LAWS OF MALAŴI
COMPANIES
CHAPTER 46:03
Containing Pages 1–392
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LAWS OF MALAŴI
Companies
Cap. 46:03
1
CHAPTER 46:03
COMPANIES
ARRANGEMENT OF SECTIONS
SECTION
PART I
Preliminary
1. Short title
2. Interpretation
3.
4.
5.
6.
7.
PART II
The Office of the Registrar of Companies
Establishment of the office of the Registrar of Companies
Functions of the Registrar
Fees payable to the Registrar
Registration of documents
Power to require delivery by electronic means
PART III
Registers
8. The Registers
9. Allocation of unique identifiers
10. Preservation of original documents and reconstitution of lost
documents
11. Records relating to dissolved companies
12. Searches and evidence of a register
13. Material not available for public search
14. Form of application for search
15. Certification of copies as accurate
16. Registrar’s powers of inspection
17. Power to require compliance
18. Power to extend time for doing any required act
19. Removal of material from the register
20. Rectification of the register
21. Application to foreign companies
22. Arrangements with other agencies
PART IV
Core Company Requirements
23.
24.
25.
26.
Division I—Types of Companies
Private limited liability company
Public limited liability company
Company limited by guarantee
State owned companies
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Division II—Company Formation
Forming a company
Requirements for incorporation
Incorporation
Statement of capital
Certificate of incorporation
Legal effects of incorporation
Division III—The Constitution of the Company
33. A company’s constitution and its effect
34. Power to adopt model constitution and default application of model
constitution
35. Adoption, alteration and revocation of constitution
36. Constitutional documents to be provided to members
37. Right to participate in profits otherwise than as member is void
Division IV—Capacity, Powers and Validity of Acts
38. A company’s capacity and power of directors to bind the company
39. Validity of company actions
40. Dealings between a company and any other person
41. No constructive notice
42. Common seal
43. Official seal required for share certificates of public companies
44. Ratification of pre-incorporation contracts
Division V—Company Names and Registered Office
45. Application for reservation of a name
46. Availability of name
47. Prohibited names and power of the Registrar to refuse a company name
48. Public limited company’s requirement to use plc
49. Private limited company’s requirement to use limited
50. Company limited by guarantee requirement to use limited
51. Provision of misleading information as to activities
52. Change of name
53. Direction to change name
54. Requirement to use company name
55. Requirement for company to have a current registered office in Malaŵi
Division VI—Alteration of Company Status by Re-Registration
56. Re-registration of public company as private company
57. Objection to resolution for a public company to be re-registered as
a private company
58. Certificate of re-registration from a public to a private company
59. Re-registration of private company as a public company
60. Consideration for shares recently allotted to be valued
61. Certificate of re-registration from a private to a public company
62. Single member company changing status
27.
28.
29.
30.
31.
32.
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Division VII—Core Requirements for Private Companies
63. Number of shareholders
64. Private company not permitted to make a public offer of securities
65. Exemption of a private company from the requirement to keep a
register of shareholders
66. Exemption of a private company from the requirement to hold
shareholders’ meetings
67. Exemption of a private company from the requirement to have a
company seal
68. Exemption of a private company from the requirement to have a
company secretary
69. Permitted transactions
70. Directors of private companies to comply with applicable corporate
governance standards
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
PART V
Shareholders and Their Rights
Meaning of “shareholder”
Liability of shareholders
Code of conduct for shareholders of private companies
Code of conduct for shareholders of all public companies
Subsidiary may not hold shares in holding company
Prohibition in section 75 not to apply where a subsidiary is acting as
personal representative or trustee
Residual interest under pension scheme or employees’ share scheme
to be disregarded for purposes of section 75
Employer’s rights of recovery under pension scheme or employees’
share scheme to be disregarded for purposes of section 75
Subsidiary acting as authorized intermediary in securities
Application of provisions to companies limited by guarantee
Application of this Part to nominees acting on behalf of a subsidiary
PART VI
The Shares of a Company
Division I—Legal Nature, Types of Shares and Related Particulars
82. Legal nature of shares
83. Classification of shares
84. Preferences, rights and limitations in respect of shares
85. Statement of rights to be given to shareholders
86. Transferability of shares
87. No par or nominal value shares
88. Numbering of shares
89. Issue of shares
90. Alteration in number of shares
91. Fractional shares
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92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
Companies
Pre-emptive rights to new issues
Consideration for issue of shares
Shares not paid in cash
Calls on shares
Consent to issue shares
Time of issue of shares
Board may authorize distribution
Net asset restriction on distribution by public companies
Reduction of stated capital
Application of premiums received on issue of shares
Power to issue shares at a discount
Return as to allotment
Division II—Dividends and Distributions
104. Dividends
105. Shares in lieu of dividends
106. Shareholder discounts
107. Recovery of distributions
108. Reduction of shareholder liability treated as distribution
Division III—Acquisition and Redemption of Company’s Own Shares
109. Company may acquire its own shares
110. Purchase of own shares
111. Disclosure document
112. Meaning of “redeemable”
113. Application of this act to redemption of shares
114. Redemption of redeemable preference shares
115. Redemption at option of company
116. Redemption at option of shareholder
117. Redemption on fixed date
118. Cancellation of shares repurchased
119. Rights of holders of special classes of shares
Division IV—Treasury Shares
120. Company may hold its own shares
121. Rights and obligations of shares that company holds in itself
suspended
122. Reissue of shares that company holds in itself
123. Enforceability of contract to repurchase shares
Division V—Financial Assistance in Connexion with Purchase of Shares
124. Restrictions on giving financial assistance
125. Transactions not prohibited by section 124
Divisions VI—Debentures
126. Issue of debentures
127. Specific performance
128. Perpetual debentures
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129. Register of debenture holders
130. Reissue of redeemed debentures
131.
