect as if it required a prospectus to state in addition to the matters required by that section to be stated in a prospectus-

(a) The net amount of the consideration received or to be received by the company in respect of the shares or debentures to which the offer relates; and

(b) The place and time at which the contract under which the said shares or debentures have been or are to be allotted may be inspected,-

and section fifty-one of this Act as applied by this section shall have effect as though the persons making the offer were persons named in a prospectus as directors of a company.

(4) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or firm by two directors of the company or not less than half of the partners, as the case may be, and any such director or partner, may sign by his agent authorised in writing.

Cf. 1933, No. 29, s. 49; 1948 U.K. Act, s. 45

56. Interpretation of provisions relating to prospectuses - For the purposes of the foregoing provisions of this Part of this Act -

(a) A statement included in a prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included; and

(b) A statement shall be deemed to be included in a prospectus if it is contained therein or in any report or memorandum appearing on the face thereof, or by reference incorporated therein or issued therewith.

Cf. 1933, No. 29, s. 48 (1); 1948 U.K. Act, s. 46

Allotment

57. Prohibition of allotment unless minimum subscription received - (1) No allotment shall be made of any share capital of a company, offered to the public for subscription unless the amount stated in the prospectus as the minimum amount which, in the opinion of the directors must be raised by the issue of share capital in order to provide for the matters specified in paragraph four of the Fourth Schedule to this Act has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company. For the purposes of this subsection, a sum shall be deemed to have been paid to and received by the company if a cheque for that sum has been received in good faith by the company and the directors of the company have no reason for suspecting that the cheque will not be paid.

(2) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as "the minimum subscription".

(3) The amount payable on application on each share shall not be less than ten per cent of the nominal amount of the share.

(4) If the conditions aforesaid have not been complied with on the expiration of four months after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest, and if any such money is not so repaid within five months after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of five per cent per annum from the expiration of that period of five months:

Provided that a director shall not be liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.

(5) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void.

(6) This section, except subsection three thereof, shall not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription.

Cf. 1933, No. 29, s. 50; 1948 U.K. Act, s. 47

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

58. Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to Registrar - (1) A company having a share capital which does not issue a prospectus on or with reference to its formation, or which has issued such prospectus but has not proceeded to allot any of the shares offered to the public for subscription, shall not allot any of its shares or debentures unless at least three days before the first allotment of either shares or debentures there has been delivered to the Registrar for registration a statement in lieu of prospectus signed by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing, in the form and containing the particulars set out in Part I of the Fifth Schedule to this Act, and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.

(2) Every statement in lieu of prospectus delivered under this section shall, where the persons making any such report as aforesaid have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph five of the said Fifth Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

(3) If a company acts in contravention of subsection one or subsection two of this section, the company and every director of the company who knowingly and wilfully authorises or permits the contravention shall be liable to a fine not exceeding one hundred pounds.

(4) Where a statement in lieu of prospectus delivered to the Registrar under subsection one of this section includes any untrue statement, any person who authorised the delivery of the statement in lieu of prospectus for registration shall be liable-

(a) On conviction on indictment, to imprisonment for a term not exceeding two years or a fine not exceeding five hundred pounds, or both; or

(b) On summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding one hundred pounds, or both,-

unless he proves either that the untrue statement was immaterial or that he had reasonable ground to believe and did up to the time of the delivery for registration of the statement in lieu of prospectus believe that the untrue statement was true.

(5) For the purposes of this section-

(a) A statement included in a statement in lieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included; and

(b) A statement shall be deemed to be included in a statement in lieu of prospectus if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein.

Cf. 1933, No. 29, s: 51; 1948 U.K. Act, s. 48

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

As to the penalty for false statements, see s. 461 and the 13th Sched.

59. Effect of irregular allotment - (1) An allotment made by a company to an applicant in contravention of the provisions of sections fifty-seven and fifty-eight of this Act shall be voidable at the instance of the applicant within one month after the holding of the statutory meeting of the company and not later, or, in any case where the company is not required to hold a statutory meeting, or where the allotment is made after the holding of the statutory meeting, within one month after the date of the allotment, and not, later, and shall be so voidable notwithstanding that the company is in course of being wound up.

(2) If any director of a company knowingly contravenes, or permits or authorises the contravention of, any of the provisions of the said sections with respect to allotment, he shall be liable to compensate the company and the allottee respectively for any loss, damages, or costs which the company or the allottee may have sustained or incurred thereby:

Provided that proceedings to recover any such loss, damages, or costs shall not be commenced after the expiration of two years from the date of the allotment.

Cf. 1933, No. 29, s. 52; 1948 U.K. Act, s. 49

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

60. Return as to allotments - (l) Whenever a company limited by shares or a company limited by guarantee and having a share capital makes any allotment of its shares, the company shall within one month thereafter deliver to the Registrar for registration-

(a) A return of the allotments, stating the number and nominal amount of the shares comprised in the allotment, the names, addresses, and descriptions of the allottees, and the amount, if any, paid or due and payable on each share; and

(b) In the case of shares allotted as fully or partly paid up otherwise than in cash, a contract in writing constituting the title of the allottee to the allotment, together with any contract of sale, or for services or other consideration in respect of which that allotment was made, such contracts being duly stamped, and a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted.

(2) Where such a contract as above mentioned is not reduced to writing, the company shall within one month after the allotment deliver to the Registrar for registration the prescribed particulars of the contract, stamped with the same stamp duty as would have been payable if the contract had been reduced to writing, and those particulars shall be deemed to be an instrument within the meaning of the Stamp Duties Act 1954.

(3) If default is made in complying with this section, every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds for every day during which the default continues:

Provided that, in case of default in delivering to the Registrar within one month after the allotment any ,document required to be delivered by this section, the company, or any officer liable for the default, may apply to the Court or the Registrar for relief, and the Court or the Registrar, if satisfied that the omission to deliver the document was accidental or due to inadvertence, or that it is just and equitable to grant relief, may make an order extending the time for the delivery of the document for such period as the Court or the Registrar may think proper.

Cf. 1933, No. 29, s. 53; 1948 U.K. Act, s. 52

Subs. (1) (a) is not applicable to private companies; see s. 354 (4) and the 9th Sched.

This section does not apply to labour shares; see s. 67 (7).

As to the penalty for false statements, see s. 461 and the 13th Sched.

Commissions and Discounts

61. Power to pay certain commissions, and prohibition payment of all other commissions, discounts, etc. - (1), It shall be lawful for a company to pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in t e company, or procuring or agreeing to procure subscription whether absolute or conditional, for any shares in the company if-

(a) The payment of the commission is authorised by the articles; and

(b) The commission paid or agreed to be paid does no exceed ten per cent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is the less; and

(i) In the case of shares offered to the public for subscription, disclosed in the prospectus; or

(ii) In the case of shares not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus and delivered before the payment of the commission to the Registrar for registration, and, where a circular or notice, not being a prospectus, inviting subscription for the shares is issued, also disclosed in that circular or notice; and

(d) The number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in manner aforesaid.

(2) Save as aforesaid, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount, or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.

(3) Nothing in this section shall affect the power of any company to pay such brokerage as it has heretofore been lawful for a company to pay.

(4) A vendor to, promoter of, or other person who receives payment in money or shares from, a company shall have and shall be deemed always to have had power to apply any part of the money or shares so received in payment of any commission the payment of which, if made directly by the company, would have been legal under this section.

(5) If default is made in complying with the provisions of this section relating to the delivery to the Registrar of the statement in the prescribed form, the company and every officer of the company who is in default shall be liable to a fine not exceeding twenty-five pounds.

Cf. 1933, No. 29, s. 54; 1948 U.K. Act, s. 53

62. Prohibition of provision of financial assistance by company for purchase of or subscription for its own or its holding company's shares - (1) Subject as provided in this section, it shall not be lawful for a company to give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security, or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or, where the company is a subsidiary company, in its holding company:

Provided that nothing in this section shall be taken to prohibit-

(a) Where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business:

(b) The provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of, or subscription for, fully paid shares in the company or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company:

(c) The giving by a company of financial assistance, by means of a loan, guarantee, or the provision of security, to persons who are bona fide in the employment of the company and (except in the case of a private company) are not directors of the company, with a view to enabling those persons to purchase or subscribe for fully paid shares in the company or its holding company to be held by themselves by way of beneficial ownership.

(2) If a company acts in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred pounds.

Cf. 1933, No, 29, s. 56; 1948 U.K. Act, s. 54

Construction o f References to Offering Shares or Debentures to the Public

63. Construction of references to offering shares or debentures to the public - (1) Any reference in this Act to offering shares or debentures to the public shall, subject to any provision to the contrary contained therein, be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner, and references in this Act or in a company's articles to invitations to the public to subscribe for shares or debentures shall, subject as aforesaid, be similarly construed.

(2) This section shall not be taken as requiring any offer or invitation to be treated as made to the public if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation, or otherwise as being a domestic concern of the persons making and receiving it.

Cf. 1948 U.K. Act, s. 55

Issue of Shares at Premium and Discount and Redeemable Preference Shares

64. Application of premiums received on issue of shares - (1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account to be called "the share premium account", and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.

(2) The share premium account may, notwithstanding anything in subsection one of this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares, in writing off-

(a) The preliminary expenses of the company; or

(b) The expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company,-

or in providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the company.

(3) Where a company has before the commencement of this Act issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act:

Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of the Eighth Schedule to this Act shall be disregarded in determining the sum to be included in the share premium account.

Cf. 1948 U.K. Act, s.56

65. Power to issue shares at a discount - (1) Subject as provided in this section, it shall be lawful for a company to issue at a discount shares in the company of a class already issued:

Provided that -

(a) The issue of the shares at a discount must be authorised by resolution passed in general meeting of the company, and must be sanctioned by the Court:

(b) The resolution must specify the maximum rate of discount at which the shares are to be issued:

(c) Not less than one year must at the date of the issue have elapsed since the date on which the company was entitled to commence business:

(d) The shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the Court or within such extended time as the Court may allow.

(2) Where a company has passed a resolution authorising the issue of shares at a discount, it may apply to the Court for an order sanctioning the issue, and on any such application the Court, if, having regard to all the circumstances of the case, it thinks proper so to do, may make an order sanctioning the issue on such terms and conditions as it thinks fit.

(3) Every prospectus relating to the issue of the shares must contain particulars of the discount allowed on the issue of the shares or of so much of that discount as has not been written off at the date of the issue of the prospectus. If default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 58; 1948 U.K. Act, s. 57

66. Power to issue redeemable preference shares - (1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed:

Provided that-

(a) No such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend, or out of the proceeds of a fresh issue of shares made for the purposes of the redemption:

(b) No such shares shall be redeemed unless they are fully paid:

(c) The premium, if any, payable on redemption must have been provided for out of the profits of the company or out of the company's share premium account before the shares are redeemed:

(d) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund, to be called "the capital redemption reserve fund", a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid up share capital of the company.

(2) Subject to the provisions of this section, the redemption of preference shares thereunder may be effected on such terms and in such manner as may be provided by the articles of the company.

(3) The redemption of preference shares under this section by a company shall not be taken as reducing the amount of the company's authorised share capital.

(4) Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it shall have power to issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not for the purposes of any registration fee, licence fee, or other fee or duty be deemed to be increased by the issue of shares in pursuance of this subsection:

Provided that, where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to any fee or duty as aforesaid, be deemed to have been issued in pursuance of the subsection unless the old shares are redeemed within one month after the issue of the new shares.

(5) The capital redemption reserve fund may, notwithstanding anything in this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.

Cf. 1933, No.29, s.57; 1948 U.K. Act, s.58

Labour Shares

67. Power to issue labour shares – (1) Subject to the provisions of this section, a company may, unless expressly prohibited from so doing by its memorandum, issue special shares (in this section referred to as labour shares) to persons for the time being employed in the service of the company.
(2) With respect to labour shares issued as aforesaid the following special provisions shall apply:

(a) They shall have no nominal value, and shall not form part of the capital of the company;

(b) They shall be numbered consecutively, commencing with the number one:

(c) They shall not be transferable, save in accordance with the provisions (if any) in that behalf of the articles of the company:

(d)They shall entitle the holders thereof to attend and vote at meetings of shareholders, and to share in the profits of the company, or in its assets in the event of its being wound up, to such extent and in such manner as may be determined by the memorandum or articles of the company;

(e) Save as may be expressly provided herein or by the memorandum or articles of the company, the holders of labour shares shall have and enjoy all the privileges of other shareholders.

(3) If the holder of any labour shares ceases to be employed in the service of the company (whether by reason of death or otherwise) he shall be deemed to have surrendered his shares, and in any such case there shall be payable to him or his personal representatives, as the case may be, either in cash or in capital shares, the value of those shares computed in accordance with the articles of the company.

(4) A company issuing labour shares may, if authorised so to do by its articles, issue capital shares in payment or satisfaction wholly or in part of any share in the profits of the company to which the holders of labour shares or their personal representatives may by virtue of those labour shares from time to time become entitled under the articles of the company.
(5) A company having issued labour shares shall cause to be entered in its register of members from time to time-

(a) Full particulars as to all labour shares issued by it, with the names and addresses of the persons to whom the shares have been issued:

(b) Particulars as to all labour shares surrendered to the company, and of the amounts paid by the company to the shareholders on any such surrender:

(6) A copy or abstract of all such particulars shall in each year be forwarded to the Registrar with the annual return required to be forwarded pursuant to section one hundred and thirty of this Act.

(7) Nothing in section sixty or in section three hundred and fifty-nine of this Act shall apply with respect to labour shares issued pursuant to this section, or to the holders of such shares; and no person shall by reason of his holding any labour shares issued by a company be deemed to be a member of the company for the purposes of section forty-one, or paragraph (d) of section two hundred and seventeen, or subparagraph (i) of paragraph (a) of the proviso to subsection one of section two hundred and nineteen of this Act.

Cf. 1933, No. 29, s. 59

Miscellaneous Provisions as to Share Capital

68. Power of company to arrange for different amounts being paid on shares – A company, if so authorised by its articles, may do any one or more of the following things:

(a) Make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares:

(b) Accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up:

(c) Pay dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

Cf. 1933, No.29, s. 60; 1948 U.K. Act, s.59

69. Reserve liability of limited company – A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in the event and for the purposes aforesaid:

Provided that any mortgage or charge granted or created by a limited company on the whole or any part of its uncalled capital, whether before or after the passing of any such special resolution, shall have the same validity, force, and effect as if no such special resolution had been passed, save that, in the case of a mortgage or charge granted or created after the passing of any such special resolution, the right of any person entitled by virtue of the mortgage or charge to require the calling up of any uncalled capital affected by the special resolution shall be deferred until the event of the company being wound up.

Cf. 1933, No. 29, s. 61; 1948 U.K. Act, s. 60

This section is not applicable to a private company; see s.354(4) and the 9th Sched.

70. Power of company limited by shares to alter its share capital - (1) A company limited by shares or a company limited by guarantee and having a share capital, if so authorised by its articles, may alter the conditions of its memorandum as follows: that is to say, it may -

(a) Increase its share capital by new shares of such amount as it thinks expedient:

(b) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares:

(c) Convert all or any of its paid up shares into stock, and reconvert that stock into paid up shares of any denomination:

(d) Subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced shares shall be the same as it was in the case of the share from which the reduced share is derived:

(e) Cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

(2) The powers conferred by this section must be exercised by the company in general meeting.

(3) A cancellation of shares in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act.

Cf. 1933, No. 29, s.62; 1948 U.K.Act, s.61

As to the surrender of shares in cooperative companies, see ss.10-15 of the Cooperative Dairy Companies Act 1949 and ss.4-9 of the Cooperative Companies Act 1956.

71. Notice to Registrar of consolidation of share capital, conversion of shares into stock, etc. - (1) if a company having a share capital has -

(a) Consolidated and divided its share capital into shares of larger amount than its existing shares; or

(b) Converted any shares into stock; or

(d) Subdivided its shares or any of them; or

(e) Redeemed any redeemable preference shares; or

(f) Cancelled any shares, otherwise than in connection with a reduction of share capital under section seventy-five of this Act,-

it shall within one month after so doing give notice thereof to the Registrar specifying, as the case may be, the shares consolidated, divided, converted, subdivided, redeemed, or cancelled, or the stock reconverted.

(2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 63; 1948 U.K. Act, s. 62

72. Notice of increase of share capital - (1) Where a company having a share capital, whether its shares have or have not been converted into stock, has increased its share capital beyond the registered capital, it shall, within fifteen days after the passing of the resolution authorising the increase, give to the Registrar notice of the increase, and the Registrar shall record the increase.

(2) The notice to be given as aforesaid shall include such particulars as may be prescribed with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued, and there shall be forwarded to the Registrar together with the notice a printed or typewritten copy of the resolution authorising the increase.

(3) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 64; 1948 U.K. Act, s. 63

As to private companies, see s. 361.

73. Power of unlimited company to provide for reserve share capital on reregistration - (1) An unlimited company having a share capital may, by its resolution for registration as a limited company in pursuance of this Act, do either or both of the following things, namely:

(a) Increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up:

(b) Provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.

(2) Notwithstanding anything in subsection one of this section, any mortgage or charge granted or created by the company, whether before or after the passing of the resolution, on any part of its capital which by virtue of paragraph (a) or paragraph (b) of that subsection is subject to the condition that it is not capable of being called up except in the event and for the purposes of the company being wound up shall have. the same validity, force, and effect as if no such condition existed, save that, in the case of a mortgage or charge granted or created after the passing of the resolution, the right of any person entitled by virtue of the mortgage or charge to require the calling up of any uncalled capital affected by the condition shall be deferred until the event of the company being wound up.

Cf. 1933, No. 29, s. 65; 1948 U.K. Act, s. 64

74. Power of company to pay interest out of capital in certain cases - Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a lengthened period, the company may pay interest on so much of that share capital as is for the time being paid up for the period and subject to the conditions and restrictions in this section mentioned, and may charge the sum so paid by way of interest to capital as part of the cost of construction of the work or building, or the provision of plant:

Provided that-

(a) No such payment shall be made unless it is authorised by the articles or by special resolution:

(b) No such payment, whether authorised by the articles or by special resolution, shall be made without the previous sanction of the Court:

(c) Before sanctioning any such payment the Court may, at the expense of the company, appoint a person to inquire and report to it as to the circumstances of the case, and may, before making the appointment, require the company to give security for the payment of the costs of the inquiry:

(d) The payment shall be made only for such period as may be determined by the Court, and that period shall in no case extend beyond the close of the half year next after the half year during which the works or buildings have been actually completed or the plant provided:

(e) The rate of interest shall in no case exceed five per cent per annum or such other rate as may for the time being be prescribed by the Governor-General by Order in Council:

(f) The payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid.

Cf. 1933, No. 29, s. 66; 1948 U.K. Act, s. 65

Reduction of Share Capital

75. Special resolution for reduction of share capital - (1) Subject to confirmation by the Court, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles, by special resolution reduce its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may -

(a) Extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or

(b) Either with or without extinguishing or reducing liability on any of its shares, cancel any paid up share capital which is lost or unrepresented by available assets; or

(c) Either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the wants of the company, -

and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.

(2) A special resolution under this section is in this Act referred to as "a resolution for reducing share capital".

Cf. 1933, No. 29, s. 67;1948 U.K.Act, s. 66

76. Application to Court for confirming order, objections by creditors, and settlement of list of objecting creditors - (1) Where a company has passed a resolution for reducing share capital, it may apply to the Court for an order confirming the reduction.

(2) Where the proposed reduction of share capital involves either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid up share capital, and in any other case if the Court so directs, the following provisions shall have effect, subject nevertheless to subsection three of this section:

(a) Every creditor of the company who at the date fixed by the Court is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction:

(b) The Court shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction:

(c) Where a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the Court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or claim by appropriating, as the Court may direct, the following amounts:

(i) If the company admits the full amount of the debt or claim, or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim:

(ii) If the company does not admit and is not willing to provide for the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the Court after the like inquiry and adjudication as if the company were being wound up by the Court.

(3) Where a proposed reduction of share capital involves either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid up share capital, the Court may, if having regard to any special circumstances of the case it thinks proper so to do, direct that subsection two of this section shall not apply as regards any class or any classes of creditors.

Cf. 1933, No. 29, s, 68; 1948 U.K. Act, s. 67

77. Order confirming reduction and powers of Court on making such order - (1) The Court, if satisfied, with respect to every creditor of the company who under section seventy-six of this Act is entitled to object to the reduction, that either his consent to the reduction has been obtained or his debt or claim has been discharged or has determined, or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit.

(2) Where the Court makes any such order, it may-

(a) If for any special reason it thinks proper so to do, make an order directing that the company shall, during such period, commencing on or at any time after the date of the order, as is specified in the order, add to its name as the last words thereof the words "and reduced"; and

(b) Make an order requiring the company to publish as the Court directs the reasons for reduction, or such other information in regard thereto as the Court may think expedient with a view to giving proper information to the public, and, if the Court thinks fit, the causes which led to the reduction.

(3) Where a company is ordered to add to its name the words "and reduced", those words shall, until the expiration of the period specified in the order, be deemed to be part of the name of the company.

Cf. 1933, No. 29, s. 69; 1948 U.K. Act, s. 68

78. Registration of order and minute of reduction - (1) The Registrar, on production to him of an order of the Court confirming the reduction of the share capital of a company, and the delivery to him of a copy of the order and of a minute approved by the Court showing, with respect to the share capital of the company as altered by the order, the amount of the share capital, the number of shares into which it is to be divided, and the amount of each share, and the amount, if any, at the date of the registration deemed to be paid up on each share, shall register the order and minute.

(2) On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order so registered shall take effect,

(3) Notice of the registration shall be published in such manner as the Court may direct.

(4) The Registrar shall certify under his hand the registration of the order and minute, and his certificate shall be conclusive evidence that all the requirements of this Act with respect to reduction of share capital have been complied with, and that the share capital of the company is such as is stated in the minute.

(5) The minute when registered shall be deemed to be substituted for the corresponding part of the memorandum, and shall be valid and alterable as if it had been originally contained therein.

(6) The substitution of any such minute as aforesaid for part of the memorandum of the company shall be deemed to be an alteration of the memorandum within the meaning of section thirty-eight of this Act.

Cf. 1933, No. 29, s. 70; 1948 U.K. Act. s. 69

79. Liability of members in respect of reduced shares - (1) In the case of a reduction of share capital a member of the company, past or present, shall not be liable in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount of the share as fixed by the minute and the amount paid, or the reduced amount, if any, which is to be deemed to have been paid, on the share, as the case may be:

Provided that, if any creditor, entitled in respect of any debt or claim to object to the reduction of share capital, is, by reason of his ignorance of the proceedings for reduction, or of their nature and effect with respect to his claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of the provisions of this Act with respect to winding up by the Court, to pay the amount of his debt or claim, then-

(a) Every person who was a member of the company at the date of the registration of the order for reduction and minute shall be liable to contribute for the payment of that debt or claim and amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day before the said date; and

(b) If the company is wound up, the Court, on the application of any such creditor and proof of his ignorance as aforesaid, may, if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.

(2) Nothing in this section shall affect the rights of the contributories among themselves.

Cf. 1933, No. 29, s. 71; 1948 U.K. Act, s. 70

80. Penalty for concealing name of creditor, etc. - If any officer of the company-

(a) Wilfully conceals the name of any creditor entitled to object to the reduction; or

(b) Wilfully misrepresents the nature or amount of the debt or claim of any creditor; or

he shall be guilty of a crime, and shall be liable on conviction to imprisonment for a term not exceeding three years.

Cf. 1933, No. 29, s. 72; 1948 U.K. Act, s. 71

Variation of Shareholders' Rights

81. Rights of holders of special classes of shares - (1) If, in the case of a company the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorising the variation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of the said provision the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than five per cent :of the issued shares of that class, being persons who did not consent to or vote in favour of the resolution for the variation, may apply to the Court to have the variation cancelled, and, where any such application is made, the variation shall not have effect unless and until it is confirmed by the Court:

Provided that an application under this section shall not be deemed to be invalid by reason of the applicants or any of them having consented to or voted in favour of the resolution for the variation, if the Court is satisfied that any material fact was not disclosed by the company to those applicants before they so consented or voted.

(2) An application under this section must be made within twenty-one days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose:

Provided that in any case where an investigation of the affairs of the company is pending under section one hundred and sixty-eight or section one hundred and sixty-nine of this Act, or where an application for such an investigation has been made, and an application for the extension of the period of twenty-one days referred to in this subsection is made within that period, the Court may from time to time extend that period as it thinks fit.

(3) On any such application the Court, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested in the application, may, if it is satisfied, having regard to all the circumstances of the case, that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation, and shall, if not so satisfied, confirm the variation.

(4) The decision of the Court on any such application shall be final.

(5) The company shall within fifteen days after the making of an order by the Court on any such application forward a copy of the order to the Registrar, and, if default is made in complying with this provision, the company and every officer of the company who is in default shall be liable to a default fine.

(6) The expression "variation" in this section includes abrogation, and the expression varied" shall be construed accordingly.

Cf. 1933, No. 29, s. 73; 1948 U.K. Act, s. 72

Transfer of Shares and Debentures, Evidence of Title, etc.

82. Nature of shares - The shares or other interest of any member in a company shall be Personal estate, transferable in manner provided by the articles of the company, and shall not be of the nature of real estate.

Cf. 1933, No. 29, s. 74 (1) 1948 U.K. Act, s. 73

83. Numbering of shares - Each share in a company having a share capital shall be distinguished by its appropriate number:

Provided that, if at any time all the issued shares in a company, or all the issued shares therein of a particular class, are fully paid up and rank pari passu for all purposes, none of those shares need thereafter have a distinguishing number so long as it remains fully paid up and ranks pari passu for all purposes with all shares of the same class for the time being issued and fully paid up.

Cf. 1933, No. 29, s. 74 (2); 1948 U.K. Act, s. 74

84 Transfer not to be registered except on production of instrument of transfer - (1) Notwithstanding anything in the articles of a company, it shall not be lawful for the company to register a transfer of shares in or debentures., of the comp any unless a proper instrument of transfer has been delivered o the company:

Provided that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.

(2) If any transfer is registered or purported to be registered in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine of fifty pounds.

Cf. 1933, No. 29, s. 75; 1948 U.K. Act, s. 75

85. Transfer by personal representative. Rights of personal representative or assignee in bankruptcy - (1) A transfer of the share or other interest of a deceased member of a company made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer.

(2) Where the registered holder of any share dies or becomes bankrupt his personal representative or the assignee of his estate, as the case may be, shall, upon the production of such evidence as may from time to time be properly required by the directors in that behalf, be entitled to the same dividends and other advantages, and to the same rights (whether in relation to meetings of the company, or to voting, or otherwise), as the registered holder would have been entitled to if he had not died or become bankrupt; and where two or more persons are jointly entitled to any share in consequence of the death of the registered holder they shall, for the purposes of the articles of the company, be deemed to be joint holders of the share.

Cf. 1933, No. 29, s. 76; 1948 U.K. Act, s, 76

86. Vesting shares or debentures of deceased holder without requiring probate or letters of administration - (1) Where the registered holder of any shares in or debentures of company has died, whether before or after the commencement of this Act, and the actual amount paid up on the shares or owing under the debentures does not exceed two hundred pounds, the directors of the company may in their discretion, and without requiring the production of probate or letters of administration, resolve that any person be registered as the holder of the shares or debentures who proves to the satisfaction of the directors-

(a) That he is entitled thereto under the will or on the intestacy of the deceased member or debenture holder; or

(b) That he is entitled to obtain probate of the will of the deceased member or debenture holder; or letters of administration of his estate; and

(c) That in neither case has any grant of any such probate or letters of administration been made in New Zealand or resealed in New Zealand; and

(d) That the Commissioner of Inland Revenue has been notified of the proposed resolution and is satisfied either that the value of the shares or debentures does not exceed two hundred pounds or that no death duty will be payable in New Zealand in the estate of the deceased member or debenture holder.

(2) After the passing of any resolution as aforesaid the company shall upon production of the share certificate or debentures (if any have been issued to the deceased member or debenture holder) register the person referred to in the resolution as the holder of the shares or debentures, as the case may be, and thereupon that person shall become entitled thereto, subject to all outstanding interests or equities affecting the same.

Cf. 1941; No. 26, s. 6

87. Registration of transfer at request of transferor - On the application of the transferor of any share or interest in a company, the company shall enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

Cf. 1933, No. 29, s. 77; 1948 U.K. Act, s. 77

88. Notice of refusal to register transfer, and penalty for delay in registration - (1) If a company refuses to register a transfer of any shares or debentures, the company shall, within two months after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal and return the transfer to the transferee.

(2) If default is made in complying with this section, or if the company, not having refused to register any transfer of shares or debentures as aforesaid, neglects to register the transfer within two months after the date on which the transfer was lodged with the company, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 78; 1948 U.K. Act, s. 78

89. Certification of transfers - (1) The certification by a company of any instrument of transfer of shares in or debentures of the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.

(2) Where any person acts on the faith of a false certification by a company made negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.

(3) For the purposes of this section-

(a) An instrument of transfer shall be deemed to be certificated if it bears the words "certificate lodged" or words to the like effect:

(b) The certification of an instrument of transfer shall be deemed to be made by a company if-

(i) The person issuing the instrument is a person authorised to issue certificated instruments of transfer on the company's behalf; and

(ii) The certification is signed by a person authorised to certificate transfers on the company's behalf or by any officer or servant either of the company or of a body corporate so authorised:

(i)It purports to be authenticated by his signature or initials (whether handwritten or not); and

(ii) It is not shown that the signature or initials was or were placed there neither by himself nor by any person authorised to use the signature or initials for the purpose of certificating transfers on the company's behalf.

Cf. 1948 U.K. Act, s. 79

90. Duties of company with respect to issue of certificates. Form of share certificate - (1) Every company shall, within two months after the allotment of any of its shares, debentures, or debenture stock, and within two months after the dates on which a transfer of any such shares, debentures, or debenture stock is lodged with the company, complete and have ready for delivery the certificates of all shares, the debentures, and the certificates of all debenture stock allotted or transfered, unless the conditions of issue o f the shares, debentures, or debenture stock otherwise provide. The expression "transfer" for the purpose of this subsection means a transfer duly stamped and otherwise valid, and does not include such a transfer as the company is for any reason entitled to refuse to register and does not register.

(2) If default is made in complying with this section the company and every officer of the company who is in default shall be liable to a default fine.

(3) If any company on which a notice has been served requiring the company to make good any default in complying with the :provisions of subsection one of this section fails to make good the default within ten days after the service of the notice, the Court may, on the application of the person entitled to have the certificates or the debentures delivered to him, make an order directing the company and any Officer of the company to make good the default within such time as may be specified in the order, and any such order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default.

(4) Every certificate of the shares of a company (including shares of an overseas company registered in a branch register kept in New Zealand) issued after the commencement of this Act shall be under the common seal of the company (or in the case of an overseas company shall either be under its common seal or be signed by a person authorised in that behalf by the company), shall be dated and distinguished by its appropriate number, and shall state-

(a) The Short Title of the Act or other authority under which the company is incorporated:

(b) The amount of the authorised capital of the company

(c) The address of the registered office, or, in the case of an overseas company, the principal office of the company in New Zealand:

(d) The extent to which the shares are paid up.

(5) Where the share capital of any such company is divided into different classes, every certificate of the shares of the company issued after the commencement of this Act-

(a) Shall relate to shares of one class only:

(b) Shall state prominently on the face of the certificate the class to which the shares belong, including in particular the word "redeemable" in the description of the shares if they are redeemable preference shares:

(6) If default is made in complying with subsection four or subsection five of this section, the company and every officer or agent of the company who knowingly and wilfully authorises or permits the default shall be liable to a fine not exceeding fifty pounds.

(7) Any default in complying with subsection four or subsection five of this section shall not affect the rights of any holder of shares:

Cf. 1933, No. 29, s. 79; 1948 U.K. Act, s. 80

Subss. (4)- (7) of this section apply to share warrants; see s. 93 (4). This section does not apply to-

(a) Cooperative Dairy Companies; see s. 28 (1) (4) of the Cooperative Dairy Companies Act 1949:

(b) Cooperative companies under the Cooperative Companies Act 1956; see s. 10 (2) (a) of' that Act.

91. Certificate to be evidence of title - A certificate under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member to the shares.

Cf. 1933, No. 29, s. 80; 1948 U.K. Act, s. 81

92. Evidence of grant of probate - The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, or confirmation as executor, of a deceased person having been granted to some person shall be accepted the company, notwithstanding anything in its articles, as sufficient evidence of the grant.

Cf. 1933, No. 29, s. 81; 1948 U.K. Act, s.82

93. Issue and effect of share warrants to bearer - (1) A company limited by shares, if so authorised by its articles, may, with respect to any fully paid up shares, issue under its common seal a warrant stating that the bearer of the warrant is entitled to the shares therein specified, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares included in the warrant.

(2) Such a warrant as aforesaid in this Act termed a "share warrant".

(3) A share warrant shall entitle the bearer thereof to the shares therein specified, and the shares may be transferred by delivery of the warrant.

(4) Subsections four to seven of section ninety of this Act shall apply with respect to share warrants as if they were share certificates.

Cf. 1933, No. 29, s. 82; 1948 U.K. Act, s. 83

94. Penalty for personation of shareholder - If any person falsely and deceitfully personates any owner of any share or interest in any company, or of any share warrant or coupon issued in pursuance of this Act, and thereby obtain or endeavours to obtain any such share or interest or share warrant or coupon, or receives or endeavours to receive any money due to any such owner, as if the offender were the true and lawful owner, he shall be guilty of a crime, and shall be liable on conviction to imprisonment for a term not exceeding fourteen years.

Cf. 1933, No. 29, s. 83; 1948 U.K. Act, s. 84

Special Provisions as to Debentures

95. Rights of inspection of register of debenture holders and to copies of register and trust deed - (1) Every register of holders of debentures of a company shall, except when duly closed (but subject to such reasonable restrictions as the company may in :general meeting impose, so that not less than two hours in each day shall be allowed for inspection), be open to the inspection of the registered holder of any such debentures or any holder of shares in the company without fee, and of any other person on payment of a fee of two shillings or such less sum as may be prescribed by the company.

(2) Any such registered holder of debentures or holder of shares as aforesaid or any other person may require a copy of the register of the holders of debentures of the company or any part thereof on payment of two shillings for every hundred words required to be copied.

(3) A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his request on payment in the case of a printed trust deed of the sum of five shillings or such less sum as may be prescribed by the company, or, where a printed copy of the trust deed is not available, on payment of two shillings for every hundred words required to be copied.

(4) If inspection is refused, or a copy is refused or not forwarded, the company and every officer of the company who is in default shall be liable to a fine not exceeding five pounds, and further shall be liable to a default fine of two pounds.

(5) Where a company is in default as aforesaid, the Court may by order compel an immediate inspection of the register, or direct that the copies required shall be sent to the person requiring them.

(6) For the purposes of this section a register shall be deemed to be duly closed if closed in accordance with provisions contained in the articles or in the debentures or, in the case of debenture stock, in the stock certificates, or in the trust deed or other document securing the debentures or debenture stock, during such period or periods, not exceeding in the whole thirty days in any year, as may be therein specified.

Cf. 1933, No. 29, s. 84; 1948 U.K. Act, s. 87

96. Liability of trustees for debenture holders - (l) Subject to the following provisions of this section, any provision contained in a trust deed for securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, shall be void in so far as it would have the effect of exempting a trustee thereof from or indemnifying him against liability for breach of trust where he fails to show the degree of care and diligence required of him as trustee, having regard to the provisions of the trust deed conferring on him any powers, authorities, or discretions.

(2) Subsection one of this section shall not invalidate-

(a) Any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release; or

(b) Any provision enabling such a release to be given-

(i) On the agreement thereto of a majority of not less than three-fourth's in value of the debenture holders voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose; and

(ii) Either with respect to specific acts or omissions or on the trustee dying or ceasing to act.

(3) Subsection one of this section shall not operate-

(a) To invalidate any provision in force at the commencement of this Act so long as any person then entitled to the benefit of that provision or afterwards given the benefit thereof under subsection four of t is section remains a trustee of the deed in question; or

(b) To deprive any person of any exemption or right to be indemnified in respect of anything done or omited to be done by him while any such provision was in force.

(4) While any trustee of a trust deed remains entitled to the benefit of a provision saved by subsection three of this section, the benefit of that provision may be given either-

(a) To all trustees of the deed, resent and future; or

(b) To any named trustees or proposed trustees thereof,-

by a resolution passed by a majority of not less than three fourths in value of the debenture holders voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, a meeting summoned for the purpose in any manner approved by the Court.

Cf. 1948 U.K. Act, s. 88

97. Perpetual debentures - A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the commencement of this Act, shall not be invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long, any role of equity to the contrary notwithstanding.

Cf. 1933, No. 29, s. 85; 1948 U.K. Act, s. 89

98. Power to reissue redeemed debentures in certain cases - (1) Where either before or after the commencement of this Act a company has redeemed any debentures previously issued, then-

(a) Unless any provision to the contrary, whether express or implied, is contained in the articles or in any contract entered into by the company; or

(b) Unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled,-

the company shall have, and shall be deemed always to have had, power to reissue the debentures, either by reissuing the same debentures or by issuing other debentures in their place.

(2) Subject to the provisions of section ninety-nine of this Act, on a reissue of redeemed debentures the person entitled to the debentures shall have, and shall be deemed always to have had, the same priorities as if the debentures had never been redeemed.

(3) Where a company has either before or after the commencement of this Act deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

(4) The reissue of a debenture or the issue of another debenture in its place under the power by this section given to, or deemed to have been possessed by, a company, whether the reissue or issue was made before or after the commencement of this Act, shall be treated as the issue of a new debenture for the purposes of stamp duty, if any, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued.

Cf. 1933, No. 29, s. 86 (1), (2), (4), (5); 1948 U.K. Act, s. 90

99. Saving, in case of reissued debentures, of rights of certain mortgagees - Whereas by section two of the Companies Amendment Act 1910 it was provided that, upon the reissue of redeemed debentures, the person entitled to the debentures should have the same rights and priorities as if the debentures had not previously been issued: And whereas section eighty-six of the Companies Act 1933 provided (amongst other things) that the said person should have the same priorities as if the debentures had never been redeemed, but saved, in the case of debentures redeemed before, but reissued after the date of the commencement of that Act (that is to say, the first day of April, nineteen hundred and thirty-four), the rights and priorities of persons under mortgages and charges created before that date: Be it therefore enacted as follows:

Where any debentures which were redeemed before the said first day of April have been reissued on or after that day and before the commencement of this Act, or are reissued after the commencement of this Act, the reissue of the debentures shall not prejudice and shall be deemed never to have prejudiced any right or priority which any person would have had under or by virtue of any such mortgage or charge as aforesaid if the said section two had been enacted in this Act instead of section ninety-eight of this Act.

Cf.. 1933, No. 29, s. 86 (6); 1948 U.K. Act, s. 91

100. Specific performance of contracts to subscribe for debentures - A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.

Cf. 1933, No. 29, s. 87; 1948 U.K. Act, s. 92

101. Payment of certain debts out of assets subject to floating charge in priority to claims under the charge - (1) Where either a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge; or possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge, then, if the company is not at the time in course of being wound up, the debts which in every winding up are under the provisions of Part VI of this Act relating to preferential payments to be paid in priority to all other debts shall be paid out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.

(2) In the application of the said provisions, section three hundred and eight of this Act shall be construed as if the provision for payment of accrued holiday pay becoming payable on the termination of employment before or by the effect of the winding-up order or resolution were a provision for payment of that holiday pay becoming payable on the termination of employment before or by the effect of appointment of the receiver or possession being taken aforesaid.

(3) The periods of time mentioned in the said provision of Part VI of this Act shall be reckoned from the date of the appointment of the receiver or of possession being taken aforesaid, as the case may be.

(4) Where the date referred to in subsection three of this section occurred before the commencement of this Act, subsections one and three of this section shall have effect with the substitution, for references to the said provisions of Part VI of this Act, of references to the provisions which by virtue of subsection eight of the said section three hundred and eight are deemed to remain in force in the case therein mentioned, and subsection two shall not apply.

(5) Any payments made under this section shall be recouped as far as may be out of the assets of the company available for payment of general creditors.

Cf. 1983, No. 29, s. 88; 1948 U.K. Act, s. 94

PART IV

REGISTRATION OF CHARGES

Registration of Charges With Registrar of Companies

102. Registration of charges created by companies - (1) Where a company creates any charge to which this section applies, it shall be the duty of the company within the time prescribed by subsection three of this section to cause a copy of the instrument by which the charge is created or evidenced to be delivered to the Registrar for registration in manner required by this Act. Every such copy shall be accompanied by a statutory declaration as to the execution of the instrument and verifying the copy as a true copy:

Provided that if the instrument by which the Charge is created or evidenced is registered under any Act other than this Act it shall be sufficient compliance with the requirements of this subsection if, within the time prescribed as aforesaid, particulars of the instrument sufficient to identify it, and such other particulars (if any) as maybe prescribed, are delivered to the Registrar for registration.

(2) This section applies to the following charges:

(a) A charge for the purpose of securing any issue of debentures:

(b) A charge on uncalled share capital of the company:

(c) A charge created or evidenced by an instrument which, if executed by an individual, would require registration under the Chattels Transfer Act 1924:

(d) A floating charge on the undertaking or property of the company:

(e) A charge on land, wherever situate, or any interest therein:

(f) A charge on book debts of the company:

(g) A charge on calls made but not paid:

(h) A charge on a ship or any share in a ship:

(i) A charge on goodwill, on a patent or a licence under a patent, on a trade mark, or on a copyright or a licence under a copyright.

(3) Instruments required to be registered in accordance with the foregoing provisions of this section shall, in the case of instruments executed in New Zealand, be so registered within twenty-one days after the date of the execution thereof, and, in the case of instruments executed outside New Zealand, within three months after the date of execution.

(4) Where a charge, is created in New Zealand but comprises property outside New Zealand, a copy of the instrument creating or purporting to create the charge must be sent for registration under this section notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate.

(5) Where a negotiable instrument has been given to secure the payment of any book debts of a company the deposit of the instrument for the purposes of securing an advance to the company shall not for the purposes of this section be treated as a charge on those book debts.

(6) The holding of debentures entitling the holder to a charge on land shall not for the purposes of this section be deemed to be an interest in land.

(7) Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it shall for the purposes of this section be sufficient if there are delivered to or received by the Registrar within twenty-one days, or three months, as the case may be, after the execution of the deed containing the charge, or, if there is no such deed, after the execution of any debentures of the series, the following particulars:

(a) The total amount secured by the whole series; and

(b) The dates of the resolutions authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined; and

(d) The names of the trustees, if any, for the debenture holders,-

together with a copy of the deed containing the charge, or, if there is no such deed, a copy, of one of the debentures of the series, in either case accompanied by a statutory declaration as required by subsection one of this section:

Provided that, where more than one, issue is made of debentures in the series, there shall be sent to the Registrar, for entry in the register, particulars of the date and amount of each issue, but an omission to do this shall not affect the validity of the debentures issued.

(8) Where any commission, allowance, or discount has been paid or made either directly or indirectly by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring'' or agreeing to procure subscriptions, whether absolute or conditional, for any such debentures, the particulars required to be sent for registration under this section shall include particulars as to the amount or rate per cent of the commission, discount, or allowance so paid or made, but omission to do this shall not affect the validity of the debentures issued:

Provided that the deposit of any debentures as security for any debt of the company shall not for the purposes of this subsection be treated as the issue of the debentures at a discount.

(9) Registration of any charge under this section may be effected on the application of any person interested therein. Where registration is effected on the application of some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him to the Registrar on the registration.

(10) If any company makes default in sending to the Registrar for registration a copy of the instrument creating or evidencing any charge created by the company, or the particulars of the issues of debentures of a series, requiring registration as aforesaid, then, unless the registration has been effected on the application of some other person, the company and every officer of the company who is in default shall be liable to a default fine of fifty pounds.

(11) For the purposes of this Part of this Act-

(a) The expression "charge" includes "mortgage"; and

(b) Land held by a company under an agreement for sale and purchase shall be deemed to be the property of the company subject to a charge created by the agreement, and securing the balance of purchase money for the time being unpaid.

(12) Except as provided in subsection two of section four of the Chattels Transfer Act 1924, registration of any instrument under this Part of this Act shall not in itself constitute notice to any person of the contents of that instrument.

Cf. 1933, No. 29; s. 89; 1948 U.K. Act, ss. 95, 96

As to the penalty for false statements, see s. 461 and the 13th Sched.

As to the application of certain provisions of' the Chattels Transfer Act 1924 to instruments registered under this Part of this Act, see s. 59 of that Act.

As to the registration under this Part of this Act of charges for unpaid tax deductions under the Income Tax Assessment Act 1957, see s. 32 of that Act (reprinted with the Land and Income Tax Act: 1954).

103. Unregistered charges to be void in certain cases - (1) This section applies to-

(a) Every charge created on or after the first day of April, nineteen hundred and thirty-four, and required to be registered under section one hundred and two of this Act or under section eighty-nine of the Companies Act 1933, other than charges registrable under any Act other than that Act or this Act; and

(b) Every charge created before the first day of April, nineteen hundred and thirty-four, and registrable under section one hundred and thirty of the Companies Act 1908.

(2) Subject to the provisions of this Part of this Act, every charge to which this section applies shall, so far as any security on a company's property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the charge is registered in the mariner and within the time prescribed by section one hundred and two, of this Act or by section one hundred and thirty of the Companies Act 1908, as the case may be, or, if the time for registration is extended under section one hundred and, eight of this Act, then within the extended time, but without prejudice to any contract or obligation for repayment of the money thereby secured, and when a charge becomes void under this subsection the money secured thereby shall immediately become payable.

(3) A charge created outside New Zealand and registered more than twenty-one days after the execution of the instrument creating or evidencing the charge, but within three

Months after the execution thereof, shall, as to property in New Zealand, take effect subject to any rights acquired before the registration thereof.

Cf. 1993, No. 29, s.90; 1948 U.K. Act, s.95 (1)

104. Duty of company to register charges existing on property acquired – (1) Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Part of this Act, the company shall cause a copy of the instrument by which the charge was created or is evidenced, accompanied by a statutory declaration as to the date of the acquisition of the property and verifying the copy as a true copy, to be delivered to the Registrar for registration in manner required by this Act within twenty-one days after the date on which the acquisition is completed:

Provided that, if the property is situate and the charge was created outside New Zealand, three months after the completion of the acquisition shall be substituted for twenty-one days after the completion thereof as the time within which the copy of the instrument is to be delivered to the Registrar:

Provided also that if the instrument by which the charge is created or evidenced has been already registered with the Registrar, or is registered under any Act other than this Act, it shall be sufficient compliance with the requirements of this subsection if, within twenty-one days, or three months, as the case may be, particulars of the instrument sufficient to identify it, and such other particulars (if any) as may be prescribed, are delivered to the Registrar for registration.

(2) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine of fifty pounds unless it is proved to the satisfaction of the Court that a copy of the instrument required to be registered was not obtainable by the company.

Cf. 1933, No. 29, s. 91; 1948 U.K. Act, s. 97

As to the penalty for false statements, see s.461 and the 13th Sched.

