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COMPANIES ACT.

ARRANGEMENT OF SECTIONS.

   Section

PART I
PRELIMINARY.

   1.   Commencement.

   2.   Interpretation.

   3.   Register of companies.

PART II
INCORPORATION OF COMPANIES AND RELATED MATTERS.

   4.   Mode of forming an incorporated company.

Private companies.

   5.   Meaning of a private company.

Public companies.

   6.   Meaning of a public company.

Memorandum of association.

   7.   Requirements with respect to memorandum.

   8.   Signature of memorandum.

   9.   Restriction on alteration of memorandum.

   10.   Mode in which and extent to which objects of company may be altered.

Articles of association.

   11.   Articles prescribing regulations for companies.

   12.   Regulations required in case of unlimited company or company limited by guarantee.

   13.   Adoption and application of Table A.

   14.   Adoption and application of Table F.

   15.   Printing and signature of articles.

   16.   Alteration of articles by special resolution.

Form of memorandum and articles.

   17.   Statutory forms of memorandum and articles.

Registration.

   18.   Form for registration of a company.

   19.   Registration of memorandum and articles.

   20.   Lifting the corporate veil.

   21.   Effect of memorandum and articles.

   22.   Conclusiveness of certificate of incorporation.

   23.   Re-registration of unlimited company as limited.

   24.   Re-registration of private company as a public company.

   25.   Consideration for shares recently allotted to be valued.

   26.   Additional requirements relating to share capital.

   27.   Certificate of re-registration.

   28.   Modification for unlimited company to re-register.

Limited liability company becoming unlimited.

   29.   Re-registration of limited liability company as unlimited.

   30.   Certificate of re-registration.

Unlimited company becoming limited.

   31.   Re-registration of unlimited company as limited.

   32.   Certificate of re-registration.

Public company becoming private.

   33.   Re-registration of public company as private.

   34.   Objection to resolution under section 33.

   35.   Certificate of re-registration.

Provisions with respect to names of companies.

   36.   Reservation of name and prohibition of undesirable names.

   37.   Power to require company to abandon misleading name.

   38.   Prohibition on trading under misleading name.

   39.   Prohibition of improper use of "limited".

   40.   Change of name.

   41.   Power to dispense with "Ltd" or "Limited" in the name of charitable organisations and other companies.

General provisions with respect to memorandum and articles.

   42.   Interpretation of certain provisions in the memorandum, articles or resolutions of a company limited by guarantee.

   43.   Alterations in memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent.

   44.   Power to alter conditions in memorandum which could have been contained in articles.

   45.   Copies of memorandum and articles to be given to members.

   46.   Issued copies of memorandum to embody alterations.

Membership of company.

   47.   Definition of member.

   48.   Membership of a holding company.

Reduction of number of members below a legal minimum in case of a public company.

   49.   Members severally liable for debts where a business is carried on with fewer than the required number of members.

Contracts and related particulars.

   50.   Form of contracts.

   51.   A company's capacity not limited by its memorandum.

   52.   Power of directors to bind the company.

   53.   No duty to enquire as to capacity of a company or authority of directors.

   54.   Pre-incorporation contracts.

   55.   Documents executed.

   56.   Bills of exchange and promissory notes.

   57.   Execution of deeds abroad.

   58.   Power for a company to have official seal for use abroad.

   59.   Authentication of documents.

PART III
SHARE CAPITAL AND DEBENTURES.

   60.   Registration of prospectus.

Allotment.

   61.   Return as to allotment.

Commissions, discounts and financial assistance.

   62.   Power to pay certain commissions; prohibition of payment of all other commissions, discounts and related particulars.

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

   64.   Special restrictions for public companies.

   65.   Relaxation of the rule in section 63 for private companies.

Issue of shares at premium, discount and redeemable preference shares.

   66.   Application of premiums received on issue of shares.

   67.   Power to issue shares at a discount.

   68.   Power to issue redeemable preference shares.

Miscellaneous provisions as to share capital.

   69.   Power of a company to arrange for different amounts being paid on shares.

   70.   Reserve liability of a limited liability company.

   71.   Power of a company limited by shares to alter its share capital.

   72.   Notice to the registrar of consolidation of share capital, conversion of shares into stock and related particulars.

   73.   Notice of increase of share capital.

   74.   Power of unlimited company to provide for reserve share capital on re-registration.

   75.   Power of a company to pay interest out of capital in certain cases.

Reduction of share capital.

   76.   Special resolution for reduction of share capital.

   77.   Application to the court for a confirming order; objections by creditors and settlement of the list of objecting creditors.

   78.   Order confirming the reduction and powers of the court on making that order.

   79.   Registration of order and minute of reduction.

   80.   Liability of members in respect of reduced shares.

   81.   Penalty for concealing the name of a creditor, etc.

Variation of shareholders' rights.

   82.   Rights of holders of special classes of shares.

Transfer of shares and debentures, evidence of title and related particulars.

   83.   Nature of shares.

   84.   Numbering of shares.

   85.   Transfer not to be registered except on production of instrument of transfer.

   86.   Transfer by personal representative.

   87.   Transfer of shares in a single member company.

   88.   Registration of a transfer at request of the transferor.

   89.   Notice of refusal to register a transfer.

   90.   Certification of a transfer.

   91.   Duties of a company with respect to issue of certificates.

   92.   Certificate to be evidence of title.

   93.   Transfer of title to securities without written documents.

   94.   Evidence of grant of probate.

   95.   Issue and effect of share warrants to bearer.

   96.   Penalty for impersonation of shareholder.

   97.   Offences in connection with share warrants.

Special provisions as to debentures.

   98.   Provisions as to registers of debenture holders.

   99.   Rights of debenture holders and shareholders to inspect the register of debenture holders and to have copies of a trust deed.

   100.   Liability of trustees for debenture holders.

   101.   Perpetual debentures.

   102.   Power to reissue redeemed debentures in certain cases.

   103.   Specific performance of contracts to subscribe for debentures.

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

PART IV
REGISTRATION OF CHARGES.

Registration of charges with registrar.

   105.   Registration of charges.

   106.   Duty of a company to register charges created by the company.

   107.   Duty of a company to register charges existing on property acquired.

   108.   Certificate of registration of a charge.

   109.   Endorsement of certificate of registration on debentures.

   110.   Entries of satisfaction and release of property from charge.

   111.   Extension of time to register charges.

Provisions as to company's register of charges and copies of instruments creating charges.

   112.   Copies of instruments creating charges to be kept by the company.

   113.   Company's register of charges.

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

PART V
MANAGEMENT AND ADMINISTRATION.

Registered office and name.

   115.   Registered office of a company.

   116.   Notification of the situation of the registered office, the registered postal address and of any change in them.

   117.   Publication of name by company.

Statement of amount of paid up capital.

   118.   Statement of amount of capital subscribed and amount paid up.

Register of members.

   119.   Register of members.

   120.   Index of members.

   121.   Provisions as to entries in the register in relation to share warrants.

   122.   Inspection of the register and index.

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

   124.   Power to close the register.

   125.   Power of the court to rectify register.

   126.   Trusts not to be entered on the register.

   127.   Register to be evidence.

Branch register.

   128.   Power for a company to keep a branch register.

   129.   Regulations as to a branch register.

   130.   Stamp duty in cases of shares registered in branch registers.

   131.   Provisions as to branch registers of commonwealth companies kept in Uganda.

Annual returns.

   132.   Annual return to be made by a company having a share capital.

   133.   Annual return to be made by a company not having a share capital.

   134.   Time for completion of the annual return.

   135.   Documents to be annexed to the annual return.

   136.   Certificates to be sent by a private company with the annual return.

Meetings and proceedings.

   137.   Statutory meeting and statutory report.

   138.   Annual general meeting.

   139.   Convening of an extraordinary general meeting on requisition.

   140.   Length of notice for calling meetings.

   141.   General provisions as to meetings and votes.

   142.   Power of the court to order a meeting.

   143.   Proxies.

   144.   Right to demand a poll.

   145.   Voting on poll.

   146.   Representation of corporations at meetings of companies and of creditors.

   147.   Circulation of members' resolutions and related particulars.

   148.   Special resolution.

   149.   Resolution requiring special notice.

   150.   Registration and copies of certain resolutions and agreements.

   151.   Resolution passed at adjourned meetings.

   152.   Minutes of proceedings of meetings of company and of directors.

   153.   Inspection of minute books.

Accounts and audit.

   154.   Keeping of books of account.

   155.   Profit and loss account and balance sheet.

   156.   General provisions as to contents and form of accounts.

   157.   Obligation to lay group accounts before the holding company.

   158.   Form of group accounts.

   159.   Contents of group accounts.

   160.   Financial year of the holding company and subsidiary.

   161.   Meaning of "holding company" and "subsidiary".

   162.   Signing of a balance sheet.

   163.   Unqualified report.

   164.   Accounts and auditors' report to be annexed to the balance sheet.

   165.   Directors' report to be attached to the balance sheet.

   166.   Right to receive copies of the balance sheet and auditors' report.

   167.   Appointment and remuneration of auditors.

   168.   Provisions as to resolution relating to appointment and removal of auditors.

   169.   Disqualifications for appointment as auditor.

   170.   Auditors' report and right of access to books and to attend and be heard at general meetings.

   171.   Construction of references to documents annexed to accounts.

Investigation by the registrar.

   172.   Investigation by the registrar.

Inspection.

   173.   Investigation to company's affairs on application of members.

   174.   Investigation of a company's affairs in other cases.

   175.   Power of inspectors to carry an investigation into the affairs of related companies.

   176.   Production of documents and evidence on investigation.

   177.   Inspector's report.

   178.   Proceedings on an inspector's report.

   179.   Expenses of investigation of a company's affairs.

   180.   Inspector's report to be evidence.

   181.   Appointment and powers of inspectors to investigate ownership of a company.

   182.   Power to require information as to persons interested in shares or debentures.

   183.   Power to impose restrictions on shares or debentures.

   184.   Saving for advocates and bankers.

Directors and other officers.

   185.   Number of directors.

   186.   Nominee director of a single member company.

   187.   Secretary.

   188.   Prohibition of certain persons being sole director or secretary.

   189.   Avoidance of acts done by a person in dual capacity as director and secretary.

   190.   Qualifications of company secretaries.

   191.   Validity of acts of directors and managers.

   192.   Restrictions on appointment or advertisement of directors.

   193.   Share qualifications of directors.

   194.   Appointment of directors to be voted on individually.

   195.   Removal of directors.

   196.   Minimum age for appointment of directors and retirement of directors over the age limit.

   197.   Duty of directors to disclose age to the company.

   198.   Duties of directors.

   199.   Disqualification of directors.

   200.   Provisions as to undischarged bankrupts acting as directors.

   201.   Power to restrain fraudulent persons from managing companies.

   202.   Prohibition of tax-free payments to directors.

   203.   Prohibition of loans and guarantees to directors.

   204.   Inter-company loans in same group.

   205.   Transactions at behest of holding company.

   206.   Funding of director's expenditure on duty to company.

   207.   Loan by money-lending company.

   208.   Civil remedies for breach of section 203.

   209.   Criminal penalties for breach of section 203.

   210.   Connected and related persons.

   211.   Approval of the company necessary for payment by it to director for loss of office.

   212.   Approval of the company necessary for any payment in connection with transfer of its property to director for loss of office and related particulars.