132.
133.
134.
PART VII
Registered Valuers
Valuation by registered valuers
Register of valuers
Practice as a registered valuer
Removal and restoration of names of valuers from the register
PART VIII
Share Certification and Transfer
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
Division I—Securities by Written Instrument
Share certificate as evidence of title
Rights to a lien on shares
Requirement for instrument of transfer
Procedure on lodging of transfer
Request of transfer or for entry in the register
Transfer by personal representatives or on the grant of probate
Certification of transfers
Duties of company with respect to certificates
Transfer of shares in a single member company
Private companies
Company to maintain share register
Treasury shares to be entered on the register of shares
Share register to be kept available for search
Place where register kept
Right to search and require copies
Public company’s secretary’s duty to keep, maintain and supervise
share register
Power of Registrar to rectify share register
Trusts not to be entered on register
Share certificates
Replacement of lost or destroyed certificates
Share register as evidence of legal title
Division II—Securities Without Written Instrument
Meaning of securities
Power to issue directives
PART IX
The Officers of a Company
Division I—Directors and The Board of Directors
158. Meaning of “director”
159. Powers of directors as to the management of the company
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Companies
160. Substantial transactions
161. Delegation of powers
Division II—Appointment and Removal of Directors
162. Number of directors
163. Direction for a company to make an appointment
164. Qualification and minimum age for appointment as director
165. Director’s consent required
166. Appointment of first and subsequent directors
167. Court may appoint directors
168. Appointment of directors of public company to be voted on
individually
169. Removal of directors
170. Director ceasing to hold office
171. Resignation or death of last remaining director
172. Notice of change of directors and secretaries
173. Validity of acts of directors
174. Register of directors
Division III—Core Duties of Directors
175. Scope and nature of general duties
176. Duty to act within powers
177. Duty to promote the success of the company
178. Duty to exercise independent judgment
179. Duty to exercise reasonable care, skill and diligence
180. Duty to avoid conflict of interest
181. Duty not to accept benefits from third parties
182. Duty to declare interest in proposed transaction or arrangement
183. Consent, approval or authorization by members
184. Duty to comply with the prescribed code of corporate governance in
Malaŵi
185. Civil consequences for breach of general duties
Division IV—Core Disclosure Obligations in Transactions
Involving Self-Interest
186. Meaning of “interested”
187. Declaration of interest
188. Voidability of transactions where no declaration has been made
189. Effect on third parties
190. Application of sections 188 and 189 in certain cases
191. Interested director may vote
192. Relevant interests to be disregarded in certain cases
193. Disclosure of share dealing by directors
194. Restrictions on share dealing by directors
Division V—Transactions Involving Self-Interest which Require
the Disclosure and Approval of Shareholders
195. Directors’ long-term service contracts
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196. Substantial property transactions
197. Meaning of “substantial”
198. Exception for transactions with shareholders or other group
companies
199. Exception in case of company in winding-up or administration
200. Exception for transaction on a licensed stock exchange
201. Loans and quasi-loans to directors or connected persons
202. Meaning of “quasi-loan” and related expressions
203. Credit transactions
204. Meaning of “credit transactions”
205. Exceptions for expenditure on company business, etc.
206. Other relevant transactions or arrangements
207. The value of transactions and arrangements
208. Payments for loss of office
209. Amounts taken to be payments for loss of office
210. Payments by company
211. Payment in connexion with transfer of undertaking, etc.
212. Payment in connexion with share transfer
213. Exceptions for payments in discharge of legal obligations
214. Exception for small payments
215. Payments made without approval
Division VI—Directors’ Service Contracts for Public Companies
216. Directors’ service contracts
217. Copy of contract or memorandum of terms to be available for
inspection
218. Right of shareholder to inspect and request copy
219. Application to shadow directors
Division VII—Directors’ Liabilities
220. Standard of care and civil liability of directors and officers
221. Indemnity and insurance
222. Duty of directors as to the company’s solvency
Division VIII—Company Secretaries
223. Public company required to have secretary
224. Direction requiring public company to appoint secretary
225. Qualifications of secretaries of public companies
226. Discharge of functions where office vacant or secretary unable to act
227. Duty to keep register of secretaries
228. Duty to notify Registrar of changes
PART X
Accounting Requirements
Division I—General Obligations for All Companies Except
Private Companies
229. Requirement to keep accurate and complete accounting records
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230.
231.
232.
233.
234.
235.
236.
237.
238.
239.
240.
241.
242.
243.
256.
Place where accounting records shall be kept
Appointment of auditor
Auditor’s fees and expenses
Appointment of a partnership as auditor
Qualifications of auditor
Approval of auditor
Automatic reappointment of auditor
Appointment of first auditor
Replacement of auditor
Auditor not seeking reappointment or giving notice of resignation
Auditor to avoid conflict of interest
Auditor’s report
Access to information
Auditor’s attendance at shareholders’ meeting
Division II—General Obligations for Private Companies
General obligations for private companies
Division III—Financial Statements
Obligation to prepare financial statements
Content and form of financial statements
Financial statements to be prepared in Malaŵi currency
Presentation of group financial statements
Content and form of group financial statements
Right of member or debenture holder of a public company to copies
of financial statements and reports
Division IV—Filing of Annual Reports and Accounts for
Companies other than Private Companies
Obligation to prepare an annual report and accounts
Content of directors’ report
Sending annual report and accounts to shareholders
Failure to send an annual report and accounts
Filing of annual report and accounts
Division V—Annual Return
Annual return
257.