105. Register of charges to be kept by Register – (1) The Registrar shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Part of this Act, and shall, on payment of the prescribed fee, enter in the register with respect to such charges the following particulars:

(a) In the case of a charge to the benefit of which the holders of a series of debentures are

entitled, such particulars as are specified in subsection seven of section one hundred and two of

this Act:

(b) In the case of any other charge-

(i) If the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company, the date of the acquisition of the property; and

(ii) The amount secured by the charge; and

(iii) Short particulars of the property charged; and

(iv) The persons entitled to the charge.

(2) The Registrar shall, on payment of the prescribed fee, give a certificate under his hand of the registration of any charge registered in pursuance of this Part of this Act stating the amount thereby secured, and the certificate shall be conclusive evidence that the requirements of this Part of this Act as to registration have been complied with.

(3) The register kept in pursuance of this section and all documents registered under this Part of this Act shall be open to inspection by any person on payment of the prescribed fee.

Cf. 1933, No. 29, s. 92; 1948 U.K. Act, s. 98

106. Endorsement of certificate of registration on debentures - (1) The company shall cause a copy of every certificate of registration given under section one hundred and five of this Act to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the charge so registered:

Provided that nothing in this subsection shall be construed as requiring a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created.

(2) If any person knowingly and wilfully authorises or permits the delivery of any debenture or certificate of debenture stock which under the provisions of this section is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he shall, without prejudice to any other liability, be liable to a fine not exceeding one hundred pounds.

Cf. 1933, No. 29, s. 93; 1948 U.K. Act, s. 99

107. Entries of satisfaction and release of property from charge - (1) The Registrar, on evidence being given to his satisfaction with respect to any registered charge,-

(a) That the debt for which the charge was given has been paid or satisfied in whole or in part; or

(b) That the property or undertaking charged or any part thereof has been released from the charge or has ceased to form part of the company's property or undertaking,-

and on payment of the prescribed fee, shall enter on the register-

(i) A memorandum of satisfaction in whole or in part; or

(ii) A memorandum of the fact that the property or undertaking or any part thereof has been released from the charge; or

(iii) A memorandum of the fact that the property or undertaking or any part thereof has ceased to form part of the company's property or undertaking,-

as the case may be, and where he enters any such memorandum he shall, if required, and on payment of the prescribed fee, furnish the company with a copy thereof.

(2) The Court, on application made to it for that purpose, and on being satisfied as to the fact stated in paragraph (a) or paragraph (b) of subsection one of this section, may order that a memorandum as aforesaid, as the case may require, be entered on the register, and the Registrar shall enter that memorandum accordingly.

Cf. 1933, No. 29, s. 94; 1948 U.K. Act, s. 100

108. Rectification of register of charges - (1) The Court, on being satisfied that the omission to register a charge within the time required by this Act, or that the omission or misstatement of any particular from or in any document or memorandum registered or entered under this Part of this Act, was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the Court just and expedient, order that the time for registration shall be extended, or, as the case may be, that the omission or misstatement shall be rectified.

(2) The foregoing provisions of this section shall apply with respect to charges created before the commencement of this Act and registrable under section one hundred and thirty of the Companies Act 1908, or under Part IV of the Companies Act 1933, in the same manner in all respects as they apply to charges created after the commencement of this Act.

Cf. 1933, No. 29, s.95; 1948 U.K. Act, s.101

109. Registration of enforcement of security - (1) If any person obtains an order for the appointment of a receiver or manager of the property of a company, or appoints such a receiver or manager under any powers contained in any instrument, he shall, within seven days from the date of the order or of the appointment under the said powers, give notice of the fact to the Registrar, and the Registrar shall, on payment of the prescribed fee, enter the fact in the register of charges.

(2) Where any person appointed receiver or manager of the property of a company under the powers contained in any instrument ceases to act as such receiver or manager, he shall, on so ceasing, give the Registrar notice to that effect, and the Registrar shall enter the notice in the register of charges.

(3) If any person makes default in complying with the requirements of this section he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s.96; 1948 U.K. Act, s.102

Provisions as to Company's Register of Charges and as to
Copies of Instruments Creating Charges

110. Copies of instruments creating charges to be kept by company - Every company shall cause a copy of every instrument creating any charge requiring registration under this Part of this Act to be kept at the registered office of the company:

Provided that, in the case of a series of uniform debentures, a copy of one debenture of the series shall be sufficient.

Cf. 1933, No. 29, s. 97; 1948 U.K. Act, s. 103

111. Company's register of charges - (1) Every limited company shall keep at the registered office of the company a register of charges, and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge, and, except in the case of securities to bearer, the names of the persons entitled thereto.

(2) If any officer of the company knowingly and wilfully authorises or permits the omission of any entry required to be made in pursuance of this section he shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 98; 1948 U.K. Act, s. 104

112. Right to inspect copies of instruments creating charges and company's register of charges - (1) The copies of instruments creating any charge requiring registration under this Part of this Act with the Registrar, and the register of charges kept in pursuance of section one hundred and eleven of this Act, shall be open during business hours (but subject to such. reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day shall be allowed for inspection) to the inspection of any creditor or member of the company without fee, and the register of charges shall also be open to the inspection of any other person on payment of such fee, not exceeding two shillings for each inspection, as the company may prescribe.

(2) If inspection of the said copies or register is refused, every officer of the company who is in default shall be liable to a fine not exceeding five pounds and to a further fine not exceeding two pounds for every day during which the refusal continues.

(3) In the case of any such refusal, the Court may by order compel an immediate inspection of the copies or register.

Cf. 1933, No. 29, s. 99; 1948 U.K. Act, s. 105

Rights of the Crown

113. Application of this Part to charges in favour of Crown - This Act shall bind the Crown in respect of all charges to which the Crown is entitled that are created, or acquired by or on behalf of the Crown, after the commencement of this Act.

Application of This Part to Overseas Companies

114. Application of this Part to charges created, and property subject to charge acquired, by overseas company - The provisions of this Part of this Act shall extend to charges on property in New Zealand which are created, and to charges on property in New Zealand which is acquired, by an overseas company which has an established place of business in New Zealand.

Cf. 1933, No. 29, s. 100; 1948 U.K. Act, s. 106

As to the penalty for false statements, see s. 461 and the 13th Sched.

PART V
MANAGEMENT AND ADMINISTRATION

Registered Office and Name

115. Registered office of company - (1) A company shall, as from the date of its incorporation, have a registered office in New Zealand to which all communications and notices may be addressed.

(2) Notice of the situation of the registered office, and of any change therein, shall be given to the Registrar on or before the date of the incorporation of the company or within fourteen days after the date of the change, as the case may be, and the Registrar shall record the same. The inclusion in the annual return of a company of a statement as to the address of its registered office shall not be taken to satisfy the obligation imposed by this subsection.

(3) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 102; 1948 U.K. Act, s. 107

116. Publication of name by company - (1) Every company -

(a) Shall paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible:

(b) Shall have its name engraven or otherwise permanently marked in legible characters on its seal:

(c) Shall have its name mentioned in legible characters in all business letters of the company and in all notices and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts, and letters of credit of the company.
Vol. 2 Companies Act 195
(2) For the purposes of paragraphs (a) and (c) of subsection one of this section, it shall be lawful to use -

(a) The abbreviations "Co." or "Coy." instead of the word "Company" contained in the name of a company:

(b) The abbreviation "Ltd." instead of the word "Limited" contained in the name of a company:

(3) If a company does not paint or affix its name in manner directed by this Act, the company and every officer of the company who is in default shall be liable to a fine not exceeding five pounds, and if a company does not keep its name painted or affixed in manner so directed, the company and every officer of the company who is in default shall be liable to a default fine.

(4) If a company fails to comply with paragraph (b) or paragraph (c) of subsection one of this section, the company shall be liable to a fine not exceeding fifty pounds.

(5) If an 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 is not so engraven or marked as aforesaid; or

(b) Issues or authorises the issue of any business letter of the company or any notice or 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 or goods, wherein its name is not mentioned in manner aforesaid; or

(c) Issues or authorises the issue of any bill of parcels, invoice, receipt, or letter of credit of the company, wherein its name is not mentioned in manner aforesaid, -

he shall be liable to a fine not exceeding fifty pounds, and shall further be personally liable to the holder of the bill of exchange, promissory note, cheque, or order for money or goods, for the amount thereof, unless it is duly paid by the company.

Cf. 1933, No. 29, s. 103; 1948 U.K. Act, s. 108

This section does not apply to a company exempted under s. 33 from having "Limited" in, its name;

see s. 33 (4).

Restrictions on Commencement of Business

117. Restrictions on commencement of business - (1) Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers unless -

(a) Shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription; and

(b) Every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription; and

(c) There has been delivered to the Registrar for registration a statutory declaration by the secretary or one of the directors, in the prescribed form, that the aforesaid conditions have been complied with.

(2) Where a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers unless -

(a) There has been delivered to the Registrar for registration a statement in lieu of prospectus; and

(c) Where has been delivered to the Registrar for registration a statutory declaration by the secretary or one of the directors, in the prescribed form, that paragraph (b) of this subsection has been complied with.

(3) The Registrar shall, on the delivery to him of the said statutory declaration, and, in the case of a company which is required by this section to deliver a statement in lieu of prospectus, of such a statement, certify that the company is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled.

(4) Any contract made by a company before the date at which it is entitled to commence business shall be provisional only, and shall not be binding on the company until that date, and on that date it shall become binding.

(5) Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures or the receipt of, any money payable on application for debentures.

(6) If any company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a fine not exceeding fifty pounds for every day during which the contravention continues.

(7) Nothing in this section shall apply to -

(a) A company registered before the eighth day of November, nineteen hundred and one (being the date of the passing of the Companies Act 1901) ; or

(b) A company registered before the first day of April, nineteen hundred and thirty-four (being the date of the commencement of the Companies Act 1933) which has not issued a prospectus inviting the public to subscribe for its shares.

Cf. 1933, No. 29, s. 104; 1948 U.K. Act, s. 109

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

As to the penalty for false statements, see s. 461 and the 13^th Sched.

Register of Members

118. Register of members -(1) Every company shall keep a register of its members, and enter therein the following particulars:

(a) The names, addresses, and descriptions of the members, and in the case of a company having a share capital a statement of the shares held by each member, distinguishing each share by its number so long as the share has a number, and of the amount paid or agreed to be considered as paid on the shares of each member;

(b) The date at which each person was entered in the register as a member; and

Provided that, where the company has converted any of its shares into stock, and given notice of the conversion to the Registrar, the register shall show the amount of stock held by each member instead of the amount of shares and the particulars relating to shares specified in paragraph (a) of this subsection.

(2) The register of members shall be kept at the registered office of the company:

Provided that, -

(a) If the work of making it up is done at another office of the company, it may be kept at that other office; and

(b) If the company arranges with some other person for the making up of the register to be undertaken on behalf of the company by that other person, it may be kept at the office of that other person at which the work is done,-

so, however, that it shall not be kept at a place outside New Zealand.

(3) Every company shall send notice to the Registrar the place where its register of members is kept and of any change in that place:

Provided that a company shall not be bound to send notice under this subsection where the register has, at all time since it came into existence or, in the case of a register in existence at the commencement of this Act, at all times since then, been kept at the registered office of the company.

(4) Where a company makes default in complying with subsection one of this section or makes default for fourteen days in complying with subsection three of this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 105; 1948 U.K. Act, s. 110

119. Index of members of company - (1) Every company having more than fifty members shall, unless the register of members is in such a form as to constitute in itself an index, keep an index of the names of the members of the company, and shall, within fourteen days after the date on any alteration is made in the register of members, make any necessary alteration in the index.

(2) The index shall in respect of each member contain a sufficient indication to enable the account of that member in the register to be readily found.

(3) The index shall be at all times kept at the same place the register of members.

(4) If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 106; 1948 U.K. Act, s. 111

120. Provisions as to entries in register in relation to share warrants - (1) On the issue of a share warrant the company shall strike out of its register of members the name of the member then entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in the register the following particulars namely:

(a) The fact of the issue of the warrant;

(b) A statement of the shares included in the warrant, distinguishing each share by its number so long as the share has a number; and

(2) The bearer of a share warrant shall, subject to the articles of the company, be entitled, on surrendering it for cancellation, to have his name entered as a member in the register of members.

(3) The company shall be responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant in respect of the shares therein specified without the warrant being surrendered and cancelled.

(4) Until the warrant is surrendered, the particulars specified in subsection one of this section shall be deemed to be the particulars required by this Act to be entered in the register of members, and, on the surrender, the date of the surrender must be entered.

(5) Subject to the provisions of this Act, the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles.

Cf. 1933, No. 29, s. 107 1948 U.K. Act, s.112

121. Inspection of register and index and pending transfers - (1) Except when the register of members is closed under the provisions of this Act, the register, and index of the names, of the members of a company shall during business hours (subject to such reasonable restrictions as the company in general meeting may impose, so that not less than two hours in each day shall be allowed for inspection) be open to the inspection of any member without charge and of any other person on payment of two shillings, or such less sum as the company may prescribe, for each inspection.

(2) The right to inspect the register and index of a company conferred by subsection one of this section shall be deemed to include the right to inspect, and to take copies of and extracts from, every transfer of shares that has been lodged with the company and has not been registered or returned to the transferee.

(3) Any member or other person may require a copy of the register, or of any part thereof, on payment in advance of two shillings, or such less sum as the company may prescribe, for every hundred words or fractional part thereof required to be copied. The company shall cause any copy so required by any person to be sent to that person within a period of ten days commencing on the day next after the day on which the requirement is received by the company.

(4) If any inspection required under this section is refused, or if any copy required under this section is not sent within the proper period, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine not exceeding two pounds, and further to a default fine of two pounds.

(5) In the case of any such refusal or default, the Court may by order compel an immediate inspection of the register and index (including all transfers lodged and not registered or returned as aforesaid) or direct that the copies required shall be sent to the persons requiring them.

Cf. 1933, No. 29, s. 108;1948 U.K. Act, s. 113

122. Consequences of failure to comply with requirements as to register owing to agent's default - Where, by virtue of paragraph (b) of the proviso to subsection two of section one hundred and eighteen of this Act, the register of members is kept at the office of some person other than the company, and by reason of any default of his the company fails to comply with subsection three of that section, subsection three of section one hundred and nineteen of this Act, or section one hundred and twenty-one of this Act, or with any requirements of this Act as to the production of the register, that other person shall be liable to the same penalties as if he were an officer of the company who was in default, and the power of the Court under subsection five of section one hundred and twenty-one of this Act shall extend to the making of orders against that other person and his officers and servants.

Cf. 1948, U.K. Act, s. 114

123. Power to close register - A company may, on giving notice by advertisement in some newspaper circulating, in the district in which the registered office of the company is situate, close the register of members for any time or times not exceeding in the whole thirty days in each year.

Cf. 1933, No. 29, s. 109; 1948 U.K. Act, s. 115

124. Power of Court to rectify register - (1) If -

(a) The name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or

(b) Default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be member,-

the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register.

(2) Where an application is made under this section, the Court may either refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved.

(3) On an application under this section the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.

(4) In the case o£ a company required by this Act to send a list of its members to the Registrar, the Court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the Registrar.

(5) In any case in which the nominal value of the shares in respect of which rectification of the register is applied for does not exceed five hundred pounds the powers of the Supreme Court under this section may be exercised by a Magistrate's Court, and for the purposes of any such application references in this section to the Court shall accordingly be deemed to include a Magistrate's Court.

Cf. 1933, No. 29, s. 110; 1948 U.K. Act s 116

125. Trusts not to be entered on register - No notice of any trust, expressed, implied, or constructive, shall be entered on the register or be receivable by the Registrar.

Cf. 1933, No. 29, s. 111; 1948 U.K. Act, s. 117

126. Register to be evidence - The register of members shall be prima facie evidence of any matters by this Act directed or authorised to be inserted therein.

Cf. 1933, No. 29, s. 112; 1948 U.K. Act, s. 118

Branch Registers

127. Power for company to keep branch registers - (1) A company may cause to be kept in any part of the Commonwealth outside New Zealand a branch register of any of its members who desire to have their names entered therein (in this Act called a "branch register").

(2) The company shall give to the Registrar notice of the situation of the office where any branch register is kept and of any change in its situation, and, if it is discontinued, of its discontinuance, and any such notice shall be give within fourteen days of the opening of the office or of the change or discontinuance, as the case may be.

(3) If default is made in complying with subsection two of this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 113; 1948 U.K. Act, s. 119

128. Regulations as to branch registers - (1) A branch register shall be deemed to be part of the company's register of members (in this section called the principal register).

(2) It shall be kept in the same manner in which the principal register is by this Act required to be kept, except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district where the branch register is kept.

(3) The company shall- ,

(a) Transmit to its registered office a copy of every entry in its branch register as soon as may be after the entry is made; and

(b) Cause to be kept at the place where the company's principal register is kept a duplicate of its branch register duly entered up from time to time.

(4) Every such duplicate shall for all the purposes of this Act be deemed to be part of the principal register.

(5) Subject to the provisions of this section with respect to the duplicate register, the shares registered in branch register shall be distinguished from the shares registered in the principal register, and no transaction with respect to any shares registered in a branch register shall, during the continuance of that registration, be registered in any other register.

(6) A company may discontinue to keep a branch register, and thereupon all entries in that register shall be transferred to some other branch register or to the principal register.

(7) Subject to the provisions of this Act, any company may, by its articles, make such provisions as it may think fit respecting the keeping of branch registers.

(8) If default is made in complying with subsection three of this section, the company and every officer of the company who is in default shall be liable to a default fine; and where, by virtue of paragraph (b) of the proviso to subsection two of section one hundred and eighteen of this Act, the principal register is kept at the office of some person other than the company and by reason of any default of his the company fails to comply with paragraph (b) of subsection three of this section, he shall be liable to the same penalty as if he were an officer of the company who was in default.

Cf. 1933, No. 29, s. 114; 1948 U.K. Act, s. 120

129. Provisions as to branch registers of Commonwealth companies kept in New Zealand -Subsection two of section one hundred and eighteen (except the proviso thereto) and sections one hundred and twenty-one and one hundred and twenty-four of this Act shall, subject to any necessary modifications and adaptations, apply to and in relation to any branch register kept in New Zealand by a company incorporated in any part of the Commonwealth outside New Zealand as they apply to and in relation to the registers of companies within the meaning of this Act.

Cf. 1933, No. 29, s. 116; 1948 U.K. Act, s. 123

Manual Return

130. Annual return to be made by a company having a share capital - (1) Every company having a share capital shall, once at least in every calendar year, make a return containing the particulars hereinafter referred to:

Provided that a company need not make a return under this subsection either in the year of its incorporation or, if it is not required by section one hundred and thirty-five of .this Act to hold an annual general meeting during the following year, in that year.

(2), The return shall be in accordance with the form set out in the Sixth Schedule to this Act, or as near thereto as circumstances admit, and shall contain -

(a) The address of the registered office of the company:

(b) In a case in which the register of members is, under the provisions of this Act, kept elsewhere than at the registered office of the company, the address or the place where it is kept:

(d) Particulars of the total amount of the indebtedness of the company in respect of all charges which are required to be registered with the Registrar under this Act, or which would have been required so to be registered if created after the twenty-third day of November, nineteen hundred and three:

(e) All such particulars with respect to the persons who immediately after the annual general meeting held on the date of the return are the directors of the company and any person who at that date is the secretary of the company as are by this Act required to be contained with respect to directors and the secretary respectively in the register of the directors and secretaries of a company:

(f) A list of past and present members as hereinafter provided.

(3)The summary of share capital must distinguish between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash; and must specify the following particulars:

(a) The amount of the share capital of the company, and the number of the shares into which it is divided:

(b) The number of shares taken from the commencement of the company up to the date of the return.

(d) The total amount of calls received:

(e) The total amount of calls unpaid:

(f) The total amount of the sums, if any, paid by way of commission in respect of any shares or debentures since the date of the last return or (in the case of the first return) since the date of the incorporation of the company:

(g) Particulars of the discount allowed on the issue of any shares issued at a discount, or of so much of that discount as has not been written of at .the date of the return

(h) The total amount of' the sums; if any, allowed by way of discount in respect of any debentures since the date of the last return or (in the case of the first return) since the date of the incorporation of the company

(i) The total number of shares forfeited and not sold or otherwise disposed of

(j) The total amount of shares for which share warrants are outstanding at the date of the return:

(k) The total amount of share warrants issued and surrendered respectively since the date of the last return or (in the case of the first return) since the date of the incorporation of the company:

(l) The number of shares comprised in each share warrant.

(4) The list of past and present members shall be dated as at the date of the return or, at the option of the company, as at the thirty-first day of March preceding the date of the return and shall -

(a) Contain the names and addresses of all persons who on the date of the list are members of the company, and of all persons who have ceased to be members since the date of the last list or (in the case of the first return) since the incorporation of the company:

(b) State the number of shares held by each of the existing members at the date of the list specifying shares transferred since the date of the last list, or (in the case of the first return) since the incorporation of the company, by persons who are still members and have ceased to be members respectively, and the dates of registration of the transfers:

(c) If the names aforesaid are not arranged in alphabetical order, have annexed thereto an index sufficient to enable the name of any person in the list to be easily found

Provided that where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the list must state the amount of stock held by each of the existing members instead of the amount of shares and the particulars relating to shares hereinbefore required:

Provided also that the list may in any year, if the list contained in the return for either of the two immediately preceding years has given as at the date of that list, the full particulars required by the foregoing provisions of this sub-section, give only such of the particulars so require as relate to persons ceasing to be or becoming members since the date of the last list and to shares transferred since that date or to changes as compared with that date in the amount of stock held by a member.

(5) In the case of a company keeping a branch register –

(a) References in the second proviso to subsection four of this section to the particulars required by that sub-section shall be taken as not including any such particulars contained in the branch register, in so far as copies of the entries containing those particulars are not received at the registered office of the company before the date of the list in question:

(b) Where an annual return or a list of past and present members is dated between the date when any entries are made in the branch register and the date when copies of those entries are received at the registered office of the company, the particulars contained in those entries, so far as relevant to an annual return, shall be included in the next or a subsequent annual return as may be appropriate having regard to the particulars included in that return with respect to the company's register of members.

(6) If a company fails to comply with this section; the company and every officer of the company who is in default shall be liable to a default fine.

(7) For the purposes of this section the expressions "director" and "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Cf. 1933, No. 29, ss. 117, 119 (4), (5); 1945, No. 40, s. 12; 1948 U.K. Act, s. 124

As to the penalty for false statement, see s. 461 and the 13^th Sched

131. Annual return to be made by company not having a share capital - (1) Every company not having a share capital shall once at least in every calendar year make a return containing the particulars hereinafter referred to:

Provided that a company need not make a return under this subsection either in the year of its incorporation or, if it is not required by section one hundred and thirty-five of this Act to hold an annual general meeting during the following year, in that year.

(2) The return shall contain-

(a) The address of the registered office of the company:

(b) In a case in which the register of members is, under the provisions of this Act, kept elsewhere than at that office, the address of the place where it is kept:

(c) Particulars of the total amount of the indebtedness of the company in respect of all charges which are required to be registered with the Registrar under this Act, or which would have been required so to be registered if created after the twenty-third day of November, nineteen hundred and three:

(d) All such particulars with respect to the persons who immediately after the annual general meeting held on the date of the return are the directors of the company and any person who at that date is the secretary of the company as are by this Act required to be contained with respect to directors and the secretary respectively in the register of directors and secretaries of a company.

(3) If a company fails to comply with this section, the company and every officer of the company who is in default shall be liable to a default fine.

(4) For the purposes of this section the expressions "director" and "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Cf. 1933, No. 29, ss. 118, 119 (4), (5); 1948 U.K. Act, s. 125

As to the penalty for false statements, see s. 461 and the 13th Sched.

132. Time for completion of annual return - (1) The annual return must be completed within one month after the annual general meeting for the year, and the company must forthwith forward to the Registrar a copy signed both by a director and by the secretary of the company.

(2) If a company fails to comply with this section, the company and every officer of the company who is in default shall be liable to a default fine. For the purposes of this sub-section the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Cf. 1933, No. 29, s. 119 (1), (4), (5); 1948 U.K. Act, s. 126

133. Documents to be annexed to annual return - (1) There shall be annexed to the annual return-

(a) A copy, certified both by a director and by the secretary of the company to be a true copy, of every balance sheet laid before the company in general meeting during the period to which the return relates (including every document required by law to be annexed to the balance sheet) ; and

(b) A copy, certified as aforesaid, of the report of the auditors on, and of the report of the directors accompanying, each such balance sheet,

and where any such balance sheet or document required by law to be annexed thereto is in a foreign language, there shall be annexed to that balance sheet a translation in English of the balance sheet or document certified in the prescribed manner to be a correct translation.

(2) If any such balance sheet as aforesaid or document required by law to be annexed thereto did not comply with. the requirements of the law; as in force at the date of the auditors' report, with respect to the form of balance sheets or documents aforesaid, as the case may be, there shall be made such additions to and corrections in the copy as would have been required to be made in the balance sheet or document in order to make it comply with the said requirements, and the fact that the copy has been so amended shall be stated thereon.

(3) If a company fails to comply with this section, the company and every officer of the company who is in default shall be liable to a default fine. For the purposes of this sub-section the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Cf. 1933, No. 29, s. 119 (3), (4), (3), 1948 U.K. Act, s. 127

This section is not applicable to private companies; see s. 394 (4) and the 9th Sched,

Meetings and Proceedings

134. Statutory meeting and statutory report - (1) Every company limited by shares and every company limited by guarantee and having a share capital shall, within a period of not less than one month nor more than three months from the date at which the company is entitled to commence business, hold a general meeting of the members of the company, which shall be called "the statutory meeting".

(2) The directors shall, at least fourteen days before the day on which the meeting is held, forward a report (in this Act referred to as the statutory report) to every member of the company

Provided that if the statutory report is forwarded later than is required by this subsection, it shall, notwithstanding that fact, be deemed to have been duly forwarded if it is so agreed by all the members entitled to attend and vote at the meeting.

(3) The statutory report shall be certified by not less than two directors of the company and shall state -

(a) The total number of shares allotted, distinguishing shares allotted as fully or partly paid up otherwise than in cash, and stating in the case of shares partly paid up the extent to which they are so paid up, and in either case the consideration for which they have been allotted;

(b) The total amount of cash received by the company in respect of all shares allotted, distinguished as aforesaid;

(c) An abstract of the receipts of the company and of the payments made thereout, up t o a date within seven days of the date of the report, exhibiting under distinctive headings the receipts of the company from shares and debentures and other sources, the payments made thereout, and particulars concerning the balance remaining in hand, and an account or estimate of the preliminary expenses of the company;

(d) The names, addresses, and descriptions of the directors, auditors (if any), managers (if any), and secretary of the company; and

(e) The particulars of any contract the modification of which is to be submitted to the meeting for its approval, together with the particulars of the modification or proposed modification.

(4) The statutory report shall, so far as it relates to the shares allotted by the company, and to the cash received in respect of those shares; and to the receipts and payments of the company, be certified as correct by the auditors, if any, of the company.

(5) The directors shall cause a copy of the statutory report, certified as required by this section, to be delivered to the Registrar for registration forthwith after the sending thereof to the members of the company.

(6) The directors shall cause a list showing the names, addresses, and descriptions of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the meeting and to remain open and accessible to any member of the company during the continuance of the meeting.

(7) The members of the company present at the meeting shall be at liberty to discuss any matter relating to the formation of the company, or arising out of the statutory report, whether previous notice has been given or not, but no resolution of which notice has not been given in accordance with the articles may be passed.

(8) The meeting may adjourn from time to time, and at any adjourned meeting any resolution of which notice has been given in accordance with the articles, either before or subsequently to the former meeting, may be passed, and the adjourned meeting shall have the same powers as an original meeting.

(9) In the event of any default in complying with the provisions of this section, every director of the company who is knowingly and wilfully guilty of the default or, in the case of default by the company, every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 121; 1948 U.K. Act, s. 130

This section is not applicable to private companies; see s. 354 (4) and the, 9th Sched.

As to the penalty for false statements, see s. 461 and the 13th Sched.

135. Annual general meeting - (1) Every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:

Provided that, so long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year.

(2) If default is made in holding a meeting of the comp any in accordance with subsection one of this section, the Court may, on the application of any member of the company, call, or direct the calling of, a general meeting of the company and give such ancillary or consequential directions as the Court thinks expedient, including directions modifying or supplementing, in relation to the calling, holding, and conducting of the meeting; the operation of the company's articles; and it is hereby declared that the directions that may be given under this subsection include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(3) A general meeting held in pursuance of subsection two of this section shall, subject to any directions of the Court, be deemed to be an annual general meeting of the company; but where a meeting so held is not held in the year in which the default in holding the company's annual general meeting occurred, the meeting so held shall not be treated as the annual general meeting for the year in which it is held unless at that meeting the company resolves that it shall be so treated.

(4) Where a company resolves that a meeting shall be so treated, a copy of the resolution shall, within fifteen days after the passing thereof, be forwarded to .the Registrar and recorded by him.

(5) If default is made in holding a meeting of the company in accordance with subsection one of this section, or in complying with any directions of the Court under subsection two thereof, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds, and if default is made in complying with subsection four of this section, the company and every officer of the company who is in default shall be liable to a default fine of two pounds.

Cf. 1933, No. 29, s. 120; 1948 U.K. Act, s. 131

As to private companies, see s. 362 (2).

136. Convening of extraordinary general meeting requisition - (1) The directors of a company, notwithstanding anything in its articles, shall, on the requisition of either -

(a) Not less than one hundred members having a right to vote at general meetings of the company; or

(b) A member or members of the company holding at the date of the deposit of the requisition not less than one-tenth in nominal value of such of the shares of the company as at the date of the deposit carry the right of voting at general meetings of the company, or, in the case of a company not having a share capital, a member or members of the company representing not less than one-tenth of the total voting rights of all the members having at the said date a right to vote at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company.

(2) The requisition must state the objects of the meeting, and trust be signed by the requisitionists and deposited at the registered office of the company, and may consist of several documents in like form each signed by one or more requisitionists.

(3) If the directors do not within twenty-one days from the date of the deposit of the requisition proceed duly to convene a meeting to be held within forty days from the said date, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from the said date.

(4) A meeting convened under this section by the requisitionists shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors.

(5) Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitionists by the company, and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such of the directors as were in default.

(6) For the purposes of this section the directors shall; in the case of a meeting at which a resolution is to be proposed as a special resolution, be deemed not to have duly convened the meeting if they do not give such notice thereof as is required by section one hundred and forty-five of this Act.,

Cf. 1933, No. 29, s. 122; 1948 U.K. Act, s. 132

As to the power to modify subs. (1) (a,) for unusually large companies, see a. 471 and the 14th Sched.

137. Length of notice for calling meetings - (1) Any provision of a company's articles shall be void in so far as it provides -

(a) For the calling of a meeting of the company (other than an adjourned meeting or a meeting for the passing of a special resolution) by a shorter notice than fourteen clear days' notice in writing; or

(b) For a notice of a meeting of the company sent by post being deemed to be served earlier than on the day after the date of its posting.

(2) Save in so far as the articles of a company make other provision in that behalf (not being a provision avoided by subsection one of this section),-

(a) A meeting of the company (other than an adjourned meeting or a meeting for the passing of a special resolution) may be called by not less than fourteen clear days' notice in writing:

(b) A notice of a meeting of the company sent by post shall be deemed to be served on the day after the date of its posting.

(3) A meeting of a company shall, notwithstanding that it is called by shorter notice than that specified in subsection two of this section or in the company's articles, as the case may be, be deemed to have been duly called if it is so agreed -

(a) In the case of a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and

(b) In the case of any other meeting, by a majority in a number of the members having a right to attend and vote at the meeting, being a majority together holding not less than ninety-five per cent in nominal value of the shares giving a right to attend and vote at the meeting, or, in the case of a company not having a share capital, together representing not less than ninety-five per cent of the total voting rights at that meeting of all the members.

Cf. 1933, No. 29, s. 123 (1) (a); 1948 U.K. Act, s. 133

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

In its application to cooperative dairy companies subs. (1) (a) must be read as if the word "seven" were substituted for the word "fourteen"; see s. 28 (2) (a) of the Cooperative Diary Companies Act 1949.

138. General provisions as to meetings and votes - The following provisions shall have effect in so far as the articles of the company do not make other provision in that behalf

(2) Any meeting called, held, and conducted in .accordance with an order under this section shall:' for all purposes be deemed to be a meeting of the company duly called, held, and conducted.

(a) Notice of the meeting of a company shall be served on every member of the company in the Manner in which notices are required to be served by Table A, and for the purpose of this paragraph the expression "Table A" means that table as for the time being in force:

(b) Two or more members holding not less than one-tenth of the issued share capital or, if the company has not a share capital, not less than five per cent in number of the members of the company may call a meeting:

(d) Any member elected by the members present at a meeting, may be chairman thereof:

(e) In the case of a company originally having a share capital every member shall have one vote to respect of each share or each ten pounds of stock held by him, and in any other case every member shall have one vote.

Cf. 1933, No. 29, s. 123 (1) (b), (c), (d), (e), (f); 1948 U.K. Act, s. 134

In the case of private companies para. (c) is to be read as if the word ."two" were substituted for the word "three" ;see s. $34 (2) (b).

139: Power of Court to order meeting - (1) If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in manner prescribed by the articles or this Act, the Court may, either of its own emotion or on the application of any director of the company or of any member of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held, and conducted in such manner as the Court thinks fit, and where any such order is made may give such ancillary or consequential directions as it thinks expedient; and it is hereby declared that the directions that may be given under this subsection include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2). Any meeting called, held, and conducted in accordance with an order under this section shall for all purposes be deemed to be a meeting of the company duly called, held, and conducted.

Cf. 1933, No. 29, s. 123 (2) ; 1948 U.K. Act; s. 13

140. Proxies - (1) Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of him, and a proxy appointed to attend and vote shall also have the same right as the member to speak at the meeting:

Provided that, unless the articles otherwise provide,-

(a) This subsection shall not apply in the case of a company not having a share capital; and

(b) A member shall not be entitled to appoint more than one proxy to attend or the same occasion, but, subject to the foregoing provisions of this paragraph; a member may appoint two or more alternative proxies; and

(2) In every notice calling a meeting of a company having a share capital there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy or, where that is allowed, one or more proxies to attend and vote instead of him, and that a proxy need not also be a member; and if default is made in complying with this subsection in respect of any meeting, every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds.

(3) Any provision contained in a company's articles shall be void in so far as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy, to be received by the company or any other person more than forty-eight hours before a meeting or adjourned meeting in order that the appointment may be effective thereat.

(4) If for the purpose of any meeting of a company invitations to appoint as proxy a person or one of a number of personas specified in the invitations are issued at the company's expense to some only of the members entitled to be sent a notice of the meeting and to vote thereat by proxy, every officer of the company who knowingly and wilfully authorises or permits their issue as aforesaid shall be liable to a fine not exceeding one hundred pounds:

Provided that an officer shall not be liable under this sub-section by reason only of the issue to a member at his request in writing of a form of appointment naming the proxy or of a list of persons willing to act as proxy if the form or list is available on request in writing to every member entitled to vote at the meeting by proxy.

(5) This section shall apply to meetings of any class of members of a company as it applies to general meetings of the company.

Cf. 1948 U.K. Act, s.136

As to the power to modify subs. (3) for unusually large companies, see s.471 and the 14th Sched.

This section does not apply to cooperative dairy companies; see s.28 (1) (b) of the Cooperative Dairy Companies Act 1949.

141. Right to demand a poll – (1) Any provision contained in a company's articles shall be void in so far as it would have the effect either –

(a) Of excluding the right to demand a poll at a general meeting on any question other than the election of the chairman of the meeting or the adjournment of the meeting; or

(b) Of making ineffective a demand for a poll on any such question which is made either-

(i) By not less than five members having the right to vote at the meeting; or

(ii) By a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

(iii) By a member or members holding shares in the company conferring a right to vote at the meeting, being shares on which as aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

(2) The instrument appointing a proxy to vote at a meeting of a company shall be deemed also to confer authority to demand or join in demanding a poll, and for the purposes of subsection one of this section a demand by a person as proxy for a member shall be the same as a demand by the member.

Cf. 1933, No.29, s.125 (4); 1948 U.K. Acts, s.137

142. Voting on a poll - On a poll taken at a meeting of a company or a meeting of any class of members of a company, a member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.

Cf. 1948 U.K. Act, s. 138

143. Representation of corporations at meetings of companies and of creditors-(1) A corporation, whether, a company within the meaning of this Act or not, may -

(a) If it is a member of another corporation, being a company within the meaning of this Act, by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the company or at any meeting of any class of members of the company

(b) If it is a creditor (including a holder of debentures) of another corporation, being a company within the meaning of this Act, by resolution of its directors or other governing body authorise such person as it thinks fit to Act as its representative at any meeting of any creditors of the company held in pursuance of this Act or of any rules made thereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.

(2) A person authorised as aforesaid shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member, creditor, or holder of debentures of that other company.

Cf. 1933; No. 29, s. 124; 1948 U.K. Act, s. 139

144. Circulation of members' resolution, etc. -(1) Subject to the following, provisions of this section, it shall be the duty of a company, on the requisition in writing of such number of Members: as is hereinafter specified and (unless the company otherwise resolves) at the expense of the requisitionists,-

(a) To give to members of the company entitled to receive notice of the next annual general meeting notice of any resolution which may properly be moved and is intended to be moved at that meeting

(b) To circulate to members entitled to receive notice of any general meeting any statement of not more than one thousand words with respect to the after referred to in any proposed resolution or the business to be dealt with at that meeting.

(2) The number of members necessary for a requisition under this section shall be -

(a) Any number of members representing not less than one-tenth of the total voting rights of all the members having at the date of the requisition a right to vote at the meeting to which the requisition relates; or

(b) Not less than one hundred members having a right to vote at the meeting.

(3) Notice of any such resolution shall be given, and any such statement shall be circulated, to members of the company entitled to receive notice of the meeting by serving a copy of the resolution or statement on each such member in any manner permitted for service of notice of the meeting, and notice of any such resolution shall be given to any other member of the company by giving notice, of the general elect of the resolution in any manner permitted for giving him notice of meetings of the company.

Provided that the copy shall be served, or notice of the effect of the resolution shall be given, the case may be, in the same manner and, so far as practicable, at the same time as notice of the meeting, and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable thereafter.

(4) A company shall not be bound under this section to give, notice of any resolution or, to circulate any statement unless -

(a) A copy of the requisition signed by the requisitionists (or two or more copies which between them contain the signatures of all the requisitionists) is deposited at the registered office of the company -

(i) In the case of a requisition requiring notice of a resolution, not less than six weeks before the meeting; and

(ii) In the case of any other requisition, not less than one week before the meeting; and

(b) There is deposited or tendered with the requisition a sum reasonably sufficient to meet the company's exposes in giving effect thereto

Provided that if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered once of the company, an annual general meeting is called for a date six weeks or less after the copy has been deposited; the copy though not deposited within the time required, by this subsection shall be deemed to live been properly deposited for the purposes thereof.

(5) The company shall also not be bound under this section to circulate any statement if, on the application either of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the court may order the company's costs on an application under this section to be paid in whole or in part by the requisitionists, notwithstanding that they are not parties to the application.

(6) Notwithstanding anything in the company's articles, the business which may be dealt with at an annual general meeting shall include any resolution of which notice is given in accordance with this section, and for the purposes of this subsection notice shall be deemed to have been so given notwithstanding the accidental omission, in giving it, of one or more members.

(7) In the event of any default in complying with the provisions of this section, every officer of the company who is in default shall be liable to a fine not exceeding five hundred pounds.

Cf. 1948 UK Act, s. 140

As to the power to modify subs, (2) (b) for unusually large companies, see s. 471 and the 14th,sched.

145. Extraordinary and special resolutions - (1) A resolution shall be an extraordinary resolution when it has been passed by a majority of not less than three-fourths of such members as, being entitled so to do, vote in person or, where proxies are slowed, by proxy at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given.

(2) A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not less than twenty-one clear days' notice, specifying the intention to propose the resolution as a special resolution, has been duly given.

Provided that, if it is so agreed by a majority in number of the members having the right to attend and vote at any such meeting a , being a majority together holding not less than ninety-five per cent in nominal value of the shares giving that right, or, in the case of a company not having.. a share capital, together representing trot less than ninety-five per cent of the total voting rights at that meeting of all the members, as resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one clear days' notice has been given.

(3) At any meeting at which an extraordinary resolution or special resolution is submitted to be passed, a declaration of the chairman that the resolution is carried shall, unless a poll demanded, be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

(4) In computing the majority on a poll demanded on the question that an extraordinary resolution or special resolution be passed, reference shall be had to the number of votes cast for and against the resolution.

(5) For the purposes of this section, notice of a meeting shall be deemed to be duly given and the meeting to be duly held when the notice is given and the meeting to be duly held when the notice is given and the meeting held in manner provided by this Act or the articles.

Cf. 1993, No.29, s.125; 1948 U.K. Acts, s.141

As to private companies, see s.362.

In its application to cooperative dairy companies subs. (2) must I If the word "fourteen" were substituted for the word "twenty-one places; see s. 28 (2) (b) of the Cooperative Dairy Companies Act 1949

146. Resolutions requiring special notice – Where by any provision hereafter contained in this Act special notice is required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given company not less than twenty-eight clear days before the meeting at which it is moved, and the company shall give its members notice of any such resolution at the, same time in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice thereof, either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by the articles, not less than fourteen clear days before the meeting:

Provided that if, after notice of the intention to move such a resolution has been given to the company, a meeting is called for a date twenty-eight days or less after the notice has been given, the notice though not given within the required by this subsection shall be deemed to have properly given for the purposes thereof.

Cf. 1948 U.K. Act, s. 142

147. Registration and copies of certain resolution and agreements - (1) A printed or typewritten copy of every resolution or agreement to which this section applies shall, within fifteen days after the passing or making thereof, be forwarded to the Registrar and recorded by him.

(2) Where articles have been registered, a copy of every such resolution or agreement for the time being in force shall be embodied in or attached to every copy of the articles issued after the passing of the resolution or the making of the agreement.

(3) Where articles have not been registered, a printed or typewritten copy of every such resolution or agreement shall be forwarded to any member, at his request, on payment of two shillings or such less sum as the company may direct.

(4) This section shall apply to –

(a) Special resolutions:

(b) Extraordinary resolutions:

(c) Resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless, as the case may be, they had been passed as special resolutions or as extraordinary resolutions:

(d) Resolutions or agreements which have been agreed to by all the members of some class of shareholders, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner, and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members:

(e) Resolutions requiring a company to be wound up voluntarily, passed under paragraph (a) of subsection one of section two hundred and sixty-eight of this Act.

(5) If a company fails to comply with subsection one of this section, the company and every officer of the company who is in default shall be liable to a default fine of two pounds.

(6) If a company fails to comply with subsection two or subsection three of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one pound for each copy in respect of which default is made.

(7) For the purposes of subsections five and six of this section a liquidator of the company shall be deemed to be an officer of the company.

Cf. 1933, No. 29, s. 126; 1948 U.K. Act, s. 143

As to private companies, see ss. 354 (3) (a) and 362 (7).

148. Resolutions passed at adjourned meetings - Where a resolution is passed at an adjourned meeting of -

(a) A company:

(b) The holders of any class of shares in a company:

the resolution shall for all purposes be treated as having been passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date.

Cf. 1933, No. 29, s. 127; 1948 U.K. Act, s. 144

149. Minutes of proceedings of meetings of company and of directors and managers - (1) Every company shall cause minutes of all proceedings of general meetings, all proceedings at meetings of its directors, and, where there are managers, all proceedings at meetings of its managers to be entered in books kept for that purpose.

(2) Any such minute if purporting to be signed by the chairman of the meeting at which the proceedings were had, or by the chairman of the next succeeding meeting, shall be evidence of the proceedings.

(3) Where minutes have been made in accordance with the provisions of this section o£ the proceedings at any general meeting of the company or meeting of directors or managers, then, until the contrary is proved, the meeting shall be deemed to have been duly held and convened, and all proceedings had thereat to have been duly had, and all appointments of directors, managers, or liquidators shall be deemed to be valid.

(4) If a company fails to comply with subsection one of this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 128; 1948 U.K. Act, s. 145

As to the form of minute books, see s. 459.

150. Inspection of minute books - (1) The books containing the minutes of proceedings of any general meeting of a company held on or after the first day of April, nineteen hundred and thirty-four, shall be kept at the registered office of the company, and shall during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that not less than two hours in each day be allowed for inspection) be open to the inspection of any member without charge.
Vol. 2 Companies Act 1955 465 117
(2) Any member shall be entitled to be furnished within seven days after he has made a request in that behalf to the company with a copy of any such minutes as aforesaid at a charge not exceeding two shillings for every hundred words.

(3) If any inspection required under this section is refused or if any copy required under this section is not sent within the proper time, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine not exceeding two pounds and further to a default fine of two pounds.

(4) In the case of any such refusal or default, the Court may by order compel an immediate inspection of the books in respect of all proceedings of general meetings or direct that the copies required shall be sent to the persons requiring them.

Cf. 1933, No. 29, s. 129; 1948 U.K. Act, s. 146

Accounts and Audit

151. Keeping of books of account - (1) Every company shall cause to be kept proper books of account in which shall be kept full, true, and complete accounts of the affairs and transactions of the company.

(2) The books of account shall be kept at the registered office of the company or at such other place as the directors think fit, and shall at all times be open to inspection by any director:

Provided that if books of account are kept at a place outside New Zealand there shall be sent to, and kept at a place in, New Zealand and be at all times open to inspection by any director such accounts and returns with respect to the business dealt with in the books of account so kept as will disclose with reasonable accuracy the financial position of that business at intervals not exceeding six months and will enable to be prepared in accordance with this Act the company's balance sheet, its profit and loss account or income and expenditure account, and any document annexed to any of those documents giving information which is required by this Act and is thereby allowed to be so given.

(3) If any person being an officer of a company fails to take all reasonable steps to secure compliance by the company with the requirements of this section, or has by his own wilful act been the cause of any default by the company thereunder, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:

Provided that –

(a) In any proceedings against a person in respect of an offence under this section consisting of a failure to take reasonable steps to secure compliance by the company with the requirements of this section, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that those requirements were complied with and was in a position to discharge that duty; and

(b) A person shall not be sentenced to imprisonment for such an offence unless, in the opinion of the Court dealing with the case, the offence was committed wilfully.

Cf. 1933, No. 29, s. 130; 1948 U.K. Act, s. 147; Companies Act 1938, s. 123 (1), (2) (Victoria)

As to the form of books of account, see s. 459.

As to the power to modify the proviso to subs. (2), see s. 153 (4)

152. Profit and loss account and balance sheet-(1) The directors of every company shall at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year lay before the company in general meeting a profit and loss account or, in the case of a company not trading for profit, an income and expenditure account for the period, in the case of the first account, since the incorporation of the company, and, in any other case, since the preceding account, made up to a date not earlier than the date of the meeting by more than nine months:

Provided that the Court, if for any special reason it thinks fit so to do, may, in the case of any company, extend the period of eighteen months aforesaid, and in the case of any company and with respect to any year extend the period of nine months aforesaid.

(2) The directors shall cause to be made out in every calendar year, and to be laid before the company in general meeting, a balance sheet as at the date to which the profit and loss account or the income and expenditure account, as the case may be, is made up.