   213.   Duty of director to disclose payment for loss of office made in connection with takeover or transfer of shares in company.

   214.   Provisions supplementary to sections 211 to 213.

   215.   Register of director's shareholding and related particulars.

   216.   Particulars in accounts of directors' salaries, pensions and related particulars.

   217.   General duty to make disclosure for purposes of sections 215 and 216.

   218.   Disclosure by directors of interests in contracts.

   219.   Substantial property transactions involving directors and related particulars.

   220.   Exceptions to section 219.

   221.   Liabilities arising from contravention of section 219.

   222.   Invalidity of certain transactions involving directors and related particulars.

   223.   Extension of sections 219 and 222 to spouses and children.

   224.   Contracts with sole members who are directors.

   225.   Duty of director to disclose shareholdings in own company.

   226.   Register of directors' interests.

   227.   Sanctions for noncompliance.

   228.   Register of directors and secretaries.

   229.   Particulars with respect to directors in trade catalogues, circulars and related particulars.

   230.   Limited liability company may have directors with unlimited liability.

   231.   Special resolution of limited liability company making liability of directors unlimited.

   232.   Provisions as to assignment of office by directors.

Avoidance of provisions in articles or contracts relieving officers from liability.

   233.   Provisions as to liability of officers and auditors.

Arrangements and reconstructions.

   234.   Powers to compromise with creditors and members.

Information as to compromise with creditors and members.

   235.   Information as to compromise with creditors and members.

   236.   Provisions for facilitating reconstruction and amalgamation of companies.

   237.   Amalgamations.

   238.   Authorisation of amalgamation.

   239.   Amalgamation proposal.

   240.   Incorporation document of amalgamated company.

   241.   Manner of authorising amalgamation.

   242.   Registration of amalgamation.

   243.   Certificates on amalgamation.

   244.   Creditors' rights on amalgamation.

   245.   Powers of court in relation to amalgamations.

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

Minorities.

   247.   Alternative remedy to winding up in cases of oppression.

   248.   Protection of members against prejudicial conduct.

   249.   Order on application of the registrar.

   250.   Provisions as to petitions and orders under this Part.

PART VI
COMPANIES INCORPORATED OUTSIDE UGANDA.

Provisions as to establishment of place of business in Uganda.

   251.   Application of sections 252 to 260.

   252.   Documents to be delivered to the registrar by foreign companies carrying on business in Uganda.

   253.   Certificate of registration and power to hold land.

   254.   Returns to be delivered to the registrar by a foreign company.

   255.   Registration of charges created by foreign companies.

   256.   Accounts of a foreign company.

   257.   Obligation to state name of foreign company, whether limited and country where incorporated.

   258.   Service on a foreign company.

   259.   Cessation of business by a foreign company and striking it off the register.

   260.   Offences and penalties.

   261.   Interpretation of sections 252 to 259.

PART VII
GENERAL PROVISIONS RELATING TO REGISTRATION.

   262.   Designation of registrars.

   263.   Fees.

   264.   Inspection, production and evidence of documents kept by the registrar.

   265.   Enforcement of duty of company to make returns to the registrar.

PART VIII
MISCELLANEOUS PROVISIONS WITH RESPECT TO INSURANCE COMPANIES AND CERTAIN SOCIETIES AND ASSOCIATIONS.

   266.   Certain companies to publish periodical statement.

   267.   Certain companies taken to be insurance companies.

PART IX
VOLUNTARY WINDING UP.

   268.   Voluntary winding up of company.

   269.   Notice of resolution for voluntary winding up.

Consequences of voluntary winding up.

   270.   Effect of voluntary winding up on the business and status of a company.

Declaration of solvency.

   271.   Statutory declaration of solvency in case of a proposal for voluntary winding up.

   272.   Application of Insolvency Act to voluntary winding up of a company.

PART X
GENERAL.

Forms of registers, etc.

   273.   Form of registers and related particulars.

Service of documents.

   274.   Service of documents.

   275.   Returns and related particulars filed out of time.

Offences and penalties.

   276.   Penalty for false statements.

   277.   Penalty for improper use of the word "limited".

   278.   Provision with respect to default fines and meaning of "officer in default".

   279.   Production and inspection of books where offence suspected.

   280.   Cognisance of offences.

   281.   Application of fines.

   282.   Provisions relating to institution of criminal proceedings.

   283.   Savings for privileged communications.

Legal proceedings.

   284.   Costs in actions by certain limited liability companies.

   285.   Power of court to grant relief in certain cases.

   286.   Power to enforce orders.

   287.   Hearing before exercise of registrar's discretion.

   288.   Mode of giving evidence in proceedings before the registrar.

   289.   Power of registrar to award costs.

   290.   Costs of registrar in proceedings before court.

   291.   Court's power to review registrar's decision.

   292.   Discretion of court in appeals.

   293.   Procedure in cases of option to apply to court or registrar.

   294.   Regulations.

   295.   Power of Minister to amend First Schedule.

   296.   Savings for certain rules.

   297.   Omitted dates not to prejudice vested rights.

   298.   Repeal and savings.

      First Schedule   Currency point.

      Second Schedule   Form for registration of a company.

      Third Schedule   Contents and form of annual report of a company having a share capital.

      Fourth Schedule   Accounts.

      Fifth Schedule   Matters to be expressly stated in the auditors' report.

      Sixth Schedule   Form of statement to be filed and published by insurance companies and deposit, provident or benefit societies.

      Seventh Schedule   Provisions referred to in section 276 of this Act.

COMPANIES ACT.

Commencement: 1 July, 2013.

   An Act to amend, replace and reform the law relating to the incorporation, regulation and administration of companies and to make provision for related matters.

PART I
PRELIMINARY.

1.   Commencement.

   This Act shall come into force on a date appointed by the Minister by statutory instrument*.

2.   Interpretation.

   (1) In this Act, unless the context otherwise requires—

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

   "annual return" means the return required to be made in the case of a company having a share capital, under section 132 and in the case of a company not having a share capital, under section 133;

   "approved stock exchange" means a stock exchange approved under section 24 of the Capital Markets Authority Act and includes an interim stock trading facility approved under section 90 of that Act;

   "articles" means the articles of association of a company as originally framed or as altered by special resolution, including, so far as they apply to the company, the regulations contained in Table A in the First Schedule to the repealed Companies Act or in Table A in the Second Schedule to this Act;

   "book or paper" includes accounts, deeds, writings and documents;

   "capital markets authority" means the capital markets authority established by the Capital Markets Authority Act;

   "charge" means a form of security for the payment of a debt or performance of an obligation consisting of the right of a creditor to receive payment out of some specific fund or out of the proceeds of the realisation of specific property; and includes a mortgage;

   "company" means a company formed and registered under this Act or an existing company or a re-registered company under this Act;

   "company limited by guarantee" and "company limited by shares" have the meaning assigned to them respectively by section 4(2);

   "court" used in relation to a company, means the court having jurisdiction under this Act;

   "currency point" has the value assigned to it by the First Schedule to this Act;

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

   "director" includes any person occupying the position of director by whatever name called and shall include a shadow director;

   "document" includes summons, notice, order and other legal process and registers, indices, reports, certificates and accounts and may be in any form including any writing, any material, and any information recorded or stored by means of any mechanical or electronic device and any material derived from them;

   "dormant company" means a company that is not doing business and does not have accounting transactions in a financial year;

   "existing company" means a company formed and registered before the coming into force of this Act;

   "financial year" means in relation to a body corporate, the period in respect of which any financial statements of the body corporate laid before it in a general meeting is made up whether that period is a year or not;

   "group accounts" has the meaning assigned to it by section 157(1);

   "holding company" means a company as defined by section 161;

   "insurance company" means an insurance company within the meaning of the Insurance Act which carries on the business of insurance either solely or in conjunction with any other business or businesses;

   "limited liability company" means a company limited by shares or a company limited by guarantee;

   "lifting the corporate veil" means disregarding the corporate personality of a company in order to apportion liability to a person who carries out any act;

   "members voluntary winding up" has the meaning assigned to it by the law that governs insolvency in Uganda;

   "memorandum" means the memorandum of association of a company as originally framed or as altered from time to time;

   "Minister" means the Minister responsible for justice;

   "officer" in relation to body corporate, includes a director, manager or secretary;

   "personal representative" means—

   (a)   in the case of a deceased person to whom the Succession Act applies either wholly or in part, his or her executor or administrator;

   (b)   in the case of any other deceased person, any person who, under law or custom is responsible for administering the estate of such deceased person;

   "printed" means reproduced by original letterpress or by such other means as may be prescribed;

   "private company" has the meaning assigned to it by section 5(1);

   "prospectus" means a prospectus, notice, circular, advertisement or other invitation, offering to the public securities for subscription or purchase and includes—

   (a)   a prospectus relating to an offer of debt securities to the public;

   (b)   a prospectus in respect of any other offer of securities to the public;

   "registrar" means the registrar of companies or an assistant registrar or other officer performing the duty of registration of companies under this Act;

   "repealed Companies Act" means the Companies Act repealed under section 298;

   "resolution for reducing share capital" has the meaning assigned to it by section 76(2);

   "shadow director" means a person in accordance with whose directions or instructions the directors of a company are accustomed to act but does not include a person who gives advice to the directors in a professional capacity;

   "share" means share in the share capital of a company and includes stock except where a distinction between stock and shares is expressed or implied;

   "share warrant" has the meaning assigned to it by section 95(2);

   "statutory meeting" means the meeting required to be held by section 137(1);

   "statutory report" has the meaning assigned to it by section 137(2);

   "subsidiary" means a subsidiary as defined by section 161;

   "unlimited company" has the meaning assigned to it by section 4(2)(c)*.

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

3.   Register of companies.

   There shall be kept by the registrar a record called "the Register of Companies" where all the matters prescribed by this Act shall be entered.

PART II
INCORPORATION OF COMPANIES AND RELATED MATTERS.

4.   Mode of forming an incorporated company.

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

   (2) The company may be—

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

   (b)   a company having the liability of its members limited by the memorandum to the amount that the members undertake in the memorandum to contribute to the assets of the company if it is being wound up, in this Act referred to as "a company limited by guarantee";

   (c)   a company not having any limit on the liability of its members in this Act referred to as "an unlimited company"; or

   (d)   private or public.

Private companies.

5.   Meaning of a private company.

   (1) For the purpose of this Act, "private company" means a company which by its articles—

   (a)   restricts the right to transfer its shares and other securities;

   (b)   limits the number of its members to 100, not including persons who are employed by the company and persons who, have been formerly employed by the company; and

   (c)   prohibits any invitation to the public to subscribe for any shares or debentures of the company.

   (2) Where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this section, be treated as a single member.

Public companies.

6.   Meaning of a public company.

   A company which is not a private company under section 5 is a public company.

Memorandum of association.

7.   Requirements with respect to memorandum.

   (1) The memorandum of every company shall be printed in the English language and shall state—

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

   (b)   that the registered office of the company is to be situated in Uganda; and

   (c)   may also state the objects of the company.

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

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

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

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

   (b)   a subscriber of the memorandum may not take less than one share; and

   (c)   each subscriber shall write opposite his or her name the number of shares he or she takes.