258.
259.
260.
PART XI
Public Offerings of Securities
Public offers of securities in Malaŵi
Meaning of a “public offer”
Meaning of a “private offer”
General duty of disclosure in a prospectus
244.
245.
246.
247.
248.
249.
250.
251.
252.
253.
254.
255.
PART XII
Arrangements, Compromises and Reconstructions;
Mergers and Takeovers
Division I—Arrangements, Compromises and Reconstructions
261. Interpretation in this Division
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262. Power to refer any compromise to the Court
263. Information as to compromises with creditors and members
264. Provisions for reconstructions
Division II—Mergers and Divisions
265. Application of this Division
266. Mergers and merging companies
267. Draft terms of a merger
268. Publication of draft terms of a merger
269. Approval of members of a merging company
270. Directors’ report of a merging company
271. Expert’s report on a merger
272. Supplementary accounting statement for a merger
273. Inspection of documents on a merger
274. Approval of constitution of a new transferee company on a merger
275. Protection of holders of securities to which special rights are
attached in a merger
276. No allotment of shares to transferor company or its nominee in a merger
277. Circumstances in which certain particulars and reports are not
required in a merger
278. Circumstances in which a meeting of members of the transferee
company is not required in a merger
279. Circumstances in which no members’ meetings are required in a
merger
280. Other circumstances in which meetings of members of transferee
company are not required in a merger
Division III—Mergers and Divisions for Public and
Private Companies
281. Divisions and companies involved in a division
282. Draft terms of a division scheme
283. Publication of draft terms of a division
284. Approval of members of companies involved in the division
285. Directors’ explanatory report for a division
286. Expert’s report in a division
287. Supplementary accounting statement in a division
288. Inspection of documents in a division
289. Report on material changes of assets of a transferor company in a
division
290. Approval of constitution of new transferee company in a division
291. Protection of holders of securities to which special rights attach in a
division
292. No allotment of shares to a transferor company or its nominee in a
division
293. Circumstances in which a meeting of members of a transferor
company are not required in a division
294. Circumstances in which a meeting of members of a transferee
company are not required in a division
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295. Agreement to dispense with reports in a division
296. Power of Court to exclude certain requirements in a division
Division IV—The Takeover Panel
297. The takeover Panel
298. Panel rules
299. Panel rulings
300. Directions
301. Power to require documents and information
302. Restrictions on disclosure of information
303. Contravention of the restrictions on disclosure of information
304. Panel’s duty of cooperation
305. Appeals
306. Failure to comply with rules about bid documentation
307. Panel as party to proceedings
308. Enforcement by the Court
309. Exemption from liability in damages
310. Privilege against self-incrimination
Division V—Takeover Offers
311. Meaning of “takeover offer”
312. Shares already held by the offeror
313. Cases where the offer is treated as being in the same terms
314. Shares to which an offer relates
315. Effect of impossibility of communicating or accepting an offer
“Squeeze-Out”
316. Right of offeror to buy out minority shareholder
317. Further provisions about notices given under section 316
318. Effect of notice under section 316
319. Further provisions about consideration held on trust
“Sell-Out”
320. Right of minority shareholder to be bought out by offeror
321. Further provision about rights to be bought out by offeror
322. Effect of right to be bought out
323. Applications to the Court
324. Joint offers
325. Associates
326. Convertible securities
327. Debentures carrying voting rights
328. Interpretation in this Part
PART XIII
Winding-up and Liquidation
329. Application of the Insolvency Act
330. Winding-up
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PART XIV
Remedies and Enforcement
331.
332.
333.
334.
335.
336.
337.
338.
339.
340.
341.
342.
343.
344.
345.
346.
347.
348.
349.
350.
351.
352.
353.
354.
355.
356.
Division I—Company Investigations
Power to appoint inspectors
Power to make regulations for the investigation of companies
Cost of investigations
Report of inspector
Duty to cooperate with inspectors
Power to terminate or suspend any investigation in relation to a
company
Division II—Proceedings by Shareholders and Directors
Derivative actions
Cost of derivative action to be met by company
Powers of Court where leave granted
Compromise, settlement or withdrawal of derivative action
Personal actions by shareholders against directors
Personal actions by shareholders against company
Unfairly prejudicial conduct
Remedies
Division III—Penalties
False or misleading statements provided under this Act
Fraudulent trading
Director’s disqualification
Division IV—Removal from the Register of Companies
Grounds for removal from the register of companies
Requirement for the Registrar to give the company notice of
intention
Objection to removal from the register
Duties of Registrar where objection received
Circumstances where property of the company removed from the
register vests in the state
General power to restore to the register
Division V—Dormant Companies
Meaning of dormant company
Company may be recorded in the register as dormant company
Exemption available to dormant companies
PART XV
Foreign Companies
357. Application of this Part
358. Meaning of carrying on business
359. Availability of name before carrying on business
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360.
361.
362.
363.
364.
365.
366.
367.
368.
369.
370.
371.
Registration of foreign companies
Registered office and authorized agents
Return of alterations
Registrar’s certificate
Validity of transactions not affected
Financial statements
Notice by foreign company of particulars of its business in Malaŵi
Name and country of incorporation
Branch registers
Cessation of business in Malaŵi
Interpretation in this Part
Prospectus
372.
373.
374.
375.
376.
377.
PART XVI
Service of Documents
Service of documents on company in legal proceedings
Service of other documents on company
Service of documents on foreign company in legal proceedings
Service of other documents on foreign company
Service of documents on shareholders and creditors
Additional provisions relating to service
378.
379.