(3) If any person being a director of a company fails to take all reasonable steps to comply with the provisions of this section, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:

Provided that –

(b) A person shall not be sentenced to imprisonment for such an offence unless, in the opinion of the Court dealing with the case, the offence was committed wilfully.

Cf. 1933, No. 29, s. 131; 1948 U.K. Act, s. 148; 1938 Victorian Act, s. 123 (3), (5)

As to private companies, see s. 362(2).

153. General provisions as to contents and form of accounts - (1) Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of its financial year, and every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year.

(2) A company's balance sheet and profit and loss account shall comply with the requirements of the Eighth Schedule to this Act, so far as applicable thereto.

(3) Save as expressly provided in the following provisions of this section or in Part III of the said Eighth Schedule, the requirements of subsection two of this section and the said Eighth Schedule shall be without prejudice either to the general requirements of subsection one of this section or to any other requirements of this Act.

(4) The Governor-General may, by Order in Council made on the application or with the consent of a company's directors, modify in relation to that company -

(a) Any of the requirements of this Act as to the matters to be stated in a company's balance sheet or profit and loss account (except the requirements of subsection one of this section)

(b) The requirements of the proviso to subsection two of section one hundred and fifty-one of this Act,-

for the purpose of adapting them to the circumstances of the company.

(5) Subsections one and two of this section shall not apply to a company's profit and loss account if -

(a) The company has subsidiaries; and

(b) The profit and loss account is framed as a consolidated profit and loss account dealing with all or any of the company's subsidiaries as well as the company and -

(i) Complies with the requirements of this Act relating to consolidated profit and loss accounts; and

(ii) Shows how much of the consolidated profit or loss for the financial year is dealt with in the accounts of the company.

(6) If any person being a director of a company fails to take all reasonable steps to secure compliance as respects any accounts laid before the company in general meeting with the provisions of this section and with the other requirements of this Act as to the matters to be stated in accounts, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:

Provided that -

(a) In any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that the said provisions or the said other requirements, as the case may be, were complied with and was in a position to discharge that duty; and

(b) A person shall not be sentenced to imprisonment for any such offence unless, in the opinion of the Court dealing with the case, the offence was committed wilfully.

(7) For the purposes of this section and the following provisions of this Act, except where the context otherwise requires, -

(a) Any reference to a balance sheet or profit and loss account shall include any notes thereon or document annexed thereto giving information which is required by this Act and is thereby allowed to be so given; and

(b) Any reference to a profit and loss account shall be taken, in the case of a company not trading for profit, as referring to its income and expenditure account, and references to profit or to loss and, if the company has subsidiaries, references to a consolidated profit and loss account shall be construed accordingly.

Cf. 1933, No. 29, ss. 55, 56 (2), 57 (2), 58 (3), 66 (1) (g), (2), 86 (3), 132, 133; 1948 U.K. Act, s. 149; 1938 Victorian Act, ss. 123 (4), 124

As to the application of subs. (6) where a private company does not appoint an auditor, see s. 354 (3) (c).

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

154. Obligation to lay group accounts before holding company - (1) Where at the end of its financial year a company has subsidiaries, accounts or statements (in this Act referred to as group accounts) dealing as hereinafter mentioned with the state of affairs and profit or loss of the company and the subsidiaries shall, subject to subsection two of this section, be laid before the company in general meeting when the company's own balance sheet and profit and loss account are so laid.

(2) Notwithstanding anything in subsection one of this section, -

(a) Group accounts shall not be required where the company is at the end of its financial year the wholly owned subsidiary of another body corporate incorporated in New Zealand; and

(b) Group accounts need not deal with a subsidiary of the company if the company's directors are of opinion that -

(i) It is impracticable, or would be of no real value to members of the company, in view of the insignificant amounts involved, or would involve expense or delay out of proportion to the value to members of the company; or

(ii) The result would be misleading, or harmful to the business of the company or any of its subsidiaries; or

(iii) The business of the holding company and that of the subsidiary are so different that they cannot reasonably be treated as a single undertaking,-

and, if the directors are of such an opinion about each of the company's subsidiaries, group accounts shall not be required:

Provided that the approval of the Governor-General in Council shall be required for not dealing in group accounts with a subsidiary on the ground that the result would be harmful or on the ground of the difference between the business of the holding company and that of the subsidiary.

(3) If any person being a director of a company fails to take all reasonable steps to secure compliance as respects the company with the provisions of this section, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds

Provided that -

(a) In any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that the requirements of this section were complied with and was in a position to discharge that duty; and person shall not be sentenced to imprisonment for an offence under this section unless, in the opinion of the Court dealing with the case, the offence was committed wilfully.

(4) For the purposes of this section a body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members except that other and that other's wholly owned subsidiaries and its or their nominees.

Cf. 1933, No. 29, s. 134; 1948 U.K. Act; s. 150; 1938 Victorian Act, s. 125

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

155. Form of group accounts - (1) Subject to subsection two of this section, the group accounts laid before a holding company shall be consolidated accounts comprising -

(a) A consolidated balance sheet dealing with the state of affairs of the company and all the subsidiaries to be dealt with in group accounts

(b) A consolidated profit and loss account dealing with the profit or loss of the company and those subsidiaries.

(2) If the company's directors are of opinion that it is better for the purpose -

(a) Of presenting the same or equivalent information about the state of affairs and profit or loss of the company and those subsidiaries; and

(b) Of so presenting it that it may be readily appreciated by the company's members,-

the group accounts may be prepared in a form other than that required by subsection one of this section, and in particular may consist of more than one set of consolidated accounts dealing respectively with the company and one group of subsidiaries and with other groups of subsidiaries or of separate accounts dealing with each of the subsidiaries, or of statements expanding the information about the subsidiaries in the company's own accounts, or any combination of those forms.

(3) The group accounts may be wholly or partly incorporated in the company's own balance sheet and profit and loss account.

Cf. 1948 U.K. Act, s. 151

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

156. Contents of group accounts - (1) The group accounts laid before a company shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole, so far as concerns members of the company.

(2) Where the financial year of a subsidiary does not coincide with that of the holding company, the group accounts shall, unless the Governor-General, by Order in Council made on the application or with the consent of the holding company's directors, otherwise directs, deal with the subsidiary's state of affairs as at the end of its financial year ending with or last before that of the holding company, and with the subsidiary's profit or loss for that financial year.

(3) Without prejudice to subsection one of this section, the group accounts, if prepared as consolidated accounts, shall comply with the requirements of the Eighth Schedule to this Act, so far as applicable thereto, and if not so prepared shall give the same or equivalent information:

Provided that the Governor-General may, by Order in Council made on the application or with the consent of a company's directors, modify the said requirements in relation to that company for the purpose of adapting them to the circumstances of the company.

Cf. 1948 U.K. Act, s. 152

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) off the Cooperative Dairy Companies Act 1949.

157. Financial year of holding company and subsidiary - (1) A holding company's directors shall secure that, except where in their opinion there are good reasons against it, the financial year of each of its subsidiaries shall coincide with the company's own financial year.

(2) Where it appears to the Registrar desirable for a holding company or a holding company's subsidiary to extend its financial year so that the subsidiary's financial year may end with that of the holding company, and for that purpose to postpone the submission of the relevant accounts to a general meeting from one calendar year to the next, the Registrar may on the application or with the consent of the directors of the company whose financial year is to be extended direct that, in the case of that company, the submission of accounts to a general meeting, the holding of an annual general meeting, or the making of an annual return shall not be required in the earlier of the said calendar years.

Cf. 1948 U.K. Act, s. 153

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

158. Meaning of "holding company" and "subsidiary" - (1) For the purposes of this Act, a company shall, subject to the provisions of subsection three of this section, be deemed to be a subsidiary of another company if, but only if,-

(a) That other company either -

(i) Is a member of it and controls the composition of its board of directors; or

(ii) Holds more than half in nominal value of its equity share capital as defined in subsection five of this section; or

(b) The first-mentioned company is a subsidiary of any company which is that other company's subsidiary.

(2) For the purposes of subsection one of this section, the composition of a company's board of directors shall be deemed to be controlled by another company if, but only if, that other company by the exercise of some power exercisable by it without the consent or concurrence of any other person can appoint or remove the holders of all or a majority of the directorships; but for the purposes of this provision that other company shall be deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied, that is to say-

(a) That a person cannot be appointed thereto without the exercise in his favour by that other company of such a power as aforesaid; or

(b) That a person's appointment thereto follows necessarily from his appointment as director of that other company; or

(3) In determining whether one company is a subsidiary of another company -

(a) Any shares held or power exercisable by that other company in a fiduciary capacity shall be treated as not held or exercisable by it:

(b) Subject to paragraphs (c) and (d) of this subsection, any shares held or power exercisable -

(i) By any person as a nominee for that other company (except where that other company is concerned only in a fiduciary capacity); or

(ii) By, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is concerned only in a fiduciary capacity,-

shall be treated as held or exercisable by that other company:

(c) Any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned company or of a trust deed for securing any issue of such debentures shall be disregarded:

(d) Any shares held or power exercisable by, or by a nominee for, that other company or its subsidiary (not being held or exercisable as mentioned in paragraph (c) of this subsection) shall be treated as not held or exercisable by that other company if the ordinary business of that other company or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

(4) For the purposes of this Act, a company shall be deemed to be another company's holding company if, but only if, that other company is its subsidiary.

(5) In this section the expression "company" includes any body corporate, and the expression "equity share capital" means, in relation to a company, its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

Cf. 1933, No. 29, s. 135; 1948 U.K. Act, s. 154

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

159. Signing of balance sheet - (1) Every balance sheet of a company shall be signed on behalf of the board by two of the directors of the company.

(2) If any copy of a balance sheet which has not been signed as required by this section is issued, circulated, or published, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 137; 1948 U.K. Act, s. 155

In its application to private companies subs. (1) must be read as if the word "one" were substituted for the word "two"; see s. 354 (2) (c).

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

160. Accounts and auditors' report to be annexed to balance sheet - (1) The profit and loss account and, so far as not incorporated in the balance sheet or profit and loss account, any group accounts laid before the company in general meeting, shall be annexed to the balance sheet, and the auditors' report shall be attached thereto.

(2) Any account so annexed shall be approved by the board of directors before the balance sheet is signed on their behalf.

(3) If any copy of a balance sheet is issued, circulated, or published without having annexed thereto a copy of the profit and loss account or any group accounts required by this section to be so annexed, or without having attached thereto a copy of the auditors' report, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 137; 1948 U.K. Act, s. 156

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

161. Directors' report to be attached to balance sheet - (1) There shall be attached to every balance sheet laid before a company in general meeting a report by the directors with respect to the state of the company's affairs, the amount, if any, which they recommend should be paid by way of dividend, and the amount, if any, which they propose to carry to reserves within the meaning of the Eighth Schedule to this Act.

(2) The said report shall deal, so far as is material for the appreciation of the state of the company's affairs by its members and will not in the directors' opinion be harmful to the business of the company or of any of its subsidiaries, with any change during the financial year in the nature of the company's business, or in the company's subsidiaries, or in the classes of business in which the company has an interest, whether as member of another company or otherwise.

(3) If any person being a director of a company fails to take all reasonable steps to comply with the provisions of subsection one of this section, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:

Provided that -

(a) In any proceedings against a person in respect of an offence under the said subsection one, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that the provisions of that subsection were complied with and was in a position to discharge that duty; and

(b) A person shall not be liable to be sentenced to imprison-ment for such an offence unless, in the opinion of the Court dealing with the case, the offence was committed wilfully.

Cf. 1933, No. 29, s. 131 (2); 1948 U.K. Act, s. 157

This section does not apply to cooperative dairy companies; see s. 28 (1) (c) of the Cooperative Dairy Companies Act 1949.

162. Right to receive copies of balance sheet and auditors' report - (1) A copy of every balance sheet, including every document required by law to be annexed thereto, which is to be laid before a company in general meeting, together with a copy of the auditors' report, shall, not less than fourteen days before the date of the meeting, be sent to all persons entitled to receive notices of general meetings of the company.

(2) Any member of the company, whether he is or is not entitled to have sent to him copies of the company's balance sheets, and any holder of debentures of the company, shall be entitled to be furnished on demand, without charge, with a copy of the last balance sheet of the company, including every document required by law to be annexed thereto, together with a copy of the auditors' report on the balance sheet.

(3) If default is made in complying with subsection one of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding twenty pounds, and if, where any person makes a demand for any document with which he is by virtue of subsection two of this section entitled to be furnished, default is made in complying with the demand within seven days after making thereof, the company and every officer of the company who is in default shall be liable to a default fine, unless it is proved that that person has already made a demand for and been furnished with a copy of the document.

(4) In the case of any such default, the Court may by order direct that the copies or documents required shall be sent to the persons requiring them.

Cf. 1933, No. 29, s. 138; 1948 U.K. Act, s. 158 (1)-(3)

By virtue of s. 354 (4) and the 9th Sched. this section does not apply to private companies, as to which see s. 363.

As to mining companies, see s. 443 (2).

In its application to cooperative dairy companies subs. (1) must be read as if the word "seven" were substituted for the word "fourteen"; see s. 28 (2) (c) of the Cooperative Dairy Companies Act 1949.

163. Appointment and remuneration of auditors - (1) Every company shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that, until the conclusion of the next, annual general meeting.

(2) The appointment of a partnership by the firm name to be the auditors of a company shall be deemed to be the appointment of all the persons who are partners in the firm at the time of the appointment.

(3) At any annual general meeting a retiring auditor, however appointed, shall be reappointed without any resolution being passed unless -

(a) He is not qualified for reappointment; or

(b) A resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed; or

Provided that where notice is given of an intended resolution to appoint some person or persons in place of a retiring auditor, and by reason of the death, incapacity, or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with, the retiring auditor shall not be automatically reappointed by virtue of this subsection.

(4) Subject as hereinafter provided, the first auditors of a company may be appointed by the directors at any time before the first annual general meetings, and auditors so appointed shall hold office until the conclusion of that meeting:

Provided that –

(a) The company may at a general meeting remove any such auditors and appoint in their place any other persons who have been nominated for appointment by any member of the company and of whose nomination notice has been given to the members of the company not less than fourteen days before the date of the meeting; and

(b) if the directors fail to exercise their powers under this subsection, the company in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease.

(5) The directors may fill any casual vacancy in the office of auditor, but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

(6) Where at an annual general meeting no auditors are appointed or reappointed, or where a casual vacancy in the office of auditors is not filled within one month after the occurrence of the vacancy, the Registrar may appoint a person to fill the vacancy.

(7) The company shall, within one week of the Registrar's power under subsection six of this section becoming exercisable, give him notice of that fact, and, if a company fails to give notice as required by this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

(8) The fees and expenses of the auditors of a company –

(a) In the case of an auditor appointed by the directors or by the Registrar, may be fixed by the directors or by the Registrar, as the case may be:

(b) Subject to paragraph (a) of this subsection, shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine.

Cf. 1933, No. 29, s.139; 1948 U.K. Act, s.159

As to private companies, see ss. 354 (3) and 362 (2).

164. Provisions as to resolutions relating to appointment and removal of auditors - (1) Special notice shall be required for a resolution at a company's annual general meeting appointing as auditor a person other than a retiring auditor or providing expressly that a retiring auditor shall not be reappointed.

(2) On receipt of notice of such an intended resolution as aforesaid, the company shall forthwith send a copy thereof to the retiring auditor (if any).

(3) Where notice is given of such an intended resolution as aforesaid and the retiring auditor makes with respect to the intended resolution representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so,-

(a) In any notice of the resolution given to members of the company, state the fact of the representations having been made; and

(b) Send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company),-

and if a copy of the representations is not sent as aforesaid because received too late or because of the company's default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting:

Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the Court may order the company's costs on an application under this section to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

(4) Subsection three of this section shall apply to a resolution to remove the first auditors by virtue of subsection four of section one hundred and sixty-three of this Act as it applies in relation to a resolution that a retiring auditor shall not be reappointed.

Cf. 1948 U.K. Act, s. 160

As to private companies; see s. 362 (1)

165. Disqualifications for appointment as auditor - (1) None of the following persons shall be qualified for appointment as auditor of a company:

(a) An officer or servant of the company:

(b) A person who is a partner of or in the employment of an officer or servant of the company:

(2) References in this section to an officer or servant shall be construed as not including references to an auditor.

(3) A person shall also not be qualified for appointment as auditor of a company if he is, by virtue of the foregoing provisions of this section, disqualified for appointment as auditor of any other body corporate which is that company's subsidiary or holding company or a subsidiary of that company's holding company, or would be so disqualified if the body corporate were a company.

(4) No person shall be qualified for appointment as auditor of a company unless he is a member of the New Zealand Society of Accountants, or a member, fellow, or associate of an association of accountants constituted in some part of the Commonwealth outside New Zealand, and for the time being approved for the purpose of the audit of company accounts by the Minister by notice published in the Gazette.

Provided that nothing in this subsection shall disqualify any person appointed as auditor of a company before the first day of April, nineteen hundred and thirty-four, from acting as auditor of that company, or from being at any time and from time to time reappointed as auditor thereof.

(5) Any unqualified person that acts as auditor of a company shall be liable to a fine not exceeding one hundred pounds.

(6) If a company appoints any unqualified person to be an auditor,-

(a) The appointment shall be void, and the Registrar may appoint a qualified person to fill the vacancy:

(b) The company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred pounds and to a further fine not exceeding five pounds for every day during which the unqualified person acts as auditor of the company.

Cf. 1933, No. 29, s. 140; 1948 U.K. Act, s. 161

Subs. (1) (b) is not applicable to private companies; see s. 354 (4) and the 9th Sched.

166. Auditors' report and right of access to books and to attend and be heard at general meetings - (1) The auditors shall make a report to the members on the accounts examined by them, and on every balance sheet, every profit and loss account, and all group accounts laid before the company in general meeting during their tenure of office, and the report shall state-

(a) Whether they have obtained all the information and explanations that they have required:

(b) Whether, in their opinion, proper books of account have been kept by the company, so far as appears from their examination of those books:

(c) Whether, in their opinion, according to the best of their information and the explanations given to them and as shown by the books of the company, -

(i) The balance sheet is properly drawn up so as to give a true and fair view of the state of the company's affairs as at the end of its financial year; and

(ii) The profit and loss account is properly drawn up so as to give a true and fair view of the results of the business of the company for its financial year,-

or, as the case may be, so as to give a true and fair view thereof subject to the non-disclosure of any matters (to be indicated in the report) which by virtue of Part III of the Eighth Schedule to this Act are not required to be disclosed:

(d) Whether, in their opinion, according to the best of their information and the explanations given to them, the accounts, the balance sheet, the profit and loss account, and the group accounts give the information required by this Act in the manner so required:

(e) In the case of a holding company submitting group accounts, whether, in their opinion, the group accounts have been properly prepared in accordance with the provisions of this Act so as to give a true and fair view of the state of affairs and results of the business of the company and its subsidiaries dealt with thereby, so far as concerns members of the company, or, as the case may be, so as to give a true and fair view thereof subject to the non-disclosure of any matters (to be indicated, in the report) which by virtue of Part III of the Eighth Schedule to this Act are not required to be disclosed.

(2) The auditors' report shall be read before the company in general meeting and shall be open to inspection by any member.

(3) Every auditor of a company shall have a right of access at all times to the books and papers of the company, and shall be entitled to require from the officers of the company such information and explanation as he thinks necessary for the performance of the duties of the auditors.

(4) The auditors of a company shall be entitled to attend any general meeting of the company, and to receive all notices of and other communications relating to any general meeting which any member of the company is entitled to receive, and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as auditors.

(5) If any officer of a company refuses or fails, without lawful justification, the proof whereof shall lie on him, to allow any auditor access to any such books or papers in his custody or power, or to give any such information possessed by him as and when required, or otherwise hinders, obstructs, or delays an auditor in the performance of his duties or the exercise of his powers, he shall be liable to a fine not exceeding twenty pounds, and to a further fine not exceeding five pounds for every day during which the default, refusal, or contravention continues.

Cf. 1933, No. 29, s. 141; 1948 U.K. Act, s. 162

As to the penalty for false statements under subss. (1) and (3), see s. 461 and the 13th Sched.

This section does not apply to cooperative dairy companies; see s. 28 (1) (d) of the Cooperative Dairy Companies Act 1949.

167. Construction of references to documents annexed to accounts - References in this Act to a document annexed or required to be annexed to a company's accounts or any of them shall not include the directors report or the auditors' report:

Provided that any information which is required by this Act to be given in accounts, and is thereby allowed to be given in a statement annexed, may be given in the directors' report instead of in the accounts and, if any such information is so given, the report shall be annexed to the accounts and this Act shall apply in relation thereto accordingly, except that the auditors shall report thereon only so far as it gives the said information.

Cf. 1948 U.K. Act, s. 163

Inspection

168. Investigation of company's affairs on application of members - (1) The Court may appoint one or more competent inspectors to investigate the affairs of a company and to report thereon in such manner as the Court directs -

(a) In the case of a company having a share capital, on the application either of not less than two hundred members or of members holding not less than one-tenth of the shares issued:

(b) In the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company's register of members.

(2) The application shall be supported by such evidence as the Court may require for the purpose of showing that the applicants have good reason for requiring the investigation, and the Court may, before appointing an inspector, require the applicants to give security, to an amount not exceeding one hundred and fifty pounds, for payment of the costs of the investigation.

Cf. 1933, No. 29, s. 142 (1), (2) , 1948 U.K. Act, s. 164

As to the power to modify subs. (1) (a) for unusually large companies, see s. 471 and the 14th Sched.

169. Investigation of company's affairs in other cases - (1) Without prejudice to its powers under section one hundred and sixty-eight of this Act, the Court -

(a) Shall appoint one or more competent inspectors to investigate the affairs of a company and to report thereon in such manner as the Court directs, if -

(i) The company by special resolution; or

(ii) The Court by order -

declares that its affairs ought to be investigated by an inspector appointed by the Court; and

(b) May do so if it appears to the Court that there are circumstances suggesting

(i) That its business is being conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive of any part of its members or that it was formed for any fraudulent or unlawful purpose; or

(ii) That persons concerned with its formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance, or other misconduct towards it or towards its members; or

(iii) That its members have not been given all the information with respect to its affairs which they might reasonably expect.

(2) An application for the appointment of an inspector or inspectors under this section may be made either in proceedings brought in that behalf or in any other proceedings properly brought before the Court.

Cf. 1948 U.K. Act, s. 165

170. Power of inspectors to carry investigation into affairs of related companies - If an inspector appointed under section one hundred and sixty-eight or section one hundred and sixty-nine of this Act to investigate the affairs of a company thinks it necessary for the purposes of his investigation to investigate also the affairs of any other body corporate which is or has at any relevant time been the company's subsidiary or holding company or a subsidiary of its holding company or a holding company of its subsidiary, he shall have power so to do, and shall report on the affairs of the other body corporate so far as he thinks the results of his investigation thereof are relevant to the investigation of the affairs of the first-mentioned company.

Cf. 1948 U.K. Act, s. 166

171. Production of documents, and evidence, on investigation - (1) It shall be the duty of all officers and agents of the company and of all officers and agents of any other body corporate whose affairs are investigated by virtue of section one hundred and seventy of this Act to produce to the inspectors all books and papers of or relating to the company or, as the case may be, the other body corporate which are in their custody or power and otherwise to give to the inspectors all assistance in connection with the investigation which they are reasonably able to give.

(2) An inspector may examine on oath the officers and agents of the company or other body corporate in relation to its business, and may administer an oath accordingly.

(3) If any officer or agent of the company or other body corporate refuses to produce to the inspectors any book or paper which it is his duty under this section so to produce, or refuses to answer any question which is put to him by the inspectors with respect to the affairs of the company or other body corporate, as the case may be, the inspectors may certify the refusal under their hand to the Court, and the Court may thereupon inquire into the case, and after hearing any witnesses who may be produced against or on behalf of the alleged offender, and after hearing any statement which may be offered in defence, punish the offender in like manner as if he had been guilty of contempt of the Court.

(4) If an inspector thinks it necessary for the purpose of his investigation that a person whom he has no power to examine on oath should be so examined, he may apply to the Court and the Court may if it sees fit order that person to attend and be examined on oath before it on any matter relevant to the investigation, and on any such examination -

(a) The inspector may take part therein either personally or by barrister or solicitor:

(b) The Court may put such questions to the person examined as the Court thinks fit

(c) The person examined shall answer all such questions as the Court may put or allow to be put to him, but may at his own cost employ a barrister or solicitor, who shall be at liberty to put to him such questions as the Court may deem just for the purpose of enabling him to explain or qualify any answers given by him,-

and notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against him:

Provided that, notwithstanding anything in paragraph (c) of this subsection, the Court may allow the person examined such costs as in its discretion it may think fit, and any costs so allowed shall be paid as part of the expenses of the investigation.

(5) In this section, any reference to officers or to agents shall include past, as well as present, officers or agents, as the case may be, and for the purposes of this section the expression "agents", in relation to a company or other body corporate, shall include the bankers and solicitors of the company or other body corporate and any persons employed by the company or other body corporate as auditors, whether those persons are or are not officers of the company or other body corporate.

Cf. 1933, No. 29, ss. 142 (3), (4), (5), 144 (3), (4) ; 1948 U.K. Act, s. 167

172. Inspectors' report - (1) The inspectors may, and, if so directed by the Court, shall, make interim reports to the Court, and on the conclusion of the investigation shall make a final report to the Court.

(2) The Court shall-

(a) Forward a copy of any report made by the inspectors to the registered office of the company;

(b) If the Court thinks fit, furnish a copy thereof on request and on payment of the prescribed fee to any other person who is a member of the company or of any other body corporate dealt with in the report by virtue of section one hundred and seventy of this Act or whose interests as a creditor of the company or of any such other body corporate as aforesaid appear to the Court to be affected; and

(c) Where the inspectors are appointed under section one hundred and sixty-eight of this Act, furnish, at the request of the applicants for the investigation, a copy to them -

and may also cause the report to be printed and published.

Cf. 1933, No. 29, s. 142 (6) ; 1948 U.K. Act, s. 168

173. Proceedings on inspectors' report - (1) If from any report made under section one hundred and seventy-two of this Act it appears to the Court that any person has, in relation to the company or to any other body corporate whose affairs have been investigated by virtue of section one hundred and seventy of this Act, been guilty of any offence for which he is criminally liable, the Court shall cause the matter to be referred to the Attorney-General, and no prosecution shall be commenced except with the consent of the Attorney-General.

(2) If in any such case the Attorney-General considers that the case is one in which a prosecution ought to be instituted he shall cause proceedings to be instituted accordingly, and it shall be the duty of all officers and agents of the company or other body corporate as aforesaid (other than the defendant in the proceedings) to give all assistance in connection with the prosecution which they are reasonably able to give. Subsection five of section one hundred and seventy-one of this Act shall apply for the purposes of this subsection as it applies for the purposes of that section.

(3) If, in the case of any body corporate liable to be wound up under this Act, it appears to the Attorney-General from any such report as aforesaid that it is expedient so to do by reason of any circumstances suggesting -

(a) That its business is being conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive of any part of its members or that it was formed for any fraudulent or unlawful purpose; or

(b) That persons concerned with its formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance, or other misconduct towards it or towards its members,-

the Attorney-General may, unless the body corporate is already being wound up by the Court, present a petition for it to be so wound up if the Court thinks it just and equitable that it should be wound up or a petition for an order under section two hundred and nine of this Act or both.

(4) If from any such report as aforesaid it appears to the Attorney-General that proceedings ought in the public interest to be brought by any body corporate dealt with by the report for the recovery of damages in respect of any fraud, misfeasance, or other misconduct in connection with the promotion or formation of that body corporate or the management of its affairs, or for the recovery of any property of the body corporate which has been misapplied or wrongfully retained, he may himself bring proceedings for that purpose in the name of the body corporate.

(5) The Attorney-General shall indemnify the body corporate against any costs or expenses incurred by it in or in connection with any proceedings brought by virtue of subsection four of this section.

Cf. 1933, No. 29, s. 143 (1), (2); 1948 U.K. Act, s. 169

174. Expenses of investigation of company's affairs - (1) The expenses of and incidental to an investigation by an inspector appointed by the Court under the foregoing provisions of this Act shall be defrayed as follows:

(a) Where as a result of the investigation a prosecution is instituted by direction of the Attorney-General the expenses shall be defrayed out of the Consolidated Fund, unless the Court directs, as it is hereby authorised to do, that they shall be paid wholly or in part by any person who is convicted on the prosecution

(b) In any other case the expenses shall be defrayed by the company, unless the Court directs, as it is hereby authorised to do, that they shall either be paid by the applicants or in part by the company and in part by the applicants

Provided that -

(i) If any convicted person or the company fails to pay the whole or any part of the sum which he or it is liable to pay under this subsection, the applicants shall make good the deficiency up to the amount by which the security, if any, given by them under section one hundred and sixty-eight of this Act exceeds the amount, if any, which they have under this subsection been directed by the Court to pay; and

(ii) Any balance of the expenses not defrayed either by any convicted person or the company or the applicants shall be defrayed out of the Consolidated Fund.

(2) The report of an inspector may, if he thinks fit, and shall, if the Court so directs, include a recommendation as to the directions (if any) which he thinks appropriate, in the light of his investigation, to be given under paragraph (a) or paragraph (b) of subsection one of this section.

(3) For the purposes of this section, any costs or expenses incurred by the Attorney-General in or in connection with proceedings brought by virtue of subsection four of section one hundred and seventy-three of this Act (including expenses incurred by virtue of subsection five thereof) shall be treated as expenses of the investigation giving rise to the proceedings.

Cf. 1933, No. 29, s. 143 (3); 1948 U.K. Act, s. 170

175. Inspectors' report to be evidence - A copy of any report of any inspectors appointed under the foregoing provisions of this Act, authenticated by the seal of the company whose affairs they have investigated, shall be admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report.

Cf. 1933, No. 29, s. 145; 1948 U.K. Act, s. 171

176. Appointment and powers of inspectors to investigate ownership of company - (1) Where it appears to the Court that there is good reason so to do, it may appoint one or more competent inspectors to investigate and report on the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company.

(2) The appointment of an inspector under this section may define the scope of his investigation, whether as respects the matters or the period to which it is to extend or otherwise, and in particular may limit the investigation to matters connected with particular shares or debentures.

(3) Where an application for an investigation under this section with respect to particular shares or debentures of a company is made to the Court by members of the company,

and the number of applicants or the amount of the shares held by them is not less than that required for an application for the appointment of an inspector under section one hundred and sixty-eight of this Act, the Court shall appoint an inspector to conduct the investigation unless it is satisfied that the application is vexatious, and the inspector's appointment shall not exclude from the scope of his investigation any matter which the application seeks to have included therein, except in so far as the Court is satisfied that it is unreasonable for that matter to be investigated.

(4) Subject to the terms of an inspector's appointment, his powers shall extend to the investigation of any circumstances suggesting the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of his investigation.

(5) For the purposes of any investigation under this section, sections one hundred and seventy to one hundred and seventy-two of this Act shall apply with the necessary modifications of references to the affairs of the company or to those of any other body corporate, so, however, that -

(a) The said sections shall apply in relation to all persons who are or have been, or whom the inspector has reasonable cause to believe to be or have been, financially interested in the success or failure or the apparent success or failure of the company or any other body corporate whose membership is investigated with that of the company, or able to control or materially to influence the policy thereof, including persons concerned only on behalf of others, as they apply in relation to officers and agents of the company or of the other body corporate, as the case may be; and

(b) The Registrar of the Court shall not be bound to furnish the company or any other person with the copy of any report by an inspector appointed under this section or with a complete copy thereof if the Court is of opinion that there is good reason for not divulging the contents of the report or of parts thereof, but the Court shall cause to be kept by the Registrar of Companies a copy of any such report, or, as the case may be, the parts of any such report as respects which it is not of that opinion.

(6) The expenses of any investigation under this section shall be defrayed out of the Consolidated Fund.

Cf. 1948 U.K. Act, s. 172

177. Power to require information as to persons interested in shares or debentures – (1) Where it appears to the Court that there is good reason to investigate the ownership of any shares in or debentures of a company and that it is unnecessary to appoint an inspector for the purpose, the Court may require any person whom it has reasonable cause to believe –

(a) To be or to have been interested in those shares or debentures; or

(b) To act or to have acted in relation to those shares or debentures as the solicitor or agent of someone interested therein, -

to give the Court any information which he has or can reasonably be expected to obtain as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who act or have acted on their behalf in relation to the shares or debentures.

(2) For the purposes of this section, a person shall be deemed to have an interest in a share or debenture if he has any right to acquire or dispose of the share or debenture or any interest therein or to vote in respect thereof, or if his consent is necessary for the exercise of any of the rights of other persons interested therein, or if other persons interested therein can be required or are accustomed to exercise their rights in accordance with his instructions.

(3) Any person who fails to give any information required of him under this section, or who is giving such information makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material, shall be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.

Cf. 1948 U.K. Act, s.173

178. Power to impose restrictions on shares or debentures - (1) Where in connection with an investigation under section one hundred and seventy-six or section one hundred and seventy-seven of this Act it appears to the Court that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to assist the investigation as required by this Act, the Court may by order direct that the shares shall until further order be subject to the restrictions imposed by this section.

(2) So long as any shares are directed to be subject to the restrictions imposed by this section -

(a) Any transfer of those shares, or in the case of unissued shares any transfer of the right to be issued therewith and any issue thereof, shall be void:

(b) No voting rights shall be exercisable in respect of those shares:

(d) Except in a liquidation, no payment shall be made of any sums due from the company on those shares, whether in respect of capital or otherwise.

(3) Any order directing that shares shall cease to be subject to the said restrictions which is expressed to be made with a view to permitting a transfer of those shares may continue the restrictions mentioned in paragraphs (c) and (d) of subsection two of this section, either in whole or in part, so far as they relate to any right acquired or offer made before the transfer.

(4) Any person who -

(a) Exercises or purports to exercise any right to dispose of any shares which, to his knowledge, are for the time being subject to the said restrictions or of any right to be issued with any such shares; or

(b) Votes in respect of any such shares, whether as holder or proxy, or appoints a proxy to vote in respect thereof; or

(c) Being the holder of any such shares, fails to notify of their being subject to the said restrictions any person whom he does not know to be aware of that fact but does know to be entitled, apart from the said restrictions, to vote in respect of those shares whether as holder or proxy,-

shall be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.

(5) Where shares in any company are issued in contravention of the said restrictions, the company and every officer of the company who is in default shall be liable to a fine not exceeding five hundred pounds.

(6) A prosecution shall not be instituted under this section except by or with the consent of the Attorney-General.

(7) This section shall apply in relation to debentures as it applies in relation to shares.

Cf. 1948 U.K. Act, s. 174

179. Saving for solicitors and bankers - Nothing in the foregoing provisions of this Part of this Act shall require disclosure to the Court or to an inspector appointed by the Court-

(a) By a solicitor of any privileged communication made to him in that capacity, except as respects the name and address of his client; or

(b) By a company's bankers as such of any information as to the affairs of any of their customers other than the company.

Cf. 1948 U.K. Act, s. 175

Directors and Other Officers

180. Directors - Every company shall have at least two directors.

Cf. 1933, No. 29, s. 146; 1948 U.K. Act, s. 176

In its application to a private company this section must be read as requiring at least one director; see s. 354 (2) (c).

As to a private company being prohibited from having certain persons as sole director, see s. 355.

181. Secretary - (1) Every company shall have a secretary. (2) Anything required or authorised to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to any officer of the company authorised generally or specially in that behalf by the directors.

Cf. 1948 U.K. Act, s. 177

As to a private company being prohibited from having certain persons as secretary, see s. 355.

182. Avoidance of acts done by person in dual capacity as director and secretary - A provision requiring or authorising a thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary.

Cf. 1948 U.K. Act, s. 179

183. Validity of acts of directors - The acts of a director or manager shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.

Cf. 1933, No.29, s.150; 1948. U.K Act, .s. 180

184. Restrictions on appointment or advertisement of director - (1) A person shall not be capable of being appointed director of a company by the articles, and shall not be named as a director or proposed director of a company in a prospectus issued by or on behalf of the company, or as proposed director of an intended company in a prospectus issued in relation to that intended company, or in a statement in lieu of prospectus delivered to the Registrar by or on behalf of a company, unless, before the registration of the articles, or the publication of the prospectus, or the delivery of the statement in lieu of prospectus, as the case may be, he has by himself or by his agent authorised in writing -

(a) Signed and delivered to the Registrar for registration a consent in writing to act as such director; and

(b) Either -

(i) Signed the memorandum for a number of shares not less than his qualification, if any; or

(ii) Taken from the company and paid or agreed to pay for his qualification shares, if any; or

(iii) Signed and delivered to the Registrar for registration an undertaking in writing to take from the company and pay for his qualification shares, if any; or

(iv) Made and delivered to the Registrar for registration a statutory declaration to the effect that a number of shares, not less than his qualification, if any, are registered in his name.
Vol. 2 Companies Act 1955 493 145
(2) Where a person has signed and delivered as aforesaid an undertaking to take and pay for his qualification shares, he shall, as regards those shares, be in the same position as if he had signed the memorandum for that number of shares.

(3) References in this section to the share qualification of a director or proposed director shall be construed as including only a share qualification required on appointment or within a period determined by reference to the time of appointment, and references therein to qualification shares shall be construed accordingly.

(4) On the application for registration of the memorandum and articles of a company, the applicant shall deliver to the Registrar a list of the persons who have consented to be directors of the company, and, if this list contains the name of any person who has not so consented, the applicant shall be liable to a fine not exceeding fifty pounds.

(5) This section shall not apply to -

(a) A company not having a share capital; or

(b) A company which was a private company before becoming a public company; or

(c) A prospectus issued by or on behalf of a company after the expiration of one year from the date on which the company was entitled to commence business.

Cf. 1933, No. 29, s. 147; 1948 U.K.. Act, s. 181

As to the penalty for false statements, see s. 461 and the 13th Sched. This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

This section does not apply to cooperative companies under the Cooperative Companies Act 1956; see s. 10 (2) (b) of that Act.

185. Share qualifications of directors - (1) Without prejudice to the restrictions imposed by section one hundred and eighty-four of this Act, it shall be the duty of every director who is by the articles of the company required to hold a specified share qualification, and who is not already qualified, to obtain his qualification within two months after his appointment, or such shorter time as may be fixed by the articles.

(2) For the purpose of any provision in the articles requiring a director or manager to hold a specified share qualification, the bearer of a share warrant shall not be deemed to be the holder of the shares specified in the warrant.

(3) The office of director of a company shall be vacated if the director does not within two months from the date of his appointment, or within such shorter time as may be fixed by the articles, obtain his qualification, or if after the expiration of the said period or shorter time he ceases at any time to hold his qualification.

(4) A person vacating office under this section shall be incapable of being reappointed director of the company until he has obtained his qualification.

(5) If after the expiration of the said period or shorter time any unqualified person acts as a director of the company, he shall be liable to a fine not exceeding five pounds for every day between the expiration of the said period or shorter time or the day on which he ceased to be qualified, as the case may be, and the last day on which it is proved that he acted as a director.

Cf. 1933, No. 29, s. 148; 1948 U.K. Act, s. 182

This section does not apply to cooperative companies under the operative Companies Act 1956; see s. 10 (2) (c) of that Act.

186. Appointment of directors to be voted on individually - (1) At a general meeting of a company, a motion for the appointment of two or more persons as directors of the company by a single resolution shall not be made, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it.

(2) A resolution moved in contravention of this section shall be void, whether or not its being so moved was objected to at the time

Provided that -

(a) This subsection shall not be taken as excluding the operation of section one hundred and eighty-three of this Act; and

(b) Where a resolution so moved is passed, no provision for the automatic reappointment of retiring directors in default of another appointment shall apply.

(3) For the purposes of this section, a motion for approving a person's appointment or for nominating a person for appointment shall be treated as a motion for his appointment.

(4) Nothing in this section shall apply to a resolution altering the company's articles.

(5) Nothing in this section shall be deemed to prevent the election of two or more directors by ballot or poll.

Cf. 1948 U.K. Act, s. 183

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

187. Removal of directors-(1) A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him.

(2) Special notice shall be required of a resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this section the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.

(3) Where notice is given of an intended resolution to remove a director under this section and the director concerned makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests the notification to members of the company, the company shall, unless the representations are received by it too late for it to do so, -

(a) In any notice of the resolution given to members of the company state the fact of the representations having being made; and

(b) Send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after the receipt of the representations by the company),-

and if a copy of the representations is not sent as aforesaid because received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting :
Provided that copies of the representations need not be sent out and the representations need not read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the Court may order the company’s costs on an application under this section to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.

(4) A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.

(5) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was not last appointed a director.

(6) Nothing in the foregoing provisions of this section shall be taken as depriving a person removed thereunder of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director or as derogating from any power to remove a director which may exist apart from this section.

(7) A director shall not be removed by, or vacate his office by reason of, any resolution, request, or notice of the directors or any of them, notwithstanding anything in the company's articles or in any agreement.

Cf. 1948 U.K. Act, s. 184

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

188. Provisions as to undischarged bankrupts acting as directors - (1) If any person being an undischarged bankrupt acts as director of, or directly or indirectly takes part in or is concerned in the management of, any company except with the leave of the Court, he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.

Provided that a person shall not be guilty of an offence under this section by reason that he, being an undischarged bankrupt, has acted as director of, or taken part or been concerned in the management of, a company, if he was on the first day of April, nineteen hundred and thirty-four, acting as director of, or taking part or being concerned in the management of, that company and has continuously so acted, taken part, or been concerned since that date and the bankruptcy was prior to that date.

(2) The leave of the Court for the purposes of this section shall not be given unless notice of intention to apply therefor has been served on the Official Assignee, and it shall be the duty of the Official Assignee, if he is of opinion that it is contrary to the public interest that any such application should be granted, to attend on the hearing of and oppose the granting of the application.

(3) In this section the expression "company" includes an unregistered company and an overseas company which has an established place of business within New Zealand.

Cf. 1933, No. 29, s. 149; 1948 U.K. Act, s. 187

189. Power to restrain fraudulent persons from managing companies - (1) Where -

(a) A person is convicted on indictment of any offence in connection with the promotion, formation, or management of a company; or

(b) In the course of winding up a company or from any report made by any inspectors under section one hundred and seventy-two of this Act it appears that a person-

(i) Has been guilty of any offence for which he is liable (whether he has been convicted or not) under section three hundred and twenty of this Act; or

(ii) Has otherwise been guilty, while an officer of the company, of any fraud in relation to the company or of any breach of his duty to the company,-

the Court may make an order that that person shall not, without the leave of the Court, be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of a company for such period not exceeding five years as may be specified in the order.

(2) A person intending to apply for the making of an order under this section shall give not less than ten days' notice of his intention to the person against whom the order is sought, and on the hearing of the application the last-mentioned person may appear and himself give evidence or call witnesses.

(3) An application for the making of an order under this section may be made by the Official Assignee, or by the liquidator of the company, or by any person who is or has been a member or creditor of the company; and on the hearing of any application for an order under this section by the Official Assignee or the liquidator, or of any application for leave under this section by a person against whom an order has been made on the application of the Official Assignee or the liquidator, the Official Assignee or liquidator shall appear and call the attention of the Court to any matters which seem to him to be relevant, and may himself give evidence or call witnesses.

(4) An order may be made by virtue of subparagraph (ii) of paragraph (b) of subsection one of this section notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made, and for the purposes of the said subparagraph (ii) the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the Company have been accustomed to act.

(5) If any person acts in contravention of an order made under this section, he shall, in respect of each offence, be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.

Cf. 1933, No. 29, ss. 216, 268 (4), (5); 1948 U.K. Act, s. 188

190. Prohibition of loans to directors - (1) It shall not be lawful for a company to make a loan to any person who is its director or a director of its holding company, or to enter into any guarantee or provide any security in connection with a loan made to such a person as aforesaid by any other person:

Provided that nothing in this section shall apply either –

(a) To anything done by a subsidiary, where the director is its holding company; or

(b) Subject to subsection two of this section, to anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him properly to perform his duties as an. officer of the company; or

(c) In the case of a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, to anything done by the company in the ordinary course of that business.

(2) Paragraph (b) of the proviso to subsection one of this section shall not authorise the making of any loan, or the entering into any guarantee, or the provision of any security, except either -

(a) With the prior approval of the company given at a general meeting at which the purposes of the expenditure and the amount of the loan or the extent of the guarantee or security, as the case may be, are disclosed; or

(b) On condition that, if the approval of the company is not given as aforesaid at or before the next following annual general meeting, the loan shall be repaid or the liability under the guarantee or security shall be discharged, a the case may be, within six months from the conclusion of that meeting.

(3) Where the approval of the company is not given as required by any such condition, the directors authorising the making of the loan, or the entering into the guarantee, or the provision of the security, shall be jointly and severally liable to indemnify the company against any loss arising therefrom.

Cf. 1948 U.K. Act, s. 190

This section is not applicable to private companies; see s. 354 (4) and the 9th Sched.

191. Approval of company requisite for payment by it to director for loss of office, etc. - It shall not be lawful for a company to make to any director of the company any payment by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, without particulars with respect to the proposed payment (including the amount thereof) being disclosed to members of the company and the proposal being approved by the company in general meeting.

Cf. 1948 U.K. Act, s. 191

For provisions supplementary to this section, see s. 194.

192. Approval of company requisite for any payment, in connection with transfer of its property, to director for loss of office, etc.- (1) It is hereby declared that it is not lawful in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, unless particulars with respect to the proposed payment (including the amount thereof) have been disclosed to the members of the company and the proposal approved by the company in general meeting.

(2) Where a payment which is hereby declared to be illegal is made to a director of the company, the amount received shall be deemed to have been received by him in trust for the company.

Cf. 1933, No. 29, s. 156 (1), (2); 1948 U.K. Act, s. 192

For provisions supplementary to this section, see s. 194.

193. Duty of director to disclose payment for loss of office, etc., made in connection with transfer of shares in company - (1) Where in connection with the transfer to any persons of all or any of the shares in a company, being a transfer resulting from -

(a) An offer made to the general body of shareholders;

(b) An offer made by or on behalf of some other body corporate with a view to the company becoming its subsidiary or a subsidiary of its holding company;

(c) An offer made by or on behalf of an individual with a view to his obtaining the right to exercise or control the exercise of not less than one-third of the voting power at any general meeting of the company; or

(d) Any other offer which is conditional on acceptance to a given extent,-

a payment is to be made to a director of the company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, it shall be the duty of that director to take all reasonable steps to secure that particulars with respect to the proposed payment (including the amount thereof) shall be included in or sent with any notice of the offer made for their shares which is given to any shareholders.

(2) If -

(a) Any such director fails to take reasonable steps as aforesaid; or

(b) Any person who has been properly required by any such director to include the said particulars in or send them with any such notice as aforesaid fails so to do,-

he shall be liable to a fine not exceeding twenty-five pounds.

(3) If -

(a) The requirements of subsection one of this section are not complied with in relation to any such payment as is therein mentioned; or

(b) The making of the proposed payment is not, before the transfer of any shares in pursuance of the offer, approved by a meeting summoned for the purpose of the holders of the shares to which the offer relates and of other holders of shares of the same class as any of the said shares,-

any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made, and the expenses incurred by him in distributing that sum amongst those persons shall be borne by him and not retained out of that sum.