   (5) Notwithstanding subsection (1)(c), where the company's memorandum states that the object of the company is to carry on business as a general commercial company the memorandum shall state that—

   (a)   the object of the company is to carry on any trade or business whatsoever; and

   (b)   the company has power to do all such things as are incidental or conducive to the carrying on of any trade or business by it.

8.   Signature of memorandum.

   (1) The memorandum shall be dated and shall be signed by each subscriber in the presence of at least one attesting witness who shall state his or her occupation and postal address.

   (2) Opposite the signature of every subscriber there shall be written in legible characters his or her full name, occupation and postal address.

9.   Restriction on alteration of memorandum.

   A company may not alter the conditions contained in its memorandum except in the cases in the mode and to the extent for which express provision is made in this Act.

10.   Mode in which and extent to which objects of company may be altered.

   (1) A company that has included in its memorandum its objects, may, by special resolution, alter its memorandum with respect to the objects of the company, so far as may be required to enable it to—

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

   (b)   attain its main purpose by new or improved means;

   (c)   enlarge or change the local area of its operations;

   (d)   carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company;

   (e)   restrict or abandon any of the objects specified in the memorandum;

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

   (g)   amalgamate with any other company or body of persons, except that if an application is made to the registrar in accordance with this section for the alteration to be cancelled, it shall not have effect except in so far as it is confirmed by the registrar.

   (2) A resolution under this section may be passed—

   (a)   by the holders of not less in aggregate than 15 percent in nominal value of the company's issued share capital or any class of them, if the company is not limited by shares, not less than 15 percent of the company's members; or

   (b)   by the holders of not less than 15 percent of the company's debentures entitling the holders to object,

except that an application shall not be made by any person who has consented to or voted in favour of the alteration.

   (3) An application for the cancellation of a resolution altering the memorandum shall be made to the registrar within 21 days after the date on which the resolution altering the memorandum was passed.

   (4) On application to the registrar under subsection (3), the registrar may make an order cancelling the alteration or confirming the alteration either wholly or in part.

   (5) Where parties propose an arrangement, the registrar shall adjourn the proceedings in order to allow an arrangement to be made for the purchase of the interests of the dissenting members and may give such directions and directions as he or she may think fit.

   (6) Where an arrangement is proposed to be entered into in accordance with subsection (5), no part of the capital of the company shall be expended in any such purchase.

   (7) The debentures entitling the holders to object to alterations of a company's objects shall be any debentures secured by a floating charge or which form part of the same series as any debentures issued.

   (8) A special resolution altering a company's objects shall require the same notice to the holders of any such debentures as to members of the company and in default of any provisions regulating the giving of notice to any debenture holder, the provisions of the company's articles regulating the giving of notice to members shall apply.

   (9) In the case of a company which is, by virtue of a licence from the registrar exempt from the obligation to use the word "limited" as part of its name, a resolution altering the company's objects shall also require the same notice to the registrar as to members of the company.

   (10) Where a company passes a resolution altering its objects—

   (a)   if no application for cancellation is made to the registrar under this section, it shall, within 14 days from the end of the period for making the application deliver to the registrar a printed copy of its memorandum as altered; and

   (b)   if the application for cancellation is made, the registrar shall stay registration of the resolution for alteration until the application is heard and disposed of.

Articles of association.

11.   Articles prescribing regulations for companies.

   It shall be lawful for a company to register in addition to its memorandum and articles of association, such regulations of the company as the company may deem necessary.

12.   Regulations required in case of unlimited company or company limited by guarantee.

   (1) In the case of an unlimited company, the articles must state the number of members with which the company proposes to be registered and, if the company has a share capital, the amount of share capital with which the company proposes to be registered.

   (2) In the case of a company limited by guarantee, the articles must state the number of members with which the company proposes to be registered.

   (3) Where an unlimited company or a company limited by guarantee has increased the number of its members beyond the registered number, it shall, within 14 days after the increase was resolved on or took place, give to the registrar notice of the increase and the registrar shall record the increase.

   (4) Where default is made in complying with subsection (3), the company and every officer of the company who is in default is liable to a default fine of 25 currency points.

13.   Adoption and application of Table A.

   (1) Articles of association may adopt all or any of the regulations contained in Table A.

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

14.   Adoption and application of Table F.

   (1) A public company shall, at the time of registration of its articles, adopt and incorporate into its articles the provisions of the code of corporate governance contained in Table F.

   (2) A private company may, at the time of registration of its articles or subsequently, adopt and incorporate into its articles the provisions of the code of corporate governance contained in Table F.

   (3) Where a company adopts all or any Part of the codes in Table F, a printed copy of that table shall be annexed to or incorporated in each copy of its articles of association.

   (4) A company that has adopted the code of corporate governance shall annually file a statement of compliance with the registrar and the Capital Markets Authority.

   (5) A company that fails to comply with subsection (4) shall be liable to pay a fine of 50 currency points.

   (6) The Minister shall in consultation with the Capital Markets Authority by statutory instrument amend Table F.

15.   Printing and signature of articles.

   Articles shall be—

   (a)   in the English language;

   (b)   printed;

   (c)   divided into paragraphs numbered consecutively; and

   (d)   signed by each subscriber to the memorandum of association in the presence of at least one witness who shall attest the signature and add his or her occupation and postal address.

16.   Alteration of articles by special resolution.

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

   (2) An alteration made under subsection (1) in the articles shall, subject to this Act, be as valid as if originally contained in the articles and be subject to alteration by special resolution.

Form of memorandum and articles.

17.   Statutory forms of memorandum and articles.

   The form of—

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

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

   (c)   the memorandum and articles of association of an unlimited company having a share capital,

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

Registration.

18.   Form for registration of a company.

   (1) A company shall be registered by filling in the particulars contained in the registration form in the Second Schedule to this Act.

   (2) On filing of the form under subsection (1), the registrar shall register the company and assign to it a registration number if the registrar is satisfied that the applicant has complied with the Act.

   (3) On registration of the company, the registrar shall issue a certificate signed by him or her that the company is incorporated and in the case of a limited liability company, that the company is limited.

19.   Registration of memorandum and articles.

   (1) The memorandum and the articles, if any, shall be delivered to the registrar and he or she shall retain and register them and shall assign a registration number to each company so registered.

   (2) A company shall indicate its registration number on all its official documents.

20.   Lifting the corporate veil.

   The High Court may, where a company or its directors are involved in acts including tax evasion, fraud or where, save for a single member company, the membership of a company falls below the statutory minimum, lift the corporate veil.

21.   Effect of memorandum and articles.

   (1) Subject to this Act, the memorandum and articles shall, when registered, bind the company and the members of the company to the same extent as if they had been signed and sealed by each member and contained covenants on the part of each member to observe all the provisions of the memorandum and articles.

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

22.   Conclusiveness of certificate of incorporation.

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

   (2) ...

23.   Re-registration of unlimited company as limited.

   (1) Subject to this section, a company registered as unlimited may re-register under this Act as limited or a company already registered as a limited liability company may re-register under this Act as unlimited.

   (2) The re-registration of an unlimited company as a limited liability company shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred or any contract entered into, by, with or on behalf of the company before the re-registration.

   (3) On re-registration under this section, the registrar shall close the original registration of the company and may dispense with the delivery to him or her of copies of any documents furnished on the occasion of the original registration of the company, but, subject to this subsection, the re-registration shall take place in the same manner and shall have effect as if it were the first registration of the company under this Act.

24.   Re-registration of private company as a public company.

   (1) Subject to this section, a private company, other than a company not having a share capital, may be re-registered as a public company if—

   (a)   a special resolution that it should be so re-registered is passed; and

   (b)   an application for re-registration is delivered to the registrar, together with the documents specified in subsection (4).

   (2) A company shall not be re-registered under this section if it has previously been re-registered as unlimited.

   (3) The special resolution under subsection (1) shall—

   (a)   alter the company's memorandum so that it states that the company is to be a public company;

   (b)   make such other alterations in the memorandum as are necessary to bring it, in substance and in form, into conformity with the requirements of this Act with respect to the memorandum of a public company; and

   (c)   make such alterations in the company's articles as may be necessary in the circumstances.

   (4) The application shall be in the prescribed form and be signed by a director or secretary of the company and the documents to be delivered with it are the following—

   (a)   a printed copy of the memorandum and articles as altered in accordance with the resolution;

   (b)   a copy of a written statement by the company's auditors that in their opinion the relevant balance sheet shows that at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called up share capital and undistributable reserves;

   (c)   a copy of the relevant balance sheet, together with a copy of an unqualified report by the company's auditors in relation to that balance sheet; and

   (d)   a statutory declaration in the prescribed form by a director or secretary of the company stating—

      (i)   that the special resolution required by this section has been passed and that the conditions specified in sections 25 and 26 so far as applicable, have been satisfied; and

      (ii)   that between the date of the balance sheet and that of the application for re-registration, there has been no change in the company's financial position that has resulted in the amount of its net assets becoming less than the aggregate of its called up share capital and undistributable reserves.

   (5) In this section, "relevant balance sheet" means a balance sheet prepared as at a date not exceeding seven months before the company's application under this section.

   (6) A resolution that a company be re-registered as a public company may change the company name by deleting the word "company" or the words "and company" including any abbreviations of them.

   (7) A private company not being a single member company which has two or more members on the commencement of this Act shall not become a single member company.

25.   Consideration for shares recently allotted to be valued.

   (1) This section applies if shares have been allotted by the company between the date as at which the relevant balance sheet was prepared and the passing of the special resolution under section 24 and those shares were allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash.

   (2) Subject to this section the registrar shall not entertain an application by the company under section 24 unless—

   (a)   the consideration for the allotment has been valued; and

   (b)   a report with respect to the value of the consideration has been made to the company in accordance with that section during the six months immediately preceding the allotment of the shares.

   (3) Where an amount standing to the credit of any of the company's reserve accounts or of its profit and loss account, has been applied in paying up to any extent any of the shares allotted or any premium on those shares, the amount applied does not count as consideration for the allotment and accordingly subsection (2) does not apply to it.

   (4) Subsection (2) does not apply if the allotment is in connection with an arrangement providing for it to be on terms that the whole or part of the consideration for the shares allotted is to be provided by the transfer to the company or the cancellation of all or some of the shares or of all or some of the shares of a particular class in another company, with or without the issue to the company applying under section 20 of shares or of shares of any particular class in that other company.

   (5) Subsection (4) does not exclude the application of subsection (2), unless under the arrangement it is open to all the holders of the shares of the other company in question or, where the arrangement applies only to shares of a particular class, all the holders of the other company's shares of that class to take part in the arrangement.

   (6) In determining whether subsection (2) is excluded under subsection (5), shares held by a company or by a nominee of the company allotting shares in connection with the arrangement by a company or by a nominee of the company which is that company's holding company or subsidiary or a company which is a subsidiary of its holding company shall be disregarded.

   (7) Subsection (2) does not preclude an application under section 24 if the allotment of the company's shares is in connection with its proposed merger with another company; where one of the companies concerned proposes to acquire all the assets and liabilities of the other in exchange for the issue of shares or other securities of that one to shareholders of the other, with or without any cash payment to shareholders.

   (8) In this section—

   (a)   "arrangement" means any agreement, scheme or arrangement including an arrangement sanctioned in accordance with the insolvency laws on a company compromise with creditors and members or liquidator in winding up accepting shares as consideration for sale of company's property; and

   (b)   "another company" includes any body corporate.