380.
381.
382.
383.
PART XVII
Miscellaneous
Prohibition of large partnerships
Jurisdiction
Periodic information to the Minister of Lands on status of
shareholding of companies in Malaŵi
General penalty
Regulations, rules, etc.
Repeal and savings
CHAPTER 46:03
COMPANIES
15 of 2013
G.N. 40/2015
3/2016
4/2016
17/2016
An Act to consolidate the law relating to the incorporation,
administration and regulation of companies, and to provide
for matters incidental thereto and connected therewith
[20th May, 2016]
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PART I
Preliminary
1. This Act may be cited as the Companies Act.
Short title
2.— (1) In this Act, unless the context otherwise requires—
Interpretation
“accounting period” means, in relation to a company or any other
body corporate, the period in respect of which the financial
statements of the company or any other body corporate are
made up, whether that period is a year or not;
“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 provisions contained in
regulations made by the Minister;
“beneficial interest”, when used in relation to a company’s securities,
means the right or entitlement of a person, through ownership,
agreement, relationship or otherwise, alone or together with
another person to—
(a) receive or participate in any distribution in respect of the
company’s securities;
(b) exercise or cause to be exercised, in the ordinary course,
any or all of the rights attaching to the company’s securities; or
(c) dispose or direct the disposition of the company’s
securities, or any part of a distribution in respect of the
securities,
but does not include any interest held by a person in a unit trust or
collective investment scheme in terms of the Securities Act.
Cap. 46:06
“board” in relation to a company, means—
(a) the directors of the company where the number is not
less than the required quorum acting together as a board of
directors; or
(b) where the company has only one director, that director;
“company” means a body corporate, including a foreign company or
any other body corporate incorporated outside Malaŵi;
“constitution” means the memorandum and articles of association of
a company;
“contributory” means a person liable to contribute to the assets of a
company in the event of its being wound-up, and includes the
holder of fully paid shares in the company;
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“convertible securities” means any securities of a company that
may, by their terms, be converted into other securities of the
company, including—
(a) any non-voting securities issued by a company and
which will become voting securities—
(i)
on the occurrence of a designated event; or
(ii) if the holder of those securities so elects at some time
after acquiring them; and
(b) options to acquire securities to be issued by the
company, irrespective of whether or not those securities may
be voting securities or non-voting securities contemplated in
paragraph (a);
“court” used in relation to a company, means the High Court;
“debenture” means a written acknowledgement of indebtedness
issued by a company in respect of a loan made or to be
made to it or to any other person or of money deposited or
to be deposited with the company or any other person or of
the existing indebtedness of the company or any other person
whether constituting a charge on any of the assets of the
company or not; and—
(a) includes—
(i)
debenture stock;
(ii) convertible debenture;
(iii) a bond or an obligation;
(iv) loan stock;
(v) an unsecured note; or
(vi) any other instrument executed, authenticated,
issued or created in consideration of such a loan or existing
indebtedness; and
(b) does not include—
(i)
a bill of exchange;
(ii) a promissory note;
(iii) a letter of credit;
(iv) an acknowledgement of indebtedness issued in
the ordinary course of business for goods or services
supplied;
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(v) a policy of insurance; or
(vi) a deposit certificate, pass book or other similar
document issued in connexion with a deposit or current
account at a banking company;
“debenture holders’ representative” means a person designated as
such in an agency deed;
“debenture stock”—
(a) means a debenture by which a company or a debenture
holder’s representative acknowledges that the holder of the
stock is entitled to participate in the debt owing by the company
under the agency deed; and
(b) includes loan stock;
“distribution”, in relation to a distribution by a company to a
shareholder, means—
(a) the direct or indirect transfer of money or property, other
than the company’s own shares, to or for the benefit of the
shareholder; or
(b) the incurring of a debt to or for the benefit of the
shareholder, in relation to shares held by that shareholder, and
whether by means of a purchase of property, the redemption or
other acquisition of shares, a distribution of indebtedness, or by
some other means;
“dividend” has the meaning set out in section 104;
“dormant company” means that a company is “dormant” during any
period in which it has no significant accounting transaction;
“employees’ share scheme” means a scheme for encouraging or
facilitating the holding of shares in or debentures of a company
by or for the benefit of—
(a) the bona fide employees or former employees of—
(i)
the company;
(ii) any subsidiary of the company; or
(iii) the company’s holding company or any subsidiary of
the company’s holding company; or
(b) the spouses, civil partners, surviving spouses, surviving
civil partners, or minor children or step-children of such
employees or former employees;
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“International Financial Reporting Standards” or “IFRS”, or such
subsequent standards howsoever called, means Standards and
Interpretations issued by the International Accounting Standards
Board (“IASB”) or its successor bodies and comprise—
(a) International Financial Reporting Standards (“IFRS”);
(b) International Accounting Standards;
(c) IFRIC Interpretations; and
(d) SIC Interpretations;
“International Standards on Auditing” means the International
Standards on Auditing issued by the International Auditing and
Assurance Board;
“liquidator” includes the Official Receiver acting as the liquidator;
“member” means—
(a) a shareholder within the meaning of section 71; and
(b) in the case of a company limited by guarantee, a person
whose name is entered in or who is entitled to have his name
entered in the register of members;
“memorandum” means the memorandum of association of a
company;
“nominee” means a person who, in exercising a right in relation to
a share, debenture or other property, is entitled to exercise that
right only in accordance with instructions given by some other
person either directly or through the agency of one or more
persons, and a person is the nominee of another person where
he is entitled to exercise such a right only in accordance with
instructions given by that other person;