(4) Where the shareholders referred to in paragraph (b) of subsection three of this section are not all the members of the company and no provision is made by the articles for summoning or regulating such a meeting as is mentioned in that paragraph, the provisions of this Act and of the company's articles relating to general meetings of the company shall, for that purpose, apply to the meeting either without modification or with such modifications as the Registrar on the application of any person concerned may direct for the purpose of adapting them to the circumstances of the meeting.

(5) If at a meeting summoned for the purpose of approving any payment as required by paragraph (b) of subsection three of this section a quorum is not present and, of the meeting has been adjourned to a later date, a quorum is again not present, the payment shall be deemed for the purposes of that subsection to have been approved.

Cf. 1933, No. 29, s. 156 (3), (4) ; 1948 U.K. Act, s. 193

194. Provisions supplementary to last three sections - (1) Where in proceedings for the recovery of any payment as having, by virtue of subsections one and two of section one hundred and ninety-two or subsections one and three of section one hundred and ninety-three of this Act, been received by any person in trust it is shown that -

(a) The payment was made in pursuance of any arrangement entered into as part of the agreement for the transfer in question, or within one year before or two years after that agreement or the offer leading thereto; and

(b) The company or any person to whom the transfer was made was privy to that arrangement,-

the payment shall be deemed, except in so far as the contrary is shown, to be one to which the subsections apply.

(2) If in connection with any such transfer as is mentioned in section one hundred and ninety-two or section one hundred and ninety-three of this Act -

(a) The price to be paid to a director of the company whose office is to be abolished or who is to retire from office for any shares in the company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares; or

(b) Any valuable consideration is given to any such director,-

the excess or the money value of the consideration, as the case may be, shall, for the purposes of that section, be deemed to have been a payment made: to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office.

(3) It is hereby declared that references in sections one hundred and ninety-one, one hundred and ninety-two, and one hundred and ninety-three of this Act to payments made to any director of a company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, do not include any bona fide payment by way of damages for breach of contract or by way of pension in respect of past services, and for the purposes of this subsection the expression "pension" includes any superannuation allowance, superannuation gratuity, or similar payment.

(4) Nothing in sections one hundred and ninety-two and one hundred and ninety-three of this Act shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are therein mentioned or with respect to any other like payments made or to be made to the directors of a company.

Cf. 1933, No. 29, s. 156 (5), (6); 1948 U.K. Act, s. 194

195. Register of directors' shareholdings, etc.-(1) Every company shall keep a register showing as respects each director of the company (not being its holding company) the number, description, and amount of any shares in or debentures of the company or any other body corporate, being the company's subsidiary or holding company, or a subsidiary of the company's holding company, which are held by or in trust for him or of which he has any right to become the holder (whether on payment or not)

Provided that the register need not include shares in any body corporate which is the wholly owned subsidiary of another body corporate, and for this purpose a body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members but that other and that other's wholly owned subsidiaries and its or their nominees.

(2) Where any shares or debentures fail to be or cease to be recorded in the said register in relation to any director by reason of a transaction entered into after the commencement of this Act and while he is a director, the register shall also show the date of, and price or other consideration for, the transaction

Provided that where there is an interval between the agreement for any such transaction and the completion thereof, the date shall be that of the agreement.

(3) The nature and extent of a director's interest or right in or over any shares or debentures recorded in relation to him in the said register shall, if he so requires, be indicated in the register.

(4) The company shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon inquiry as to, the rights of any person in relation to any shares or debentures.

(5) The said register shall, subject to the provisions of this section, be kept at the company's registered office and shall be open to inspection during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that not less than two hours in each day be allowed for inspection) as follows:

(a) During the period beginning fourteen days before the date of the company's annual general meeting and ending three days after the date of its conclusion, it shall be open to the inspection of any member or holder of debentures of the company; and

(b) During that or any other period, it shall be open to the inspection of any person acting on behalf of the Registrar.

(6) In computing the fourteen days and the three days mentioned in subsection five of this section, any day which is a Saturday or Sunday or a bank holiday shall be disregarded.

(7) Without prejudice to the rights conferred by subsection five of this section, the Registrar may at any time require a copy of the said register, or any part thereof.

(8) The said register shall also be produced at the commencement of the company's annual general meeting and remain open and accessible during the continuance of the meeting to any person attending the meeting.

(9) If default is made in complying with subsection eight of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds; and if default is made in complying with subsection one or subsection two of this section, or if any inspection required under this section is refused or any copy required thereunder is not sent within a reasonable time, the company and every officer of the company who is in default shall be liable to a fine not exceeding five hundred pounds and further to a default fine of two pounds.

(10) In the case of any such refusal, the Court may by order compel an immediate inspection of the register.

(11) For the purposes of this section -

(a) Any person in accordance with whose directions or instructions the directors of a company are accustomed to act shall be deemed to be a director of the company; and

(b) A director of a company shall be deemed to hold, or to have any interest or right in or over, any shares or debentures if a body corporate other than the company holds them or has that interest or right in or over them, and either -

(i) That body corporate or its directors are accustomed to act in accordance with his directions or instructions; or

(ii) He is entitled to exercise or control the exercise of one-third or more of the voting power at any general meeting of that body corporate.

Cf. 1948 U.K. Act, s. 195

As to bank holidays, see ss. 23 and 24 of the Banking Act 1908.

As to the duty of directors to make disclosure to the company for the purposes of this section, see s. 198.

196. Statement as to remuneration of directors to be furnished to shareholders - (1) Subject as hereinafter provided, the directors of a company shall, on demand in that behalf made to them in writing -

(a) In the case of a company having a share capital, either by not less than two hundred members or by members holding not less than one-tenth of the shares issued

(b) In the case of a company not having a share capital, by not less than one-fifth in number of the persons on the company's register of members,-

furnish to all the members of the company within a period of one month from the receipt of the demand a statement, certified as correct, or with such qualifications as may be necessary, by the auditors of the company, showing as respects each of the last three preceding years in respect of which the accounts of the company have been made up the aggregate amount received in that year by way of remuneration or other emoluments by persons being directors of the company, whether as such directors or otherwise in connection with the management of the affairs of the company; and there shall, in respect of any such director who is -

(i) A director of any other company which is a subsidiary of the first-mentioned company; or

(ii) By virtue of the nomination, whether direct or indirect, of the company a director of any other company-

be included in the said aggregate amount any remuneration or other emoluments received by him for his own use, whether as a director of, or otherwise in connection with the management of the affairs of, that other company:

Provided that a demand for a statement under this section shall be of no effect if the company within one month after the date on which the demand is made resolves that the statement shall not be furnished:

Provided also that it shall be sufficient to state the total aggregate of all sums paid to or other emoluments received by all the directors in each year without specifying the amount received by any individual.

(2) In computing for the purpose of this section the amount of any remuneration or emoluments received by any director, the amount actually received by him shall, if the company has paid on his behalf any sum by way of income tax or other tax in respect of the remuneration or emoluments, be increased by the amount of the sum so paid.

(3) If any director fails to comply with the requirements of this section he shall be liable to a fine not exceeding fifty pounds.

(4) In this section and section one hundred and ninety-seven of this Act the expression "emoluments" includes fees, percentages, and other payments made or consideration given, directly or indirectly, to a director as such, and the money value of any allowances or perquisites belonging to his office.

Cf. 1933, No. 29, s. 154

As to the duty of directors to make disclosure to the company for the purposes of this section, see s. 198.

As to the power to modify subs. (1) (a) for unusually large companies, see s. 471 and the 14th Sched.

197. Particulars in accounts of loans to officers and remuneration of directors - (1) The accounts which, in pursuance of this Act, are to be laid before every company in general meeting shall, subject to the provisions of this section, contain particulars showing -

(a) The amount of any loans made during the company's financial year to -

(i) Any officer of the company; or

(ii) Any person who, after the making of the loan, became during that year an officer of the company,-

by the company or a subsidiary thereof or by any other person under a guarantee from or on a security provided by the company or a subsidiary thereof (including any such loans which were repaid during that year):

(b) The amount of any loans made in manner aforesaid to any such officer or person as aforesaid at any time before the company's financial year and outstanding at the expiration thereof:

(c) The aggregate amount paid during the company's financial year to the directors as remuneration for their services, inclusive of all emoluments as defined in section one hundred and ninety-six of this Act, whether paid by the company or by any subsidiary thereof:

Provided that this paragraph shall not apply in relation to a managing director of the company or a subsidiary thereof, and, in the case of any other director who is a full-time salaried employee of the company or a subsidiary thereof, there shall not be required to be included in the said total amount any sums paid to him except sums paid by way of director's fees.

(2) Subsection one of this section shall not require the inclusion in accounts of particulars of –

(a) A loan made in the ordinary course of its business by the company or a subsidiary thereof, where the ordinary business of the company or, as the case may be, the subsidiary includes the lending of money; or

(b) A loan made by the company or a subsidiary thereof to an employee of the company or subsidiary, as the case may be, if the loan does not exceed two thousand pounds and is certified by the directors of the company or subsidiary, as the case may be, to have been made in accordance with any practice adopted or about to be adopted by the company or subsidiary with respect to loans to its employees,-

not being, in either case, a loan made by the company under a guarantee from or on a security provided by a subsidiary thereof or a loan made by a subsidiary of the company under a guarantee from or on a security provided by the company or any other subsidiary thereof.

(3) If in the case of any such accounts as aforesaid the requirements of this section are not complied with, it shall be the duty of the auditors of the company by whom the accounts are examined to include in their report on the balance sheet of the company, so far as they are reasonably able to do so, a statement giving the required particulars.

(4) References in this section to a subsidiary shall be taken as referring to a subsidiary at the end of the company's financial year (whether or not a subsidiary at the date of the loan).

Cf. 1933, No. 29, s. 136; 1948 U.K. Act, ss. 196, 197

198. General duty to make disclosure for purposes of last three sections - (1) It shall be the duty of any person who is or has at any time during the preceding five years been an officer of a company to give notice to the company of such matters relating to himself as may be necessary for the purposes of sections one hundred and ninety-five, one hundred and ninety-six, and one hundred and ninety-seven of this Act.

(2) Any such notice given for the purposes of the said section one hundred and ninety-five shall be in writing and, if it is not given at a meeting of the directors, the director giving it shall take reasonable steps to secure that it is brought up and read at the next meeting of directors after it is given.

(3) Any person who makes default in complying with the foregoing provisions of this section shall be liable to a fine not exceeding fifty pounds.

Cf. 1948 U.K. Act, s. 198

199. Disclosure by directors of interests in contracts - (1) Subject to the provisions of this section, it shall be the duty of a director of a company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company to declare the nature of his interest at a meeting of the directors of the company.

(2) In the case of a proposed contract the declaration required by this section to be made by a director shall be made at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he became so interested, and in a case where the director becomes interested in a contract after it is made, the said declaration shall be made at the first meeting of the directors held after the director becomes so interested.

(3) For the purpose of this section, a general notice given to the directors of a company by a director to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm shall be deemed to be a sufficient declaration of interest in relation to any contract so made:

Provided that no such notice shall be of effect unless either it is given at a meeting of the directors or the director takes reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given.

(4) Any director who fails to comply with the provisions of this section shall be liable to a fine not exceeding one hundred pounds.

(5) Nothing in this section shall be taken to prejudice the operation of any rule of law restricting directors of a company from having any interests in contracts with the company.

Cf. 1933, No. 29, s. 155; 1948 U.K. Act, s. 199

200. Register of directors and secretaries - (1) Every company shall keep at its registered office a register of its directors and secretaries.

(2) The said register shall contain the following particulars with respect to each director, that is to say,-

(a) In the case of an individual, his present Christian name and surname, any former Christian name or surname, his usual residential address, his nationality, and his business occupation, if any, or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships; and

(b) In the case of a corporation, its corporate name and registered or principal office:

Provided that paragraph (a) of this subsection shall not apply to any directorships held by a director in companies of which the company is the wholly owned subsidiary, or which are the wholly owned subsidiaries either of the company or of another company of which the company is the wholly owned subsidiary, and for the purposes of this proviso -

(d) A body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members except that other and that other's wholly owned subsidiaries and its or their nominees.

(3) The said register shall contain the following particulars with respect to the secretary or, where there are joint secretaries, with respect to each of them, that is to say:

(a) In the case of an individual, his present Christian name and surname, any former Christian name and surname, and his usual residential address; and

(b) In the case of a corporation, its corporate name and registered or principal office:

Provided that, where all the partners in a firm are joint secretaries, the name and principal office of the firm may be stated instead of the said particulars.

(4) The company shall, within the periods respectively mentioned in subsection five of this section, send to the Registrar a return in the prescribed form containing the particulars specified in the said register and a notification in the prescribed form of any change among its directors or in its secretary or in any of the particulars contained in the register, specifying the date of the change.

(5) The periods referred to in subsection four of this section are the following, namely:

(a) The period within which the said return is to be sent shall be a period of fourteen days from the appointment of the first directors of the company; and

(b) The period within which the said notification of a change is to be sent shall be fourteen days from the happening thereof:

Provided that, in the case of a return containing particulars with respect to any person who is the company's secretary at the commencement of this Act, the period shall be fourteen days from the commencement of this Act.

(6) The register to be kept under this section shall during business hours (subject to such reasonable restrictions as the company may by its articles or in general meeting impose, so that not less than two hours in each day be allowed for inspection) be open to the inspection of any member of the company without charge and of any other person on payment of two shillings, or such less sum as the company may prescribe, for each inspection.

(7) If any inspection required under this section is refused or if default is made in complying with any provision of this section, the company and every officer of the company who is in default shall be liable to a default fine.

(8) In the case of any such refusal, the Court may by order compel an immediate inspection of the register.

(9) For the purposes of this section -

(a) A person in accordance with whose directions or instructions the directors of a company are accustomed to act shall be deemed to be a director and officer of the company:

(b) The expression "Christian name" includes a forename:

(c) In the case of a peer or a person usually known by a title different from his surname the expression "surname" means that title:

(d) References to a former Christian name or surname do not include-

(i) In the caste of a peer or a person usually known by a British title different from his surname, the name by which he was known before the adoption of or succession to the title; or

(ii) In the case of any person, a former Christian name or surname where that name or surname was changed or disused before the person bearing the name attained the age of eighteen years or has been changed or disused for a period of not less than twenty years; or

(iii) In the case of a married woman, the name or surname by which she was known before the marriage.

Cf. 1933, No. 29, s. 151; 1948 U.K. Act, s. 200

201. Limited company may have directors with unlimited liability - (1) In a limited company the liability of the directors, or of the managing director, may, if so provided by the memorandum, be unlimited.

(2) In a limited company in which the liability of a director is unlimited, the directors of the company and the member who proposes a person for election or appointment to the office of director shall add to that proposal a statement that the liability of the person holding that office will be unlimited, and before the person accepts the office or acts therein, notice in writing that his liability will be unlimited shall be given to him by the following or one of the following persons-namely, the promoters of the company, the directors of the company, and the secretary of the company.

(3) If any director or proposer makes default in adding such a statement, or if any promoter, director, or secretary makes default in giving such a notice, he shall be liable to a fine not exceeding one hundred pounds, and shall also be liable for any damage which the person so elected or appointed may sustain from the default, but the liability of the person elected or appointed shall not be affected by the default.

Cf. 1933, No. 29,s. 152; 1948 U.K. Act, s. 202

202. Special resolution of limited company making liability of directors unlimited - (1) A limited company, if so authorised by its articles, may, by special resolution, alter its memorandum so as to render the liability of its directors or of any managing director unlimited in respect of any debt or liability contracted by the company after the passing of the resolution or, in the case of a director who is out of New Zealand when the resolution is passed and who has not received due notice of the intention to propose the resolution, unlimited in respect of any debt or liability contracted by the company after the expiration of twenty-one days after written notice has been given to the director of the passing of the resolution and the terms thereof.

(2) Upon the passing of any such special resolution the provisions thereof shall be as valid as if they had been originally contained in the memorandum.

Cf. 1933, No. 29, s. 153; 1948 U.K. Act, s. 203

203. Provisions as to assignment of office by directors - If in the case of any company provision is made by the articles or by any agreement entered into between any person and the company for empowering a director or manager of the company to assign his office as such to another person, any assignment of office made in pursuance of the said provision shall, notwithstanding anything to the contrary contained in the said provision, be of no effect unless and until it is approved by a special resolution of the company.

Cf. 1933, No. 29, s. 157; 1948 U.K. Act, s. 204

Avoidance of Provisions in Articles or Contracts
Relieving Officers from Liability

204. Provisions as to liability of officers and auditors - Subject as hereinafter provided, any provision, whether contained in the articles of a company or in any contract with a company or otherwise, for exempting any officer of the company or any person (whether an officer of the company or not) employed by the company as auditor from, or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty, or breach of trust of which he may be guilty in relation to the company shall be void:

Provided that –

(a) Nothing in this section shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any such provision was in force; and

(b) Notwithstanding anything in this section, a company may, in pursuance of any such provision as aforesaid, indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted, or in connection with any application under section four hundred and sixty-eight of this Act in which relief is granted to him by the Court.

Cf. 1933, No. 29, s. 158; 1948 U.K. Act, s. 205

Arrangements and Reconstructions

205. Power to compromise with creditors and members- (1) Where a compromise or arrangement is proposed between a company and its creditors or any class of them, or between the company and its members or any class of them, the Court may, on the application in a summary way of the company or of any creditor or member of the company, or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be summoned in such manner as the Court directs. If any question arises under this section as to whether or not any members or creditors of a company constitute a class of members or a class of creditors, as the case may be, it shall be determined by the Court as in the circumstances it thinks proper.

(2) If a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members, as the case may be, voting in person or, where proxies are allowed, by proxy at the meeting agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be, and also on the company, or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.

(3) An order made under subsection two of this section shall have no effect until a sealed copy of the order has been delivered to the Registrar for registration, and a copy of every such order shall be annexed to every copy of the memorandum of the company issued after the order has been made, or, in the case of a company not having a memorandum, of every copy so issued of the instrument constituting or defining the constitution of the company.

(4) If a company makes default in complying with subsection three of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one pound for each copy in respect of which default is made.

(5) In this section and section two hundred and six of this Act the expression "company" means any company liable to be wound up under this Act, the expression "creditor" includes every person who has a claim that upon the winding up of the company would be admissible to proof in accordance with section three hundred and six of this Act, and the expression "arrangement" includes a reorganisation of the share capital of the company by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both those methods.

Cf. 1933, No. 29, s. 159; 1948 U.K. Act, s. 206

206. Information as to compromises with creditors and members - (1) Where a meeting of creditors or any class of creditors or of members or any class of members is summoned under section two hundred and five of this Act there shall-

(a) With every notice summoning the meeting which is sent to a creditor or member, be sent also a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors of the company, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons; and

(b) In every notice summoning the meeting which is given by advertisement, be included either such a statement as aforesaid or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement as aforesaid.

(2) Where the compromise or arrangement affects the rights of debenture holders of the company, the said statement shall give the like explanation as respects the trustees of any deed for securing the debentures as it is required to give as respects the company's directors.

(3) Where a notice given by advertisement includes a notification that copies of a statement explaining the effect of the compromise or arrangement proposed can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement.

(4) Where a company makes default in complying with any requirement of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding five hundred pounds, and for the purpose of this subsection any liquidator of the company and any trustee of a deed for securing any issue of debentures of the company shall be deemed to be an officer of the company:

Provided that a person shall not be liable under this subsection if that person shows that the default was due to the refusal of any other person, being a director or trustee for debenture holders, to supply the necessary particulars as to his interests.

(5) It shall be the duty of any director of the company and of any trustee for debenture holders of the company to give notice to the company of such matters relating to himself as may be necessary for the purposes of this section, and any person who makes default in complying with this subsection shall be liable to a fine not exceeding fifty pounds.

Cf. 1948 U.K. Act, s. 207

207. Provisions for facilitating reconstruction and amalgamation of companies - (1) Where an application is made to the Court under section two hundred and five of this Act for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as a transferor company) is to be transferred to another company (in this section referred to as the transferee company), the Court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters:

(a) The transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company:

(b) The allotting or appropriation by the transferee company of any shares, debentures, policies, or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person:

(c) The continuation by or against the transferee company of any legal proceedings pending by or against any transferor company:

(d) The dissolution, without winding up, of any transferor company:

(e) The provision to be made for any persons who, within such time and in such manner as the Court directs, dissent from the compromise or arrangement:

(f) Such incidental, consequential, and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out.

(2) Where an order under this section provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and, in the case of any property, if the order so directs, freed from any charge which is by virtue of the compromise or arrangement to cease to have effect.

(3) Where an order is made under this section, every company in relation to which the order is made shall cause a sealed copy thereof to be delivered to the Registrar for registration within seven days after the making of the order, and if default is made in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

(4) In this section the expression "property" includes property, rights, and powers of every description, and the expression "liabilities" includes duties.

(5) Notwithstanding the provisions of subsection five of section two hundred and five of this Act, the expression "company" in this section does not include any company other than a company within the meaning of this Act.

Cf. 1933, No. 29, s. 160; 1948 U.K. Act, s. 208

208. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority - (1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as the transferor company) to another company, whether a company within the meaning of this Act or not (in this section referred to as the transferee company), has, within four months after the making of the offer in that behalf by the transferee company, been approved by the holders of not less than nine tenths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee company or its subsidiary), the transferee company may, at any time within two months after the expiration of the said four months, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his shares, and when such a notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee company:

Provided that where shares in the transferor company of the same class or classes as the shares whose transfer is involved are already held as aforesaid to value greater than one-tenth of the aggregate of their value and that of the shares (other than those already held aforesaid) whose transfer is involved, the foregoing provisions of this subsection shall not apply unless-

(a) The transferee company offers the same terms to all holders of the shares (other than those already held aforesaid) whose transfer is involved, or, where those shares include shares of different classes, of each class of them; and

(b) The holders who approve the scheme or contract, besides holding not less than nine-tenths in value of the shares (other than those already held as aforesaid) whose transfer is involved, are not less than three-fourths in number of the holders of those shares.

(2) Where, in pursuance of any such scheme or contract as aforesaid, shares in a company are transferred to another company or its nominee, and those shares together with any other shares in the first-mentioned company held by, or by a nominee for, the transferee company or its subsidiary at the date of the transfer comprise or include nine-tenths in value of the shares in the first-mentioned company or of any class of those shares, then -

(a) The transferee company shall within one month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or contract it has already complied with this requirement) give notice of that fact in the prescribed manner to the holders of the remaining shares or of the remaining shares of that class, as the case may be, who have not assented to the scheme or contract; and

(b) Any such holder may within three months from the giving of the notice to him require the transferee to acquire the shares in question,-

and where a shareholder gives notice under paragraph (b) of this subsection with any respect to any shares, the transferee company shall be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the share of the approving shareholders were transferred to it, or on such other terms as may be agreed or as the Court on the application of either the transferee company or the shareholder thinks fit to order.

(3) Where a notice has been given by the transferee company under subsection one of this section and the Court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of one month from the date on which the notice has been given, or, if an application to the Court by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee company and on its own behalf by the transferee company, and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares:

Provided that an instrument of transfer shall not be required for any share for which a share warrant is for the time being outstanding.

(4) Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received.

(5) In this section the expression "dissenting shareholder" includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee company in accordance with the scheme or contract.

(6) In relation to an offer made by the transferee company to shareholders of the transferor company before the commencement of this Act, this section shall have effect

(a) With the substitution, in subsection one, for the words "the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee company or its subsidiary) ", of the words "the shares affected" and with the omission of the proviso to that subsection;

(b) With the omission of subsection two; and

(c) With the omission, in subsection three, of the words "together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee company and on its own behalf by the transferee company" and of the proviso to that subsection.

Cf. 1933, No. 29, s. 161; 1948 U.K. Act, s.209

Minorities

209. Remedy in cases of oppression. Alteration of memorandum or articles-(1) Any member of a company who complains that the affairs of the company are being conducted in a manner oppressive to some part of the members (including himself) or, in a case falling within subsection three of section one hundred and seventy-three of this Act, the Attorney-General, may make an application to the Court for an order under this section.

(2) If on any such application the Court is of opinion that the company's affairs are being conducted as aforesaid, and-

(a) That to wind up the company would unfairly prejudice that part of the members, but otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up; or

(b) That, in any other case, it is just and equitable to make an order under this section,

the Court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit whether for regulating the conduct of the company's affairs in future, or for the purchase of the shares o£ any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company's capital, or otherwise.

(3) Where an order under this section makes any alteration in or addition to any company's memorandum or articles, then, notwithstanding anything in any other provision of this Act, but subject to the provisions of the order, the company concerned shall not have power without the leave of the Court to make any further alteration in or addition to the memorandum or articles inconsistent with the provisions of the order; but, subject to the foregoing provisions of this subsection, the alterations or additions made by the order shall be of the same effect as if duly made by resolution of the company and the provisions of this Act shall apply to the memorandum or articles as so altered or added to accordingly.

(4) A sealed copy of any order under this section altering or adding to, or giving leave to alter or add to, a company's memorandum or articles shall, within fourteen days after the making thereof, be delivered by the company to the Registrar for registration; and if a company makes default in complying with this subsection, the company and every officer of the company who is in default shall be liable to a default fine.

(5) In relation to an application under this section, section three hundred and forty-one of this Act shall apply as it applies in relation to a winding-up petition.

Cf. 1948 U.K. Act, s. 210

PART IV

WINDING UP

(i) PRELIMINARY

Modes of Winding Up

210. Modes of winding up-(1) The winding up of a company may be either-

(a) By the Court; or

(b) Voluntary; or

(2) The provisions of this Act with respect to winding up apply, unless the contrary appears, to the winding up of a company in any of those modes.

Cf. 1933 No. 29, s. 162; 1948 U.K. Act, s. 211

As to the application of this Part to local Trusts under the Licensing Trusts Act 1949, see s. 46A (3) of that Act.

As to the application of this Part to Boards under Part II of the Charitable Trusts Act 1957, see ss. 24 (2) and 25 (4) of that Act.

Contributories

211. Liability as contributories of present and past members-(1) In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities, and the costs, charges, and expenses of the winding up, and for the adjustment of the rights of the Contributories among themselves, subject to the provisions of subsection two of this section and the following qualifications:

(a) A past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up:

(b) A past member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member:

(c) A past member shall not be liable to contribute unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Act

(d) In the case of a company limited by shares no contribution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member:

(e) In the case of a company limited by guarantee no contribution shall, subject to the provisions of subsection three of this section, be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up

(f) Nothing in this Act shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract

(g) A sum due to any member of a company, in his character of a member, by way of dividends, profits, or otherwise, shall not be deemed to be a debt of the company payable to that member in a case of competition between himself and any other creditor not a member of the company, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.

(2) In the winding up of a limited company any director or manager, whether past or present, whose liability is, under the provisions of this Act, unlimited, shall, in addition to his liability (if any) to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of the winding up a member of an unlimited company

Provided that-

(a) A past director or manager shall not be liable to make such further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up

(b) A past director or manager shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office

(c) Subject to the articles of the company, a director or manager shall not be liable to make such further contribution unless the Court deems it necessary to require that contribution in order to satisfy the debts and liabilities of the company, and the costs, charges, and expenses of the winding up.

(3) In the winding up of a company limited by guarantee which has a share capital, every member of the company shall be liable, in addition to the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up, to contribute to the extent of any sums unpaid on any shares held by him.

Cf. 1933, No 29, s. 163; 1948 U.K. Act, s. 212

212. Definition of contributory-(1) The term "contributory" means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.

(2) The term "contributory", unless the context otherwise requires, includes every holder of fully paid shares.

Cf. 1933, No. 29, s. 164; 1948 U.K. Act, s. 213

213. Nature of liability of contributory-The liability of a contributory shall create a debt (of the nature of a liability under a deed) accruing due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.

Cf. 1933, No. 29, s. 165; 1948 U.K. Act, s. 214

214. Contributories in case of death of member-(1) If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives shall be liable in a due course of administration to contribute to the assets of the company in discharge of his liability, and shall be contributories accordingly.

(2) If the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased contributory and for compelling payment thereout of the money due.

Cf. 1933, No. 29, s. 166; 1948 U.K. Act, s. 215

215. Contributories in case of bankruptcy of member-If a contributory becomes bankrupt, either before or after he has been placed on the list of contributories,-

(a) The assignee of his estate shall represent him for all the purposes of the winding up, and shall be a contributory accordingly, and may be called on to admit to proof against the estate of the bankrupt, or otherwise to allow to be paid out of his assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the assets of the company; and

(b) There may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as calls already made.

Cf. 1933, No. 29, s. 167; 1948 U.K. Act, s. 216

216. Provisions as to married women- (1) The husband of a female contributory married before the first day of January, eighteen hundred and eighty-five (being the date of the commencement of the Married Women's Property Act 1884) shall, during the continuance of the marriage, be liable, as respects any liability attaching to any shares acquired by her before that date, to contribute to the assets of the company the same sum as she would have been liable to contribute if she had not married, and he shall be a contributory accordingly.

(2) Subject as aforesaid, nothing in this Act shall affect the provisions of the Married Women's Property Act 1952.

Cf. 1933, No. 29, s. 168; 1948 U.K. Act, s. 217

(ii) WINDING UP BY THE COURT

Cases in Which Company May be Wound Up by Court

217. Circumstances in which company may be wound up by Court-A company may be wound up by the Court if-

(a) The company has by special resolution resolved that the company be wound up by the Court

(b) Default is made in delivering the statutory report to the Registrar or in holding the statutory meeting

(c) The company does not commence its business within a year from its incorporation, or suspends its business for a whole year

(d) The number of members is reduced below seven:

(e) The company is unable to pay its debts:

(f) The Court is of opinion that it is just and equitable that the company should be wound up.

Cf. 1933, No. 29, s. 169; 1948 U.K. Act, s. 222

In the case of private companies para. (d) is to be read as if the word "two" were substituted for the word "seven"; see s. 354 (2) (a) (ii).

The holding of labour shares does not make a person a member of a company for the purposes of para. (d) of this section; see s. 67 (7).

As to local Trusts under the Licensing Trusts Act 1949. see s. 46A (1) (b), (2) (b), and (3) of that Act.

As to Boards under Part II of the Charitable Trusts Act 1957, see s. 25 (1) of that Act.

218. Definition of inability to pay debts-A company shall be deemed to be unable to pay its debts-

(a) If a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving it at the registered office of the company, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor; or

(b) If execution or other process issued on a judgment, decree, or order of any Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

(c) If it is proved to the satisfaction of the Court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the company.

Cf. 1933, No 29, s. 170; 1948 U.K. Act, s. 223

Petition for Winding Up and Effects Thereof

219. Provisions as to applications for winding up-(1) An application to the Court for the winding up of a company shall be by petition, presented, subject to the provisions of this section, either by the company, or by any creditor or creditors (including any contingent or prospective creditor or creditors), contributory or contributories, or by all or any of those parties, together or separately:

Provided that-

(a) A contributory shall not be entitled to present a winding-up petition unless-

(i) Either the number of members is reduced below seven; or

(ii) The shares in respect of which he is a contributory, or some of them, either were originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder; and

(b) A winding-up petition shall not, if the ground of the petition is default in delivering the statutory report to the Registrar or in holding the statutory meeting, be presented by any person except a shareholder, not before the expiration of fourteen days after the last day on which the meeting ought to have been held; and

(c) The Court shall not give a hearing to a winding-up petition presented by a contingent or prospective creditor until such security for costs has been given as the Court thinks reasonable and until a prima facie case for winding up has been established to the satisfaction of the Court; and

(d) In a case falling within subsection three of section one hundred and seventy-three of this Act, a winding-up petition may be presented by the Attorney-General.

(2) Where a company is being wound up voluntarily or subject to supervision, a winding-up petition may be presented by the Official Assignee as well as by any other person authorised in that behalf under the other provisions of this section, but the Court shall not make a winding-up order on the petition unless it is satisfied that the voluntary winding up or winding up subject to supervision cannot be continued with due regard to the interests of the creditors or contributories.

(3) Where under the provisions of this Part of this Act any person as being the husband of a female contributory is himself a contributory, and a share has during the whole or any part of the six months mentioned in subparagraph (ii) of paragraph (a) of the proviso to subsection one of this section been held by or registered in the name of the wife, or by or in the name of a trustee for the wife or for the husband, the share shall, for the purposes of this section, be deemed to have been held by and registered in the name of the husband.

Cf. 1933, No. 29, s. 171; 1948 U.K. Act, s. 224

In its application to private companies para. (a) (i) of the proviso to subs (1) must be read as if the word "two" were substituted for the word "seven", see s. 354 (2) (a) (iii)

The holding of labour shares does not make a person a member of a company for the purposes of para. (a) (i) of the proviso to the subs. (1); see s. 67 (7).

As to local Trusts under the Licensing Trusts Act 1949, see s. 46A (1) (b) and (2) (b) of that Act.

As to Boards under Part II of the Charitable Trusts Act 1957, see s. 25 (2) of that Act.

220. Powers of Court on hearing petition-(1) On hearing a winding-up petition the Court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit, but the Court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

(2) Where the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the Court, if it is of opinion-

(a) That the petitioners are entitled to relief either by winding up the company or by some other means; and

(b) That in the absence of any other remedy it would be just and equitable that the company should be wound up-

shall make a winding-up order, unless it is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.

(3) Where the petition is presented on the ground of default in delivering the statutory report to the Registrar or in holding the statutory meeting, the Court may-

(a) Instead of making a winding-up order, direct that the statutory report shall be delivered or that a meeting shall be held; and

(b) Order the costs to be paid by any persons who, in the opinion of the Court, are responsible for the default.

Cf. 1933, No. 29, s. 172; 1948 U.K. Act, s. 225

221. Power to stay or restrain proceedings against company - At any time after the presentation of a winding-up petition, and before a winding-up order has been made, the company, or any creditor or contributory, may-

(a) Where any action or proceeding against the company is pending in the Supreme Court or Court of Appeal, apply to the Court in which the action or proceeding is pending for a stay of proceedings therein; and

(b) Where any other action or proceeding is pending against the company, apply to the Supreme Court to restrain further proceedings in the action or proceeding,-

and the Court to which application is so made may, as the case may be, stay or restrain the proceedings accordingly on such terms as it thinks fit.

Cf. 1933, No. 29, s. 173; 1948 U.K. Act, s. 226

As to the application of this section to a winding up subject to supervision, see s. 302.

222. Avoidance of dispositions of property, etc., after commencement of winding up- In a winding up by the Court, any disposition of the property of the company, including things in action, and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up, shall, unless the Court otherwise orders, be void.

Cf. 1933, No. 29, s. 174; 1948 U.K. Act, s. 227

As to the application of this section to a winding up subject to supervision, see s. 303.

223. Avoidance of attachments, etc.-Where any company is being wound up by the Court, any attachment, distress, or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void to all intents.

Cf. 1933, No. 29, s. 175; 1948 U.K. Act, s. 228 (1)

As to the application of this section to a winding up subject to supervision, see s. 303.

Commencement o f Winding Up

224. Commencement of winding up by the Court-(1) Where before the presentation of a petition for the winding up of a company by the Court a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and, unless the Court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.

(2) In any other case the winding up of a company by the Court shall be deemed to commence at the time of the presentation of the petition for the winding up.

Cf. 1933, No. 29, s. 176; 1948 U.K. Act, s. 229

Consequences o f Winding-up Order

225. Copy of order to be forwarded to Registrar-On the making of a winding-up order a sealed copy of the order must forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute thereof in his books relating to the company.

Cf. 1933, No. 29, s. 177; 1948 U.K. Act, s. 230

226. Actions stayed on winding-up order-When a winding-up order has been made, or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court may impose.

Cf. 1933, No. 29, s. 178; 1948 U.K. Act, s. 231

A winding up does not affect proceedings in the Compensation Court or elsewhere in relation to workers' compensation; see s. 132 (2) of the Workers' Compensation Act 1956.

227. Effect of winding-up order-An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.

Cf. 1933, No. 29, s. 179; 1948 U.K. Act, s. 232

Official Assignee in Winding Up

228. Official Assignee in Bankruptcy to be Official Assignee for winding-up purposes-For the purposes of this Act so far as it relates to the winding up of any company by the Court, the term "Official Assignee" means the Official Assignee under the Bankruptcy Act 1908 of the district wherein the company's principal office is situate, or if there are two or more such Official Assignees, then such one of them as the Court may appoint.

Cf. 1933, No. 29, s. 180; 1948 U.K. Act, s. 233

229. Appointment of Official Assignee by Court in certain cases-If in the case of the winding up of any company by the Court it appears to the Court desirable that some Official Assignee, other than the person who would by virtue of section two hundred and twenty-eight of this Act be the Official Assignee, should be the Official Assignee for the purposes of that winding up, the Court may appoint that other Official Assignee to act as Official Assignee in that winding up, and the person so appointed shall be deemed to be the Official Assignee in that winding up for all the purposes of this Act.

Cf. 1933, No. 29, s. 181; 1948 U.K. Act, s. 234

230. Deputy Official Assignees-(1) The Governor-General may, by Warrant under his hand, appoint a fit person (not being a person employed under the Public Service Act 1912) to be the deputy of the Official Assignee in the winding up of companies, or in the winding up of any particular company. Every such deputy shall receive such remuneration as the Governor-General directs. No person appointed under this subsection shall by virtue of that appointment become a person employed under the Public Service Act 1912 and nothing in that Act shall apply with respect to any appointment under this subsection.

(2) A fit person may also be appointed under the Public Service Act 1912 to be the deputy of the Official Assignee in the winding up of companies, or in the winding up of any particular company.

(3) Subject to the control of the Official Assignee, every deputy appointed under this section shall have and may exercise, in relation to the companies in respect of which he is so appointed, all the powers, duties, and functions of the Official Assignee. The fact that a deputy exercises in relation to any such company any power, duty, or function conferred by this Act on the Official Assignee shall be conclusive evidence of his authority so to do.

Cf. 1933, No. 29, s. 182

231. Statement of company's affairs to be submitted to Official Assignee-(1) Where the Court has made a winding-up order or appointed a provisional liquidator, there shall, unless the Court thinks fit to order otherwise and so orders, be made out and submitted to the Official Assignee a statement as to the affairs of the company in the prescribed form, verified by affidavit, and showing the particulars of its assets, debts, and liabilities, the names, addresses, and descriptions of its creditors, the securities held by them respectively, the dates when the securities were respectively given, and such further or other information as may be prescribed or as the Official Assignee may require.

(2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person who is at that date the secretary of the company, or by such of the persons hereinafter in this subsection mentioned as the Official Assignee, subject to the direction of the Court, may require to submit and verify the statement, that is to say, persons-

(a) Who are or have been officers of the company:

(b) Who have taken part in the formation of the company at any time within one year before the relevant date

(c) Who are in the employment of the company, or have been in the employment of the company within the said year, and are, in the opinion of the Official Assignee, capable of giving the information required:

(d) Who are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

(3) The statement shall be submitted within fourteen days from the relevant date, or within such extended time as the Official Assignee or the Court may for special reasons appoint.

(4) Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the Official Assignee or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the Official Assignee may consider reasonable, subject to an appeal to the Court.

(5) If any person, without reasonable excuse, makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding ten pounds for every day during which the default continues.

(6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom.

(7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of a contempt of Court and shall, on the application of the liquidator or of the Official Assignee, be punishable accordingly.

(8) In this section the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment, and, in a case where no such appointment is made, the date of the winding-up order.

Cf. 1933, No. 29, s. 183; 1948 U.K. Act, s. 235

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

232. Report by Official Assignee-(1) In a case where a winding-up order is made, the Official Assignee shall, as soon as practicable after receipt of the statement to be submitted under section two hundred and thirty-one of this Act, or, in a case where the Court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the Court-

(a) As to the amount of capital issued, subscribed, and paid up, and the estimated amount of assets and liabilities; and

(b) If the company has failed, as to the causes of the failure; and

(c) Whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of the business thereof.

(2) The Official Assignee may also, if he thinks fit, make a further report, or further reports, stating the manner in which the company was formed and whether in his opinion any fraud has been committed by any person in its promotion or formation, or by any officer of the company in relation to the company since the formation thereof, and any other matters which in his opinion it is desirable to bring to the notice of the Court.

(3) If the Official Assignee states in any such further report as aforesaid that in his opinion a fraud has been committed as aforesaid, the Court shall have the further powers provided in section two hundred and sixty-three of this Act.

Cf. 1933, No. 29, s. 184; 1948 U.K. Act, s. 236

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

Liquidators

233. Power of Court to appoint liquidators-For the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the Court may impose, the Court may appoint a liquidator or liquidators.

Cf. 1933, No. 29, s. 185; 1948 U.K. Act, s. 237

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

234. Appointment and powers of provisional liquidator- (1) Subject to the provisions of this section, the Court may appoint a liquidator provisionally at any time after the presentation of a winding-up petition and before the making of a winding-up order, and either the Official Assignee or any other fit person may be appointed.

(2) Where a liquidator is provisionally appointed by the Court, the Court may limit and restrict his powers by the order appointing him.

Cf. 1933, No. 29, s. 186; 1948 U.K. Act, s. 238

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

235. Appointment, style, etc., of liquidators-The following provisions with respect to liquidators shall have effect on a winding-up order being made

(a) The Official Assignee shall by virtue of his office become the provisional liquidator, and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such:

(b) The Official Assignee shall summon separate meetings of the creditors and contributories of the company for the purpose of determining whether or not an application is to be made to the Court for appointing a liquidator in the place of the Official Assignee:

(c) The Court may make any appointment and order required to give effect to any such determination, and, if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matter aforesaid, the Court shall decide the difference and make such order thereon as the Court may think fit:

(d) In a case where a liquidator is not appointed by the Court, the Official Assignee shall be the liquidator of the company:

(e) The Official Assignee shall by virtue of his office be the liquidator during any vacancy:

(f) A liquidator shall be described, where a person other than the Official Assignee is liquidator, by the style of "the liquidator", and, where the Official Assignee is liquidator, by the style of "the Official Liquidator", of the particular company in respect of which he is appointed, and not by his individual name.

Cf. 1933, No. 29, s. 187; 1948 U.K. Act, s. 239

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

236. Provisions where person other than Official Assignee is appointed liquidator-Where in the winding up of a company by the Court a person other than the Official Assignee is appointed liquidator, that person-

(a) Shall not be capable of acting as liquidator until he has notified his appointment to the Registrar and has given security in accordance with the order of the Court (if any) in that behalf:

(b) Shall give the Official Assignee such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid, as may be requisite for enabling that officer to perform his duties under this Act.

Cf. 1933, No. 29, s. 188; 1948 U.K. Act, s. 240

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

237. General provisions as to liquidators-(1) A liquidator appointed by the Court may resign or, on cause shown, be removed by the Court.

(2) Where a person other than the Official Assignee is appointed liquidator he shall receive such salary or remuneration by way of percentage or otherwise as the Court may direct, and, if more such persons than one are appointed liquidators their remuneration shall be distributed among them in such proportions as the Court directs.

(3) A vacancy in the office of a liquidator appointed by the Court shall be filled by the Court.

(4) If more than one liquidator is appointed by the Court, the Court shall declare whether any act by this Act required or authorised to be done by the liquidator is to be done by all or any one or more of the persons appointed.

(5) Subject to the provisions of section three hundred and twenty-three of this Act, the acts of a liquidator appointed by the Court shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

Cf. 1933, No. 29, s. 189; 1948 U.K. Act, s. 242

This section (except subs. (5) does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

238. Custody of company's property-Where a winding-up order has been made or where a provisional liquidator has been appointed, the liquidator or the provisional liquidator, as the case may be, shall take into his custody, or under his control, all the property and things in action to which the company is or appears to be entitled.

Cf. 1933, No. 29, s. 190; 1948 U.K. Act, s. 243 (1)

239. Vesting of property of company in liquidator-Where a company is being wound up by the Court, the Court may, on the application of the liquidator, by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon the property to which the order relates shall vest accordingly, and the liquidator may, after giving such indemnity, if any, as the Court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

Cf. 1933, No. 29, s. 191; 1948 U.K. Act, s. 244

240. Powers of liquidator- (1) The liquidator in a winding up by the Court shall have power, with the sanction either of the Court or of the committee of inspection,-

(a) To bring or defend any action or other legal proceeding in the name and on behalf of the company:

(b) To carry on the business of the company, so far as may be necessary for the beneficial winding up thereof:

(d) To pay any classes of creditors in full:

(e) To make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages, against the company, or whereby the company may be rendered liable:

(f) To compromise all calls and liabilities to calls, debts, and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory, or alleged contributory, or other debtor, or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability, or claim, and give a complete discharge in respect thereof.

(2) The liquidator in a winding up by the Court shall have power-

(a) To sell the real and personal property and things in action of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels:

(b) To do all acts and to execute, in the name and on behalf of the company, all deeds, receipts, and other documents, and for that purpose to use, when necessary, the company's seal:

(c) To prove, rank, and claim in the bankruptcy or insolvency of any contributory for any balance against his estate, and to receive dividends in the bankruptcy or insolvency in respect of that balance, as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors:

(d) To draw, accept, make, and endorse any bill of exchange or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made, or endorsed by or on behalf of the company in the course of its business:

(e) To raise on the security of the assets of the company any money requisite:

(f) To take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself:

(g) To appoint an agent to do any business which the liquidator is unable to do himself:

(h) To do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

(3) The exercise by the liquidator in a winding up by the Court of the powers conferred by this section shall be subject to the control of the Court, and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of those powers.

Cf. 1933, No. 29, s. 192; 1948 U.K. Act, s. 245

241. Exercise and control of liquidator's powers-(1) Subject to the provisions of this Act, the liquidator of a company which is being wound up by the Court shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions that may be given by resolution of the creditors or contributories at any general meeting, or by the committee of inspection, and any directions given by the creditors or contributories at any general meeting shall in case of conflict be deemed to override any directions given by the committee of inspection.

(2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors or contributories, by resolution, either at the meeting appointing the liquidator or otherwise, may direct, or whenever requested in writing to do so by one-tenth in value of the creditors or contributories, as the case may be.

(3) The liquidator may apply to the Court in manner prescribed for directions in relation to any particular matter arising under the winding up.

(4) Subject to the provisions of this Act, the liquidator shall use his own discretion in the management of the estate and its distribution among the creditors.

(5) If any person is aggrieved by any act or decision of the liquidator that person may apply to the Court, and the Court may confirm, reverse, or modify the act or decision complained of, and make such order in the premises as it thinks just.

Cf. 1933, No. 29, s. 193; 1948 U.K. Act, s. 246

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

242. Books to be kept by liquidator-Every liquidator of a company which is being wound up by the Court shall keep, in manner prescribed, proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor or contributory may, subject to the control of the Court, personally or by his agent inspect any such books.

Cf. 1933, No. 29, s. 194; 1948 U.K. Act, s. 247

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

243. Payments of liquidator into bank-(1) Every liquidator of a company which is being wound up by the Court shall, in such manner and at such times as the Court directs, pay the money received by him to an account in the name of the Official Assignee, or in the name of the company in liquidation, or in such other name as the Court directs, at such bank carrying on business in New Zealand as the Court appoints.

(2) If any such liquidator at any time retains for more than ten days a sum exceeding fifty pounds, or such other amount as the Court in any particular case authorises him to retain, then, unless he explains the retention to the satisfaction of the Court, he shall pay interest on the amount so retained in excess at the rate of twenty per cent per annum, and shall be liable to disallowance of all or such part of his remuneration as the Court may think just, and to be removed from his office by the Court, and shall be liable to pay any expenses occasioned by reason of his default.

