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Tuvalu Sessional Legislation |
TUVALU
THE COMPANIES ACT, 1991
(Act 13 of 1991)
I assent
Toaripi Lauti PC
GCMG
Governor-General
20th February 1992
An Act to provide for the incorporation companies and
matters connected therewith and regulation of matters connected
therewith.
(Commencement: _________________)
ENACTED by the Parliament of Tuvalu
PART I - PRELIMINARY
Short title and commencement
1. (1) This Act may be cited as the Companies Act,
1991.
(2) This Act shall come into operation on such date as the Minister
may, by notice published in the Gazette, appoint.
Interpretation
2. The First
Schedule applies for the purpose of the interpretation of this Act.
PART II - CONSTITUTION OF COMPANIES AND INCIDENTAL MATTERS
Division 1 - Formation
Capacity to form a company
3. (1) Subject to subsections (2) and (3), a company may
be formed under this Act for any lawful purpose by one, or more than one,
person.
(2) A natural person-
(a) who is less than eighteen years of age;
(b) who is of unsound mind and has been so found by the court s in Tuvalu or elsewhere; or
(c) who is an undischarged bankrupt,
may not form, or join in the formation of, a company under this Act.
(3) A corporation may not form, or join
in the formation of, a proprietary company.
Formation of company
4. (1) Any person or persons wishing to of a form under
this Act a form under this Act a company-
(a) shall subscribe in the manner provided in subsection (2) to the Memorandum of Association of the proposed company;
(b) shall lodge, or cause to be lodged, the following instruments with the Registrar-
(i) the Memorandum of Association;
(ii) the statements required to be so lodged by sections 109(2) and 118(1);
(iii) if the company is to be incorporated as a proprietary company, a statement to that effect; and
(iv) in any case where section 58 applies, any report to be so lodged under subsection (2) of that section; and
(c) may lodge, or cause to be lodged, with the Registrar for registration, Articles of Association of the proposed company subscribed to in the manner provided in subsection (2).
(2) A person
wishing to subscribe to the Memorandum of Association of Articles of Association
of a proposed company shall do so-
(a) in the case of a natural person, by signing the Memorandum or, as the case may be, Articles;
(b) in the case of a corporation, by affixing the seal of the corporation to, or by causing a person duly authorised by the corporation to sign, the Memorandum or, as the case may be, the Articles,
in the
presence of at least one witness (not being another subscriber) who shall attest
the signature or the fixing of the seal and
add his address.
(3) No subscriber to the Memorandum may take less than one
share and each subscriber must write opposite to his name the number of
share he
takes.
Types of company
5. A company may be incorporated under this Act as a public
company or as a proprietary company.
Company to have share capital
6. Every company
incorporated under this Act shall be limited by shares, that is to say, be a
company in respect of which the liability
of every member is limited to the
amount paid up on each share of which he is the holder.
Prohibition of partnership, etc. exceeding certain numbers
7. An association or partnership consisting -
(a) in the case of an association or partnership formed for the purpose of carrying on the business of banking, of more than ten persons; or
(b) in any other case, of more than twenty persons,
which has for its object the
acquisition of gain by the association or partnership, or individual members
thereof, shall not be formed
unless it is formed under this Act or is formed in
pursuance of some other enactment.
Division 2 - Memorandum and Articles
Contents of Memorandum
8. (1) The Memorandum of a company shall set out in
respect of the company -
(a) the name of the company;
(b) that the registered office of the company is to be situated in Tuvalu;
(c) the amount of share capital with which the company proposes to be registered and the division of that share capital into shares of a fixed amount;
(d) that the liability of the members is limited;
(e) the number of directors, or the minimum and maximum number of directors, of the company; and
(f) if section 58 applies, the matter required by that section to be stated in the Memorandum.
(2) In the case of a proprietary company, the
Memorandum of the company shall, in addition to meeting the requirements of
subsection
(1), meet the requirements of section 18.
(3) It is not
necessary to set out in the Memorandum of a company the objects of the company,
but any restriction which is to be imposed
on the capacity or powers of the
company shall be set out in the Memorandum.
(4) Nothing in this section
operates to prevent the inclusion in the Memorandum of a company or provision
with respect to any matter
not required by this section to be the included in
the Memorandum.
Adoption
and application of Articles in the
Second Schedule
9. (1)
Articles of a company may-
(a) in the case of a public company, adopt all or any of the Articles in Part I of the Second Schedule; or
(b) in the case of a proprietary company, adopt all or any of the Articles contained in Part II of that Schedule.
(2) if Articles are not registered pursuant to
section 12(1) (a), or if Articles are so registered, in so far as the Articles
do not
exclude or modify the Articles contained in Part I or Part II of the
Second Schedule, as the case may be, those Articles shall, so
far as applicable,
be the Articles of the company in the same manner and to the same extend as if
they were contained in duly registered
Articles.
Effects of Memorandum of incorporation and Articles
10. Subject to this Act, the Memorandum and Articles of a
Company bind the company and its members to the same extend as if they
respectively
had been signed by each member and contained convenants on the part
of each member to observe the provision of the Memorandum and
Articles.
Amendment of Memorandum and Articles
11. (1) Part I of the Third Schedule applies with respect
to the amendment of the Memorandum of a company
(2) Part II of the Third
Schedule applies with respect to the amendment of the Articles of a
company.
Division 3 - Registration
Registration of Memorandum, etc.
12. Where, in respect of a proposed company, the
instruments referred to in section 4(1)(b) are lodged with the Registrar, the
Registrar
shall, if he is satisfied that the requirements of this Act have been
met, the register the Memorandum and the Articles (if any)
of the proposed
company.
Effects of
registration
13. (1) Where the Memorandum of a company is
registered pursuant to section 12, the Registrar shall issue under his hand in
respect
of the company a certificate of incorporation-
(a) stating the name of the company;
(b) stating whether the company is incorporated as a public or a proprietary company; and
(c) giving the date of the incorporation of the company, which shall be the same date as the date of the issue of the certificate.
(2) A company comes into
existence on the date so given in the certificate of incorporation issued in
respect of the company
(3) A certificate issued in respect of a company
under subsection (1) is conclusive evidence that the company was entitled to be
incorporated
and that the provisions of this Act have been complied with respect
to its incorporation.
Division 4 - Names of Companies
Items to be included in name of company
14. (1) The last
item in the name of a company shall be the word "Limited" or the abbreviation
"LTD".
(2) The penultimate item in the name of a proprietary company
shall be "Proprietary" or the abbreviation "PTY."
Prohibited names
15. (1) A company shall not be registered by a name which
-
(a) contains any item that is prescribed;
(b) is identical with the name of an existing company or so clearly resembles such a name as to be likely to be mistaken for it;
(c) includes the word "Proprietary" or the abbreviation "PTY" unless it is being incorporated as, or concerted to, a proprietary company; or
(d) does not comply with the requirements of section 14(1) or, in the case of a proprietary company, with the requirements of section 14(1) and (2).
(2) Where, through in adverse otherwise,
a company is register which contravenes or does not satisfy the requirements of
subsection
(1) or by a name meet the company -
(a) shall, as soon as may be after it becomes aware of that fact;
(b) shall, on being required by the Registrar to do so within a period specified by him,
alter its name to a name approved by
the Registrar.
(3) A company which does not subsection (2) (a), or with
the requirement of the Registrar under subsection (2) (b), is guilty of an
offence.
Approval of Registrar to change of name
16. (1) Subject to subsection (3), a company shall not
amend its Memorandum to change its name unless the Registrar has .approved
the
proposed new name.
(2) Where a company changes its name it shall notify
the Registrar accordingly and the Registrar-
(a) shall register the new company name; and
(b) shall re-issue the certificate of incorporation in respect of the company altered to meet the case.
(3) This section
does not apply in the case of a change of name necessary to enable a company to
convert to a public company, or,
as the case may be, a proprietary,
company.
Legal proceedings, etc., not affected by change of name
17. A change of
its name does not affect the identity of a company or any rights or obligations
of the company, and legal proceedings
that might have been commenced or
continued by or against the company in its former name may be commenced or
continued by or against
it in its 'new name.
Division 5 - Proprietary Companies
Incorporation of proprietary company
18. A company may
be incorporated as a proprietary company if its Memorandum -
(a) limits to not more than twenty the number of its members;
(b) restricts the rights to transfer its shares;
(c) prohibits any invitations to the public to subscribe for any shares in, or debenture of, the company;
(d) prohibits any invitations to the public to deposit money with the company for fixed periods or payable at call, whether or not bearing any interest;
(e) requires all the directors of the company to be members of the company; and
(f) prohibits the issue of classes of shares.
Determining number of members of proprietary company
19. In
determining the number of members of a proprietary company two or more persons
who jointly hold shares shall be counted as one
person.
Conversion of public company to
proprietary company
20. (1) Subject to subsection (2),a public
company wishing to convert to a company to proprietary company may do so but in
every such
case the company shall lodge Registrar a notice of conversion in the
prescribed form, accompanied by-
(a) a copy of a special resolution of the company -
(i) determining to convert to a proprietary company; and
(ii) amending its Memorandum in such manner as is necessary to enable it to so convert; and
(b) a statutory declaration by the directors of the company to the effect that no circumstances exists which -
(i) if the company were converted to a proprietary company on the date on which the declaration is lodged; and
(ii) if the special resolution making the amendments referred to in paragraph (a)(ii) had effect,
would entitle
the Court to make a determination under section 27(1) that the company had
ceased to be a proprietary company.
(2) A company which has ceased,
pursuant to a determination made under section 27(1), to be a proprietary
company, shall not thereafter
convert to a proprietary company without the leave
of the Court.
Conversion of proprietary company to public company
21. Subject to its Memorandum and Articles, a proprietary
company wishing to convert to a public company may do so but in every such
case
the company shall lodge with the Registrar a notice of conversion in the
prescribed form, accompanied by-
(a) a copy of a special resolution of the company-
(i) determining to convert to a public company; and
(ii) amending its memorandum to remove the word "Proprietary" or, as the case may be, the abbreviation "PTY" from its name; and
(b) a statement in lieu of a prospectus which complies with the requirements of section 52.
Re-issue of certificate of incorporation on conversion
22. (1) Subject
to subsection (2), on compliance-
(a) by a public company with the requirement of section 20; or
(b) by a proprietary company with the requirements of section 21,
the Registrar shall re-issue the
certificate of incorporation in respect of the company altered to meet the
case.
(2) The Registrar shall not re-issue a certificate of incorporation
pursuant to subsection (1) until the expiration of the period
of one month after
the date on which the special resolution referred to in section 20(1) (a) or, as
the case may be, in section 21(a),
was passed.
(3) A company is converted
to a proprietary company or, as the case may be, a public company from the date
of re-issue pursuant to
subsection (1) of the certificate of incorporation of
the company.
Effect of re-issue of certificate of incorporation
23. (1) Where a certificate of re-issued re-issue pursuant
to section (22)-
(a) section 13(3) applies to the extent provided to the certificate so re-issued as it applies to a certificate issued under section 13; and
(b) the re-issued certificate is prima facie evidence that the company meets the requirements necessary, and was entitled, to convert to a proprietary company or, as the case may be, a public company.
(2)
The conversion of a company pursuant to section 22 does not affect the identity
of the company or any right or obligation of the
company or render defective any
legal proceedings by or against the company, and any legal proceedings that
could have been continued
or commenced by or against it prior to the conversion
may, notwithstanding any change, be continued or commenced by or against it
after the conversion.
Right of pre-emption
24. (1) In this section -
"continuing member", in relation to a proprietary company, means a member of the company on the date on which the price, at which, the shares of any outgoing member are to be acquired under this section, is determined in accordance with this section;
"outgoing member", in relation to a proprietary company, means a member of the company in relation to whom a relevant event occurs;
"relevant event", means an event of a kind referred to in subsection (2).
(2)
This section applies in relation to a proprietary company when any of the
following events occur, namely -
(a) a member of the company dies or is adjudged bankrupt;
(b) an order made under section 25 is made in relation to a member and has effect;
(c) a member of the company resigns, is removed from “office”, or ceases to hold, a directorship of the company but does not cease to be a member; or
(d) a member of the company contracts to sell, or creates a derivative interest in, any of his shares in the company.
(3) Where a relevant event occurs by virtue of
which this section applies in relation to a proprietary company and the
Memorandum
or Articles of the company so provide, each continuing member of the
company is entitled to acquire shares in the company of the
outgoing member in
accordance with the provisions of the Memorandum or, as the case may be, the
Articles.
Expulsion of member
25. (1) On
application made by a member of a proprietary company the Court may, on any
ground referred to in subsection (2), order that
any other member of the company
shall be an outgoing member for the purpose of the acquisition of his shares in
the company pursuant
to section 24.
(2) The grounds on which the Court
may make an order under subsection (1) in relation to a member of a proprietary
company are -
(a) that the member whose expulsion is sought-
(i) has been guilty of serious or persistent breaches of the provisions of this Act or of the Memorandum or Articles of the company;
(ii) has been guilty of conduct seriously detrimental to the interests of the company or its members as a whole; or
(iii) has an interest or holds a position in another corporation, firm or undertaking which is likely to cause him to act to the detriment of the company and to result in substantial harm to it; or
(b) that the member whose expulsion is sought is a director of the company and -
(i) has been guilty of serious breaches of duty as a director;
(ii) has been guilty of serious breaches of duty as a director of another corporation, or as a partner in a firm; or
(iii) has been convicted of a criminal offence involving dishonesty.
(3) An order made
under this section has effect for the period of three months following the date
of the order, without prejudice
to the provision in the Memorandum or Articles
of a company of a kind referred to in section 24.
Voting Agreements
26. No agreement by a member of a company with another
person (whether a member or not) whereby that other person may require the
member to vote in a particular manner at any meeting of the company, or whereby
the member agrees to vote in a particular manner,
or not to vote, at any such
meeting, is valid.
Default by a proprietary company
27. (1) Where a
proprietary company is in default as provided in subsection (4), the Court in
proceedings on an application under this
section by the Registrar or a member or
creditor of the company has ceased to be a proprietary company.
(2) The
Court may refuse to make an order under subsection (1) if satisfied that in all
the circumstances of the case it is fair and
reasonable to grant relief to the
company concerned.
(3) The court may order that any person be joined as a
party in proceedings on an application under subsection (1) if the Court thinks
it is desirable to so order for the purpose of disposing of the
application.
(4) A proprietary company is in default for the purpose of
this section -
(a) if default has been made in relation to the company in complying with a limitation, restriction, prohibition or requirement of a kind referred to in section 18;
(b) Where the company has been convicted of an offence under section 29(1) or 163(7); or
(c) the Memorandum of the company have been so altered that they no longer include limitations, restrictions, and prohibitions of the kind referred to in section 18 or no longer satisfy the requirements of that section 14.
Effect of determination under section 27
28. (1) Where the Court by order determines under section
27 that a company has ceased to be a proprietary company -
(a) the company is, with effect from the date of the order, a public company;
(b) the company shall be deemed to have changed its name on that date by the omission from it of the word "Proprietary" or, as the case may be, the abbreviation "PTY"; and
(c) the company shall, within thirty days after that date, lodge with the Registrar a statement in lieu of a prospectus which complies with the requirements of section 52.
(2) Where default
is made in complying with subsection (1)(c) the Company is guilty of an
offence.
Offences
29. (1) Where
default is made, in relation to a proprietary company, in complying with any
prohibition of a kind referred to in paragraph
(c) or (d) of section 18, the
company and each director of the company who is in default is guilty of an
offence.
(2) Where the directors of a company make and lodge with the
Registrar a statutory declaration for the purposes of section 22 and
the
declaration is false in a material particular, each director is guilty of an
offence.
(3) In proceedings for an offence under subsection (2) it is a
defence for a person charged to prove -
(a) that he relied on information supplied to him by an officer of the company of which the person charged is or was a director when the declaration was made; and
(b) that the officer was in a position to supply the information and in the circumstances, it was reasonable to rely on it.
(4) Where a company which is not a
proprietary company uses as part of its name the word "Proprietary" or the
abbreviation "PTY",
the company and each, director of the company is guilty of
an offence.
Division 6 - Members and Shareholders of Company and Liability of Members
Membership of company
30. (1) A person who agrees to become a member of a
company and whose name is entered in the company's register of members is a
member
of the company.
(2) A subscriber to the Memorandum of a company is
deemed for the purposes of subsection (1) to have agreed to become a member of
the company and, as soon as may be after its registration, his name shall be
entered in the company's register of members.
(3) Every member shall be a
shareholder of the company and shall hold at least one share and every holder of
a share shall be a member
of the company.
(4) Membership of a company
shall continue until a valid transfer of all the shares held by the member is
registered by the company,
or until all such shares are transmitted by operation
of law to another person or forfeited or cancelled under this Act or the
Memorandum
or Articles, of the company or until the member dies when the rights
and obligations attached to membership shall pass to his estate.
(5) In
this Act, any reference to holders of shares is a reference to persons who are
shareholders in respect of the shares, and any
reference to holding share shall
be construed accordingly.
(6) For the purposes of this Act, shares shall
be considered as having been issued if any person is a shareholder in respect of
them.
Liability of members
31. (1) Subject to subsection (2), in the event of a
company being wound up every present or past member is liable to contribute to
the assets of the company, to an
amount sufficient for payment of its debts and expenses of the winding-up, and
for the adjustment of the rights of the members
and past members among
themselves.
(2) Subsection (1) is subject to the following limitations,
namely-
(a) a past member is not liable to contribute if he has ceased to be a member for a period of one year or more before the commencement of the winding up;
(b) a past member is not 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 section;
(c) no contribution is required from any member or past member exceeding the amount, if and, unpaid on the shares in respect of which he is liable as a present or past member;
(d) a past member is not liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member; and
(e) any sum due from the company to a member or past member, in his character of member, by way of divided or otherwise, shall not be set-off against the amounts for which he is liable to contribute in accordance with this section, but any such sum shall be taken into account for the purposes of final adjustment of the rights of the members and past members amongst themselves.
(3) For the purposes of
subsections (1) and (2), "past members" includes the estate of a deceased member
and, where any person dies
after becoming liable as a member, the liability is
enforceable against his estate.
(4) Except as provided in subsections (1)
to (3), a member or a past member of a company is not liable as such for any of
the debts
or liabilities of the company.
(5) In the event of a company
being wound up, any instalment of the issue price of a share remaining to be
paid all, with effect from
the commencement of the winding up, be treated as an
amount unpaid on the share whether or not the due date for the payment of the
instalment has occurred.
Minimum membership for carrying on business
32. If a company carries on business without having at
least two members and does so for more than six months, a person who, for the
whole or any part of the period that it so carries on business after those six
months-
(a) is a member of the company; and
(b) knows that it is carrying on business with only one member,
is liable (jointly and severally with the
company) for the payment of the company's debts contracted during the period or,
as the
case may be, that part of it.
PART III - PRE-INCORPORATION CONTRACT CAPACITY AND POWERS OF COMPANY
Pre-incorporation contracts
33. (1) Except as
provided in this section, a person who enters into a written contract in the
name of on behalf of a company before
it comes into existence is personally
bound by the contract and is entitled to its benefits.
(2) A company may,
within a reasonable time after it comes into existence, by any action or conduct
signifying its intention to be
bound thereby, adopt a written contract made
before it came into existence in its name or on its behalf, and upon any such
adoption-
(a) the company is bound by the contract and is entitled to the benefits thereof as if the company had been in existence at the date of the contract and had been a party thereto; and
(b) a person who purported to act in the name of or on behalf of the company ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.
(3) Except as
provided in subsection (4), whether or not a written contract made before the
coming into existence of a company is
adopted by the company, a party to the
contract may apply to the Court for an order fixing obligations under the
contract as joint
or joint and several, or apportioning liability between the
company and a person who purported to act in the name of or on behalf
of the
company, and upon such application the Court may make any order it thinks
fit.
(4) A person who entered into a written contract in the name of or
on behalf of a company before it came into existence is not bound
by the
contract or entitled to the benefits thereof in any event unless it is so
provided in the contract.
Capacity and powers of company
34. (1) Subject to this Act or to any other enactment
restricting or having the effect of restricting its capacity or powers, a
company
by virtue of this section, has-
(a) unlimited capacity; and
(b) the rights, powers and privileges of a natural person of full age and capacity.
(2) A company may hold
land.
(3) A company may, in pursuance of this section, carry on in any
jurisdiction of outside Tuvalu, any activity subject to the laws
of the
jurisdiction.
Effect of and reliance on restrictions in Memorandum of company
35. (1) Where pursuant to section 8(3) there is set out in
the Memorandum of a company any provision restricting the capacity or powers
of
the company of, the restriction may be relied on, and has effect, only in the
circumstances referred to in subsection (2), and
no-
(a) act of the company;
(b) agreement to which the company is a party; or
(c) conveyance or transfer of property by or to the company,
is invalid by reason only of failure to company
with the restriction.
(2) Subject to subsection (3), a restriction in the
Memorandum of a company of a kind referred to in subsection (1) may be relied
on
and has effect for the purposes of -
(a) proceedings against the company -
(i) by a director or member of the company; or
(ii) where the company has issued debentures secured by a floating charge over all or any of the company's property, by the holder of any of the debenture or the trustee for the holders of the debentures;
(b) proceedings by the company or a member of the company against the present or former officers of the company for failure to observe any such restriction;
(c) proceedings by the Minister or a member of the company to wind up the company under the companies (Winding Up) Act 1991; or
(d) proceedings for the purposes of section 210(1)(c).
(3) A person may not, in
proceedings referred to in subsection (2), rely on a restriction in the
Memorandum of a company of a kind
referred to in subsection (1), in any case
where he voted in favour of, or otherwise, expressly or by conduct, agreed to,
the doing
of an act (including the entering into of an agreement) by the company
or the conveyance by or to the company of property, which,
it is alleged in the
proceedings, was or would be contrary to such a restriction.
Power of court to make orders in proceedings under section 35
36 (1) Where, in proceedings of a kind referred to in
section 35 (2) (a), the Court makes an order restraining the doing of any act
(including the entering of into an agreement) or the conveyance or transfer of
any property, the Court may -
(a) in those proceedings; or
(b) in proceedings on an application under this subsection by the company concerned or any other interested person,
make
such orders as it thinks proper for declaring or adjusting rights and
liabilities in connection with the act, conveyance or transfer,
or any agreement
relating thereto.
(2) Without limiting the generality of the power of the
Court under subsection (1), the orders which may be made under that subsection
include -
(a) an order for the payment or repayment of moneys;
(b) an order discharging any person from obligation to pay moneys;
(c) an order setting aside or restraining the performance of any agreement;
(d) an order for the payment by any person of compensation to any other person for the loss suffered, or which may be suffered, by that or other person by reason of the Act, conveyance transfer concerned being restrained; and
(e) an order for payment of costs
(3) An order
made -
(a) under subsection (2) (d) -
(i) may provide for the payment of compensation by or to the company concerned;
(ii) but shall not provide for the payment of compensation for loss of anticipated profits to be delivered from, or as a result of, any act or the conveyance or transfer of any property; or
(b) under subsection (2) (e) may provide for payment of costs by or to the company concerned.
(4) The Court -
(a) may order that any person be joined as a party in proceedings of a kind referred to in subsection (1); and
(b) shall not, in any such proceedings, make an order for the payment or repayment by any person of money or compensation unless that person is a party in the proceedings.
Authority of directors, officers and agents, etc.
37. (1) A company, or a guarantor of an obligation of a
company, may not assert against a person dealing with the company or with
any
person who has assumed rights from the company, that -
(a) the Memorandum or Articles of the company have not been complied with;
(b) the person or persons named in the most recent notice lodged with the Registrar pursuant to section 126 is not the director or are not the directors of the company;
(c) the place named in the most recent notice lodged with the Registrar pursuant to section 109 is not the registered office of the company;
(d) a person held out by the company as an officer or agent of the company has not been duly elected or appointed or does not have the authority to exercise the powers or performed the duties customarily exercised or performed by the officer or agent of a company carrying on business of the kind carried on by the company or customarily exercised or performed by an officer or agent of the company concerned; or
(e) a document officer or agent with actual authority, or with customarily would in the exercise or performance of his powers or duties have authority to issue the document, is not valid or is issued without authority, except where the person has actual knowledge of the matter sought to be so asserted or, it having regard to his position with, or relationship with the company, he ought to have knowledge of that matter.
(2) This section -
(a) does not affect the operation of section 35 or 36; and
(b) shall not operate so as to allow any person to recover a debt from a company, or to enforce any liability against a company, or to treat any transaction as binding on a company if, in connection with the same matter, the person has been guilty of a fraud upon the company, or has participated or acquiesced in a fraud committed upon the company.
No constructive notice
38. Subject to this Act, no person is affected by, or is
deemed to have a notice or notice knowledge of, the content, of a document
concerning a company by reason only that the document has been registered by the
Registrar or is available for inspection at an office
of the company.
Notice of matters by company
39. A company shall be considered as having notice of a
matter if notice of the company matter is given to or received or obtained
by
any director of the company, other than a director who obtains the notice for
the purpose of, or in the course of, committing
a breach of duty as a
director, of the company, or a
fraud or wrong upon the company.
Form of contract
40. (1) A contract made according to subsection (2) on
behalf of a company -
(a) is effectual it form and binds the company and the other party to the contract; and
(b) may be varied or discharged in the same manner in which it is authorised by subsection (2) to be made.
(2) Subject to any
enactment, a contract which -
(a) if made between private persons would, by law, be required to be in writing under seal, may be made on behalf of a company in writing under seal;
(b) if made between private persons would, by law, required to be in writing or to be evidenced in writing signed by the parties to be charged thereby may be made or evidenced in writing and signed in the name or on behalf of the company; and
(c) if made between private persons would, by law, be valid although made by parol only and not reduced to writing, maybe made by parol on behalf of the company by any person acting under its authority express or implied.
Bills of exchange and promissory notes
41. 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 the company or if expressed to be made,
accepted or endorsed on behalf or on account of the
company.
Powers of
attorney
42. (1) A
company may, by writing under seal; empower any person, either generally or in
respect of any specified matter, as its attorney,
to execute deeds on its behalf
in any placed within or outside Tuvalu.
(2) A deed signed by a person
empowered as provided in subsequent (1) binds the company and has the same
effect as it would have if
it were the company's common seal.
Common seal and official seal for use abroad
43. (1) A company shall have a common seal but, except
where required by any enactment to use its common seal, the company-
(a) may use that seal; or
(b) may use any other form of seal other than its official seal.
(2) A Company, if authorised by its
Articles may have for use in any country other than, or in any district or place
not situated
in Tuvalu, an official seal which shall be facsimile of the common
seal of the company, with the addition on its face of the name
of the country,
district or place where it is to be used.
(3) Every document to which an
official seal is duly affixed binds a company as if it had been sealed with the
common seal of the
company.
(4)
A company may, by instrument in writing under its common seal, authorise
any agent appointed for that purpose to affix the official
seal to any document
to which the company is party in the country, district or place where the
official seal may be used.
(5) Any person dealing with an agent appointed
pursuant to subsection (4) in reliance on the instrument conferring the
authority is
entitled to assume that the authority of the agent continues during
the period, if any, mentioned in the instrument or, if no period
is so
mentioned, until that person has actual: notice of the revocation or
determination of the authority.
(6) The person affixing an official seal
shall, by writing under his hand, certify on the document to which the seal is
affixed, the
date on which and the place, at which it is affixed.
PART IV - SHARES, DEBENTURES AND CHARGES.
DIVISION 1 - Prospectuses
Filing of prospectus
44. (1) Every
prospectus issued by or on behalf of a company or in relations to any intended
company shall be dated, and that date shall,
unless the contrary be proved, be
taken as the date of publication of the prospectus.
(2) A copy of every
such prospectus, signed by every person who is named therein as a director or
proposed director of the company,
or by his agent authorised in writing, shall
be filed for registration with the Registrar on or before the date of its
publication,
and no such prospectus shall be issued until a copy thereof has
been so filed for registration.
(3) The Registrar shall not register any
prospectus unless it is dated, and the copy thereof signed, in a manner required
by this
section.
(4) Every prospectus shall state on the face of it that
a copy has been filed for registration as required by this section.
(5)
Where a prospectus is issued without a copy thereof being so filed, the company,
and every person who is knowingly a party to
the issue of the prospectus, shall
be guilty of an offence.
Specific requirements as to particulars of prospectus
45. (1) Every prospectus issued by or on requirements
behalf of a company; or by any person on behalf of as to any person who is or
has been engaged or interested in the formation of the company must
state-
(a) the contents of the Memorandum, with the names, descriptions and addresses of the signatories, and the number of shares subscribed for by them respectively and the number of founders or management or deferred shares, if any, and the nature and extend of the interest of the holders in the property and profits of the company;
(b) the number of shares, if any, fixed by the Articles as the qualification of a director and any provision in the Articles as to the remuneration of the directors;
(c) the names, descriptions and addresses of the directors or proposed directors;
(d) the minimum subscription on which the directors may a proceed to allotment, and the amount payable on application and allotment on each share, and in the case of a second or subsequent offer of shares, the amount offered for subscription on each previous allotment made within the two preceding years, and the amount actually allotted and the amount, if any paid on the shares so allotted;
(e) the number and amount of shares and debentures which within the two preceding years have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash and in the latter case the extent to which they are so paid up and in either case the consideration for which those shares or debentures have been issued or are proposed or intended to be issued;
(f) the names and addresses of the vendors of any property purchased or acquired by the company or proposed so to be purchased or acquired, which is to be paid for wholly or partly out of the proceeds of the issue offered for subscription by the prospectus or the purchase or acquisition of which has not been completed at the date of issue of the prospectus, and the amount payable in cash, shares or debentures to the vendor and where there is more than one separate vendor, or the company is a sub-purchaser, the amount so payable to each vendor:
Provided that where the vendors or any of them are the members of the firm shall not be treated as separate vendors;
(g) the amount (if any) paid or payable as purchase money in cash, shares or debentures or any such property, specifying the amount (if any) payable for goodwill;
(h) the amount (if any) paid within the two preceding year or payable as commission for subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions for any shares in, or debentures of, the company, or the rate of any such commission:
Provided that it shall not be necessary to state the commission payable to sub-underwriters;
(i) the amount or estimated of preliminary expenses;
(j) the amount paid within the two preceding years or intended to be paid to any promoter and the consideration for any such payment;
(k) the dates and parties to every material contract and reasonable time and place at which any material contract or a comply thereof may be inspected:
Provided that this requirement shall not apply to a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company or to any contract entered into more than two years before the date of issue of the prospectus;
(l) the names and addresses of the auditors of the company;
(m) full particulars the nature and extent of the interest (if any) of every director in the promotion of, or in the property proposed to be acquired by, the company or, where the interest of such a director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director or otherwise for services rendered by him or by the firm in connection with the promotion or foundation of the company; and
(n) where the company is a company having shares of more than one class, the right of voting at meetings of the company, conferred by the several classes of the shares respectively.
(2) For the purposes of this section, every
person shall be deemed to be a vendor who has entered into any contract,
absolute or conditional,
for the sale or purchase, or for any option of
purchase, of any property to be acquired by the company in ably case where
-
(a) the purchase money is not fully paid at the date of issue of the prospectus; or
(b) the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospectus; or
(c) the contract depends for its validity or fulfilment on the result of that issue.
(3) Where any of the property to be
acquired by the company is o be taken on lease, this section shall apply as if
the expression
"vendor" included the lessor, and the expression "purchase money"
included the consideration for the lease, and the expression "sub-purchased"
included a sub-lease.
(4) Any condition requiring or binding any,
applicant for shares or debentures to waive compliance with any requirement of
section,
or purporting to affect him with notice of any contract, document or
matter not specifically referred to in the prospectus shall
be void.
(5)
Where any such prospectus as is mentioned in this section is published as a
newspaper advertisement, it shall not be necessary
in the advertisement to
specify the contents of the memorandum or the signatories thereto or the number
of shares subscribed for
by them.
(6) In the event of non-compliance with
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, if he proves that -
(a) as regards any matter not disclosed, he was cognisant thereof; or
(b) the non-compliance arose from an honest mistake of fact on his part:
Provided that in the event of non-compliance with the requirements contained in paragraph (m) of subsection (1), no director or other person shall incur any liability respect of the non-compliance unless it be proved that he had knowledge of the matters not disclosed.
(7) This section does not apply to a circular or
notice inviting existing members or debentures holders of a company to subscribe
either for shares or debentures of the company, whetherwith or without the right
to renounce in favour or other persons, but subject
as aforesaid this section
shall apply to any prospectus whether issued on or with reference to the
formation of a company, or subsequently.
(8) The requirements of this
section as to the memorandum and the qualification, remuneration and interest of
directors, the names,
descriptions and addresses of directors or proposed
directors and the amount or estimated amount of preliminary expenses shall not
apply in the case of a prospectus issued more than one year after the date at
which the company is entitled to commence business.
(9) Nothing in this
section shall limit or diminish any liability which any person may incur under
the general law of this Act apart
from this section.
Obligation of companies where no prospectus is issued
46. (1) A company which does not issue a prospectus on or
with reference to its formation shall not allot any of its shares or debentures
unless before the first allotment of either shares or debentures there has been
filed with the Registrar a statement in lieu of prospectus
complying with the
requirements of section 52.
(2) This section does not apply to a
proprietary company.
Restriction on alteration of terms mentioned in prospectus, etc.
47. A company shall not previously to the annual general
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 meeting.
Liability for statements in prospectus
48. (1) where a
prospectus invites persons to subscribe for shares in or debentures of a
company-
(a) every person who is a director of the company at the time of the issue of the prospectus; or
(b) every person who has authorised the naming of him 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;
(c) every promoter of the company; and
(d) every person who has authorised the issue of the prospectus,
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 report or memorandum appearing on the face thereof or by reference
incorporated
therein or issued therewith, unless it is proved-
(i) with respect to every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, 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;
(ii) with respect to every untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that it fairly represented the statement or was a correct and fair copy of or extract from the report or valuation:
Provided that the director or any person named as director, promoter or person who authorised the issue of the prospectus shall be liable to pay such compensation if it is proved that he had no reasonable ground to believe that the person making the statement, report or, valuation was competent to make it; and
(iii) with respect to every un true statement purporting to be a statement made by an official persona or contained in what purports to be a copy of or extract from a public official document, that it was a correct and fair representation of the statement or copy of or extract from the document;
or unless it is proved-
(iv) that having consented to become a director of the company he withdrew his consent. before the issue of the prospectus and that was issued without his authority or consent;
(v) 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
(vi) 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.