26.   Additional requirements relating to share capital.

   (1) For a private company to be re-registered under section 24 as a public company, the following conditions with respect to its share capital must be satisfied at the time the special resolution under that section is passed—

   (a)   the nominal value of the company's allotted share capital must not be less than the authorised minimum; and

   (b)   each of the company's allotted shares must be paid up at least as to one quarter of the nominal value of that share and the whole of any premium on it.

   (2) In addition to the conditions specified in subsection (1), if any shares in the company or any premium on them have been fully or partly paid up by an undertaking given by any person that he or she or another person should do work or perform services whether for the company or any other person, the undertaking must have been performed or otherwise discharged.

   (3) Subject to subsection (4), if shares have been allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash and the consideration for the allotment consists of or includes an undertaking to the company other than one to which subsection (4) applies, then either—

   (a)   the undertaking must have been performed or otherwise discharged; or

   (b)   there must be a contract between the company and some person under which the undertaking is to be performed within five years from the time the resolution under section 24 is passed.

   (4) For purpose of determining whether subsections (1)(b), (2) and (3) are complied with, certain shares in the company may be disregarded if any share was allotted in accordance with an employees' share scheme and by reason of which the company would but for this subsection, be precluded under subsection (1)(b) from being re-registered as a public company.

   (5) A share is not to be disregarded under subsection (4), if the aggregate in nominal value of that share and other shares proposed to be so disregarded is more than one-tenth of the nominal value of the company's allotted share capital; but for that purpose the allotted share capital is treated as not including any shares disregarded under subsection (4).

   (6) Any shares disregarded under subsection (4) shall be treated as not forming part of the allotted share capital for the purposes of subsection (1)(a).

27.   Certificate of re-registration.

   (1) Where the registrar is satisfied, on an application under section 24, that a company may be re-registered under that section as a public company, the registrar shall—

   (a)   retain the application and other documents delivered to him or her under that section; and

   (b)   issue the company with a certificate of incorporation stating that the company is a public company.

   (2) The registrar may accept a declaration under section 24(4)(d) as sufficient evidence that the special resolution required by that provision has been passed and the other conditions of re-registration have been satisfied.

   (3) The registrar shall not issue the certificate if it appears to him or her that the court has made an order confirming a reduction of the company's capital which has the effect of bringing the nominal value of the company's allotted share capital below the authorised minimum.

   (4) Upon the issue to a company of a certificate of incorporation under this section—

   (a)   the company by virtue of the issue of that certificate becomes a public company; and

   (b)   any alterations in the memorandum and articles set out in the resolution take effect accordingly.

   (5) The certificate is conclusive evidence—

   (a)   that the requirements of this Act in respect of re-registration and of matters precedent and incidental to it have been complied with; and

   (b)   that the company is a public company.

28.   Modification for unlimited company to re-register.

   (1) The special resolution required by section 24(1)(a) must, in addition to the matters mentioned in subsection (3) of that section—

   (a)   state that the liability of the members is to be limited by shares and what the company's share capital is to be; and

   (b)   make such alterations in the company's memorandum as are necessary to bring it in substance and in form into conformity with the requirements of this Act with respect to the memorandum of a company limited by shares.

   (2) The certificate of incorporation issued under section 27(1)(b) shall in addition to containing the statement required by paragraph (b) of that subsection, state that the company has been incorporated as a company limited by shares, and—

   (a)   the company by virtue of the issue of the certificate becomes a public company limited by shares; and

   (b)   the certificate is conclusive evidence of the fact that it is such a company.

Limited liability company becoming unlimited.

29.   Re-registration of limited liability company as unlimited.

   (1) Subject to this section, a company which is registered as a limited liability company may be re-registered as an unlimited company on an application for the purpose of complying with the requirements of this section.

   (2) A company is excluded from re-registering under this section if it is a limited liability company by virtue of re-registration under section 23.

   (3) A public company cannot be re-registered under this section as an unlimited company.

   (4) An application under this section must be in the prescribed form and be signed by a director or the secretary of the company and be lodged with the registrar, together with the documents specified in subsection (8).

   (5) The application must set out such alterations in the company's memorandum which—

   (a)   if it is to have a share capital, are required to bring it in substance and in form into conformity with the requirements of this Act with respect to the memorandum of a company to be formed as an unlimited company having a share capital; or

   (b)   if it is not to have a share capital, are required in the circumstances.

   (6) If articles have been registered, the application must set out such alterations in them which—

   (a)   if the company is to have a share capital, are required to bring the articles in substance and in form into conformity with the requirements of this Act with respect to the articles of a company to be formed as an unlimited company having a share capital; or

   (b)   if the company is not to have a share capital, are required in the circumstances.

   (7) Where articles have not been registered, the application must have annexed to it and request the registration of printed articles and these must, if the company is to have a share capital, comply with the requirements mentioned in subsection (6)(a) and, if not, be articles appropriate to the circumstances.

   (8) The documents to be lodged with the registrar in respect of an application under this section are—

   (a)   the prescribed form of assent to the company's being registered as unlimited, subscribed by or on behalf of all the members of the company; and

   (b)   a statutory declaration made by the directors of the company stating—

      (i)   that the persons by whom or on whose behalf the form of assent is subscribed constitute the whole membership of the company; and

      (ii)   if any of the members have not subscribed that form themselves; that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do so;

   (c)   a printed copy of the memorandum incorporating the alterations in it set out in the application; and

   (d)   if articles have been registered, a printed copy of them incorporating the alterations set out in the application.

   (9) For the purposes of this section—

   (a)   subscription to a form of assent by the personal representative of a deceased member of a company is taken to be subscription by him or her; and

   (b)   a trustee in bankruptcy of a member of a company is, to the exclusion of the latter, taken to be a member of the company.

30.   Certificate of re-registration.

   (1) The registrar shall retain the application and other documents lodged with him or her under section 29 and shall—

   (a)   if articles are annexed to the application, register them; and

   (b)   issue to the company a certificate of incorporation appropriate to the status to be assumed by it by virtue of section 29.

   (2) On the issue of the certificate—

   (a)   the status of the company, by virtue of the issue is changed from limited to unlimited;

   (b)   the alterations in the memorandum set out in the application and if articles have been previously registered, any alterations to the articles in the application shall take effect as if duly made by resolution of the company; and

   (c)   the provisions of this Act apply accordingly to the memorandum and articles as altered.

   (3) The certificate is conclusive evidence that—

   (a)   the requirements of section 29 in respect of re-registration and of matters precedent and incidental to it have been complied with; and

   (b)   the company was authorised to be re-registered under section 29 and was duly so re-registered.

Unlimited company becoming limited.

31.   Re-registration of unlimited company as limited.

   (1) Subject to this Act, a company which is registered as unlimited may be re-registered as limited if a special resolution that it should be so re-registered is passed and, the requirements of section 28 are complied with in respect of the resolution and otherwise.

   (2) A company cannot under this section be re-registered as a public company; and a company is excluded from re-registering under it if it is unlimited by virtue of re-registration under section 29.

   (3) The special resolution under subsection (1) shall state whether the company is to be limited by shares or by guarantee and—

   (a)   if it is to be limited by shares, must state what the share capital is to be and provide for the making of such alterations in the memorandum as are necessary to bring it, in substance and in form, into conformity with the requirements of this Act with respect to the memorandum of a company so limited and such alterations in the articles as are necessary in the circumstances;

   (b)   if it is to be limited by guarantee, must provide for the making of such alterations in its memorandum and articles as are necessary to bring them in substance and in form into conformity with the requirements of this Act with respect to the memorandum and articles of a company limited by guarantee.

   (4) The special resolution is subject to the provisions on the registration of resolutions under this Act; and an application for the company to be re-registered as limited, in the prescribed form signed by a director or by the secretary of the company, must be lodged with the registrar, together with the documents specified in subsection (5), not earlier than the day on which the copy of the resolution forwarded is received by him or her.

   (5) The documents to be lodged with the registrar are—

   (a)   a printed copy of the memorandum as altered in accordance with the resolution; and

   (b)   a printed copy of the articles as altered.

   (6) This section does not apply in relation to the re-registration of a private company as a public company under section 24.

32.   Certificate of re-registration.

   (1) The registrar shall retain the application and other documents lodged with him or her under section 31 and shall issue to the company a certificate of incorporation appropriate to the status to be assumed by the company by virtue of that section.

   (2) On the issue of the certificate—

   (a)   the status of the company is, by virtue of the issue, changed from unlimited to limited; and

   (b)   the alterations in the memorandum specified in the resolution and the alterations in and additions to the articles so specified take effect.

   (3) The certificate is conclusive evidence that the requirements of section 31 in respect of re-registration and of matters precedent and incidental to it have been complied with and that the company was authorised to be re-registered under that section and was duly so re-registered.

Public company becoming private.

33.   Re-registration of public company as private.

   (1) A public company may be re-registered as a private company if—

   (a)   a special resolution complying with subsection (2) that it should be so re-registered is passed and has not been cancelled by the court;

   (b)   an application for the purpose in the prescribed form and signed by a director or the secretary of the company is delivered to the registrar, together with a printed copy of the memorandum and articles of the company as altered by the resolution;

   (c)   the period during which an application for the cancellation of the resolution under this Act may be made has expired without any such application having been made; or

   (d)   where an application under this section is made and the application is withdrawn or an order is made under section 34(5) confirming the resolution and a copy of that order is delivered to the registrar.

   (2) The special resolution must alter the company's memorandum so that it no longer states that the company is to be a public company and must make such other alterations in the company's memorandum and articles as are required in the circumstances.

   (3) A company shall not under this section be re-registered otherwise than as a company limited by shares or by guarantee.

   (4) The re-registration of a public company as a private company shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred or any contract entered into, by, with or on behalf of the company before the re-registration.

34.   Objection to resolution under section 33.

   (1) Where a special resolution by a public company to be re-registered under section 33 as a private company has been passed, an application may be made to the registrar for the cancellation of that resolution.

   (2) The application under subsection (1) may be made—

   (a)   by the holders of not less in aggregate than five percent in nominal value of the company's issued share capital or any class of shares in the company;

   (b)   if the company is not limited by shares, by not less than five percent of its members; or

   (c)   by not less than 50 of the company's members, but not by a person who has consented to or voted in favour of the resolution.

   (3) The application must be made within 28 days after the passing of the resolution and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

   (4) Where such an application is made, the company shall give notice in the prescribed form of that fact to the registrar.

   (5) On the hearing of the application, the registrar shall make an order cancelling or confirming the resolution and—

   (a)   may make that order on such terms and conditions as he or she thinks fit and may adjourn the proceedings in order that an arrangement may be made to the satisfaction of the registrar for the purchase of the interests of dissenting members; and

   (b)   may give such directions and make such orders as it thinks expedient for facilitating or carrying into effect the arrangement.

   (6) The order of the registrar may provide for the purchase by the company of the shares of any of its members and for the reduction accordingly of the company's capital and may make such alterations in the company's memorandum and articles as may be required in consequence of that provision.

   (7) Where the order of the registrar requires the company not to make any or any specified alteration in its memorandum or articles, the company shall not without the leave of the registrar make any such alteration.

   (8) An alteration in the memorandum or articles made by virtue of an order under this section, if not made by resolution of the company is of the same effect as if duly made by resolution and this Act applies accordingly to the memorandum or articles as so altered.