“non-executive director” means a director who is not involved in the
day-to-day management of the company;
“offer” includes an invitation to make an offer;
“offeree” means a holder of shares which are included in a takeover
offer;
“officer”, in relation to a company means a director, manager or a
secretary or where the affairs of the company are managed by
its members, a member;
“one person company”—
(a) means a private company in which the only shareholder
is also the sole director of the company; and
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(b) does not include a company in which the only shareholder
is a company;
“ordinary resolution” means a resolution passed by a simple majority
of votes cast by such shareholders of the company as are entitled
to vote, voting in person or by proxy at a general meeting;
“par or nominal value” means the stated or face value;
“parent”, in relation to another company, means that the other
company is its subsidiary;
“pre-emptive rights” means the rights conferred on shareholders
under section 92;
“pre-incorporation contract” means—
(a) a contract purporting to be made by a company before its
incorporation; or
(b) a contract made by a person on behalf of a company
before and in contemplation of its incorporation;
“public notice” means, in respect of any notice that is required to be
given of any matter affecting a company, that notice shall be
given by publishing a notice of the matter—
(a) in the Gazette; and
(b) in two daily newspapers in wide circulation in Malaŵi;
“Registrar” means the Registrar of Companies appointed pursuant
to section 3;
“share” means a share in the share capital of a company;
“special resolution” means a resolution approved by a majority of
not less than seventy-five per cent or, if a higher majority is
required by the company constitution, that higher majority, of
the votes cast of those shareholders as are entitled to vote and
voting in person or by proxy;
“stated capital”—
(a) means subject to section 100, in relation to a class or
classes of shares issued by a company including such no
par value or nominal shares as may have been issued by the
company before the commencement of this Act, means the total
of all amounts received by the company or due and payable to
the company in respect of—
(i)
the issue of the shares; and
(ii) calls on the shares;
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(b) subject to section 100, in relation to a class or classes
of shares issued by a company including such par value or
nominal shares as may have been issued by the company before
the commencement of this Act, means the total of all amounts
received by the company or due and payable to the company in
respect of—
(i) the nominal paid-up value of the shares where
applicable; and
(ii) the share premiums paid to the company in relation
to those shares and required to be transferred to the share
premium account under section 101;
“subsidiary” means—
(a) in relation to another company where—
(i)
that other company, referred to as the parent—
(aa) controls the composition of the Board of the
company;
(bb) is in a position to exercise, or control the exercise
of, more than one-half of the maximum number of votes
that can be exercised at a meeting of the company;
(cc) holds more than one-half of the issued shares
of the company, other than shares that carry no right to
participate beyond a specified amount in a distribution of
either profits or capital; or
(dd) is entitled to receive more than one-half of every
dividend paid on shares issued by the company, other than
shares that carry no right to participate beyond a specified
amount in a distribution of either profits or capital; or
(ii) the company is a subsidiary of a company that is the
parent’s subsidiary.
(b) in determining whether a company is a subsidiary of another
company—
(i) shares held or a power exercisable by that other company
only as a trustee not be treated as held or exercisable by it;
(ii) subject to paragraphs (iii) and (iv), shares held or a
power exercisable—
(aa) by a person as a nominee for that other company,
except where that other company is concerned only as a
trustee; or
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(bb) by, or by a nominee for, a subsidiary of that other
company, not being a subsidiary which is concerned only
as a trustee, shall be treated as held or exercisable by that
other company;
(iii) shares held or a power exercisable by a person under the
provisions of debentures of the company or of an agency deed
for securing an issue of debentures shall be disregarded;
(iv) shares held or a power exercisable by, or by a nominee
for, that other company or its subsidiary, not being held or
exercisable in the manner described in paragraph (iii) shall not
be treated as held or exercisable by that other company where—
(aa) the ordinary business of that other company or
its subsidiary, as the case may be, includes the lending of
money; and
(bb) the shares are held or the power is exercisable
by way of security only for the purposes of a transaction
entered into in the ordinary course of that business;
“substantial shareholder” means a person in Malaŵi or elsewhere,
who holds by himself or his nominee, a share or an interest in a
share which entitles him to exercise not less than five per cent
of the aggregate voting power exercisable at the meeting of
shareholders;
“unanimous resolution” means a resolution which has the assent of
every shareholder entitled to vote on the matter which is the
subject of the resolution, and either—
(a) given by voting at a meeting to which notice to propose the
resolution has been duly given and of which the minutes of the meeting
here duly recorded that the resolution was carried unanimously; or
(b) where the resolution is signed by every shareholder or
his agent duly appointed in writing signed by him, one or more
documents in similar form, including electronic communications,
each signed by the shareholder concerned, or his agent;
“winding-up resolution” means a resolution passed for the winding
up of a company;
“year” means a calendar year.
(2) For the purposes of this Act, a person controls a body
corporate, or its business, if—
(a) in the case of a body corporate that is a company—
(i) that body corporate is a subsidiary of that first person; or
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(ii) that first person together with any related or inter-related
person, is—
(aa) directly or indirectly able to exercise or control
the exercise of a majority of the voting rights associated
with securities of that company, whether pursuant to a
shareholder agreement or otherwise; or
(bb) has the right to appoint or elect, or control the
appointment or election of, directors of that company
who control a majority of the votes at a meeting of the
board; or
(b) that first person has the ability to materially influence the
policy of the body corporate in a manner comparable to a person
who, in ordinary commercial practice, would be able to exercise
control.