(2) Where 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 his withdrawn his
consent before the issue of the prospectus and has not authorised
or consented
to the issue thereof, 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 so named
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 in defending himself
against any action or legal proceedings brought against him in respect
thereof.
(3) Every person who, by reason of his being a director or named
as a director or as having agreed to become a director or of his
having
authorised the issue of the prospectus, becomes liable to make any payment under
this section may recover contribution, as
in the cases of contract, from any
other person who if sued separately would having been liable, to make the same
payment, unless
the person who has become so liable was, and that other person
was not, guilty of fraudulent misrepresentation.
DIVISION 2 - Restrictions on Allotments
Restriction as to allotment
49. (1) No allotment shall be made of any share capital of
a company offered to the public for subscription, unless the following
conditions have been complied with, namely -
(a) the amount (if any) fixed by the Memorandum or Articles and named in the prospectus as the minimum subscription upon which the directors may proceed to allotment ;or
(b) if no amount is so fixed and named, then the whole amount of the share capital so offered for subscription,
has been
subscribed, and the sum payable on application for the amount so fixed and
named, or for the whole amount offered for subscription,
has been paid to and
received by the company.
(2) The amount so fixed and named and the whole
amount aforesaid 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 application on each share less than five per
cent of the nominal amount of the share
(4) Where these conditions have
not been compiled with on the expiration of forty days 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
forty-eight days 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 the forty-eighth
day:
Provided that a director shall not be liable if he proves that the
loss 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 (3), shall not apply to any allotment of shares subsequent to the
first allotment of shares offered
to the public for subscription.
(7) In
the case of the first allotment of share capital payable in cash of a company
which does not issue any invitation to the public
to subscribe for its shares,
no allotment shall be made unless the minimum subscription, that is to
say-
(a) the amount (if any) fixed by the Memorandum or Articles and named in the statement in lieu of prospectus as the minimum subscription upon which the directors may proceed to allotment; or
(b) if no amount is so fixed and named, then the whole amount of the share capital other than that issued or agreed to be issued as fully or partly paid otherwise than in cash,
has been subscribed
and an amount no less than five percent of the nominal amount of each share
payable in cash has been paid to and
received by the company.
(8)
Subsection (7) does not apply to a proprietary company.
Effect of irregular allotment
50. (1) An allotment made by a company to an applicant in
contravention of allotment section 49 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 and shall be so voidable
notwithstanding that the company
is in course of being wound up.
(2) Any director of a company who
knowingly contravenes or permits or authorises the contravention of any of the
provisions of section
49 with respect to allotment 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.
(3)
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.
Restrictions on commencement of business
51. (1) A 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;
(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 or, in case of a company which does not issue a prospectus inviting the pubic to subscribe for its shares, on the shares payable in cash;
(c) there has been filed with the Registrar: a statutory declaration by the secretary or one of the directors, in the prescribed form, that the aforesaid conditions have been complied with; and
(d) in the case of a company which does not issue a prospectus inviting the public to subscribe or its shares, there has been filed with the Registrar a statement in lieu of prospectus.
(2) The
Registrar shall, on the filing of the statutory declaration, certify that the
company is entitled to commence business, and
that certificate shall be
conclusive evidence that the company is so entitled:
Provided that in the
case of a company which does not issue a prospectus inviting the public to
subscribe for its shares, the Registrar
shall not give such a certificate unless
a statement in lieu of prospectus has been filed with him.
(3) 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 day, and on that date it shall become binding.
(4) 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.
(5) Where any company commences business or exercises
borrowing powers in contravention of this section, every person who is
responsible
for the contravention is, without prejudice to any other liability
guilty of an offence.
(6) Nothing in this section shall apply to a
proprietary company.
Requirement as to statement in lieu of prospectus
52. (1) To comply with the requirement of this Act a
statement in lieu of prospectus lodged by or on behalf of a company-
(a) shall be signed by every person who is named therein as a proposed director of the company or by his agent authorised in writing;
(b) shall, subject the provisions contained in Part III of the Fourth Schedule, be in the form of and state the matters specified in Part I of that Schedule and set out the reports specified in Part II of that Schedule;
(c) shall, where the persons making any report specified in Part II of that Schedule have made therein or have, without giving the reasons, indicated therein any such a adjustment as are mentioned in paragraph 5 of that Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefore;
(d) shall, where appropriate, make the disclosure required by section 54(2); and
(e) shall, where appropriate, make the disclosure with respect to commission or brokerage required by section 54(4).
(2) The
Registrar shall not accept for registration any statement in lieu of prospectus
unless it appears to the Registrar to comply
with the requirements of this
Act.
(3) Where in any statement in lieu of prospectus there is any untrue
statement or wilful non-disclosure, any director who signed the
statement is
guilty of an offence unless he proves either that he had reasonable grounds to
believe and did, up to the time of the
delivery for registration of the
statement, believe that the untrue statement was true or the non-disclosure
immaterial.
Return as to allotment
53. (1) Where a company makes an allotment of its shares
the company shall, within one month thereafter, lodge with the Registrar
a
return of the allotment stating -
(a) the number of the shares comprised in the allotment;
(b) the amount (if any) paid, deemed to be paid, or due and payable on the allotment of each share;
(c) if appropriate, the class of shares to which each share comprised in the allotment belongs;
(d) the names and addresses of each of the allottees and the number and if appropriate, class of, shares allotted to him.
(2) Where shares are allotted or deemed
to have been allotted as fully for partly paid up otherwise than in cash, the
company-
(a) shall, if the allotment is made pursuant to a contract in writing, deliver, within one month after the allotment, to the Registrar the contract for registration; or
(b) shall, if the allotment is not so made, deliver, within one month after the allotment, to the Registrar particulars in the prescribed form of the contract evidencing the entitlement of the allottee for registration.
(3) If shares are allotted, or
agreed to be, allotted with a view to all or any of them being offered for sale
(whether by the allottee
or through another person or persons), this section
applies as if the shares had been allotted by the company to the first holders
of them who do not take them with a view to offering them for sale.
(4)
If default is made in complying with this section, the company and every officer
of the company in default is guilty of an offence
DIVISION 3 - Financial Assistance by company in Acquisition of own shares, commission and Discount
54. (1) Subject to this Division, share a person is
acquiring or is proposing to acquire shares in a company, it is not unlawful for
the company or any of its subsidiaries to give financial assistance directly or
indirectly for the purpose of that acquisition before
or at the same time as the
acquisition takes place.
(2) Subject to this Division, where a person has
acquired shares in a company and any Liability has been incurred (by that or any
other person), for the purpose of that acquisition, it is not lawful for the
company or any of its subsidiaries to give financial
assistance directly or
indirectly for the purpose of reducing the liability so incurred.
(3) A
reference in this section to giving financial assistance includes a reference to
doing so by means of the making of a loan,
the giving of a guarantee, the
provision of security, the making of a gift, the release of any obligation, the
cancellation of a
debt or otherwise.
(4) Nothing in subsection (1)
prohibits a company from giving financial assistance for the purpose of an
acquisition of shares in
it or its holding company if-
(a) the company's principal purpose in giving that assistance is not to give it for the purpose of an such acquisition, or the giving of the assistance for that purpose is but an incidental part of some larger purpose of the company; and
(b) the assistance is given in good faith in the interests of the company.
(5) Nothing in subsection (2)
prohibits a company from giving financial assistance if-
(a) the company's principal purpose in giving the assistance is not to reduce or discharge any liability incurred by a person for the purpose of the acquisition of shares in the company or its holding company, or the reduction or discharge of any such liability but is an incidental part of some larger purpose of the company; and
(b) the assistance is given in good faith in the interests of the company.
(6) Nothing in this section prohibits
-
(a) a distribution of a company's assets by way of a dividend lawfully made or a distribution made in the course of the company's winding up;
(b) the allotment of bonus shares;
(c) a reduction of capital confirmed by order of the Court under section 72;
(d) a redemption shares made in accordance with section 66;
(e) anything done in pursuance of an order of the Court under section 196;
(f) anything done under arrangement made in pursuance of section 67 of the Companies (Winding Up) Act; or
(g) anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue of section 84 of the Companies (Winding Up) Act, 1991;
(7) Nothing in this section prohibits-
(a) where the lending f money is part of the ordinary business of the company, the lending of money by the company in the ordinary course of its business;
(b) the provision by a company in accordance with an employee share scheme authorised by special resolution of the company of money for the acquisition of fully paid up shares in the company or its holding company; or
(c) the making by a company of loans to persons (other than directors) employed in good faith by the company with a view to enabling those persons to acquire shares of the company, or of its holding company, to be held by them by way of beneficial ownership.
(8) If a company
contravenes subsection (1) or (2), each officer of the company who is in default
is guilty of an offence.
Payment of commission
55. (1) The
directors of a company acting honestly and in good faith with a view to the best
interests of the company may, subject subsection
(2), authorise payment by the
company of commission 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
absolutely
or conditionally, for any shares in the company.
(2) No
commission shall be paid by a company-
(a) unless a payment of that kind is authorised by the Articles of the company;
(b) of any amount that centum of the price at are issued or the authorised by the Articles, whichever is the less;
(c) unless the amount or rate of the commission is -
(i) in the case of shares offered to the public for subscription, disclosed in the prospectus; and
(ii) in the case of shares not so offered, disclosed in the statement in lieu of prospectus 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 is disclosed in the manner required by paragraph (c).
(3) Except as provided in subsection (1)
or (2), 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, whether the shares
or money are so applied by being added to the purchase
money or any property
acquired by the company or to the contract price of any work to be executed for
the company, or the money is
paid out of the nominal purchase money or contract
price or otherwise.
(4) Nothing in this section affects the powers of a
company to pay brokerage (in addition to or instead of the commission referred
to in subsection (1) as it has heretofore been lawful for a company to pay, but
the amount or rate per centum of the brokerage paid
or agreed to be paid by the
company shall, in the case of shares offered to the public for subscription, be
disclosed in the prospectus
or, in the case of shares not offered to the public
for subscription, be disclosed in the statement in lieu of prospectus and, where
a circular or notice (not being a prospectus) inviting subscriptions for the
shares is issued, also disclosed in the circular notice.
(5) A vendor
to, promoter of, or other person who receives payment in money or shares from, a
company shall have 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 lawful under this
section.
Statement in balance sheet as
to commission
56. (1)
Where a company has paid any sum by way of commission in respect of any shares
in the company, the amounts so paid or so much
thereof as has not been written
off, shall be stated in every balance sheet of the company until the whole
amount thereof has been
written off.
DIVISION 4 - Payment for Shares
Payment for shares issues for cash
57. (1) Subject to section 59 and to this section, the
issue price of shares issued by a company to be paid for in cash shall be paid
to the company within one after they are allotted and may be paid by instalments
if the company so agrees.
(2) If a shareholder fails to pay to a company
an instalment of the issue price in respect of shares held by him within one
month
after the instalment becomes due, the company may serve a written notice
on him stating -
(a) the amount due in respect of the shares;
(b) the date on which it became due; and
(c) that unless the amount is paid within one month after the notice is served, the shares will be forfeited, but without prejudice to the recovery after the forfeiture of any unpaid instalments,
and if the amount is not so paid-
(d) the allotment of he shares shall become void and the shares shall be forfeited to the company;
(e) the company ma recover any instalments of the price which are due but unpaid at the date the allotment is avoided; and
(f) the company is not accountable to the shareholder for instalments of the issue price which have been paid when the allotment of the shares is avoided.
(3) Nothing in this section affects the liability
of a shareholder under section 31.
Arrangement for issue of shares made before incorporation of company
58. (1) Where, by
an arrangement made before its incorporation, any shares of a company are to be
paid for by a consideration other than
cash, the Memorandum of the company shall
state the nature of the consideration, the value of the consideration or its
value in money
terms, and the extend to which the shares to be issued in respect
of it will be credited as paid up.
(2) Subject to subsection (4) in such
a case as is referred to in subsection (1) a report of a qualified accountant,
valuer or surveyor
to the effect that the consideration is worth at least the
amount to be credited as paid up on the shares to be issued in respect
of it
shall be lodged with he Registrar when the Memorandum is so lodged.
(3) A
report shall not be treated as being a report for the purposes of subsection (2)
if it is-
(a) made more than one month before the date on which it is so lodged with the Registrar; or
(b) made by a subscriber to the Memorandum of the company, a proposed director of the company, or a person who is to furnish any consideration in respect of which the report is required or an employee or partner of that person.
(4) Subsection (2) does not apply when
the consideration in question consists of services.
(5) Subsection (2)
does not apply in the case of an arrangement made before the incorporation of a
company which is to be incorporated
as a proprietary company.
Payment for shares issued for consideration other than cash
59. (1) If shares are issued for a consideration other
than cash, the shares shall not be allotted until-
(a) any services constituting the consideration have been performed; or
(b) any asserts constitution consideration have been transferred to the company.
(2) For the purposes of this section, assets
shall be considered as transferred to a company-
(a) in the case of goods, when the ownership passes to the company or when they are delivered to it;
(b) in the case of negotiable instruments, when the company becomes entitled to enforce all the rights embodied in them in its own name without the concurrence of any other person; and
(c) in any other case, when the ownership or lesser rights agreed to be vested in the company are legally vested in it.
Shares issued to subscribers
60. Shares taken
by a subscriber to the Memorandum of a public company in pursuance of an
undertaking of his in pursuance of the Memorandum,
and any premium on the
shares, shall be paid for in cash.
Meaning of payment in cash
61. For the purposes of this Part, shares in payment in a
company are issued for a consideration cash other than cash, except when
they
are to be paid for wholly by legal tender or by a cheque, banker's draft or
banker's cheque, or by setting off a debt which
is owed by the company and is
immediately payable; and in those excepted cases they are issued for a
consideration in cash.
DIVISION 5 - SHARES
Nature of shares
62. Shares in a company are personal estate and shares are
not of the nature of real state, and a share is transferable in the manner
provided in this Act.
Difference in calls and payments etc.
63. A company, if so authorised by its Articles may
-
(a) make arrangement on the issue of shares for a difference between 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; and
(c) pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
Prohibition on allotment of shares at a discount
64. (1) A company's share shall not be allotted at a
discount.
(2) If shares are allotted in contravention of this section,
the allottee is liable to pay the company an amount equal to the amount
of the
discount, with interest at the appropriate rate.
Application of share premium
65. (1) If a company issues shares at 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, called "the share premium
account".
(2) The share premium account may be applied by the company in
paying up issued shares to be allotted to members as fully paid bonus
shares, or
in writing off -
(a) the company's preliminary expenses; or
(b) the expenses of or the commission paid on discount allowed on, any issue of shares or debentures of the company,
or in
providing for the premium payable on redemption of debentures of the
company.
(3) Subject to this section, the provisions of this Act relating
to the reduction of a company's share capital apply as if the share
premium
account were part of the paid up share capital.
Redeemable shares
66. (1) Subject to this section, a company if so
authorised by its Articles, may issue shares which by the terms of the terms of
the
issue will be redeemed or, at the option of the company, or he shareholders,
may be redeemed.
(2) The redemption of shares so issued by a company
shall be effected only on the terms and in the manner stipulated in the Articles
of the company, and if shares are issued which may be redeemed at the option of
the company, the Articles shall state the terms of
the option and in particular
-
(a) the earliest date on which the company may redeem the shares and the latest day by which must redeem them if any such latest date is provided for; and
(b) the manner in which the company will exercise the option, whether by itself selecting shares for redemption or by drawings on ballot of or otherwise.
(3) Notwithstanding anything in the
Articles of a company-
(a) no shares issued as provided in subsection (1) shall be redeemed except out of profits of the company which would otherwise be available for the payment of dividends, or out of the proceeds of a fresh issue of shares made for the purpose of the redemption;
(b) the minimum premium (if any) payable on redemption shall be provided out of profits of the company which would otherwise be available or the payment of dividends before the shares are redeemed, or out of the share premium account;
(c) no shares issued as provided in subsection (1) shall be redeemed unless a statutory declaration is made by the directors of the company in accordance with this Act and lodge with the Registrar for registration, to the effect that there are no grounds for believing -
(i) that the company is, or would after payment be, enable to pay its liabilities as they become due; or
(ii) that the realisable value of the company's assets would, after the redemption, be less than the aggregate of its liabilities, and the amount required to pay the holders or shares that have a right to be paid on a redemption or in a winding up rateably with or prior to the holders of the shares to be redeemed; and
(d) no shares issued as provided in subsection (1) shall be redeemed unless they are fully paid up.
(4) Shares so issued by a
company shall not be redeemed at a price which is in excess of the redemption
price therefore stated in
the Articles of the company or calculated in
accordance with a formula so stated, but without prejudice to the payment of a
premium
on redemption.
(5) The premium (if any) payable on the redemption
shall be provided for out of the share premium account.
(6) Where
redeemable preference shares are redeemed otherwise than out of the proceeds of
a fresh issue of shares, there shall out
of profits that would otherwise have
been available for dividends, be transferred to a reserve called the "capital
redemption reserve"
a sum equal to the nominal amount of the shares redeemed,
and the provision of this Act relating to reduction of the share capital
of a
company shall, except as provided in this section, apply as if the capital
redemption reserve were paid up share capital of
the company.
(7) Shares
redeemed under this section shall be treated as cancelled on redemption, and the
amount of the company's issue share capital
shall be diminished by the nominal
value of those shares accordingly; but the redemption of shares by a company is
not to be taken
as reducing the amount of the company's authorised share
capital.
(8) Without prejudice to subsection (7), where a company is
about to redeem shares, it has power to issue shares up to the nominal
value of
the shares to be, redeemed as if those shares had never been issued.
(9)
The capital redemption reserve may be applied in paying up unissued shares of
the company to be issued to members of the company
as fully paid up bonus
shares.
(10) When a company redeems, any redeemable preference shares, it
shall within thirty days after doing so, lodge with the registrar
a statement
specifying the shares to be redeemed.
(11) If default is made in
complying with subsection (10), the company an every officer of the company who
is in default is guilty of an
offence.
Power of company to alter its share capital
67. (1) A company
may, if so authorised by its Articles, after the conditions of its Memorandum in
any one or more of the following ways,
that is to say -
(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 with shares of larger amount that 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 (but subjected to subsection (2)); or
(e) cancel shares which, at the date of the passing of the resolution to cancel them, have not been taken or agreed to be taken by any person, and diminish the amount of the company's share capital by the amount of the shares so cancelled.
(2) On any subdivision under
subsection (1) (d) the proportion between the amount paid and the amount, if
any, unpaid on each reduced
share must be the same as it was in the case of the
share from which the reduced share is derived.
(3) The power conferred by
this section must be exercised by a company in an annual general meeting and
meet the relevant requirements
of Part I of the Third Schedule.
(4) A
cancellation of shares under this section does not for the purposes of this Act
constitute a reduction of share capital.
Notice to Registrar of consolidation of share capital, etc.
68 (1) If a company has -
(a) consolidated and divided its share capital into shares of larger amount than its existing shares;
(b) converted any shares into stock;
(c) re-converted stock into shares;
(d) subdivided its shares or any of them;
(e) redeemed any redeemable shares; or
(f) cancelled any shares, otherwise than in connection with a reduction of share capital under section 67,
it shall within one month after so doing give
notice thereof to the Registrar specifying, as the case maybe, 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 is guilty of
an
offence.
Notice of increase of share capital
69. (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 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 of
companies together
with the notice a printed 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 is guilty of
an
offence.
Special resolution for reduction of share capital
70. (1) Subject to confirmation by the Court, a company
may, if so authorised by its Articles, by 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.
(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 asserts; 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 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”.
Application to Court for confirming order
71. (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 confirming order involve 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 (3)-
(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 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 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 amount -
(i) if the company admits the full amount of the debt or claim, or, though not for admitting it, is willing to provide for it, then the full amount of the debt or claim; 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 (2) shall not apply
as regards any class or any classes of creditors.
Order confirming reduction, object to etc.
72. (1) The Court, if satisfied, with respect to every
creditor of the company who under section 81 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 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, add to its name as is specified in the order, added 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.
Registration of order
73. (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.
Liability of members in respect of reduced shares
74. (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 of
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 an 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 settle 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.
Penalty for concealing name of creditor
75. If any officer of the company -
(a) wilfully conceals the name of any creditor entitled to object to the reduction;
(b) wilfully misrepresents the nature or amount of the debt or claim of any creditor; or
(c) aids, abets or is privy to any such concealment or misrepresentation as aforesaid,
is guilty of an offence.
Rights of certain holders of shares
76. (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 fifteen
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.
(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.
(3) On any such application the
Court, after hearing the applicant an 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 represented by the
applicant, disallowed the variation and shall,
if not so satisfied, confirm the
variation.
(4) The decision of the Court on any such application is
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.
(6) If default is made in complying with subsection (5) the
company and every officer of the company who is in default is guilty of
an
offence.
(7) The expression "variation" in this section includes
abrogation and expression "varied" shall be construed accordingly.
Validation of shares improperly issued
77. Where a
company has purported to issue or allot shares and the creation, issue or
allotment of those shares was invalid by reason
of any provision of this or any
other enactment of the Memorandum or Articles of the company or otherwise, or
the terms of issue
or allotment were inconsistent with or unauthorised by any
such provision, the Court may, upon application made by the company or
by a
holder or mortgagee of any of those shares or by a creditor of the company, and
upon being satisfied that in all the circumstances
it is just equitable to do
so, make an order validating the issue or allotment of those shares or
confirming the terms of issue or
allotment thereof or both, and upon a copy of
the order being lodged with the Registrar those shares shall be deemed to have
been
validly issued or allotted upon the terms of the issue or allotment
thereof.
DIVISION 6 - Debentures
Cases in which trust deed must be executed and contents of trust deed
78. (1) Every corporation which offers in Tuvalu
debentures to the public for subscript on or purchase shall, before issuing any
of
the debentures, execute a debenture trust deed in respect of them and procure
the execution of the deed by trustees for the debenture
holders appointed by the
deed.
(2) No debenture trust deed shall cover more than one class of
debentures, whether or not the trust deed is required by this section
to be
executed.
(3) Where a trust deed is required to be executed by this
section but has not been executed, the Court, on the application of a debenture
holder concerned, may-
(a) order the corporation to execute a trust deed;
(b) direct that a person nominated by the Court shall be appointed to be trustee; and
(c) give such consequential directions as it thinks fit as to the contents of the trust deed and its execution by the trustee thereof.
(4) For the purposes of this
Act-
(a) debentures belong to different classes if different rights attach to them in respect of-
(i) the rate of, or dates for, payment of interest;
(ii) the dates when, or the instalments by which, the principal of-the debenture will be repaid, unless the difference is solely that the class of debentures will be repaid at different dates during that period of time and particular debentures will be repaid at different dates during that period according to selections made by the company or by drawings, ballot o otherwise;
(iii) any right to subscribe for or convert the debentures into shares in, or other debentures of, the corporation or any other company; or
(iv) the powers of the debenture holders to realise any security,
and debentures further belong to different classes if they do not rank equally for payment when any security invested in the debenture holders under any trust deed-
(v) is realised; or
(vi) when the company is wound up,
that is to say, if, in those circumstances, the subject matter of any such security or the proceeds thereof, or any assets available to satisfy the debentures, is or are not to be applied in satisfying the debentures strictly in proportion to the amount of principal, premiums and arrears of interest to which the holders of them are respectively entitled; and
(b) a debenture is covered by a trust deed if the holder of the debenture is entitled to participate in any money payable by the company under the deed, or is entitled to the benefit of any mortgage, charge or security created by the deed, whether alone or together with other persons.
(5) The directors of a corporation
who are in default are guilty of an offence if the corporation issues debentures
in circumstances
in which this section requires a debenture trust deed to be
executed without such a deed having been executed in compliance with
this
section, or if the company issues debentures under a trust deed which covers two
or more classes of debentures.
(6) Every debenture trust deed, whether
required by this section or not, shall state-
(a) the maximum sum which the corporation may raise by issuing debentures of the same class;
(b) the maximum discount which may be allowed on the issue or re-issue of the debentures, and the maximum premium at which the debentures may be made redeemable;
(c) the nature of any assets over which a mortgage, charge or security is created by the trust deed in favour of the trustee for the benefit of the debenture holders equally, and except where such a charge is a floating charge or a general floating charge, the identity of the assets subject to it;
(d) the nature of any assets over which a mortgage, charge or security has been, or will be created in favour of any person other than the trustee for the benefit of the debenture holders equally, and except where such a charge is a floating charge or a general floating charge, the identity of the assets subject to it;
(e) whether the corporation has created or will have to create any mortgage, charge or security for the benefit of some, but not all, of the holders of debentures issued under the trust deed;
(f) any prohibition or restriction on the power of the corporation to issue debentures or to create mortgages, charges or any security on any of its assets ranking in priority to, or equally with, the debentures issued under the trust deed;
(g) whether the corporation will have power to acquire debentures issued under the trust deed before the date of their redemptions and to re-issue the debentures;
(h) the dates on which interest on the debentures issued under the trust deed will be paid and the manner in which payment will be made;
(i) the date or dates on which the principal of the debentures issued under the trust deed will be repaid, and unless the whole principal is to be repaid to all the debenture holders at the same time, the manner in which redemption will be effected, whether by the payment of equal instalments of principal in respect of each debenture, or by the selection of debentures for redemption by the company, or by drawing, ballot, or otherwise;
(j) in the case of convertible debentures, the dates and terms on which the debentures may be converted into shares and the amounts which will be credited as paid up on those shares, and the dates and terms on which the holders may exercise any right to subscribe for shares in right of the debentures held by them;
(k) the circumstances in which the debenture holders will be entitled to realise any mortgage, charge or security invested in the trustee or any other person for their benefit (other than the circumstances in which they are entitled to do so by this Act);
(l) the powers of the corporation and the trustee to call meetings of the debenture holders, and the rights of debenture holders to require the corporation or the trustee to call such meetings;
(m) whether the rights of debenture holders may be altered or abrogated and, if so, the conditions which must be fulfilled, and the procedure which must be followed, to effect such an alteration or abrogation; and
(n) the amount or rate of remuneration to be paid to the trustee and the period for which it will be paid, and whether it will be paid in priority to the principal, interest and costs in respect of debentures issued under the trust deed.
(7) If debentures are issued without a
covering debenture trust deed being executed, the statements required by
subsection (6) shall
be included in each debenture or in a note forming part of
the same document or endorsed thereon, and in applying that subsection
references therein to the debenture trust deed shall be construed as references
to all or any of the debentures of the same class.
(8) Subsection (7)
does not apply if the debenture is the only debenture of the class to which it
belongs which has been or may be
issued, and the rights of the debenture holder
cannot be altered or abrogated without his consent.
(9) The directors of
a corporation who are in default are guilty of an offence if they issue
debentures under a trust deed which does
not comply with subsection (6), or if
they issue a debenture which should comply with subsection (7) but does not do
so.
(10) Every debenture which is covered by a debenture trust deed shall
state either in the body thereof or in a not forming part of
the same document
or endorsed thereon-
(a) the matters required to be stated in a debenture trust deed by subsection (6) (a), (b), (f), (h), (i.), (j), (l) and (m);
(b) whether the trustee of the covering debenture trust deed holds the mortgages, charges and securities vested in him by the trust deed in trust for the debenture holders equally, or in trust for some only of the debenture holders, and if so, which debenture holders; and
(c) whether the debenture is secured by a general floating charge vested in the trustee of the covering debenture trust deed or in the debenture holders.
(11) A debenture issued by a company shall state
on its face in clearly legible print that it is unsecured if no mortgage, charge
or security is vested in the holder of the debenture or in any other person for
his benefit as security for payment of principal
or interest.
(12) The
directors of a company who are in default are guilty of an offence if the
company issues a debenture which should comply
with subsection (10) or (11) but
does not do so.
Disqualification for appointment as trustee of debenture trust deed
79. (1) A person is not qualified for appointment as a
trustee of a debenture trust deed if-
(a) he is an officer or an employee of the company which issues debentures covered by the trust deed or of a company in the same group of companies as the company so issuing debentures; or
(b) he is less than eighteen years of age, is of unsound mind and has been so found by a Court in Tuvalu or elsewhere or he is an undischarged bankrupt.
(2) If a trustee becomes subject to
any of the disqualifications mentioned in subsection (1), after he has been
appointed, he shall
immediately cease to be qualified to act as a trustee of the
debenture trust deed.
(3) Any person who acts as a trustee of a debenture
trust deed is guilty of an offence if his appointment is invalid under
subsection
(1) or if he is disqualified to act under subsection (2).
Realisation of debenture holder's security
80. (1) Debenture holders are entitled to realise any
security vested in them or in any security vested in them or in any other person
for their benefit if-
(a) the corporation fails to pay any instalment of interest, or the whole or part of the principal or any premium, owing under the debenture or the debenture trust deed covering the debentures, within one month after it becomes due;
(b) the corporation fails to fulfil any of the obligations imposed on it by the debentures or the debenture trust deed;
(c) any circumstances occur which by the terms of the debentures or debenture trust deed entitle the holders of the debentures to realise their security; or
(d) the corporation is wound up.
(2) Debenture
holders whose debentures are secured by a general floating charge vested in
themselves or the trustee of the covering
debenture trust deed or any other
person shall additionally be entitled to realise their security if-
(a) any creditor of the corporation issues a process of execution against any of its assets or commences proceedings for winding up of the company by order of any court of competent jurisdiction;
(b) the corporation ceases to pay its debts as they fall due;
(c) the corporation ceases to carry on business;
(d) the corporation suffers, after the issue of debentures of the class concerned, losses or diminutions in the value of its assets which in the aggregate amount to more than one-half of the total amount owing in respect of debentures whose holders rank before them for payment of principal or interest; or
(e) any circumstances occur which entitle debenture holders who rank for payment of principal or interest in priority to-the debentures secured by the general floating charge to realise their security.
(3) At any time after a class of debenture holders become entitled to realise their security, a receiver of any assets subject to a mortgage, charge or security in favour of the class of debenture holders or the trustee of the covering trust deed or any other person may be appointed-
(a) by that trustee;
(b) by the holders of debentures in respect of which there is owing more than one-half of the total amount owing in respect of all the debentures of the same class; or
(c) by the Court on the application of any trustee or debenture holder of the class concerned.
(4) A receiver appointed
under this section has, subject to any order made by the Court, power to take
possession of the assets subject
to the mortgage, charge or security, and to
sell those assets and, if the mortgage, charge or security extends to such
property,
to collect debts owed to the company, to enforce claims vested in the
company, to compromise, settle and enter into arrangements
in respect of claims
by or against the corporation's business with a view to selling it on the most
favourable terms, to grant or
accept leases of land and licences in respect of
patents, designs, copyright or trademarks, and to recover any instalment unpaid
on the corporation's issued shares.
(5) The remedies given by this
section are in addition to, and not in substitution for, any other powers and
remedies conferred on
the trustee of the debenture trust deed or on the
debenture holders by the debenture trust deed, and any power or remedy which is
expressed in any instrument to be exercisable if the debenture holders become
entitled to realise their security is exercisable on
the occurrence of any of
the events specified in subsection (1), or in the cases of a general floating
charge, in subsection (1)
and (2); but a manager of the business or of any of
the assets of a company may not be appointed for the benefit of debenture
holders
unless a receiver has also been appointed and has not ceased to
act.
(6) No provision in any instrument which purports to exclude or
restrict the remedies given by this section is valid.
Disqualification for appointment as a receiver or manager
81. (1) A person may not be appointed to be a receiver or
manager of any assets of a company, and may not act as such a receiver or
manager, if the person-
(a) is a corporation; or
(b) is disqualified under section 79 from being a trustee of a debenture trust deed executed by the corporation or would be so disqualified if a debenture trust deed had been executed by the corporation.
(2) If a person who was appointed to be a
receiver or manager becomes disqualified from continuing to act under subsection
(1) or
under any provision contained in a debenture or debenture trust deed,
another person may be appointed in his place by the persons
who are entitled to
make the appointment or by the Court, but a receivership shall not terminate to
or be interrupted by the occurrence
of the disqualification.
(3) Any
person who acts as a receiver or manager of any assets of a company while
disqualified by sub-section (1) is guilty of an
offence.
Application to the court
82. A receiver of assets of a corporation appointed under
section 80(3) or 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 to the Court
may give directions, in relation to any particular matter arising in connection
with the performance
of his functions, and on any such application to the Court
may give directions, or may make such order declaring the rights of persons
before the Court or otherwise, or may make such order directing any person to do
or abstain from doing anything, as the Court thinks
just or necessary in the
circumstance
Liability of receivers
83. (1) A receiver of assets of a of corporation under
section 81(3) or under the powers contained in any instrument is 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 is entitled in respect
of that liability to an indemnity out of the assets of which he was appointed to
be receiver; but nothing
in this subsection shall be taken as limiting any right
to an 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.
(2) Where the purported
appointment of a receiver out of Court is invalid because the charge under which
the appointment purported
to be made is invalid or because, in the circumstances
of the case, the powers of appointment under the charge were not exercisable,
the Court may, on application being made to it-
(a) wholly or to such extent as it thinks fit, exempt the receiver from personal liability in respect of anything done or omitted to be done by him which, if the appointment had been valid, would have been properly done or omitted to be done; and
(b) order that the person by whom the purported appointment was made, shall be personally liable to the extent to which such relief has been granted.
Notification of appointment of receiver or manager
84. (1) Where a receiver or manager of any assets of a
corporation has been appointed for the benefit of debenture holders, every
invoice, order for goods or business letter issued by or on behalf of the
company or the receiver or the liquidator of the company,
being a document on or
in which the name of the corporation 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, 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, is
guilty
of an offence.
Power of Court to fix remuneration of receiver or manager
85. (1) The Court may, on an application made by the
liquidator of a company, by remuneration to any person who, under section 80(3)
or under the powers contained in any instrument, has been appointed as receiver
or manager of any assets of the corporation for the
benefit of debenture
holders.