   (9) A company which fails to comply with subsections (4) or (7) and any officer of it who is in default is liable to a fine of 25 currency points and, for continued contravention, to a daily default fine of five currency points.

   (10) A person aggrieved by a decision of the registrar made under this section may appeal to court.

35.   Certificate of re-registration.

   (1) If the registrar is satisfied that a company may be re-registered under section 33 he or she shall—

   (a)   retain the application and other documents delivered to him or her under that section; and

   (b)   issue the company with a certificate of incorporation appropriate to a private company.

   (2) On the issue of the certificate—

   (a)   the company by virtue of the issue becomes a private company; and

   (b)   the alterations in the memorandum and articles set out in the resolution under section 33 take effect accordingly.

   (3) The certificate is conclusive evidence that—

   (a)   the requirements of section 33 in respect of re-registration and of matters precedent and incidental to it have been complied with; and

   (b)   the company is a private company.

Provisions with respect to names of companies.

36.   Reservation of name and prohibition of undesirable names.

   (1) The registrar may, on written application, reserve a name pending registration of company or a change of name by an existing company, any such reservation shall remain in force for 30 days or such longer period, not exceeding 60 days as the registrar may, for special reasons, allow and during that period no other company is entitled to be registered with that name.

   (2) No name shall be reserved and no company shall be registered by a name, which in the opinion of the registrar is undesirable.

   (3) Upon registration, a limited liability company shall add the initials "Ltd" or the word "Limited" at the end of its name.

37.   Power to require company to abandon misleading name.

   (1) Where in the registrar's opinion the name by which a company is registered gives a misleading indication of the nature of its activities as to be likely to cause harm to the public, the registrar may direct it to change its name.

   (2) The direction shall, if not duly made the subject of an application to the court under subsection (3), be complied with within six weeks from the date of the direction or such longer period as the registrar may think fit to allow.

   (3) The company may, within a period of 21 days from the date of the direction, apply to the court to set it aside and the court may set the direction aside or confirm it and, if it confirms the direction, shall specify a period within which it must be complied with.

   (4) Where a company makes default in complying with a direction under this section, it is liable to a fine of 25 currency points and, for continued contravention, to a daily default fine of five currency points.

   (5) Where a company changes its name under this section, the registrar shall enter the new name on the register in place of the former name and shall issue a certificate of incorporation altered to meet the circumstances of the case and the change of name has effect from the date on which the altered certificate is issued.

   (6) A change of name by a company under this section does not affect any of the rights or obligations of the company or render defective any legal proceedings by or against it and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

38.   Prohibition on trading under misleading name.

   (1) A person who is not a public company commits an offence if he or she carries on any trade, profession or business under a name which includes as its last part, the words "public limited liability company".

   (2) A public company commits an offence if in circumstances in which the fact that it is a public company is likely to be material to any person, it uses a name which may reasonably be expected to give the impression that it is a private company.

   (3) A company or officer of a company who contravenes subsection (1) or (2) is liable to a fine not exceeding 1,000 currency points or imprisonment not exceeding two years or both and, for continued contravention, to a daily default fine not exceeding 20,000 currency points.

39.   Prohibition of improper use of "limited".

   A person shall not trade or carry on business under a name or title of which "limited" or any contraction or imitation of that word is the last word, unless duly incorporated with limited liability.

40.   Change of name.

   (1) A company may by special resolution and with the approval of the registrar signified in writing change its name.

   (2) Where, through inadvertence or otherwise, a company on its first registration or on its registration by a new name is registered by a name which, in the opinion of the registrar, is too similar to the name by which a company in existence is previously registered, the first-mentioned company may change its name with the consent of the registrar and, if the registrar so directs within six months after it is registered by that name, shall change it within six weeks from the date of the direction or such longer period as the registrar may allow.

   (3) Where a company defaults in complying with a direction under this subsection, it is liable to a fine of five currency points or a fine of five currency points for every day on which the offence continues.

   (4) Where a company changes its name under this section, it shall, within 14 days, give to the registrar notice of the change of name and the registrar shall enter the new name in the register in place of the former name, and shall issue to the company a certificate of change of name and notify the change of name in the Gazette and in a newspaper of wide circulation.

   (5) A change of name by a company under this section shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

41.   Power to dispense with "Ltd" or "Limited" in the name of charitable organisations and other companies.

   (1) Where it is proved to the satisfaction of the registrar that—

   (a)   an association about to be formed as a limited liability company is to be formed for promoting commerce, art, science, religion, charity or any other useful object; and

   (b)   the association intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,

the registrar may by licence direct that the association may be registered as a company with limited liability, without the addition of the word "limited" to its name, and the association may be registered accordingly and shall, on registration, enjoy all the privileges and, subject to the provisions of this section, be subject to all the obligations of a limited liability company.

   (2) Where it is proved to the satisfaction of the registrar that—

   (a)   the objects of a company registered under this Act as a limited liability company are restricted to those specified in subsection (1) and to objects incidental or conducive to them; and

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

the registrar may by licence authorise the company to make by special resolution a change in its name including or consisting of the omission of the word "limited", and sections 40(4) and (5) shall apply to a change of name under this subsection as they apply to a change of name under that section.

   (3) A licence by the registrar under this section may be granted on such conditions and subject to such regulations as the registrar thinks fit, and those conditions and regulations shall be binding on the company to which the licence is granted, and where the grant is under subsection (1) shall, if the registrar so directs, be inserted in the memorandum and articles or in one of those documents.

   (4) A body to which a licence is granted under this section shall be excepted from the provisions of this Act relating to the use of the word "limited" as any part of its name, the publishing of its name and the sending of lists of members to the registrar.

   (5) The registrar may, revoke a licence under this section, and upon revocation the registrar shall enter in the register the word "private limited liability company" at the end of the name of the company to which it was granted, and the company shall cease to enjoy the exemptions and privileges or, as the case may be, the exemptions granted by this section; but before a recommendation is made to the registrar, the registrar shall give to the body notice in writing of his or her intention and shall afford it an opportunity of being heard in opposition to the revocation.

   (6) Where a company in respect of which a licence under this section is in force alters its memorandum with respect to its objects, the registrar may, unless he or she sees fit to recommend the revocation of the licence, recommend to the registrar the variation of the licence by making it subject to such conditions and regulations as the registrar may think fit, in lieu of or in addition to the conditions and regulations, if any, to which the licence was formerly subject.

General provisions with respect to memorandum and articles.

42.   Interpretation of certain provisions in the memorandum, articles or resolutions of a company limited by guarantee.

   (1) In the case of a company limited by guarantee and not having a share capital, every provision in the memorandum or articles or any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member is void.

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

43.   Alterations in memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent.

   (1) Notwithstanding anything in the memorandum or articles of a company, a member of the company is not bound by an alteration made in the memorandum or articles after the date on which he or she became a member, if and so far as the alteration requires him or her to take or subscribe for more shares than the number held by him or her at the date on which the alteration is made, or in any way increases his or her liability as at that date to contribute to the share capital of, or otherwise to pay money, to the company.

   (2) This section does not apply where the member agrees in writing before or after the alteration is made, to be bound.

44.   Power to alter conditions in memorandum which could have been contained in articles.

   (1) Subject to sections 43 and 247, any condition contained in a company's memorandum which could lawfully have been contained in articles of association instead of the memorandum may, subject to this section, be altered by the company by special resolution.

   (2) Where an application is made to the registrar for the alteration to be cancelled, it shall not have effect except in so far as it is confirmed by the registrar.

   (3) This section does not apply where the memorandum itself provides for or prohibits the alteration of all or any of the conditions referred to in subsection (1) and does not authorise any variation or abrogation of the special rights of any class of members.

   (4) Sections 10(2)(a), (3), (4), (7) and (8) apply in relation to any alteration and to any application made under this section as they apply in relation to alterations and to applications made under that section.

   (5) This section applies to a company's memorandum whether registered before or after the commencement of this Act.

   (6) A person aggrieved by a decision of the registrar under this section may appeal to court.

45.   Copies of memorandum and articles to be given to members.

   (1) A company shall, when required by any member, send to him or her a copy of the memorandum and articles, if any and a copy of any written law which alters the memorandum, subject to payment in the case of a copy of the memorandum and articles, of one currency point or such less sum as the company may prescribe and in the case of a copy of a written law, of a sum not exceeding the published price of the written law as the company may require.

   (2) Where a company defaults in complying with this section, the company and every officer of the company who is in default is liable to a fine of 25 currency points for each default.

46.   Issued copies of memorandum to embody alterations.

   (1) Where an alteration is made in the memorandum of a company, every copy of the memorandum issued after the date of the alteration shall be in accordance with the alteration.

   (2) Where an alteration has been made under section 43 and the company at any time after the date of the alteration issues any copies of the memorandum which are not in accordance with the alteration, the company is liable to a fine of 25 currency points for each copy issued and every officer of the company who is in default is liable to the same penalty.

Membership of company.

47.   Definition of member.

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

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

48.   Membership of a holding company.

   (1) Except as otherwise provided in this section, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary is void.

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

   (3) This section shall not prevent a subsidiary which is, at the commencement of this Act, a member of its holding company, from continuing to be a member but, subject to subsection (2), the subsidiary shall have no right to vote at meetings of the holding company.

   (4) Subject to subsection (2), subsections (1) and (3) shall apply in relation to a nominee for a body corporate which is a subsidiary, as if references in subsections (1) and (3) to such a body corporate include references to its nominee.

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

Reduction of number of members below a legal minimum in case of a public company.

49.   Members severally liable for debts where a business is carried on with fewer than the required number of members.

   Where a company, other than a private company limited by shares or by guarantee, 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.

Contracts and related particulars.

50.   Form of contracts.

   (1) A company may make a contract, by execution under its common seal or on behalf of the company, by a person acting under its authority, express or implied.

   (2) Contracts on behalf of a company may be made as follows—

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

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

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

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

51.   A company's capacity not limited by its memorandum.

   (1) The validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything contained in the company's memorandum.

   (2) A member of a company may bring proceedings to restrain the doing of an act which but for subsection (1) would be beyond the company's capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

   (3) The directors shall observe any limitations on their powers contained in the company's memorandum, and any action by the directors which but for subsection (1) would be beyond the company's capacity may only be ratified by the company by special resolution.

   (4) A resolution ratifying the action under subsection (3) shall not affect any liability incurred by the directors or any other person and relief from the liability must be agreed to separately by special resolution.

52.   Power of directors to bind the company.

   (1) The power of the board of directors to bind the company or authorise others to do so in favour of a person dealing with the company in good faith shall not be limited by the company's memorandum.

   (2) For the purposes of subsection (1)—

   (a)   a person "deals with" a company if he or she is a party to any transaction or other act to which the company is a party; and

   (b)   a person shall be presumed to have acted in good faith unless the contrary is proved.

   (3) The references in this section to limitations on the directors' power under the company's memorandum include limitations deriving from—

   (a)   a resolution of the company in a general meeting or a meeting of any class of shareholders; or

   (b)   any agreement between the members of the company or of any class of shareholders.

   (4) Subsection (1) does not affect any right of a member of the company to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

   (5) Subsection (1) does not affect any liability incurred by the directors or any other person, by reason of the directors' exceeding their powers.

53.   No duty to enquire as to capacity of a company or authority of directors.

   A party to a transaction with a company is not bound to enquire whether it is permitted by the company's memorandum or as to any limitation on the powers of the board of directors to bind the company or authorise others to do so.