(3) A liquidator of a company which is being wound up by the Court shall not pay any sums received by him as liquidator into his private banking account.

Cf. 1933, No. 29, s. 195; 1948 U.K. Act, s. 248

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

244. Audit of liquidator's accounts-(1) The accounts of every liquidator of a company which is being wound up by the Court shall be audited by the Audit Office, and the Controller and Auditor-General shall have the same powers in respect of all money belonging to any such company and of all persons dealing therewith as he has by virtue of any Act for the time being in force in respect of the public money and of persons dealing therewith.

(2) The accounts so audited shall be open to the inspection of any creditor or contributory, or of any person interested.

(3) Within one month after the liquidator has realised all the property of the company, or so much thereof as can, in his opinion, be realised without needlessly protracting the liquidation, and has distributed a final dividend (if any) to the creditors, and adjusted the rights of the contributories among themselves and made a final return (if any) to the contributories, or has resigned, or has been removed from his office, he shall prepare and submit to the Audit Office a statement of accounts and balance sheet, showing in detail his receipts and payments in respect of the company; and the Audit Office shall forthwith prepare a report on the statement of accounts and balance sheet, and file the report and state-ment and balance sheet in the Court, and give notice to the liquidator of the filing.

(4) Every statement of accounts and balance sheet so submitted shall be verified by a statutory declaration of the liquidator, and with the report of the Audit Office shall, when filed as aforesaid, be open to inspection without fee by any creditor or contributory, or by any person interested.

(5) Notice of the filing of every such statement of accounts and the report of the Audit Office shall be advertised by the liquidator in one or more newspapers circulating in the locality in which the winding up has been conducted.

(6) If the liquidator is dissatisfied with any decision or finding of the Controller and Auditor-General, the liquidator may, within two months thereafter, appeal to the Court, which shall give such decision thereon as it thinks proper.

Cf. 1933, No. 29, s. 196; 1948 U.K. Act, s. 249

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

245. Control of Minister of Justice over liquidators-(1) The Minister shall take cognisance of the conduct of liquidators of companies which are being wound up by the Court, and, if a liquidator does not faithfully perform his duties and duly observe all the requirements imposed on him by statute, rules, or otherwise with respect to the performance of his duties, or if any complaint is made to the Minister by any creditor or contributory in regard thereto, the Minister shall inquire into the matter, and take such action thereon as he may think expedient.

(2) The Minister may at any time require any liquidator of a company which is being wound up by the Court to answer any inquiry in relation to any winding up in which he is engaged, and may, if the Minister thinks fit, apply to the Court to examine him or any other person on oath concerning the winding up.

(3) The Minister may also direct a local investigation to be made of the books and vouchers of the liquidator.

Cf. 1933, No. 29, s. 197; 1948 U.K. Act, s. 250

This section does not apply in a winding up subject to supervision; see s.305 and the 7th Sched.

246. Release of liquidators-(1) After the advertising of the filing of the statement of accounts and report referred to in section two hundred and forty-four of this Act, the liquidator of a company which is being wound up by the Court shall apply to the Court for an order releasing hire from his administration of the property of the company, and shall advertise in one or more newspapers circulating in the locality in which the winding up has been conducted notice of his intention to make application for an order of release, and of the time at which he intends to make the application.

(2) The hearing of the application shall be on a day not less than fourteen days and not more than thirty days after the advertising of the intention to apply.

(3) On the hearing, the Court shall take into consideration the report of the Audit Office, and any objection which may be urged by any creditor or contributory, or person interested, against the release of the liquidator, and shall either grant or withhold the release accordingly.

(4) Where the release of a liquidator is withheld, the Court may, on the application of any creditor or contributory, or person interested, make such order as it thinks just, charging the liquidator with the consequences of any act or default which he may have done or made contrary to his duty.

(5) An order of the Court releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company, or otherwise in relation to his conduct as liquidator, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

(6) Where the liquidator has not previously resigned or been removed his release shall operate as a removal of him from his office.

Cf. 1933, No. 29, s. 198; 1948 U.K. Act, s. 251

This section does not apply in a winding up subject to supervision; see s.305 and the 7th Sched.

Committees o f Inspection

247. Meetings of creditors and contributories to determine whether committee of inspection shall be appointed- (1) When a winding-up order has been made by the Court, it shall be the business of the separate meetings of creditors and contributories summoned for the purpose of determining whether or not an application should be made to the Court for appointing a liquidator in place of the Official Assignee, to determine further whether or not an application is to be made to the Court for the appointment of a committee of inspection to act with the liquidator and who are to be members of the committee if appointed.

(2) The Court may make any appointment and order required to give effect to any such determination, and if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matters aforesaid the Court shall decide the difference, and make such order thereon as the Court may think fit.

Cf. 1933, No. 29, s. 199; 1948 U.K. Act, s. 252

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

248. Constitution and proceedings of committee of inspection-(1) A Committee of inspection appointed in pursuance of this Act shall consist of creditors and contributories of the company or persons holding general powers of attorney from creditors or contributories, or duly authorised officers of companies which are creditors or contributories in such proportions as may be agreed on by the meetings of creditors and contributories, or as, in case of difference, may be determined by the Court.

(2) The committee shall meet at such times as it from time to time appoints, and, failing any such appointment, at least once a month, and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.

(3) The committee may act by a majority of its members present at a meeting, but shall not act unless a majority of the committee are present.

(4) A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

(5) If a member of the committee becomes bankrupt, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee without the leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.

(6) A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of contributories, if he represents contributories, of which seven days' notice has been given, stating the object of the meeting.

(7) On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, reappoint the same or appoint another creditor or contributory to fill the vacancy Provided that if the liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled he may apply to the Court and the Court may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order.

(8) The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.

Cf. 1933, No. 29, s. 200; 1948 U.K. Act, s. 253

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

249. Powers of Court where no committee of inspection- Where there is no committee of inspection, the Court may, on the application o£ the liquidator, do any act or thing or give any direction or permission which is by this Act authorised or required to be done or given by the committee.

Cf. 1933, No. 29, s. 201; 1948 U.K. Act, s. 254

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

As to the application of this section to a committee of inspection appointed in a creditors' voluntary winding up, see s. 286 (2).

General Powers of Court in Case o f Winding Up by Court

250. Power to stay winding up- (1) The Court may at any time after an order for winding up, on the application either of the liquidator, or the Official Assignee, or any creditor or contributory, and on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the Court thinks fit.

(2) On any application under this section the Court may, before making an order, require the Official Assignee to furnish to the Court a report with respect to any facts or matters which are in his opinion relevant to the application.

(3) A sealed copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his books relating to the company.

Cf. 1933, No. 29, s. 202; 1948 U.K. Act, s. 256

251. Settlement of list of contributories and application of assets-(1) As soon as may be after making a winding-up order, the Court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of this Act and shall cause the assets of the company to be collected and applied in discharge of its liabilities

Provided that, where it appears to the Court that it will not be necessary to make calls on or adjust the rights of contributories, the Court may dispense with the settlement of a list of contributories.

(2) In settling the list of contributories, the Court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.

Cf. 1933, No. 29, s. 203; 1948 U.K. Act, s. 257
252. Delivery of property to liquidator-The Court may, at any time after making a winding-up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent, or officer of the company to pay, deliver, convey, surrender, or transfer forthwith, or within such time as the Court directs, to the liquidator any money, property, or books and papers in his hands to which the company is prima facie entitled.

Cf. 1933; No. 29, s. 204; 1948 U.K. Act, s. 258

253. Payment of debts due by contributory to company and extent to which set-off allowed-(1) The Court may, at any time after making a winding-up order, make an order on any contributory for the time being on the list of contributories to pay, in manner directed by the order, any money due from him or from the estate of the person whom he represents to the company, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act.

(2) The Court, in making such an order, may-

(a) In the case of an unlimited company, allow to the contributory by way of set-off any money due to him or to the estate which he represents from the company on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit; and

(b) In the case of a limited company, make to any director or manager whose liability is unlimited or to his estate the like allowance.

(3) In the case of any company, whether limited or unlimited, when all the creditors are paid in full, any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

Cf. 1933, No. 29, s. 205; 1948 U.K. Act, s. 259

254. Power of Court to make calls- (1) The Court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the Court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges, and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so made.

(2) In making a call the Court may take into consideration the probability that some of the contributories may partly or wholly fail to pay the call.

Cf. 1933, No. 29, s. 206; 1948 U.K. Act, s. 260

255. Payment into bank of money due to company- (1) The Court may order any contributory, purchaser, or other person from whom money is due to the company to pay the amount due into such bank carrying on business in New Zealand as the Court appoints to the account of the liquidator instead of to the liquidator, and any such order may be enforced in the same manner as if it had directed payment to the liquidator.

(2) All money and securities paid or delivered into any such bank in the event of a winding up by the Court shall be subject in all respects to the orders of the Court.

Cf. 1933, No. 29, s. 207; 1948 U.K. Act, s. 261

256. Order on contributory conclusive evidence-(1) An order made by the Court on a contributory shall, subject to any right of appeal, be conclusive evidence that the money, if any, thereby appearing to be due or ordered to be paid is due.

(2) All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings.

Cf. 1933, No. 29, s. 208; 1948 U.K. Act, s. 262

257. Appointment of special manager-(1) Where the Official Assignee becomes the liquidator of a company, whether provisionally or otherwise, he may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or contributories generally, require the appointment of a special manager of the estate or business of the company other than himself, apply to the Court, and the Court may on such application appoint a special manager of the said estate or business to act during such time as the Court may direct, with such powers, including any of the powers of a receiver or manager, as may be entrusted to him by the Court.

(2) The special manager shall give such security and account in such manner as the Court directs.

(3) The special manager shall receive such remuneration as may be fixed by the Court.

(4) The special manager may at any time be removed by the Court.

Cf. 1933, No. 29, s. 209; 1948 U.K. Act, s. 263

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

258. Power to exclude creditors not proving in time-The Court may fix a time or times within which creditors are to prove their debts or claims, or to be excluded from the benefit of any distribution made before those debts are proved.

Cf. 1933, No. 29, s. 210; 1948 U.K. Act, s. 264

259. Adjustment of rights of contributories-The Court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.

Cf. 1933, No. 29, s. 211; 1948 U.K. Act, s. 265

260. Inspection of books by creditors and contributories-(1) The Court may, at any time after making a winding-up order, make such order for inspection of the books and papers
of the company by creditors and contributories as the Court thinks just, and any books and papers in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.

(2) Nothing in this section shall be taken as excluding or restricting any rights conferred on any person by any other Act.

Cf. 1933, No. 29, s. 212; 1948 U.K. Act, s. 266

261. Power to order costs of winding up to be paid out of assets-The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges, and expenses incurred in the winding up in such order of priority as the Court thinks just.

Cf. 1933, No. 29, s. 213; 1948 U.K. Act, s. 267

262. Power to summon persons suspected of having property of company-(1) The Court may, at any time after the appointment of a provisional liquidator or the making of a winding-up order, summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, affairs, or property of the company.

(2) The Court may examine him on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories, and may reduce his answers to writing and require him to sign them.

(3) The Court may require him to produce any books and papers in his custody or power relating to the company, but, where he claims any lien on books or papers produced by him, the production shall be without prejudice to that lien, and the Court shall have jurisdiction in the winding up to determine all questions relating to that lien.

(4) If any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the Court at the time appointed, not having a lawful impediment (made known to the Court at the time of its sitting, and allowed by it), the Court may cause him to be apprehended and brought before the Court for examination.

(5) A person who is summoned or examined by the Court under the authority conferred by this section shall not be excused from answering any question on the ground that the answer may incriminate or tend to incriminate him.

(6) A statement made by any such person in answer to any question put to him by or before the Court in proceedings under this section shall not, in criminal proceedings, be admissible in evidence against him, except upon a charge of perjury against him in respect of his sworn testimony upon the examination.

(7) Any person examined by the Court under the authority of this section may be represented by a barrister or solicitor, who may also examine him, and his answers to the barrister or solicitor shall form part of his examination.

(8) Save with the consent of the Court, on the application of the provisional liquidator or the liquidator and subject to such conditions as the Court may prescribe, it shall not be lawful for any person to publish a report of any examination under this section, or of any matter arising in the course of any such examination, and every person who, in breach of this subsection, publishes any such report shall be liable to a fine not exceeding one hundred pounds.

Cf. 1933, No. 29, s. 214; 1948 U.K. Act, s. 268

263. Power to order public examination of promoters and officers-(1) Where an order has been made for winding up a company by the Court, and the Official Assignee has made a further report under this Act stating that in his opinion a fraud has been committed by any person in the promotion or formation of the company, or by any officer of the company in relation to the company since its formation, the Court may, after consideration of the report, direct that that person or officer shall attend before the Court on a day appointed by the Court for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealings as officer thereof.

(2) The liquidator and any creditor or contributory may take part in the examination either personally or by barrister or solicitor.

(3) The Court may put such questions to the person examined as the Court thinks fit.

(4) The person examined shall be examined on oath, and shall answer all such questions as the Court may put or allow to be put to him.

(5) A person ordered to be examined under this section shall at his own cost, before his examination, be furnished with a copy of the Official Assignee's report, and may at his own cost employ a barrister or solicitor, who shall be at liberty to put to him such questions as the Court may deem just for the purpose of enabling him to explain or qualify any answers given by him:

Provided that, if any such person applies to the Court to be exculpated from any charge made or suggested against him, it shall be the duty of the Official Assignee to appear on the hearing of the application and call the attention of the Court to any matters which appear to the Official Assignee to be relevant, and if the Court, after hearing any evidence given or witnesses called by the Official Assignee, grants the application, the Court may allow the applicant such costs as in its discretion it may think fit.

(6) Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against him, and shall be open to the inspection of any creditor or contributory at all reasonable times.

(7) The Court may, if it thinks fit, adjourn the examination from time to time.

(8) An examination under this section may, if the Court so directs, and subject to general rules, be held before any Magistrate, or before any Registrar of the Supreme Court, and the powers of the Court under this section as to the conduct of the examination may be exercised by the person before whom the examination is held.

Cf. 1933, No. 29, s. 215; 1948 U.K. Act, s. 270

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

As to further report by the Official Assignee, see s. 232 (2).

264. Power to arrest absconding contributory-The Court, at any time either before or after making a winding-up order, on proof of probable cause for believing that a contributory is about to quit New Zealand, or otherwise to abscond, or to remove or conceal any of his property for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company, may cause the contributory to be arrested, and his books and papers, money, securities for money, and movable personal property to be seized, and him and them to be safely kept until such time as the Court may order.

Cf. 1933, No. 29, s. 217; 1948 U.K. Act, s. 271

265. Powers of Court cumulative-Any powers by this Act conferred on the Court shall be in addition to and not in restriction of any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.

Cf. 1933, No. 29, s. 218; 1948 U.K. Act, s. 272

266. Delegation to liquidator of certain powers of Court- Provision may be made by general rules for enabling or requiring all or any of the powers and duties conferred and imposed on the Court by this Act in respect of the following matters:

(a) The holding and conducting of meetings to ascertain the wishes of creditors and contributories:

(b) The settling of lists of contributories and the rectifying of the register of members where required, and the collecting and applying of the assets:

(d) The making of calls:

(e) The fixing of a time within which debts and claims must be proved,-

to be exercised or performed by the liquidator as an officer of the Court, and subject to the control of the Court:

Provided that the liquidator shall not, without the special leave of the Court, rectify the register of members, and shall not make any call without either the special leave of the Court or the sanction of the committee of inspection.

Cf. 1933, No. 29, S. 219; 1948 U.K. Act, S. 273

This section does not apply in a winding up subject to supervision; see s. 305 and the 7th Sched.

267. Dissolution of company-(1) When the affairs of a company have been completely wound up, the Court, if the liquidator makes an application in that behalf, shall make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.

(2) A sealed copy of the order shall within fourteen days from the date thereof be forwarded by the liquidator to the Registrar, who shall make in his books a minute of the dissolution of the company.

(3) If the liquidator makes default in complying with the requirements of this section he shall be liable to a fine not exceeding five pounds for every day during which he is in default.

Cf. 1933, No. 29, s. 220; 1948 U.K. Act, s. 274

(iii) VOLUNTARY WINDING UP

Resolutions for and Commencement of Voluntary Winding Up

268. Circumstances in which company may be wound up voluntarily-(1) A company may be wound up voluntarily-

(a) When the period, if any, fixed for the duration of the company by the memorandum or articles expires, or the event, if any, occurs, on the occurrence of which the memorandum or articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily:

(b) If the company resolves by special resolution that the company be wound up voluntarily

(c) If the company resolves by extraordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up.

(2) In this Act the expression "a resolution for voluntary winding up" means a resolution passed under any of the provisions of subsection one of this section.

Cf. 1933, No. 29, s. 221; 1948 U.K. Act, s. 278

As to the registration, and copies of resolution passed under subs. (1) (a), see s.147 (4) (e).

As to local Trusts under the Licensing Trusts Act 1949, see s.46A (1) (a) and (2) (a) of that Act.

As to Boards under Part II of the Charitable Trusts Act 1957, see s. 24 of that Act.

269. Notice of resolution to wind up voluntarily-(1) When a company has passed a resolution for voluntary winding up it shall within fifteen days after the passing of the resolution give notice of the resolution by advertisement in the Gazette, and in one or more newspapers circulating in the locality in which the registered office of the company is situated.

(2) If default is made in complying with this section the company and every officer of the company who is in default shall be liable to a default fine, and for the purposes of this subsection the liquidator of the company shall be deemed to be an officer of the company.

Cf. 1933, No. 29, s. 222; 1948 U.K. Act, s. 279

270. Commencement of voluntary winding up-A voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntary winding up.

Cf. 1933, No. 29, s. 223; 1948 U.K. Act, s. 280

Consequences o f Voluntary Winding Up

271. Effect of voluntary winding up on business and status of company-In case of a voluntary winding up the company shall, from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof:

Provided that the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its articles, continue until it is dissolved.

Cf. 1933, No. 29, s. 224 (1); 1948 U.K. Act, s. 281

272. Avoidance of transfers, etc., after commencement of voluntary winding up-Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members of the company, made after the commencement of a voluntary winding up shall be void.

Cf. 1933, No. 29, s. 224 (2) ; 1948 U.K. Act, s. 282

273. Stay of proceedings on commencement of voluntary winding up-When a company has passed a resolution for voluntary winding up-

(a) No action or proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose; and

(b) Any attachment, distress, or execution thereafter put in force against the estate or effects of the company shall be void to all intents.

Cf. 1933, No. 29, s. 225

A winding up does not affect proceeding in the Compensation Court or elsewhere in relation to workers’ compensation; see s. 132 (2) of the Workers’ Compensation Act 1956.

Declaration o f Solvency

274. Statutory declaration of solvency in case of proposal to wind up voluntarily-(1) Where it is proposed to wind up a company voluntarily, the directors of the company or, in the case of a company having more than two directors, the majority of the directors may, at a meeting of the directors, make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company, and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within such period not exceeding twelve months from the commencement of the winding up as may be specified in the declaration.

(2) A declaration made as aforesaid shall have no effect for the purposes of this Act unless-

(a) It is made within the five weeks immediately preceding the date of the passing of the resolution for winding up the company and is delivered to the Registrar for registration before that date; and

(b) It embodies a statement of the company's assets and liabilities as at the latest practicable date before the making of the declaration.

(3) Any director of a company making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period specified in the declaration shall be liable on summary conviction to imprisonment for a period not exceeding six months or to a fine not exceeding five hundred pounds or to both; and if the company is wound up in pursuance of a resolution passed within the period of five weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed until the contrary is shown that the director did not have reasonable grounds for his opinion.

(4) A winding up in the case of which a declaration has been made and delivered in accordance with this section or section two hundred and twenty-six of the Companies Act 1933 is in this Act referred to as a members’ voluntary winding up, and a winding up in the case of which a declaration has not been made and delivered as aforesaid is in this Act referred to as a creditors' voluntary winding up.

(5) Subsections one to three of this section shall not apply to a winding up commenced before the commencement of this Act.

Cf. 1933, No. 29, s. 226; 1939, No. 39, s. 11; 1948 U.K. Act, s. 283

Provisions Applicable to a Members' Voluntary Winding Up

275. Provisions applicable to a members' winding up- The provisions contained in sections two hundred and seventy-six to two hundred and eighty-two of this Act shall, subject to the provisions of the last of them, apply in relation to a members' voluntary winding up.

Cf. 1933, No. 29, s. 227; 1948 U.K. Act, s. 284

276. Power of company to appoint and fix remuneration of liquidators-(1) The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them.

(2) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting, or the liquidator, sanctions the continuance thereof.

Cf. 1933, No. 29, s. 228; 1948 U.K. Act. s. 285

As to local Trust under the Licensing Trusts Act 1949, see para. (a) of the proviso to s. 46A (3) of that Act.

277. Power to fill vacancy in office of liquidator-(1) If a vacancy occurs by death, resignation, or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.

(2) For that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators.

(3) The meeting shall be held in manner provided by this Act or by the articles or in such manner as may, on application by any contributory or by the continuing liquidators, be determined by the Court.

Cf. 1933, No. 29, s. 229; 1948 U.K. Act, s. 286

278. Power of liquidator to accept shares, etc., as consideration for sale of property of company- (1) Where a company is proposed to be, or is in course of being, wound up altogether voluntarily, and the whole or part of its business or property is proposed to be transferred or sold to another company, whether a company within the meaning of this Act or not (in this section called the transferee company), the liquidator of the first-mentioned company (in this section called the transferor company) may, with the sanction of a special resolution of that company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive (in compensation or part compensation for the transfer or sale) shares, policies, or other like interests in the transferee company for distribution among the members of the transferor company, or may enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies, or other like interests, or in addition thereto, participate in the profits of or receive any other benefit from the transferee company.

(2) Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company.

(3) If any member of the transferor company who did not vote in favour of the special resolution expresses his dissent therefrom in writing addressed to the liquidator, and left at the registered office of the company within seven days after the passing of the resolution, he may require the liquidator either to abstain from carrying the resolution into effect, or to purchase his interest at a price to be determined by agreement or by arbitration in manner provided by this section.

(4) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the company is dissolved, and be raised by the liquidator in such manner as may be determined by special resolution.

(5) A special resolution shall not be invalid for the purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators, but, if an order is made within a year for winding up the company by or subject to the supervision of the Court, the special resolution shall not be valid unless sanctioned by the Court.

(6) For the purposes of an arbitration under this section, any appointment required to be made on behalf of any company may be made under the hand of the liquidator, and every such arbitration shall be conducted in accordance with the provisions of the Arbitration Act 1908.

Cf. 1933, No. 29, s. 230; 1948 U.K. Act, s. 28'7

279. Duty of liquidator to call creditors' meeting in case of insolvency-(1) If, in the case of a winding up commenced after the commencement of this Act, the liquidator is at any time of opinion that the company will not be able to pay its debts in full within the period stated in the declaration under section two hundred and seventy-four of this Act, he shall forthwith summon a meeting of the creditors, and shall lay before the meeting a statement of the assets and liabilities of the company.

(2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding fifty pounds.

280. Duty of liquidator to call general meeting at end of each year-(1) Subject to the provisions of section two hundred and eighty-two of this Act, in the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up and of each succeeding year or at the first convenient date within three months from the end of the year or such longer period as the Court or the Registrar may allow, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year.

(2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding ten pounds.

Cf. 1933, No.29, s. 231; 1948 U.K. Act, s. 289

281. Final meeting and dissolution-- (1) Subject to the provisions of section two hundred and eighty-two of this Act, as soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving any explanation thereof.

(2) The meeting shall be called in the same manner as if it were an ordinary general meeting of the company, and, in addition, notice of the meeting, specifying the time, place, and object thereof, shall, at least fourteen days before the meeting, be published in the Gazette.

(3) Within one week after the meeting the liquidator shall send to the Registrar a copy of the account, and shall make a return to him of the holding of the meeting and of its date, and if the copy is not sent or the return is not made in accordance with this subsection the liquidator shall be liable to a fine not exceeding five pounds for every day during which the default continues:

Provided that if a quorum is not present at the meeting the liquidator shall, in lieu of the return hereinbefore mentioned, make a return that the meeting was duly summoned and that no quorum way made the present thereat, and upon such a return being made the provisions of this subsection as to the making of the return shall be deemed to have been complied with.

(4) The Registrar on receiving the account and either of the returns hereinbefore mentioned shall forthwith register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved

Provided that the Court may, on the application of the liquidator or of any other person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the Court thinks fit.

(5) It shall be the duty of the person on whose application an order of the Court under this section is made, within seven days after the making of the order, to deliver to the Registrar a sealed copy of the order for registration, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

(6) If the liquidator fails to call a general meeting of the company as required by this section, he shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 232; 1948 U.K. Act, s. 290

282. Alternative provisions as to annual and final meetings in case of insolvency-Where section two hundred and seventy-nine of this Act has effect, sections two hundred and ninety and two hundred and ninety-one thereof shall apply to the winding up to the exclusion of sections two hundred and eighty and two hundred and eighty-one of this Act, as if the winding up were a creditors' voluntary winding up and not a members' voluntary winding up

Provided that the liquidator shall not be required to summon a meeting of creditors under the said section two hundred and ninety at the end of the first year from the commencement of the winding up, unless the meeting held under the said section two hundred and seventy-nine is held more than three months before the end of that year.

Cf. 1948 U.K. Act, s. 291

Provisions Applicable to a Creditors’ Voluntary Winding Up

283. Provisions applicable to a creditors' winding up-The provisions contained in sections two hundred and eighty-four to two hundred and ninety-one of this Act shall apply in relation to a creditors' voluntary winding up.

Cf. 1933, No. 29, s. 233; 1948 U.K. Act, s. 292

284. Meeting of creditors-(1) The company shall cause a meeting of the creditors of the company to be summoned for the day, or the next day following the day, on which there is to be held the meeting at which the resolution for voluntary winding up is to be proposed, and shall cause the notices of the said meeting of creditors to be sent by post to the creditors simultaneous with the sending of the notices of the said meeting of the company.

(2) The company shall cause notice of the meeting of the creditors to be advertised once in the Gazette and once at least in two local newspapers circulating in the district where the registered office or principal place of business of the company is situate.

(3) The directors of the company shall-

(a) Cause a full statement of the position of the company's affairs, together with a list of the creditors of the company and the estimated amount of their claims, to be laid before the meeting of creditors to be held as aforesaid; and

(b) Appoint one of their number to preside at the said meeting.

(4) It shall be the duty of the director appointed to preside at the meeting of creditors to attend the meeting and preside thereat.

(5) If the meeting of the company at which the resolution for voluntary winding up is to be proposed is adjourned and the resolution is passed at an adjourned meeting, any resolution passed ate the meeting of the creditors held in pursuance of subsection one of this section shall have effect as if it had been passed immediately after the passing of the resolution for winding up the company.

(6) If default is made-

(a) By the company in complying with subsections one and two of this section:

(b) By the directors of the company in complying with subsection three of this section:

the company, directors, or director, as the case may be, shall be liable to a fine not exceeding one hundred pounds, and, in the case of default by the company, every officer of the company who is in default shall be liable to a like penalty.

Cf. 1933, No. 29, s. 234; 1948 U.K. Act, s. 293.

As to private companies, see s. 362 (8), (9).

285. Appointment of liquidator-The creditors and the company at their respective meetings mentioned in section two hundred and eighty-four of this Act may nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons the person nominated by the creditors shall be liquidator, and if no person is nominated by the creditors the person, if any, nominated by the company shall be liquidator:

Provided that, in the case of different persons being nominated, any director, member, or creditor of the company may, within seven days after the date on which the nomination was made by the creditors, apply to the Court for an order either directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or appointing some other person to be liquidator instead of the person appointed by the creditors.

Cf. 1933, No. 29, s. 235; 1948 U.K. Act, s. 294

As to local Trusts under the Licensing Trusts Act 1949, see para. (a) of the proviso to s. 46A (3) of that Act.

286. Appointment of committee of inspection-(1) The creditors at the meeting to be held in pursuance of section two hundred and eighty-four of this Act, or at any subsequent meeting, may, if they think fit, appoint a committee of inspection consisting of not more than three persons, and if such a committee is appointed the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee not exceeding three in number

Provided that the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection, and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the Court otherwise directs, be qualified to act as members of the committee, and on any application to the Court under this provision the Court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.

(2) Subject to the provisions of this section and to general rules, the provisions of section two hundred and forty-eight of this Act (except subsection one) shall apply with respect to a committee of inspection appointed under this section as they apply with respect to a committee of inspection appointed in a winding up by the Court.

Cf. 1933, No. 29, s. 236; 1948 U.K. Act, s. 295

287. Fixing of liquidators' remuneration and cesser of directors' powers-(1) The committee of inspection, or, if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators.

(2) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the committee of inspection, or, if there is no such committee, the creditors, sanction the continuance thereof.

Cf. 1933, No. 29, s. 237; 1948 U.K. Act, s. 296

288. Power to fill vacancy in office of liquidator-If a vacancy occurs, by death, resignation, or otherwise, in the office of a liquidator, other than a liquidator appointed by, or by the direction of, the Court, the creditors may fill the vacancy.

Cf. 1933, No. 29, s. 238; 1948 U.K. Act, s. 297

289. Application of section 278 to a creditors’ voluntary winding up-The provisions of section two hundred and seventy-eight of this Act shall apply in the case of a creditors’ voluntary winding up as in the case of a members’ voluntary winding up, with the modification that the powers of the liquidator under the said section shall not be exercised except with the sanction either of the Court or of the committee of inspection.

Cf. 1933, No. 29, s. 239; 1948 U.K. Act, s. 298

290. Duty of liquidator to call meetings of company and of creditors at end of each year-(1) In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within three months from the end of the year or such longer period as the Court or the Registrar may allow, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceeding year.

(2) If the liquidator fails to comply with this section, he shall be liable to a fine not exceeding ten pounds.

Cf. 1933, No. 29, s. 240; 1948 U.K. Act, s. 299

291. Final meetings and dissolution-(1) As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors, for the purpose of laying the account before the meetings, and giving any explanation thereof.

(2) The meeting of the company shall be called in the same manner as if it were an ordinary general meeting of the company, and, in addition, notice of the meeting, specifying the time, place, and object thereof, shall, at least: fourteen days before the meeting, be published in the Gazette.

(3) The meeting of the creditors shall be called by a notice: in the Gazette, specifying the time, place, and object thereof, and published at least fourteen days before the meeting. A. copy of the notice shall be sent by post to every creditor at least fourteen days before the meeting.

(4) Within one week after the date of the meetings, or, if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the Registrar a copy of the account, and shall make a return to him of the holding of the meetings and of their dates, and if the copy is not sent or the return is not made in accordance with this subsection the liquidator shall be liable to a fine not exceeding five pounds for every day during which the default continues

Provided that if a quorum is not present at either such meeting the liquidator shall, in lieu of the return hereinbefore mentioned, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made the provisions of this subsection as to the making of the return shall, in respect of that meeting, be deemed to have been complied with.

(5) The Registrar on receiving the account and in respect of each such meeting either of the returns hereinbefore mentioned shall forthwith register them, and on the expiration of three months from the registration thereof the company shall be deemed to be dissolved:

(6) It shall be the duty of the person on whose application an order of the Court under this section is made, within seven days after the making of the order, to deliver to the Registrar a sealed copy of the order for registration, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

(7) If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this section, he shall be liable to a fine not exceeding fifty pounds.

Cf. 1933, No. 29, s. 241; 1948 U.K. Act, s. 300

Provisions Applicable to Every Voluntary Winding Up

292. Provisions applicable to every voluntary winding up-The provisions contained in sections two hundred and ninety-three to three hundred of this Act shall apply to every voluntary winding up whether a members' or a creditors' winding up.

Cf. 1933, No. 29, s. 242; 1948 U.K. Act, s. 301

293. Distribution of property of company-Subject to the provisions of this Act as to preferential payments, the property of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu, and, subject to such application, shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.

Cf. 1933, No. 29, s. 243; 1948 U.K. Act, s. 302

As to local Trusts under the Licensing Trusts Act 1949, see para (b) of the proviso to s. 46A (3) of that Act.

As to Boards under Part II of the Charitable Trusts Act 1957, see s. 27 of that Act.

294. Powers and duties of liquidator in voluntary winding up-(1) The liquidator may-

(a) In the case of a members' voluntary winding up, with the sanction of an extraordinary resolution of the company, and, in the case of a creditors' voluntary winding up, with the sanction of the Court or the committee of inspection or (if there is no such committee) a meeting of the creditors, exercise any of the powers given by paragraphs (d), (e), and (f) of subsection one of section two hundred and forty of this Act to a liquidator in a winding up by the Court:

(b)Without sanction, exercise any of the other powers by this Act given to the liquidator in a winding up by the Court:

(c) Exercise the power of the Court under this Act of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories:

(d) Exercise the power of the Court of making calls:

(e) Summon general meetings of the company for the purpose of obtaining the sanction of the company by special or extraordinary resolution or for any other purpose he may think fit.

(2) The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.

(3) When several liquidators are appointed, any power given by this Act may be exercised by such one or more of them as may be determined at the time of their appointment, or, in default of such determination, by any number not less than two

Provided that in the event of a vacancy in the office of any liquidator any such power as aforesaid may be validly exercised by the liquidator or all the liquidators for the time being in office

Cf. 1933, No. 29, s. 244; 1948 U.K. Act s. 303

295. Power of Court to appoint and remove liquidator in voluntary winding up-(1) If from any cause whatever there is no liquidator acting, the Court may appoint a liquidator.

(2) The Court may, on cause shown, remove a liquidator and appoint another liquidator.

Cf. 1933, No. 29, s. 245; 1948 U.K. Act, s. 304

296. Notice by liquidator of his appointment-(I) The liquidator shall, within twenty-one days after his appointment, deliver to the Registrar for registration a notice of his appointment in the form prescribed.

(2) If the liquidator fails to comply with the requirements of this section he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s. 246; 1948 U.K. Act, s. 305

As to the penalty for false statements, see s. 461 and the 13th Sched.

297. Arrangement when binding on creditors-(l) Any arrangement entered into between a company about to be, or in the course of being, wound up and its creditors shall, subject to the right of appeal under this section, be binding on the company if sanctioned by an extraordinary resolution, and on the creditors if acceded to by three-fourths in number and value of the creditors.

(2) Any creditor or contributory may, within three weeks from the completion of the arrangement, appeal to the Court against it, and the Court may thereupon, as it thinks just, amend, vary, or confirm the arrangement.

Cf. 1933, No. 29, s. 247; 1948 U.K. Act, s. 306

298. Power to apply to Court to have questions determined or powers exercised-(1) The liquidator or any contributory or creditor may apply to the Court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls, or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court.

(2) The Court, if satisfied that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.

(3) A sealed copy of an order made by virtue of this section staying the proceedings in the winding up shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his books relating to the company.

Cf. 1933, No. 29, s. 248; 1948 U.K. Act, s. 307

299. Costs of voluntary winding up-All costs, charges, and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims.

Cf. 1933, No. 29, s. 249; 1948 U.K. Act, s. 309

300. Saving for rights of creditors and contributories-The winding up of a company shall not bar the right of any creditor or contributory to have it wound up by the Court, but, in the case of an application by a contributory, the Court must be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up.

Cf. 1933, No. 29, s. 250; 1948 U.K. Act, s. 310

(IV) WINDING UP SUBJECT TO SUPERVISION OF COURT

301. Power to order winding up subject to supervision- When a company has passed a resolution for voluntary winding up, the Court may make an order that the voluntary winding up shall continue but subject to such supervision of the Court, and with such liberty for creditors, contributories, or others to apply to the Court, and generally on such terms and conditions, as the Court thinks just.

Cf. 1933, No. 29, s. 251; 1948 U.K. Act, s. 311

302. Effect of petition for winding up subject to supervision-A petition for the continuance of a voluntary winding up subject to the supervision of the Court shall, for the purpose of giving jurisdiction to the Court over actions, be deemed to be a petition for winding up by the Court.

Cf. 1933, No. 29, s. 252; 1948 U.K. Act, s. 312 See s. 221.

303. Application of sections 222 and 223 to winding up subject to supervision-A winding up subject to the supervision of the Court shall for the purposes of sections two hundred and twenty-two and two hundred and twenty-three of this Act be deemed to be a winding up by the Court.

Cf. 1933, No. 29, s. 253; 1948 U.K. Act, s. 313

304. Power of Court to appoint or remove liquidators-(1) Where an order is made for a winding up subject to supervision, the Court may by that or any subsequent order appoint an additional liquidator.

(2) A liquidator appointed by the Court under this section shall have the same powers, be subject to the same obligations, and in all respects stand in the same position, as if he had been duly appointed in accordance with the provisions of this Act with respect to the appointment of liquidators in a voluntary winding up.

(3) The Court may remove any liquidator so appointed by the Court or any liquidator continued under the supervision order, and fill any vacancy occasioned by the removal, or by death or resignation.

Cf. 1933, No. 29, s. 254; 1948 U.K. Act, s. 314

305. Effect of supervision order-(1) Where an order is made for a winding up subject to supervision the liquidator may, subject to any restrictions imposed by the Court, exercise all his powers, without the sanction or intervention of the Court, in the same manner as if the company were being wound up altogether voluntarily:

Provided that the powers specified in paragraphs (d), (e), and (f) of subsection one of section two hundred and forty of this Act shall not be exercised by the liquidator except with the sanction of the Court, or, in a case where before the order the winding up was a creditors' voluntary winding up, with the sanction of the Court or the committee of inspection or (if there is no such committee) a meeting; of the creditors.

(2) A winding up subject to the supervision of the Court is not a winding up by the Court for the purpose of the provisions of this Act which are specified in the Seventh Schedule to this Act, but, subject as aforesaid, an order for a winding up subject to supervision shall for all purposes be deemed to be an order for winding up by the Court:

Provided that, where the order for winding up subject to supervision was made in relation to a creditors' voluntary winding up in which a committee of inspection had been appointed, the order shall be deemed to be an order for winding up by the Court for the purpose of section two hundred and forty-eight of this Act (except subsection one thereof), except in so far as the operation of that section is excluded in a voluntary winding up by general rules.

Cf. 1933, No. 29, s. 255; 1948 U.K. Act, s. 315

(V) PROVISIONS APPLICABLE TO EVERY MODE OF WINDING UP

Proof and Ranking of Claims

306. Debts of all descriptions may be proved-In every winding up (subject, in the case of insolvent companies, to the application in accordance with the provisions of this Act of the law of bankruptcy) all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or sound only in damages, or for some other reason do not bear a certain value.

Cf. 1933, No. 29, s. 256; 1948 U.K. Act, s. 316

As to the proof of actual or contingent claims for workers' compensation, see s. 132 of the Workers Compensation Act 1956.

307. Application of bankruptcy rules in winding up of insolvent companies-In the winding up of an insolvent company the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of bankruptcy with respect to the estates of persons adjudged bankrupt, and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively are entitled to by virtue of this section.

Cf. 1933, No. 29, s. 257; 1948 U.K. Act, s. 317

308. Preferential payments-(1) In a winding up there shall be paid in priority to all other debts-

(a) All wages or salary of any servant or worker, whether or not earned wholly or in part by way of commission, and whether payable for time or for piece work, in respect of services rendered to the company during four months next before the relevant date:

(b) All holiday pay becoming payable to any servant: or worker (or in the case of his death to any other person in his right) on the termination of his employment before or by the effect of the winding-up order or resolution

(c) Unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has at the commencement of the winding up under such a contract of insurance as is mentioned in section nine of the Law Reform Act 1936 rights capable of being transferred to and vested in the worker, all amounts due in respect of any compensation or liability for compensation under [the Workers' Compensation Act 1956] accrued before the relevant date:

(d) All sums required by any other enactment to be included among the debts which are to be paid in priority to all other debts in the winding up.

(2) Notwithstanding anything in paragraphs (a) and (b) Of subsection one of this section, the sum to which priority is to be given under those paragraphs shall not, in the case of any one claimant, exceed two hundred pounds.

(3) Where any payment has been made-

(a) To any servant or worker in the employment of a company, on account of wages or salary; or

(b) To any such servant or worker or, in the case of his death, to any other person in his right, on account of holiday pay,-

out of money advanced by some person for that purpose, the person by whom the money was advanced shall in a winding up have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which the servant or worker would have been entitled to priority in the winding up has been diminished by reason of the payment having been made.

(4) The foregoing debts shall-

(a) Rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions; and

(b) So far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge.

(5) Subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them.

(6) In the event of a landlord or other person distraining or having distrained on any goods or effects of the company within one month next before the date of a winding-up order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof

Provided that, in respect of any money paid under any such charge, the landlord or other person shall have the same rights of priority as the person to whom the payment is made.

(7) For the purposes of this section-

(a) Any remuneration in respect of a period of, holiday or of absence from work through sickness or other good cause shall be deemed to be wages in respect of services rendered to the company during that period:

(b) The expression "holiday pay", in relation to any person, means all sums payable to him by the company under the Annual Holidays Act 1944, and includes all sums which by or under any other enactment or any award, agreement, or contract of service are payable to him by the company as holiday pay:

(i) In the case of a company ordered to be wound up compulsorily, the date of the appointment (or first appointment) of a provisional liquidator, or, if no such appointment was made, the date of the winding-up order, unless in either case the company had commenced to be wound up voluntarily before that date; and

(ii) In any case where subparagraph (i) of this paragraph does not apply, means the date of the passing of the resolution for the winding up of the company.

(8) This section shall not apply in the case o£ a winding up where the relevant date as defined in subsection seven of section two hundred and fifty-eight of the Companies Act 1933 occurred before the commencement of this Act, and in such a case the provisions relating to preferential payments which would have applied if this Act had not passed shall be deemed to remain in full force.

Cf. 1933, No. 29, s. 258; 1948 U.K. Act, s. 319

In subs. (1) (c) the Workers' Compensation Act 1956, being the corresponding enactment in force at the date of this reprint, has been substituted for the repealed Workers Compensation Act 1922.

As to the application of this section when a receiver is appointed or possession is taken under debentures secured by a floating charge, see s. 101. For other preferential claims, see s. 37 of the Apprentices Act 1948; s.71 of the Military Training Act 1949; and s. 31 (2) of the Income Tax Assessment Act 1957 (reprinted with the Land and Income Tax Act 1954).

Effect of Winding Up on Antecedent and Other Transactions

309. Fraudulent preference-(1) Any transfer, mortgage, delivery of goods, payment, execution, or other act relating to property made or done by or against a company which, had it been made or done by or against an individual, would be deemed in his bankruptcy a fraudulent preference, shall in the event of the company being wound up be deemed a fraudulent preference of its creditors and be invalid accordingly.

(2) For the purposes of this section the date of the commencement of the winding up shall be deemed to correspond with the date of the adjudication in bankruptcy in the case of an individual.

(3) Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void to all intents.

Cf. 1933, No. 29, s. 259; 1948 U.K. Act, s. 320

310. Liabilities and rights of certain fraudulently preferred persons-(I) Where, in the case of any company, anything made or done after the commencement of this Act is void under section three hundred and nine of this Act as a fraudulent preference of a person interested in property mortgaged or charged to secure the company's debt, then (without prejudice to any rights or liabilities arising apart from this provision) the person preferred shall be subject to the same liabilities, and shall have the same rights, as if he had undertaken to be personally liable as surety for the debt to the extent of the charge on the property or the value of his interest; whichever is the less.

(2) The value of the said person's interest shall be determined as at the date of the transaction constituting the fraudulent preference and shall be determined as if the interest were free of all encumbrances other than those to which the charge for the company's debt was then subject.

(3) On any application made to the Court with respect to any payment on the ground that the payment was a fraudulent preference of a surety or guarantor, the Court shall have jurisdiction to determine any questions with respect to the payment arising between the person to whom the payment was made and the surety or guarantor and to grant relief in respect thereof, notwithstanding that it is not necessary so to do for the purposes of the winding up, and for that purpose may give leave to bring in the surety or guarantor as a third party as in the case of an action for the recovery of the sum paid. This subsection shall apply, with the necessary modifications, in relation to transactions other than the payment of money as it applies in relation to payments.

Cf. 1948 U.K. Act, s. 321

311. Effect of floating charge-Where a company is being wound up, a floating charge on the undertaking or property of the company created within twelve months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except as to money actually advanced or paid, or the actual price or value of goods sold or supplied, to the company at the time of or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent per annum or such other rate as may for the time being be prescribed:

Provided that, in relation to a charge created more than four months before the commencement of this Act, this section shall have effect with the substitution, for the words "twelve months", of the words "four months".

Cf. 1933, No. 29, s. 260; 1948 U.K. Act, s. 322

312. Disclaimer of onerous property-(1) Where any part of the property of a company which is being wound up consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Court and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the commencement of the winding up, or such extended period as may be allowed by the Court, disclaim the property:

Provided that, where any such property has not come to the knowledge of the liquidator within one month after the commencement of the winding up, the power under this section of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the Court.

(2) The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests, and liabilities of the company, and the property of the company, in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any other person.

(3) The Court, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other order in the matter as the Court thinks just.

(4) The liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any person interested in the property requiring him to decide whether he will or will not disclaim and the liquidator has not, within a period of twenty-eight days after the receipt of the application or such further period as may be allowed by the Court, given notice to the applicant that he intends to apply to the Court for leave to disclaim; and, in the case of a contract, if the liquidator, after such an application as aforesaid, does not within the said period or further period disclaim the contract, the company shall be deemed to have adopted it.

(5) The Court may, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as the Court thinks just, and any damages payable under the order to any such person may be proved by him as a debt in the winding up.

(6) The Court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this Act in respect of any disclaimed property and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any person entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the Court thinks just, and on any such vesting order being made the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose:

Provided that, where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the company, whether as underlessee or as mortgagee, except upon the terms of making that person-

a) Subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding up; or

(b) If the Court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date,-

and in either event (if the case so requires) as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or underlessee declining to accept a vesting order upon those terms shall be excluded from all interest in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon those terms, the Court shall have power to vest the estate and interest of the company in the property in any person liable either personally or in a representative character, and either alone or jointly with the company, to perform the lessee's covenants in the lease, freed and discharged from all estates, encumbrances, and interests created therein by the company.

(7) Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding up.

Cf. 1933, No. 29, s. 261; 1948 U.K. Act, s. 323

313. Liability for rentcharge on company's land after disclaimer-(1) Where on a disclaimer under section three hundred and twelve of this Act land vests subject to a rent charge in the Crown or any other person, that shall not, subject to subsection two of this section, impose on the Crown or the said other person or its or his successors in title any personal liability in respect of the rentcharge.

(2) This section shall not affect any liability in respect of sums accruing due after the Crown or the said other person, or some person claiming through or under the Crown or the said other person, has taken possession or control of the land or has entered into occupation thereof.

(3) This section shall apply to land vesting and sums accruing due before, as well as after, the commencement of this Act.

Cf. 1948 U.K. Act, s. 324

314. Restriction of rights of creditor as to execution or attachment- (1) Where a creditor has issued execution against the goods or lands of a company or has attached any debt due to the company, and the company is subsequently wound up, he shall not be entitled to retain the benefit of the execution or attachment against the liquidator in the winding up of the company unless he has completed the execution or attachment before the commencement of the winding up Provided that-

(a) Where any creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which the creditor so had notice shall, for the purposes of the foregoing provision, be substituted for the date of the commencement of the winding up

(b) A person who purchases in good faith under a sale by the Sheriff any goods of a company on which an execution has been levied shall in all cases acquire a good title to them against the liquidator; and

(c) The rights conferred by this subsection on the liquidator may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court may think fit.