(2) The power of the Court under subsection (1) 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;
(b) be exercisable notwithstanding that the receiver or manager has ceased to act before the making of the order; 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 to account for the excess or such part thereof as may be specified, in the order,
but the power conferred by paragraph
(c) 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 whether by the liquidator
or by the receiver or manager, vary or amend
an order made under subsection
(1).
(4) This section does not apply if the receiver is appointed by the
Court, and the Court fixes his remuneration by the order appointing
him or by a
subsequent order made on his application.
Statement of the company's affairs
86. (1) Where a receiver of the whole, or substantially
the whole, of the assets of a corporation (hereafter in this section and section
87 referred to as "the receiver") is appointed under section 80(3), or under the
powers contained in any instrument, for the benefit
of the holders of any
debentures of the company secured by a general floating charge, then subject to
this section and section 87-
(a) the receiver shall forthwith send notice to the corporation of his appointment;
(b) there shall, within fourteen days after receipt of the notice, or such longer period as may be allowed by the receiver, be made out and submitted to the receiver in accordance with section 87 a statement in the prescribed form as to the affairs of the corporation;
(c) the receiver shall, within two months after receipt of that statement, send-
(i) to the Registrar and, if he was appointed by the Court, 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;
(ii) to the company, a company of those comments or, if he does not see fit to make any comments, a notice to that effect;
(iii) to the trustee of the debenture trust deed covering the debentures in respect of which he was appointed, a copy of the statement and those comments (if any); and
(iv) to the holders of all debentures belonging to the same class as the debentures in respect of which he was appointed, a copy of that 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 of the assets of the corporation, send
to the Registrar, to the trustee
of the trust deed covering the debentures in
respect of which he was appointed, and to the holders of all debentures
belonging to
the same class as the debentures in respect of which he was
appointed, an abstract in the prescribed form showing his receipts and
payments
during that period of twelve months or, where he ceases so to act, and the
aggregate amounts of his receipts and of his
payments during all preceding
periods since his appointment.
(3) Subsection (1) does not apply in
relation to the appointment of a receiver to act with an existing receiver, or
in place of a
receiver dying or ceasing to act, except that, where that
subsection applies to a receiver who dies or ceases to act before it has
been
fully complied with, the references in paragraphs (b) and (c) of that subsection
to the receiver are, subject to subsection
(4), deemed to include references to
his successor and to any continuing receiver.
(4) If the company is being
wound up, this section and section 87 apply notwithstanding
that the receiver and the
liquidator are the same person, but with any necessary modifications arising
from that fact.
(5) Nothing in subsection (2) 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 which, he may be required to do so
apart from that subsection.
(6) If the receiver fails to comply with this
section, he is guilty of an offence.
Contents of statement of affairs, etc.
87. (1) The statement as to the affairs of a corporation
required by section 86 to be submitted to the receiver (or his successor)
shall
show as at the date of the receiver's appointment the particulars of the
corporation's assets, debts and liabilities, the names,
residences and
occupations of its creditors, the securities held by the respectively, the dates
when the securities were respectively
given and such further or other
information as may be prescribed.
(2) The statement of affairs shall be
submitted by, and be verified by the signed declaration of, one, or more than
one, person who
is at the date of the receiver's appointment director, and by
the secretary or joint secretaries at the date of the corporation,
or by such of
the persons hereafter in this subsection mentioned, as the receiver (or his
successor), subject to the direction of
the Registrar, may require to submit and
verify the statement, namely, persons who-
(a) are or have been of officers of the corporation;
(b) have taken part in the formation of the corporation at any time within one year before the date of the receiver's appointment;
(c) are in the employment of corporation, or have been in the employment of the corporation within that year, and are in the opinion of the receiver capable of giving the information required; or
(d) are or have been within that year officers of or in the employment of the corporation which is, or within the said year was, the holding corporation or a subsidiary of the corporation to which the statement relates.
(3) Any person making or verifying
the statement of affairs or any part of it 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 making or verifying of the statement as
the receiver
(or his successor) may consider reasonable, subject to an appeal to the
Court.
(4) Any person who, without lawful excuse, fails to comply with
this section is guilty of an offence.
Enforcement of receiver's duty to make returns
88. (1) If any receiver of any assets of a
corporation-
(a) having made default in filing, or making any return, account or other document or in giving any notice which a receiver is by law or by order of the Court 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 section 92(3) or 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 receipt and payments and to vouch the same and to pay over to the liquidator any amount shown by the accounts payable to him,
the Court may, on an
application made for the purpose, make an order directing the receiver to make
good the default within such time
as may be specified in the order.
(2)
In the case of any default such as is mentioned in paragraph (a) of subsection
(1), an application for the purposes of this section
may be made by any
shareholder, member, creditor or debenture holder of the corporation or by the
Registrar, and in the case of any
default such as is mentioned in paragraph (b)
of that subsection, the application shall be made by the liquidator, and in
either
case the order of the Court made on the application may provide that all
costs of and incidental to the application shall be borne
by the
receiver.
Rights of debenture holders
89. (1) The trustee of a debenture trust deed holds all
contracts, stipulations and undertakings given to him and all mortgages, charges
and securities vested in him in connection with the debentures covered by the
deed, or some of those debentures, exclusively for
the benefit of the debenture
holders concerned (except insofar as the deed otherwise provides), and the
trustee shall exercise due
diligence in respect of the enforcement of those
contracts, stipulations, undertakings, mortgages, charges and securities and the
fulfilment of his functions generally.
(2) A debenture holder may
sue-
(a) the corporation which issued the debentures he holds for payment of any amount payable to him in respect of the debentures; or
(b) the trustee of the debenture trust deed covering the debentures he holds for compensation for any breach of the duties which the trustee owes him, and in any such action it is not necessary for any other debenture holders of the same class, or if the action is brought against the company, the trustee of the covering trust deed, to be joined as a party.
(3) This section applies not
withstanding anything contained in a debenture, debenture trust or debenture
trust deed is valid and
binding on all the debenture holders of the class
concerned insofar as it enables a meeting of the debenture holders by a
resolution
supported by the votes of the holders of at least three-quarters in
value of the debentures of that class in respect of which votes
are cast on the
resolution-
(a) to release any trustee from liability for any breach of his duties to the debenture holders which he has already committed, or generally from liability for all such breaches (without necessarily specifying them) upon his ceasing to be a trustee;
(b) to consent to the alteration or abrogation of any pf the rights, powers or remedies of the debenture holders and the trustee of the debenture trust deed covering their debentures (except the powers and remedies under section 80); or
(c) to consent to the substitution for the debentures by debentures of a different class issued by the corporation or any other corporation, or the cancellation of to debentures in consideration of the issue to the debenture holders of shares credited as fully paid in the corporation or any other corporation.
(4) The trustee of a debenture
trust deed shall comply with section 166(4) in the circumstances referred to
therein.
DIVISION 7 - Titles and Transfers
Transfer of shares and debentures
90. (1) Shares in, or debenture of, a company may be
transferred by a written instrument of transfer debentures signed
by-the transferor and naming the
transferee.
(2) Where an instrument of transfer is prescribed in the
Articles of a company, that instrument shall be used to transfer shares in,
or
debentures-of, the
company.
(3) Subject to Subsection (2), no particular form of words are
necessary to transfer shares or debentures, provided that words are
used which
show with reasonable certainty that the person signing the transfer intends to
vest the title to the shares or debentures
in the transferee.
(4) Subject
to subsection (5), the beneficial ownership of shares in, or debentures of, a
company passes to a transferee-
(a) on the delivery to him of the instrument of transfer signed by the transferor, and the transferor’s share certificate or debenture; or
(b) on the deliver to him of an instrument of transfer signed by the transferor which has been certified by or on behalf of the company.
(5) If the transferor concerned is
not the member of the company in respect of the shares or, as the case may be,
is not the registered
holder of the debentures, subsection (4) has effect as if
references to the transfer signed by the transferor included a reference
to
transfers signed by that member or, as the case may be, registered holder, and
all holders of the shares or, debentures intermediate
between that member and
all the holders of the shares or debentures intermediate between that member or
registered holder and the
transferor.
(6) Notwithstanding subsection (4)
or (5), a company and, in the case of debentures, the trustee of the covering
trust deed shall
not be bound or entitled to treat the transferee of shares or
debentures as the owner of them until the transfer to him has been
registered by
the company or until the Court orders the company to register the transfer to
him, and until the transfer is presented
to the company for registration, the
company shall not be treated as having notice of the transferee's interest
thereunder or of
the fact that the transfer has been made.
(7) This
section applies notwithstanding anything contained in the Memorandum or Articles
of a company, and notwithstanding anything
contained in any debenture trust deed
or debentures or any contract or instrument.
Restriction on transfers
91. (1) No restriction or condition in a debenture trust
deed or in a debenture shall limit the right of any person to transfer a
debenture held by him.
(2) A restriction on the right of a share holder
to transfer his shares in a company contained in the Memorandum or Articles of
the
company shall be invalid if .its effect in any particular case is to limit
the persons to whom, or the times or prices at which,
the shareholder may
transfer his shares so that there is no reasonable likelihood of the shareholder
being able to sell them within
a reasonable time at a fair price.
(3) A
transfer of the shares or debentures of a shareholder or debenture holder of a
company made by his personal representative,
trustee in bankruptcy, or by a
receiver appointed by or for the benefit of debenture holders, or by a receiver
or other person appointed
by the Court to administer the estate of a person of
unsound mind, or by the guardian of a minor, or by a person appointed by the
Court to execute the transfer shall, although the person executing the transfer
is not himself a member of the company or a registered
holder of the debentures,
be as valid as if he had been such a member or registered holder at the time of
the execution of the instrument
of transfer.
(4) Subsection (3) applies
notwithstanding anything contained in the Memorandum or Articles of a company,
and notwithstanding anything,
contained in any trust deed or debenture or any
contract or instrument.
(5) Subsection (1) and (2) of this section do not
apply to a proprietary company.
Certification of transfers
92. (1) A company is under a duty to certificate a
transfer of shares or debenture on the presentation to it of a transfer signed
by the holder thereof accompanied by delivery to it of the share certificate or
debenture in respect of the shares or debentures;
a certification shall consist
of a statement signed on behalf of the company and written or endorsed on the
transfer to the effect
that the share certificate or debenture, as the case may
be, has been delivered to or lodged with the company.
(2) The
certification by a company of any transfer of shares in, or debentures of, the
company shall be taken as 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 transfer, but not as a representation
that the transferor has any title to the shares or debentures.
(3) Where
any person acts on the faith of a false certification by a company made
fraudulently or negligently, the company is liable
to compensate him for any
loss he suffers in consequence thereof.
(4) A company which has
certificated a transfer is liable to compensate any person for loss which he
suffers in consequence of the
company subsequently releasing possession of the
share certificate or debenture in respect of which the certificate was given,
otherwise
than on the surrender of the certified transfer.
(5) For the
purposes of this section-
(a) the certification of an instrument of transfer is deemed to be made by a company if-
(i) the person issuing the certification is a person authorised to issue certificated transfers on the company's behalf; and
(ii) the certification is signed by any other officer or servant either of the company or of a corporation so authorised;
(b) a certificate is deemed to be signed by any person-
(i) if it purports to be authenticated by his signature or initials (whether handwritten or not); and
(ii) unless it is shown that the signature or initials was or were placed there neither by himself nor by any person authorise to use the signature or initials for the purpose of certifying transfers on the company's behalf.
(6) If a company fails to
certificate a transfer and to return it to the person requesting certification
within seven days after receiving
the transfer signed by the holder of the
shares or debentures to which the transfer relates and the share certificate or
debentures
relating to such shares or debentures, the company and every officer
of the company in default is guilty of an offence.
Issue of share certificate and debentures
93. (1) Every company shall, within five weeks after the
allotment of any of its shares or debentures, and within two months after
the
date on which a transfer of any such shares or debentures is presented to the
company for registration, complete and have ready
for delivery to the allottee
or transferee a proper certificate or debenture for the shares or the debentures
allotted or transferred
to him.
(2) If default is made in complying
section, the company and every officer of the company in default is guilty of an
offence.
(3) For the purposes of this section, "transfer" means a
transfer in proper form duly signed by the transferor or transferee otherwise
valid, and does not include a transfer which the company is for any reason
entitled to refuse to register and does not register.
Registration of transfer
94. (1) Notwithstanding anything in the Memorandum or
Articles of a company or in debenture, trust deed or other contract or
instrument,
the company shall not register a transfer of shares in or debentures
of the company unless a transfer in proper and duly signed by
the transferor and
transferee has been delivered to the company, but nothing in this section shall
prejudice any duty of the company
to register as a member or debenture holder of
the company any person to whom the ownership of any shares in or debentures of
the
company has been transmitted by operation of law.
(2)
On. the application of the
transferor of any shares in, or debenture of, a company, the company shall enter
in its register of members
or debenture holders the name of the transferee in
the same manner and subject to the same conditions as if the application for the
entry was made by the transferee.
(3) If a company refuses to register a
transfer of any shares or debentures, the company shall, within five weeks after
the date on
which the transfer was lodged with the company, send to the
transferor and the transferee notice of the refusal setting out in the
notice
the facts which it considers justify the refusal.
(4) Notwithstanding
anything in the Memorandum or Articles of a company or in any debenture, trust
deed or other contract or instrument,
a company (other than a proprietary
company) shall register the trustee in bankruptcy, or the personal
representative of a member
or debenture holder as a member in respect of the
shares or as holder of the debentures of the bankrupt or, as the case may be
the
deceased person, in its register of members or debenture holders, as the
case maybe, with in seven days after he produces to the
company satisfactory
evidence of his title and requests it to register him as a member or debenture
holder.
(5) If default is made in complying with this section, the
company and every director of the company in default is guilty of an
offence.
Effect on registration and share certificate
95. (1) A certificate issued by a company and signed on
its behalf stating that any shares in or debentures of, the company are held
by
any person is prima facie proof of the title of that person to the shares or
debentures.
(2) The registration of a person as a member or debenture
holder of a company, on the issue of a share certificate or debenture,
constitutes
a representation by the company that the person so registered, or
the person named in the share certificate or debenture as entitled
to the shares
or debentures mentioned therein, is entitled to the shares or debentures
mentioned in the register or in the share
certificate or debenture, and the
company is not entitled to deny the truth of that representation as against a
person who believes
it to be true and contracts to acquire the shares or
debentures or any interest therein in good faith and for money or money's
worth.
(3) It is no defence for a company to show for the purposes of
subsection (1) or (2) that a registration of the issues of a share
certificate
or other document was procured by fraud or by the presentation to it of a forged
document.
DIVISION 8 - Registration of Charges
Registration of charges
96. (1) Subject to this Division, where a charge to which
this section applies is created by a company there shall be lodged with
the
Registrar for registration within twenty-eight days after the creation of the
charge a statement of the particulars prescribed
by subsection (4) and-
(a) the instrument (if any) by which the charge is created or evidenced; or
(b) a copy thereof together with a statutory declaration verifying the execution of the charge and also certifying the copy to be a true copy of the instrument,
and if this section is not complied with in relation to the charge the charge is, so far as any security of the company's property or undertaking is thereby conferred, void.
(2) Nothing in subsection (1)
shall prejudice any contract or obligation for repayment of the money secured by
a charge and when a
charge becomes void under this section the money received
thereby shall immediately become payable.
(3) This section applies to
every charge created by a company, including a charge created by the company on
shares in a subsidiary
of the company and held by the company, except-
(a) any pledge of, or possessory lien on, goods;
(b) any charge by way of pledge, deposit, letter of hypothecation or trust receipt, or bills of lading, dock warrants, or other documents of title to goods, or of bills of exchange, promissory notes, or other negotiable securities for money.
(4) Subject to subsection (5) and
(6) statement referred to in subsection (1) shall contain the following
particulars, namely-
(a) the date of creation of the charge;
(b) the nature of the charge;
(c) the amount secured by the charge, or the maximum sum deemed to be secured by the charge in accordance with section 97;
(d) short particulars of the property charged;
(e) the persons entitled to the charge; and
(f) in the case of a floating charge, the nature of any restriction on the power of the company to grant further charges ranking in priority to, or equally with the charge thereby created.
(5) 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
equally is created by a company, it shall be sufficient if there is lodged with
the
Registrar for registration within twenty-eight days after the execution of
the instrument containing the charge or, if there is no
such instrument after
the execution of the first debenture of the series, a statement containing the
following particulars, namely-
(a) the total amount secured by the whole series:
(b) the dates of the resolutions authorising the issue of the series and the date of the covering instrument (if any) by which the security is treated or defined;
(c) the name of the trustee (if any) for the debenture holders;
(d) the particulars specified in subsection (4) (b), (d) and (f) together with-
(e) the instrument containing the charge; or
(f) a copy of the instrument statutory declaration verifying the execution of the instrument and certifying the copy of one of the debentures of the series and a statutory declaration certifying the copy to be a true copy.
(6) For the purposes of subjection (1)
and (5) a certified copy is a copy which has endorsed a certificate to the
effect that it is
a true and complete copy of the original, under the seal of
the company or under the hand of some person interested therein otherwise
than
on behalf of the company.
(7) This section does not affect the provisions
of any other enactment relating to the registration of charges
(8) Where
a charge requiring registration under this section is created before the lapse
of thirty days after the creation of a prior
unregistered charge, and comprises
all or any part of the property comprised in the prior charge, and the
subsequent charge is given
as a security for the same debt as is secured by the
prior charge, or any part of that debt, then to the extent to which the
subsequent
charge is a security for the same debt or part thereof, and so far as
respects the property comprised in the prior charge, the subsequent
charge shall
not be operative or have any validity unless it its proved to the satisfaction
of the Court that, it was given in good
faith for the purpose of correcting some
material error in the prior charge or under other proper circumstances and not
for the purposes
of avoiding or evading the provisions of this Division.
Charge to secure fluctuating amounts
97. (1) When a charge, particulars of which require
registration under section 96, is expressed to secure all sums due or to become
due on or other fluctuating amount, the particulars required under section
96(4)(c) shall state the maximum sum deemed to be secured
by charge, being the
maximum amount covered by the stamp duty paid thereon, and the charge is,
subject to subsection (2), void, so
far as any security on the company's
property is conferred by the charge, as respects any excess over the stated
maximum.
(2) Where-
(a) additional stamp duty is paid on a charge of a kind referred to in subsection(1); and
(b) at any time thereafter prior to commencement of the winding up of the company amended particulars of the charge stating the increased maximum sum deemed to be secured by the charge, together with the original instrument by which the charge was created or evidenced, are lodged with the Registrar for registration,
then, as from the date on which
it is so lodged, the charge, if otherwise valid, is effective to the extent of
the increased maximum
sum except as regards any person who, prior to the date on
which the charge is so lodged, has acquired any proprietary rights in,
or a
fixed or floating charge on, the property subject to the charge.
Charge on property acquired
98. (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 Division, the company shall
cause-
(a) a statement of the particulars prescribed by section 96(4) and of the date of the acquisition of the property; and
(b) the instrument by which the charge was created or is evidenced or a copy thereof, accompanied by a statutory declaration as required by section 96, and certified as provided in subsection (6) of that section, to be lodged with the Registrar for registration within twenty-eight days after the date on which the acquisition is completed.
(2) Failure to
comply with this section does not affect the validity of the charge
concerned.
Duty to register charges
99. (1) Documents and particulars register lodged in the
case of a requirement under-
(a) section 96, by the company concerned or by any person inter documents; and
(b) section 98, by the company concerned,
but if default is made by the company concerned,
in complying with the requirements under either of those sections the company
and
every officer of the company in default is guilty of an offence.
(2)
Any person (other than the company concerned) referred to in subsection (1)(a)
who meets the requirements of section 96 may recover
from the company the amount
of any fees properly payable by the person on the registration.
Register of charges to be kept by the Registrar
100. (1) The Registrar shall keep register of charges to
be kept by Registrar charges lodged for registration under this Division
and
shall enter in the register with respect to those charges the following
particulars, namely-
(a) in any case to which section 96(5) applies, such particular as are required to be contained in a statement lodged under that subsection;
(b) in any case to which section 98 applies, such particulars as are required to be contained in a statement lodged under subsection (1)(a) of that section; and
(c) in any other case, such particulars as are required by section 96(4) to be contained in a statement lodged under that section.
(2) The Registrar shall issue a certificate of every registration stating if applicable, the amount secured by the charge or, in a case referred in section 97, the maximum amount secured by the charge, and the certificates shall be conclusive evidence that the requirements as to registration have been complied with.
Endorsement of certificate of registration on debentures
101. (1) A company shall endorse on every debenture issued
by the certificate of registration on debentures-
(a) a copy of the certificate of registration; or
(b) a statement that the registration has been effected and the date of the registration.
(2) Subsection (1) does not
apply to any debenture issued by a company before the charge was
registered.
(3) Every person who knowingly authorises or permits the
delivery of any debenture which is not endorsed as required by subsection
(1) is
guilty of an offence.
Entries of satisfaction and release of property from charge
102. (1) Where, with respect to any registered charge-
(a) the debt for which the charge was given has been paid or satisfied in whole or in part; or
(b) the property or undertaking charged, or any part thereof, has been released from the charge or has cased to form part of the company's property or undertaking,
the company may lodge with the Registrar in the prescribed form a memorandum of satisfaction in whole or in part, or of the fact that the property or undertaking or any part thereof has been released from the charge or has ceased to form part of the company's property or undertaking, as the case may be, and the Registrar shall enter particulars of that memorandum in the register.
(2)A memorandum of satisfaction must
be supported by evidence sufficient to satisfy the Registrar of the payment,
satisfaction, release
or ceasing referred to in subsection (1).
Rectification of register
103. The Court, on being satisfied that the to register a
charge within the time required or that the omission or mis-statement of
any
particular with respect to any such charge or in a memorandum of satisfaction
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, or that
on other grounds it
is just and equitable to get relief, may, on the application
of the company or any person interested and on such terms and conditions
as
seems to the court just and expedient, order that the time for registration be
extended or that the omission or mis-statement
be rectified.
Copies of charges to be kept by company
104. (1) Every company shall cause a copy of every
instrument creating any charge requiring registration under this Division to be
kept at the registered office of the company, but in the case of a series of
debentures the keeping of a copy of one debenture of
the series shall be
sufficient for the purposes of this subsection.
(2) Every 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 or 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 the names of the persons entitled thereto.
Inspection
105. The copies of instruments and the register of charges
kept in pursuance of section 106 shall be open to the inspection of any
creditor
or member of the company without fee, and the register of any charges shall also
be open to the other person on payment
of such fee, not exceeding five dollars
for each inspection, as is fixed by the company.
Default in complying with section 104
106. If default is made in complying with section 104, the
company and every officer of the company in default is guilty of an
offence.
Registration of enforcement of security
107. (1) Where any person obtains an order for the
appointment of a receiver of any of the property of a company or a points such
a
receiver or enters into possession of such any property under any powers
contained in an charge, notice of the fact in the prescribed
form shall, within
ten days from the date of the order, appointment or entry into possession, be
given by the Registrar who shall
enter the fact in the register of the
particulars of charges relating to the company.
(2) Where any person
appointed receiver of the property of a company ceases to act as such receiver
or where any person having entered
into possession goes out of possession, he
shall, within ten days of so ceasing to act or to remain in possession, give
notice to
that effect in the prescribed form to the Registrar who shall enter
the notice in the register of the particulars of charges relating
to the
company.
(3)Any person (other than the Registrar) who makes default in
complying with any duty imposed on him by subsection (1) or (2) is guilty
of an
offence.
Application to charges created by external company
108. Subject .to section 226, this Division applies to
charges on property; in property in Tuvalu which are created, and to charges
on
property in Tuvalu which is acquired, after the commencement of this Act by an
external company in the same way and with the same
consequences as if the
external company registered under this Act.
PART V - MANAGEMENT AND ADMINISTRATION
DIVISION 1 - Registered office and name
Registered office of a company
109. (1) A company shall at all times having a registered
office of office within Tuvalu to which all communications and notices may
be
addressed.
(2) The intended situation of the registered office of a
proposed company shall be specified in a statement lodged with the Registrar
as
part of the application with respect to the formation of the company.
(3)
Notice in the prescribed form of any change in the situation of a
company’s registered office shall be given to the Registrar
within
fourteen days of the chance.
(4) The Registrar shall record the new
situation of a company's registered office notified to him under subsection (3)
(a).
(5) If default is made in complying with subsection (1) or (3) the
company and every officer of the company in default is guilty of
an
offence.
Publication of company's name
110. (1) Every company-
(a) shall display, and keep displayed, 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 mentioned in legible characters in all letters, communication, notices, advertisements, and other official publications of the company, and in all bills of exchange, cheques, promissory notes, endorsements, and orders for money or goods purporting to be signed by or behalf the company, and in all invoices, receipts and letters of credit of the company;
(c) shall have its name engraved in legible characters on its common seal.
(2) If default is made in complying-
(a) with subsection (1)(a) the company concerned and every officer of the company in default is guilty of an offence;
(b) with subsection (1)(b) or (c), the company concerned is guilty of an offence;
(3) If an officer of a company or any person on its behalf-
(a) uses, or authorises the use of, any seal purporting to be the common seal of the company on which its name is not engraved as required by subsection (1)(c); or
(b) issues, or authorises the issue of, any business letter, communication, notice, advertisement, or other official publication of the company, or signs or authorised to be signed on behalf of the company any bill of exchange, promissory note, cheque or other negotiable instrument or any other order, receipt or letter of credit the name of the company is not required by subsection (1)(b),
he is guilty of an offence, and where he has
signed, issued or authorised to be signed or issued on behalf of the company any
bill
of exchange, promissory note, or any negotiable instrument or any
endorsement thereon or order wherein that name is not so mentioned,
he is, in
addition, liable to the holder of the instrument or order four the amount due
thereon, unless it is paid by the company.
DIVISION 2 - Registers of members, and of debenture holders
Register of members index
111. (1) Every company shall keep a register of its
members and enter therein-
(a) particulars of the names and addresses of the members and a statement of the shares held by each member, distinguish by its number so long as the share has a number, and of the amount paid be considered as paid on the shares of each member.
(b) the date at which the name of each person was entered in the register as a member;
(c) the date at which any person ceased to be a member; and
(d) the date of every allotment of shares to members and the number of shares comprised in each allotment,
not later than five weeks after the
particulars of any matter required to be so entered are available to the
company, but the validity
of any entry is not affected.
(2) The matter
referred to in subsection (1) (c) shall be entered in a separate part of the
register which shall be so made up that
the entries therein against the several
names inscribed therein appear in chronological order.
(3)
Notwithstanding anything in subsection (1), but subject to subsection (2), a
company may keep the names and particulars relating
to persons who have ceased
to be members of the company separately, and the names and particulars relating
to former members need
not be supplied to any person who applies, for a copy of
the register unless he specifically requests the names and particulars of
former
members.
(4) Unless the register of members is in such form as to
constitute in itself an index of the names inscribed in each part of the
register, the company shall keep an index of the names kept in each Part of the
register which shall-
(a) in respect of each name, contain a sufficient indication to enable information inscribed against it to be readily found; and
(b) be kept in the same place as the register.
(5) If default is made in complying with
subsection (1), (2) or (4) the company and every officer of the company in
default is guilty
of an offence.
Where register is to be kept
112. (1) The register of members of a company and index
(if any) shall be kept at the registered office of the company, but -
(a) if the work of making them up is done at another office of the company, within Tuvalu, they may be kept at that other office;
(b) if the company arranges with some other person to make up the register and index (if any) on its behalf they may be kept at the office of that other person at which the work is done if that office is within Tuvalu.
(2) A company shall, within seven days after the
register of members of the company and index (if any) are first kept at an
office
or place other than the registered office of the company, lodge with the
Registrar notice of the office or place where the register
and index (if any)
are kept aid shall, within seven days, after any change in the office or other
place at which the register and
index (if any) are kept lodge with the Registrar
notice of the change.
(3) If default is made in complying with this
section the company and every officer of the company in default is guilty of an
offence.
Inspection of register
113. (1) The register of members of a company and the of
index shall be open to the inspection of any member of register the company
or
the Registrar without charge and of any other person on payment of one dollar or
such lesser sum as the company requires.
(2) Any member of a company or
other person may request the company to furnish him with a copy of the register
of members, or any
part thereof, on payment in advance of one dollar, or such
lesser sum as the company requires, for every hundred words or fractional
part
thereof required to be copied.
(3) Where a request is made to a company
pursuant to subsection (2), the company shall ca se any copy required by the
person concerned
to be sent to the person within the period of ten days
commencing on the day next after the day on which the request is received
by the
company.
(4) If default is made in complying with subsection (3), the
company and every officer of the company in default is guilty of an
offence.
Consequences of default by agent
114. Where, by virtue of section 112(1), the register of
members of a company is kept at the ice of a person of and not at an office
of
the company, and by reason of any default fault of his the company fails to
comply with section 112(1) or (2) or with section
113 or with any requirement
agent of this Act as to the production of the register, that person is liable to
be prosecuted for any
offence, and on conviction to incur the same penalty, as
if he were an officer of the company.
Trusts not to be entered in register of members or debenture
115. (1) Except as provided in this sec ion, no notice not
to be of any trust (express, implied or constructive) shall entered be
entered
by a company in its register of members or in its register of debenture holders
or be receivable by the Registrar, and no
liabilities shall be effected by of
anything done in pursuance of
subsections (2), (3) and members or (4) and the company concerned shall not be
affected with debenture notice of any
trust by reason of anything so done.
(2) Any personal representative of the estate of a deceased person who
was registered in the register of members of a company as the
holder of a share
in the company may become registered as the holder of that share as personal
representative of that estate.
(3) Any personal representative of the
estate of a deceased person who was equitably entitled to a share in a company,
being a share
registered in the register of members of the company may, with the
consent of the company and of the registered holder of he share,
become
registered as the holder of the share as personal representative of that
estate.
(4) A personal representative registered pursuant to subsection
(2) or (3) as the holder of a share is, in respect of that share,
subject to the
same liabilities (and no more) as he would have been subject to if the share had
remained registered in the name of
the deceased person concerned.
(5)
Shares in a company registered in its register of members and held by a trustee
in respect of a particular trust may, with the
consent of the company, be marked
in the register in such a way as to identify them as being held in respect of
the trust.
Register of debenture holders
116. (1) Every corporation which issues, in Tuvalu,
debentures shall keep a register of debenture holders debenture and enter
therein
a statement of holders
(a) the names-and addresses of the debenture holders;
(b) the principal of the debentures held by each of them;
(c) the amount or the highest amount of any premium payable on redemption of the debentures;
(d) the issue price of the debenture, and the amount paid up on the issue price;
(e) the date on which the name of each person was entered on the register as a debenture holder; and
(f) the date on which each person ceased to be a debenture holder.
(2) Section 30(3) applies to debenture
holders as it applies to share holders, but with the substitution of references
to debentures
and debenture holders therein for references to shares and
shareholders, with the substitution of register of debenture holders for
register of members, and with the substitution of registered debenture holders
for the persons mentioned in paragraph (a) thereof.
(3) The provisions of
sections 111(3) and (4), and sections 112, 113 and 114 (with necessary
modifications) apply with respect to
the register of debentures and debenture
holders as they apply with respect to the register of members and shareholders,
and if default
is made in complying with any of those provisions (as so applied)
the company concerned and every officer of the company in default
is guilty of
an offence under any of those provisions with has effect to such a default.
(4) In its application for the purposes of this section, subsection (2)
of section 113 shall be deemed to impose additionally an obligation
(subject to
the conditions in that subsection) on a company to furnish a debenture holder
with a copy of any trustee relating to
or securing any issue of
debentures.
DIVISION 3 - DIRECTORS AND OFFICERS
Minimum number of directors of company
117. (1) Every company shall have at least two
directors.
(2) Where a company has
(a) an even number of directors, not less than half in number; and
(b) an odd number of directors, a majority in number,
of the directors shall be nationals of
Tuvalu.
(3) For the purposes of this section-
(a) a person is a national of Tuvalu if he-
(i)is a citizen or
(ii) has resided in Tuvalu throughout the period of seven years immediately preceding his appointment as a director;
(b) the residence of a person shall be determined in accordance with the law in force in Tuvalu relating to citizenship.
(4) An individual who is a national of Tuvalu
when he is appointed to be a director of a company is not disqualified from
continuing
as a director by reason only of ceasing to be such a national during
the term of his directorship; and a company is not in breach
of the requirements
of subsection (2) if those requirements are not complied with during that term
in relation to the company by
reason of the director so ceasing to be such a
national.
Statement in relation to first directors
118. (1) There shall be lodged with the Registrar in
relation to any part of the application with respect to formation of a company
a
statement in the prescribe form containing the names and relevant particulars of
the persons who are to be the first directors.
(2) The statement required
to be delivered by this section shall be signed by or on behalf of the
subscribers of the Memorandum of
the company and shall contain a consent signed
by the person, to act in the relevant capacity.
(3) The persons named in
the statement required by this section as the directors of the company are, on
the incorporation of the company,
deemed to have been respectively appointed as
the first directors of the company and any appointment by the Memorandum of the
company
delivered to the Registrar of a person as director is void unless he is
named as a director in the statement.
Appointment of directors of public company
119. (1) Subject to this section, a director of company
may be appointed only by ordinary resolution passed at a general meeting of
the
company and for a period not exceeding five years, but a director may be
re-appointed in like manner on any number of occasions
for a period not
exceeding five years on each re-appointment.
(2) Subject to section 118,
the Memorandum of a company may make provision with respect to the appointment
of the first directors
of the company.
(3) The first directors of a
company cease to hold office at the termination of the first annual general
meeting of the company, but
they are eligible for re-appointment under
subsection (1) at that meeting.
(4) If a casual vacancy occurs in the
office of a director, the remaining director or directors may fill the vacancy,
and the person
filling the vacancy ceases to hold office at the termination of
the next succeeding annual general meeting, but is eligible for re-appointment
under subsection (1) at that meeting.
(5) Subject to section 118 and to
subsection (8), any provision in the Memorandum or Articles
of a company by which a director
may be appointed in any other manner than the manner provided by this section is
void.