54.   Pre-incorporation contracts.

   (1) A contract which purports to be made on behalf of a company before the company is formed, has effect, as one made with the person purporting to act for the company.

   (2) A company may adopt a pre-incorporation contract with its formation and registration made on its behalf without a need for novation.

   (3) In all cases where the company adopts a pre-incorporation contract, the liability of the promoter of that company shall cease.

55.   Documents executed.

   A document executed by a director and the secretary of a company or by two directors of a company and expressed to be executed by the company has the same effect as if executed under the common seal of the company.

56.   Bills of exchange and promissory notes.

   A bill of exchange or promissory note shall be taken to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of or by or on behalf or on account of, the company by any person acting under its authority, express or implied.

57.   Execution of deeds abroad.

   (1) A company may, by writing under its common seal or a signature by a person acting under its authority empower any person, either generally or in respect of any specified matters as its attorney, to execute deeds on its behalf in any place not situated in Uganda.

   (2) A deed signed by an attorney under subsection (1) on behalf of the company and under his or her seal shall bind the company and have the same effect as if it were under the common seal of the company.

58.   Power for a company to have official seal for use abroad.

   (1) A company whose objects require or comprise the transaction of business beyond the limits of Uganda may, if authorised by its articles, have for use in any place outside Uganda, an official seal which shall take the form of an embossed metal die which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every place where it is to be used.

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

   (3) A company having an official seal for use in a place referred to in subsection (1) may, by writing under its common seal, authorise any person appointed for the purpose in that place, to affix the official seal to any deed or other document to which the company is party in that place.

   (4) The authority of a person appointed under subsection (3) shall, as between the company and any person dealing with that person, continue during the period, if any, mentioned in the instrument conferring the authority or if no period is mentioned, then until notice of the revocation or determination of that person's authority has been given to the person dealing with him or her.

   (5) The person affixing an official seal under subsection (3) shall, by writing signed by him or her, certify on the deed or other instrument to which the seal is affixed, the date and place at which it is affixed.

59.   Authentication of documents.

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

PART III
SHARE CAPITAL AND DEBENTURES.

60.   Registration of prospectus.

   A prospectus shall not be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication—

   (a)   the Capital Markets Authority has approved the company's prospectus in accordance with the Capital Markets Authority Act; and

   (b)   there has been delivered to the registrar for registration a copy of the prospectus signed by every person who is named in it as a director or proposed director of the company or by his or her agent authorised in writing.

Allotment.

61.   Return as to allotment.

   (1) Whenever a private company limited by shares or a company limited by guarantee and having a share capital makes any allotment of its shares, the company shall, within 60 days thereafter, deliver to the registrar for registration—

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

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

   (2) Where a contract under subsection (1) is not reduced into writing, the company shall, within 60 days after the allotment deliver, to the registrar for registration the prescribed particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced into writing and those particulars shall be deemed to be an instrument within the meaning of the Stamps Act* and the registrar may, as a condition of filing the particulars, require that the duty payable on it be adjudicated under section 36 of that Act.

   (3) Where default is made in complying with this section, every officer of the company who is in default is liable to a fine of 25 currency points and an additional fine of five currency points for every day during which the default continues.

Commissions, discounts and financial assistance.

62.   Power to pay certain commissions; prohibition of payment of all other commissions, discounts and related particulars.

   (1) A company may pay a commission to any person in consideration of his or her subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company if—

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

   (b)   the commission paid or agreed to be paid does not exceed 10 percent of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is less;

   (c)   the amount or rate percent of the commission paid or agreed to be paid is—

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

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

   (d)   the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in the manner described in paragraph (c).

   (2) Except as provided in this section, a company shall not 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 or her subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or procuring or agreeing to procure subscriptions whether absolute or conditional for any shares in the company, whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.

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

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

   (5) If default is made in complying with the provisions relating to the delivery to the registrar of the statement in the prescribed form, the company and every officer of the company who is in default is liable to a fine of 25 currency points and in case of continued default, five currency points for each day on which the default continues.

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

   (1) Subject to this section, a company shall not give, whether directly or indirectly, and whether by means of a loan, guarantee, security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company, or, where the company is a subsidiary company in its holding company.

   (2) Nothing in this section shall be taken to prohibit—

   (a)   the lending of money by the company; where the lending of money is part of the ordinary business of a company;

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

   (c)   the making by a company of loans to persons, other than directors, in good faith in the employment of the company with a view to enabling those persons to purchase or subscribe for fully paid shares in the company or its holding company to be held by themselves by way of beneficial ownership; and

   (d)   the assistance is given in good faith in the interests of the company.

   (3) This section does not prohibit—

   (a)   a distribution of a company's assets by way of 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 this Act;

   (d)   a redemption or purchase of shares made in accordance with this Act;

   (e)   anything done in accordance with an order of court under this Act and compromises and arrangements with creditors and members;

   (f)   anything done under an arrangement made in accordance with the insolvency law acceptance of shares by liquidator in winding up as consideration for sale of property; or

   (g)   anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue of the insolvency laws.

   (4) Where a company acts in contravention of this section, the company commits an offence and is liable to a fine not exceeding 1,000 currency points.

   (5) Where a company commits an offence under subsection (4), every officer of the company who contributes to the default commits an offence and is liable on conviction to imprisonment not exceeding two years or a fine not exceeding 200 currency points or both.

   (6) For the purposes of this section, "financial assistance" means—

   (a)   financial assistance given by way of gift in the best interests of the company;

   (b)   financial assistance given by way of guarantee, security or indemnity, other than an indemnity in respect of the indemnifier's own neglect or default or by way of release or waiver;

   (c)   financial assistance given by way of a loan or any other agreement under which any of the obligations of the person giving the assistance are to be fulfilled at a time when in accordance with the agreement, any obligation of another party to the agreement remains unfulfilled or by way of the novation of or the assignment of rights arising under a loan or such other agreement; or

   (d)   any other financial assistance given by a company the net assets of which are by reason of the financial assistance reduced to a material extent or which has no net assets.

64.   Special restrictions for public companies.

   (1) In the case of a public company, financial assistance may only be given if the company has net assets which are not reduced by the financial assistance or, to the extent that those assets are reduced by the financial assistance, if the assistance is provided out of distributable profits.

   (2) For the purposes of subsection (1)—

   (a)   "net assets" means the amount by which the aggregate of the company's assets exceeds the aggregate of its liabilities taking the amount of both assets and liabilities to be as stated in the company's accounting records immediately before the financial assistance is given; and

   (b)   "liabilities" includes any amount retained as reasonably necessary for the purpose of providing for any liability or loss which is either likely to be incurred or certain to be incurred but uncertain as to amount or as to the date on which it will arise.

65.   Relaxation of the rule in section 63 for private companies.

   (1) A private company is not prohibited from giving financial assistance—

   (a)   for the acquisition of its shares; or

   (b)   for the acquisition of shares in another company where the acquisition of shares is in its holding company and—

      (i)   the holding company is a private company; and

      (ii)   giving the assistance complies with the requirements of sections 70 and 72.

   (2) The financial assistance may only be given if the company has net assets which are not reduced by the financial assistance or, to the extent that they are reduced, if the assistance is provided out of distributable profits.

   (3) A private company, which is a subsidiary company, shall not give financial assistance for the acquisition of shares in its holding company, where the subsidiary is also a subsidiary of a public company which is a subsidiary of the holding company in which the shares were or are to be acquired.

   (4) Unless the company proposing to give the financial assistance is a wholly-owned subsidiary, the giving of financial assistance under this section shall be approved by special resolution of the company in a general meeting.

   (5) Where the financial assistance is to be given by the company in a case where the acquisition of shares in question is or was an acquisition of shares in its holding company, that holding company and any other company which is both the company's holding company and a subsidiary of that other holding company except in any case, a company which is a wholly-owned subsidiary shall also approve by special resolution in a general meeting the giving of the financial assistance.

   (6) The directors of the company proposing to give the financial assistance and, where the shares acquired or to be acquired are shares in its holding company, the directors of that company and of any other company which is both the company's holding company and a subsidiary of that other holding company shall, before the financial assistance is given, make a statutory declaration stating that this section has been complied with.

Issue of shares at premium, discount and redeemable preference shares.

66.   Application of premiums received on issue of shares.

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

   (2) The share premium account may, notwithstanding anything in subsection (1), be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares in writing off—

   (a)   the preliminary expenses of the company;

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

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

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

   (4) Any part of the premium which has been applied as referred to in subsection (3) that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of the Fourth Schedule to this Act shall be disregarded in determining the sum to be included in the share premium account.

67.   Power to issue shares at a discount.

   (1) Subject to this section, a company may issue at a discount shares in the company of a class already issued, except that—

   (a)   the issue of the shares at a discount must be authorised by resolution passed in a general meeting of the company and must be sanctioned by the court;

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

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

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

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

68.   Power to issue redeemable preference shares.

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

   (2) Subsection (1) is subject to the following—

   (a)   shares shall not be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

   (b)   the shares shall not be redeemed unless they are fully paid;

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

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

   (3) Subject to this section, the redemption of preference shares under this section may be effected on the terms and in the manner provided by the articles of the company.

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

   (5) Where a company has redeemed or is about to redeem any preference shares under this section, the company may issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and, accordingly, the share capital of the company shall not for the purpose of any enactments relating to stamp duty be deemed to be increased by the issue of shares under this subsection.

   (6) Where new shares are issued before the redemption of the old shares, the new shares shall not, so far as relates to stamp duty, be taken to have been issued under subsection (5) unless the old shares are redeemed within one month after the issue of the new shares.

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

Miscellaneous provisions as to share capital.

69.   Power of a company to arrange for different amounts being paid on shares.

   (1) A company, if so authorised by its articles, may do any one or more of the following things—

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

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

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

   (2) A company shall not pay a dividend or make any other distribution to its members except out of profits available for that purpose.

   (3) For the purposes of this section, a company's profits available for the payment of a dividend or other distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made.

   (4) In determining whether a company has profits available for the payment of a dividend or other distribution, the directors of the company shall rely upon the accounts of the company which the directors reasonably believe have been prepared in accordance with generally accepted accounting principles consistently applied.

   (5) In case of a wilful or negligent contravention of this section, the directors under whose administration the contravention happened shall be jointly and severally liable, at any time within six years after paying the unlawful dividend or other distribution to its members, to the company and to the company's creditors upon its dissolution or insolvency, to the full amount of the dividend or other distribution unlawfully paid.

   (6) A member of a company that has paid a dividend or made a distribution in contravention of this section may bring a suit on behalf of the company against the directors of the company.

70.   Reserve liability of a limited liability company.

   (1) A limited liability company may by special resolution determine that any portion of its capital, which has not been already called up shall not be capable of being called up, except where the company is being wound up and for the purposes of winding up.

   (2) Where a special resolution has been passed under subsection (1), the share capital to which the resolution relates shall not be capable of being called except where the company is being wound up and for the purposes of the winding up.

71.   Power of a company limited by shares to alter its share capital.

   (1) A company limited by shares or a company limited by guarantee and having a share capital, if authorised by its articles, may alter the conditions of its memorandum by—

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

   (b)   consolidating and dividing all or any of its share capital into shares of larger amount than its existing shares;

   (c)   converting all or any of its paid up shares into stock and reconverting that stock into paid up shares of any denominations;

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

   (e)   cancelling shares which, at the date of the passing of the relevant resolution have not been taken or agreed to be taken by any person and diminishing the amount of its share capital by the amount of the shares cancelled.