(2) For the purposes of this section an execution against goods shall be deemed to be completed by seizure and sale, and an attachment of a debt shall be deemed to be completed by receipt of the debt, and an execution against land shall be deemed to be completed by seizure and, in the case of an equitable interest, by the appointment of a receiver.

(3) In this section the expression "goods" includes all chattels personal, and the expression "Sheriff" includes any officer charged with the execution of a writ or other process.

Cf. 1933, No. 29, s. 262; 1948 U.K. Act, s. 325

315. Duties of Sheriff as to goods taken in execution-(1) Subject to the provisions of subsection three of this section, where any goods of a company are taken in execution, and, before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the Sheriff that a provisional liquidator has been appointed or that a winding-up order has been made or that a resolution for voluntary winding up has been passed, the Sheriff shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator, but the costs of the execution shall be a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge.

(2) Subject to the provisions of subsection three of this section, where under an execution in respect of a judgment for a sum exceeding twenty pounds the goods of a company are sold or money is paid in order to avoid sale, the Sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid and retain the balance for fourteen days, and, if within that time notice is served on him of a petition for the winding up of the company having been. presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding up of the company, and an order is made or a resolution is passed, as the case may be, for the winding up of the company, the Sheriff shall pay the balance to the liquidator, who shall be entitled to retain it as against the execution creditor.
(3) The rights conferred by this section on the liquidator may be set aside by the Court in favour of the creditor to such extent and subject to such terms as the Court thinks fit.

(4) In this section the expression "goods" includes all chattels personal, and the expression "Sheriff" includes any officer charged with the execution of a writ or other process.

Cf. 1933, No. 29, s. 263; 1948 U.K. Act, s. 326

Offences Antecedent to or in Course of Winding Up

316. Offences by officers of companies in liquidation- (1) If any person, being a past or present officer of a company which at the time of the commission of the alleged offence is being wound up, whether by or under the supervision of the Court or voluntarily, or is subsequently ordered to be wound up, by the Court, or subsequently passes a resolution for voluntary winding up,-

(a) Does not to the best of his knowledge and belief fully and truly discover to the liquidator all the property, real and personal, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company; or

(b) Does not deliver up to the liquidator, or as he directs, all such part of the real and personal property of the company as is in his custody or under his control, and which he is required by law to deliver up; or

(c) Does not deliver up to the liquidator, or as he directs, all books and papers in his custody or under his control belonging to the company and which he is required by law to deliver up; or

(d) Within twelve months next before the commencement of the winding up or at any time thereafter conceals any part of the property of the company to the value of ten pounds or upwards, or conceals any debt due to or from the company; or

(e) Within twelve months next before the commencement of the winding up or at any time thereafter fraudulently removes any part of the property of the company to the value of ten pounds or upwards; or

(f) Makes any material omission in any statement relating to the affairs of the company; or

(g) Knowing or believing that a false debt has been proved by any person under the winding up, fails for the period of a month to inform the liquidator thereof; or

(h) After the commencement of the winding up prevents the production of any book or paper affecting or relating to the property or affairs of the company; or

(i) Within twelve months next before the commencement of the winding up or at any time thereafter conceals, destroys, mutilates, or falsifies, or is privy to the concealment, destruction, mutilation, or falsification of, any book or paper affecting or relating to the property or affairs of the company; or

(j) Within twelve months next before the commencement of the winding up or at any time thereafter makes or is privy to the making of any false entry in any book or paper affecting or relating to the property or affairs of the company; or

(k) Within twelve months next before the commencement of the winding up or at any time thereafter fraudulently parts with, alters, or makes any omission in, or is privy to the fraudulent parting with, altering, or making any omission in, any document affecting or relating to the property or affairs of the company; or

(1) After the commencement of the winding up or at any meeting of the creditors of the company within twelve months next before the commencement of the winding up attempts to account for any part of the property of the company by fictitious losses or expenses; or

(m) Has within twelve months next before the commencement of the winding up or at any time thereafter, by any false representation or other fraud, obtained any property for or on behalf of the company on credit which the company does not subsequently pay for; or

(n) Within twelve months next before the commencement of the winding up or at any time thereafter, under the false pretence that the company is carrying on its business, obtains on credit, for or on behalf of the company, any property which the company does not subsequently pay for; or

(o) Within twelve months next before the commencement of the winding up or at any time thereafter pawns, pledges, or disposes of any property which the company which has been obtained on credit and has not been paid for, unless the pawning, pledging, or disposing is in the ordinary way of the business of the company; or

(p) Is guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding up-

he shall be guilty of an offence and shall, in the case of the offences mentioned respectively in paragraphs (m), (n), and (o) of this subsection, be liable on conviction on indictment to imprisonment for a term not exceeding five years, or on summary conviction to imprisonment for a term not exceeding twelve months, and in the case of any other offence shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding twelve months or to a fine not exceeding one hundred pounds or to both:

Provided that it shall be a good defence to a charge under any of paragraphs (a), (b), (c), (d), (f), (n), and (o) if the accused proves that he had no intent to defraud, and to a charge under any of paragraphs (h), (i), and (j) if he proves that he had no intent to conceal the state of affairs of the company or to defeat the law.

(2) Where any person pawns, pledges, or disposes of any property in circumstances which amount to an offence under paragraph (o) of subsection one of this section, every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged, or disposed of in such circumstances as aforesaid shall be guilty of an offence, and shall be liable on conviction on indictment to imprisonment for a term not exceeding five years, or on summary conviction to imprisonment for a term not exceeding twelve months or to a fine not exceeding one hundred pounds or to both.

(3) For the purposes of this section the expression "officer" shall include any person in accordance with whose directions or instructions the directors of a company have been accustomed to act.

Cf. 1933, No. 29, s. 264; 1948 U.K. Act, s. 328

317 Penalty for falsification of books-If any officer or contributory of any company being wound up destroys, mutilates, alters, or falsifies any books or papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book, or paper belonging to the company with intent to defraud or deceive any person, he shall be guilty of a crime, and on conviction on indictment shall be liable to imprisonment for any term not exceeding two years.

Cf. 1933, No. 29, s. 265; 1948 U.K. Act, s. 329

318. Frauds by officers of companies which have gone into liquidation-If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Court or which subsequently passes a resolution for voluntary winding up,

(a) Has by false pretences or by means of any other fraud induced any person to give credit to the company; or

(b) With intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; or

(c) With intent to defraud creditors of the company, has concealed or removed any part of the property of the company since, or within two months before, the date of any unsatisfied judgment or order for payment of money obtained against the company-

he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding twelve months.

Cf. 1933, No. 29, s. 266; 1948 U.K. Act, s. 330

319. Liability where proper accounts not kept-(1) If where a company is wound up it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the winding up or the period between the incorporation of the company and the commencement of the winding up, whichever is the shorter, every officer of the company who is in default shall, unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on the default was excusable, be liable on conviction on indictment to imprisonment for a term not exceeding one year, or on summary conviction to imprisonment for a term not exceeding six months.

(2) For the purposes of this section proper books of account shall be deemed not to have been kept in the case of any company if there have not been kept such books or accounts as are necessary to exhibit and explain the transactions and financial position of the trade or business of the company, including books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, statements of the annual stocktakings and (except in the case of goods sold by way of ordinary retail trade) of all goods sold and purchased, showing the goods and the buyers and sellers thereof in sufficient detail to enable those goods and those buyers and sellers to be identified.

Cf. 1933, No. 29, s. 267; 1948 U.K. Act, s. 331
320. Responsibility for fraudulent trading of persons concerned-(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court, on the application of the Official Assignee or the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct. On the hearing of an application under this subsection the Official Assignee or the liquidator, as the case may be, may himself give evidence or call witnesses.

(2) Where the Court makes any such declaration it may give such further directions as it thinks proper for the purpose of giving effect to that declaration, and, in particular, may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him, or any company or person on his behalf, or any person claiming as assignee from or through the person liable or any company or person acting on his behalf, and may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under this subsection. For the purpose of this subsection the expression "assignee" includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation, mortgage, or charge was created, issued, or transferred or the interest created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made.

(3) Where any business of a company is carried on with such intent or for such purpose as is mentioned in subsection one of this section, every person who was knowingly a party to the carrying on of the business in manner aforesaid shall be liable on conviction on indictment to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred pounds or to both.

(4) The provisions of this section shall have effect notwithstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made, and every declaration under subsection one of this section shall be deemed to be a final judgment within the meaning of paragraph (f) of section twenty-six of the Bankruptcy Act 1908.

Cf. 1933, No. 29, s. 268 (1)-(3), (6), (7) ; 1948 U.K. Act, s. 332

321. Power of Court to assess damages against delinquent directors, etc.--(1) If in the course of winding up a company it appears that any person who has taken part in the formation or promotion of the company, or any past or present director, manager, or liquidator, or any officer of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of the Official Assignee, or of the liquidator, or of any creditor or contributory, examine into the conduct of the promoter, director, manager, liquidator, or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance, or breach of trust as the Court thinks just.

(2) The provisions of this section shall have effect notwithstanding that the offence is one for which the offender may be criminally liable.

(3) Where an order for payment of money is made under this section, the order shall be deemed to be a final judgment within the meaning of paragraph (f) of section twenty-six of the Bankruptcy Act 1908.

Cf. 1933, No. 29, s. 269; 1948 U.K. Act, s. 333

322. Prosecution of delinquent officers and members of company-(1) If it appears to the Court in the course of a winding up by, or subject to the supervision of, the Court that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, the Court may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator to refer the matter to the Attorney-General.

(2) If it appears to the liquidator in the course of a voluntary winding up that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter to the Attorney-General, and shall furnish to him such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator and relating to the matter in question, as the Attorney-General may require.

(3) Where any report is made under subsection two of this section to the Attorney-General, he may, if he thinks fit, refer the matter to the Official Assignee for further inquiry, and the Official Assignee shall thereupon investigate the matter, and may if he thinks it expedient apply to the Court for an order conferring on the Official Assignee or any person designated by him for the purpose with respect to the company concerned all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding up by the Court.

(4) If it appears to the Court in the course of a voluntary winding up that any past or present officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the Attorney-General under subsection two of this section, the Court may, on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report, and on a report being made accordingly the provisions of this section shall have effect as though the report had been made in pursuance of the provisions of subsection two of this section.

(5) If any matter is reported or referred to the Attorney-General under this section, no prosecution shall at any time thereafter be commenced in respect of that matter without his consent.

(6) If, where any matter is reported or referred to the Attorney-General under this section, he considers that the case is one in which a prosecution ought to be instituted, he shall cause proceedings to be instituted accordingly, and it shall be the duty of the liquidator and of every officer and agent of the company past and present (other than the defendant in the proceedings) to give him all assistance in connection with the prosecution which he is reasonably able to give. For the purposes of this subsection the expression "agent" in relation to a company shall be deemed to include any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.

(7) If any person fails or neglects to give assistance in manner required by subsection six of this section, the Court may, on the application of the Attorney-General, direct that person to comply with the requirements of the said subsection; and where any such application is made with respect to a liquidator the Court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne by the liquidator personally.

Cf. 1933, No. 29, s. 270; 1948 U.K. Act, s. 334

Supplementary Provisions as to Winding Up

323. Disqualification of body corporate for appointment as liquidator-(1) A body corporate shall not be qualified for appointment as liquidator of a company, whether in a winding up by or under the supervision of the Court or in a voluntary winding up, and-

(a) Any appointment made in contravention of this provision shall be void; and

(b) Any body corporate which acts as liquidator of a company shall be liable to a fine not exceeding one hundred pounds.

(2) Nothing in this section shall disqualify a body corporate from acting as liquidator of a company if acting under an appointment made before the first day of April, nineteen hundred and thirty-four.

Cf. 1933, No. 29, s. 271; 1948 U.K. Act, s. 335

324. Corrupt inducement affecting appointment as liquidator-Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company's liquidator shall be liable to a fine not exceeding one hundred pounds.

Cf. 1948 U.K. Act, s. 336

325. Enforcement of duty of liquidator to make returns-(1) If any liquidator who has made any default in filing, delivering, or making any return, account, or other document, or in giving any notice which he is by law required to file, deliver, make, or give, fails to make good the default within fourteen days after the service on him of a notice requiring him to do so, the Court may, on an application made to the Court by any contributory or creditor of the company or by the Registrar, make an order directing the liquidator to make good the default within such time as may be specified in the order.

(2) Any such order may provide that all costs of and incidental to the application shall be borne by the liquidator.

(3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a liquidator in respect of any such default as aforesaid.

Cf. 1933, No. 29, s. 272; 1948 U.K. Act, s. 337

326. Notification that a company is in liquidation- (1) Where a company is being wound up, whether by or under the supervision of the Court or voluntarily, every invoice, order for goods, or business letter issued by or on behalf of the company or a liquidator of the company, or a receiver or manager of the property of the company, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up.

(2) If default is made in complying with this section, the company and any of the following persons who knowingly and wilfully authorises or permits the default-namely, any officer of the company, any liquidator of the company, and any receiver or manager-shall be liable to a fine not exceeding twenty pounds.

Cf. 1933, No. 29, s. 273; 1948 U.K. Act, s. 338

327. Books of company to be evidence-Where a company is being wound up, all books and papers of the company and of the liquidators shall, as between the contributories of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.

Cf. 1933, No. 29, s. 274; 1948 U.K. Act, s. 340

328. Disposal of books and papers of company-(1) When a company has been wound up and is about to be dissolved, the books and papers of the company and of the liquidators may be disposed of as follows, that is to say:

(a) In the case of a winding up by or subject to the supervision of the Court, in such way as the Court directs:

(b) In the case of a members' voluntary winding up, in such way as the company by extraordinary resolution directs, and, in the case of a creditors' voluntary winding up, in such way as the committee of inspection or, if there is no such committee, as the creditors of the company may direct.

(2) After five years from the dissolution of the company no responsibility shall rest on the company, the liquidators, or any person to whom the custody of the books and papers has been committed, by reason of any book or paper not being forthcoming to any person claiming to be interested therein.

(3) Provision may be made by general rules for enabling the Registrar to prevent, for such period (not exceeding five years from the dissolution of the company) as the Registrar thinks proper, the destruction of all or any of the books and papers of a company which has been wound up, and for enabling any creditor or contributory of the company to make representations to the Registrar, and to appeal to the Court from any direction which may be given by the Registrar in the matter.

(4) If any person acts in contravention of any general rules made for the purposes of this section or of any direction of the Registrar thereunder he shall be liable to a fine not exceeding one hundred pounds.

Cf. 1933, No. 29, s. 275; 1948 U.K. Act, s. 341

329. Information as to pending liquidations-(1) If where a company is being wound up the winding up is not concluded within one year after its commencement the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the Registrar a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in and position of the liquidation.

(2) If a liquidator fails to comply with this section he shall be liable to a fine not exceeding fifty pounds for each day during which the default continues.

Cf. 1933, No. 29, s. 276 (1), (3); 1948 U.K. Act, s. 342

330. Unclaimed assets may be paid to Public Account as unclaimed moneys after six months-(1) If it appears either from any statement sent to the Registrar under section three hundred and twenty-nine of this Act or otherwise that a liquidator has in his hands or under his control any moneys representing unclaimed assets of the company which have remained unclaimed for not less than six months after the date of their receipt, the liquidator may if he thinks fit pay those moneys into the Public Account to the credit of the Consolidated Fund at any time before they have become unclaimed moneys within the meaning of the Unclaimed Moneys Act 1908, and the company and the liquidator shall thereafter be relieved from all further liability in respect of the moneys so paid.

(2) All moneys so paid shall be deemed to be unclaimed moneys, and the provisions of the Unclaimed Moneys Act 1908 shall apply accordingly.

Cf. 1948 U.K. Act, s. 343

331. Resolutions passed at adjourned meetings of creditors and contributories-Where a resolution is passed at an adjourned meeting of any creditors or contributories of a company the resolution shall, for all purposes, be treated as having been passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date.

Cf. 1933, No. 29, s. 277; 1948 U.K. Act, s. 345

Supplementary Powers o f Court

332. Meetings to ascertain wishes of creditors or contributories-(1) The Court may, as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories of the company, as proved to it by any sufficient evidence, and may, if it thinks fit, for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held, and conducted in such manner as the Court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the Court.

(2) In the case of creditors regard shall be had to the value of each creditor's debt.

(3) In the case of contributories regard shall be had to the number of votes conferred on each contributory by this Act or the articles.

Cf. 1933, No. 29, s. 278; 1948 U.K. Act, s. 346

333. Affidavits, etc., in New Zealand and elsewhere- (1) Any affidavit required to be sworn under the provisions or for the purposes of this Part of this Act may be sworn in any place in New Zealand or elsewhere, whether within or outside the Commonwealth, before any Court, judge, or person lawfully authorised by rules of Court made under the Judicature Act 1908 to take and receive affidavits in that place.

(2) All Courts, judges, justices, Commissioners, and persons acting judicially shall take judicial notice of the seal or stamp or signature, as the case may be, of any such Court, judge, or person, attached, appended, or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part of this Act.

Cf. 1933, No. 29, s. 279; 1948 U.K. Act, s. 351

334. Certain provisions of this Part to bind the Crown- The provisions of this Part of this Act relating to the remedies against the property of a company, the priorities of debts, and the effect of an arrangement with creditors, shall bind the Crown.

Cf. 1933, No. 29, s. 280

Provisions as to Dissolution

335. Power of Court to declare dissolution of company void -(1) Where a company has been dissolved the Court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the Court to be interested make an order, upon such terms as the Court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.

(2) It shall be the duty of the person on whose application the order was made, within seven days after the making of the order, or such further time as the Court may allow, to deliver to the Registrar for registration a sealed copy of the order, and if that person fails so to do he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s. 281; 1948 U.K. Act, s. 352

336. Registrar may strike defunct company off register-(1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or in operation, he may send to the company by post a letter inquiring whether the company is carrying on business or in operation.

(2) If the Registrar does not within one month of sending the letter receive any answer thereto, he shall within fourteen days after the expiration of the month send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received, and that, if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the Gazette with a view to striking the name of the company off the register.

(3) If the Registrar either receives an answer to the effect that the company is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Gazette, and send to the company by post, a notice that at the expiration of three months from the date of that notice the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved.

(4) If, in any case where a company is being wound up, the Registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of six consecutive months, the Registrar shall publish in the Gazette and send to the company or the liquidator, if any, a like notice as is provided in subsection three of this section.

(5) If any charge is registered under Part IV of this Act on any of the property of a company to which a notice published in the Gazette in accordance with subsection three or subsection four of this section relates the Registrar shall forthwith after publication send a copy of the notice to the person or persons entitled to the charge and, if the Registrar deems it necessary, to the solicitor (if any) who registered the charge.

(6) At the expiration of the time mentioned in the notice the Registrar may, unless cause to the contrary is previously shown, strike the name of the company off the register, and shall publish notice thereof in the Gazette, and on the publication in the Gazette of this notice the company shall be dissolved

Provided that-

(a) The liability, if any, of every director, managing officer, and member of the company shall continue and may be enforced as if the company had not been dissolved; and

(b) Nothing in this subsection shall affect the power of the Court to wind up a company the name of which has been struck off the register.

(7) If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register, the Court, on an application made by the company or member
or creditor before the expiration of twenty years from the publication in the Gazette of the notice aforesaid, may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register, and upon a sealed copy of the order being delivered to the Registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the Court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.

(8) A notice to be sent under this section to a liquidator may be addressed to the liquidator at his last known place of business, and a letter or notice to be sent under this section to a company may be addressed to the company at its registered office, or, if no office has been registered, to the care of some officer of the company, or, if there is no officer of the company whose name and address are known to the Registrar, may be sent to each of the persons who subscribed the memorandum, addressed to him at the address mentioned in the memorandum.

Cf. 1933, No. 29, s. 282; 1948 U.K. Act, s. 353

337. Property of dissolved company to be bona vacantia -(1) Where a company is dissolved all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property, but not including property held by the company on trust for any other person) shall, subject and without prejudice to any order which may at any time be made by the Court under section three hundred and thirty-five or section three hundred and thirty-six of this Act, be deemed to be bona vacantia, and shall accordingly belong to the Crown, and shall vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown.

(2) This section applies to companies dissolved at any time, whether before or after the commencement of this Act, and whether before or after the commencement of the Companies Act 1933.

(3) Where transmission to the Crown as bona vacantia under this section of any land or interest in land has been registered under the Land Transfer Act 1952, the effect of any order under section three hundred and thirty-five or section three hundred and thirty-six of this Act shall not be to revest the land or interest in the company, but shall be to entitle the company to compensation equal to the value of the land or interest as at the date of the registration of the transmission. Any such compensation shall be paid from the Land Settlement Account on the direction of the Minister of Lands. If the land or interest has been sold or contracted to be sold by the Crown the value of the land as at the date aforesaid shall be deemed to be the net amount received or to be received from the sale. In the event of any dispute as to the value of the land or interest in any other case the matter shall be referred to and determined by the Land Valuation Court, which for that purpose shall have jurisdiction as for a proceeding under section thirty-three of the Land Valuation Court Act 1948.

Cf. 1933, No. 29, s. 283; 1948 U.K. Act, s. 354

As to the appointment of the Public Trustee as the manner of any property where it is not known whether it is subject to any trust for any other person, see s. 79 (1) (c) of the Public Trust Office Act 1957.

338. Power of Crown to disclaim title to property vesting under preceding section-(1) Where any property vests in the Crown under section three hundred and thirty-seven of this Act, the Crown's title thereto under that section may be disclaimed by a notice signed by the Secretary to the Treasury.

(2) Where a notice of disclaimer under this section is executed as respects any property that property shall be deemed not to have vested in the Crown under section three hundred and thirty-seven of this Act, and subsections two and six of section three hundred and twelve of this Act and section three hundred and thirteen thereof shall apply in relation to the property as if it had been disclaimed under subsection one of the said section three hundred and twelve immediately before the dissolution of the company.

(3) The right to execute a notice of disclaimer under this section may be waived by or on behalf of the Crown either expressly or by taking possession or other act evincing that intention.

(4) A notice of disclaimer under this section shall be of no effect unless it is executed within twelve months of the date on which the vesting of the property as aforesaid came to the notice of the Secretary to the Treasury, or, if an application in writing is made to him by any person interested in the property requiring him to decide whether he will or will not disclaim, within a period of three months after the receipt of the application or such further period as may be allowed by the Court.

(5) A statement in a notice of disclaimer of any property under this section that the vesting of the property came to the notice of the Secretary to the Treasury on a specified date or that no such application as aforesaid was received by him with respect to the property before a specified date shall, until the contrary is proved, be sufficient evidence of the fact stated.

(6) A notice of disclaimer under this section shall be delivered to the Registrar and retained and registered by him, and copies thereof shall be published in the Gazette and sent to any persons who have given the Secretary to the Treasury notice that they claim to be interested in the property.

(7) This section shall apply to property vested in the Crown as aforesaid at the commencement of this Act, and where the vesting came to the notice of the Secretary to the Treasury more than six months before the commencement of this Act notice of disclaimer under this section may (except where an application is made to him under subsection four of this section) be executed at any time within six months after the commencement of this Act.

Cf. 1948 U.K. Act, s. 355

339. Liability for rentcharge on company's land after dissolution-(1) Section three hundred and thirteen of this Act shall apply to land which by operation of law vests subject to a rentcharge in the Crown or any other person on the dissolution of a company as it applies to land so vesting on a disclaimer under section three hundred and twelve of this Act.

(2) In this section the expression "company" includes any body corporate.

Cf. 1948 U.K. Act, s. 356

Officers of Court

340. Returns by officers-The officers of the Court shall make to the Registrar such returns of the business of their respective Courts and offices in relation to the winding up of companies, at such times, and in such manner and form, as may be prescribed, and from those returns the Registrar shall cause books to be prepared in the prescribed form, and those books shall, upon payment of the prescribed fee, be open for public information and searches.

Cf 1933, No. 29, s. 284; 1948 U.K. Act, s. 364

Rules and Fees

341. General rules and fees for winding up-(1) General rules for carrying into effect the objects of this Act so far as relates to the winding up of companies may be made in the manner in which rules of Court are made under the Judicature Act 1908.

(2) All rules made under this section shall be laid before Parliament within twenty-eight days after the date of the making thereof, if Parliament is then sitting, and, if not, shall be laid before Parliament within twenty-eight days after the date of the commencement of the next ensuing session.

(3) There shall be paid in respect of proceedings under this Act in relation to the winding up of companies such fees as may be prescribed by rules made under this section, and any rules so made may provide by whom and in what manner those fees are to be collected and accounted for.

Cf. 1933, No. 29, s. 285; 1948 U.K. Act, s. 365

PART VII
RECEIVERS AND MANAGERS

342. Disqualification of body corporate for appointment as receiver-(1) A body corporate shall not be qualified for appointment as receiver of the property of a company, and. any body corporate which acts as such a receiver shall be liable to a fine not exceeding one hundred pounds.

(2) Nothing in this section shall disqualify a body corporate from acting as receiver as aforesaid if acting under an appointment made before the first day of April, nineteen hundred and thirty-four.

Cf. 1933, No. 29, s. 286; 1948 U.K. Act, s. 366

343. Disqualification of undischarged bankrupt from acting as receiver or manager-(1) If any person being an undischarged bankrupt acts as receiver or manager of the property of a company on behalf of debenture holders, he shall, subject to subsection two of this section, be liable on conviction on indictment to imprisonment for a term not exceeding two years, or on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.

(2) Subsection one of this section shall not apply to a receiver or manager where-

(a) The appointment under which he acts and the bankruptcy were both before the commencement of this Act; or

(b) He acts under an appointment made by order of a Court.

Cf. 1948 U.K. Act, s. 367

344. Power to appoint Official Assignee as receiver for debenture holders or creditors-Where an application is made to the Court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the Court, the Official Assignee may be so appointed.

Cf. 1933, No. 29, s. 287; 1948 U.K. Act, s. 368

This section does not apply in a winding up subsection to supervision; see s. 305 and the 7th Sched.

345. Receivers and managers appointed out of Court- (1) A receiver or manager of the property of a company appointed under the powers contained in any instrument may apply to the Court for directions in relation to any particular matter arising in connection with the performance of his functions, and on any such application the Court may give such directions, or may make such order declaring the rights of persons before the Court or otherwise, as the Court thinks just.

(2) A receiver or manager of the property of a company appointed as aforesaid shall, to the same extent as if he had been appointed by order of a Court, be personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and entitled in respect of that liability to indemnity out of the assets; but nothing in this subsection shall be taken as limiting any right to indemnity which he would have apart from this subsection, or as limiting his liability on contracts entered into without authority or as conferring any right to indemnity in respect of that liability.

(3) This section shall apply whether the receiver or manager was appointed before or after the commencement of this Act, but subsection two thereof shall not apply to contracts entered into before the commencement of this Act.

Cf. 1948 U.K. Act, s. 369

346. Notification that receiver or manager appointed- (1) Where a receiver or manager of the property of a company has been appointed, every invoice, order for goods, or business letter issued by or on behalf of the company or the receiver or manager or the liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver or manager has been appointed.

(2) If default is made in complying with the requirements of this section, the company and any of the following persons who knowingly and wilfully authorises or permits the default -namely, any officer of the company, any liquidator of the company, and any receiver or manager-shall be liable to a fine not exceeding twenty pounds.

Cf. 1933, No. 29, s. 288; 1948 U.K. Act, s. 370

347. Power of Court to fix remuneration on application of liquidator- (1) The Court may, on an application made to the Court by the liquidator of a company, by order fix the amount to be paid by way of remuneration to any person who, under the powers contained in any instrument, has been appointed as receiver or manager of the property of the company.

(2) The power of the Court under subsection one of this section shall, where no previous order has been made with respect thereto under that subsection,-

(a) Extend to fixing the remuneration for any period before the making of the order or the application therefor; and

(b) Be exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application therefor; and

(c) Where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extend to requiring him or his personal representatives to account for the excess or such part thereof as may be specified in the order

Provided that the power conferred by paragraph (c) of this subsection shall not be exercised as respects any period before the making of the application for the order unless in the opinion of the Court there are special circumstances making it proper for the power to be so exercised.

(3) The Court may from time to time, on an application made either by the liquidator or by the receiver or manager, vary or amend an order made under subsection one of this section.

(4) This section shall apply whether the receiver or manager was appointed before or after the commencement of this Act, and to periods before, as well as to periods after, the commencement of this Act.

Cf. 1933, No. 29, s. 289; 1948 U.K. Act, s. 371

348. Provisions as to information where receiver or manager appointed-(1) Where a receiver or manager of the whole or substantially the whole of the property of a company (hereinafter in this section and in section three hundred and forty-nine of this Act referred to as the receiver) is appointed on behalf of the holders of any debentures of the company secured by a floating charge, then, subject to the provisions of this section and section three hundred and forty-nine of this Act,-

(a) The receiver shall forthwith send notice to the company of his appointment; and

(b) There shall, within fourteen days after receipt of the notice, or such longer period as may be allowed by the Court or by the receiver, be made out and submitted to the receiver in accordance with section three hundred and forty-nine of this Act a statement in the prescribed form as to the affairs of the company; and

(i) To the Registrar and to the Court, a copy of the statement and of any comments he sees fit to make thereon, and in the case of the Registrar also a summary of the statement and of his comments (if any) thereon; and

(ii) To the company, a copy of any such comments as aforesaid or, if he does not see fit to make any comments, a notice to that effect; and

(iii) To any trustees for the debenture holders on whose behalf he was appointed and (so far as he is aware of their addresses) to all such debenture holders, a copy of the said summary.

(2) The receiver shall within two months or such longer period as the Court may allow after the expiration of the period of twelve months from the date of his appointment and of every subsequent period of twelve months, and within two months or such longer period as the Court may allow after he ceases to act as receiver or manager of the property of the company, send to the Registrar, to any trustees for the debenture holders of the company on whose behalf he was appointed, to the company, and (so far as he is aware of their addresses) to all such debenture holders an abstract in the prescribed form showing his receipts and payments during that period of twelve months or, where he ceases to act as aforesaid, during the period from the end of the period to which the last preceding abstract related up to the date of his so ceasing, and the aggregate amounts of his receipts and of his payments during all preceding periods since his appointment.

(3) Where the receiver is appointed under the powers contained in any instrument, this section shall have effect-

(a) With the omission of the references to the Court in subsection one; and

(b) With the substitution for the references to the Court in subsection two of references to the Registrar,-

and in any other case references to the Court shall be taken as referring to the Court by which the receiver was appointed.

(4) Subsection one of this section shall not apply in relation to the appointment of a receiver or manager to act with an existing receiver or manager or in place of a receiver or manager dying or ceasing to act, except that, where that subsection applies to a receiver or manager who dies or ceases to act before it has been fully complied with, the references in paragraphs (b) and (c) thereof to the receiver shall (subject to subsection five of this section) include references to his successor and to any continuing receiver or manager. Nothing in this subsection shall be taken as limiting the meaning of the expression "the receiver" where used in, or in relation to, subsection two of this section.

(5) This section and section three hundred and forty-nine of this Act, where the company is being wound up, shall apply notwithstanding that the receiver or manager and the liquidator are the same person, but with any necessary modifications arising from that fact.

(6) Nothing in subsection two of this section shall be taken to prejudice the duty of the receiver to render proper accounts of his receipts and payments to the persons to whom, and at the times at which, he may be required to do so apart from that subsection.

(7) If the receiver makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding five pounds for every day during which the default continues.

(8) Where any instrument contains power to appoint a receiver or manager of the property of a company on behalf of debenture holders, nothing in section ninety-two of the Property Law Act 1952 shall be construed to require any notice to be given before any money secured by the debentures becomes payable, or before a receiver or manager is appointed and enters into possession of the property of the company.

Cf. 1948 U.K. Act, s. 372

As to the penalty for false statements under subs. (2), see s. 461 and the 13th Sched.

349. Special provisions as to statement submitted to receiver-(1) The statement as to the affairs of a company required by section three hundred and forty-eight of this Act to be submitted to the receiver (or his successor) shall show as at the date of the receiver's appointment the particulars of the company's assets, debts, and liabilities, the names, addresses, and descriptions of its creditors, the securities held by them respectively, the dates when the securities were respectively given, and such further or other information as may be prescribed.

(2) The said statement shall be submitted by, and be verified by affidavit of, one or more of the persons who are at the date of the receiver's appointment the directors and by the person who is at that date the secretary of the company, or by such of the persons hereafter in this subsection mentioned as the receiver (or his successor), subject to the direction of the Court, may require to submit and verify the statement, that is to say, persons-

(a) Who are or have been officers of the company:

(b) Who have taken part in the formation of the company at any time within one year before the date of the receiver's appointment:

(c) Who are in the employment of the company, or have been in the employment of the company within the said year, and are in the opinion of the receiver capable of giving the information required:

(d) Who are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

(3) Any person making the statement and affidavit shall be allowed, and shall be paid by the receiver (or his successor) Out of his receipts, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the receiver (or his successor) may consider reasonable, subject to an appeal to the Court.

(4) Where the receiver is appointed under the powers contained in any instrument, this section shall have effect with the substitution for references to the Court of references to the Registrar and for references to an affidavit of references to a statutory declaration; and in any other case references to the Court shall be taken as referring to the Court by which the receiver was appointed.

(5) If any person without reasonable excuse makes default in complying with the requirements of this section, he shall be liable to a fine not exceeding ten pounds for every day during which the default continues.

(6) References in this section to the receiver's successor shall include a continuing receiver or manager.

Cf. 1948 U.K. Act, s. 373

350. Delivery to Registrar of accounts of receivers and managers-( 1) Except where subsection two of section three hundred and forty-eight of this Act applies, every receiver or manager of the property of a company who has been appointed under the powers contained in any instrument shall, within one month, or such longer period as the Registrar may allow, after the expiration of the period of six months from the date of his appointment and of every subsequent period of six months, and within one month after he ceases to act as receiver or manager, deliver to the Registrar for registration an abstract in the prescribed form showing his receipts and his payments during that period of six months, or, where he ceases to act as aforesaid, during the period from the end of the period to which the last preceding abstract related up to the date of his so ceasing, and the aggregate amount of his receipts and of his payments during all preceding periods since his appointment.

(2) Every receiver or manager who makes default in complying with the provisions of this section shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s. 290; 1948 U.K. Act, s. 374

As to the penalty for false statements, see s. 461 and the 13th Sched.

351. Enforcement of duty of receivers and managers to make returns, etc.-(1) If any receiver or manager of the property of a company-

(a) Having made default in filing, delivering, or making any return, account, or other document, or in giving any notice, which a receiver or manager is by law required to file, deliver, make, or give, fails to make good the default within fourteen days after the service on him of a notice requiring him to do so; or

(b) Having been appointed under the powers contained in any instrument, has, after being required at any time by the liquidator of the company so to do, failed to render proper accounts of his receipts and payments and to vouch the same and to pay over to the liquidator the amount properly payable to him,-

the Court may, on an application made for the purpose, make an order directing the receiver or manager, as the case may be, to make good the default within such time as may be specified in the order.

(2) In the case of any such default as is mentioned in paragraph (a) of subsection one of this section, an application for the purposes of this section may be made by any member or creditor of the company or by the Registrar, and in the case of any such default as is mentioned in paragraph (b) of that subsection the application shall be made by the liquidator, and in either case the order may provide that all costs of and incidental to the application shall be borne by the receiver or manager, as the case may be.

(3) Nothing in this section shall be taken to prejudice the operation of any enactments imposing penalties on receivers in respect of any such default as is mentioned in subsection one of this section.

Cf. 1933, No. 29, s. 291; 1948 U.K. Act, s. 375

352. Construction of references to receivers and managers-It is hereby declared that, except where the context otherwise requires,-

(a) Any reference in this Act to a receiver or manager of the property of a company, or to a receiver thereof, includes a reference to a receiver or manager, or (as the case may be) to a receiver, of part only of that property and to a receiver only of the income arising from that property or from part thereof; and

(b) Any reference in this Act to the appointment of a receiver or manager under powers contained in any instrument includes a reference to an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument.

Cf. 1948 U.K. Act, s. 376

PART VIII
PRIVATE COMPANIES

353. Formation of private companies-(1) Notwithstanding anything in this Act, it shall be lawful for any number of persons not exceeding twenty-five associated for any lawful purpose, by subscribing their names to a memorandum of association as hereinafter specified, and otherwise complying with the requirements of this Act in respect of registration, to form a private company having its capital divided into shares, and having the liability of its members limited by shares, or by shares and by guarantee.

(2) Where two or more persons hold one or more shares in a company jointly they shall, for the purposes of this Part of this Act, be treated as a single member.

Cf. 1933, No. 29, s. 292; 1948 U.K. Act, s. 28 (2)

354. Application of Act to private companies-(1) Subject to this Part of this Act, all the provisions of this Act shall, so far as applicable, apply to private companies.

(2) the application thereof to private companies,-

(a)The following provisions of this Act shall be construed as if the references therein to seven members were references to two members

(i) Section forty-one, as to carrying on business when the number of members is reduced below the legal minimum

(ii) Paragraph (d) of section two hundred and seventeen, as to winding up by the Court when the number of members is reduced below the legal minimum

(iii) Subparagraph (i) of paragraph (a) of the proviso to subsection one of section two hundred and nineteen, as to the presentation of a winding-up petition by a contributory when the number of members is reduced below the legal minimum:

(b) Paragraph (c) of section one hundred and thirty-eight of this Act (as to the quorum for meetings) shall be construed as if the reference therein to three members were a reference to two members:

(c) Subsection one of section one hundred and fifty-nine and section one hundred and eighty of this Act shall be construed as if the reference therein to two directors were a reference to one director.

(3) Section one hundred and sixty-three of this Act shall not apply to a private company (not being a subsidiary of a company that is not a private company) In respect of any annual general meeting if at or before that meeting all the members of the company having the right to vote on that resolution pass a unanimous resolution that no auditor be appointed at that meeting. Every such resolution shall expire at the commencement of the next annual general meeting after the meeting to which it relates. Where a resolution under this subsection is passed-

(a) Section one hundred and forty-seven of this Act shall apply to the resolution

(b) The Registrar may at any time before the next annual general meeting, if he thinks fit, on the application or with the consent of any member or creditor of the company, or of his own motion, appoint an auditor or auditors to hold office until the conclusion of the next annual general meeting

(c) Every balance sheet of the company prepared while the company has no auditor shall include a statement that the accounts have not been audited; and subsection six of section one hundred and fifty-three of this Act shall apply in every case of failure to comply with this paragraph.

(4) The provisions of this Act which are specified in the Ninth Schedule to this Act do not apply to private companies.

Cf. 1933, No. 29, s. 293; 1948 U.K. Act, ss. 31, 42 (2), 48 (3), 109 (7) (a), 129, 130 (10), 134 (c), 161 (2) 176, 181 (5) (b), 183 (1), 184 (1), 222 (d), 224 (1) (a) (i).

355. Prohibition of certain persons being sole director or secretary- No private company shall-

(a) Have as secretary a person who is the sole director of the company:

(b) Have as secretary to the company a corporation the sole director of which is the sole director of the company:

Cf. 1948 U.K. Act, ss. 177 (1), 178

As to directors or principal officers of a private company holding a land agent's license, see ss. 17 (1A) and 24 (2) (ee) of the Land Agents Act 1953.

356. Memorandum of association-(1) Where a company is formed under this Part of this Act the memorandum must, in addition to all other matters required by this Act to be stated therein, state that the company is a private company.

(2) All the share capital with which a private company is registered must be subscribed for in the memorandum, and shall be deemed to be allotted to the respective subscribers on the date of the incorporation of the company.

Cf. 1933, No. 29, s. 294

357. Certificate of incorporation-Every certificate of incorporation issued in respect of a private company shall state expressly that it is so issued.

Cf. 1933, No. 29, s. 295

358. Registration of articles by companies existing on 1 April 1934-Every copy of a company's articles duly registered under section two hundred and ninety-six of the Companies; Act 1933 shall be conclusive evidence of the provisions contained in the articles of the company at the time of the registration of the copy, and every certificate duly registered under that section to the effect that a company had not made any articles shall be conclusive evidence that at the time of the registration of the certificate the company had not made any articles.

Cf. 1933, No. 29, s. 296 (2)

359. Prohibition of increasing membership beyond twenty-five-(1) If a private company enters the name of any person in its register of members (whether upon the registration of a transfer or transmission of shares, or upon the allotment of any shares, or otherwise) so as to increase the number of the members of the company beyond twenty-five, the company and every officer of the company who knowingly and wilfully authorises or permits the entry shall be liable to a fine not exceeding fifty pounds, and a further fine not exceeding five pounds for every day during which the number of members continues in excess of twenty-five.

(2) In computing the number of the members of a company for the purposes of subsection one of this section, no account shall be taken of persons who are in the full time employment of the company, and have been in such employment for at least two years, or of persons who, having been formerly in the full time employment of the company for at least two years, were, while in that employment, and have continued after the termination of that employment to be, members of the company:

Provided that the total number of the members of the company shall not at any time exceed fifty.

(3) Where the number of the members of a private company exceeds twenty-five, the company shall send with the annual return required by section one hundred and thirty of this Act a certificate signed both by a director and by the secretary of the company, in accordance with the form set out in the Sixth Schedule to this Act, to the effect that the excess of the number of members of the company over twenty-five consists wholly of persons who under subsection two of this section are not to be included in computing the number of twenty-five.

Cf. 1933, No. 29, s. 297

This section does not apply to labour shares; see s. 67 (7).

As to the penalty for false statements under subs. (3), see s. 461 and the 13th Sched.

360. Prohibition of issue of share prospectus; and certificate to accompany annual return-(1) It shall not be lawful for a private company or for the directors thereof to issue any prospectus inviting subscriptions for shares in its capital.

(2) A private company shall send with the annual return required by section one hundred and thirty of . this Act a certificate signed both by a director and by the secretary of the company that the company has not since the date of the last return, or, in the case of a first return, since the date of the incorporation of the company, issued any such prospectus.

Cf. 1933, No. 29, s. 298; 1948 U.K. Act, s. 128

As to the penalty for false statements under subs. (2), see s. 461 and the 13th Sched.

361. Increased capital to be fully subscribed for-(1) No private company shall increase its share capital beyond the registered capital unless-

(a) All the new shares are subscribed for in a memorandum of subscription in the form set out in the Tenth Schedule to this Act, executed in the same manner as the memorandum of association; and

(b) The names of the subscribers of the memorandum of subscription are, on the increase being made, duly entered in the company's register of members in respect of the shares respectively so subscribed for by them.

(2) All the new shares shall be deemed to be allotted to the respective subscribers on the date on which the increase is made.

(3) In every case of an increase of capital by a private company the company shall forward the memorandum of subscription to the Registrar, together with the notice to be given pursuant to section seventy-two of this Act.

(4) If a private company increases its capital without complying with subsection one of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds, and a further fine not exceeding five pounds for every day during which the default continues.

(5) If default is made in complying with subsection three of this section, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 299

362. Passing of resolutions by entries in minute book. Registration and copies o£ certain resolutions. Special provisions as to a creditors' voluntary winding up- (1) Anything that may be done by a company registered under Part II of this Act by resolution, special resolution, or extraordinary resolution passed at a meeting of the company may, subject to any special provisions in that behalf in the articles of the company, be done by a private company in the same manner or by resolution passed, without a meeting or any previous notice being required, by means of an entry in its minute book signed by at least three-fourths of the members having the right to vote on that resolution, holding in the aggregate at least three-fourths in nominal value of the shares giving that right.

(2) It shall not be necessary for a private company to hold an annual general meeting if everything required to be done at that meeting by resolution, special resolution, or extraordinary resolution (including the adoption or approval of every balance sheet or other document required to be laid before the meeting) is, within the time prescribed for the holding of the meeting, done by means of an entry in its minute book in accordance with this section.

(3) Any such entry may be signed on behalf of a member by his agent duly authorised in writing.

(4) For the purposes of this section a memorandum pasted or otherwise permanently affixed in the minute book and purporting to have been signed for the purpose of becoming an entry therein shall be deemed to be an entry accordingly, and any such entry may consist of several documents in like form, each signed by or on behalf of one or more members.

(5) The company shall within seven days after any resolution is passed by means of an entry in its minute book in accordance with this section send to every member by or on behalf of whom the entry has not been signed a copy thereof, including the signatures.

(6) If default is made in complying with subsection five of this section, the company and every officer of the company who is in default shall be liable to a default fine.

(7) The provisions of section one hundred and forty-seven of this Act shall apply to resolutions which have been passed by means of entries in the minute book of a private company in accordance with the foregoing provisions of this section to the same extent as if those resolutions had been passed at a meeting of the company.

(8) Where a private company passes a resolution for a creditors' voluntary winding up by means of an entry in its minute book in accordance with the foregoing provisions of this section, the company, instead of complying with the requirements of subsection one of section two hundred and eighty-four of this Act, shall cause a meeting of the creditors of the company to be summoned for a day not later than the tenth day after the day on which the resolution is passed, and shall cause notice of the said meeting to be sent by post to the creditors at least seven days before the day on which the meeting is to be held. In every such case all references in this Act to subsection one of the said section two hundred and eighty-four shall be read as references to this subsection.

(9) Where a private company passes a resolution for a creditors' voluntary winding up by means of an entry in its minute book in accordance with the foregoing provisions of this section, the company may at the same time, or at any subsequent time before the date of the meeting of creditors to be summoned as provided in subsection eight of this section, appoint the Official Assignee to be the provisional liquidator of the company; and thereupon the Official Assignee shall become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such.

Cf. 1933, No. 29, s. 300; 1939, No. 39, s. 12

363. Right to receive copies of balance sheets and auditors’ reports-(1) Any member of a private company shall be entitled to be furnished, within seven days after he has made a request in that behalf to the company, with a copy of any balance sheet laid before the company within five years before the date of the request or of any balance sheet to be laid before the company within fourteen days after the date of the request, including every document required by law to be annexed thereto, together with a copy of the auditors' report on the balance sheet, at a charge not exceeding two shillings for every hundred words, that charge to be payable at the time when the request is made.

(2) If default is made in furnishing such a copy to any member who requests it and tenders to the company the amount of the proper charge therefor, the company and every officer of the company who is in default shall be liable to a default fine.

(3) In the case of any such default, the Court may by order direct that the copies or documents required shall be sent to the persons requiring them.

364. Additional powers of Court on winding up-(1) If it appears to the Court on the winding up of a private company that any member of the company acting in its affairs has, before the winding up, knowingly done or omitted any act, or been party or privy to any act or omission, which, if that member were a sole trader and had been adjudged bankrupt, would render him liable to the penalty imposed by section one hundred and thirty-eight of the Bankruptcy Act 1908, the Court may, if it finds that the act or omission has in fact prejudiced the creditors or any creditor of the company, order any such member to pay to the liquidator of the company such sum in addition to the amount for which he may be liable under the constitution of the company as to the Court may seem just.

(2) The Court may by the same or any subsequent order direct that any such sum or any part thereof shall be applied in payment of the claims of any particular creditor or creditors of the company, on such terms, if any, as the Court may direct.

(3) The powers conferred by this section shall be in addition to any other powers which the Court may have on winding up.