(6) The Memorandum or Articles of a company or any trust deed,
debentures, agreement or instrument may provide for the appointment
of one
director, or two or more directors (not exceeding in number one-third of the
number of directors for the time being holding
office) by any class of
shareholder or by the debenture holders of the company or by the trustee of the
covering debenture trust
deed.
(7) 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.
(8) The Articles of a company may provide for the 1 automatic
re-appointment of a director at the expiration of his term of office
if no other
person is appointed by a general meeting in his place, but such a director shall
not be automatically re-appointed if
an ordinary resolution for the
re-appointment of the director is defeated.
(9) This section does not
apply to a proprietary company.
Appointment of directors of proprietary company
120. (1) Subject to this section, a director of a
proprietary company may be appointed only by instrument in writing signed by
such
a number, or proportion, of the members of the company as is prescribed in
Articles of the company.
(2) Subject to sections 117 and 118, the
Memorandum of proprietary company may provide of a person or persons to be the
first company
directors of the company
(3) Subject to the Memorandum, a
director of a proprietary company holds office for life unless he resigns the
office of director,
is removed from office or ceases to hold office by re
operation of any provision of this Act.
(4) A director of a proprietary
company wishing to resign his office shall give notice in writing to that effect
to the company, and
the resignation shall have effect, unless withdrawn with the
consent of the company on the expiration of the period of one month
after notice
is so given.
(5) A director of a proprietary company may be removed from
office by instrument in writing signed by the same number, or proportion,
of the
members of the company who, under the Memorandum of the company, are empowered
to appoint a director.
Application of section 119 or 120 where company converts under section 22 or 21
121. (1) Where a public company converts under section 20
to a proprietary company any director or directors holding office immediately
after the conversion, or are deemed to be the first director of the proprietary
company, and section 120 applies accordingly.
(2) Where a proprietary
company converts under section 21 to a public company, any director or directors
holding office immediately
after the conversion is, or are deemed to be a first
director or first directors the public company and section 119 applies
accordingly.
(3) Where, in any case of a kind referred to in subsection
(2), a single director only is deemed to be a first director by reason
of the
operation of that subsection, any other director or directors appointed to meet
the requirements of section 117 (a) is also
deemed to be a first director of the
company, and section 119 applies accordingly.
Disqualification for appointment as director
122. (1) A person-
(a) who is less than eighteen years of age;
(b) who is of unsound mind and has been so found by a Court in Tuvalu or elsewhere;
(c) who is an undischarged bankrupt; or
(d) which is not an individual,
shall not be appointed to be a director of a company.
(2) A person who is trustee of a
debenture trust deed covering debentures issued by a company shall not be
appointed to be a director
of the company or of any company belonging to the
same group of companies as the company.
(3) Where a person is appointed
to be a director of a company and after that appointment any matter arises which
by reason of subsection
(1)(b), or (c) or subsection (2) or (3) would disqualify
him from being, appointed to be a director of the company, he shall, subject
to
subsection (4), forthwith cease to be a director, and in the case of a public
company a casual vacancy in the directorship which
he held shall
occur.
(4) The Court may, on application made under this subsection,
permit a person disqualified by subsection (1)(c) from being appointed
to be a
director, or a person who would but for this subsection cease to be a director
by reason of subsection (3), to be appointed
to be a director of a particular
company or to continue to be such a director, as the case may be, and if a
person is permitted to
be so appointed or to so continue he is deemed not to be
so appointed or to have ceased to be a director by reason of subsection
(3).
(5) Subject to subsection (6), a person who-
(a) is disqualified under subsection (1) from being appointed as a director of a company and who acts as a director while so disqualified; or
(b) ceases by reason of subsection (3) to be a director of a company and who continues to act as a director,
is guilty of an offence.
(6) Subsection (5)
does not apply to a person of a kind referred to in subsection (1)(a) or
(b).
(7) Where any person is disqualified under this section from being
appointed as a director of a company, he shall not, while the disqualification
continues, in any way, whether directly or indirectly be concerned or take part
in the management of a company.
(8) Any person who contravenes subsection
(7) guilty of an offence.
Director's share qualification
123. (1) Unless a company's Articles otherwise provide, a
director of the company need not be a company.
(2) Every director who is
by the Articles required to hold a specified
share qualification and who is not
already qualified shall obtain his qualification within two months after his
appointment or such shorter
period as is fixed by the Articles.
(3)
Unless otherwise provided by the Articles of a company, the qualification of any
director of the company shall be held by him
solely and not as one of several
joint holders.
(4) A director shall vacate his office if he has not
within the period referred to in subsection (2) obtained his qualification or
if
after so obtaining it he ceases at anytime to hold his qualification.
(5)
A person vacating his office under subsection (4) is incapable of being
re-appointed as director until he has obtained his qualification
(6) A
director who fails to vacate his office as required by subsection (4) is guilty
of an offence.
Removal of directors of public company by resolution
124. (1) Subject to this section, a company may by
ordinary resolution remove a director of the company before the expiration of
his
period of office, notwithstanding anything-
(a) in its Memorandum or Articles; or
(b) in any agreement between the director and the company.
(2) A resolution to remove
a, director nay
be passed at an annual general
meeting or at an extraordinary general meeting, and it is immaterial whether the
meeting is called by
the directors, the Registrar or any other person or by
order of the Court, or whether the proposed resolution is included in the
notice
of the meeting at the instance of the directors or any other person.
(3)
The directors who call, or the other person who calls, the general meeting shall
be given written notice of the proposal to the
director whose removal is
proposed at least one month before the general meeting concerned.
(4) If
the director whose removal is proposed makes written representations in respect
of the proposal to the company and requires
notification to be given to members
of the company, the company shall, subject to subsection (5),unless the
representations are received
by it too late for it to do so-
(a) in every notice or advertisement relating to the meeting at which the proposal is to be considered, state the fact of the representations having been made; and
(b) send a copy of the representations to every member, debenture holder or trustee for debenture holders 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 so sent because they were 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 meting.
(5) Copies of
representations of a kind referred to in subsection (4) need not be sent out and
the representations need not be read
out at a meeting, if, on the application
either of the company or of any other person who claims to be aggrieved made
within seven
days after the receipt of the representations by the company, the
Court is satisfied that the rights conferred by this section are
being abused to
secure needless publicity, for
defamatory matter, and on any such application the Court may order the company's
costs on the application to be paid in whole
or in part by the
director.
(6) A vacancy created by the removal of a director under this
section, if, not filled as the meeting at which time he is removed,
may be
filled as a casual vacancy.
(7) A person appointed director in replace of
a person removed under this section shall be treated, for the purpose of
determining
the time at which he or she 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 last appointed a director.
(8) Subject to subsection (9),
nothing in section shall be taken as depriving a person removed under this
section of compensation
or damages payable to him in respect of the termination
of his appointed as director, or of any appointment, office or employment
under
the company which terminates with his appointment as a director, or as
derogating from any power to remove a director which
may exist apart from this
section.
(9) The damages or compensation payable to a director, whether
fixed as liquidated compensation by any agreement entered into by him,
and
whether constituting damages or compensation for breach of any such agreement or
a condition to be fulfilled by the company or
any other person if his
appointment is terminated, shall not exceed three times the average annual
remuneration to which he has been
entitled for his services as a director of the
company or in any other capacity between the time of his appointment or most
recent
re-appointment as a director and the time of his removal.
(10) If
a company-
(a) fails to give written notice of a proposed resolution to remove a director to that director in compliance with subsection (3);
(b) fails in any notice or advertisement relating to the meeting at which the proposed resolution is to be considered to state that representations have been made by the director whose removal is sought (if that is the case);
(c) fails to send a copy of any return representations made by the director whose removal is sought in respect of the proposed resolution to every member, debenture holder and trustee for debenture holders of the company to whom a notice of the meeting at which the proposal is made is sent, or to every shareholder or debenture holder or trustee for debenture holders who makes a written requests for such a copy to be sent to the address given in the written request within two days after the request is received,
the company and any officer of the company who is
in default is guilty of an offence
(11) Where the holders of any class of
shares in the company have exclusive right pursuant to section 132(6) to elect
one, or more
than one, director, a director so elected may be removed only by an
ordinary resolution at a meeting of the shareholders of that
of
class.
(12) Where the holders of debentures, or the trustee of one, or
more than one, trust deed have an exclusive right pursuant to section
119(6) to
elect one, or more than one, director, a director so elected may be removed only
by an ordinary resolution at a meeting
of the debenture holders concerned.
(13) For the purposes of this section, a person shall be deemed to hold
an appointment, office or employment under a company if he
holds it by virtue of
a contract with the company, its holding company or subsidiary under a provision
for the purpose contain in
the articles of incorporation of any such
company.
(14) This section does not apply to proprietary company.
125. (1) Subject to this section, every of a company who is in any way,
whether directly or indirectly, interested in a contract or
proposed contract
with a company shall disclose in writing to the company or request to have
entered in the minutes of' directors
the nature and extent of his
interest.
(2) The requirements of subsection (1) do not apply in any case
where the interest of the officer consists only of being a member
or creditor of
a company which is interested in a contract or proposed contract with the
first-mentioned company if the interest
of the officer may properly be regarded
as not being a material interest.
(3) An officer of a company shall not
to be interested or to have been at any time interested in a contract or
proposed contract by
reason only-
(a) in a case where the contract or proposed contract relates to a loan to the company, that he has guaranteed or joined in guaranteeing the repayment of the loan or any part of the loan;
(b) in a case where the contract or proposed contract has been or will be made with, for the benefit of, or on behalf of, another company which is in the same group as the company of which he is an officer, that he is an officer of that other company; or
(c) that it relates to his remuneration as an officer, or employee of the company or of a company belonging to the same group of companies as the company.
(4) The disclosure required by
subsection (1) shall be made, in the case of a director-
(a) at the meeting at which a proposed contract is first considered;
(b) if the director was not then interested in a proposed contract, at the first meeting after he becomes so interested;
(c) if the director becomes interested after the contract is made, at the first meeting after he becomes so interested; or
(d) if a person who is interest later becomes a director at the first meeting after he becomes a director.
(5) The
disclosure required by subsection (1) shall be made, in the case of an officer
who is not a director-
(a) forthwith after he becomes aware that the contract or proposed contract is to be, or has been, considered at a meeting of directors;
(b) if the officer becomes interested after a contract is made, forthwith after he becomes so interested; or
(c) if a person who is interested later becomes an officer, forthwith after he becomes an officer.
(6) If a contract or
proposed contract with a company is one that, in the ordinary course of the
company’s business, would not
require approval by the directors or
shareholders of the company, an officer shall disclose in writing to the company
or request
to have minutes of meetings of the directors the nature and extent of
his interest forthwith after the officer becomes aware of the
contract or
proposed contract.
(7) A director of a company referred to in subsection
(1) shall not vote on any resolution to approve the contract or proposed
contract
in which he is interested.
(8) For the purposes of this section,
a general notice to the directors of a company by an officer of the company
declaring that he
is an officer (naming the office) 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 a specified company or firm is a sufficient
declaration of interest in relation to any contract
so made or proposed to be
made.
(9) Where an officer of a company fails to disclose an interest in
a contract in accordance with this section in any case in which
this section
applies, the Court, upon the application of the company or a shareholder of the
company, may set aside the contract
on such terms as it thinks fit.
Register of directors
126. (1) A company shall keep at its registered office a
register of its directors.
(2) The register kept by a company pursuant to
subsection (1) shall contain with respect to each director of the
company-
(a) a statement of his present forename and surname, any former fore name, or surname, his usual residential address and his business occupation (if any);
(b) particulars of other directorships held by the director; and
(c) who is, or who is to perform the functions of, a managing director, a statement to that effect.
(3) The register
kept by a particular company need not contain, pursuant to subsection (2)(b),
particulars of directorships held by
a director in any company of which the
particular company is wholly owned subsidiary.
(4) The register kept by a
company pursuant to subsection (1) shall be open to the inspection of a member
of the company without charge,
and of any other person on payment of one dollar,
or such lesser sum as a company requires, for each inspection.
(5) A
company shall lodge with the Registrar within one month after a person ceases to
be director of the company or, except in the
case of a person becoming a
director of the company pursuant to section 118 (3), becomes a director of the
company, a return in the
prescribed form notifying the Registrar of the change
and containing, with respect to each person who is then a director of the
company,
the particulars required to be specified in the register in relation to
him.
(6) A director in respect of whom an entry is required to be made in
the register shall notify the company in writing within seven
days after the
matter occasioning the requirement of the entry occurs or arises, and shall
include in the notification the particulars
which the company is required to
enter in the register in respect of that matter.
(7) A director is guilty
of an offence-
(a) if he fails to comply with subsection (6); or
(b) if he gives false, misleading or incomplete information to any company with a view to it making an entry in its register.
Register of directors' holdings
127 (1) A company
shall keep a register showing the required particulars with respect to any
interest in shares in, or debentures of,-
(a) the company;
(b) any company belonging to the same group of companies as the company;
(c) any associated company of the company,
which is vested in a director of the company or of any company belonging to the same group of companies as the company.
(2) For the purposes of this section, an interest
in shares or debentures is vested in a director if-
(a) the shares or debentures are registered in the director's name, or the names of the director and other persons jointly, or in the name of a nominee for him, or for him and them;
(b) the director has a derivative interest in the shares or debentures, or right or power to acquire a derivative interest in them;
(c) the director has a right the shares or debentures, or another person has a right to subscribe for them and the director has a right to acquire them after they have been allotted;
(d) the shares or debentures are the subject of a voting arrangement in favour of a director, that is to say, an arrangement (whether legally enforceable or not) by which he director may require the holder of the shares or debentures to vote, or not to vote, or to vote in a particular manner, at any general meeting of the company or at any meeting of a class of shareholders or debenture holders, or by which the director may require the older of the shares or debentures to appoint the director or any other person to be his proxy with power to vote in respect of the shares or debentures at any such meeting.
(3) For the purpose of this section,
a company is the associated company of another company if-
(a) the company holds, by its if or its nominee, shares in the other company which entitle the holder of the shares to exercise at least one-fifth of the unrestricted voting rights exercisable at any general meeting of that other company, or if that other company holds, by itself or its nominees, shares in the company which entitle their holder to exercise the same fraction of voting rights at any of its general meetings; or
(b) the other company is the holding company or subsidiary of a third company which is an associated company of the company by virtue of paragraph (a).
(4) For the purposes of subsection (1),
the required particulars with respect to an interest in shares or debentures
vested in a director
are-
(a) the number of classes of the shares and the number, classes and the amount of the principal and premiums payable of the holder of the debentures;
(b) the nature of the interest and its duration (if it is limited in duration);
(c) the date of the acquisition of the interest and the consideration (if any) given by the director or any other person for the acquisition; and
(d) the date of the disposal of by the director or the date of its cessation (whichever first occurs) and the consideration (if any) received by him or any other person for such disposal or cessation.
(5) A director in respect of whom
any entry is required to be made in the register shall notify the company in
writing within seven
days after the matter occasioning the requirement of the
entry occurs or arises, and shall include in the notification the particulars
which the company is required to enter in the register in respect of that
matter.
(6) This section extends to interest debentures vested in a
director at the time when he becomes a director, and subsection (5) applies
in
that case with the substitution of a period of seven days after the director
becomes-a director for the period
of seven days after the matter occasioning the requirement of an entry occurs or
arises.
(7) The register shall be
so made up that entries in it
against the several names recorded in the register appear in chronological
order.
(8) The entries which are required by this section to be made in
the register shall not be removed from the register, notwithstanding
the fact
that respect of whom they are required to be made ceases to be a director, but
it shall not be necessary to make an entry
in the register in respect of a
matter which occurs or arises after he ceases to be a director.
(9)
Sections 112, 113 and 114 with the necessary modifications apply to the register
kept under this section as they apply to the
register of members.
(10)
This section does not apply to an interest of a director which is created by the
Memorandum of a company if the interest is one
which is conferred on all the
shareholders of the company or on all the shareholders of the class concerned,
on the same terms and
conditions, as on the director, that is to say, strictly
in proportion to the shares, or shares of that class, held by them respectively.
(11) A company and every director of a company who is in default is
guilty of an offence -
(a) if the company fails to make an entry required by this section to be made in the register within three days after notification of the matter required to be registered is given to it or any of its directors (other than a person in respect of whom an entry is required to be made) acquires knowledge of the matter in relation to which an entry is required to be made (which ever is the earlier); or
(b) if the company makes a false, misleading or incomplete entry in relation to a matter which is required to be entered in the register.
(12) A director of a company is guilty of an offence if he fails to give a written notice of any matter in compliance with subsection (5) or (6), within the time thereby limited, to every company which is required to make an entry in relation to the matter in the register, or if he gives false, misleading or incomplete information to any such company with a view to it making an entry in its register.
(13) This section does not apply
to proprietary company.
Extension of section 127 to spouses and children
128. (1) For the
purposes of section 27-
(a) an interest of the wife or husband of a director of a company (not being herself or himself a director thereof) in shares or debentures shall be treated as being the director's interest, and so shall an interest of an infant son or infant daughter of a director of a company (not being himself or herself a director thereof) in shares or debentures; and
(b) a contract, assignment or right of subscription entered into, exercised or made by, or grant made to, the wife or husband of a director of a company (not being herself or himself a director thereof) shall be treated as having been entered into, exercised or made by, or as the case may be, as having been made to, the director, and so shall a contract, assignment or right of subscription entered into, exercised or made by, or grant made to, an infant son or infant daughter of a director of a company (not being himself or herself a director thereof).
(2) A director of a company shall be
under obligation to notify the company in writing of the occurrence, while he or
she is director,
of either of the following events, namely-
(a) the grant to his wife or her his or her infant son or infant daughter, by the company, of a right to subscribe for shares in, or debentures of the company; and
(b) the exercise by his wife or her husband or by his or her infant son or daughter right as aforesaid granted by the company to the wife, husband, son or daughter,
stating, in the case of the grant of
a right, the like information as is required by section 141 to be stated by the
director on the
grant to him by another company of a right to subscribe for
shares in, or debentures of, that other company and, in the case of the
exercise, the like information as is required by section 141 to be stated by the
director on the grant to him by another company
of a right to subscribe for
shares in, or debentures of, that other company and, in the case of the exercise
of right, the like information
as is required by that section to be stated by
the director ion the exercise of a right granted to him by another company to
subscribe
for shares in, or debentures of, that other company; and obligation
imposed by this subsection on a director must be fulfilled by
him before the
expiration of the period of five days beginning with the day next following that
on which the occurrence of the event
that gives rise to it comes to his
knowledge.
(3) A person is guilty of an offence if he fails to give a
written notice of any matter in compliance with subsection (2), within
the time
thereby limited, to the company concerned, or if he gives false, misleading or
incomplete information to the company.
(4) In this section, "son" or
"daughter" includes illegitimate son or daughter, and "wife"
“husband” or includes a reputed
wife or reputed husband.
Prohibition of 1oans to directors of public company
129. (1) Subject to this section, no company shall,
whether directly or indirectly, and whether by means of a loan guarantee or the
provision of security or otherwise, give financial assistance-
(a) to any officer of the company or of any company in the same group of companies as the company;
(b) to any corporation in which any director, or any of the directors collectively, hold, personally or by way of nominee, shares which entitle the director or, as the case may be, the directors to exercise at least fifty-one per centum of the unrestricted voting rights at any general meeting of that corporation;
(c).to any subsidiary of a corporation such as is referred to in paragraph (b); or
(d) to an officer of a corporation such as is referred to in paragraph (b) or (c).
(2) Nothing in subsection (1) shall be
taken as prohibiting-
(a) where section 54 applies, the giving of financial assistance to purchase or subscribe for shares when authorised to do so by that section;
(b) where lending money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business;
(c) anything done to provide any person with funds to meet expenditure incurred or to be incurred by him for the purposes of the company so providing those funds; or
(d) the giving of financial assistance to employees of a company (other than directors) to enable or assist them to purchase or erect living accommodation for their own occupation.
(3) Where a company
contravenes this section, any director of the company who authorised the making
of the loan, the entering into
of any guarantee, the provision of any security
or the doing of any other thing, which constitutes the offence is guilty of an
of
an offence.
(4) The prohibition in subsection (1) against giving
financial assistance to an officer a company or corporation extends to giving
any such financial assistance to the family of an officer and, for that
purpose-
(a) the family of an officer includes the wife or husband (or reputed wife or husband), the parents and any children (whether legitimate or illegitimate), of the officer; and
(b) this section (with the necessary modifications) applies accordingly.
(5) Nothing in this section
operates to prevent a company from recovering the amount of any financial
assistance given, for which
the company became liable under any guarantee
entered into or security given, contrary to this section.
(6) This
section does not apply in the case of financial assistance given by a
proprietary company.
Prohibition of loans to directors of proprietary company, etc.
130. (1) Subject to this section, no proprietary company
shall, whether directly or indirectly and whether by mean of a loan, guarantee
or the provision of security or otherwise, give financial assistance to any
officer of the company.
(2) Nothing in subsection (1) shall be taken as
prohibiting the giving of financial assistance to an officer of a proprietary
company-
(a) if all the members of the company agree in writing to the company to do so or the giving of the financial assistance has been approved by a special resolution of the company; and
(b) there are reasonable grounds for believing that-
(i) the company would, after giving the loan or meeting any other liability which might be required to meet as a result of giving the financial assistance, be, able to pay its liabilities s they become due; or
(ii) the realisable value of the company’s assets would, notwithstanding the giving of the loan or the meeting of any other liability which it might be required to meet as a result of giving the financial assistance, be greater than the aggregate of its assets and stated capital.
(3) Nothing in
subsection (1) shall be taken as prohibiting the giving of financial assistance
or the doing of anything in any of
the circumstances referred to in section
129(2)(a), (c) or (d).
(4) Where a proprietary company contravenes this
section, any director of the company who authorised the making of the loan, the
entering
into of any guarantee, the provision of any security or the doing of
any other thing, which constitutes the offence is guilty of
an
offence.
(5) The prohibition in subsection (1) against giving financial
assistance to an officer of a proprietary company extends to the giving
of any
such financial assistance to the family of an officer, and for that
purpose-
(a) the family of an officer includes the persons referred to in subsection 129 (4) (a); and
(b) this section (with the necessary modifications) applies accordingly;
(6) Nothing in this section
operates to prevent a company from recovering the amount of any financial
assistance given contrary to
this section.
Directors' remuneration
131. (1) subject to subsection (2), no remuneration shall
be paid to a director of a company unless the amount or rate thereof is
specified in the Memorandum or Articles of the company or in a written service
agreement between the company and the director which
has been authorised or
approved by a general meeting of the company.
(2) If a written service
agreement between a company and a director of the company is entered into
without the authorisation of a
general meeting, remuneration may be paid under
the agreement to the director for a period not exceeding six months until the
remuneration
is approved by a general meeting, but if such approval is refused
no remuneration for a period prior to the refusal is recoverable
by the
company.
(3) No payment shall be made by a company as a pension or
retirement benefit;
(a) to an officer or former officer of the company as a pension or retirement benefit;
(b) to an officer or former officer of the company for loss of his office, or of any office in connection with the management of the company's affairs, or of any office in connection with the management of any subsidiary of the company, or as consideration for or in connection with his retirement from any such office;
(c) to a dependent of, or to a person nominated by, or to the estate of an officer or former officer of the company by way of a pension or a provision; or
(d) to any person in return for an undertaking to provide any benefit falling within the foregoing paragraphs,
unless the payment is previously authorised by an ordinary resolution passed at a general meeting of the company or unless the payment is provided for by a written service agreement between the company and the officer or former officer and the term relating to the payment has been approved by an ordinary resolution passed at a general meeting before, or within six months after, the agreement is entered into.
(4) No payment to which this
section applies shall be made by a company free of income tax, or otherwise
calculated by reference to,
or varying with, the amount of income tax payable by
any person o to or with any specified rate of income tax and the payment to
be
made shall be a gross sum subject to income tax equal to the net sum for which
the Memorandum or Articles of the company or any
resolution or contract in
respect of payment, actually provides-
(5) In this section-
"dependent" includes any person (whether related to an officer or former officer or not) who is entitled to any benefit or advantage under a contract, trust, scheme or arrangement to which the company is a party by reason of the person's connection with the officer or former officer;
"income tax" means any tax imposed on, and calculated by reference to the amount of the income of, a person by the law of Tuvalu or any other country;
"pension" includes any superannuation allowance, superannuation gratuity or similar payment;
"provision" includes any payment of money to, or the conferment of any benefit on, the recipient whether on one occasion or on two or more successive occasions
"remuneration" includes salary, fees, commission, share or percentage of profits, expenses allowance and any other form of emolument whether in cash or not, relating to services as a director of a company or any of its subsidiaries.
(6) Nothing in this section
operates to enable a company or any other person to recover any premium paid by
a company to secure the
provision of any benefit falling within paragraph (a),
(b) or (c) of subsection (3), but any sum paid or the value of any benefit
conferred under any of those paragraph by the person to whom the premium is paid
is recoverable by the company from the recipient
if subsection (3) has not been
complied with.
Compensation for loss of office by a director on transfer of company's undertaking
132. (1) A company shall not, in connection with the
transfer of the whole or any part of the undertaking or property of the company,
make any payment to a director or former director of the company by way of
compensation for loss of his office, or of any office
in connection with the
management of the company's affairs, or of any office in connection with the
management of any subsidiary
of the company, or as consideration for or in
connection with his retirement from any such office, unless particulars with
respect
to the proposed payment (including the amount thereof) have been
disclosed to the shareholders of the company and the proposal has
been approved
by the company by an ordinary resolution passed in a general meeting.
(2)
Where a payment which is prohibited by this section is made to a director or
former director of a company, the amount received
shall be deemed to have been
received by the director or former director in trust for the company and may be
recovered by it from
the director as a debt immediately due and
payable.
(3) Particulars of a proposed payment to a director or former
director within this section shall be sufficiently disclosed to shareholders
of
the company if the particulars are included in or accompany the notice calling
the general meeting and any advertisement of the
meeting published by the
company.
Contravention of section 132
133. Where any person makes or receives a payment, or a
director or former director of a company acquiesces in the making of a payment,
which is prohibited by section 132, he is guilty of an offence.
Provisions supplementary to section 132
134. (1) Where in proceedings for the recovery of any
payment as having, by virtue of section 132, been received by a director or
former director, or officer or former officer, in trust, it is shown-
(a) that 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 was made; and
(b) the company or any person to whom the transfer was made was privy to that agreement, the payment is deemed, unless the contrary is proved, to be one to which section 132 applies.
(2) Where, in
connection with a transfer such as is referred to in section 132,-
(a) the price to be paid to a director 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 like shares in the company; or
(b) any valuable consideration is paid to any such director,
the excess of the price or, as the case may be, the money value of the consideration is, for the purposes of section 132, deemed to have been a payment made by way of compensation for loss of office or as consideration for or in connection with his retirement from office.
(3) References to sections 131 and 132
to payments made to any officer or former officer, or director or former
director, of a company
by way of compensation for loss of office, or as
consideration for or in connection with his retirement from officer do not
include
bona fide payments by way of damages (not exceeding the amount specified
in section 124(9) or by way of pension in respect of past
services; for the
purpose of this subsection, “pension” includes any superannuation
allowance, superannuation gratuity
or similar payment.
Validity of acts of officers
135. An act of an officer of a company in the ordinary
course of the business of the company is valid notwithstanding any defect in
his
election, appointment or
qualification.
136.
(1) The directors of a company are responsible for the management of the
business and affairs of the company.
(2) Every officer of a
company in exercising his powers and performing his duties shall-
(a) act honestly and in good faith with a view to the best interests of the company;
(b) exercise the care, diligence and skill that reasonably prudent person would exercise in comparable circumstances; and
(c) comply with this Act, the Regulations and the Memorandum and Articles of the company.
(3) No information about the business
or affairs of a company shall be disclosed by an officer of the company
except-
(a) for the purposes of the exercise or performance of his functions as an officer;
(b) for the purposes of any legal proceedings;
(c) pursuant to the requirements of any enactment; or
(d) when authorised by the company.
(4) In determining in any case whether or not a
director (other than a managing director or a director who performs executive
functions)
has complied with the requirements of subsection (2)(b), regard shall
be had to his general knowledge and experience, and the reference
in subsection
(2)(b) to a reasonably prudent person shall, for that purpose, be taken to be a
reference to a reasonably prudent person
having that knowledge and
experience.
(5) The director or directors of a company shall be deemed to
be acting in accordance with the requirement of subsection (2) (a) if,
in the
exercise of his or their powers, he or they make reasonable provision with
respect to the welfare of employees, or former
employees, of the
company.
Directors liability
137. (1) Where shares in a company are allotted for a
consideration other than cash, directors who voted for or consented to the
resolution
referred to in section 59(1) (a) passed in relation to those shares
are jointly and severally liable to the company to make good
any amount by
which, to their knowledge, the consideration is less than the fair equivalent of
the cash that the company would have
received if the shares had been allotted
for cash on the date of the resolution.
(2) Directors of a company who
vote for or consent to a resolution to authorising-
(a) a commission contrary to section 55; or
(b) financial assistance contrary to section 54, 129 or 130,
are jointly and severally liable to
restore to the company any amounts so distributed or paid and not otherwise
recovered by the company.
(3) A director of a company who has satisfied
a judgment rendered under this section is entitled to contributions from the
other directors
who voted for or consented to the unlawful act upon which the
judgment was founded.
(4) A director of a company liable under subsection
(2) to restore any amount to the company may apply to the Court for an order
compelling
a shareholder or other recipient to pay or deliver to the director
any money or property that was paid or distributed to the shareholder
or other
recipient contrary to section 63, 129 or 130
(5) In connection with an
application under subsection (4), the Court may, if it is satisfied that it is
equitable to do so-
(a) order a shareholder or other recipient to deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 129 or 130;
(b) order a company to return or issue shares to a person from whom the company has purchased, redeemed or otherwise acquired shares; or
(c) make any further order it thinks fit.
(6)
A director of a company is not liable under subsection (1) if he proves that he
did not know and could not reasonably have known
that the share was issued for a
consideration less than the fair equivalent of the money which the company would
have received if
the share had been issued for cash.
(7) An action to
enforce a liability imposed by this section may not be commenced after two years
from the date of the resolution
authorising the action complained of.
Exemption from liability
138. (1) Subject to subsection (2), any provision, whether
contained in the Memorandum or Articles of a company, in any contract with
a
company or otherwise, or in any resolution of a company or purporting to exempt
any officer, or the auditor of the company, or
purporting to indemnify any such
person against, liability in respect of any negligence, default, breach of duty
or breach of trust
of which he may be guilty in relation to the company, is
void.
(2) Notwithstanding subsection (1), a company may, in pursuance of
its articles of incorporation or otherwise, indemnify any officer
or the auditor
of the company against any liability incurred by him in defending any
proceedings (whether civil or criminal) in which
judgement is given in his
favour or in which he is acquitted or in connection with any application in
relation thereto in which relief
is granted to him by the Court under this
Act.
Limitation on exemption of director from liability
139. The resignation of a director of a company does not
itself release the person from his duties as an officer of the company unless,
in all the circumstances of the case, it is reasonable for the person to assume
that, having notified the company of his resignation,
company will lodge with
the Registrar the appropriate turn under section 126.
Relief from liability by order of the court
140. (1) In proceedings in a Court to enforce against an
officer any liability-
(a) under section 136 or 137 arising in respect of, or as a result of, anything done or omitted to be done by him; or
(b) in respect of any negligence, default, breach of duty or breach of trust, otherwise arising in relation to him as such an officer, the court may relieve the officer, either wholly or partly on such terms as the court thinks fit, of liability if the officer proves-
(c) in proceedings in respect of any liability referred to in paragraph (a), that in doing or omitting to do the thing concerned he honestly and reasonably relied-
(i) upon financial statements of the company or in a written report of the auditor of the company fairly to reflect the financial condition of; or
(ii) upon a report of an expert; or
(d) in proceedings in respect any liability referred to in paragraph (b), that he 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 or breach, as the case may be.
(2) Where any officer of a company has
reason to apprehend that any claim will, or may be, made against him in respect
of any negligence,
default or breach of duty (arising otherwise than under
section 136 or 137) he may apply to the Court for relief, and the Court on
the
application has the same power to relieve him as it would have under this
section in proceeding before the Court against the
person for any such
negligence, default or breach of duty.
DIVISION 4 - Meetings and Proceedings
Annual General Meeting
141. (1) Subject to subsection (2) and section 142, a
company shall hold an annual general meeting-
(a) not later than eighteen months after the company comes into existence; and
(b) thereafter, at least once in every calendar year and not later than fifteen months after the holding of the last preceding annual meeting.
(2) The Minister may, on application
made by a company in accordance with a resolution of the directors and signed by
a director or
secretary, on payment of the prescribed fee and subject to such
conditions and directions as the Minister thinks fit to impose or
give,-
(a) extend the period of eighteen or fifteen months referred to in subsection (1); and
(b) permit an annual general meeting to be held in a calendar year other than the calendar year in which it would otherwise be required by subsection (1) to be held,
and a company is not in default under subsection (1) if it holds an annual general meeting within the period so extended or in accordance with any such permission.
(3) An application by a company
for an extension of a period or for permission under subsection
(2,) shall be made before the
.expiration of the period or of the
calendar year in which the annual general meeting would otherwise be required to
be held as the case may be.
(4) Where in a calendar year (other than the
year of its incorporation or the following year) a company does not hold an
annual general
meeting, an annual general meeting of the company shall, for the
purposes of calculating the period within which the next annual
general meeting
is, under subsection (1), required to be, held, be deemed to have been held on
the thirty-first of December in that
calendar year unless the Registrar
otherwise directs or on such other date in that calendar year as the Registrar
determines.
(5) If default is made in holding an annual general meeting
under this section or in complying with any conditions of the Minister
under
subsection (2)-
(a) the company and every officer of the company in default is guilty of an offence; and
(b) the Minister may of his own motion or on the application of any member of the company order a general meeting to be held.
(6) If default is made in complying with
an order made under subsection (5)(b), the Court may, on the application of the
Minister,
order that company to be wound up.
Circumstances in which proprietary company need not hold annual general meeting
142. (1) The Articles of a proprietary company may provide
that it need not hold an annual general meeting in any year if-
(a) copies of its balance sheet, profit and loss account, directors' annual report and auditors' report in respect of that year, are sent to every shareholder and debenture holder of the company at least eight weeks before the latest date by which the company is required by section 141 to hold an annual general meeting; and
(b) no shareholder or debenture holder has, at least four weeks before that latest date, served a written notice on the company requiring it to hold an annual general meeting.