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

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

72.   Notice to the registrar of consolidation of share capital, conversion of shares into stock and related particulars.

   (1) If a company having a share capital has—

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

   (b)   converted any shares into stock;

   (c)   reconverted stock into shares;

   (d)   subdivided its shares or any of them or redeemed any redeemable preference shares; or

   (e)   cancelled any shares, otherwise than in connection with a reduction of a share capital under section 76,

it shall, within 30 days after doing so, give notice of the decision to the registrar specifying the shares consolidated, divided, converted, subdivided, redeemed or cancelled or the stock reconverted.

   (2) Where default is made in complying with this section, the company and every officer of the company who is in default are liable to a default fine of 25 currency points.

73.   Notice of increase of share capital.

   (1) Where a company having a share capital, whether its shares have or have not been converted into stock, has increased its share capital beyond the registered capital, it shall, within 30 days after the passing of the resolution authorising the increase, give the registrar notice of the increase and the registrar shall record the increase.

   (2) A notice under subsection (1) shall include such particulars as may be prescribed with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued and there shall be forwarded to the registrar together with the notice, a printed copy of the resolution authorising the increase.

   (3) Where default is made in complying with this section, the company and every officer of the company who is in default are liable to a default fine of 25 currency points.

74.   Power of unlimited company to provide for reserve share capital on re-registration.

   An unlimited company having a share capital may, by its resolution for registration as a limited liability company under this Act—

   (a)   increase the nominal amount of its share capital by increasing the nominal amount of each of its shares but subject to the condition that no portion of the increased capital shall be capable of being called up except where the company is being wound up and for the purposes of the winding up; or

   (b)   provide that a specified portion of its uncalled share capital shall not be capable of being called up except where the company is being wound up and for the purpose of the winding up.

75.   Power of a company to pay interest out of capital in certain cases.

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

   (2) Subsection (1) is subject to the following—

   (a)   payment shall not be made unless it is authorised by the articles or by special resolution;

   (b)   the payment whether authorised by the articles or by special resolution shall not be made without the previous approval of the registrar;

   (c)   before approving the payment the registrar may, at the expense of the company, appoint a person to inquire and report to him or her as to the circumstances of the case and may, before making the appointment, require the company to give security for the payment of the costs of the inquiry;

   (d)   the payment shall be made only for period determined by the registrar, and that period shall not extend beyond the close of the half-year next after the half-year during which the works or buildings have been actually completed or the plant provided;

   (e)   the rate of interest shall not exceed five percent per year or such other rate as the Minister may for the time being by regulations prescribe; and

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

Reduction of share capital.

76.   Special resolution for reduction of share capital.

   (1) Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if authorised by its articles, by special resolution reduce its share capital in any way, and, in particular, without prejudice to the generality of the foregoing power, may—

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

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

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

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

77.   Application to the court for a confirming order; objections by creditors and settlement of the list of objecting creditors.

   (1) Where a company has passed a resolution for reducing share capital, it shall apply by petition to the court for an order confirming the reduction and shall in the meantime cause the resolution to be published in the Gazette and in a newspaper having national wide circulation.

   (2) Where the proposed reduction of share capital involves diminishing 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 to subsection (3)—

   (a)   a creditor of the company who at the date fixed by the court is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company is 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 entered or are to be excluded from the right of objecting to the reduction;

   (c)   where a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his or her 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 admitting it, is willing to provide for it, then the full amount of the debt or claim; or

      (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 the diminishing of any liability in respect of any paid up share capital, the court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that subsection (2) shall not apply as regards any class or classes of creditors.

78.   Order confirming the reduction and powers of the court on making that order.

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

   (2) Where the court makes an order under subsection (1), it may—

   (a)   during a period, commencing on or at any time after the date of the order as is specified in the order, add to its name as the last words of the name the words "and reduced"; and

   (b)   make an order requiring the company to publish in the Gazette and in any other method that the court may direct, the reason for reduction or such other information in regard to it 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 taken to be part of the name of the company.

79.   Registration of order and minute of reduction.

   (1) The registrar, on production to him or her of an order of the court confirming the reduction of the share capital of a company and the delivery to him or her 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 taken to be paid up on each share, shall register the order and minute.

   (2) The resolution for reducing share capital as confirmed by the order under subsection (1) shall only take effect on the registration of the order and the minute.

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

   (4) The registrar shall issue a certificate signed by him or her in respect of the registration of the order and minute and the certificate signed by the registrar 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 taken to be substituted for the corresponding part of the memorandum and shall be valid and may be altered as if it had been originally contained in the memorandum.

   (6) The substitution of the minute under subsection (5) for part of the memorandum of the company shall be taken to be an alteration of the memorandum within the meaning of section 46.

80.   Liability of members in respect of reduced shares.

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

   (2) If any creditor, entitled in respect of any debt or claim to object to the reduction of share capital, is, by reason of his or her ignorance of the proceedings for reduction, or of their nature and effect with respect to his or her claim, not entered on the list of creditors, and, after the reduction, the company is unable, within the meaning of this Act with respect to winding up by the court, to pay the amount of his or her debt or claim, then—

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

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

   (2) This section shall not affect the rights of the contributories among themselves.

81.   Penalty for concealing the name of a creditor, etc.

   If an 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 the concealment or misrepresentation,

he or she commits an offence and is liable on conviction to imprisonment not exceeding one year or to a fine not exceeding 100 currency points or both.

Variation of shareholders' rights.

82.   Rights of holders of special classes of shares.

   (1) Where the share capital of a company is divided into different classes of shares, and 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 approval of a resolution passed at a separate meeting of the holders of those shares and in accordance with that provision, then if the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than 15 percent 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.

   (2) Where an application is made under subsection (1), the variation shall not have effect unless and until it is confirmed by the court.

   (3) An application under this section shall be made by petition within 30 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.

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

   (5) The decision of the court on any application under this section shall be final.

   (6) The company shall within 30 days after the making of an order by the court on an application under this section, forward a certified copy of the order to the registrar.

   (7) If default is made in complying with subsection (6) the company and every officer of the company who is in default is liable to a default fine of 25 currency points.

   (8) In this section, "variation" includes abrogation and "varied" shall be construed accordingly.

Transfer of shares and debentures, evidence of title and related particulars.

83.   Nature of shares.

   The shares or other interest of any member in a company shall be movable property transferable in the manner provided by the articles of the company.

84.   Numbering of shares.

   (1) Each share in a company having a share capital shall be distinguished by its appropriate number.

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

85.   Transfer not to be registered except on production of instrument of transfer.

   (1) Notwithstanding anything in the articles of a company, it is not lawful for the company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company.

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

86.   Transfer by personal representative.

   A transfer of the share or other interest of a deceased member of a company made by his or her personal representative shall, although the personal representative is not himself or herself a member of the company, be as valid as if he or she had been a member at the time of the execution of the instrument of transfer.

87.   Transfer of shares in a single member company.

   (1) A single member company may transfer or allot shares on the death of the single member or by operation of law or by a single member company converting into a private company not being a single member company.

   (2) In case of a transfer of shares or further allotment of shares the company shall—

   (a)   pass a special resolution for change of status from single member company to private company and alter its articles accordingly within 30 days of transfer of shares or further allotment of shares; and

   (b)   appoint and elect one or more additional directors within 15 days of date of passing of the special resolution and notify the appointment to the registrar.

   (3) In case of death of single member, the company may either be wound up or be converted into a private company not being a single member company for which—

   (a)   the nominee director shall transfer the shares in the name of the legal heirs of the single member within 30 days;

   (b)   the company shall pass a special resolution for change of status from single member company to private company not being a single member company and alter its articles accordingly within 30 days of transfer of shares; and

   (c)   the members shall appoint or elect one or more additional directors in accordance with this Act and within 15 days of date of passing of the special resolution and notify the appointment to the registrar.

   (4) In case of operation of the law the company shall—

   (a)   transfer the shares, within seven days, in the name of relevant persons to give effect to the order of the court or any other authority;

   (b)   pass a special resolution for change of status from single member company to private company and alter its articles accordingly within 30 days of transfer of shares; and

   (c)   appoint additional director or directors in accordance with this Act within 15 days of date of passing of the special resolution and notify the appointment in the prescribed form within 14 days of date after the appointment.

   (5) The persons becoming members due to transfer or transmission or further allotment of shares, as the case may be, shall pass a special resolution to make alterations in articles and appoint one or more additional directors.

   (6) Where a single member company converts into a private company pursuant to subsection (1), it shall file a notice in writing, with the registrar within 60 days from the date of passing of special resolution.

88.   Registration of a transfer at request of the transferor.

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

89.   Notice of refusal to register a transfer.

   (1) Where a company refuses to register a transfer of any shares or debentures, the company shall, within 60 days after the date on which the transfer was lodged with the company, send to the transferee notice of the refusal.

   (2) Where default is made in complying with this section, the company and every officer of the company who is in default is liable to a default fine of 25 currency points.

90.   Certification of a transfer.

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

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

   (3) For the purposes of this section—

   (a)   an instrument of transfer shall be taken to be certified if it bears the words "certificate lodged" or words to the like effect;

   (b)   the certification of an instrument of transfer shall be taken to be made by a company if—

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

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

   (c)   a certification shall be taken to be signed by a person if—

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

      (ii)   it is not shown that the signature or initials was or were placed there by himself or herself or by any person authorised to use the signature or initials for the purpose of certificating transfers on the company's behalf.

91.   Duties of a company with respect to issue of certificates.

   (1) A company shall, within 60 days after the allotment of any of its shares, debentures or debenture stock and within two months after the date on which a transfer of the shares, debentures or debenture stock is lodged with the company, complete and have ready for delivery the certificates of all shares, the debentures and the certificates of all debenture stock allotted or transferred, unless the conditions of issue of the shares, debentures or debenture stock otherwise provide.

   (2) For the purposes of subsection (1), "transfer" means a transfer duly stamped and otherwise valid and does not include a transfer which the company is for any reason entitled to refuse to register and does not register.

   (3) If default is made in complying with this section, the company and every officer of the company who is in default is liable to a default fine of 25 currency points.

   (4) If a company on which a notice has been served requiring the company to make good any default in complying with subsection (1), fails to make good the default within 10 days after the service of the notice, the registrar may, on the application of the person entitled to have the certificates or the debentures delivered to him or her, make an order directing the company and any officer of the company to make good the default within the time specified in the order.

   (5) The order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company responsible for the default.

92.   Certificate to be evidence of title.

   A certificate, under the common seal of the company or any other title evidencing securities under this Act or any other law specifying any shares held by any member shall be prima facie evidence of title of the member to the shares.

93.   Transfer of title to securities without written documents. *

   The Minister may, by statutory instrument make regulations providing for the title to securities to be evidenced and transferred without written documents.

94.   Evidence of grant of probate.

   The production to a company of any document which is by law sufficient evidence of—

   (a)   probate of the will or letters or certificate of administration of the estate, of a deceased person having been granted to some person; or

   (b)   the Administrator General having undertaken administration of an estate under the Administrator General's Act,

shall be accepted by the company, notwithstanding anything in its articles as sufficient evidence of the grant or undertaking.