(3) For the purposes of this Act—
(a) an individual is related to another individual if they—
(i) are married, or live together in a relationship similar to
a marriage; or
(ii) are separated by no more than two degrees of natural or
adopted family relationship;
(b) an individual is related to a legal person if the individual
directly or indirectly controls the legal person, as determined in
accordance with subsection (2); and
(c) a body corporate is related to another body corporate if—
(i) either of them directly or indirectly controls the other,
or the business of the other, as determined in accordance with
subsection (2);
(ii) either is a subsidiary of the other; or
(iii) a person directly or indirectly controls each of them, or
the business of each of them, as determined in accordance with
subsection (2).
(4) For the purposes of this Act—
“hard copy” or “electronic form” and related expressions means—
(a) a document or information is sent or supplied in hard copy
form if it is sent or supplied in a paper copy or similar form capable
of being read, and, references to hard copy have a corresponding
meaning;
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(b) a document or information is sent or supplied in electronic
form if it is sent or supplied—
(i) by electronic means (for example, by e-mail or fax); or
(ii) by any other means while in an electronic form (for
example, sending a disk by post) and references to electronic
copy have a corresponding meaning;
(c) a document or information is sent or supplied by electronic
means if it is—
(i) sent initially and received at its destination by means
of electronic equipment for the processing (which expression
includes digital compression) or storage of data; and
(ii) entirely transmitted, conveyed and received by wire, by
radio, by optical means or by other electromagnetic means and
references to electronic means have a corresponding meaning;
(d) document or information authorized or required to be sent
or supplied in electronic form shall be sent or supplied in a form,
and by a means, that the sender or supplier reasonably considers
will enable the recipient—
(i) to read it; and
(ii) to retain a copy of it;
(e) for the purposes of this subsection, a document or
information can be read only if—
(i) it can be read with the naked eye; or
(ii) to the extent that it consists of images (for example
photographs, pictures, maps, plans or drawings), it can be seen
with the naked eye; and
(f) this interpretation applies whether the provision of this Act
uses the words “sent” or “supplied”, or uses other words such as
“deliver”, “provide”, “produce” or, in the case of a notice, “give”,
to refer to the sending or supplying of a document or information.
(5) For the purposes of this Act—
“solvency test” means—
(a) the company is able to pay its debts as they become due in
the normal course of business; and
(b) the value of the company’s assets is greater than the sum
of—
(i) the value of its liabilities; and
(ii) the company’s stated capital;
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(b) other than in relation to compromises, reconstructions and
takeovers in determining whether the value of a company’s assets
is greater than the value of its liabilities, the board may take into
account—
(i) in the case of a public company or a private company,
the most recent financial statements of the company prepared in
accordance with IFRS; and
(ii) a valuation of assets or estimates of liabilities that are
reasonable in the circumstances;
(c) for the purposes of determining whether the value of the
compromise, reconstruction or takeover company’s assets is
greater than the sum of the value of its liabilities and its stated
capital, the directors of each compromise, reconstruction or
takeover company—
(i)
shall have regard to—
(aa) financial statements that are prepared in accordance
with IFRS and that are prepared as if the compromise,
reconstruction or takeover had become effective; and
(bb) all other circumstances that the directors know or
ought to know would affect, or may affect, the value of the
compromise, reconstruction or takeover company’s assets
and the value of its liabilities;
(ii) may rely on valuations of assets or estimates of liabilities
that are reasonable in the circumstances.
PART II
The Office of the Registrar of Companies
Establishment
of the office of
the Registrar
of Companies
3.—(1) (a) There shall be a Registrar of Companies who shall
have legal qualifications and be an officer in the public service.
(b) shall be such Deputy Registrars of Companies and Assistant
Registrars of Companies who shall have legal qualifications and
be officers in the public service.
(2) Anything in this Act authorized or required to be done by the
Registrar or to be signed by the Registrar, may be done by or signed
by the Deputy Registrar or Assistant Registrar and shall be valid and
effective as if done by or signed by the Registrar.
(3) The Registrar shall be supported by adequate structures and
employees with appropriate skills to enable him to perform the duties
of the Registrar.
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(4) The Registrar shall have a seal and such seal shall bear the
words “Registrar of Companies, Malaŵi.”
4.— (1) The functions of the Registrar shall be to—
(a) administer this Act including the regulations made under
it and the supervision of the incorporation and registration of
companies under this Act;
Functions of
the Registrar
(b) establish and maintain a company’s registry in the Malaŵi
Business Registration Database established under the Business
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Registration Act;
(c) perform such other functions as may be specified by this
Act or any other written law; and
(d) undertake such other activities as may be necessary or
expedient to give full effect to this Act.
5.— (1) The Minister, on the recommendation of the Registrar, Fees payable
the
shall have powers to require the payment of fees to the office of to
Registrar
the Registrar in respect of the performance of any of the Registrar’s
functions or the provision of any services or facilities incidental to,
or otherwise connected with, the performance of the Registrar’s
functions under this Act.
(2) The Minister may, on the recommendation of the Registrar, by
order published in the Gazette, prescribe a schedule of penalties for
non-compliance with the provisions of this Act.
6.— (1) On receipt of a document for registration under this Act, Registration of
documents
the Registrar shall—
(a) subject to subsection (2), register the document; and
(b) issue to the person, from whom the document was received,
a written acknowledgement of receipt of the document.
(2) The Registrar may refuse to register a document submitted to
him for registration under this Act where the document—
(a) is not in the approved form;
(b) is not in accordance with this Act or any regulations made
under this Act;
(c) is not in a form that enables particulars to be entered directly
by electronic or other means in the device or facility where the
register is kept wholly or partly by means of a device or facility
referred to in section 7;
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(d) has not been properly completed;
(e) contains matter contrary to law;
(f) contains any error, alteration or erasure;
(g) contains material that is not clearly legible; or
(h) is not in accordance with any directive or notice issued by
the Registrar.