(2) Where a
proprietary company, pursuant to its Articles and subsection (1), does not hold
an annual general meeting, sections 141,
147, 149 to 154, 158, 166, and 176(3)
do not apply in respect of the annual general meeting or the accounts and
reports which this
Act requires to be laid before the annua1 general meeting for
the year in question.
Extraordinary general meetings and requisitions of meetings
143. (1) A general meeting of the company which is not an
annual general meeting is in this Act called an extraordinary general meeting.
(2) The directors of a company, notwithstanding anything in its
Memorandum or Articles shall, on the requisition of members of the
company
holding at the date of the deposit of the requisition not less than, one-tenth
of unrestricted voting rights at general meetings
of the company, forthwith
proceed duly to convene an extraordinary general meeting of the
company.
(3) The directors of a company, notwithstanding anything in its
Memorandum or Articles, shall, on the requisition of shareholders
holding at the
date pf the deposit of the requisition not less than one-tenth of all issued and
outstanding shares of any class,
forthwith proceed duly to convene a meeting of
that class of shareholders.
(4) The trustee of a debenture trust deed,
notwithstanding anything contained therein or in any debenture or in any
contract or instrument,
shall, on the requisition of persons holdings at the
date of the deposit of the requisition debenture covered by the trust deed which
carry not less than one–tenth of the total voting rights attached to all
the issued outstanding debentures of that class, forthwith
proceed duly to
convene a meeting of that class of debenture holders.
(5) The requisition
shall state the objects of the meeting and shall 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.
(6) If the directors or trustee for debenture holders do
not or does not within twenty-one days after the date of the deposit of the
requisition proceed duly to convene a meeting to be held not later than
twenty-eight days after the meeting is convened, any one
or more of the
requisitionists may convene a meeting to transact the business specified in the
requisition, but any meeting so convened
shall not be held after the expiration
of six months from that date.
(7) A meeting convened under this section
by any one or more of the requisitionists shall be in the same manner, as nearly
as possible,
as that in which meetings are to be convened by directors by any
convened by directors.
(8) Any reasonable expenses incurred by the
requisitionists by reason of the failure of directors or trustee for debenture
holders
duly to convene a meeting shall be paid to the requisitionists by the
company by way of fees or other remuneration in respect of
their services to
such of the directors or trustees for debenture holders as were in
default.
(9) If the directors or trustee for debenture holders fail to
convene a meeting in compliance with this section, each of them is guilty
of an
offence.
Ordinary and special resolutions
144. (1) Business shall be transacted at general meetings
of a company by ordinary resolution, unless this Act or the Articles of
incorporation or by-laws of the company, require a special
resolution.
(2) All business which cannot be transacted at a general
meeting of a company by an ordinary resolution shall, subject to the provisions
of this Act, be transacted by special resolution, and no provision in the
Memorandum or Articles of the company requiring or permitting
the business to be
transacted in any other way is valid.
(3) A resolution is passed as an
ordinary resolution if it is proposed as such, and of the votes which are cast
in favour of and against
the resolution more votes are cast in favour of the
resolution than are cast against it.
(4) A resolution is passed as a
special resolution if it is proposed as such and not less than three- quarters
of the votes which
are cast are cast in favour of it.
(5) Nothing in this
section affects any provision in the Articles of a proprietary company making
the passing of any resolution, or
the effectiveness of any resolution, or the
doing of any act, conditional on one or more named persons consenting thereunto.
145.
(1) Any provision of a company's Memorandum or Articles is void in so far as it
provides for the calling of a meeting of the company
(other than an adjourned
meeting) by a shorter notice than-
(a) in the case of the annual general meeting or a meeting for the passing of a special resolution, twenty-one days' notice in writing; and
(b) in the case of any other meeting, fourteen days' notice in writing.
(2) A meeting of the company (other
than an adjourned meeting) shall, unless the Memorandum or Articles require
longer notice, be
called-
(a) in the case of the annual general meeting or a meeting called to pass a special resolution (with or without other business), by twenty-one days' notice in writing; and
(b) in the case of any other meeting, by fourteen days' notice in writing.
(3) A meeting of a company shall, notwithstanding that it is called by shorter notice than that required by subsection (2) or the company's Memorandum or Articles, be deemed to have been duly called if it is so agreed-
(a) in the case of a meeting called as an annual general meeting, by all members entitled to attend and vote at the meeting; or
(b) in the case of any other meeting, by a majority in 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 centum of the unrestricted voting rights exercisable at the meeting.
(4) Subject to subsection (5), general meetings
of a company shall be held at the place within Tuvalu provided in the Articles
of
the company or, in the absence of such provision, at the place within Tuvalu
that the directors of the company determine.
(5) A general meeting of a
company may be held outside Tuvalu if all the shareholders holders or debenture
holders entitled to attend
and vote at the meeting so agree; and a shareholder
or debenture holder who attends such a general meeting may not object except
where he attends the meeting to object to the transaction at the meeting of
business on the ground that it is not being lawfully
held.
Power of Court to order meeting
146.(1) If for any reason it is impracticable to a meeting
of a company in any manner in which meeting of the company may be called
or to
conduct the meeting of the company in a manner prescribed by the Memorandum and
Articles of the company or by this Act the
Court may, either on its own motion
or on the application of any director or member of the company, of any debenture
holder who would
be entitled to vote at the meeting, order a meeting to be
called, held an conducted in such manner as the Court thinks fit, and it
may
give such ancillary or consequential directions as it thinks expedient,
including a direction that one member 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 made pursuant to this section is for all
purposes deemed to
be a meeting duly called, held and conducted.
Contents of notice calling a meeting
147. (1) Except
in the case of the meeting called under section 146, the notice calling a
meeting of a company shall contain in clearly
legible print or type-
(a) a statement identifying the type of meeting involved and, in, the case of a meeting of a class of shareholders or debenture holders, identifying that class;
(b) a statement of the time and place of the meeting;
(c) a statement of the business to be transacted at the meeting, in sufficient detail to permit a person entitled to attend and vote at the meeting to form a reasoned judgement thereon;
(d) the text of any resolution, other than a procedural resolution, to be proposed at the meeting and a statement whether the resolution will be proposed as an ordinary or special resolution;
(e) where applicable, a statement drawing attention to the proxy form sent pursuant to section 144(5) with the notice and indicating briefly the entitlement in relation to proxies;
(f) if the Memorandum or Articles of the company provide for or, in the case of a meeting of debenture holders permit, postal voting, a statement that any person entitled to attend and vote at the meeting may vote by posts;
(g) a statement that all appointments of proxies and postal votes must be delivered to the company not later than forty-eight hours before the time at which the meeting will commence or if they, are to be effective at any adjournment of the meeting, not later than forty-eight hours before the time at which the adjourned meeting is to commence;
(h) where applicable a statement of any material interest of directors, or any directors, (in whatever capacity) relevant to the resolution and the effect on that interest of the resolution in so far as the effect is different from the effect of the resolution on the interest of persons not having that material interest.
(2) If a resolution incorporates the
terms of any contract, arrangement or document as part thereof, the notice
calling the meeting
at which the resolution is proposed shall be accompanied by
a copy the contract, arrangement or document or by a statement of the
terms of
the contract or arrangement if it is not in writing.
(3) For the purposes
of this section, a procedural resolution is a resolution-
(a) declaring a dividend;
(b) approving or rejecting the annual accounts of the company or the directors' or auditors’ report; or
(c) to elect a chairman of a meeting, to adjourn or terminate a meeting, to terminate discussion on a proposed resolution or an amendment thereto, or to take a vote on any matter without further discussion.
Circulation of proposed resolutions, etc
148. (1) Subject
to this section, a company shall, on the requisition in writing of such number
of persons as is specified in subsection
(2) and (unless the otherwise resolves)
at the expense of the requisitionists-
(a) give to members of the company notice of any resolution which may properly be moved and is intended to be moved at any general meeting;
(b) circulate to members any statement of not more than three thousand words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting;
(c) circulate to shareholders or debenture holders of any class a statement of not more than three thousand words with respect to the matter referred to in any resolutions to be proposed or the business to be dealt with, at any meeting of shareholders or debenture holders of that class, as the case may be.
(2) The number of members, shareholders or
debenture holders, as the case may be, necessary for requisitions under
subsection (1)
is-
(a) any number of members, share holders or debenture holders, as the case may be, representing not less than twenty-one of the total voting rights of all the members, shareholders or debenture holders, as the case may be, having at the date of the requisition of the right to vote at the meeting to which the requisition relates;
(b) not less than ten per centum of the number of the shareholders or, in the case of a meeting of a class of shareholders, not less than ten per centum of the shareholders of that class, in the company;
(c) in the case of a meeting of a class of debenture holders, not less than twenty-five debentures of the class concerned on which there has been paid up an average sum, per debenture holder, of not less than three hundred dollars; or
(d) not less than ten per, centum of the members, shareholders or debenture holders, as the case may be, holding shares in the company on which there has been paid up an average sum, per member, shareholder or debenture holder, as the case may be, of not less than three hundred dollars.
(3) A company is
not 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 expenses in giving effect thereto;
but if, after a copy of a requisition
requiring notice of a resolution has been deposited at the registered office of
the company,
a meeting o f the kind to which the requisition relates 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
have been properly deposited for the
purposes thereof.
(4) The company
is not bound under this section to circulate any statement if, on an application
made within seven days after the
deposit of the requisition; either by the
company or by 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 or applicant'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.
(5) This section applies notwithstanding anything contained
in the Articles of incorporation or by-laws or in a debenture trust deed
or any
debentures or in any other contract or instrument.
(6) If default is made
in complying with this section, the company and every officer of the company in
default is guilty of an offence.
Persons to whom notice of meetings is to be given
149. (1) Notice of all general meetings shall be given to
every member of the company, whether he is entitled to attend and vote at
the
meeting or not.
(2) Notice shall be given to the Registrar of all
meetings of a public company at which accounts are to given be
considered.
(3) Notice of all meetings of a class of shareholders or
debenture holders shall be given to all shareholders or debenture holders
of the
class concerned.
(4) A notice of a meeting and all documents required by
sections 147(2) and (3) and 148(1) to be sent to a member, shareholder or
debenture holder shall either be delivered to that person or sent to him by
pre-paid post to his most recent address in Tuvalu appearing
in the register of
members or, as the case may be, the register of debenture holders or to the most
recent address in the Island
supplied by him to the company for the giving of
notices to him.
(5) Where the Memorandum or Articles of a company, a
debenture trust deed or debentures, or any other contract or instrument provide
that a meeting may be valid, notwithstanding an omission to give notice of the
meeting to a person entitled to receive it, any resolution
passed at the meeting
is voidable if notice was not given to so many persons that, if they had all
voted at the meeting in support
of the side which was defeated upon a vote taken
upon the resolution, the result of the voting would have been different from the
result declared by the person presiding at the meeting.
(6) If default is
made in complying with this section the company and every officer of the company
in default is guilty of an offence.
(7) This section applies
notwithstanding contained in the Memorandum or Articles of a company, or in a
debenture trust deed or any
debentures or in any other contract or
instrument.
Proxies
150. (1) Subject
to subsection (3), a member of a company entitled to attend and vote at a
meeting of the company or at a meeting of
any class of members of the company is
entitled to appoint a proxy or, in the case of a member of a public company,
one, or more
than one, proxy, to attend and vote instead of the member at the
meeting.
(2) A proxy appointed pursuant to subsection (1) by a member of
a company need not himself be a member of the company.
(3) A member of a
proprietary company is not entitled to appoint a proxy to attend and vote
instead of the member at a general meeting
of the company except-
(a) when authorised to do so by the by-laws of the company; or
(b) with the leave of the Court.
(4) A proxy entitled to attend is also entitled
to speak at the meeting, but not more than two proxies appointed by the same
member
have that right to
speak.
(5) There shall be
sent with each notice calling a meeting of a company in relation to which a
proxy may be appointed an instrument of
proxy so draw as to enable a member to
indicate, in respect of resolutions dealing with special business and set out in
the notice,
whether he wishes his proxy to vote for or, against the resolution
or to vote as the proxy thinks fit;
(6) A proxy may not vote at a meeting
or an adjournment thereof unless the instrument appointing him is deposited at
the registered
office of the company concerned not less than forty-eight hours
before time at which the meeting is to commence or at which the adjournment
thereof is to commence, as the case may be;
(7) Where instruments
appointing proxies have been deposited as provided in subsection (6), any person
entitled to attend and vote
at the meeting at which the proxy is to be used
(whether in his own right or as proxy for another person so entitled to attend
and
vote) may, at any time during the business hours of the company prior to the
conclusion of the meeting or the taking of the poll,
but subject to such
reasonable restrictions as the company may impose, inspect and take copies of
any of those instruments of proxy.
(8) The appointment of a proxy is
terminated by the death or insanity of the appointer or by his revocation of the
proxy; and the
personal attendance of a member at a meeting or the later
appointment of another proxy in respect of the same share is deemed to
be a
revocation.
(9) A vote given in accordance with the terms of an
instrument of proxy may be treated by a company as valid notwithstanding the
termination
of revocation pursuant to subsection (8) of the appointment so on as
no intimation in writing of the termination or, revocation or
of the event
giving rise thereto has been received by the company at its registered office or
other place appointed for the deposit
of instruments of proxy, before the
commencement of the meeting or adjourned meeting or more than twenty-four hours
before a poll.
(10) For the purposes of subsection (5)
"special business" means all
business transacted at a meeting with the exception of declaring a dividend, the
consideration of the accounts,
balance sheets, and the reports of the directors
and auditors, the election of directors in the place of those retiring and the
fixing
of the remuneration of the auditors.
Postal voting
151. (1) If the
Articles of a company permit postal voting at meetings of the company, this
section applies with respect to general meetings
and meeting of all classes of
shareholders or debenture holders of the company.
(2) Any person entitled
to attend and vote at a meeting referred to in subsection (1) or proxy appointed
by him may vote at the meeting
or at an adjournment thereof by delivering to the
company, not later than forty-eight hours before the time when the meeting or,
as the case may be, adjourned meeting is to commence, a written statement of the
name of the person entitled to vote and his proxy
(if any) and the manner in
which he or his proxy wishes to vote on each or any of the resolutions set out
in the notice calling the
meeting.
(3)A postal vote given by a proxy is
valid only if the proxy could have voted at the meeting if he had attended
personally.
(4) A person or his proxy who gives a postal vote shall be
counted toward a quorum, and his postal vote shall be dealt with, as if
that
person were personally present at the meeting and personally voted in the manner
expressed in his postal vote.
Method of taking votes
152. (1) Subject to subsection (2), the chairman of a
general meeting of a company or of a meeting of a class of shareholders or
debenture
holders shall take the vote on any resolution proposed at the meeting
by a show of hands, unless the number of postal votes and proxy
appointments
indicating how the proxy is authorised to vote which have been delivered to the
company show that the resolution or
amendment will necessarily be passed or
defeated, in which case the chairman shall so do and shall state the number of
votes which
have given, or which have been authorised to be so given, in favour
of and against the resolution.
(2) A shareholder, debenture holder for
proxy may demand a poll either before or after any vote by show of
hands.
(3) The votes of a proxy shall be counted only if he attends the
meeting at which he is authorised to vote and votes at the meeting.
(4) A
proxy may vote on a show of hands and on a poll taken on any
resolution.
(5) If a proxy appointment authorised a proxy to vote only in
favour of, or only against, a resolution proposed at any meeting, his
votes
shall not be counted unless he votes in the manner in which he is authorised to
vote.
(6) On a poll taken at any meeting, a person entitled to more than
one vote, or a proxy for one, or more than one, person entitled
to more than one
vote may cast some of his votes in one way and some in another and postal votes
shall: for this purpose be deemed
to be votes given on a poll.
Declaration of the result of voting
153. (1) The
chairman of a meeting shall declare the result of the meeting on a poll, either
at the meeting or at a continuation of the
meeting has been suspended for the
purpose of taking a poll, and in the declaration he shall state the number of
votes which have
been cast for and against the resolution and for against any
amendment proposed thereto-
(a) by proxies authorised to vote only for or against the resolution or amendment;
(b) by postal votes; or
(c) in any other way,
and he shall also state the number of voted cast w have not been counted because the chairman consider them not to have been validly cast.
(2) A chairman who does not comply with
subsection (1) or who falsifies the result of a poll is guilty of an
offence.
(3) A continuation of a meeting which has been suspended for the
purposes of making a poll shall not be considered, for the purposes
of this Act
or within meaning of a company's Memorandum or Articles or of a debenture trust
deed or a debenture, to be an adjournment,
to be an adjournment of the
meeting.
Written resolution
154. (1) Subject to subsection (4), a resolution in
resolution in writing signed by all the members entitled to attend and vote on
the resolution at a general meeting or if' the company has only one such member,
that member, is as valid and effective for all purposes
as if the same had been
passed at a general meeting of the company duly convened and held; and if
described as a special resolution
is deemed to be a special resolution within
the meaning of this Act.
(2) A resolution in writing so signed is deemed
to have been passed on the date on which the resolution was signed by the last
member
to sign, and where the resolution states a date as being the date of the
signature of a member, the statement is prima facie evidence
that the resolution
was signed on that date by the member.
(3) A copy of every resolution
referred to in subsection (1) shall be kept with the minutes of the meetings of
shareholders.
(4) Subsection (1) does not apply to a resolution to remove
an auditor or a director.
Resolutions passed in adjourned meetings
155. Where a resolution is passed at an adjourned meeting
of a company by the holders of any class of shares passed debentures in
or of a
company or the directors of a company, the resolution shall for all purposes be
treated, as having adjourned as having been
passed on the date of the adjourned
meeting and not on an earlier date.
Certain resolutions to be lodged with
Registrar
156. (1) This section applies to-
(a) special resolutions passed at a general meeting;
(b) resolutions agreed to by all the members of any 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;
(c) written resolutions passed pursuant toll section 154;
(d) resolutions attaching rights to shares;
(e) resolutions imposing restrictions on the borrowing powers of directors; and
(f) resolutions passed at meetings of classes of debenture holders consenting to the alteration of abrogation of the rights, powers or remedies of the debenture holders, or of the trustee of the debenture trust deed sunder which the debentures were issued.
(2) Subject to
subsection (3), a printed typewritten copy of every resolution to which section
applies shall, within the period of
six weeks after the date on which the
resolution was passed, be lodged by the company concerned with the
Registrar.
(3) If an application is made to the Court under section 157,
a company is not required to deliver a copy of a resolution to which
this
section applies unless the Court confirms the resolution in whole or in part,
copy of the resolution as so confirmed and a copy
of the order of the Court
shall be delivered by the company to the Registrar within fifteen days after the
order of the Court is
drawn up.
(4) A copy of every resolution to which
this section applies, for the time being in force, shall be embodied in, or
annexed to, every
copy of the Articles of the company concerned issued after the
passing of resolution or, in the case of resolutions referred to in
subsection
(1) (f), to every copy of the covering debenture trust deed issued after the
passing resolution.
(5)If a company fails to comply with subsection (2)
or (3) the company and every officer of the company in default is guilty of an
offence.
(6) The reference in subsection (5), to "an officer of the
company" is deemed to include a liquidator of the company.
Application to Court to declare that resolution was not passed or was not defeated
157. (1) Within one month after a resolution has been
declared to have been passed or defeated at a general meeting of a company or,
at a meeting of a class of shareholders or debenture holders, any person
aggrieved thereby may apply to the Court for a declaration
that the resolution
was not passed or was not defeated, as the case may be.
(2) Without
prejudice to the generality of the expression "aggrieved person", a person shall
be considered to be an aggrieved person-
(a) if the resolution was proposed at general meeting and the applicant is a shareholder of company; or
(b) if the resolution was proposed at a meeting of a class of shareholders or debenture holders and the applicant is a shareholder or a debenture holder of that class, but a person shall not be considered as aggrieved by the passing of a resolution in favour of which the or he or his proxy voted or by the defeat of a resolution against which he or his proxy voted.
(3) An application may be made to the
Court under this section on the grounds that-
(a) the meeting was not properly convened;
(b) votes tendered at the meeting were improperly accepted or rejected by the chairman, and in consequence the resolution was wrongly declared to have been passed or defeated;
(c) the chairman's declaration of the number of votes cast in favour and against the resolution was incorrect; and in consequence the resolution was wrongly declared to have been passed or defeated;
(d) the resolution passed at the meeting (not being a resolution authorised by is Act to alter the Memorandum or Articles of a company or to alter or abrogate the rights of debenture holders) is inconsistent with the Memorandum or Articles of a company or with the term of a debenture trust deed or a debenture; or
(e) the resolution passed at the meeting is voidable under any other provisions of this Act.
(4) The right to apply to the
Court under this section is in addition to any other right conferred by this Act
on the holders of a
fraction of the shares in, or debentures of, a company to
apply to the Court to cancel any resolution.
(5) On the hearing of an
application under this section the Court-
(a) may confirm in whole or in part any resolution which has been declared to have been passed at a meeting or may declare s resolution not to have been passed; or
(b) may declare a resolution which has been declared to have been defeated at a meeting to have been passed in whole or in part or a declare such a resolution to have been defeated.
(6) The order of the
Court shall be substituted for the declaration of the chairman at the Meeting
that the resolution was passed
or defeated, and all persons shall act
accordingly.
(7) If an application to the Court is not made under this
section or under any other provision of this Act which confers a right to
make
an application on the holders of the fraction of the shares in, or debentures
of, a company, within one month after the declaration
by the chairman of the
meeting that the resolution in question has been passed or defeated, or such
1onger period as is specified
in any such other provision of this Act, or if all
applications made to the Court are dismissed, it shall thereafter be
conclusively
resumed that the resolution was passed or defeated as declared by
the chairman and, if he declared the resolution to have been passed,
that the
meeting at which it was passed was duly convened and held and that the
resolution is valid.
(8) This section does not apply to procedural
resolutions as defined in section 147(3).
Minutes
158. (1) Every company shall cause minutes of all
proceedings of general meetings, meetings of classes of shareholders and
debenture
holders and meetings of the directors and committees of directors to
be entered in books kept for that purpose.
(2) The minutes of a general
meeting or a meting of a class of shareholders or debenture holders shall set
out in full the declaration
made by the chairman under section 153 in respect of
each resolution voted on at the meeting.
(3) 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 to which it relates.
(4) Where minutes have been made in
accordance with this section of the proceedings at any general meeting of a
company, any meeting
of a class of shareholders or debenture holders or, any
meeting of the directors or a committee of directors, then, until the contrary
is proved, the meeting shall be deemed to have been duly held and convened and
all proceedings had at the meeting to have been duly
and all resolutions
declared by the chairman of the meeting to have been passed shall be deemed to
be valid.
(5) If a company fails to comply with subsection (1) or (2),
the company and every officer of the company who is in default is guilty
of an
offence.
Inspection of minutes
159. (1) The books containing the minutes of proceedings
inspection of any general meeting of a company, or any meeting of a class
of
shareholders or debenture holders, 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 by-laws or in general meeting impose, so
that no less than two hours in
each day be allowed for inspection) be open to
the inspection of any shareholder or debenture holder of the company without
charge.
(2) Any shareholder or debenture holder of a company is 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 specified in subsection (1) at a
charge not exceeding fifty cents for
each hundred words copied.
(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 is guilty of an offence.
Quorum
160. (1) Unless the Articles of a company otherwise
provide and subject to subsection (2), two or more persons present at a meeting
constitute a quorum.
(2) Where a company has-
(a) only one shareholder; or
(b) only one shareholder of any class of the shares,
he constitutes a quorum at any .meeting or, as the case may be, at any meeting of shareholders of that class of shares.
(3) If a quorum is present at the
opening of a meeting, the persons present may, unless the Articles otherwise
provide, proceed with
the business of the meeting notwithstanding that a quorum
is not present throughout the meeting.
(4) If a quorum is not present at
the opening of a meeting, the persons present may adjourn the meeting to a fixed
time and place
but may not transact any, other business.
DIVISION 5 - Annual Returns
Annual return to be made by Company
161. (1) Subject to this section, every company shall, to
once at least in every year, make a return- be made by Company-
(a) in the prescribed form;
(b) made up-
(i) to the date of the annual meeting of the company; or
(ii) in the case of a proprietary company which, pursuant to its Articles and, section 142(1), does not hold an annual general meeting, to the latest date, on which the company would have been required to hold an annual general meeting if its Articles had not provided that it n ed not hold an annual general meeting; and
(c) containing such particulars as may be prescribed.
(2) A company is not required to
make a return pursuant to subsection (1)-
(a) in the year of its incorporation; or
(b) in the following year if in that year the company is not required by section 141 to hold an annual general meeting.
(3) The annual
return signed by a director or the secretary of the company shall be lodged with
the Registrar within forty-two days
after the annual general meeting.
(4)
If a company fails to comply with this section, the company and every officer of
the company who is in default is guilty of an
offence.
Documents to be annexed to annual return
162. (1) Subject to this Act, there shall be annexed to
the annual return of a company-
(a) a written copy, certified both by a director and by the secretary of the company to be a true copy, of all balance sheets, profit and loss accounts and group accounts .led before the company in general meeting or circulated to members and registered debenture holders during the period to which the return relates;
(b) a copy, so certified, of the reports of the auditors on, and of the reports of directors accompanying, all such accounts,
and where any
such account or other document is in a foreign language there shall be annexed o
that account or document a translation
in English of the account or other
document certified to be a correct translation.
(2) If any such account
or document did not comply with the requirements of the law, as in force at the
date of the audit, with respect
to the form of accounts or documents; 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 if the account or document were to comply
with those requirements, and the fact that the copy
has been so amended shall be
stated thereon.
(3) A company which-
(a) has not offered shares in, or debentures of, the company to the public; and
(b) is not a subsidiary of a company which has done so,
may delete from any document or account annexed, pursuant to subsection (1)(a), to an annual return lodged with the Registrar-
(c) any information about the emoluments of the directors of the company included in the document or account pursuant to section,168; and
(d) any particulars included in the document or account with respect to turnover and rents recoverable and payable,
but the fact
that the document or account has been amended by any such deletion shall be
stated in the document or account.
(4) For the purposes of section 161,
the accounts and documents required by this section to be annexed to the annual
return of a company
are deemed to be part thereof.
(5) This section does
not apply to a proprietary company which delivers to the Registrar with its
annual return the certificates required
by section 163(1) and (2).
Provision as to proprietary companies
163. (1) A proprietary company shall deliver to the to
Registrar with its annual return a certificate, signed by each of its directors
and by its secretary, that the conditions required to be fulfilled for a company
to be a proprietary company have been fulfilled
in respect of it continuously
and without exception since the date of its incorporation as, or conversion to,
a proprietary company
or the date of its last annual return, whichever is the
later.
(2) A proprietary company shall also deliver to the Registrar with
its annual return-
(a) a certificate of solvency signed by its auditor containing the statement and opinion by the auditor of the company required by subsection (3), and made with reference to the state of the company's assets and liabilities at the date on which the balance sheet of the company laid before an annual general meeting during the period to which the annual return relates (in this section referred to as the “company's last balance sheet”); and
(b) a certificate signed by each director and the auditor of the company that the certificate referred to in paragraph (a) agrees with the balance sheet and profit and loss account to be laid.
(3) A certificate of solvency shall-
(a) state the amounts shown in the company's last balance sheet as the total values respectively of the company's fixed assets, current assets and investments;
(b) state the amount shown in the company's last balance sheet as the total amount of the company's debts and liabilities accrued due at, or accruing due within one year after, the date as at which the balance sheet is made out, and the amount so shown as the total amount of the company's other debts and-liabilities; and
(c) state whether, in the opinion of the, auditor of the company, the company was, at the date at which its last balance sheet was made out, able or unable to pay its debts .and liabilities as they fall due.
(4) If the company does not
hold an annual general meeting in the year to which the annual return rebates,
the certificates required
by subsection (3) shall be modified so as to refer to
the balance sheet or the balance sheet and profit and loss account, as the
case
may be, copies of which were sent to the members of the company in compliance
with section 142(1) during the period to which
the annual return
relates
(5) For the purpose
of section 161, the certificates required by this section are deemed to form
part of the annual report with which
they should be lodged with the
Registrar.
(6) If the auditor of a company refuses to give or sign either
of the certificates mentioned in subsection (2), the annual return
shall contain
a statement to that effect and have annexed thereto the documents specified in
section 162(1); a company which delivers
an annual return containing such a
statement and having annexed to it the documents so specified is deemed to have,
complied with
this section.
(7) Where a proprietary company fails to
comply with subsection (1) or (2) the company and every director of the company
in default
is guilty of an offence.
Offences in connection with annual returns
164. (1) If -
(a) a director or secretary of a company signs an annual return lodged with the Registrar which contains any statement which is false, deceptive or misleading or which omits any matter required annual by this Act to be included therein;
(b) a director or secretary of a company lodges or concurs in the lodgement of any document with the Registrar with an annual return, and that document purports to be a copy of an account or document required by section 163 which contains a statement which is false, misleading or deceptive or an opinion which he has, no reasonable ground to believe to be accurate,
he is guilty of an offence.
(2) It is a
sufficient defence if the person charged with an offence under this section
proves that up to the time of the delivery
to the Registrar of the annual
return, copy of an account or document, or certificate, as the case may be, he
believed on reasonable
grounds that section 161 and section 162 or, as the case
may be, 163 had been complied with.
PART VI - ACCOUNTS AND AUDIT
DIVISION 1 - Accounts
Accounts to be kept
165. (1) Every company shall cause to be kept proper to be
books of account with respect to-
(a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;
(b) all goods and purchases of goods of the company; and;
(c) the assets and liabilities of, the company.
(2) For the purposes of subsection
(1), proper books of account are not deemed to be kept with respect to the
matters referred to
in that subsection if there are not kept such books as are
necessary to give a true and fair view of the state of the company's affairs
and
to explain its transactions.
(3) The books of account of a company shall
be kept at the registered office of the company or at such other place as the
directors
of the company think fit and shall at all times be open to inspection
by the director.
(4) Where books of account of a company are kept at a
place outside Tuvalu there shall be a place in, Tuvalu and be at all times open
to inspection by the directors of the company such accounts and returns with
respect to the business dealt with in the books of accounts
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, and any
document
annexed to any of those documents giving information which is required
by this Act and is allowed by this Act to be so given.
(5) A director of
a company who fails to secure compliance by the company with the requirements of
this section or who has by his
own act been the cause of any default by the
company under this section, is guilty of an offence.
(6) In proceedings
for an offence under this section consisting of a failure to secure compliance
by a company with the requirements
of this section, it is a sufficient defence
if the person charged proves that he had reasonable grounds to believe and did
not 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.
(7) A person convicted of an offence under his
section shall not be sentenced to a term of imprisonment unless the Court before
which
he is convicted is satisfied that he knowingly or recklessly committed the
offence.
Profit and loss account balance sheet
166. (1) Subject to subsection (2), the directors of a
company shall cause to be made out and laid before the company at each annual
general meeting a profit and loss account for the period since the date to which
the last preceding meeting after the incorporation
of the company, made up for a
period ending on a date not earlier than six months before the date of the
meeting and giving a true
and fair view of the profit or loss of the company for
that period.
(2) Notwithstanding subsection (1), the, Registrar may, on
application made in accordance with a resolution of the directors of a
company,
and signed on behalf of the company by a director or secretary, extend, subject
to such conditions as the Registrar thinks
fit, the period of six months
referred to in subsection (1).
(3) The directors shall cause to be made
out in every calendar year, and to be laid before an annual general meeting, a
balance sheet
as at the date to which the profit and loss account is made
up.
(4) If a company fails to comply with this section, every director of
the company is guilty of an offence.
(5) In proceedings for an offence
under this section, section 165(6) applies as it applies to proceedings for an
offence under section
165.
(6) Section 165(7) applies with respect to a
person convicted of an offence under this section as it applies with respect to
a person
convicted of an offence under section 165.
Provisions as to contents and form of annual accounts
167. (1) Subject to this section-
(a) 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
(b) every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for its financial year.
(2) Subject to this section, a company's
balance sheet and profit and loss account shall comply with the requirements of
the regulations
with respect to matters to be specified or contained therein, so
far as applicable thereto.
(3) When a company has subsidiary companies
accounts or statements (hereinafter called "group accounts") dealing with the
financial
position and profit or loss of the company and its subsidiaries shall
also be prepared and included with both the said profit and
loss account and
balance sheet.
(4) Save as expressly provided in the following provisions
of this section, the requirements of subsection (2) are without prejudice
to the
requirements of subsection (1) or to any other requirements of this
Act.
(5) On the application or with the consent of the directors of a
company, the Minister, may modify, in relation to the company, the
requirements
of this Act as to the matters to be stated in any account of the company so as
to adapt these requirements to the circumstances
of the company, but without
prejudice to the requirement of subsection (1).
(6) It shall be the duty
of every company which is a subsidiary of another company in respect of, which
group accounts have to be
prepared and of the directors and auditors of that
company to give to the directors of such other company and its auditors all such
information and access to records as the latter may reasonably require to enable
group accounts to be properly prepared in accordance
with this Act.
(7) A
director of a company who fails to take all reasonable steps as respects any
accounts, or accounts laid before the company in
general meetings, to secure
compliance with the provisions of this section and with the other requirements
of this Act as to matters
to be stated in accounts is guilty of an
offence.
(8) In proceedings for an offence under this section, section
165(6) applies as it applies to proceedings for an offence under section
165.
(9) Section 165(7) applies with respect to a person convicted of an
offence under this section as it applies with respect to a person
convicted of
an offence under section 165.
Particulars of the directors' emoluments, etc.
168. (1) In the annual accounts of a company, or in a
particular statement annexed thereto, there shall, subject to and in accordance
with this section, be shown-
(a) the amount of the emoluments of each director of the company;
(b) the aggregate amount of the pensions paid to individuals in their capacities as the directors or, former directors of the company; and
(c) the aggregate amount of an compensation paid to or received by directors or former directors of the company in respect of loss of office.