95.   Issue and effect of share warrants to bearer.

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

   (2) A warrant described in subsection (1) is, in this Act referred to as a "share warrant".

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

96.   Penalty for impersonation of shareholder.

   If a person falsely and deceitfully impersonates an owner of any share or interest in any company, or of any share warrant or coupon, issued under this Act, and obtains or endeavours to obtain any such share or interest or share warrant or coupon, or receives or endeavours to receive any money due to the owner, as if the offender were the true and lawful owner, he or she commits an offence and is liable on conviction to imprisonment not exceeding seven years.

97.   Offences in connection with share warrants.

   (1) If a person—

   (a)   with intent to defraud, forges or alters or offers, utters, disposes of or puts off, knowing it to be forged or altered, any share warrant or coupon or any document purporting to be a share warrant or coupon, issued under this Act; or

   (b)   by means of any such forged or altered share warrant, coupon or document, purporting to be a share warrant, demands or endeavours to obtain or receive any share or interest in any company under this Act or to receive any dividend or money payable in respect of it, knowing the warrant, coupon or document to be forged or altered,

he or she commits an offence and is liable on conviction to imprisonment not exceeding five years.

   (2) If a person without lawful authority or excuse, proof of which shall lie on him or her—

   (a)   engraves or makes on any plate, wood, stone or other material any share warrant or coupon purporting to be—

      (i)   a share warrant or coupon issued or made by any particular company under this Act;

      (ii)   a blank share warrant or coupon so issued or made;

      (iii)   a part of such a share warrant or coupon; or

   (b)   uses any such plate, wood, stone or other material for the making or printing of any such share warrant or coupon or of any such blank share warrant or coupon or any part of it respectively; or

   (c)   knowingly has in his or her custody or possession any such plate, wood, stone or other material,

he or she commits an offence and is liable on conviction to imprisonment not exceeding five years.

Special provisions as to debentures.

98.   Provisions as to registers of debenture holders.

   (1) A company which, issues a series of debentures shall keep at the registered office of the company a register of holders of the debentures.

   (2) Subject to subsection (1)—

   (a)   where the work of making up the register or duplicate is done at some office of the company other than the registered office, the register or duplicate may be kept at that office;

   (b)   where the company keeps in Uganda both the register and duplicate referred to in paragraph (a), it shall be kept at that office; and

   (c)   where the company keeps in Uganda both the register and duplicate referred to in paragraph (a), it shall keep them at the same place.

   (3) A company shall give notice to the registrar of the place where the register and any duplicate is kept and of any change in that place.

   (4) A company shall not be bound to give notice under subsection (3) if the register or duplicate has, at all times since it came into existence after the commencement of this Act, been kept at the registered office of the company.

99.   Rights of debenture holders and shareholders to inspect the register of debenture holders and to have copies of a trust deed.

   (1) A register of holders of debentures of a company shall, except when duly closed be open to the inspection of the registered holders of the debentures or any holder of any shares in the company without fee and to any other person, on payment of a fee of half a currency point or such less sum as may be prescribed by the company.

   (2) The company may, in a general meeting, impose reasonable restrictions on inspection under subsection (1) but the restrictions shall not be such as to reduce the period of inspection to less than two hours in each day.

   (3) Every registered holder of debentures and every holder of shares in a company may require a copy of the register of the holders of debentures of the company or any part of it on payment of a reasonable fee prescribed by the company for every 100 words required to be copied.

   (4) A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his or her request on payment in the case of a printed trust deed of the sum of a reasonable fee prescribed by the company or, where the trust deed has not been printed, on payment of a reasonable fee prescribed by the company for every 100 words required to be copied.

   (5) If inspection is refused or a copy is refused or not forwarded, the company and every officer of the company who is in default is liable to a default fine of 25 currency points and further fine of five currency points for each day the default continues.

   (6) Where a company is in default under this section, the registrar may by order compel an immediate inspection of the register or direct that the copies required shall be sent to the person requiring them.

   (7) For the purposes of this section, a register shall be taken to be duly closed if closed in accordance with provisions contained in the articles or in the debentures or in the case of debenture stock in the stock certificates or in the trust deed or other document securing the debentures or debenture stock, during such period or periods, not exceeding in the whole 30 days in any year as may be specified in the relevant document.

   (8) A person aggrieved by a decision of the registrar under this section may appeal to court.

100.   Liability of trustees for debenture holders.

   (1) Subject to this section, any provision contained in a trust deed for securing an issue of debentures or in any contract with the holders of debentures secured by a trust deed is void in so far as it would have the effect of exempting a trustee under the trust deed from or indemnifying him or her against liability for breach of trust where he or she fails to show the degree of care and diligence required of him or her as trustee, having regard to the provisions of the trust deed conferring on him or her any powers, authorities or discretion.

   (2) Subsection (1) shall not invalidate—

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

   (b)   a provision enabling the release to be given—

      (i)   on the agreement to it of a majority of not less than three-fourths in value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for those purposes; and

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

   (3) Subsection (1) shall not operate—

   (a)   to invalidate any provision in force at the commencement of this Act so long as any person then entitled to the benefit of that provision or afterwards given the benefit of it under subsection (4) remains a trustee of the deed in question; or

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

   (4) While any trustee of a trust deed remains entitled to the benefit of a provision saved by subsection (3) the benefit of that provision may be given either—

   (a)   to all trustees of the deed, present and future; or

   (b)   to any named trustees or proposed trustees, by a resolution passed by a majority of not less than three-fourths in value of the debenture holders present in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, a meeting summoned for the purpose in any manner approved by the registrar.

101.   Perpetual debentures.

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

102.   Power to reissue redeemed debentures in certain cases.

   (1) Where either before or after the commencement of this Act a company has redeemed any debentures previously issued, then unless—

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

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

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

   (2) Subject to section 103, on a reissue of redeemed debentures the person entitled to the debentures shall have and shall be taken always to have had the same priorities as if the debentures had never been redeemed.

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

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

   (5) A person who lends money on the security of a debenture reissued under this section which appears to be duly stamped may give the debenture in evidence in any proceedings for enforcing his or her security without payment of the stamp duty or any penalty in respect of it, unless he or she had notice or but for his or her negligence, might have discovered, that the debenture was not duly stamped but in any such case the company shall be liable to pay the proper stamp duty and penalty.

103.   Specific performance of contracts to subscribe for debentures.

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

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

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

   (2) The periods of time mentioned in Part IX of this Act* shall be reckoned from the date of the appointment of the receiver or of possession being taken as referred to in subsection (1), as the case may be.

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

PART IV
REGISTRATION OF CHARGES.

Registration of charges with registrar.

105.   Registration of charges.

   (1) Subject to this Part, every charge created by a company registered in Uganda and being a charge to which this section applies is, so far as any security on the company's property or undertaking is conferred by it, is void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidenced are delivered to or received by the registrar for registration in a manner required by this Act within 42 days after the date of its creation.

   (2) Subsection (1) shall apply without prejudice to any contract or obligation for repayment of the money secured by the charge and when a charge becomes void under this section the money secured by the charge shall immediately become payable.

   (3) This section applies to the following charges—

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

   (b)   a charge on uncalled share capital of the company;

   (c)   a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale;

   (d)   a charge on immovable property, wherever situated or any interest in it;

   (e)   a charge on book debts of the company;

   (f)   a floating charge on the undertaking or property of the company;

   (g)   a charge on calls made but not paid;

   (h)   a charge on a ship or any share in a ship; and

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

   (4) In the case of a charge created outside Uganda comprising property situated outside Uganda, the delivery to and the receipt by the registrar of a copy verified in the prescribed manner of the instrument by which the charge is created or evidenced shall have the same effect for the purposes of this section as the delivery and receipt of the instrument itself and 42 days after the date on which the instrument or copy could in due course of post and if dispatched with due diligence, have been received in Uganda shall be substituted for 42 days after the date of the creation of the charge as the time within which the particulars and instrument or copy are to be delivered to the registrar.

   (5) The instrument creating or purporting to create the charge may be sent for registration under this section notwithstanding that further proceedings may be necessary to make the charge valid or effectual.

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

   (7) The holding of debentures entitling the holder to a charge on immovable property shall not be taken to be an interest in immovable property.

   (8) Where a series of debentures containing or giving by reference to any other instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it shall for the purposes be sufficient if there are delivered to or received by the registrar within 42 days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars—

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

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

   (c)   a general description of the property charged; and

   (d)   the names of the trustees, if any, for the debenture holders, together with the deed containing the charge or a copy of it verified in the prescribed manner or, if there is no such deed, one of the debentures of the series.

   (9) Subject to subsection (8), where more than one issue is made of debentures in the series, there shall be sent to the registrar, for entry in the register particulars of the date and amount of each issue; but an omission to do that shall not affect the validity of the debentures issued.

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

   (11) Subject to subsection (9), the deposit of any debentures as security for any debt of the company shall not for the purposes of subsection (10) be treated as the issue of the debentures at a discount.

   (12) For the purposes of this Part a charge shall be taken to be created in the case of an instrument creating a charge, on the date of the execution of the charge by or on behalf of the company, and in the case of a charge created by deposit of title deeds on the date of the deposit of the title deeds.

106.   Duty of a company to register charges created by the company.

   (1) It shall be the duty of a company to send to the registrar for registration the particulars of every charge created by the company and of the issues of debentures of a series, requiring registration under section 105, but registration of any such charge may be effected on the application of any person interested in the charge.

   (2) Where registration is effected on the application of some person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him or her to the registrar on registration.

   (3) If a company fails for 42 days or such extended period as the registrar may order to send to the registrar for registration the particulars of any charge created by the company or of the issues of debentures of a series, requiring registration, then unless the registration has been effected on the application of some other person, the company and every officer or other person who is a party to the default is liable to a default fine of 50 currency points.

   (4) For the purpose of subsection (3)—

   (a)   in the case of a mortgage the 42 days referred to in that subsection shall be taken to run from the time of filing the mortgage instrument with the registrar of titles;

   (b)   in the case of a debenture, the time shall run from the date of execution of the debenture.

107.   Duty of a company to register charges existing on property acquired.

   (1) Where after the commencement of this Act, a company acquires any property which is subject to a charge of any kind as would, if it has been created by the company after the acquisition of the property, have been required to be registered under this Part, the company shall cause the prescribed particulars of the charge, together with a copy certified in the prescribed manner to be a correct copy of the instrument, if any, by which the charge was created or is evidenced, to be delivered to the registrar for registration in a manner required by this Act within 42 days after the date on which the acquisition is completed.

   (2) If the property under subsection (1) is situated and the charge was created outside Uganda, 30 days after the date on which the copy of the instrument could in due course of post and if dispatched with due diligence, have been received in Uganda shall be substituted for 42 days after the completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the registrar under that subsection.

   (3) If default is made in complying with this section, the company and every officer of the company who is in default is liable to a default fine of 25 currency points.

108.   Certificate of registration of a charge.

   (1) The registrar shall issue a certificate signed by him or her of the registration of the charge registered under this Part and within any period allowed under this Part, stating the amount secured by the charge.

   (2) The certificate shall be conclusive evidence that the requirements of this Part as to registration have been complied with.

109.   Endorsement of certificate of registration on debentures.

   (1) The company shall cause a copy of every certificate of registration given under section 108 to be endorsed on every debenture

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