(3) Where the Registrar refuses to register a document under
subsection (2), the Registrar shall, within fourteen days of the day
on which the document was submitted for registration, in that behalf,
in writing or by using such means of communication as may be
determined by him, notify the person who submitted the document
and may require—
(a) that the document be appropriately amended or completed
and submitted for registration again; or
(b) that a fresh document be submitted in its place, on payment
of the prescribed fee and within such time limit as may be
determined by the Registrar.
(4) A document submitted under subsection (3) within the time
limit provided there under shall, in all circumstances, be deemed to
have been filed on the day the document was first submitted under
subsection (1).
(5) Where a document is not collected for the purposes of
subsection (3) (a), or is not resubmitted within the time limit specified
in a notice under subsection (3) (b), the document shall—
(a) be deemed not to have been filed; and
(b) in the case of a document not collected for the purposes of
subsection (3) (a), be disposed of by the Registrar in such manner
as he may determine.
(6) The Registrar may, for the purposes of this section, issue such
directions or guidelines as he considers necessary.
(7) For the purposes of this Act, a document shall be registered
when—
(a) the document is filed in a register kept by the Registrar;
(b) particulars of the document are entered in any device or
facility referred to in section 7 (2).
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(8) The registration of a document or the refusal of registration of
a document by the Registrar shall not—
(a) affect the validity of the document;
(b) create a presumption as to the correctness of the information
contained therein.
(9) The Registrar may from time to time, by notice published in
the Gazette, prescribe—
(a) the form of notices required to be given to the Registrar
under this Act; or
(b) the procedure to be followed in registering documents or
performing any act or thing required to be done under this Act.
7.— (1) Notwithstanding anything to the contrary, the Registrar Power to
may authorize to be made, submitted or done electronically in such require
delivery by
manner and through such computer system as may be approved by electronic
means
the Registrar—
(a) the incorporation or registration of a company;
(b) the payment of any fees;
(c) the undertaking of such other activities as may be necessary
or expedient to give full effect to this Act;
(d) the performance of any act or thing which is required to be
done in relation to paragraphs (a) to (c).
(2) For the purposes of this section, the Minister may make
regulations—
(a) providing that any document reproduced electronically or
by other means by the Registrar shall for all purposes be treated
as if it were the original document, notwithstanding any law to the
contrary;
(b) authorizing the destruction of any documents which have
been recorded or stored electronically or by other means; and
(c) giving full effect to, and ensuring the efficient operation of,
any device or facility of the kind referred to in subsection (1).
PART III
Registers
8.— (1) The Registrar shall keep such registers as he considers The Registers
necessary in such form and in such manner as he thinks fit.
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(2) The registers referred to in subsection (1) may be kept in such
manner as the Registrar thinks fit including, either wholly or partly,
by means of a device or facility—
(a) that records or stores information electronically or by other
means; and
(b) that permits the information so recorded or stored to be
readily inspected or reproduced in usable form.
Allocation
of unique
identifiers
9. The Registrar shall assign unique identifiers to all registered
companies.
Preservation
of original
documents and
reconstitution
of lost
documents
10.— (1) The originals of documents delivered to the Registrar
in hard copy shall be kept for seven years after they are received
by the Registrar, after which they may be destroyed provided the
information contained in them has been recorded.
(2) The Registrar is under no obligation to keep the originals of
documents delivered in electronic form, provided the information
contained in them has been recorded.
(3) Where the memorandum, articles, or any other document
relating to a company required to be filed, has been lost or destroyed—
(a) the company may, with the approval of the Registrar, file a
copy of the document;
(b) the Registrar may require the company to submit certified
copies of the document within such time as the Registrar may
decide.
(4) Where the Registrar gives his approval under subsection (3) (a),
the Registrar may direct that a notice to that effect be given to such
person and in such manner as the Registrar may decide.
(5) The Registrar may, on being satisfied—
(a) that the original document has been lost or destroyed;
(b) of the date of the filing of the original document; and
(c) that the copy of the document produced to him is a correct
copy,
certify on that copy that the Registrar is so satisfied and direct that
the copy be filed in the same manner as the original document.
(6) The copy shall, on being filed, from such date as is mentioned
in the certificate as the date of the filing of the original, have the
same force and effect as the original.
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11.— (1) This section applies where—
(a) a company is dissolved;
(b) a foreign company ceases to have any connexion with
Malaŵi by virtue of which it is required to register under this Act.
27
Records
relating to
dissolved
companies
(2) The Registrar may direct that records relating to the company
or institution may be removed from the register at any time after two
years from the date on which it appears to the Registrar that—
(a) the company has been dissolved;
(b) the foreign company has ceased to have any connexion
with Malaŵi by virtue of which it is required to register under
this Act.
(3) Records in respect of which a direction is given shall be
disposed of under the enactments relating to the institution or office
under which the directive is made.
12.— (1) Subject to the other provisions of this section, a person Searches and
of a
may, on payment of the prescribed fees and during such time as the evidence
register
Registrar may decide, search—
(a) any document in a register kept by the Registrar;
(b) the particulars of any registered document that have been
entered on any device or facility referred to in section 7 (2);
(c) any registered document the particulars of which have been
entered in any such device or facility.
(2) A person may, subject to the other provisions of this section,
apply to the Registrar for—
(a) a certificate of incorporation of a company;
(b) a copy of, or extract from, a document in a register kept by
the Registrar;
(c) the particulars of any registered document that have been
entered in any device or facility referred to in section 7 (2) of this
Act; or
(d) a copy of, or extract from, a registered document the
particulars of which have been entered in any such device or
facility.