(2) The amounts to be shown under this
section for any financial year shall be the sums receivable in respect of that
year, whenever
paid, or, in the case of sums not receivable in respect of a
period, the sums paid during that year.
(3) Where it is necessary to do
so for the purposes of making any distinction required by this section in any
amount to be shown thereunder,
the directors of a company may apportion any
payments between the matters in respect of which they have been paid or have yet
to
be paid in such manner as they think appropriate.
(4) In the annual
accounts of a company, or in a statement annexed thereto, there shall be shown
the number of directors who have
waived rights to receive emoluments to which
this section would otherwise apply, and the aggregate amount of those
emoluments.
(5) Where any of the requirements off this section are not
complied with in relation to any accounts; the auditors of the company,
shall
include in their; report, so far as they are reasonably able to do so, a
statement giving the particulars necessary to meet
those requirement.
DIVISION 2 - Directors' Annual Reports
Duty to lay directors' annual report
169. (1) The directors of a company-
(a) shall lay before every annual general meeting of the company; or
(b) if pursuant in section 142 the company does not hold an general meeting, shall send in annul accordance with section 142(1)(a) to every shareholder, and debenture holder of the company,
a report (in this Act called "the directors'
annual report") with respect to-
(c) the affairs of the company; and
(d) if the company is a, holding company, the affairs of its subsidiaries unless the company is itself a wholly owned subsidiary.
(2) The directors' annual report
shall state the names of the persons who, at any time during the financial year,
were directors of
the company and the principal activities of the company and of
its subsidiaries, in the course of that year and any significant change
in those
activities in that year, and also-
(a) if significant changes in the fixed assets of the company or of any of its subsidiaries have occurred in that year, give particulars of the changes and, if (in the case of those assets) the market or saleable value thereof (as at the end of that year) differs substantially from the amount thereof as shown in the balance sheet, give particulars of that difference;
(b) if, in that year, the company has issued any shares or debentures, state the reason for making the issue, the, class of shares or debentures, the number issued and the consideration received by the company for the issue;
(c) in respect of each person who has at any time during the year been; a director of the company or of a company which at any time during that year belonged to the same group of companies as the company, or of a company which has at any time during that year been an associated company of the company, contain the entries required by section 141 to be made in the register of directors' holdings kept by the company;
(d) state the directors' proposals as to the application of the profits of the company shown in its profit and loss account, including its profits and revenue reserves carried forward from earlier financial years; and
(e) contain particulars of any other matters so far as they are material for the appreciation of the state of the company's affairs by its members, shareholders or debenture holders, being matters which will not be harmful to the business of the company or of any company which belongs to the same group of companies as the company;
(3) Where a company is a holding
company (other than a wholly owned subsidiary of another company), the
directors' annual report shall
also deal with the matters specified in
subsection (2) in relation to each of the company's subsidiaries.
(4) If
the directors of a company consider that disclosure of any matter required to be
included in the directors' annual report by
this section would be harmful to the
company or to any company which belongs to the same group of companies as the
company, they
may with the consent of the Minister, omit that matter from the
report.
(5) If the directors' annual report does not contain a statement
required by this section to be included in it or contains a statement
which is
false, deceptive, misleading or incomplete, the auditors of the company shall,
so far as they are reasonably able to do
so, include in their report on the
accounts of the company under section 174 a statement or correction giving the
information required
by this section.
(6) If the directors of a company
fail to comply with this section, or if they send out to shareholders or
debenture holders a directors'
annual report which does not contain all the
information required by this section or which contains false, deceptive or
misleading
information, each of the directors is guilty of an
offence.
(7) A director convicted of an offence under this section shall
not be sentenced to a term of imprisonment unless the Court before
he is
convicted is satisfied that he knowingly or recklessly committed the
offence.
DIVISION 3 - Auditors
Appointment, removal and disqualification of auditors
170. (1) Subject to subsection (13), a company shall, at
each annual general meeting, appoint an auditor or auditors to hold office
from
the conclusion of the meeting until the conclusion of the next annual general
meeting.
(2) Subject to subsection (13), where at any annual general
meeting no auditors are appointed or re-appointed, the Minister may appoint
a
person to fill a vacancy; and the company shall, within one week of the
Minister's power under this subsection becoming exercisable,
give the Minister
notice of that fact.
(3) The first auditors of a company may be appointed
by the directors of a company at any time before the first annual general
meeting
of the company and auditors so appointed shall hold office until the
conclusion of that meeting.
(4) If the directors fail to exercise their
powers under subsection (3), those powers may be exercised by the company in
general meeting.
(5) The directors, or the company in general meeting,
may fill any casual vacancy in the office of auditor, but while any such vacancy
continues, the surviving or continuing auditor or suitors, if any, may
act.
(6) A company may by ordinary resolution remove an auditor before
the expiration of his term of office notwithstanding anything in
any agreement
between it and him; and where a resolution removing an auditor is passed at a
general meeting of a company, the company
shall within fourteen days give notice
of that fact in the prescribed form to the Registrar.
(7) The
remuneration of the auditor of a company-
(a) in the case of an auditor appointed by the directors or the Minister, may be fixed by the directors or, as the case may be, the Minister; or
(b) subject to paragraph (a), shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine, and for the purpose of this subsection, "remuneration" includes any sums paid by the company in respect of the auditor's expenses.
(8)
Nothing in subsection (6) shall be taken as depriving a person removed
thereunder from compensation or damages payable to him
in respect of the
termination of his appointment as auditor or of any appointment terminating with
that as auditor.
(9) Where, pursuant to section 141, a company does not
hold an annual general meeting, the company-
(a) is deemed for the purposes of this section to have held such a meeting at the latest date which, by section 141; it would otherwise have been required to hold such a meeting; and
(b) is deemed, subject to subsection (13), to have re-appointed the auditors at the meeting so deemed to have been held.
(10)
Subject to subsection (2), none of the following persons is qualified for
appointment as auditor of a company namely-
(a) an officer or servant of the company;
(b) a person who is a partner of or in the employment of an officer or a servant of the company; or
(c) a corporation.
(11) If two or more persons
carry on practice as accountants in Tuvalu, any one or more of them may be
appointed to be an auditor
or auditors of a company notwithstanding that one or
more of them is an officer or servant, or are officers or servants, of the
company
so long as the number of those of them who are appointed to be auditors
of the company exceeds the number, of those of them who are
officers or servants
of the company.
(12) A person is not qualified to be appointed as an
auditor of a particular company if he is, by virtue of subsection (10),
disqualified
for appointment as an auditor of any other company which belongs to
the same group of companies as the particular company.
(13) A proprietary
company need not comply with subsection (1) if at, or not more than fourteen
days before, the annual general meeting
concerned, all the members of the
company agree that they do not require an auditor or auditors to be appointed
but, in that event-
(a) the company shall, within fourteen days of the members so agree, lodge with the Registrar a notice -
(i) stating that the members have so agreed; and
(ii) certifying that the company has complied, and is continuing to comply, with section165 (1); and
(b) the annual return of the company shall state that no such appointment was made at the annual general meeting concerned.
(14) If a company fails to give any such notice
as is mentioned in subsection (2) or (6), or to comply, where appropriate with
subsection
(13) (a) or (b), the company and every officer of the company in
default is guilty of an offence.
Supplementary provisions relating to appointment and removal of auditors
171. (1) Subject to this section, special notice is
required for a resolution at a general meeting of a company-
(a) appointing as auditor a person other than a retiring auditor;
(b) filling a casual vacancy in the office of auditor;
(c) is re-appointing as auditor a person who was appointed-to fill a casual vacancy; or
(d) removing an auditor before the expiration of his term of office.
(2) On receipt of notice of such an
intended resolution as is mentioned in subsection (1), the company shall
forthwith send a copy
thereof-
(a) to the person proposed to be appointed or removed, as the case may be;
(b) in a case within subsection (1)(a) to the retiring auditor; and
(c) where, in a case within subsection 1(b) or (c), the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.
(3) Where notice is given of such
resolution as mentioned in subsection 1(a) or (d) and the retiring auditor or,
as the case may be,
the auditor proposed to be removed 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 representation to every member of the company to whom notice of the meeting is or has been sent.
(4) If a copy of any such representations as, are
mentioned in subsection (3) are not sent out as required by that subsection
because
they were 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.
(5) Copies of the
representations need not be sent out and representations need not be read out at
the meeting if, on the application
of 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 subsection to be paid in whole or in part by the auditor,
notwithstanding that he is not party to the application.
(6) An auditor
of a company who has been, removed shall be entitled to attend-
(a) the general meeting at which his term of office would otherwise have expired; and
(b) any general meeting at which it is proposed to fill the vacancy, caused by his removal,
and to receive all notices of, and other communications relating to, any such meeting which any member of the company is entitled to receive and to be heard at any such meeting which he attends any part of the business of the meeting which concerns him as former auditor of the company.
(7) This section does not apply in any case
where, pursuant to section 170(9) an auditor is deemed to have been
re-appointed.
Resignation of auditors and right to attend meetings
172. (1) An
auditor of a company may resign his office by depositing a notice in writing to
that effect at the registered office of the
company; and any such notice shall
operate to bring his term of office to an end on the date on which the notice is
deposited or
on such later date as may be specified therein.
(2) An
auditor's notice of resignation is not effective unless it contains
either-
(a) a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members or creditors of the company; or
(b)a statement of any such circumstances as aforesaid,
(3) Where a notice having effect
under this section is deposited at a company's registered office, the company
shall within fourteen
days send a copy of the notice-
(a) to the Registrar; and
(b) if, the notice contained a statement under subsection(2)(b), to every member of the company.
(4) The company or any person who
claims to be aggrieved may, within fourteen days of the receipt by the company
of a notice containing
a statement under subsection (2)(b), apply to the Court
for an order under subsection (5).
(5) If the Court, on an application
under subsection (4), is satisfied that the auditor is using the notice to
secure needless publicity
for defamatory matter, it may by order direct that
copies of the notice need not be sent out; and the Court may further order the
company's costs on this application to be paid in whole or in part by the
auditor, not withstanding that he is not a party to the
application.
(6)
The company shall, within fourteen days of the Court's decision, send to the
persons mentioned in subsection (3)-
(a) if the Court make an order under subsection (5), a statement setting out the effect of the order; or
(b) if the Court does not make an order under that subsection, a copy of the notice containing the statement under subsection (2)(b).
(7) If default is made in complying
with subsection (3) or (6), the company and every officer of the company in
default is guilty
of an offence.
(8) Where an auditor's notice of
resignation contains a statement under subsection (2)(b), there may be deposited
with the notice
a requisition signed by the auditor calling on the directors of
the company forthwith duly to convene an extraordinary general meeting
of the
company for the purpose of receiving and considering such explanation of the
circumstances connected with his resignation
as he may wish to place before the
meeting.
(9) Where an auditor's notice of resignation contains a
statement under subsection (2)(b), and the auditor requests the company to
circulate to its members-
(a) before the general meeting at which his term of office would otherwise have expired; or
(b) before any general meeting at which it is proposed to fill the vacancy caused by his resignation or convened on his requisition, a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation, the company shall (unless the statement is received by it too late for it to do so);
(c) in any notice of the meeting given to the members of the company, state the fact of the statement having been made; and
(d) send a copy of the statement to every member of the company to whom notice of the meeting is or has been sent.
(10) If the directors do not within
twenty-one days from the date of the deposit of a requisition under this section
proceed duly
to convene a meeting for a day not more than twenty-eight days
after the date on which the notice convening the meeting is given,
every
director who failed to take all reasonable steps to ensure that a meeting was
convened as mentioned is guilty of an offence,
and if a copy of any such
statement as is mentioned in subsection (9) is not sent out as required by that
subsection because it was
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 statement shall be read out at the meeting.
(11) Copies of a
statement need not be sent out and the statement 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 subsection
to be paid in whole or in part by the auditor, notwithstanding that he is not a
party to the application.
(12) An auditor of a company who has resigned
his office is entitled to attend any such meeting as is mentioned in subsection
(9)(a)
or (b) end to receive all notices of, and other communications relating
to, any such meeting which any member of the company is entitled
to receive and
to be heard at any such meeting which concerns him as former auditor of the
company.
Power of auditors in relation to subsidiaries
173. (1) Where a
company ("the holding company") has a subsidiary, then-
(a) if the subsidiary is a company incorporated in Tuvalu, of the subsidiary and the auditors of the holding company such information and explanation as those auditors may reasonably require for the purposes of their duties as auditors of the holding company; and
(b) in any other case, it shall be the duty of the holding company, if required by its auditors to do so, to take all steps as are reasonably open to it to obtain from it the subsidiary such information and explanation as aforesaid.
(2) If a subsidiary or holding
company fails to discharge any duty under subsection (1) the subsidiary or
holding company and every
officer thereof in default is guilty of an offence;
and if an auditor fails without reasonable excuse to discharge his duty under
paragraph (a) of that subsection he is guilty of an offence.
Auditors' report and right of access to books and to attend and be heard at meetings
174. (1) The
auditors of a company, shall make a report to the members on the a counts
examined by 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.
(2) The auditors' report shall be read before the company in
general meeting and shall be open to inspection by any members.
(3)The
report shall state whether in the auditors' opinion the company's balance sheet
and profit and loss account and (if it is a
holding company submitting group
accounts) the group accounts have been properly prepared in accordance with the
provisions of this
Act, and whether in their opinion a true and fair view is
given-
(a) in the case of the balance sheet, of the state of the company's affairs as at the end of its financial year;
(b) in the case of the profit and loss account (if it be not framed as a consolidated profit and loss account), of the company's profit or loss for its financial year; and
(c) in the case of group accounts submitted by a holding company, of the state of affairs and profit or loss of the company and its subsidiaries dealt with thereby, so far as concerns members of the company.
(4) It shall be the duty of the
auditors of a company, in preparing their report under this section, to carry
out such investigations
as will enable them to form an opinion as to the
following matters, that is to say-
(a) whether proper books of account have been kept by the company and proper returns adequate for their audit have been received from branches not visited by them; and
(b) whether the company's balance sheet and (unless it is framed as a consolidated profit and loss account) profit and loss account are in agreement with the books of accounts and returns,
and if
the auditors are of the opinion that proper books of accounts have not been kept
by the company or that proper returns adequate
for their audit have not been
received from branches not visited by them, or if the balance sheet and (unless
it is framed as a consolidated
profit and loss account) profit and loss account
are not in agreement with the books of accounts and returns, the auditors shall
state that fact in their report.
(5) Every auditor of a company shall
have a right of access at all times to the books and accounts and vouchers 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.
(6) If the auditors fail to obtain all the
information and explanations which, to the best of their knowledge and belief
are necessary
for the purposes of their audit, they shall state that fact in
their report.
(7) 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.
Offence in relation to statements made to auditors
175. (1) An officer of a company who knowingly or
recklessly makes a statement which-
(a) is misleading, false or deceptive in a material particular; and
(b) is a statement to which this subsection applied,
is guilty of an offence
(2)
Subsection (1) applies to any statement made to the auditors of the company
(whether orally or in writing) which conveys, or purports
to convey, any
information or explanation which they require, or are entitled to require, as
auditors of the company.
DIVISION 4 - Signing and Circulation of Accounts and Reports
Signing and Circulation
of Accounts, etc.
176.
(1) A company's annual accounts and the directors’ annual report shall be
approved by the directors of the company and signed
by the chairman before
copies of such accounts or reports are sent to the members or debenture holders
of the company and before
any advertisement of such accounts or report is
published.
(2) If any directors of a company refuse to approve the
company's annual accounts or the directors’
annual report, subsection (1) is
deemed to have been complied with if every copy of the account or report so sent
or advertised contains
a statement in clearly legible print of the name of the
directors who refuse and the fact of
their refusal.
(3) A copy of the company's annual accounts, the
directors' annual report and report of the auditors on the accounts of the
company
under section 174 shall not less than twenty-one days before the date of
the annual general meeting before which they are, to be
laid, be sent to every
shareholder and debenture holder of the company and to the auditors of the
company.
(4) If an annual general meeting is called by less than
twenty-one days' notice and is deemed to have been duly called by virtue of
section 145(3); subsection (3) is deemed to have been complied with if the
company's annual accounts, the directors' annual report
and the auditors' report
are sent to every person mentioned in subsection (3) before or at the same time
as the meeting is called.
(5) Any shareholder or debenture holder of a
company is, on making a written request, entitled to be supplied by a company
without
charge with a copy of the company's most recent annual accounts,
directors' annual report and auditors' report, but no one person
is entitled to
be supplied with more than one copy of each of those documents.
(6) If a
company fails to comply with any provision of this section, every officer of the
company in default is guilty of an offence.
DIVISION 5 - Dividends
Dividends
177. (1) Subject
to this section, a company may, in general meeting, declare dividend, in respect
of any year or other period.
(2) Where the recommendation of the
directors of a company with respect to the declaration of a dividend is rejected
or varied by
the company in general meeting, a statement to that effect shall be
included in the relevant directors' annual report in the relevant
annual
return.
(3) No dividend shall be payable to the shareholders of a company
except out of profits or pursuant to section 65.
(4) Every director or
officer of a company who wilfully pays or permits to be paid any dividend out of
what he knows is not profits
except pursuant to section 65 is guilty of an
offence.
(5) In addition to any liability under subsection (4), a
director or officer of a company, is liable to the creditors of the company,
or
the amount of the debts due by the company to them respectively to the extent by
which the dividend so paid have exceeded the
profits and the amount may be
recovered by the creditors or the liquidators suing on behalf of the
creditors.
(6) In this section, "dividend" includes bonus and payments by
way of bonus.
PART VII - INSPECTIONS AND INVESTIGATIONS
DIVISION 1 - General
Interpretation
178. (1) In this Part -
"company" includes an external company carrying on business within Tuvalu;
"inspector" means -
(a) in Division 2, an inspector appointed under section 179; and
(b) in Division 3, an inspector appointed under section 192;
"interested person", in relation to a company means,-
(a) a person who is or was an officer of the company;
(b) a person who acts or has at any time acted as banker, attorney-at-law, auditor or in any other capacity for the company; or
(c) a person who -
(i) has, or has at an time had, in his possession any property of the company;
(ii) is indebted to the company; or
(iii) is capable of giving information concerning the affairs of the company; and
(d) where an inspector has reasonable grounds for suspecting or believing that a person is a person of a kind referred to in paragraph (c), that person.
(2) Where an inspector is
appointed to investigate a company he has power to investigate any other company
which belongs or has, at
any time, belonged to the same group of companies as
the company if he considers it necessary to do so for the purpose of
investigating
the company in relation to which he was appointed.
(3)
Section 219 applies to determine for the purpose of this Part whether or not an
external company is carrying on business within
Tuvalu.
DIVISION 2 - Appointments by the Minister
Appointment of Inspector by Minister
179. (1). An
application for the appointment of one, or of more than one, inspector to
investigate the-
(a) affairs of the company; Minister
(b) shareholding in, or trading in the shares of, a company;
(c) compliance or non-compliance with the requirements of this Act relating to disclosure of shareholding in a company; or
(d) such of the affairs of a company as are specified in the application,
may be made to the Minister by instrument in writing.
(2) Where an application is made
under this section the applicant shall furnish such information in connection
with the application
as the Minister reasonably requires to enable him to
determine whether there are reasonable grounds four appointing one, or more
than
one, inspector.
(3) Where it appears to the Minister whether on his own
motion or as a result of an application made under subsection (1) that -
(a) it is desirable for the protection of the public or members or creditors of a company or of holders of debentures of a company;
(b) it is in the public interest because fraud, misfeasance or other misconduct by a person who is or has been concerned with the affairs of a company is alleged; or
(c) in any case it is in the public interest,
to appoint one, or more than one,
inspector to make an investigation of a company, he may by instrument in writing
appoint one, or
more than one, inspector.
(4) The Minister shall, in the
instrument appointing any inspector specify full particulars of the appointment,
including-
(a) the matters in which the investigation is to be made;
(b) the period in respect of which the investigation is to be made; and
(c) the terms and conditions of the appointment including terms and conditions relating to remuneration.
(5) The Minister may
by notice in writing given to an inspector terminate his appointment at any
time.
Notice of Appointment etc., to be
published
180. The notice of the appointment, and notice of the
termination of the appointment, of an inspector shall be published in the
Gazette.
Powers of inspectors
181. (1) An inspector may require an interested person in
relation to a company being investigated by notice in writing in accordance
with
the prescribed form given in the prescribed manner -
(a) to produce to the inspector of the company and other books relating to the affairs of the company as are in the custody or under the control of the interested person;
(b) to give to the inspector all reasonable assistance in connection with the investigation; and
(c) to appear before the inspector for examination on oath.
(2) An inspector may administer the oath
referred to in subsection (1)(c).
(3) Where books are produced to an
inspector under this Division, the inspector may take possession of the books
for such period as
he considers necessary for the purposes of the investigation,
and during that period he shall permit a person who would be entitled
to inspect
any one or more of those books, if they were not in the possession of the
inspector, or inspect at all reasonable times
such of those books as that person
would be so entitled to inspect.
Examination of interested persons
182. (1) where a company is being investigated under this
Division, an interested person in relation to company who -
(a) refuses or fails to comply with a requirement under section 181 to the extent to which he is able to comply with it;
(b) in purported compliance with such a requirement knowingly or recklessly furnishes information that is false or misleading in a material particular; or
(c) when appearing before an inspector for examination in pursuance of such a requirement -
(i) makes a statement that is false or misleading in material particular; or
(ii) refuses or fails to take an oath,
is guilty of an
offence.
(2) An attorney-at-law acting for an interested person in
relation to a company-
(a) may attend the examination; and
(b) may, to the extent that the inspector permits -
(i) address the inspector; and
(ii) examine the officer,
in relation to matters in respect of which the
inspector has questioned the interested person.
(3) An interested person
is not excused from answering a question put to him by the inspector on the
ground that the answer might
tend to incriminate him but, where the interested
person claims, before answering the question, that the answer might tend to
incriminate
him, neither the question nor the answer is admissible in evidence
against him in criminal proceedings other than proceedings under
subsection (1)
or in relation to a charge of perjury in respect of the answer.
(4) A
person who complies with the requirements of an inspector under section 181
shall not incur any liability to any person by reason
only of that
compliance.
(5) A person required to attend for examination under this
Division is entitled to such allowances and expenses as are from time to
time
prescribed.
(6) Regulations for the purposes of subsection (5) may be
made by reference to a sole of expenses for witnesses who attend before
the
Court.
Interested person failing to comply with requirements of this Division
183. (1) Where an interested person in relation to a
company fails to comply with a requirement of an inspector appointed to
investigate
the company, inspector may, unless the interested person proves that
he had a lawful excuse for his failure, apply to the Court for
an order under
subsection (2).
(2) Where an inspector applies to the Court under
subsection (1), the Court may inquire into the case and -
(a) order the interested person concerned to comply with the requirement of the inspector within such period as is fixed by the Court; or
(b) if the Court is satisfied that the interested person failed without lawful excuse to comply with the requirement of the inspector, punish him in like manner as if he had been guilty of contempt of Court and, if it sees fit, also make an order pursuant to paragraph (a).
Inspectors' reports
184. (1) An inspector may, and if so directed by the
Minister shall, make interim reports to the Minister, and on the conclusion of
the investigation shall make a final report to the Minister.
(2)Any such
reports shall be written or printed, as the Minister directs.
(3) The
Minister shall cause -
(a) a copy of any final report made by an inspector to be forwarded to the registered office of the company concerned; and
(b) a copy of the report to be furnished, on request and on payment of the prescribed fee to any person who is a member, shareholder, debenture holder or creditor of the company or of any other company dealt with in the report by virtue of section 178(2), and may also cause the report to be printed and published.
Proceedings on inspectors' reports
185. (1) If from any report made under section 215 it
appears to the Minister that an offence may have been committed by any person
and that the case is one in which a prosecution ought to be instituted, the
Minister shall refer the matter to the Attorney General
for consideration of the
question whether a prosecution should be instituted.
Expenses of investigation
186. (1).Subject to subsection (2), the expenses of an
investigation shall be borne by the State.
(2) Where, following on a
reference under section 185, a person is prosecuted for and convicted of an
offence, the Court before which
that person is convicted may, on the application
of the prosecutor, order that person to reimburse the State, pursuant to
subsection
(1), in respect of the investigations which lead to the report giving
rise to that reference.
Orders may be made by the Minister
187. (1) Where an investigation into a company is being
made under this Division and it appears to the Minister that facts concerning
shares in, or debentures of, the company or rights relating to the issue of
shares by the company cannot be ascertained because an
interested person in
relation to the company has failed or refused to comply with a requirement of an
inspector under section 185,
the Minister may, by order published in the
Gazette, make one, or more than one, of the following orders, namely-
(a) an order restraining a person from disposing of any interest in shares in, or debentures of, the company;
(b) an order restraining a person from acquiring shares in, or debentures of, the company;
(c) an order restraining the exercise of any voting or other rights at ached to shares in the company;
(d) an order directing a person who is registered as the holder of shares in respect of which an order under this section is in force to give notice in writing of that order to any person whom he knows to be entitled to exercise a right to vote attached to those shares;
(e) an order directing the company not to make payment, except in the course of winding up, of any sum due from the company in respect of shares in, or debentures of, the company;
(f) an order directing the company not to register the transfer or transmission of shares in, or debentures of, the company; or
(g) an order directing the company not to issue shares to a person who holds shares in the company by reason of his holding shares in the company nor in pursuance of an offer made to such a person by reason of his holding shares in the company.
(2) A copy of an order under subsection (1) and
of any order by which it is rescinded, revoked, altered or varied shall be
served
on the company to which it refers.
(3) Where an order under
subsection (1) is in force a person aggrieved by the order may apply to the
Court for revocation or variation
of the order and the Court may, if it is
satisfied that it is reasonable to do so, revoke or vary the order by which it
has been
altered or varied.
(4) A person who contravenes an order made
under subsection (1) is guilty of an offence.
(5) Where an offence under
subsection (4) is committed by a company, every officer of the company in
default is guilty of an offence.
Application for winding-up
188. (1) Where a report of an investigation under this
Division has been made by an inspector in respect of a company, application
may
be made to the Court by the Minister for the winding up of the company under The
Companies (Winding Up) Act, 1991.
(2) Upon the making of the application,
the provisions of this Act shall, with such adaptations as are necessary, apply
as if -
(a) in the case of a company not being an external company carrying on business within Tuvalu, proceedings for the winding up has been commenced by the company; and
(b) in the case of an external company carrying on business within Tuvalu, proceedings for an order for the affairs of the company so far as its assets in Tuvalu are concerned to be wound up in Tuvalu had been commenced in the Court by a creditor of the company in the-place in which it is incorporated or formed.
Privilege
189. Any oral or written statement or report made by an
inspector in an investigation under this Division has absolute
privilege.
Attorney-client privilege
190. Nothing in this Division shall be construed to affect
the privilege that exists in respect of an attorney-at-law and his
client.
DIVISION 3 - Appointment by the Court
Application to court
191. (1) A
shareholder of a company or the Registrar
may apply, ex parte or, upon such
notice as the Court may require, to the Court for an order directing an
investigation to be made of
the company.
(2) An application under
subsection (1) shall give particulars of the ground (being a ground referred to
in subsection (3)) on which
an order is sought.
(3) If, upon an
application in relation to a company under subsection (1), it appears to the
Court that -
(a) the business of the company is or has been carried on with intent to defraud any person;
(b) the business or affairs of the company is or has been, or are have been, carried on or conducted, or the powers of the directors are or have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, a shareholder;
(c) the company was formed for a fraudulent or unlawful purpose or is to be wound up for a fraudulent or unlawful purpose; or
(d) persons concerned with the formation, business or affairs of the company have in connection therewith acted fraudulently or dishonestly,
the Court may order an investigation to be made of the company.
(4) Where a shareholder of a company makes an
application under subsection (1) he shall give the Registrar reasonable notice
of the
application, and the Registrar is entitled to person or by an
attorney-at-law in proceedings on the application.
(5) An application
under this section is not required to give security for costs.
(6) An ex
parte application under this section shall be heard in camera.
(7) No
persons may publish anything relating to ex parte proceedings under this section
except with the authorisation of the Court
or the written consent of the company
in relation to which the application is made.
Powers of Court
192. (1) In connection with an investigation under this
Division, the Court may make any order it thinks fit including, without limiting
the generality of the foregoing -
(a) an order to investigate;
(b) an order appointing an inspector, who may be the Registrar, fixing the remuneration of an inspector, and replacing an inspector;
(c) an order determining the notice to be given to any person having an interest or dispensing with notice to any person;
(d) an order authorising an inspector to enter any premises in which the Court is satisfied that there might be any relevant information and to do all or any of the following, namely, seize, examine or make copies of any documents or records found on the premises;
(e) an order requiring any person to produce documents or records to the inspector;
(f) an order authorising an inspector to conduct a hearing, administer oaths and examine any person on oath and prescribing rules for the conduct of the hearing;
(g) an order requiring any person to attend a hearing conducted by an inspector and to give evidence on oath;
(h) an order giving directions to an inspector or any interested person on any matter arising in the investigations;
(i) an order requiring an inspector to make an interim and final report to the Court;
(j) an order determining whether a report of an inspector should be published and, if so, ordering the Registrar to publish the report in whole or in part or to send copies to any person whom the Court identifies;
(k) an order requiring an inspector to discontinue an investigation; and
(l) a final order as to the costs of the investigation.
(2) Where, pursuant to an order of a kind
referred to in subsection (1)(d), records or documents of a company are seized
the company
and its officers shall be offered reasonable access thereto while
they remain in the custody of the inspector concerned.
Powers of inspector
193. (1) An inspector has and may exercise the powers set
out in the order appointing him.
(2) An inspector shall, upon request,
produce to any person having an interest a copy of the order appointing
him.
Hearing to be in camera
194. (1) Any person having an interest may apply to the
Court for an order that a hearing conducted by an inspector be heard in camera
and for directions on any matter arising in the investigation.
(2) A
person whose conduct is being investigated or who is being examined at a hearing
conducted by an inspector has a right to be
represented by an
attorney-at-law.
Application of certain provisions
195. Sections 188, 189 and 190, (with the necessary
modifications) apply in relation to an investigation pursuant to this Division
as they apply in relation, to an investigation pursuant to Division 2.
PART VIII - ARRANGEMENTS AND RECONSTRUCTION
Power to compromise with creditors and members
196. (1) Where a compromise or arrangement is proposed
between a company and its creditor or any class of them, or between the company
and its members or any .class of them, the Court may, on the application 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.
(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, present and
voting either in. person or 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 the members or class
of members, as 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 (2) has no effect until a
copy of the order has been lodged with 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 (3) the company and every officer of the company in
default is guilty
of an offence.
(5) In this section and in section 197,
"company" means any company liable to be would up under The Companies (Winding
Up) Act, 1991, 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.
Information as to compromises with creditors and members
197. (1) Where a meeting is summoned under section 196
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 even in particular arrangement 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 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.
(2) Where the
compromise or arrangement affects the rights of debenture holders of the
company, the statement shall give the like
explanation with respect to the
trustee of any deed for securing the issue of the debentures as, under
subsection (1), a statement
is required to give with respect to the
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) Each director and each trustee
for debenture holders shall give notice to the company of such matters relating
to the company
as may be necessary for the purposes of this section.
(5)
Where a company makes default in complying with any requirements of this
section, the company and every officer of the company
in default is guilty of an
offence.
(6) For the purposes of subsection (5), the liquidator of the
company and any trustee for debenture holders is deemed to be an officer
of the
company.
(7) A person is not guilty of an offence under this section 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.
Provisions for facilitating reconstruction and amalgamation of companies
198. (1) Where an application is made to the Court under
section 196 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 any subsequent
order, make
provision for all or any of the following matters, namely-
(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 kind 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 arrangements; or
(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 made under
this section provides for the transfer of property or liabilities, that property
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, free 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 copy thereof to
be lodged with 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 in default is
guilty of an offence.
(4) In this section the expression "property"
includes property, rights and powers of every description, and the expression
"liabilities"
includes duties.
Power to acquire shares of shareholders dissenting from scheme or contract approved by majority
199. (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 corporation (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 ninety per centum in number of the shares whose
transfer is involved (other than shares 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 that 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 on which, under the scheme or contract,
the shares of the approving
shareholders are to be transferred to the transferee company.
(2) Where
shares in the transferor company of the same class or classes as the shares
whose transfer is involved are already held
as provided in subsection (1) to a
number greater than ten per centum of the aggregate of their number and that of
their shares (other
than those already so held) whose transfer is involved, the
provisions of subsection (1) do not apply unless -
(a) the transferee company offers the same terms to all holders of the shares (other than those already so held) 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 ninety per centum in number of the shares (other than those already so held) whose transfer is involved, are not less than three-fourths in number of the holders of those shares.
(3) Where, in
pursuance of any such scheme or contract, 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 ninety
per centum in number 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 company to acquire the shares in question,
and where a shareholder gives notice
under paragraph (b) with respect to any shares, the transferee company is
entitled and bound
to acquire those shares under the terms on which under the
scheme or contract the shares 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.
(4) Where a notice has been given by the transferee company under
subsection (1) 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.
(5) 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 several persons entitled to the shares in respect
of which the said sums or other consideration were respectively
received.
(6) In this section, "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.
(7) 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 (1), 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";
(b) with the omission of subsections (2) and (3); and
(c) with the omission, in subsection (4) 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".
(8) Where the shares in a company
are not divided into two or more classes, those shares are not for the purposes
of this section
deemed to constitute a class.
PART IX - REMEDIES AND OFFENCES
DIVISION 1 - Interpretation
Meaning of "complainant"
200. (1) In this
Part "complainant", in relation to a company, means -
(a) a shareholder of the company or of any company belonging to the same group of companies as the company;
(b) an officer of the company or of any company belonging to the same group of companies as the company;
(c) the Registrar; or
(d) any other person who, in the opinion of the Court, is a proper person to bring an action, or make an application, under this Part in relation to the company.
(2) In any case in which a Division
in this Part applies in relation to an external company, the reference in
subsection (1) to a
company includes an external company.
DIVISION 2 - Derivative Actions
Commencing derivative action
201. (1) Subject to subsection (2), a complainant in
relation to a company may apply to the Court for leave-
(a) to bring an action in the name and on behalf of the company or any proof its subsidiaries; or
(b) to intervene in any action to which the company or any of its subsidiaries is a party,
for the purpose of prosecuting, defending or discontinuing the action.