(4) The provisions of this section shall have effect notwithstanding that the act or omission is one for which the member may be criminally liable.

(5) Where an order for payment of money is made under subsection one of this section, the order shall be deemed to be a final judgment within the meaning of paragraph (f) of section twenty-six of the Bankruptcy Act 1908.

Cf. 1933, No. 29, s. 302

365. Reregistration of public companies as private companies - (1) Any company which is not a private company and has not for the time being more than twenty- five members may be reregistered under this Part of this Act on lodging with the Registrar an application, signed by at least three-fourths of the members, holding in the aggregate at least three- fourths in nominal value of the shares of the company, stating-

(a) The names, addresses, and descriptions of all the members of the company, and the number of shares held by them respectively, showing that they hold in the aggregate shares to the full amount of the nominal capital of the company:

(b) That notice of the application has been given to every member of the company who has not signed it:

(d) That the applicants desire that the company be reregistered under this Part of this Act.

(2) The application may be signed on behalf of a member by his agent duly authorised in writing.

(3) The application shall be verified by the statutory declaration of a director of the company, and the company shall lodge with the application the company's certificate of incorporation, and a certificate by the auditor or auditors of the company, made not more than three months before the date of the application, that they have investigated the affairs of the company, and that the company is at the date of the certificate a solvent company.

(4) On compliance with the requirements of the foregoing provisions of this section, and on payment of the prescribed fee, the Registrar shall enter on the memorandum of the company a minute that the company is reregistered under this Part of this Act as a private company, and shall enter a similar minute on the certificate of incorporation of the company, and shall sign each such minute and state therein the date thereof, and thereupon the same consequences shall follow as to the rights, powers, and duties of the company as if it had originally been incorporated under this Part of this Act; and the said minutes shall be conclusive evidence of the same matters as a certificate of incorporation; but the reregistration shall not alter the identity of the corporation, or affect the rights of the company or of any person against the company.

(5) The Registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence any such reregistration as aforesaid.

Cf. 1933, No. 29, s. 303

366. Reregistration of private companies as public companies - (1) Any private company which has not less than seven members may be reregistered under Part II of this Act on lodging with the Registrar an application, signed by at least three- fourths of the members, holding in the aggregate at least three-fourths in nominal value of the shares of the company, stating-

(a) The names, addresses, and descriptions of all the members of the company, and the number of shares held by them respectively:

(b) That notice of the application has been given to every member of the company who has not signed it:

(2) The application may be signed on behalf of a member by his agent duly authorised in writing.

(3) The application shall be verified by the statutory declaration of a director of the company, and the company shall lodge with the application its certificate of incorporation.

(4) On compliance with the requirements of the foregoing provisions of this section, and on payment of the prescribed fee, the Registrar shall enter on the memorandum of the company a minute that the company is reregistered under Part 11 of this Act, and shall enter a similar minute on the certificate of incorporation of the company, and shall sign each such minute and state therein the date thereof, and thereupon the same consequences shall follow as to the rights, powers, and duties of the company under this Act as on incorporation under Part 11 of this Act; and the said minutes shall be conclusive evidence of the same matters as a certificate of incorporation; but the reregistration shall not alter the identity of the corporation or affect the rights of the company or of any person against the company.

(5) The Registrar shall make all such entries in the appropriate registers as are necessary to give effect to and evidence any such reregistration as aforesaid.

(6) The company shall within a period of fourteen days after the date of its reregistration deliver to the Registrar for registration a statement in lieu of prospectus in the form and containing the particulars set out in Part I of the Eleventh Schedule to this Act and, in the cases mentioned in Part II of that Schedule, setting out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule:

Provided that a statement in lieu of prospectus need not be delivered under this subsection if within the said period of fourteen days a prospectus relating to the company which complies with the Fourth Schedule to this Act is issued and is delivered to the Registrar as required by section fifty-one of this Act.

(7) Every statement in lieu of prospectus delivered under subsection six of this section shall, where the persons making any such report as aforesaid have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph five of the said Eleventh Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

(8) If default is made in complying with subsection six or subsection seven of this section, the company and every officer of the company who is in default shall be liable to a default fine of fifty pounds.

(9) Where a statement in lieu of prospectus delivered to the Registrar under subsection six of this section includes any untrue statement, any person who authorised the delivery of the statement in lieu of prospectus for registration shall be liable-

(a) On conviction on indictment, to imprisonment for a term not exceeding two years or a fine not exceeding five hundred pounds, or both; or

(b) On summary conviction, to imprisonment for a term not exceeding three months or a fine not exceeding one hundred pounds, or both,-

(10) For the purposes of this section-

(a)A statement included in a statement in lieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included; and

Cf. 1933, No. 29, s. 304; 1948 U.K. Act, s. 30

As to the penalty for false statements under subss. (6)- (10), see s. 461 and the 13th Sched.

PART IX

APPLICATION OF ACT TO COMPANIES FORMED OR REGISTERED UNDER FORMER ACTS

367. Application of Act to companies formed and registered under former Companies Acts - In the application of this Act to existing companies, it shall apply in the same manner-

(a) In the case of a limited company, other than a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by shares:

(b) In the case of a company limited by guarantee, as if the company had been formed and registered under this Act as a company limited by guarantee:

(c) In the case of a company other than a limited company, as if the company had been formed and registered under this Act as an unlimited company:

(d) In the case of a private company, as if the company had been formed and registered under Part VIII of this Act as a private company:

(e) In the case of a company other than a private company, as if the company had been formed and registered under Part II of this Act:

Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered under the Joint Stock Companies Act 1860, the Companies Act 1882, the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933, as the case may be.

Cf. 1933, No. 29, s. 305; 1948 U.K. Act, s. 377

368. Application of Act to companies registered but not formed under former Companies Acts- This Act shall apply to every company registered but not formed under the Joint Stock Companies Act 1860, the Companies Act 1882, the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933, in the same manner as it is in Part X of this Act declared to apply to companies registered but not formed under this Act:

Cf. 1933, No. 29, s. 306; 1948 U.K. Act, s. 378

369. Application of Act to companies reregistered under former Companies Acts- (1) This Act shall apply to every unlimited company registered as a limited company in pursuance of section two hundred and sixty- six of the Companies Act 1882, or section two hundred and ninety- one of the Companies Act 1903, or section two hundred and ninety-one of the Companies Act 1908, or section twenty- nine of the Companies Act 1933, in the same manner as it applies to an unlimited company registered in pursuance of this Act as a limited company Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was registered as a limited company under the Companies Act 1882, the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933, as the case may be.

(2) This Act shall apply to every company reregistered as a private company in pursuance of section one hundred and seventy-one of the Companies Act 1903, or section one hundred and seventy- one of the Companies Act 1908, or section three hundred and three of the Companies Act 1933, in the same manner as it applies to a company reregistered in pursuance of this Act as a private company:

Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was reregistered as a private company under the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933, as the case may be.

(3) This Act shall apply to every company reregistered under Part I of the Companies Act 1903 in pursuance of section one hundred and seventy- two of that Act, or under Part II of the Companies Act 1908 in pursuance of section one hundred and seventy- two of that Act, or under Part 11 of the Companies Act 1933 in pursuance of section three hundred and four of that Act, in the same manner as it applies to a company reregistered under Part II of this Act in pursuance of section three hundred and sixty- six thereof:

Provided that reference, express or implied, to the date of registration shall be construed as a reference to the date at which the company was reregistered under Part I of the Companies Act 1903, or Part II of the Companies Act: 1908, or Part II of the Companies Act 1933, as the case may be.

Cf. 1933, No. 29, s. 307; 1948 U.K. Act, s. 379

370. Provision as to companies registered under the Joint Stock Companies Act - (1) A company registered under the Joint Stock Companies Act 1860 may cause its shares to be transferred in manner hitherto in use, or in such other manner as the company may direct.

(2) The power of altering articles under section twenty-four of this Act shall, in the case of an unlimited company formed and registered under the Joint Stock Companies Act 1860, extend to altering any regulations relating to the amount of capital or to its distribution into shares, notwithstanding that those regulations are contained in the memorandum.

Cf. 1933, No. 29, s. 308; 1948 U.K. Act, s. 380

PART X

COMPANIES NOT FORMED UNDER THIS ACT AUTHORISED TO REGISTER UNDER THIS ACT

371. Companies capable of being registered- (1) With the exceptions and subject to the provisions contained in this section,-

(a) Any company consisting of seven or more members, which was in existence on the first day of October, eighteen hundred and eighty-two (being the date of the commencement of the Companies Act 1882), including any company registered under the Joint Stock Companies Act 1860; and

(b) Any company formed after the date aforesaid, whether before or after the commencement of this Act, in pursuance of any Act of the United Kingdom Parliament or of the General Assembly (other than this Act), or of letters patent, or being otherwise duly constituted according to law, and consisting of seven or more members,-

may at any time register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee; and the registration shall not be invalid by reason that it has taken place with a view to the company being wound up:

Provided that-

(a) A company registered under the Companies Act 1882, the Companies Act 1903, the Companies Act 1908, or the Companies Act 1933 shall not register in pursuance of this section:

(b) A company having the liability of its members limited by Act of the United Kingdom Parliament or of the General Assembly, or by letters patent, and not being a joint stock company as hereinafter defined, shall not register in pursuance of this section:

(c) A company having the liability of its members limited by Act of the United Kingdom Parliament or of the General Assembly, or by letters patent, shall not register in pursuance of this section as an unlimited company or as a company limited by guarantee:

(d) A company that is not a joint stock company as hereinafter defined shall not register in pursuance of this section as a company limited by shares:

(e) A company shall not register in pursuance of this section without the assent of a majority of such of its members as are present in person or by proxy (in cases where proxies are allowed) at a general meeting summoned for the purpose:

(f) Where a company not having the liability of its members limited by Act of the United Kingdom Parliament or of the General Assembly, or by letters patent, is about to register as a limited company, the majority required to assent as aforesaid shall consist of not less than three- fourths of the members present in person or by proxy at the meeting:

(g) Where a company is about to register as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceased to be a member, and of the costs and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

(2) In computing any majority under this section when poll is demanded regard shall be had to the number of votes to which each member is entitled according to the regulations of the company.

Cf. 1933, No.29, s.309; 1948 U.K. Act, s.382

372. Definition of joint stock company - For the purposes of this Part of this Act, as far as relates to registration of companies as companies limited by shares, a joint stock company means a company having a permanent paid up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock, or divided and held partly in one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons, and such a company when registered with limited liability under this Act shall be deemed to be a company limited by shares.

Cf. 1933, No. 29, s. 310; 1948 U.K. Act, s. 383

373. Requirements for registration by joint stock companies - Before the registration in pursuance of this Part of this Act of a joint stock company, there shall be delivered. to the Registrar the following documents:

(a) A list showing the names, addresses, and descriptions of all persons who on a day named in the list, not being more than six clear days before the day of registration, were members of the company, with the addition of the shares or stock held by them respectively, distinguishing, in cases where the shares are numbered, each share by its number; and

(b) A copy of any Act of the United Kingdom Parliament or of the General Assembly, Royal charter, letters patent, deed of settlement, or other instrument constituting or regulating the company; and

(i) The nominal share capital of the company and the number of shares into which it is divided, or the amount of stock of which it consists;

(ii) The number of shares taken and the amount paid on each share;

(iii) The name of the company, with the addition of the word "Limited" as the last word thereof; and

(iv) In the case of a company intended to be registered as a company limited by guarantee, the resolution declaring the amount of the guarantee.

Cf. 1933, No. 29, s. 311; 1948 U.K. Act, s. 384

374. Requirements for registration by other than joint stock companies - Before the registration in pursuance of this Part of this Act of any company not being a joint stock company, there shall be delivered to the Registrar-

(a) A list showing the names, addresses, and descriptions of the directors or other managers (if any) of the company; and

(b) A copy of any Act of the United Kingdom Parliament or of the General Assembly, letters patent, deed of settlement, or other instrument constituting or regulating the company; and

(c) In the case of a company intended to be registered as a company limited by guarantee, a copy of the resolution declaring the amount of the guarantee.

Cf. 1933, No. 29, s. 312; 1948 U.K. Act, s. 385

375. Authentication of statements of existing companies - The lists of members and directors and any other particulars relating to the company required to be delivered to the Registrar shall be verified by a statutory declaration of any two or more directors or other principal officers of the company.

Cf. 1933, No. 29, s. 313; 1948 U.K. Act, s. 386

376. Registrar may require evidence as to nature of company - The Registrar may require such evidence as he thinks necessary for the purpose of satisfying himself whether any company proposing to be registered is or is not a joint stock company as hereinbefore defined.

Cf. 1933, No. 29, s. 314; 1948 U.K. Act, s. 387

377. Change of name for purposes of registration - Where the name of a company seeking registration under this Part of this Act is one by which it may not be so registered, it may change its name, with effect from its registration, to a name approved by the Registrar in writing, having regard to the provisions of section thirty- one of this Act:

Provided that the like assent of the members of the company shall be required to the change of name as is by section three hundred and seventy- one of this Act required to the registration under this Act.

Cf. 1948 U.K. Act, s. 388

378. Addition of "Limited" to name - When a company registers in pursuance of this Part of this Act with limited liability, the word "Limited" shall form, and be registered as, part of its name:

Provided that this section shall not be taken as excluding the operation of section thirty- three of this Act.

Cf. 1933, No. 29, s. 316; 1948 U.K. Act, s. 389

379. Certificate of registration of existing companies - On compliance with the requirements of this Part of this Act with respect to registration, and on payment of such fees, if any, as are payable under the First Schedule to this Act, the Registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Act, and in the case of a limited company, that it is limited, and thereupon the company shall be so incorporated..

Cf. 1933, No. 29, s. 317; 1948 U.K. Act, s. 390

380. Vesting of property on registration - All property, real and personal (including things in action), belonging to or vested in a company at the date of its registration in pursuance of this Part of this Act shall on registration pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.

Cf. 1933, No. 29, s. 318; 1948 U.K. Act, s. 391

381. Saving for existing rights and liabilities - Registration of a company in pursuance of this Part of this Act shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the company before registration.

Cf. 1933, No. 29, s. 319; 1948 U.K. Act, s. 392

382. Continuation of existing actions - All actions and other legal proceedings which at the time of the registration of a company in pursuance of this Part of this Act are pending by or against the company, or the public officer or any member thereof, may be continued in the same manner as if the registration had not taken place:

Provided that execution shall not issue against the effects of any individual member of the company on any judgment, decree, or order obtained in any such action or proceeding, but, in the event of the property and effects of the company being insufficient to satisfy the judgment, decree, or order, an order may be obtained for winding up the company.

Cf. 1933, No. 29, s. 320; 1948 U.K. Act, s. 393

383. Effect of registration under Part X - (1) When a company is registered in pursuance of this Part of this Act, the following provisions of this section shall have effect.

(2) All provisions contained in any Act of the United Kingdom Parliament or of the General Assembly, or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles.

(3) All the provisions of this Act shall apply to the company, and the members, contributories, and creditors thereof, in the same manner in all respects as if it had been formed under this Act, subject as follows:

(a) Table A shall not apply unless adopted by special resolution:

(b) The provisions of this Act relating to the numbering of shares shall not apply to any joint stock company whose shares are not numbered:

(c) Subject to the provisions of this section, the company shall not have power to alter any provision contained in any Act of the United Kingdom Parliament or of the General Assembly relating to the company:

(d) Subject to the provisions of this section, the company shall not have power, without the sanction of the Court, to alter any provision contained in any letters patent relating to the company:

(e) The company shall not have power to alter any provision contained in a Royal charter or letters patent with respect to the objects of the company:

(f) In the event of the company being wound up, every person shall be a contributory, in respect of the debts and liabilities of the company contracted before registration, who is liable to pay or contribute to the payment of any debt or liability of the company contracted before registration, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or to pay or contribute to the payment of the costs and expenses of winding up the company, so far as relates to such debts or liabilities aforesaid:

(g) In the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability as aforesaid, and, in the event of the death or bankruptcy of any contributory, or the marriage of any female contributory, the provisions of this Act with respect to personal representatives of deceased contributories, to the assignees of bankrupt contributories, and to the liabilities of husbands and wives respectively, shall apply.

(4) The provisions of this Act with respect to -

(a) The registration of an unlimited company as limited:

(b) The powers of an unlimited company on registration as a limited company to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called up except in the event of winding up:

(c) The power of a limited company to determine that a portion of its share capital shall not be capable of being called up except in the event of winding up-

shall apply notwithstanding any provisions contained in any Act of the United Kingdom Parliament or of the General Assembly, Royal charter, or other instrument constituting or regulating the company.

(5) Nothing in this section shall authorise the company to alter any such provisions contained in any instrument constituting or regulating the company as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum, and are not authorised to be altered by this Act.

(6) None of the provisions of this Act (apart from those of subsection three of section two hundred and nine thereof) shall derogate from any power of altering its constitution or regulations which may, by virtue of any Act of the United Kingdom Parliament or of the General Assembly, or other instrument constituting or regulating the company, be vested in the company.

(7) In this section the expression "instrument" includes deed of settlement and letters patent.

Cf. 1933, No. 29, s. 321; 1948 U.K. Act, s. 394

384. Power to substitute memorandum and articles for deed of settlement - (1) Subject to the provisions of this section, a company registered in pursuance of this Part of this Act may by special resolution alter the form of its constitution by substituting a memorandum and articles for a deed of settlement.

(2) The provisions of this Act with respect to confirmation by the Court and registration of an alteration of the objects of a company shall so far as applicable apply to an alteration under this section with the following modifications:

(a) There shall be substituted for the printed or type-written copy of the altered memorandum required to be delivered to the Registrar a printed or type written copy of the substituted memorandum and articles; and

(b) On the registration of the alteration being certified by the Registrar the substituted memorandum and articles shall apply to the company in the same manner as if it were a company registered under this Act with that memorandum and those articles, and the company's deed of settlement shall cease to apply to the company.

(3) An alteration under this section may be made either with or without any alteration of the objects of the company under this Act.

(4) In this section the expression "deed of settlement" includes any instrument constituting or regulating the company, not being an Act of the United Kingdom Parliament or of the General Assembly, a Royal charter, or letters patent.

Cf. 1933, No. 29, s. 322; 1948 U.K. Act, s. 395

385. Power of Court to stay or restrain proceedings - The provisions of this Act with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding- up order shall, in the case of a company registered in pursuance of this Part of this Act, where the application to stay or restrain is by a creditor, extend to actions and proceedings against any contributory of the company.

Cf. 1933, No. 29, s. 323; 1948 U.K. Act, s. 396

386. Actions stayed on winding- up order - Where an order has been made for winding up a company registered in pursuance of this Part of this Act, no action or proceeding shall be commenced or proceeded with against the company or any contributory of the company in respect of any debt of the company, except by leave of the Court, and subject to such terms as the Court may impose.

Cf. 1933, No. 29, s. 324; 1948 U.K. Act, s. 397

PART XI

WINDING UP OF UNREGISTERED COMPANIES

387. Meaning of unregistered company - For the purposes of this Part of this Act the expression "unregistered company" shall include any partnership, association, or company, with the following exceptions:

(a) A company registered under the Joint Stock Companies Act 1860, or under the Companies Act 1882, or under the Companies Act 1903, or under the Companies Act 1908, or under the Companies Act 1933, or under this Act;

(b) A partnership, association, or company formed in New Zealand and consisting of less than eight members

Cf. 1933, No. 29, s. 325; 1948 U.K. Act, s. 398

388. Winding up of unregistered companies - (1) Subject to the provisions of this Part of this Act, any unregistered company may be wound up under this Act, and all the provisions of this Act with respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in the following provisions of this section.

(2) The principal place of business in New Zealand of an unregistered company shall, for all the purposes of the winding up, be deemed to be the registered office of the company.

(3) No unregistered company shall be wound up under this Act voluntarily or subject to supervision.

(4) The circumstances in which an unregistered company may be wound up are as follows:

(a) If the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; or

(b) If the company is unable to pay its debts; or

(5) An unregistered company shall, for the purposes of this Act, be deemed to be unable to pay its debts -

(a) If a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving at its principal place of business in New Zealand, or by delivering to the secretary or some director, manager, or principal officer of the company, or by otherwise serving in such manner as the Court may approve or direct, a demand under his hand requiring the company to pay the sum so due, and the company has for three weeks after the service of the demand neglected to pay the sum, or to secure or compound for it to the satisfaction of the creditor; or

(b) If any action or other proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character of member, and, notice in writing of the institution of the action or proceeding having been served on the company by leaving the same at its principal place of business in New Zealand, or by delivering it to the secretary, or some director, manager, or principal officer of the company, or by otherwise serving the same in such manner as the Court may approve or direct, the company has not within ten days after service of the notice paid, secured; or compounded for the debt or demand, or procured the action or proceeding to be stayed, or indemnified the defendant to his reasonable satisfaction against the action or proceeding, and against all costs, damages, and expenses to be incurred by him by reason of the same; or

(c) If execution or other process issued on a judgment decree, or order obtained in any Court in favour of a creditor against the company, or any member thereof as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied; or

(d) If it is otherwise proved to the satisfaction of the Court that the company is unable to pay its debts.

Cf. 1933, No. 29, s. 326 (1) ; 1948 U.K. Act, s. 399

389. Overseas company may be wound up, although dissolved - Where an. overseas company which has been carrying on business in New Zealand ceases to carry on business in New Zealand, it may be wound up as an unregistered company under this Part of this Act notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country where it was incorporated.

Cf. 1933, No. 29, s. 326 (2); 1948 U.K. Act, s. 400

390. Contributories in winding up of unregistered company - (1) In the event of an unregistered company being wound up, every person shall be deemed to be a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves, or to pay or contribute to the payment of the costs and expenses of winding up the company, and every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any such liability as aforesaid.

(2) In the event of the death or bankruptcy of any contributory, or the marriage of any female contributory, the provisions of this Act with respect to the personal representatives of deceased contributories, to the assignees of bankrupt contributories, and to the liabilities of husbands and wives respectively, shall apply.

Cf. 1933, No. 29, s. 327; 1948 U.K. Act, s. 401

391. Power of Court to stay or restrain proceedings - The provisions of this Act with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding- up order shall, in the case of an unregistered company, where the application to stay or restrain is by a creditor, extend to actions and proceedings against any contributory of the company.

Cf. 1933, No. 29, s. 328; 1948 U.K. Act, s. 402

392. Actions stayed on winding-up order - Where an order has been made for winding up an unregistered company, no action or proceedings shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company, except by leave of the Court, and subject to such terms as the Court may impose.

Cf. 1933, No. 29, s. 329; 1948 U.K. Act, s. 403

393. Provisions of this Part cumulative - The provisions of this Part o£ this Act with respect to unregistered companies shall be in addition to and not in restriction of any provisions hereinbefore in this Act contained with respect to winding up companies by the Court, and the Court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under this Act

Provided that an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Act, and then only to the extent provided by this Part of this Act.

Cf. 1933, No. 29, s. 330; 1948 U.K. Act, s. 404

394. Saving for enactments providing for winding up under former Companies Acts -Nothing in this Part of this Act shall affect the operation of any enactment which provides for any partnership, association, or company being wound up, or being wound up as a company or as an unregistered company, under any enactment repealed by this Act, or by any former Companies Act, except that references in any such first- mentioned enactment to any such repealed enactment shall be read as references to the corresponding provision, if any, of this Act.

Cf. 1933, No. 29, s. 326 (3); 1948 U.K. Act, s. 405

PART XII

OVERSEAS COMPANIES

395. Interpretation of this Part - In this Part of this Act, unless the context otherwise requires,-

The expression "certified" means certified in prescribed manner to be a true copy or a translation

The expression "director" in relation to a company includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act:

The expression "place of business" includes a share transfer or share registration office:

The expressions "prospectus", "shares", and "debentures" have the same meanings as when used in relation to a company incorporated under this Act:

The expression "secretary" includes any person occupying the position of secretary by whatever name called.

Cf. 1933, No. 29, ss. 340, 341 (7); 1948 U.K. Act, s. 415

Provisions as to Establishment o f Place of Business in New Zealand

396. Application of sections 397 to 406 - Sections three hundred and ninety- seven to four hundred and six of this Act shall apply to all overseas companies which, after the commencement of this Act, establish a place of business within New Zealand, and to all overseas companies which have, before the commencement of this Act, established a place of business within New Zealand and continue to have an established place of business within New Zealand at the commencement of this Act.

Cf. 1933, No. 29, s. 331; 1948 U.K. Act, s. 406

397. Documents, etc., to be delivered to Registrar by overseas companies carrying on business in New Zealand - (1) Overseas companies which, after the commencement of this Act, establish a place of business within New Zealand shall, within one month from the establishment of the place of business, deliver to the Registrar for registration-

(a) A certified copy of the charter, statutes, or memorandum and articles of the company, or other instrument constituting or defining the constitution of the company, and, if the instrument is not written in the English language, a certified translation thereof:

(b) A list of the directors and secretary of the company, containing the particulars mentioned in subsection two of this section:

(c) The names and addresses of some one or more persons resident in New Zealand authorised to accept on behalf of the company service of process and any notices required to be served on the company. For the purposes of this paragraph a company incorporated in New Zealand shall be deemed to be a person resident in New Zealand.
.
(2) The list referred to in paragraph (b) of subsection one of this section shall contain the following particulars, that is to say:

(a) With respect to each director,-

(i) In the case of an individual, his present Christian name and surname and any former Christian name or surname, his usual residential address, his nationality, and his business occupation, if any, or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships; and,

(ii) In the case of a corporation, its corporate name and registered or principal office:

(b) With respect to the secretary or, where there are joint secretaries, with respect to each of them,-

(i) In the case of an individual, his present Christian name and surname, any former Christian name and surname, and his usual residential address; and

(ii) In the case of a corporation, its corporate name and registered or principal office:

Provided that, where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars mentioned in paragraph (b) of this subsection.

(3) Paragraphs (b), (c), and (d) of subsection nine of section two hundred of this Act shall apply for the purpose of the construction of references in subsection two of this section to present and former Christian names and surnames as they apply for the purpose of the construction of any such references in that section.

(4) Overseas companies which have established a place of business within New Zealand before the date of the commencement of this Act, but have not before that date delivered to the Registrar the documents and particulars specified in subsection one of section three hundred and thirty- two of the Companies Act 1933, shall continue subject to the obligation to deliver those documents and particulars in accordance with that Act.

Cf. 1933, No. 29, s. 332 (1), (2); 1948 U.K. Act, s. 407

As to the penalty for false statements, see s. 461, and the 13th Sched.

398. Evidence of incorporation of overseas company - (1) A certificate of incorporation given under the hand of any officer who may, by the law of any country outside New Zealand in which a company purports to be incorporated, be authorised to grant such a certificate, duly verified by declaration made by one of the directors or the manager of the company before a Mayor, Provost, notary public, Commonwealth representative, or other person lawfully authorised to take the declaration, shall be conclusive evidence that the company has been duly incorporated.

(2) The date of incorporation mentioned in any such certificate or declaration shall be deemed to be the date at which the company was incorporated; or, if no such date is mentioned, the date of the certificate shall be deemed to be the date at which the company was incorporated.

(3) Any such certificate and declaration may be delivered to the Registrar for registration with any documents under subsection one of section three hundred and ninety-seven of this Act.

(4) Where no certificate of incorporation has been given, the documents delivered to the Registrar for registration under paragraph (a) of subsection one of section three hundred and ninety- seven of this Act shall, if the fact that the company is incorporated is stated therein, or appears therefrom, be sufficient evidence of that fact.

(5) Nothing herein shall be construed as limiting the power of any Court to receive any evidence of the incorporation of a company that it deems sufficient.

Cf. 1933, No. 29, s. 332 (3)-(7)

399. Powers of attorney - (1) The provisions of Part XII of the Property Law Act 1952 shall, with the necessary modifications, apply with respect to any power of attorney executed by an overseas company to which this section applies to the same extent as if the company were a person and as if the commencement of the winding up of the company were the death of a person within the meaning of the said Part XII.

(2) A declaration endorsed upon or annexed to any instrument appointing, or purporting to appoint an attorney of an overseas company, made or purporting to be made by one of the directors before a Mayor, Provost, notary public, Commonwealth representative, or other person lawfully authorised to take the declaration, to the effect that-

(a) The company is incorporated under the style mentioned in the instrument, in accordance with the law of the country in which it is so incorporated, the name of the country being specified in the declaration; and

(b) The seal affixed thereto is the common seal of the said company; and

(c) The seal has been affixed, and the instrument executed, and the powers and authorities purporting to be conferred upon the attorney are authorised to be conferred under the constitution of the company, or in pursuance of the Act or instrument under which the company is incorporated, or by the regulations for the time being thereof; and

(d) The declarant is a director or general manager of the company,-

shall be conclusive evidence of the facts set forth therein.

(3) In cases where by the law of the country in which the company is incorporated no seal is necessary, or the company has no seal, the existence of that law or the fact that the company has no seal may be stated in the declaration, and the provisions of this section may be modified and shall take effect accordingly.

(4) Any power of attorney in respect of which any such declaration has been made as aforesaid, and any certified copy of any such power of attorney, shall, for all purposes, be receivable in evidence without further proof of the sealing, signature, or other execution thereof.

(5) Any such power of attorney and declaration may be delivered to the Registrar for registration with any documents registered under subsection one of section three hundred and ninety- seven of this Act.

Cf. 1933,No.29, s.333 (2)- (6)

400. Power of overseas company to hold lands - Where an overseas company to which this section applies has delivered to the Registrar-

(a) In the case of a company to which subsection one of section three hundred and ninety- seven of this Act applies, the documents and particulars therein mentioned:

(b) In the case of a company to which subsection one or subsection two of section three hundred and thirty-two of the Companies Act 1933 applied, the documents and particulars specified in subsection one of that section,-

it shall have the same power to hold lands in New Zealand as if it were a company incorporated under this Act.

Cf. 1933, No. 29, s. 333 (1) ; 1948 U.K. Act, s. 408

401. Return to be delivered to Registrar by overseas company where documents, etc., altered - If in the case of any overseas company to which this section applies any alteration is made in -

(a) The charter, statutes, or memorandum and articles of the company or other instrument constituting or defining the constitution of the company; or

(b) The directors or secretary of the company or the particulars contained in the list of the directors and secretary; or

the company shall, within the prescribed time, deliver to the Registrar for registration a return containing the prescribed particulars of the alteration.

Cf. 1933, No. 29, s. 334; 1948 U.K. Act, s. 409

As to the penalty for false statements, see s. 461 and the 13th Sched.

402. Accounts of overseas company - (1) Every overseas company to which this section applies shall, in every calendar year make out a balance sheet and profit and loss account and, if the company is a holding company, group accounts, in such form, and containing such particulars and including such documents, as under the provisions of this Act (subject, how ever, to any prescribed exceptions and to any modifications and exemptions applicable to the company) it would, if it had been a company within the meaning of this Act, have been required to make out and lay before the company in general meeting, and deliver copies of those documents to the Registrar.

(2) If any such document as is mentioned in subsection one of this section is not written in the English language, there shall be annexed to it a certified translation thereof.

Cf. 1933, No. 29, s. 335; 1948 U.K. Act, s. 410

As to the penalty for false statements, see s. 461 and the 13th Sched.

403. Obligation to state name of overseas company, whether limited, and country where incorporated - Every overseas company to which this section applies shall -

(a) In every prospectus inviting subscriptions for its shares or debentures in New Zealand state the country in which the company is incorporated; and

(b) Conspicuously exhibit on every place where it carries on business in New Zealand the name of the company and the country in which the company is incorporated; and

(c) Cause the name of the company and of the country in which the company is incorporated to be stated in legible characters in all bill heads and letter paper, and in all notices and other official publications of the company; and

(d) If the liability of the members of the company is limited, cause notice of that fact to be stated in legible characters in every such prospectus as aforesaid and in all bill heads, letter paper, notices, and other official publications of the company in New Zealand, and to be affixed on every place where it carries on its business.

Cf. 1933, No. 29, s. 336; 1948 U.K. Act, s. 411

As to the penalty for false statements, see s. 461 and the 13th Sched.

404. Service on overseas company - Any process or notice required to be served on an overseas company to which this section applies shall be sufficiently served if addressed to any person whose name has been delivered to the Registrar under this Part of this Act and left at or sent by post to the address which has been so delivered:

Provided that-

(a) Where any such company makes default in delivering to the Registrar the name and address of a person resident in New Zealand who is authorised to accept on behalf of the company service of process or notices; or

(b) If at any time all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or (in the case of companies) are dissolved, or refuse to accept service on behalf of the company, or for any reason cannot be served,-

document may be served on the company by leaving it at or sending it by post to any place of business established by the company in New Zealand.

Cf. 1933, No. 29, s. 337; 1948 U.K. Act, s. 412

405. Notice of ceasing to carry on business - (1) If any overseas company to which this section applies ceases to have a place of business in New Zealand, it shall forthwith give notice of the fact to the Registrar, and, subject to the provisions of subsection two of this section, the obligation of the company to deliver any document to the Registrar shall cease as from the date on which notice is so given.

(2) Not less than three months' notice of its intention to cease to have a place of business in New Zealand as aforesaid shall be given by the company by notice published in at least three consecutive issues of the Gazette and of some newspaper circulating at each place in New Zealand where the company has a place of business, and any notice to the Registrar under subsection one of this section shall not take effect before the expiration of three months from the date of the publication in accordance with this subsection of the first notice in the Gazette.

Cf. 1933, No. 29, s. 338; 1948 U.K. Act, s. 413 (2)

406. Penalties - If any overseas company to which this section applies fails to comply with any of the foregoing provisions of this Part of this Act, the company, and every officer or agent of the company who knowingly and wilfully authorises or permits the default, shall be liable to a fine not exceeding fifty pounds, and, in the case of a continuing offence, to a further fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s. 339; 1948 U.K. Act, s. 414

Prospectuses

407. Dating of prospectus and particulars to be contained therein - (1) It shall not be lawful for any person to issue, circulate, or distribute in New Zealand any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside New Zealand, whether the company has or has not established, or when formed will or will not establish, a place of business in New Zealand, unless the prospectus is dated and -

(a) Contains particulars with respect to the following matters:

(i) The instrument constituting or defining the constitution of the company:

(ii) The enactments, or provisions having the force of an enactment, by or under which the incorporation of the company was effected:

(iii) An address in New Zealand where the said instrument, enactments, or provisions, or copies thereof, and if the same are in a foreign language a translation thereof certified in the prescribed manner, can be inspected:

(iv) The date on which and the country in which the company was incorporated:

(v) Whether the company has established a place of business in New Zealand, and, if so, the address of its principal office in New Zealand:

(b) Subject to the provisions of this section, states the matters specified in Part I of the Fourth Schedule to this Act and sets out the reports specified in Part II of that Schedule, subject always to the provisions contained in Part III of that Schedule:

Provided that the provisions of subparagraphs (i), (ii), and (iii) of paragraph (a) of this subsection shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business, and, in the application of Part I of the Fourth Schedule for the purposes of this subsection, paragraph two thereof shall have effect with the substitution, for the reference to the articles, of a reference to the constitution of the company.

(2) Any condition requiring or binding an applicant for shares or debentures to waive compliance with any requirement imposed by virtue of paragraph (a) or paragraph (b) of subsection one of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void.

(3) It shall not be lawful for any person to issue to any person in New Zealand a form of application for shares in or debentures of such a company or intended company as is mentioned in subsection one of this section unless the form is issued with a prospectus which complies with this Part of this Act and the issue whereof in New Zealand does not contravene the provisions of section four hundred and eight of this Act:

Provided that this subsection shall not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures.

(4) In the event of non-compliance with or contravention of any of the requirements imposed by paragraphs (a) and (b) of subsection one of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non- compliance or contravention if,-

(a) As regards any matter not disclosed, he proves that he was not cognisant thereof; or

(b) He proves that the non- compliance or contravention arose from an honest mistake of fact on his part; or

(c) The non-compliance or contravention was in respect of matters which, in the opinion of the Court dealing with the case, were immaterial or were otherwise such as ought, in the opinion of that Court, having regard to all the circumstances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus a statement with respect to the matters contained in paragraph fifteen of the Fourth Schedule to this Act, no director or other person shall incur any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.

(5) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons; but, subject as aforesaid, this section shall apply to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently.

(6) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act, apart from this section.

Cf. 1933, No. 29, ss. 341 (1), (2), 342; 1948 U.K. Act, s. 417

408. Provisions as to expert's consent, and dealing on stock exchange - (1) It shall not be lawful for any person to issue, circulate, or distribute in New Zealand any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside New Zealand, whether the company has or has not established, or when formed will or will not establish, a place of business in New Zealand,-

(a) If, where the prospectus includes a statement purporting to be made by an expert, he has not given, or has before delivery of a copy of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included or there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as aforesaid; or

(b) If, where the prospectus includes-

(i) Any statement that permission has been granted for those shares or debentures to be dealt in or quoted or listed on any stock exchange in New Zealand; or

(ii) Any statement in any way referring to any such permission or to any application or intended application for any such permission, or to dealing in or quoting or listing the shares or debentures on any stock exchange in New Zealand, or to any requirements of a stock exchange in New Zealand,-

the issue of that prospectus would by reason of that statement be in contravention of section forty-nine of this Act if the company were a company within the meaning of this Act.

(2) In this section the expression "expert" includes an. engineer, valuer, accountant, and any other person whose profession or calling gives authority to a statement made by him, and for the purposes of this section a statement shall be deemed to be included in a prospectus if it is contained therein or in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.

Cf. 1948 U.K. Act, s. 419

409. Registration of prospectus - (1) It shall not be lawful for any person to issue, circulate, or distribute in New Zealand any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside New Zealand, whether the company has or has not established, or when formed will or will not establish, a place of business in New Zealand, unless before the issue, circulation, or distribution of the prospectus in New Zealand a copy thereof certified by the chairman and two other directors of the company as having been approved by resolution of the managing body has been delivered for registration to the Registrar, and the prospectus states on the face of it that a copy has been so delivered, and there is endorsed on or attached to the copy-

(a) Any consent to the issue of the prospectus required by section four hundred and eight of this Act:

(b) A copy of any contract required by paragraph thirteen of the Fourth Schedule to this Act to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars thereof:

(c) Where the persons making any report required by Part II of that Schedule have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph twenty- eight of that Schedule, a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

(2) The references in paragraph (b) of subsection one of this section to the copy of a contract required thereby to be endorsed on or attached to a copy of the prospectus shall, in the case of a contract wholly or partly in a foreign language, be taken as references to a copy of a translation of the contract in English or a copy embodying a translation in English of the parts in a foreign language, as the case may be, being a translation certified in. the prescribed manner to be a correct translation, and the reference to a copy of a contract required to be available for inspection shall include a reference to a copy of a translation thereof or a copy embodying a translation of parts thereof.

Cf. 1933, No. 29, s. 341 (1); 1948 U.K. Act, s. 420

410. Penalty for contravention of sections 407 to 409. Civil liability for misstatements in prospectus - (1) Any person who is knowingly responsible for the issue, circulation, or distribution of a prospectus, or for the issue of a form of application for shares or debentures, in contravention of any of the provisions of sections four hundred and seven, four hundred and eight, and four hundred and nine of this Act shall be liable to a fine not exceeding five hundred pounds.

(2) Section fifty- three of this Act shall extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside New Zealand, whether the company has or has not established, or when formed will or will not establish, a place of business in New Zealand, with the substitution, for references to section fifty of this Act, of references to section four hundred and eight thereof.

Cf. 1933, No. 29, s. 341 (5), (6) ; 1948 U.K. Act, ss. 421, 422

411. Interpretation of provisions as to prospectuses - (1) Where any document by which any shares in or debentures of a company incorporated outside New Zealand are offered for sale to the public would, if the company concerned had been a company within the meaning of this Act, have been deemed by virtue of section fifty- five of this Act to be a prospectus issued by the company, that document shall be deemed to be, for the purposes of this Part of this Act, a prospectus issued by the company, and all enactments and rules of law as to the contents of prospectuses and to liability in respect of statements in and omissions from prospectuses, or otherwise relating to prospectuses, shall apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of misstatements contained in the document or otherwise in respect thereof.

(2) An offer of shares or debentures for subscription or sale to any person whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent, shall not be deemed an offer to the public for the purposes of this Part of this Act.

Cf. 1933, No. 29, s. 341 (3), (4); 1948 U.K. Act, s. 423

Calls on Shares

412. Material misrepresentation to be a defence to actions for calls on shares - (1) In any proceedings in any Court, whether commenced before or after the commencement of this Act, for the recovery of the amount of any unpaid call on a share in any overseas company, it shall be a sufficient defence if it is established to the satisfaction of the Court that the shareholder was induced to apply for the share by a material misrepresentation in any prospectus or other publication of the company or by a material misrepresentation, whether in writing or not, made by any agent of the company or by any other person instrumental in inducing the application, unless it is proved that after discovering the misrepresentation the shareholder has by some positive act elected to remain a shareholder of the company in respect of the share, and the Court considers it inequitable that the defence should be allowed.

(2) Without limiting the provisions of section six of the Reciprocal Enforcement of Judgments Act 1934, any judgment registered (whether before or after the commencement of this Act) under section four of that Act shall be set aside on an application under the said section six if the Supreme Court is satisfied that the judgment was obtained in proceedings commenced by the judgment creditor or any person through whom he claims for the recovery of the amount of any unpaid call on a share in any overseas company, and that the shareholder was induced to apply for the share by a material misrepresentation in any prospectus or other publication of the company or by a material misrepresentation, whether in writing or not, made by any agent of the company or by any other person instrumental in inducing the application, unless it is proved that after discovering the misrepresentation the shareholder has by some positive act elected to remain a shareholder of the company in respect of the share, and the Court considers it inequitable that the judgment should be set aside under this subsection.

Cf. 1936, No. 58, s. 19

PART XIII

INSURANCE COMPANIES

GENERAL

413. Application for membership of a company not to be contained in a proposal for insurance - (1) No form of proposal for insurance by any company that contains or purports to be an application for shares in or membership of the company shall be issued by or on behalf of the company.

(2) Where any person makes a proposal for insurance to any company, the company shall not allot any shares to that person or admit him to membership of the company without first receiving an application for shares or membership that is contained in a document separate from the proposal for insurance.

(3) If a company acts in contravention of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding one hundred pounds.

(4) Nothing in this section shall affect the validity of any policy of insurance or of any allotment of shares or admission to membership.

Cf. 1939, No. 39, s. 10

COMPANIES CARRYING ON INSURANCE BUSINESS OTHER THAN LIFE INSURANCE

414. Interpretation and application of sections 414 to 419 - (1) In this Part of this Act, unless the context otherwise requires, the expression "paid up capital intact", in relation to any company, means paid up capital clear of all claims or demands for the time being due or pending or enforceable against the company, not being contingent liabilities arising out of or in relation to the business of the company.

(2) This section and sections four hundred and fifteen to four hundred and nineteen of this Act apply to every class of insurance business except life insurance and any insurance business commonly carried on by life insurance companies as such.

Cf. 1933, No. 29, s. 344

Local Companies

415. Minimum capital required before limited companies commence insurance business- (1) Except as provided in this section, no limited company shall carry on in New Zealand any class of insurance business to which this section applies unless it has a paid up capital intact of not less than fifty thousand pounds.

(2) A. limited company may commence any such insurance business in New Zealand if it has a paid up capital intact of not less than twenty- five thousand pounds and additional capital called up and payable within six months after the date of registration of the company of an amount not less than the difference between fifty thousand pounds and the amount of that paid up capital:

Provided that no such company shall carry on any such business after the expiration of eight months from the date of its registration unless it has a paid up capital intact of not less than fifty thousand pounds.

(3) A limited company may carry on within New Zealand the business of insuring the property of its own members, and of no other person, if it has an issued capital of not less than fifty thousand pounds of which not less than twenty- five thousand pounds is paid up capital intact:

Provided that no such company shall at any time before it has a paid up capital intact of not less than fifty thousand pounds insure the property of any person other than a member holding a share or shares in the company of a nominal value of not less than ten pounds paid up to the extent of not less than five pounds.

(4) If any company insures the property of any person in contravention of subsection three of this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding fifty pounds for every insurance so effected.

Cf. 1933, No. 29, s. 345

416 Failure to keep capital intact - (1) If any balance sheet of a limited company carrying on in New Zealand any class of insurance business to which this section applies shows a paid up capital intact of less than fifty thousand pounds (or, in a case where subsection three of section four hundred and fifteen of this Act applies, of less than twenty- five thousand pounds) the directors of the company shall, without delay, call up sufficient capital to make up the amount of fifty thousand pounds or twenty- five thousand pounds, as the case may be, and the additional capital shall be payable within four months from the date of the balance sheet which showed the deficiency of paid up capital intact.

(2) After the expiration of a period of six months from the date of any such balance sheet, if the additional capital is not paid up, the company shall cease to carry on any such insurance business in New Zealand as a limited company; and if it continues to carry on any such business the members of the company shall be liable for its debts, contracts, and engagements as if the company were an unlimited company.

Cf. 1933, No. 29, s. 346

417. Penalty - If any company carries on any business in contravention of the foregoing provisions of this Part of this Act, the company and every officer of the company who is in default shall be liable to a default fine of fifty pounds.

Cf. 1933, No. 29, s. 347

418. Insurance companies to publish periodical statement - (1) Every company shall, before it commences to carry on in New Zealand any class of insurance business to which this section applies and once in every year during which it carries on any such business, make a statement in the form set out in the Twelfth Schedule to this Act, or as near thereto as circumstances admit.

(2) A copy of the statement shall be put up in a conspicuous place in the registered office of the company, and in every branch office or place where the business of the company is carried on.

(3) Every member and every creditor of the company shall be entitled to a copy of the statement on payment of a sum not exceeding two shillings.

(4) If default is made in complying with this section, the company and every director and manager of the company who knowingly and wilfully authorises or permits the default shall be liable to a fine not exceeding five pounds for every day during which the default continues.

Cf. 1933, No. 29, s. 348; 1948 U.K. Act, s. 433

Overseas Companies

419. Capital required by overseas limited insurance companies - (1) No overseas company having the liability of its members limited shall carry on in New Zealand any class of insurance business to which this section applies unless it has a paid up capital intact of not less than fifty thousand pounds.

(2) If any balance sheet of any such company shows a paid up capital intact of less than fifty thousand pounds, and the deficiency is not made up within six months after the date of the balance sheet, the burden of proving which shall be on the company, the company shall be incapable of carrying on any such insurance business in New Zealand, and shall cease to carry on any such business until this Act has been fully complied with.

(3) Notwithstanding anything to the contrary in this section, any overseas company having the liability of its members limited may carry on in New Zealand any class of insurance business to which this section applies if it keeps deposited with the Public Trustee a sum which, together with any deposit made by it in respect of that business under the Insurance Companies' Deposits Act 1953, amounts to not less than fifty thousand pounds. The provisions of that Act shall apply with respect to every sum deposited under this sub-section as if it were a sum deposited under that Act.

(4) If any company carries on any business in contravention of this section, the company and every attorney, agent, or other officer of the company who is in default shall be liable to a default fine of fifty pounds.

(5) The foregoing provisions of this section shall be in addition to and not in restriction of any provisions elsewhere in this Act contained with respect to overseas companies.

Cf. 1933, No. 29, s. 349; 1934, No. 31, s. 30

Winding Up of Insurance Companies

420. Interpretation - In this section and sections four hundred and twenty- one to four hundred and twenty- three of this Act, unless the context otherwise requires,-

"Company" means any association of persons, whether incorporated or not:

"Deposited statement", in relation to any insurance company, means the statement deposited by the company with the Public Trustee under section sixteen of the Insurance Companies Deposits Act 1953:

"Insolvent", in relation to any insurance company, means unable to pay its debts within the meaning of section two hundred and eighteen or section three hundred and eighty- eight of this Act, whichever section is applicable:

"Insurance business" means every class of insurance business except-

(a) Life insurance, including endowment and annuity contracts; and

(b) Marine insurance; and

"Insurance company" means a company which is or has been carrying on in New Zealand any class of insurance business, being a company which may be wound up under this Act.

Cf. 1940, No. 27, s. 17

421. Minister of justice may petition on ground of insolvency - A petition for the winding up of an insurance company under this Act on the ground that it is unable to pay its debts may, with the leave of the Court, be presented by the Minister.

Cf. 1940, No. 27, s. 18

422. Investigation of insurance companies of doubtful solvency - (1) The Minister may, by notice in writing served on an insurance company, require it to furnish to him within such time as may be specified in the notice such explanations, information, accounts, balance sheets, abstracts, and statements as he considers to be necessary for the purpose of determining whether the company is insolvent, or was insolvent at any date (not earlier than the end of the financial year to which the last deposited statement of the company relates) specified in the notice, and may, by the notice, require any such explanations, information, accounts, balance sheets, abstracts, or statements to be signed by such number of the directors and by such other officers of the company, and to be accompanied by such copies of documents, as may be specified in the notice, and to be certified as correct by an auditor approved by the Minister, or by an actuary so approved, or by both such an auditor and such an actuary.

(2) If, after a notice under subsection one of this section has been served on an insurance company, either-

(a) The company does not, before the expiration of the time limited by the notice, comply with all the requirements of the notice, other than such requirements (if any) as may have been withdrawn by the Minister; or

(b) The Minister, after considering the material furnished pursuant to the said requirements, considers it to be expedient for the purpose aforesaid to do so,-

the Minister may serve on the company a notice in writing stating that he proposes to appoint one or more inspectors to investigate the affairs of the company and to report thereon in such manner as the Minister may require, and unless the company within a period of seven days from the date of the service of the notice upon it gives notice in writing to the Minister that it objects to such an appointment being made, the Minister may after the expiration of that period make such an appointment.

(3) If the company within the said period gives notice in writing to the Minister that it objects to such an appointment being made, the Minister may apply to the Court for leave to make such an appointment, and the Court shall grant leave unless it is satisfied by the company that such an appointment cannot reasonably be required for the purpose aforesaid, and on leave being granted the Minister may make such an appointment.

(4) Where an appointment is made under this section, the provisions of section one hundred and seventy- one of this Act shall apply with respect to an inspector appointed under this section in like manner as they apply to an inspector appointed under section one hundred and sixty- eight or section one hundred and sixty- nine of this Act, and any such refusal as is, or might be, made the ground of punishment of an officer or agent of the company under the said section one hundred and seventy- one shall also be a ground upon which the company may, on the petition of the Minister presented by leave of the Court, be wound up by the Court under this Act.

(5) The costs and expenses of and incidental to an investigation carried out by an inspector appointed under this section (in this subsection referred to as the expenses) shall be defrayed out of the Consolidated Fund:

Provided that-

(a) Where the Court grants leave to make an appointment, the Court may, if it thinks fit, direct the company to repay to the Consolidated Fund the whole or any part of the expenses; and

(b) If an order for the winding up of the company by the Court is made at any time within twelve months from the date on which the report of the inspector is made to the Minister, or, if more than one report is so made, from the date when the first report is so made, the expenses shall be deemed for the purposes of this Act to be expenses properly incurred in the winding up, and the amount thereof, after deducting any sum repaid to the Consolidated Fund pursuant to a direction given by the Court under paragraph (a) of this subsection, shall be paid out of the assets of the company pari passu with the taxed costs of the petition.

Cf. 1940, No. 27, s. 19

423. Supplemental provisions - (1) Rules- made- under section three hundred and forty- one of this Act may regulate the procedure and practice to be followed in the case of proceedings under sections four hundred and twenty- one and four hundred and twenty- two of this Act.

(2) In any proceedings upon a petition to wind up an insurance company presented under section four hundred and twenty- one or section four hundred and twenty- two of this Act, evidence that the company was insolvent at the end of the financial year to which the last deposited statement of the company relates, or at any date specified in a notice served under subsection one of the said section four hundred and twenty- two, shall be evidence that the company continues to be unable to pay its debts unless the contrary is proved.

Cf. 1940, No. 27, s. 20

PART XIV

MINING COMPANIES

424. Interpretation - In this Part of this Act, unless the context otherwise requires,-

"Mining company" means a company formed for mining purposes or having mining purposes among its objects:

"Mining purposes" means the purpose of obtaining any precious metal or precious stone of any kind by any method whereby the soil or earth, or any rock or stone, may be disturbed, removed, carted, carried, washed, sifted, smelted, refined, crushed, or otherwise dealt with, whether the metal or stone is the property of the Crown, or of any company, or of any person whomsoever; and includes the purchase, construction, erection, and maintenance of machinery of any kind, and letting the same for hire, for all or any such purposes as aforesaid; and also includes the purchase, construction, erection, and maintenance of races, sluices, and water courses, and the letting or selling of the water or water power therefrom or thereof for all or any such purposes as aforesaid.

Cf. 1933, No. 29, s. 350

425. Registration of mining companies - Subject to the provisions of this Part of this Act, a mining company shall be registered in the same manner, and with the same consequences in all things, as a company limited by shares.

Cf. 1933, No. 29, s. 351

426. Provisions applied to mining companies - Subject as aforesaid, all the provisions of this Act relating to companies limited by shares shall, so far as applicable and with the necessary modifications, extend and apply to mining companies.

Cf. 1933, No. 29, s. 352

427. All mining companies deemed to be registered under this Act - All mining companies registered or deemed to be registered under the Companies Act 1933 shall be deemed to be registered as mining companies under this Act.

Cf. 1933, No. 29, s. 353

428. Varieties of mining companies - (1) A mining company may be registered as either-

(a) A company limited by shares; or

(b) A no liability company, meaning thereby a company formed on the principle that there is no contract between the company and its members that the members will pay or be liable in respect of their shares for any calls, or any contribution towards the debts and liabilities of the company, in which case the words "No Liability" shall form the last words of the name of the company.

(2) Unless it is a company limited by shares, a company that is not a mining company may not alter its objects so as to include mining purposes therein.

Cf. 1933, No. 29, s. 354

429. Power to hold mining privileges - A mining company shall have power to hold mining privileges under any Act for the time being in force relating to mining.

Cf. 1933, No. 29, s. 355

Transfer of Shares

430. Special provisions as to transfer of shares - (1) No share in a mining company shall be deemed to be transferred unless and until the name of the transferee is entered in respect thereof in the register of members upon the registration of a transfer in accordance with this section.

(2) The transferor of a share in a mining company, or, where there are more transferors than one, then the transferor who first executes the transfer, shall, at the time of executing the transfer, attach to his signature the true date of signing, and that date shall be deemed to be the date of the transfer.

(3) The transferee shall present the transfer for registration in the books of the company within forty-two days from the date of the transfer if it was executed in New Zealand, within seventy days if executed in Australia or in Fiji, and within one hundred and twenty days if executed in any other place.

(4) On receipt of any transfer the secretary of the mining company shall forthwith endorse thereon the true date on which it was received.

(5) A transfer that is presented for registration at any time within one hundred and twenty days from its date (whether executed in New Zealand or elsewhere) may be registered at any time within that period of one hundred and twenty days, but no transfer shall be registered by any mining company after the expiration of one hundred and twenty days from its date without the authority of the Court; and the Court, upon reasonable cause being shown why the transfer was not previously registered, may order the secretary to register the transfer upon such terms or conditions as the Court thinks fit.

(6) Every transferor of a share in a mining company who signs a transfer in which the true date of signing is not inserted as provided in subsection two of this section, and every company that purports to register a transfer contrary to this section, and every secretary of a mining company who neglects to endorse on any transfer the true date upon which it was received for the purpose of registration, is liable to a fine not exceeding ten pounds; and if the transferee fails to cause the transfer to be presented for registration within the time prescribed by subsection three of this section he shall be liable to a fine not exceeding twenty pounds.

Cf. 1933, No. 29, s. 356

431. Trust on fraudulent transfer incapable of being enforced - If a member of a mining company, with a view to evading the liabilities incident to a share held by him in the company, transfers the share upon some trust or understanding under or according to which he is to be entitled at any future time to have .retransferred to him or to resume the ownership of or to have any interest in the share, he shall be disabled from enforcing in any Court any trust for him in the share.

Cf. 1933, No. 29, s. 357

Recovery of Calls and Forfeiture of Shares

432. Proceedings for the recovery of unpaid calls - (1) The amount of any unpaid call on a share in any mining company (other than a no liability company) may, in proceedings commenced within twenty- eight days after the call became payable, but not otherwise (except as provided in section four hundred and thirty- seven of this Act), be recovered as a debt due from the holder of the share to the company.

(2) In any proceedings under this section it shall be sufficient to state that the defendant is indebted to the company in the sum due for the call and the day on which the call became payable.

(3) A copy of the resolution of the directors of the company declaring a call to be payable on that day, verified as being a true copy by the statutory declaration of the secretary of the company (whose signature and position as secretary it shall not be necessary to prove), shall be prima facie evidence that the call was duly made.

(4) If the amount of any judgment obtained in any such proceedings is not paid within twenty- one days after the date of the judgment, the share shall at the expiration of that period of twenty- one days be absolutely forfeited, without any resolution of directors or other proceeding.

Cf. 1933, No. 29, s. 358

433. Forfeiture of shares for non-payment of calls - Where proceedings under section four hundred and thirty- two of this Act have not been commenced, and the call remains unpaid at the expiration of twenty- eight days after the day on which it became payable, or where a call on any share in a no liability company remains unpaid for a like period, the share shall thereupon be absolutely forfeited, without any resolution of directors or other proceeding.

Cf. 1933, No. 29, s. 359

434. When holder of share subject to section 211 - Notwithstanding the forfeiture of any share in a mining company other than a no liability company, the holder of the share at the time of its forfeiture shall continue to be subject to the provisions of section two hundred and eleven of this Act.

Cf. 1933, No. 29, s. 360

435. Notice of forfeiture to be given - (1) Not later than fourteen days after any share is forfeited, the secretary of the mining company shall send by registered letter addressed to the person registered in respect of the share, at his address appearing in the register, notice of the forfeiture, and of the time and place of the intended sale of the share under the provisions of section four hundred and thirty-six of this Act.

(2) If notice is not sent as aforesaid the secretary of the company shall be liable to a fine not exceeding ten pounds.

Cf. 1933, No. 29, s. 361

436. Forfeited shares to be sold by auction - (1) The directors of the mining company shall cause every forfeited share to be offered for sale by public auction, not less than twenty-eight nor more than sixty days after the forfeiture.

(2) The date and place appointed for the auction shall be advertised not less than seven nor more than fourteen days before that date in a newspaper circulating in the neighbourhood where the registered office of the company is situate and also where its mining operations are carried on.

(3) In the case of a forfeited share in a no liability company, the directors may offer the same for auction on the condition that the share may be withdrawn from sale if there is no bid equal to the amount of the unpaid call thereon; but in all other cases the share shall be offered without reserve.

(4) If any forfeited share is not offered for sale as prescribed in this section, the directors and secretary of the company shall each be liable to a fine not exceeding ten pounds in respect of each share not so offered.

Cf. 1933, No. 29, s. 362

437. Application of proceeds and recovery of balance - (1) If the share is sold at the sale, the proceeds shall be applied in payment of any calls due or made at the date of the sale, and of the expense of the advertisement, and any other expenses necessarily incurred in respect of the forfeiture and auction sale, and, where proceedings have been taken for the recovery of any such call, of all costs and expenses incurred against the member in respect of the proceedings, and the balance (if any) shall be paid to him upon his delivering to the company the scrip representing the forfeited share.

(2) If the share is not sold, or if it is sold for less than the amount of the calls, together with the costs and expenses as aforesaid, that amount or the balance thereof, as the case may be, shall (except in the case of shares in a no liability company) be recoverable from the member in any Court of competent jurisdiction as a debt due to the company.

Cf. 1933, No. 29, s. 363

438. Disposal of unsold shares - (1) If any forfeited share in a mining company offered for sale by public auction is not sold, it shall forthwith be registered in the name of the company, and shall, until reissued, be the property of the company; but no liability shall attach to the company in respect of any such share, which shall be deemed to be held in trust for the company.

(2) Before any shares held in trust for the company as aforesaid are reissued, notice in writing shall, unless the company in general meeting otherwise determines, be sent to every member of the company offering the shares to the members in proportion as nearly as may be to the number of shares previously held by each member respectively, and on such terms as the directors think fit.

(3) Any such offer shall remain open for fourteen days from the date of the notice, after which the directors may offer to the public the shares offered to and not accepted by any member.

Cf. 1933, No. 29, s. 364

439. Redemption of forfeited shares - Notwithstanding anything hereinbefore contained, the registered holder of any forfeited share in a mining company at the time of its forfeiture may, at any time up to or on the day immediately preceding that on which it is intended to sell the share, redeem it by payment to the company of all calls made thereon, and of all expenses incurred by the company in respect of the forfeiture, and of all costs and expenses of any such proceedings that may have been taken as aforesaid; and upon that payment the secretary shall re- enter the name of that person in the register of members, and he shall thereupon be entitled to the share as if the forfeiture had not been incurred.

Cf. 1933, No. 29, s. 365

440. Office to be open the day before sale - On the day immediately preceding that on which a forfeited share in a mining company is to be offered for sale the company's office shall be open during the hours for which it is by the regulations of the company to be kept open on days when it is by such regulations to be open.

Cf. 1933, No. 29, s. 366

441. Extraordinary meeting to be convened when one-third of shares in company forfeited - (1) Whenever shares equal to one- third in number or value of the total nominal capital of a mining company have become forfeited, and have been registered in the name of the company as hereinbefore provided, the directors shall within seven days thereafter convene an extraordinary meeting of the members of the company.

(2) The notice convening any such meeting shall specify the names of the members who have forfeited their shares, and the number and nominal value of the shares so forfeited, and shall declare the business of the meeting to be to take into consideration the position of the company, and to provide for the disposal of the forfeited shares in accordance with the provisions of this Act.

(3) If the directors fail within the said seven days to call such a meeting the same may be convened by any five or more members who have not forfeited their shares.

Cf. 1933, No. 29, s. 367

Dividends

442. Unpaid calls to be deducted from dividends - A dividend on any share in a mining company on which a call is due and unpaid shall be applied first in or towards payment of the unpaid call, and the holder of the share shall be entitled to receive only the balance, if any, of the dividend.

Cf. 1933, No. 29, s. 368

Accounts

443. Books to be open to inspection - (1) The books of account of a mining company shall during office hours be open to the inspection of the members and creditors of the company on payment of a fee of two shillings.

(2) Any creditor of a mining company who is not entitled to receive a copy without charge under subsection two of section one hundred and sixty- two of this Act shall be entitled to be furnished, within two days after he has made a request in that behalf to the company, and on payment at the time of the request of a reasonable fee to be fixed by the company, with a copy of the last balance sheet of the company, including every document required by law to be annexed thereto, together with a copy of the auditors' report on the balance sheet.

(3) If default is made in permitting any inspection by, or in furnishing any document to, any person who is entitled under this section to make the inspection or to receive the document, as the case may be, and who tenders to the company the proper charge therefor, the company and every officer of the company who is in default shall be liable to a default fine.

Cf. 1933, No. 29, s. 369

Overseas Mining Companies

444. Provisions relating to overseas mining companies - (1) With respect to every overseas company formed for mining purposes within the meaning of this Part of this Act, or of the Mining Act 1926, or having any such purposes among its objects, the following provisions shall apply:

(a) The company, while carrying on in New Zealand any mining operations within the meaning of the Mining Act 1926, or any business relating to mining purposes within the meaning of this Part of this Act, shall at all times make adequate provision for the registration in New Zealand of transfers of its shares, and for the execution and issue in New Zealand of scrip certificates or other documents of title in respect of its shares (hereinafter referred to as scrip certificates) and for that purpose -

(i) Shall have a registered office in New Zealand, and shall give notice of the situation of that office, and of any change therein, to the Registrar within one month after the date of commencing any such mining operations or business, or of the change, as the case may be; and also

(ii) Shall duly cause to be kept at its registered office in New Zealand a branch register (to be called the New Zealand Register), wherein shall be entered the name, address, and, if known, the description of every member who makes application in writing to be entered therein, and also the numbers and other necessary particulars of the shares to which his application relates; and also

(iii) Shall duly appoint and empower an attorney in New Zealand to do or cause to be done all things necessary for the purpose of there registering transfers of shares entered in the New Zealand Register, and executing and issuing on behalf of the company the scrip certificates in respect of those shares; and also

(iv) May prescribe the mode in which a member shall apply to be entered in the New Zealand Register, or to be removed from the New Zealand Register to the register, if any, kept abroad (hereinafter called the Foreign Register), and, generally, from one register to the other:

Provided that it shall not be lawful for any member to be entered on both the New Zealand and the Foreign Register at the same time in respect of the same shares; and also

(v) May prescribe reasonable fees (not exceeding two shillings) to be paid on each application for entry in the New Zealand Register, or removal from one register to another, and a reasonable time (not exceeding four months) to elapse between the application being made and the entry or removal being effected:

(b) The provisions of sections one hundred and eighteen to one hundred and twenty-six, four hundred and thirty, and four hundred and thirty-one of this Act shall apply to every New Zealand Register, and to every member and share entered therein, and to every transfer of any such share:

(c) The company shall, within three months after any report or balance sheet is submitted to any meeting of its members held out of New Zealand,-

(i) :File in its registered office in New Zealand a true copy of the report or balance sheet; and

(ii) Permit the same to be inspected at all reasonable times by any member in New Zealand without fee:

(d) If default is made in complying with any of the provisions of this section, the defaulting company, and every director, attorney, secretary, and manager, or other person acting in the management thereof, shall be severally liable to a fine not exceeding five pounds for every day during which the default continues.

(2) The foregoing provisions of this section shall be in addition to, and not in restriction of, any provisions elsewhere in this Act contained with respect to overseas companies.

General

445. Agreements with Maoris not to be affected - Nothing in this Part of the Act shall be construed to alter or affect any of the provisions of the several agreements entered into by the Governor- General, or any other person acting on behalf of the Governor-General, whereby gold mining has been authorised on any Maori land, or to affect prejudicially the rights and interests of the Maori owners under any such agreement.

Cf. 1933, No. 29, s. 371

PART XV

ANNUAL LICENCES

446. Interpretation - In this Part of this Act, unless the context otherwise requires,-

"Company" means a New Zealand company or an overseas company:

"New Zealand company" means a corporation incorporated in New Zealand and having a capital divided into shares or stock

"Overseas company" means a corporation incorporated outside New Zealand and having a capital divided into shares or stock; and includes an overseas insurance company:

"Overseas banking company" means an overseas company carrying on in New Zealand the business of banking:

"Overseas insurance company" means a corporation incorporated outside New Zealand and carrying on in New Zealand the business of insurance of any description, whether or not the corporation has a capital divided into shares or stock.

Cf. 1952, No. 66, s. 2

447. Company not to carry on business without annual licence - It shall not be lawful for any company within the meaning of this Part of this Act to carry on business in New Zealand, except in pursuance of an annual licence issued by the Registrar under this Part of this Act.

Cf. 1952, No. 66, s. 3

448. Licence fee - (1) For every such licence the company shall pay to the Registrar a licence fee at the rate hereinafter indicated, and a licence shall, on the payment of that fee by the company, be issued to the company accordingly.

(2) Every such licence shall be for a term of one year, commencing on the first day of January and ending with the thirty-first day of December.

Cf. 1952, No. 66, s. 4

449. Recovery of licence fee - (1) The licence fee payable under this Part of this Act shall, whether the licence has been issued or not, constitute a debt payable to the Crown and due on the first day of January in every year by every company which is then carrying on business in New Zealand.

(2) When any company commences to carry on business in New Zealand in the course of any year before obtaining a licence under this Part of this Act the full licence fee for the whole of that year shall constitute a debt payable by that company to the Crown and due on the day on which the company so commenced to carry on business.

(3) When a company before commencing to carry on business in New Zealand duly applies in the course of any year for a licence under this Part of this Act, the licence shall be issued only for the remainder of that year after the date of issue, and the licence fee shall be a proportionate part only of the full annual licence fee.

(4) All licence fees payable under this Part of this Act shall be recoverable in any Court of competent jurisdiction by the Registrar, by suit in his official name, as a debt due to the Crown.

(5) All licence fees paid to the Registrar shall be paid into the Public Account, and shall form part of the Consolidated Fund.

Cf. 1952, No. 66, s. 5

450. Penalty for carrying on business without licence. Company ceasing to carry on business to notify Registrar - (1) If any company carries on business in New Zealand without a licence in breach of this Part of this Act, the company and every officer or other person acting in the management of the business shall be jointly and severally liable to a penalty of twenty pounds for every month or fractional part of a month during which the company so carries on business unlawfully.

(2) The amount of every penalty under this section shall be recovered as if it were a licence fee.

(3) The recovery of any such penalty shall not relieve the company from its liability to the Crown for any licence fee unpaid.

(4) If any company that is at any time carrying on business in New Zealand ceases so to carry on business it shall give to the Registrar notice in writing of the fact and of the date when it so ceased to carry on business in New Zealand.

(5) If any company fails to give the notice required by subsection four of this section on or before the thirty-first day of December in the year in which it has ceased to carry on business in New Zealand, the company and every officer or other person acting in the management of the company shall be jointly and severally liable to a fine not exceeding twenty pounds.

Cf. 1952, No. 66, ss. 6, 7

451. Rates of licence fees - (1) The licence fees imposed by this Part of this Act shall be calculated at the following rates:

(a) In the case of every New Zealand company the rate shall be one shilling for every hundred pounds of the nominal capital of the company, but so that the total fee shall not be more than three hundred pounds or less than one pound:

(b) In the case of every overseas insurance company or overseas banking company the fee shall be three hundred pounds:

(c) In the case of every overseas company (other than an insurance or banking company) incorporated in some part of the Commonwealth and not employing the whole or substantially the whole of its actual capital in New Zealand the rate shall be sixpence for every hundred pounds of the nominal capital of the company, but so that the total fee shall not be more than one hundred and fifty pounds or less than ten pounds

In the case of every other overseas company the rate shall be the same as in the case of a New Zealand company, but so that the total fee shall not be less than ten pounds.

(2) Where the nominal capital of any company is increased in the course of any year, an additional licence fee, proportionate to the amount of the increase of capital, shall be forthwith payable in respect of the remainder of the year unless the company has already paid the maximum licence fee calculated in accordance with the foregoing provisions of this section.

(3) No licence fee shall be payable by any company formed for any one or more of the following purposes exclusively:

(a) Owning and working factories, ironworks, and implement and machine works; flour, threshing, or saw mills; factories for the manufacture of butter, cheese, or other products of milk; farmers' co-operative associations; or works for the cultivation, preparation, or dressing of phormium tenax:

(b) Carrying passengers or goods by land or

(d) Working mines or quarries, and selling coal, stone, or lime

(e) Owning and letting or conducting halls or buildings for public meetings or entertainments; or conducting or managing grounds, buildings, or other places of public recreation or amusement

(f) Owning or working slips or docks for building or repairing ships

(g) Preserving meat, or boiling down carcasses of animals for tallow or otherwise.

Cf. 1952, No. 66, s. 8

452. Exemption of mining companies from licence fees - (1) A mining company shall, on its application for a licence under this Part of this Act for any year, be exempt from the payment of a licence fee thereon if the company satisfies the Registrar that the business actually carried on by that company in New Zealand is confined to mining purposes exclusively.

(2) "Mining company" in this section means a company incorporated, whether in New Zealand or elsewhere, and whether under this Act or otherwise, and having mining purposes among its objects.

(3) "Mining purposes" in this section means mining purposes as defined in Part XIV of this Act, and includes mining operations as defined in the Petroleum Act 1937.

(4) If any mining company in any year in which it has been so exempted from a licence fee carries on any business in New Zealand which is not confined exclusively to mining purposes, the company shall be deemed for the purposes of this Part of this Act to have carried on business without a licence, and the company and the officers or other persons acting in the management of the business shall be liable accordingly.

Cf. 1952, No. 66, s. 9

453. Licence fees payable by Government Life Insurance and State Fire Insurance Departments - The Government Insurance Commissioner under the Government Life Insurance Act 1953 and the State Fire Insurance General Manager under the State Fire Insurance Act 1908 shall respectively be liable for the payment of the maximum licence fee payable under paragraph (a) of subsection one of section four hundred and fifty-one of this Act, as if they were New Zealand companies with the requisite nominal capital.

Cf. 1952, No. 66, s. 10

454. Licence fees payable by overseas insurer - (1) In this section -
"Overseas insurer" means any person, firm, association, company, or corporation carrying on the business of insurance of any description elsewhere than in New Zealand, and not being an overseas insurance company holding a licence under this Part of this Act: "Agent of an overseas insurer" means any person, firm, association, company, or corporation acting as an agent or intermediary through whom or by whose instrumentality contracts of insurance of any description are entered into, whether in or outside New Zealand, between an overseas insurer and any person, firm, association, company, or corporation being or carrying on business in New Zealand.

(2) Every person, firm, association, company, or corporation carrying on business in New Zealand as the agent of an overseas insurer shall for the purposes of this Part of this Act be deemed to be an overseas insurance company carrying on business in New Zealand, and shall be subject to an annual licence fee of three hundred pounds accordingly, and to the same liability for carrying on business without a licence as if that agent were an overseas insurance company, and licences may be issued to any such agent, and all the provisions of this Part of this Act shall apply accordingly.

(3) The agent of two or more overseas insurers shall be subject to a separate licence fee in respect of each agency, except in any case where the Minister, in his discretion; directs that only one fee shall be charged in respect of any number of agencies.

(4) When the agent of an overseas insurer is a company, the licence fee paid by that company as being that agent shall not be deemed to be also the licence fee payable by the company as such.

(5) Where two or more agents of the same overseas insurer carry on business in New Zealand in any year, no licence fee shall be payable by any of those agents except such one of them as is declared by the Registrar to be the chief agent for the purposes of this subsection.

Cf. 1952, No. 66, s. 11
455. Refund of licence fees paid in error or in excess - (1) If in any case the Registrar is satisfied that any licence fee has been paid under this Part of this Act, or that any licence duty has been paid under any corresponding former provisions, in error, or in excess of the amount properly payable, he may, on application made at any time within three years after the payment of that fee or duty, refund the amount thereof or the amount of the excess, as the case may be, to the person by whom it was paid.

(2) All money payable by way of refund under this section shall be paid out of the Consolidated Fund without further appropriation than this section.

PART XVI

MIS CELLANEOUS

Prohibition of Partnerships with More Than Twenty-five Members

456. Prohibition of partnerships with more than twenty-five members - (1) Except as provided in subsection two of this section, no company, association, or partnership consisting of more than twenty-five persons shall be formed for the purpose of carrying on any business that has for its object the acquisition of gain by the company, association, or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Act of the General Assembly.

(2) The limitation of numbers imposed on associations by subsection one of this section shall not apply with respect to any association with which a Department of the Government, or a local authority, or any person, arranges or enters into a contract for the execution of works of any kind wholly or in part by labour, skilled or unskilled, upon the basis of cooperation of the labourers, with or without the inclusion in the co-operation of supervisors, managers, and other specially skilled persons.

Cf. 1933, No. 29, s. 372; 1948 U. K. , s. 434

Restrictions on Offering of Shares or Debentures

457. Restrictions on offering of shares or debentures for subscription or sale - (1) In this section, unless the context otherwise requires, the expression "shares" means the shares of a company, whether a company within the meaning of this Act or not, and includes debentures and units, and the expression "unit" means any right or interest (by whatever name called) in a share, and for the purposes of this section a person shall not in relation to a company be regarded as not being a member of the public by reason only that he is a holder of shares in the company or a purchaser of goods from the company. Without limiting the generality of the foregoing provisions of this section, the term "shares" shall, for the purposes of this section, include all such instruments (commonly called bonds) as confer or purport to confer on the holders thereof any claim against a company, whether the claim is present or future, or certain or contingent, or ascertained or sounding only in damages.

(2) It shall not be lawful for any person to go from house to house offering shares for subscription or purchase to the public or any member of the public. In this subsection the expression "house" shall not include an office used for business purposes, or any other premises used by the occupier wholly or partly for the purpose of carrying on any trade, business, profession, or calling. Nothing in this subsection shall apply with respect to the offering for subscription of shares in any cooperative dairy company or other cooperative company.

(3) Subject as hereinafter provided in this subsection, it shall not be lawful to make an offer in writing to any member of the public (not being a person whose ordinary business or part of whose ordinary business it is to buy or sell shares, whether as principal or agent) of any shares for purchase, unless the offer is accompanied by a statement in writing (which must be signed by the person making the offer and dated) containing such particulars as are required by this section to be included therein and otherwise complying with the requirements of this section, or, in the case of shares in an overseas company, either by such a statement as aforesaid, or by such a prospectus as complies with Part XII of this Act:

Provided that the provisions of this subsection shall not apply-

(a) Where the shares to which the offer relates are shares which are quoted on, or in respect of which permission to deal has been granted by, any stock exchange registered under the Sharebrokers Act 1908 and approved by the Minister of Finance for the purposes of this section, and the offer so states and specifies the stock exchange; or

(b) Where the shares to which the offer relates are shares which a company has allotted or agreed to allot with a view to their being offered for sale to the public; or

(c) Where the offer was made only to persons with whom the person making the offer has been in the habit of doing regular business in the purchase or sale of shares.

(4) The written statement aforesaid shall not contain any matter other than the particulars required by this section to be included therein, and shall not be in characters less large or less legible than any characters used in the offer or in any document sent therewith.

(5) The said statement shall contain particulars with respect to the following matters:

(a) Whether the person making the offer is acting as principal or agent:

(b) The date on which and the country in which the company was incorporated and the address of its registered or principal office in New Zealand:

(c) The authorised share capital of the company and the amount thereof which has been issued, the classes into which it is divided, and the rights of each class of shareholders in respect of capital, dividends, and voting:

(d) The dividends, if any, paid by the company on each class of shares during each of the three financial years immediately preceding the offer, and if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect:

(e) The total amount of any debentures issued by the company and outstanding at the date of the statement, together with the rate of interest payable thereon:

(f) The names and addresses of the directors of the company:

(g) Whether or not the shares offered are fully paid up, and, if not, to what extent they are paid up:

(h) Whether or not the shares are quoted on, or permission to deal therein has been granted by, any registered or recognised stock exchange in New Zealand or elsewhere, and, if so, which, and, if not, a statement that they are not so quoted or that no such permission has been granted:

(i) Where the offer relates to units, particulars of the names and addresses of the persons in whom the shares represented by the units are vested, the date of and the parties to any document defining the terms on which those shares are held, and an address in New Zealand where that document or a copy thereof can be inspected.

In this subsection the expression "company" means the company by which the shares to which the statement relates were or are to be issued.

(6) If any person acts, or incites, causes, or procures any person to act, in contravention of this section, he shall be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds or to both, and in the case of a second or subsequent offence to imprisonment for a term not exceeding twelve months or to a fine not exceeding five hundred pounds, or to both.

(7) Where a person convicted of an offence under this section is a company (whether a company within the meaning of this Act or not), every director and every officer concerned in the management of the company shall be guilty of the like offence, unless he proves that the act constituting the offence took place without his knowledge or consent.

(8) Where any person is convicted of having made an offer in contravention of the provisions of this section the Court before which he is convicted may order that any contract made as a result of the offer shall be void, and, where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares. Where an order is made under this subsection (whether with or without consequential directions) an appeal against the order and the consequential directions, if any, shall lie to the Supreme Court.

Cf. 1933, No. 29, s. 343

Provisions Relating to Banks

458. Limited application of Act to banks - (1) In this section the term "bank" means a bank as defined by the Banking Act 1908.

(2) No company having for its object or for its principal object the carrying on in New Zealand of the business of banking shall be formed or registered under this Act.

(3) The provisions of sections one hundred and twenty-seven and one hundred and twenty-eight of this Act (which relate to branch registers) shall apply with respect to every bank incorporated in New Zealand as if it were a company formed and registered under this Act

Provided that if any such bank is also incorporated in a place outside New Zealand a register of any members of the bank kept outside New Zealand shall not be deemed to be a branch register within the meaning of this Act, but for the purposes of the Estate and Gift Duties Act 1955, or any other Act, every such register shall be deemed to be a branch register kept in accordance with this Act.

(4) The provisions of sections four hundred and seven to four hundred and twelve and four hundred and fifty-seven of this Act shall not apply with respect to shares in or debentures of any bank as hereinbefore defined, but shall apply with respect to shares in or debentures of any other company incorporated or to be incorporated outside New Zealand for the purpose of carrying on the business of banking, whether in New Zealand or elsewhere.

(5) The provisions of Part XV of this Act (which relate to annual licences) shall, as far as they are applicable, apply with respect to banks.

(6) Except as provided in the foregoing provisions of this section and in subsection two of section four hundred and sixty-four of this Act, nothing in this Act shall apply to banks.

459. Form of registers, minute books, etc. - (1) Any register, index, minute book, or book of account required by this Act to be kept by a company may be kept either by making entries in bound books or by recording the matters in question in any other manner.

(2) Where any such register, index, minute book, or book of account is not kept by making entries in a bound book, but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating its discovery, and where default is made in complying with this subsection, the company and every officer of the company who is in default: shall be liable to a fine not exceeding fifty pounds and further shall be liable to a default fine.

Cf. 1933, No. 29, s. 436

Services of Documents

460. Service of documents on a company - (1) A document may be served on a company by leaving it at the company's registered office, or by sending it through the post in a registered letter addressed to the company at that office.

(2) Any document to be served by post on the company shall be posted in such time as to admit of its being delivered in the due course of post within the period, if any, prescribed for the service thereof; and in proving service of any such document it shall be sufficient to prove that it was properly directed, and that it was duly put into the post office as a registered letter.

Cf. 1933, No. 29, s. 379; 1948 U.K. Act, s.437

Offences

461. Penalty for false statements - (1) If any person, in any return, report, certificate, balance sheet, or other document required by or for the purposes of any of the provisions of this Act specified in the Thirteenth Schedule to this Act, wilfully makes a statement false in any material particular, knowing it to be false, he shall be liable on conviction on indictment to imprisonment for a term not exceeding two years, and be liable on summary conviction to imprisonment for a term not exceeding four months, and also be liable in either case to a fine not exceeding one hundred pounds instead of or in addition to such imprisonment as aforesaid.

(2) Nothing in subsection one of this section shall affect the liability of any person under any other Act, but no person shall by virtue of this section be punished twice for the same offence.

Cf. 1933, No. 29, s. 374; 1948 U.K. Act, s. 438

462. Penalty for improper use of word "Limited" - If any person or persons trade or carry on business under any name or title of which "Limited", or any contraction or imitation of that word, is the last word, that person or those persons shall, unless duly incorporated with limited liability, be liable to a fine not exceeding five pounds for every day upon which that name or title has been used.

Cf. 1933, No. 29, s. 375; 1948 U.K. Act, s. 439

463. Provision with respect to default fines and meaning of "officer in default" - (1) Where by any enactment in this Act it is provided that a. company and every officer of the company who is in default shall be liable to a default fine, the company and every such officer shall, for every day during which the default, refusal, or contravention continues, be liable to a fine not exceeding such amount as is specified in the said enactment, or, if the amount of the fine is not so specified, to a fine not exceeding five pounds.

(2) For the purposes of any enactment in this Act which provides that an officer of a company who is in default shall be liable to a fine or penalty, the expression "officer who is in default" means any officer of the company who knowingly and wilfully authorises or permits the default, refusal, or contravention mentioned in the enactment.

Cf. 1933, No. 29, s. 376; 1948 U.K. Act, s. 440

464. Production and inspection of books where offence suspected - (1) If on an application made to a Judge of the Supreme Court in chambers by the Attorney-General there is shown to be reasonable cause to believe that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made -

(a) Authorising any person named therein to inspect the said books or papers or any of them for the purpose of investigating and obtaining evidence of the offence; or

(b) Requiring the secretary of the company or such other officer thereof as may be named in the order to produce the said books or papers or any of them to a person named in the order at a place so named.

(2) Subsection one of this section shall apply also in relation to any books or papers of a person carrying on the business of banking so far as they relate to the company's affairs, as it applies to any books or papers of or under the control of the company, except that no such order as is referred to in paragraph (b) thereof shall be made by virtue of this subsection:

Provided that nothing in this section shall authorise the inspection of any book or paper of the person carrying on the business of banking which the company or its officers would not be entitled to inspect.

(3) Every application under this section shall be made ex parte unless the Judge otherwise orders.

(4) No appeal shall lie against any order or decision of a Judge on or in relation to an application under this section.

Cf. 1948 U.K. Act, s. 441

465. Summary proceedings - (1) All offences under this Act made punishable by any fine may be prosecuted under [the Summary Proceedings Act 1957].

(2) Notwithstanding anything to the contrary in [the Summary Proceedings Act 1957], any information for an offence against this Act punishable on summary conviction may be laid at any time within three years after the date of the offence.

Cf. 1933, No. 29, s. 377; 1948 U.K. Act, s. 442

The Summary Proceedings Act 1957, being the corresponding enactment in force at the date of this reprint, has been substituted for the repealed Justices of the Peace Act 1927.

466. Saving for privileged communications - Nothing in this Act shall be taken to require any person who has acted as solicitor for any person to disclose any privileged communication made to him in that capacity.

Cf. 1933, No. 29, s. 378; 1948 U.K. Act, s. 446

Legal Proceedings

467. Costs in actions by certain limited companies - Where a limited company is plaintiff in any action or other legal proceeding, any Court or judge having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.

Cf. 1933, No. 29,s. 380; 1948 U.K. Act, s. 447

468. Power of Court to grant relief in certain cases - (1) If in any proceeding for negligence, default, breach of duty, or breach of trust against an officer of a company or a person employed by a company as auditor (whether he is or is not an officer of the company) it appears to the Court hearing the case that that officer or person is or may be liable in respect of the negligence, default, breach of duty, or breach of trust, but that he has acted honestly and reasonably, and that, having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused for the negligence, default, breach of duty, or breach of trust, that Court may relieve him, either wholly or partly, from his liability on such terms as the Court may think fit.

(2) Where any such officer or person aforesaid has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty, or breach of trust, he may apply to the Court for relief, and the Court on any such application shall have the same power to relieve him as under this section it would have had if it had been a Court before which proceedings against that officer or person for negligence, default, breach of duty, or breach of trust had been brought.

(3) Where any case to which subsection one of this section applies is being tried by a judge with a jury, the Judge, after hearing the evidence, may, if he is satisfied that the defendant ought in pursuance of that subsection to be relieved in whole or in part from the liability sought to be enforced against him, withdraw the case in whole or in part from the jury and forthwith direct judgment to be entered for the defendant on such terms as to costs or otherwise as the Judge may think proper.

Cf. 1933, No. 29, s. 381; 1948 U.K. Act, s. 448

469. Power to enforce orders - Orders made by the Court under this Act may be enforced in the same manner as orders made in an action pending therein.

Cf. 1933, No. 29, s. 382; 1948 U.K. Act, s. 449

Tables and Forms, and Requirements as to Accounts

470. Power to alter tables and forms, and requirements as to accounts - (1) The Governor-General may from time to time, by Order in Council,-

(a) Alter the table of fees in the First Schedule to this Act:

(b) Alter or add to the Second Schedule to this Act:

(d) Alter or add to the form in the Sixth Schedule to this Act:

(e) Alter or add to the form in the Twelfth Schedule to this Act:

(f) Alter the requirements of this Act as to the matters to be stated in a company's balance sheet, profit and loss account, and group accounts, and in particular the requirements of the Eighth Schedule to this Act, so that he does not render any such requirements more onerous.

(2) Any such table or form, or the Second Schedule to this Act, when altered, shall be published in the Gazette, and thenceforth shall have the same force as if it were included in the appropriate Schedule to this Act, but no alteration made under this section in Table A or the Second Schedule to this Act shall affect any company registered before the alteration, or shall repeal, as respects that company, any portion of that table or Schedule.

(3) Any reference in this Act to the Eighth Schedule to this Act shall be construed as a reference to that Schedule with any alterations made by any Order in Council for the time being in force under this section.

(4) Every Order in Council made under this section shall be laid before Parliament within twenty-eight days after the date of the making thereof if Parliament is then in session, and, if not, shall be laid before Parliament within twenty-eight days after the date of the commencement of the next ensuing session.

Cf. 1933, No. 29, s. 383; 1948 U.K. Act, s. 454

Relief for Unusually Large Companies

471. Power to modify certain provisions for companies with unusually large number of shareholders - Where he considers it necessary by reason of the unusually large number of shareholders, the Governor-General may, by Order in Council, exempt any company or class of companies from such of the requirements of the provisions of this Act specified in the Fourteenth Schedule to this Act as may be specified in that behalf in the order; but a company taking advantage of any such exemption shall be subject, instead of the said requirements, to such other requirements as may be specified in that behalf in the order.

Advisory Committee

472. Power to appoint advisory committee - (1) The Minister may from time to time appoint a committee to advise the Government on matters arising in the administration of this Act, and in particular in relation to the exercise of the powers conferred by sections four hundred and seventy and four hundred and seventy-one of this Act and any other powers conferred on the Governor-General by this Act.

(2) There shall be paid out of money appropriated by Parliament for the purpose to the members of any committee appointed under this section (other than persons in the service of the Crown) remuneration by way of fees, salary, or allowances and travelling allowances and expenses in accordance with the Fees and Travelling Allowances Act 1951, and the provisions of that Act shall apply accordingly as if any such committee were a statutory Board within the meaning of that Act.

Supplemental

473. Effect of section 267 of Companies Act 1933 as to keeping books of account - Subsection one of section two hundred and sixty-seven of the Companies Act 1933 (which penalised the persons responsible where proper books of account were not kept by a. company throughout the two years immediately preceding the commencement of the winding up) shall be deemed always to have had effect -

(a) As if after, the words "the period of two years immediately preceding the commencement of the winding up" there had been inserted the words "or the period between the incorporation of the company and the commencement of the winding up, whichever is the shorter"; and

(b) As if, in the phrase "unless he shows that he acted honestly or that in the circumstances in which the business of the company was carried on the default was excusable" for the word "or" there had been substituted the word "and".

Cf. 1948 U.K. Act s. 458 (2)

Repeals and Savings

474. Repeals and savings - (1) The enactments mentioned in the Fifteenth schedule to this Act are hereby repealed.

(2) Nothing in this section shall affect any Order in Council, order, rule, regulation, registration, appointment, transfer, mortgage, deed, or agreement made, resolution passed, direction given, proceeding taken, instrument issued, or thing done under any former enactment relating to companies, but any such Order in Council, order, rule, regulation, registration, appointment, transfer, mortgage, deed, agreement, resolution, direction, proceeding, instrument, or thing shall, if in force at the commencement of this Act, continue in force, and, so far as it could have been made, passed, given, taken, issued, or done under this Act, shall have effect as if made, passed, given, taken, issued, or done under this Act.

(3) Nothing in this section shall affect the operation of section one hundred and forty-four of the Companies Act 1933 as respects inspectors appointed before, or to continue an inspection begun by inspectors appointed before, the commencement of this Act, and section one hundred and seventy-five of this Act shall apply to a report of inspectors appointed under the said section one hundred and forty-four as it applies to a report of inspectors appointed under section one hundred and sixty-eight of this Act.

(4) An order made on an application under section two hundred and sixteen or subsection four of section two hundred and sixty-eight of the Companies Act 1933 which is in force at the commencement of this Act shall have effect as if it were an order under section one hundred and eighty-nine of this Act.

(5) Nothing in this section shall affect -

(a) The provisions of subsection one of section thirty-seven of the Apprentices Act 1948:

(b) The provisions of paragraph (b) of subsection one of section seventy-one of the Military Training Act 1949:

(c) The provisions of paragraph (b) of subclause one of regulation eleven of the Emergency Forces Occupational Re-establishment Regulations 1951:

Provided that, notwithstanding subsection one of section twenty-one of the Acts Interpretation Act 1924, references in the enactments mentioned in paragraphs (a), (b), and (c) of this subsection to provisions of section two hundred and fifty-eight of the Companies Act 1933 shall be construed as referring both to those provisions and to the corresponding provisions of this Act.

(6) Subject to the provisions of subsection five of this section, any Act or document referring to any former enactment relating to companies shall be construed as referring to the corresponding provision of this Act.

(7) Any person appointed to any office under or by virtue of any former enactment relating to companies shall be deemed to have been appointed to that office under or by virtue of this Act.

(8) Any register kept under any former enactment relating to companies shall be deemed part of the register to be kept under the corresponding provisions of this Act.

(9) All funds and accounts constituted under this Act shall be deemed to be in continuation of the corresponding funds and accounts constituted under the former enactments relating to companies.

(10) Nothing in this section shall affect –

(a) Table B in the Schedule to the joint Stock Companies Act 1860, or any part thereof, so far as it applies to any company existing at the commencement of this Act:

(b) Table A in the First Schedule to the Companies Act 1882, or any part thereof, so far as it applies to any company existing at the commencement of this Act:

(c) Table A in the First Schedule to the Companies Act 1903, or any part thereof, so far as it applies to any company existing at the commencement of this Act:

(d) Table A in the Second Schedule to the Companies Act 1908, or any part thereof, so far as it applies to any company existing at the commencement of this Act:

(e) Table A in the Second Schedule to the Companies Act 1933, or any part thereof, so far as it applies to any company existing at the commencement of this Act.

(11) Where. any offence, being an offence for the continuance of which a penalty was provided, has been committed under any former enactment relating to companies, proceedings may be taken under this Act in respect of the continuance of the offence, after the commencement of this Act, in the same manner as if the offence had been committed under the corresponding provisions of this Act.

(12) Save to the extent to which it is otherwise provided by subsection five of this section, the mention of particular matters in this section shall be without prejudice to the general application of the Acts Interpretation Act 1924 with respect to the effects of repeals.

(13) In this section the expression "former enactment relating to companies" means any enactment repealed by this Act, or by the Companies Act 1933, or by the Companies Act 1908, or by the Companies Act 1903, or by the Companies Act 1882.

475. Provisions as to winding-up proceedings commenced before 1 April 1934 - (1) The provisions of this Act with respect to winding up (other than sections three hundred and thirteen, three hundred and twenty-four, three hundred and thirty-four, and three hundred and thirty-nine) shall not apply to any company of which the winding up commenced before the first day of April, nineteen hundred and thirty-four, but every such company shall be wound up in the same manner and with the same incidents as if the Companies Act 1933 and this Act (apart from the said sections) had not passed, and, for the purposes of the winding up, the Act or Acts under which the winding up commenced shall be deemed to remain in full force.

(2) A sealed copy of every order staying the proceedings in a winding up commenced as aforesaid shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his books relating to the company.

Cf. 1933, No. 29, s. 384 (4); 1948 U.K. Act, s. 460

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