(2) The Court shall not give leave
under subsection (1) to a complainant in relation to a company unless the Court
is satisfied -
(a) that the complainant has, before making application under subsection (1), given to the directors of the company or its subsidiary reasonable notice of his intention to so apply if the directors do not diligently bring or, as the case maybe, prosecute, defend or discontinue the action in question;
(b) that the complainant is acting in good faith; and
(c) that it appears to be in the interest of the company or of its subsidiary that the action in question be brought, or as the case may be, prosecuted, defended or discontinued.
Power of court
202. Where,
pursuant to section 201, an action is brought or intervened in by a complainant
in relation to a company, the Court may at
any time make any order it thinks fit
in connection with the action including -
(a) an order authorising the complainant or any other person to control the conduct of the action;
(b) an order giving directions with respect to the conduct of the action;
(c) an order directing that any amount adjudged payable by a defendant in the action shall be paid in whole or in part, directly to present and former shareholders or of the company or of its subsidiary, instead of to the company or its subsidiary; or
(d) an order requiring the company or its subsidiary to pay reasonable legal costs incurred by the complainant in connection with the action.
DIVISION 3 - Protection from oppression
Application
203. (1) This Division applies in relation to an external
company carrying on business within Tuvalu as it applies in relation to
a
company.
(2) Section 219 applies to determine for the purpose of
subsection (1) whether or not an external company is carrying on business
within
Tuvalu.
Meaning of "interested person" and "oppression"
204. (1) For the purposes of this Division, "interested
person", in relation to a company, means -
(a) a complainant in relation to the company;
(b) a creditor or debenture holder of the company; or
(c) the trustee in bankruptcy or personal representatives of a bankrupt or deceased shareholder, debenture holder or creditor of the company.
(2) An interested person in relation
to a company who alleges that the affairs of the company are being conducted in
a manner oppressive
to one, or more than one, interested person (including
himself, except in a case referred to in subsection (3)) may apply to the
Court
for an order under section
205.
(3) Following a report by an inspector under Part VII to the effect
that the affairs of a company are being conducted as provided
in subsection (2),
the Minister may apply under that subsection to the Court as if he were an
interested person in relation to the
company.
(4) The affairs of a
company shall be treated as being conducted in a manner oppressive to an
interested person in relation to the
company if -
(a) any act or omission of the company or of any company belonging to the same group of companies as the company effects a result;
(b) the business or affairs of the company or of any company belonging to the same group of companies as the company has or have been carried on or conducted in a manner; or
(c) the-powers of the directors of the company or of any company belonging to the same group of companies as the company have been exercised in a manner, that is oppressive or unfairly prejudicial to, or that unfairly disregards, the interests of the interested person.
(5) It is not necessary to establish a course of
conduct by a company, or of any company belonging to the same group of companies
as the company, in order to establish under subsection (4)(a) or (c) that the
affairs of the company are being conducted in a manner
oppressive to an
interested person.
Powers of Court
205. (1) Where, on an application made under section 204,
the Court is of opinion that the affairs of a company are being or have
been,
conducted in a manner oppressive to an interested person in relation to the
company, the Court may, with a view to ending the
oppression or ensuring that it
is not repeated-
(a) make an order restraining the conduct complained of;
(b) make an order to regulate the company's affairs by amending its Memorandum or Articles;
(c) make an order directing an issue or exchange of shares;
(d) make an order appointing directors in place of, or in addition to, all or any of the directors of the company then in office;
(e) make an order directing the company, subject to subsection (7), or any other person, to purchase shares of a shareholder;
(f) make an order directing the company, subject to subsection (7), or any other person, to pay to a shareholder any part of the moneys paid to him for shares;
(g) make an order varying or setting aside a transaction or contract to which the company is a party and compensating the company or any other party to the transaction or contract;
(h) make an order directing rectification of the registers or other records of the company;
(i) make an order that the company be wound up;
(j) make an order directing that an investigation be held under Division 3 of Part VII; or
(k) make an order giving leave to the bringing of an action by the interested person in the name of the company against a third party.
(2) Where an order is made pursuant to
subsection (1) (b) then, notwithstanding anything in any other provision of this
Act, but subject
to the provisions of the order -
(a) 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 of the company inconsistent with the provisions of the order; and
(b) subject to paragraph (a), any amendment made by the order shall be of the same effect as if duly made by resolution of the company.
(3) For the purposes of an order made
pursuant to subsection (1)(h), section 207 applies as if the application under
this section
were an application under section 206.
(4) Where an order
that the company be wound up is made pursuant to subsection (1) (i),the
provisions of this Act relating to the
winding up of a company shall, with such
adaptations as are necessary, apply as if the order had been made in proceedings
in the
Court commenced by the company.
(5) For the purposes of an order
made pursuant to subsection (1) (j), Part VII applies as if the application
under this section were
an application under section 191.
(6) Where the
Court makes an order made pursuant to subsection (1) (k) then, subject to the
provisions of the order, section 202 and
Division 7 apply in relation to any
action brought as if the action were brought pursuant to section 201.
(7)
A company shall not make a payment to a shareholder pursuant to an order made
under subsection (1)(e) or (f) if there are reasonable
grounds for believing
that -
(a) the company is or would after making that payment be unable to meet its liabilities as they become due; or
(b) the realisable value of the company's assets would thereby be less than the aggregate of its liabilities.
DIVISION 4 -Rectification of records
Application to court to rectify records
206. (1) If the name of a person is alleged to be or has
been wrongly entered or retained in, or wrongly deleted or omitted from,
the
registers or other records of a company -
(a) the company;
(b) a shareholder or debenture holder of the company; or
(c) an aggrieved person,
may apply to the Court for an order that the registers or records be rectified.
(2) An applicant under subsection
(1) shall give to the Registrar notice of the application and the Registrar is
entitled to appear
and be heard in proceedings on the application either alone
or by attorney-at-law.
Powers of court
207. On an application under section 206, the Court may
make any order it thinks fit, including -
(a) an order requiring the register or records of the company to be rectified;
(b) an order restraining the company from calling or holding a meeting of the company or paying a dividend before the registers or records have been rectified;
(c) an order determining the right of a party to the proceedings to have his name entered or retained in, or deleted or omitted from, the registers or records of the company, whether the issue arises between -
(i) two or more shareholders or alleged shareholders;
(ii) two or more debenture holders or alleged debenture holders; or
(iii) the company and shareholders or debenture holders, or alleged shareholders or debenture holders; or
(d) an order compensating a party to the proceedings who has suffered a loss.
DIVISION 5 - Miscellaneous provisions with respect to Registrar
Notice of refusal by Registrar
208. (1) This section does not apply where express
provision is made for an appeal from, or reference to the Court as the result
of,
any refusal of the Registrar to file an instrument or other document lodged
with him, or where any such refusal is expressed to be,
or is by implication,
final.
(2) If the Registrar refuses to file any instrument or document
required by this Act to be filed by him before the instrument or document
becomes effective, he shall, within twenty days after the instrument or document
is lodged with him, give written notice of his refusal
to the person who lodged
the instrument or document giving reasons for the refusal.
(3) If the
Registrar refuses to file any article or document referred to in subsection (1)
and does not give notice of that refusal
in accordance with that subsection, any
person aggrieved by the refusal may apply to the Court for an order requiring
the Registrar
to change his decision, and upon such an application the Court may
make any order it thinks fit.
Application for directions, etc.
209. (1) The Registrar may apply to the Court for
directions in respect of any matter concerning his duties under this Act, and on
any such application the Court may give such directions and make such further
order as it thinks fit.
(2) The Registrar may make enquiries of any
person relating to compliance with this Act.
DIVISION 6 - Restraining or compliance order
Application for directions, etc
210. (1) Where a
company or any officer, employee, liquidator or agent of the company fails, in
relation to the company, to comply with
any requirement of-
(a) this Act or any rules or regulations made under this Act;
(b) an unanimous resolution passed by the company; or
(c) the Memorandum or Articles of the company,
a complaint in relation to, or a creditor or
debenture holder of, the company, or the trustee of a debenture trust deed
covering debentures
of the company, may apply to the Court for an order
directing the company or any such person to comply with, or to refrain from
acting
in breach of, the requirement.
(2) Subject to section 35(1), in an
application under subsection (1) the Court may make any order it thinks fit,
including any order
which the Court is empowered to make under section 36 in
proceedings of a kind referred to in section 35(2)(a).
(3) The right of
any person under subsection (1) with respect to any failure to comply with a
provision of a kind referred to in that
subsection is in addition to any other
right which the person may have with respect to the failure.
DIVISION 7 - General
Evidence of shareholder approval not decisive
211. (1) An
application made, or an action brought or intervened in, under or pursuant to
any provision in this Part shall not be stayed
or dismissed by reason only that
it is shown that an allege breach of a right or duty owed to a company or its
subsidiary has been,
or may be, approved by the shareholders of the company, but
evidence of any such approval may be taken into account in making an
order under
section 202 or 205.
(2) An application made, or an action brought or
intervened in, under or pursuant to any provision in this Part shall not be
stayed,
discontinued, settled or dismissed for want of prosecution without the
approval of the Court given upon such terms as the Court thinks
fit, and if the
Court determines that the interests of any complainant or any person of a kind
referred to in section 204(1)(b) or
(c) may be substantially affected by any
such stay, discontinuance, settlement or dismissal, the Court may order any
party to the
application or action to give notice to the complainant so referred
to.
No security for costs
212. (1) A
complainant or a person of a kind referred to in section 204(1)(b) or (c) is not
required to give security for costs in any
application made; or brought or
intervened in, under or pursuant to any provision in this Part.
(2) In an
application made, or action brought or intervened in, under or pursuant to any
provision in this Part the Court may at any
time order the company concerned or
its subsidiary to pay to the complainant or a person of a kind referred to in
section 204(1)(b)
or (c) interim costs, including legal fees and disbursements,
but the complainant or a person so referred to is accountable for those
costs so
paid upon the final disposition of the application or action.
DIVISION 8 - Offences
False and misleading statements
213. (1) Every
person who in any return, report or certificate or in accounts or in any other
document required by or for the purposes
of this Act -
(a) makes or authorises the making of a statement which is false or misleading in a material particular; or
(b) omits or authorises the omission of any matter or thing without which the return, report, certificate, accounts or other document is misleading in a material particular,
is guilty of an offence.
(2) For the purposes of subsection (1), where a
person at a meeting votes in favour of the making of a statement referred to in
paragraph
(a) of that subsection he is deemed to have authorised the making of
the statement.
(3) It is a sufficient defence if a person charged with an
offence under subsection (1) proves that he did not know and could not
by the
exercise of reasonable diligence have known that the statement concerned was
false and misleading or, as the case may be,
that the matter or thing concerned
had been omitted.
(4) Where an action or omission constitutes an offence
under any other provision of this Act and under this section no person shall
be
convicted under this section of that offence, but he may be charged with the
offences in the alternative.
False reports
214. An officer
of a corporation who, with intent to deceive, makes or furnishes, or knowingly
authorises or permits the making or furnishing
of, any false or misleading
statement or report to -
(a) a director, auditor, member; debenture holder or trustee for debenture holders of the corporation; or
(b) in the case of a corporation that is a subsidiary, an auditor of the holding company,
relating to the affairs of the corporation is guilty of an offence.
Fraudulent inducements to invest in shares or debentures
215. (1) Any
person who by any statement, promises or forecast which he knows to be false or
misleading, or by recklessly making any
statement, promise or forecast which is
false or misleading, induces or attempts to induce another person to enter into,
or to offer
to enter into, an agreement to subscribe for, underwrite, sell,
purchase, exchange or surrender shares or debentures, or to create
any
derivative interest in shares or debentures, is guilty of an offence.
(2)
For the purposes of this section, a statement, promise or forecast is made
recklessly if-
(a) it is made without belief that it is true, or in the case of a promise or forecast, that it is unlikely to be fulfilled; or
(b) if a reasonable man who had the same knowledge of the surrounding circumstances as the accused person, would not have believed that the statement was true, that a promise or forecast was likely to be fulfilled
Order to comply
216. Where a
person is convicted of an offence under any provision of this Act or of any
rules or regulations made under this Act, the
Court before which the person is
convicted may, in addition to any penalty imposed by it, order the person to
comply with the provision,
the failure to comply with which constituted the
offence.
Limitation
217. Subject to
any express provision in this Act to the contrary, a prosecution for an offence
under this Act shall be commenced not
later than two years after the completion
of the Act or omission which constitutes the offence.
Saving
218. A conviction
for an offence and this Act does not affect any right to pursue a civil remedy
in respect of the Act or omission constituting
the offence.
Penalties
219. (1) A company which commits an offence under this Act
is liable on conviction to a fine of up to $5000.
(2) A director or
officer of a company or any other person who commits an offence under this Act
is liable on conviction to a fine
of up to $3000.
PART X - EXTERNAL COMPANIES
DIVISION 1 - External Companies carrying on business in Tuvalu
External companies to which this Division applies
220. (1) This Division applies to external companies
carrying on business within Tuvalu.
(2) An external company carries on
business within Tuvalu -
(a) if business of the company is regularly transacted from an office in Tuvalu established or used for the purpose;
(b) if the company establishes or uses a share transfer or share registration office in Tuvalu;
(c) if the company enters into two or more contracts with persons resident in Tuvalu, or with companies incorporated under this Act, being contracts which -
(i) are entered into in connection with the business of the company; and
(ii) by their express or implied terms are to be wholly or substantially performed in Tuvalu, or may be so performed at the option of any party to the contract;
(d) if the company appoints an agent who resides or has a place of business in Tuvalu to represent the company in connection with the making or performance of to or more contracts of a kind referred to in paragraph (c), or in connection with the transactions in Tuvalu of the company generally, whether the appointment is made for a fixed period of time; or
(e) if the company owns, possesses or uses assets situated in Tuvalu for the purpose of carrying on or pursuing its business, if it obtains or seeks to obtain from those assests, directly or indirectly, profit or gain, whether realised in Tuvalu or not.
Documents to be delivered to Registrar by external company, etc.
221. (1) Every external company shall, within one month
after it commences to carry on business in Tuvalu, lodge with the Registrar
for
registration -
(a) a certified copy of the charter, statutes, regulations, articles of incorporation or by-law, or other instrument constituting or defining the constitution of the company;
(b) a statement in duplicate in the prescribed form giving the following particulars regarding the company, namely -
(i) its name;
(ii) the nature of its business or other main objects;
(iii) the present forenames and surname and any former forename or surname, and the address and business occupations of the person or persons authorised to manage the business in Tuvalu of the company;
(iv) if the company has shares, the number and the nominal value, if any, of its authorised and issued shares, the amount paid up thereon and the amount remaining payable thereon, distinguishing between the amounts paid and payable in cash and the amounts paid and payable otherwise than in cash;
(v) the address of its registered office or principal place of business in its country of incorporation or origin;
(vi) the address of its principal place of business in Tuvalu or if the company has no place of business in Tuvalu, a statement of that effect;
(vii) the name and address in Tuvalu of a person authorised by the company to accept service of process and other documents on behalf of the company;
(c) a list of the company's directors containing similar particulars with respect to its directors as are by this Act required to be contained in the register of directors of a company incorporated under this Act; and
(d) such particulars and copies of any charges on the property of the company as are required to be delivered for registration in accordance with section 226 or, if there are no such charges, a statement to that effect in the prescribed form.
(2) Where any change or alteration is
made in-
(a) the charter, statutes, articles of incorporation or by-laws of the external company, or other instrument lodged with the Registrar;
(b) the directors of the external company;
(c) the managing agent or agent appointed to accept service on behalf of the external company;
(d) the address of its registered office or principal place of business in its country of incorporation;
(e) the address of its principal place of business in Tuvalu; or
(f) the name of the external company,
the
external company shall, within twenty-eight days or within such further period
as the Registrar in special circumstances allows
after the change or alteration,
lodge with the Registrar particulars of the change and such documents as may be
prescribed in the
regulations.
(3) If an external company increases its
authorised share capital, within twenty-eight days or within such further period
as the Registrar
in special circumstances allows after such increase, lodge with
the Registrar notice of the amount from which and of the amount to
which it has
been so increased.
(4) If an external company not having a share capital
increases the number of its members beyond the registered number it shall,
within
twenty-eight days or within such further period as the Registrar in
special circumstances allows after the increase was resolved
or took place,
lodge with the registrar notice of the increase.
(5) Where notice of any
change or alteration is lodged with the Registrar pursuant to subsection (2) he
shall, as soon as conveniently
possible thereafter, cause a notice giving short
particulars of the change or alteration to be published and published in the
Gazette.
(6) If any document to be lodged with the Registrar under this
section is not in the English language, there shall be annexed to it
a certified
translation.
Power of external company to hold land
222. Subject to
any enactment an external company registered under this Division may hold land
in Tuvalu.
Restriction on the use of certain names
223. (1) Except
with the consent of the Minister, an external company shall not be registered by
a name that, in the opinion of the Registrar,
is undesirable or is a name, or a
name of a kind, that the Minister has directed the Registrar not to accept for
registration.
(2) Except with the consent of the Minister, any change in
the name of an external company shall not be registered, if in the opinion
of
the Minister the new name is undesirable or is a name, or a name of a kind, that
the Minister has directed the Registrar not to
accept for registration,
notwithstanding that particulars of the change have been lodged in accordance
with section 220.
(3) In any case such as is referred to in subsection
(1) or (2) the Registrar may direct the external company to take an alternative
name approved by the Registrar for the purpose of carrying on business in Tuvalu
and the company shall, within such period as the
Registrar allows, notify the
Registrar whether or not it accepts the direction.
(4) If the external
company accepts a direction given pursuant to subsection (3), the Registrar
shall register the company by the
name contained in the direction.
(5) No
external company to which this Part applies shall use, in Tuvalu, any name other
than that under which it is registered under
this Part.
Accounts of company carrying on business in Tuvalu
224. (1) Subject
to this section, every external company 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 it would, if it
had been a public company incorporated under this Act, have been a required to
make out and lay before the company in general meeting, and lodge a copy of
those documents with the Registrar for registration.
(2) The annual
accounts of an external company shall, in addition to such matters as may be
prescribed, contain the following particulars,
namely -
(a) the fixed assets and current assets of the company, and its assets which are neither fixed nor current shall be separately identified and classified, and any such assets situated in Tuvalu shall be distinguished from any such assets situate elsewhere;
(b) the amount of the company's cash held by banks, and any amount held by banks licensed to carry on business of banking under any law in force in Tuvalu relating to banking shall be distinguished from cash held by other banks;
(c) the amount of bank loans and overdrafts made or extended to the company, and any such amount so made or extended, by banks so licensed shall be distinguished from bank loans and overdrafts made by other banks;
(d) the aggregate amount of the company's debts and liabilities to persons resident in Tuvalu or to companies incorporated under this Act shall be shown, and there shall also be shown the amount of such debts and liabilities which -
(i) are already due or will become due within twelve months after the date as at which the annual accounts of the company are made out;
(ii) will become due more than twelve months after that date; and
(iii) will become due more than thirty-six months after that date; and
(e) the aggregate amount of the company's debts and liabilities which are secured by a mortgage, charge, or lien on movable or immoveable property situated in Tuvalu.
(3) For the purposes of
subsection (2)-
(a) a debt is deemed to be due on the earliest date on which the creditor could require payment to be made;
(b) the whole of a debt is deemed o be due when any instalment of it falls due; and
(c) an external company is deemed to be indebted to debenture stockholders and loan stockholders for the principal amount and any arrears or interest in respect of the debenture stock or loan stock held by them.
(4) The Minister may by order exempt any
external company from compliance with subsection (1) or (2), or from both those
subsections,
on such terms and conditions as he thinks fit if -
(a) he is satisfied that the company has, and will maintain, in Tuvalu; sufficient cash and readily realisable assets to satisfy its debts as they fall due;
(b) a company (whether an external company or not) which is the holding company of the external company has deliver to the Registrar a written undertaking to pay all the present and future debts and liabilities of the company to persons resident or companies incorporated in Tuvalu; or
(c) he is satisfied that the company is substantially the same as a proprietary company.
(5) A written undertaking in respect
of the debts and liabilities of an external company delivered under subsection
(4) shall be enforceable-
(a) by any creditor of the external company who was resident in Tuvalu at the time that the debt or liability to him was incurred, or which is a company incorporated in Tuvalu, as though the undertaking were a written guarantee of the amount payable to the creditor and given to him by the holding company for valuable consideration; and
(b) in the winding up of the external company as though the company were an unlimited company and the holding company were its only member, but without prejudice to the liability (if any) of the other members, shareholders, or contributories of the external company under this Act.
(6) The Minister may at any time
revoke an exemption granted by him under subsection (4), and thereupon any
undertaking delivered
by a holding company under that subsection shall, cease to
have effect, but without prejudice to the liability of the holding company
in
respect of debts and liabilities of the external company incurred to persons
acting in good faith without notice of the revocation
before it is advertised
under subsection (7).
(7) The Minister shall advertise the revocation
under this section by notice and in the Gazette as soon as conveniently possible
after
the revocation takes place.
(8) Upon the advertisement of
revocation under subsection (7), subsections (1) and (2) apply to the external
company as though it
were thereby required to deliver copies of its annual
accounts to the Registrar as from the date of the advertise of the revocation,
and it shall deliver copies of its annual accounts for its financial year ending
last before that date within three months after
that date.
(9) If any
document delivered to the Registrar under this section is not written in the
English language, there shall be annexed to
it a certified translation
thereof.
Publication of name, etc., of external companies
225. (1) Every external company shall -
(a) conspicuously exhibit on every place where it carries on business in Tuvalu the name of the company and the country in which the company is incorporated or formed;
(b) cause the name of the company and of the country in which the company is incorporated or formed to be stated in legible characters in all notices, advertisements 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 or parcels, invoices, receipts and letters of credit of the company; and
(c) if the liability of the members of the company is limited, cause notice of that fact to be stated in legible characters in all notices, advertisement and other official publications of the company in Tuvalu and to be affixed on every place where it carries on its business.
(2)
Where the name of an external company is in a language other than English, the
requirements of subsection (1), relating to the
name of the company is deemed to
be fulfilled by exhibiting and stating a translation thereof in
English.
(3) The fact that the word "limited", or its equivalent in a
language other than English, forms part of an external company's name
shall not
be deemed a sufficient compliance with the obligation imposed by subsection
(1)(c).
Publication of name of managing agent of external company
226. (1) Subject to subsection (2), every external company
shall, in all trade circulars and business letters on or in which the company's
name appears and which are dispatched in Tuvalu by or on behalf of the company,
state in legible characters with respect to each
person authorised to manage the
business of the company in Tuvalu -
(a) his present forenames and surname; and
(b) any former forenames or surname.
(2) The
Registrar may in special circumstances, subject to such conditions as he may
impose, exempt an external company from compliance
with subsection (1).
Application of certain provisions to external companies
227. (1) For the purposes of the application, pursuant to
section 108, of Divisions 7 and 8 of Part IV in the cases of an external
company
to charges on property in Tuvalu-
(a) particulars of charge created on property in Tuvalu prior to the date when the external company carried on business in Tuvalu; and
(b) particulars of charges created prior to the commencement of this Act,
are deemed to be duly registered if particulars thereof are lodged with the Registrar in accordance with section 220(1)(d).
(2) The Registrar shall cause to be
published in the Gazette particulars of any charge registered pursuant to this
section.
(3) A failure to register a charge of a kind referred to in
subsection (1)(a) or (b), or to publish particulars pursuant to sub section
(2),
does not affect the validity of a charge.
Service on external company
228. (1) Any process or notice required to be served on an
external company is sufficiently served if addressed to any person whose
name
has been delivered to the Registrar under this Division and left at or sent by
post to the address which has been so delivered
but -
(a) where any such company makes default in delivering to the Registrar the name and address of a person resident in Tuvalu 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 refuse to accept service on behalf of the company, or for any reason cannot be served,
a 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 Tuvalu.
(2) Where -
(a) subsection (1)(a) or (b) applies; and
(b) the company concerned has no place of business in Tuvalu,
any process or notice required to be served on the company is sufficiently served if addressed to the company and left at or sent by post to any place of business of the company in the country of its incorporation.
Removing company's name from register
229. (1) If any external company ceases to carry on
business in Tuvalu it shall, within twenty-eight days of so ceasing, give notice
of the fact to the Registrar and as from the date on which notice is so given to
obligation of the company to deliver any document
to the Registrar shall
cease.
(2) In any case where the Registrar is satisfied by any other
means that the company has ceased to carry on business in Tuvalu he
may close
the file of the company and thereupon the obligations of the company to deliver
any document to the Registrar shall cease.
(3) Where a company gives
notice as provided in subsection (1) or the Registrar is satisfied as provided
in subsection (2), he shall
cause a notice stating that the company has cease to
carry on business in Tuvalu to be published and published in the
Gazette.
Recognition of winding-up in designated state
230. (1) The Minister may make rules with respect to the
recognition and the giving effect to in Tuvalu of any order in the nature
of a
winding-up order made in a designated state in relation to an external company
incorporated or formed in the designated state.
(2) Without limiting the
generality of the power of the Minister under subsection (1), rules made under
that subsection may provide
-
(a) for the exercise in Tuvalu of the powers of a liquidator in a designated state;
(b) for the application with or without modification, of any of The Companies (Winding Up) Act, 1991;
(c) for the dissolution of an external company and the disposal of its assets in Tuvalu.
(3) Rules made under this section
shall have effect notwithstanding anything to the contrary in this
Act.
(4) For the purposes of this section, "designated state" means any
country designated under subsection 5).
(5) Where it appears to the
Minister that an enactment in force in any country contains provisions similar
to the provisions of this
section, he may, by order published in the Gazette,
designate the country for the purposes of this section.
Offences
231. If an
external company fails to comply with any provision of this Division with which
an external company is required to comply,
every officer of the company, every
person authorised to manage the business in Tuvalu of the company, and every
person whose name
has been delivered to the Registrar for the purposes of
section 218, who knowingly authorises or permits the default is guilty of
an
offence.
DIVISION 2 - Provisions applicable to all external companies
Application
232. (1) This Division applies to an external company
whether or not it carries on business within Tuvalu.
(2) Subject to this
Division, the provisions of Division 1 of Part IV and the Fourth Schedule apply
to an external company (whether
incorporate or to be incorporated) to its shares
or debentures and to its officers, as they apply to a company or a proposed
company,
to its shares or debentures and to its officers.
Control of external companies
233. (1) The Minister may make regulations under external
section 237 with respect to -
(a) the business which may be carried on within Tuvalu by an external company for that purpose provision may be made, regulating, controlling or prohibiting the carrying on of any business;
(b) the exemption (with or without conditions) of any external company or class of external company from all or any of the regulations.
(2) Any regulations made pursuant
to subsection (1) may be made to apply generally or only in respect of any
company or class of company
identified in the regulations.
Modification of provisions for the purpose of application to external company
234. For the purposes of its application pursuant to
section 231(2) to an external company, incorporated or formed or to be
incorporated
or formed, section 45(1) shall have effect as if it included a
requirement, in relation to a prospectus, that it contains particulars
with
respect to-
(a) the instrument constituting or defining the constitution of the company;
(b) the enactment, or provisions having the force of an enactment, by or under which the incorporation or formation is to be effected;
(c) an address in Tuvalu where such instruments, enactments or provisions or certified copies thereof may be inspected;
(d) the date on which and the place where the company was or is to be incorporated or formed; and
(e) whether the company has established a place of business in Tuvalu and, if so, the address of its principal office in Tuvalu.
PART XI - MISCELLANEOUS
Registrar of Companies
235. There shall be a Registrar of Companies who may be a
public officer, or a person who is not a public officer appointed by the
Minister.
Fixing record date
236. (1) For the purposes of determining shareholders or
debenture holders of a company-
(a) entitled to receive payment of a dividend or any interest under a debenture;
(b) entitled to participate in a distribution pursuant to the winding up of the company; or
(c) for any other purpose except the right to receive notice of or to vote at a meeting, the directors of the company may fix in advance a date as the record date for determination of shareholders or debenture holders, but a record date so fixed shall not precede by more than fifty days the particular action to be taken.
(2) Where a record date is fix under
subsection (1), notice thereof shall, not less than fourteen days before the
date fixed, be given
by advertisement by notice and in the Gazette.
Fees
237. There shall
be paid to the Registrar -
(a) the fees specified in the Fifth Schedule; and
(b) such other fees as are prescribed.
Regulations
238. The Minister
may make regulations for or with respect to -
(a) the keeping of registers by the Registrar and the lodging or registration of documents and the time and manner of submission of documents for lodging or registration and the requirements with which documents lodged or to be lodged with the Registrar must comply;
(b) prescribing forms for the purposes of this Act;
(c) prescribing fees, not in any case exceeding one hundred dollars, to be paid to the Registrar in respect of matters or things not provided for in the Fifth Schedule in respect of any document required to be lodged, filed, registered with or issued by the Registrar under this Act;
(d) prescribing the manner in which, and the persons by whom, and the directions or requirements in accordance with which, the forms prescribed for the purposes of this Act, or any of them, shall or may be signed, prepared or completed and in general regulating and signing, preparation and completion of those forms or any of them;
(e) the preservation of registers, records or documents and their destruction and the presumptions which may or shall be made with respect to entries in registers;
(f) the disclosure of corporate activities to employees or employees' representatives and the method and content of any such disclosure; and
(g) all matters or things which by this Act are required or permitted to be prescribed, otherwise than by rules, or which are necessary or expedient to be prescribed for giving effect to this Act.
Documents
239. A document
lodged with the Registrar for registration-
(a) shall be in durable form;
(b) shall be so prepared as to be legible but need not be printed; and
(c) shall not be in manuscript.
Amendment
240. The
Companies and Business Registration Act is amended in section 2A by the deletion
of "External Companies (Registration and Control) Act 1987" and by the
substitution therefore
of "Companies Act, 1991" and inserting a full stop after
the word "applies" and deleting the words thereafter.
Repeal
241. (1) The
External Companies (Registration and Control) Act, 1987, is hereby
repealed.
(2) An external company which at the commencement of this Act
is registered under the Act repealed by subsection (1) shall be deemed
to have
been registered under this Act and the provisions of this Act apply
accordingly.
_____________
SCHEDULES
FIRST SCHEDULE
(Section 2)
Definition
1.
In this Act, unless the context otherwise requires -
"accounts", includes the group accounts of a corporation;
"annual general meeting", in relation to a company, means a meeting of the company held for any year under section 141;
"annual return", in relation to a company, means the return required to be made by section 161;
"articles", in relation to a company means Articles of Association of the company from time to time in force;
"associated company" has the meaning assigned by section 127(3);
"company", means a company incorporated pursuant to this Act;
"contributory", in relation to a company, has the meaning assigned by section 5 of the Companies (Winding Up) Act, 1991;
"corporation", means a company, or other body corporate wherever or however incorporated, but does not include -
(a) a corporation sole; or
(b) a body corporate, or body corporate belonging to a class, that is prescribed;
"Court", means the High Court;
"debenture" includes debenture stock, bonds, notes and any other securities of a corporation whether constituting a charge on the assets of the corporation or not;
"debenture trust deed" means a deed executed by a company and the trustee appointed by the deed in connection with the issue of debentures, together with any supplemental deed, resolution or scheme of arrangement modifying the terms thereof, any deed substituted therefor;
"director" includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act
"document" includes a summons, order and other legal process, and a notice or register;
"equity share" means a share other than a preference share;
"expert" includes an engineer, a valuer, an accountant and any other person whose profession or reputation gives authority to a statement made by him;
"external company" means an incorporated or unincorporated body, formed under the law of a country other than Tuvalu which has its object, or one of its objects, the acquisition or gain by it or its members, but does not include a partnership or limited partnership some or all of whose members are liable for its debts without any limit and the shares in which are not transferable free from any restrictions;
"extraordinary general meeting", in relation to a company, means a meeting of the company held under section 143;
"financial year", in relation to a corporation, means the period in respect of which any profit and loss accounts is made up, whether or not that period is a year;
"group of companies" means two or more corporations one of which is the holding company of the other or others;
"manager", in relation to a company, means the principal executive officer of the company for the time being by whatever name called and whether or not he is a director;
"member" has the meaning assigned by section 30;
"Memorandum" in relation to a company, means Memorandum of Association of the company from time to time in force;
"officer", in relation to a corporation, includes -
(a) any director, secretary, manager or employee (by whatever name called) performing the like functions of a manager;
(b) any receiver and-manager of the undertaking of the corporation appointed under a power contained in any instrument; or
(c) any liquidator of a company appointed in a voluntary winding up,
but does not include -
(d) any receiver who is not also a manager;
(e) any receiver and manager appointed by the Court; or
(f) any liquidator appointed by the court or by the creditors;
"ordinary resolution" has the meaning assigned by section 144(3);
"preference share" means a share which carries the right to payment of a dividend of a fixed amount, or not exceeding a fixed amount, in priority to payment of a dividend on another class or other classes of shares, whether with or without other rights;
"promoter", in relation to a prospectus issued by or in connection with a company, means a promoter of the company who was a party to the preparation of the prospectus or of any relevant portion thereof, but does not include any person by reason only of his acting-in a professional capacity;
"proprietary company" means -
(a) a company incorporated as a proprietary company by virtue of section 18; and
(b) a company converted into a proprietary company pursuant to section 21;
"prospectus" means any prospectus, notice, circular, advertisement or. invitation inviting application or offers from the public to subscribe for or purchase or offering to the public for subscription or purchase any shares in or debentures of or any units of shares in or units of debentures of a company or proposed company;
"public company" means a company other than a proprietary company;
"Registrar" means the Registrar of Companies;
"share" means a share in the capital of a company;
"shareholder" has the meaning assigned by section 30(3);
"special resolution" has the meaning assigned by section 144(4);
Meaning of "the Minister"
2. In this Act the expression "the Minister" means the
Minister from time to time responsible for the administration of this Act or,
if
more than one Minister is so responsible, the Minister so responsible with
respect to the provisions in which the expression occurs.
Directors
3. For the purposes of this Act, a person shall not be
regarded as a person in accordance with those directions or instructions the
directors of a company are accustomed to act by reason only that the directors
act on advice given by him in a professional capacity.
When statement untrue
4. For the purposes of this Act, a statement included in a
prospectus or statement in lieu of prospectus is deemed to be untrue if
it is
misleading in the form and context in which it is included.
When statement included in prospectus
5. For the purposes of this Act, a statement is deemed to
be included in a prospectus or statement in lieu of prospectus if it is
contained in any report or memorandum appearing on the face thereof or by
reference incorporated therein or issued therewith.
Provisions as to what constitutes an offer to the public
6. (1) Any reference in this Act to offering shares or
debentures to the public includes, unless the contrary intention appears, a
reference to offering them to any section of the public, whether selected as
clients of the person issuing the prospectus or in any
other manner, and
references in this Act or in a company's articles of incorporation to
invitations to the public to subscribe for
shares or debentures shall, unless
the contrary intention appears, be similarly construed.
(2) Sub-paragraph
(1) 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, and in particular -
(a) a provision in a company's Memorandum or Articles prohibiting invitations to public to subscribe for shares or debentures shall not be taken as prohibiting the making to members or debenture holders of an invitation which can be properly be so regarded; and
(b) the provisions of this Act relating to proprietary companies shall be construed accordingly.
Provisions with respect to meaning of offer for subscription or purchase
7. For the purposes of this Act, a reference to an offer
or offering of shares or debentures for subscription or purchases is deemed
to
include an offer of shares or debentures by way of barter or exchange.
Definition of subsidiary and holding company
8. (1) For the purposes of this Act, a corporation is
deemed to be a subsidiary of another corporation if-
(a) that other corporation -
(i) holds more than half of the agreed equity shares in the first mentioned corporation; or
(ii) is entitled to appoint or prevent the appointment of more than half the directors of the first mentioned corporation; or
(b) the first mentioned corporation is a subsidiary of any corporation which is that other corporation's subsidiary.
(2) A
reference to this Act to the holding company of another corporation is a
reference to a corporation of which that last mentioned
corporation is a
subsidiary.
SECOND SCHEDULE
(Sec. 9)
ARTICLES
Part I
Articles for Public Company
Commission
1. The company may exercise the power under section 85 of
the Act of paying commission.
Lost share certificate etc.
2. When a share certificate or debenture is lost,
destroyed or defaced it may be renewed on payment of a fee of one dollar and on
such terms (if any) as to evidence and indemnity and the payment of expenses of
the company of investigating evidence as the directors
think fit.
Lien
3. (1) The company shall have a first and paramount lien
on every share (not being a fully paid share) for all moneys (whether presently
due or not) payable in respect of that share, and the company shall also have a
first and paramount lien on all shares (other than
fully paid shares) standing
registered in the name of a single person for all moneys presently payable by
him or his estate to the
company, but the directors may at any time declare any
share to be wholly or in part exempt from the provisions of this paragraph;
the
company's lien, if any, on a share shall extend to all dividends payable
thereon.
(2) The company may sell, in such manner as the directors think
fit, any shares on which the company has a lien, but no sale shall
be made
unless a sum in respect of which the lien exists is presently payable, nor until
the expiration of fourteen days after a
notice in writing, stating and demanding
payment of such part of the amount in respect of which the lien exists as is
presently payable,
has been given to the registered holder for the time being of
the share, or the person entitled thereto by reason of his death or
bankruptcy.
(3) To give effect to any such sale the directors may
authorise some person to transfer shares sold to the purchaser thereof; the
purchaser shall be registered as the holder of the shares comprised in any such
transfer, and he shall not be bound to see the application
of the purchase
money, nor shall his title to the shares be affected by any irregularity or
invalidity in the proceedings in reference
to the sale.
(4) The proceeds
of the sale shall be received by
the company and applied in payment f such part of the amount in respect of which
the lien exists or is presently payable,
and the residue, if any, shall (subject
to a like lien for sums not presently payable as existed upon the shares before
the sale)
be paid to the person entitled to the shares at the date of the
sale.
(5) For the purposes of this paragraph, a share is not a fully paid
share if any instalment of the issue price remains to be paid.
Payment of value price
4. The directors may, if they think fit, receive from any
person willing to advance the same, all or any part of the moneys not yet
due
upon any shares or debentures held by him, and upon all or any of the moneys so
advanced may (until the same would, but for such
advance, become payable) pay
interest a such rate not exceeding (unless the company in general meeting shall
otherwise direct) five
per centum per annum, as may be agreed upon between the
directors and the person paying that sum in advance.
Transfer of shares or debentures
5. (1) An instrument of transfer of shares or debentures
shall name the transferee, shall state the number or principal amount of
the
shares or debentures transferred, and shall be signed by the transferor. As
regards the company the transferor shall be deemed
to remain the holder of the
shares or debentures until the name of the transferee is entered in the register
of members or debenture
holders except so far as the Act otherwise provides or
the Court otherwise orders.
(2) The directors may decline to register
-
(a) the transfer of a share (not being a fully paid share) to a person of whom they shall not approve;
(b) the transfer of a share on which the company has a lien; or
(c) the transfer of a share to a person who is an infant or who is of unsound mind and has been so found by a court in Tuvalu.
(3) The directors may decline to
recognise any instrument of transfer of shares or debentures unless -
(a) a fee of (one dollar), or such lesser sum as the directors may from time to time require, is paid to the company in respect thereof;
(b) the instrument of transfer is accompanied by the certificate of the shares or debentures to which it relates, and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer;
(c) the instrument of transfer is in respect of only one class of shares or debentures.
(4) The registration of transfers
may be suspended at such times and for such periods as the directors may from
time to time determine
provided that such registration shall not be suspended
for more than thirty days in any year.
(5) The company shall be entitled
to charge a fee not exceeding one dollar on the registration of every probate,
letters of administration,
certificate of appointment of a trustee in
bankruptcy, power of attorney, notice of interest, charging order, or other
instrument.
Transmission of shares and debentures
6. (1) In case of the death of a member or debenture
holder the survivor or survivors where the deceased was a joint holder, and the
legal personal representative of the deceased where he was a sole holder, shall
be the only person recognised by the company as having
any title to his shares
or debentures; but nothing herein contained shall release the estate of a
deceased joint holder from any
liability in respect of any share which had been
jointly held by him with other persons.
(2) Any person becoming entitle
to shares or debentures in consequence of the death or bankruptcy of a member,
or debenture holder
may, upon such evidence being produced as may from time to
time properly be required by the directors and subject as hereinafter
provided,
elect either to himself as holder of the shares or debentures or to have some
person nominated by him register as the transferee
thereof, but the directors
shall, in either case, have the same right to decline or suspend registration as
they would have had in
the case of a transfer of the shares or debentures by
that member or debenture holder before his death or bankruptcy, as the case
may
be.
(3) A person becoming entitled to a share by reason of the death or
bankruptcy of the holder shall be entitled to the same dividends
and other
advantage to which he would be entitled if he were the registered holder of the
share except that he shall not, before
being registered as a member in respect
of the share, be entitled in respect of it to exercise any right conferred by;
membership
in relation to meetings of the company; but the directors may at any
time give notice requiring any such person to elect either to
be registered
himself or to transfer the share, and, if the notice is not complied with within
ninety days the directors may thereafter
withhold payment of all dividends,
bonuses or other moneys payable in respect of the share until requirements of
the notice have
been complied with.
Forfeiture shares
7. (1) If a shareholder fails to pay any instalment of the
issue price of a share on the day appointed for payment thereof, the directors
may, at any time there after during
such time as any part of the instalment remains unpaid, exercise the powers to
forfeit and re-issue the
share and to recover the unpaid instalment conferred on
the company by section 59 of the Act.
(2) A statutory declaration in
writing that the declarant is a director or the secretary of the company and
that a share in the company
has been duly forfeited on a date stated in the
declaration, shall be conclusive evidence of the facts therein stated as against
all persons claiming to be entitled to the share; the company may receive the
consideration (if any) given for the share on the re-issue
thereof and may,
issue a share certificate to the person to whom the share is re-issued, and he
shall thereupon be registered as
the holder of the share and shall not be bound
to see the application of the consideration (if any) nor shall his title to the
share
be affected by any irregularity or invalidity in the proceedings in
reference to the forfeiture, sale or disposal of the share.
Omission to give notice of meeting
8. The accidental omission to give notice of a meeting to,
or the non-receipt of notice meeting by, any person entitled to receive
notice
shall not invalidate the proceedings at that meeting.
Proxies
9. (1) In accordance with section 150 of the Act any
member entitled to attend and vote at a meeting of a company shall be entitled
to appoint another person, whether a member of the company or not, as his proxy
to attend and vote instead of him and the proxy shall,
subject to that section,
have the same rights as the member to speak at the meeting.
(2) An
instrument appointing a proxy, shall be in the following form or a form as near
thereto as circumstances admit:
NAME OF COMPANY
"I/We.............................,of....................,in the island of............................................................,being a member, members of the above-named company hereby appoint...................................................................................
of ....................................................................................
or failing him, .....................................................................
of,...................................................................................., as my/our proxy to vote for me/ us on my/our behalf at the annual OR extraordinary (as the case may be) general meeting of the company to be held on..........................the day of ..........................................19........, and at any adjournment thereof.
Signed this ...............day of ..........19..........”
Chairman of meetings
10. (1) The Chairman, if any, of the board of directors
shall preside as chairman at every general meeting of the company, or if there
is no such chairman, or if he is not present within fifteen minutes after for
the time appointed for the holding of the meeting or
is unwilling to act the
directors present shall elect one of their number to be chairman of the
meeting.
(2) If at any meeting no director is willing to act as chairman
or if no director is present within fifteen minutes after the time
appointed for
the holding of the meeting, the members present shall choose one of their number
to be chairman of the meeting.
(3) The chairman may, with the consent of
any meeting at which a quorum is present, (and shall if so directed by the
meeting), adjourn
the meeting from time to time and from place to place, but no
business shall be transacted at any adjourned meeting other than the
business
left unfinished at the meeting from which the adjournment took place, when a
meeting is adjourned for eight days or more,
notice of the adjourned meeting
shall be given as in the case of an original meeting but in any other case it
shall not be necessary
to give any notice of an adjournment or of the business
to be transacted at an adjourned meeting.
Postal voting
11. Postal voting is permitted at meetings and section 151
of the Act applies accordingly.
Classes of shares
12. Where at any time the shares of the company are
divided into different classes, paragraphs 8 to 11 and the provisions of the Act
relating to general meetings shall apply to meetings of any class of members in
like manner as they apply to general meetings.
Voting of members
13. Subject to any rights or restrictions for the time
being attached to any class of shares and which may be validly attached thereto
pursuant to the Act -
(a) on a show of hands each member and each proxy lawfully present at the meeting shall have one vote, and on a poll each member present in person or by proxy shall have one vote for each share held by him;
(b) in the case of postal voting each person entitled to attend and vote at the meeting shall have one vote for each share held by him;
Remuneration of directors
14. The remuneration payable to any director shall be
determined or approved by the members in general meeting.
Powers and duties of directors
15. (1) The directors may pay all expenses incurred in
promoting and registering the company.
(2) The directors may exercise all
such powers of the company, including power to borrow money and to mortgage or
charge its property
and undertaking of any part thereof and to issue debentures,
as are not by the Act or these by-laws required to be exercised by the
members
in general meeting.
(3) Subject to compliance with section 139 of the
Act, a director may enter into any contract with the company and the contract or
any other contract of the company in which a director is in any way interested
shall not be liable to be avoided nor shall a director
be liable to account for
any profit made thereby by reason of the director holding the office of director
or of the fiduciary relationship
thereby established.
(4) A director may
act by himself or his firm in a professional capacity for the company, except as
auditor, and he and his firm shall
be entitled to proper remuneration for
professional services as if he were not a director.
Proceedings of Directors
16. (1) The directors may meet together for the despatch
of business, adjourn, and otherwise regulate their meetings, as they think
fit.
(2) Questions arising at any meeting shall be decided by a majority
of votes and in case of an inequality of votes, the chairman shall
have a second
or casting vote.
(3) A director may, and the secretary on the requisition
of a director shall, at any time summon a meeting of the directors.
(4)
It shall not be necessary to give notice of a meeting of directors to any
director for the time being absent from Tuvalu.
(5) The quorum necessary
for the transaction of the business of the directors may be fixed by the
directors and, unless so fixed,
shall be two, providing that in no case shall
the quorum be less than a majority of the total number of directors.
(6)
The continuing directors may act notwithstanding any vacancy in their body, but,
if and so long as their number is reduced below
the number fixed by or pursuant
to these by-laws as the necessary quorum of directors, the continuing directors
or director may act
for the purpose of increasing the number of directors to
that number, or of summoning a general meeting of the company, but for no
other
purpose
(7) The directors may elect a chairman of their meetings and
determine the period for which he is to hold office; but if no such chairman
is
elected, or if at any meeting the chairman is not present within five minutes
after the time appointed for holding the same, the
directors present may choose
one of their number to be chairman of the meeting.
(8) The directors may
delegate any of their powers to committees consisting of such member or members
of their body as they think
fit; any committee so formed shall, in the exercise
of the powers so delegated, conform to any regulations that may be imposed by
the directors.
(9) A committee may elect a chairman of its meetings; if
no such chairman is elected, or if at any meeting the chairman is not present
within five minutes after the time appointed for holding the meeting the members
present may choose one of their number to be chairman
of the
meeting.
(10) A committee may meet and adjourn as it thinks proper.
Questions arising at any meeting shall be determined by a majority of votes
of
the members present, and, in the case of an equality of votes, the chairman
shall have a second or casting vote.
(11) All acts done by any meeting of
the directors or of a committee of directors or by any person acting as a
director shall, notwithstanding
that it be afterwards discovered that there was
some defect in the appointment of any such director or person acting as
aforesaid,
or that they or any of them were disqualified, be valid as if every
such person had been duly appointed and was qualified to be a
director.
(12) A resolution in writing, signed by all the directors for
the time being entitled to receive notice of a meeting of the directors,
shall
be as valid and effectual as if it had been passed at a meeting of the directors
duly convened and held.
Managing director
17. (1) Subject to the provisions of the Act, the
directors may from time to time appoint one or more of their body to the office
of managing director for such period and on such terms as they think fit, and,
subject to the terms of any agreement entered into
any particular case may
revoke such appointment. A managing director's appointment shall be
automatically determined if he ceases
for any cause to be a director.
(2)
The directors may entrust to and confer upon a managing director any of the
powers exercisable by them upon such terms and conditions
and with such
restrictions as they may think fit, and may from time to time, withdraw, alter
or vary all or any of such powers.
Secretary
18. A secretary or joint secretaries may be appointed by
the directors for such term, at such remuneration and upon such other conditions
as they may think fit; and the appointment of any secretary may be terminated by
them.
Seal
19. The directors shall provide for the safe custody of
the seal, which shall only be used by the authority of the directors or of
a
committee of the directors authorised by the directors in that behalf; and every
instrument to which the seal shall be affixed
shall be signed by a director and
shall be countersigned by the secretary or by a second director or by some other
person appointed
by the directors for that purpose.
Dividend
20. (1) The company may by ordinary resolution declare
dividends in respect of any year or other period but no dividend shall exceed
the amount recommended by the directors.
(2) The directors may from time
to time pay to the members such interim dividends as appear to the directors to
be justified by the
profits of the company.
(3) The right to declare or
pay a dividend is subject to section 177.
Power to set aside sums
21. The directors may, before recommending any dividends,
set aside out of the profit or income surplus of the company such sums as
they
think proper in order to provide for a known liability, including a disputed or
contingent liability, or as a depreciation or
replacement provision and may
carry forward any profits or income surplus which they may think prudent not to
distribute.
Form of Dividend
22. (1) All dividends shall be declared and paid as a
fixed sum per share and not as a proportion of the amount paid in respect of
a
share.
(2) The directors may deduct from a dividend payable to a
shareholder all sums of money presently payable by the shareholder to the
company in respect of his shares.
Payment of Dividend
23. (1) Any dividend payable in cash may be paid by cheque
or warrant sent by post to the registered address of the shareholder or,
in the
case of joint holders to that one who is first named on the register of members,
or to such person and to such address as
the holder of joint holders may in
writing direct.
(2) Every such cheque shall be mode payable to the order
of the person to whom it is sent.
(3) Any one of two or more joint
holders may give effectual receipts for any dividends.
(4) Every dividend
payment shall be accompanied by a statement showing the gross amount of the
dividend, and any tax deducted or deemed
to be deducted therefrom.
(5) No
dividend shall bear interest against the company.
Non cash dividends and bonus shares
24. The company, upon the recommendation of the directors
may exercise the powers conferred by article 20 -
(a) to direct that payment of a dividend shall be wholly or partly by distribution of fully paid up shares in another corporation;
(b) to resolve to make a capitalisation issue of shares; or
(c) to issue shares by way bonus,
and the directors shall do all acts and things
required to give effect to the direction or resolution.
Officers and agents
25. (1) The directors may from time to time appoint
officers and agents and may appoint any corporation, firm or body of persons,
whether nominated directly or indirectly, by the directors, to be
attorneys-at-law of the company for such purposes and with such
powers,
authorities and discretions, not exceeding those vested in or exercisable by the
directors under these by-laws, and for such
period and subject to such
conditions as they may think fit.
(2) Any such powers of attorney may
contain such provisions for the protection and convenience of persons dealing
with any such attorney
as the directors may think fit and may also authorise any
such attorney to delegate all or any of the powers, authorities and discretions
vested in him.
Notices
26. (1) A notice may be given by the company to any
member, shareholder or debenture holder either personally or by sending it by
post to him or to his registered address, or, if he has no registered address
within Tuvalu, the address (if any) within Tuvalu supplied
by him to the company
for the giving of notice to him; where a notice is sent by post, service of the
notice shall be deemed to be
effected by properly addressing, pre-paying, and
posting a letter containing the notice, and to have been effected in the case of
a notice of a meeting at the expiration f 24 hours after the letter containing
the same is posted, and in any other case at the time
at which the letter would
be delivered in the ordinary course of post.
(2) A notice may be given by
the company to the joint holders of a share or debenture by giving the notice to
the joint holder first
named in the register of members or debenture holders in
respect of the share or debenture.
(3) A notice may be given by the
company to the persons entitled to a share or debenture in consequence of the
death or bankruptcy
of a member or debenture holder by sending it through the
post in a prepaid letter addressed to them by name, or by the title of
representatives of the deceased, or trustee of the bankrupt, or any like
description, at the address (if any) within Tuvalu supplied
for the purpose by
the persons claiming to be so entitled, or until such an address has been so
supplied by giving the notice in
any manner in which the same might have been
given if the death or bankruptcy had not occurred.
(4) Notice of every
general meeting shall be given in any manner so authorised to-
(a) every member except those members who, having no registered address having no registered address within Tuvalu, have not supplied to the company an address within Tuvalu for the giving of notices to them;
(b) every person upon whom the ownership of a share devolves by reason of his being a legal personal representative or a trustee in, bankruptcy of a member, where member but for his death or bankruptcy would be entitled to receive notice of the meetings; and
(c) the auditor for the time being of the company,
and no other person shall be entitled
to receive notices of general meetings.
Winding-up
27. (1) If the
company is wound up, the liquidator may, with the sanction of a special
resolution of the company and any other sanction
required by the Act, divide
amongst the members in specie or kind the whole or any part of the assets of the
company (whether they
consist of property of the same kind or not) and may, for
such purpose set such value as he deems fair upon any property to be divided
as
aforesaid and may determine how such division shall be carried out as between
the members or different classes of members.
(2) The liquidator may,
with the like sanction, vest the
whole or any part of such assets in trustees upon such trusts for the benefit of
the members or shareholders
as the liquidator with the like sanction thinks
fit.
(3) Notwithstanding anything in this paragraph, no member or
shareholder shall be compelled to accept any shares or other securities
on which
there is any liability.
Indemnity
28. Every
director, managing director; agent, auditor, secretary and other officer for the
time being of the company shall be indemnified
out of the assets of the company
against any liability incurred by him in defending any proceedings, whether
civil or criminal, in
which judgement is given in his favour, or in which he is
acquitted, or in connection with any application under Section 155 of the
Act in
which relief is granted to him by the Court.
Interpretation
29. (1) In these
Articles, unless the context otherwise requires -
"the act" means the Companies Act 1991;
"the seal" means the common seal of the company.
(2) In these Articles, unless the
context otherwise requires-
(a) words or expressions shall have the same meaning as in the Act;
(b) references to Sections of the Act shall mean those Sections as modified or re-enacted from time to time.
PART II
Articles for Proprietary Company
Application of Part I
1. The Articles set out in Part I of the Second Schedule
to the Companies Act, 1991, shall be incorporated with these Articles and shall
apply to the company.
Duty of members
2. It shall be the duty of members of the company and all
persons claiming under them not to do or abstain from doing any act whereby
the
company may cease to be a proprietary company (except by voting for the
conversion of the company into a public company), and
if for any reason other
than such a conversion, the company ceases to be a proprietary company, every
member and all persons claiming
under him shall do all acts in their power to
enable the company to become a proprietary the company again.
THIRD SCHEDULE
(Sec. 11)
Part I
Amendment of Memorandum of Company
Amendment by special resolution
1. Subject to this Part, a company may by special
resolution amend its Memorandum-
(a) to change its name;
(b) to add, change or remove any restriction upon the capacity or powers of the company;
(c) to add, change or remove any provision that is required under section 20 to be included in the Memorandum of a proprietary company;
(d) to add, change or remove any matter permitted but not required to be included in the Memorandum; or
(e) to alter its share capital as provided in section 67, or to reduce its share capital as provided in section 70.
Limitation
2. This Part is subject to section 205(2)(a).
Certain provision may not be mended
3. The provision included in the articles of incorporation
of a company pursuant to section 8(1)(b) may not be amended.
Meetings to pass resolutions
4. (1) Notice of a meeting called to pass the special
resolution or, as the case may be, the ordinary resolution to amend the
Memorandum
of a company shall be given to all shareholders and debenture holders
of the company and to the trustee of any debenture trust deed
covering
debentures issued by company in like manner as it is given to members of the
company.
(2) A notice referred to in sub-paragraph (1) shall set out the
terms of the proposed amendment.
Proposal for amendment
5. A proposal for an amendment of the Memorandum of a
company may be made by the directors of the company or a shareholder of the
company.
Amendment affecting classes of shares
6. (1) No amendment of a kind referred to in section 67
shall be made in the Memorandum of a company unless not earlier than one month
before the alteration is made, a meeting of the holders of shares of the class
in question is held and a resolution approving the
alteration is passed at the
meeting by a majority comprising at least three-quarters of the votes
cast.
(2) The provisions of this Act and the Articles of the company
concerned relating to general meetings apply to a meeting held pursuant
to
sub-paragraph (1), except that shareholders of the class in question who are not
members of the company shall be deemed to be
members for the purpose of the
meeting, and the quorum for such a meeting shall be one, or more than one,
person present in person
or by proxy, holding at least three-quarters of the
issued shares of the class in question.
(3) If the Articles of the
company concerned provide for postal voting at general meetings, postal votes
may be given at a meeting
held under this paragraph.
(4) This paragraph
does not apply to -
(a) a class of shares none of which has been issued; or
(b) a class of shares all of which have been either been transferred to or redeemed by the company, or are held by the company or by a nominee for it, and none of which has been re-issued.
Revocation of amendment
7. When
authorised in a resolution affecting an amendment of the Memorandum of a
company, the directors of the company may, without
further approval, revoke the
resolution before it is acted upon.
Time when amendment takes effect
8. (1) Subject to
this paragraph, an amendment of the Memorandum of a company does not take effect
until the expiration of one month
after it is made.
(2) Subject to
sub-paragraph (3), sub-paragraph (1) does not apply to an amendment of the
Memorandum of a company to amend its name.
(3) Where a company amends its
Memorandum so as to enable it to convert to a public company or, as the case may
be, a proprietary
company, any amendment necessary for that purpose does not
have effect unless and until the Registrar re-issues pursuant to section
22(1)
the certificate of incorporation relating to the company.
Amendment not to affect any cause of action, etc
9. (1) No amendment of the articles of incorporation of a
company affects an existing cause of action or claim, or liability to
prosecution
in favour of or against the company or its directors or officers, or
any civil or criminal action or proceedings to which the company
is, or its
directors or officers are, a party.
(2) Where, but for this paragraph, an
amendment of the Memorandum of a company -
(a) would require a member of the company to take or subscribe for more shares than the number held by him at the date on which the amendment is made; or
(b) would in any way increase his liability as at that date to contribute to the share capital of, or otherwise to pay money, to the company,
the member is not bound by the
amendment unless, either before or after the amendment is made, he agrees to be
bound by it.
(3) Sub-paragraph (1) is in addition to and not in
substitution for section 17.
Part II
Amendment of Articles
Amendment of by-laws by directors
10. The directors of a company may, subject to this Part
and the Memorandum of the company, amend the Articles of the company by altering
or adding to them.
Amendment of Articles subject to this paragraph
11. (1) An amendment of the Articles of a company does not
have effect unless the requirements of this paragraph are satisfied.
(2)
An amendment of the Articles of a company does not have effect -
(a) until the expiration of one month after it is made; and
(b) until it is approved by ordinary resolution at a meeting of the company.
Effect of amendment
12. (1) An amendment of the Articles of a company that has
effect is, subject to this Act, as valid as if originally contained in
the
Articles and is subject in like manner to amendment.
(2) Paragraph 9
applies to an amendment of the Articles of a company as it applies to an
amendment of the Memorandum of a company.
FOURTH SCHEDULE
STATEMENT IN LIEU OF PROSPECTUS
(Sec. 52)
Part I
Statement in Lieu of Prospectus Lodged For Registration by
(Insert the name of the company)
|
The Share Capital of the company.
Divided into |
Shares
Shares |
||
|
Amount (if any) of above capital which consists of
redeemable shares
|
Shares
|
||
|
The date on or before which these shares are, or are liable,
to be redeemed.
|
|
||
|
Names, descriptions and addresses of directors or proposed
directors.
|
|
||
|
If the share capital of the company is divided into
different classes of shares, the right of voting at meetings of the company
conferred
by, and the right in respect of capital and dividend attached to the
several classes of shares, respectively.
|
|
||
|
Number of Shares and debentures issued within the two years preceding the date of this statement or proposed or agreed to be issued otherwise than in cash. |
1. Shares 2. Debentures |
||
|
The consideration for the issue or intended issue of those shares and debentures. |
3. Consideration |
||
|
Number and description of any shares or debentures which any person has or is entitled to be given an option to subscribe for, or to acquire from a person to whom they have been allotted or agreed to be allotted with a view to his offering them for sale. |
1. Shares and debentures |
||
|
Period during which option is exercisable.
|
2. Until
|
||
|
Minimum price to be paid for shares or debentures subscribed for or acquired under option. |
3. $ |
||
|
Consideration for option, or right to option.
|
4. Consideration
|
||
|
Persons to whom option or right to options was given or, if
given to existing shareholders or debenture holders as such, the relevant
shares
or debentures.
|
5. Names and addresses:
|
||
|
Names and addresses of vendors of property purchased or
acquired, or acquired by the company except where the contract for its purchase
or acquisition was entered into in the ordinary course of the business intended
to be carried on by the company or the amount of
the purchase money is not
material.
|
|
||
|
Amount (in cash, shares, or debentures) payable to each
separate vendor.
|
Total purchase price
$____________ |
||
|
Amount (if any) paid or payable (in cash or shares or
debentures) for any such property, specifying amount (if any) paid or payable
for goodwill.
|
Cash |
$
$ $________ |
|
|
Short particulars of any transaction relating to any such
property which was compiled within the two preceding years and in which
any
vendor to the company or any person who is, or was at the time thereof, a
promoter, director, or proposed director of the company
had any interest direct
or indirect.
|
|
||
|
Amount. (if any) paid or payable as commission for
subscribing or subscribing or agreeing to procure subscriptions for any shares
or debentures in the company; or
|
Amount paid:
Amount payable: |
$
$ |
|
|
Rate of the Commission
|
Per cent
|
||
|
Amount of rate of brokerage
|
|
||
|
The number of shares, if any, which persons have agreed for
a commission to subscribe absolutely
|
|
||
|
Amount or estimated amount of preliminary expenses.
|
$
|
||
|
By whom those expenses have been paid or are payable
|
|
||
|
Amount paid or intended to be paid to any promoter.
|
Name of promoter:
Amount: |
$ |
|
|
Consideration for the payment.
|
Consideration:
|
||
|
Any other benefit given or intended to be given to any
promoter.
|
Name of promoter
Nature and value of benefit: |
||
|
Consideration for giving of benefit.
|
Consideration:
|
||
|
Dates of, parties to, and general nature of every material
contract (other than contracts entered into in the ordinary course of the
business intended to be carried on by the company or entered into more than two
years before the delivery of this statement).
|
|
||
|
Time and place at which the contracts or copies thereof or
(1) in the case of a contract not reduced into writing a memorandum giving
full
particulars thereof, and (2) in the case of a contract wholly or partly in a
foreign language, a copy of a translation in English
or 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 may
be inspected.
|
|
||
|
Names and addresses of the auditors of the company (if
any).
|
|
||
|
Full particulars of the nature and extent of the interest of
every director, and of every expert, in the promotion of or in the property
proposed to be acquired by the company, or, where the interest of such a
director or expert consists in being a partner in a firm,
the nature and extent
of the interest of the firm with a statement of all sums paid or agreed to be
paid to him or to the firm in
cash or shares, or otherwise, by any person (in
the case of a director) either to induce him to become, or to qualify him as, a
director,
or otherwise for service rendered by him or
by the firm in connection with the
promotion or formation of the company or (in the case of an expert) for services
rendered by him or
the firm in connection with the promotion or formation of the
company.
|
|
||
|
And also, in the case of a statement to be lodged by a
proprietary company on becoming a public company, the following items:
|
|
||
|
Rates of dividends (if any) paid by the company in respect
of each class of shares in the company in each of the five financial years
immediately preceding the date of this statement or since the incorporation of
the company, whichever period is the shorter.
|
|
||
|
Particulars of the cases in which no dividends have been
paid in respect of any class of shares in any of these years.
|
|
||
Part II
Reports to be Set Out
1. Where it is
proposed to acquire a business, a report by accountants (who shall be named in
the statement) with respect to -
(a) the profits or losses of the business in respect of each of the five financial years immediately preceding the lodging of the statement with the Registrar; and
(b) the assets and liabilities f the business at the last date to which the accounts of the business were made up.
2.
(1) Where it is proposed to acquire shares in a corporation which by reason of
the acquisition or anything to be done in consequence
thereof or in connection
therewith will become a subsidiary of the company, a report by accountants (who
shall be named in the statement)
with respect to the profits and losses and
assets and liabilities of the other corporation in accordance with subparagraph
(2) or
(3), as the case requires, indicating how the profits or losses of the
other corporation dealt with by the report would, in respect
of the shares t be
acquired, have concerned members of the company, and what allowance would have
fallen to be made, in relation
to assets and liabilities so dealt with, for
holders of other shares, if the company had at all material times held the
shares to
be acquired.
(2) If the other corporation has no subsidiaries,
the report referred to in subparagraph (1) shall-
(a) so far as regards profits and losses, deal with the profits or losses of the other corporation in respect of each of the five financial years immediately preceding the delivery of the statement to the Registrar; and
(b) so far as regards assets and liabilities, deal with the assets and liabilities of the other corporation at the last date to which the accounts of the corporation were made up.
(3) If the other
corporation has subsidiaries, the report referred to in sub-paragraph (1)
shall-
(a) so far as regards profits and losses, deal separately with the other corporation's profits or losses as provided by sub-paragraph (2), and in addition deal as aforesaid either-
(i) as a whole with the combined profits or losses of its subsidiaries; or
(ii) individually with the profits or losses of each subsidiary,
or instead of dealing separately with the other corporation's profits or losses, deal as aforesaid as a whole with the profits or losses of the other corporation and with the combined profits or losses of its subsidiaries; and
(b) so far as regards assets and liabilities, deal separately with the other corporation's assets and liabilities as provided in sub-paragraph (2), and, in addition, deal as aforesaid either -
(i) as a whole with the combined assets and liabilities of its subsidiaries, with or without the other corporation's assets and liabilities; or
(ii) individually with the assets and liabilities of each subsidiary,
and shall indicate as respects the profit or
losses and the assets and liabilities of the subsidiaries the allowance to be
made for
persons other than members of the company.
NOTE: Where a company
is not required to furnish any of the reports referred to in this Part, a
statement to that effect giving the
reasons therefor should be
furnished.
Signatures of the persons above named
as the directors or
proposed directors or of
their agents authorised in writing)
Part III
Provisions Applying to Parts I and II of this Schedule
3. In this Schedule the expression "vendor" includes any
person who is a vendor for the purpose of the Fourth Schedule, and the
expression,
"financial year" has the meaning assigned to it in Part III of that
Schedule.
4. If in the case of a business which has been carried on or of
a corporation which has been carrying on business, for less than five
years, the
accounts of the business or corporation which have only been made up in respect
of four years, three-years, two years
or one year, Part II of this Schedule
shall have effect as if references to four years, three years, two years or one
year, as the
case may be, were substituted for references to five
years.
5. Any report required by Part II of this Schedule shall either
indicate by way of note any adjustments as respects the figures of
any profits
or losses or assets and liabilities dealt with by the report which appear to the
persons making the report necessary
or shall make those adjustments and indicate
that adjustments have been made.
FIFTH SCHEDULE
(Sec. 237)
FEES
|
Registration of a Company
|
$100
|
|
Change of name of a Company
|
$ 30
|
|
Conversion to proprietary or public company
|
$ 50
|
|
Filing of prospectus or statement in lieu of
prospectus
|
$ 50
|
|
Lodging any instrument or document or statement or notice or
resolution or report
|
$ 10
|
|
Registration of any order
|
$ 20
|
|
Registration of a charge or enforcement of security
|
$ 25
|
|
Lodging of annual return
|
$.20
|
|
Registration of an external company
|
$ 75
|
|
Lodging of annual accounts of external company
|
$ 25
|
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URL: http://www.paclii.org/tv/legis/num_act/ca1991107