(3) On an application under subsection (2), the Registrar shall, on
payment by the applicant of the prescribed fee, issue the document,
particulars or copy or certified copy applied for.
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(4) Unless otherwise ordered by the Court, the Registrar shall not
be required by any process of the Court to produce—
(a) a registered document kept by the Registrar; or
(b) evidence of the entry of particulars or a registered document
in any device or facility referred to in section 7 (2), and the Court
shall not issue such an order where it is not satisfied that the
evidence is necessary for the purposes of the proceedings.
(5) The payment of the prescribed fees under subsections (1) and
(3) shall not apply to the Government.
Material not
available for
public search
13.— (1) The following material shall not be made available by
the Registrar for public inspection—
(a) the contents of any document sent to the Registrar
containing views expressed pursuant to a proposal by company to
use certain words or expressions in a company name;
(b) confidential or protected information relating to particulars
of directors such as residential addresses;
(c) any applications for administrative action including
correction of documents, rectification of the register, to the
Registrar that have not yet been determined or were not successful;
(d) any material directed to be removed from the register by
Court order;
(e) any e-mail address, identification code or password deriving
from a document delivered for the purpose of authorizing or
facilitating electronic filing procedures or providing information
by telephone;
(f) any other material excluded from, public inspection by or
under any other law.
Form of
application for
search
Certification
of copies as
accurate
14. The Registrar may by order published in the Gazette, prescribe
the format of the application for search of the register.
15. A copy of, or extract from, a registered document—
(a) that constitutes part of a register kept by the Registrar; or
(b) particulars of which have been entered in any device or
facility referred to in section 9 (2), certified to be a true copy
or extract by the Registrar, is admissible in evidence in legal
proceedings to the same extent as the original document.
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16.— (1) For the purpose of ascertaining whether a company or Registrar’s
of
an officer is complying with this Act or any regulations made under powers
inspection
this Act, the Registrar may, on giving seventy-two hours’ written
notice to the company, call for the production of or inspect any book
required to be kept by the company.
(2) Any person who—
(a) fails to produce any document under subsection (1); or
(b) obstructs or hinders the Registrar, or any person authorized
by the Registrar, in the exercise of any powers under subsection (1),
shall be liable to a fine in accordance with the prevailing schedule
of penalties.
17.— (1) Where a person fails to comply with any requirement Power to
of this Act, the Registrar may require the person to make good the require
compliance
default within fourteen days of the service on the person of a notice
requiring him to do so.
(2) Where, for any reason, it is not practicable for the Registrar
to send individual notices under subsection (1) above, the Registrar
may publish such failure to comply in relation to any persons in any
newspaper of national circulation and in the Gazette.
(3) Any person who fails to comply with subsection (1) shall
be liable to a fine in accordance with the prevailing schedule of
penalties.
18. Where a person is required by this Act to do any act within Power to
time
a specified time, the Registrar may, on good cause being shown, extend
for doing any
required act
extend the time within which the act is required to be done.
19.— (1) The Registrar may remove from the register—
(a) any unnecessary material; or
Removal of
material from
the register
(b) any material derived from a document that has been
replaced.
(2) Notwithstanding subsection (1), the Registrar shall not
remove from the register any material whose registration has legal
consequences in relation to the company as regards formation,
registration, re-registration, change of name, change of status,
reduction of capital, change of registered office, registration of a
charge, or dissolution.
(3) On or before removing material from the Register, the Registrar
shall give notice of particulars of the material to be removed to—
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(a) the person who filed the material; and
(b) the company to which the material relates.
Rectification
of the register
20.— (1) The Registrar may rectify the register by removing
material that is or has been declared by Court to be—
(a) invalid; or
(b) factually inaccurate, or derived from something that is
factually inaccurate or forged.
(2) On or before removing material from the register, the Registrar
shall give notice of particulars of the material to be removed to—
(a) the person who filed the material; and
(b) the company to which the material relates.
(3) Notwithstanding subsection (1), no material shall be removed
from the register whose registration has legal consequences in relation
to the company as regards formation, registration, re-registration,
change of name, change of status, reduction of capital, change of
registered office, registration of a charge, or dissolution.
Application
to foreign
companies
21. The provisions in this Act, shall, unless the context otherwise
requires, apply to foreign companies registered in Malaŵi.
Arrangements
with other
agencies
22.— (1) In carrying out his functions, the Registrar shall
consult, and may enter into arrangements with other agencies of the
Government.
(2) Notwithstanding subsection (1), the Registrar may enter into
arrangements with other Government agencies with respect to—
(a) the exchange of information between the Registrar and other
agencies, with due regard for the need to protect appropriately
personal information about individuals;
(b) consultation between the Registrar and the other agencies;
(c) enforcement of this Act and assistance with enforcement of
other laws; and
(d) the conduct of investigations.
(3) The Registrar may enter into similar arrangements with
agencies outside Malaŵi that have responsibilities under the law
for the enforcement of companies legislation, or exercise similar
functions to those of the Registrar.
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PART IV
Core Company Requirements
Division I—Types of Companies
23.—(1) A company shall be a private limited liability company if— Private limited
liability
(a) its membership consists of a minimum of one person and a company
maximum of fifty persons;
(b) its memorandum prohibits it from offering any of its
securities to the public.
(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.
(3) For the purposes of this section a single member company
shall be taken to be a private company.
24. A company shall be a public limited liability company if—
(a) its membership consists of a minimum of three members;
Public limited
liability
company
(b) its memorandum permits offering its securities to the
public; and
(c) its memorandum permits the transferability of its securities.
25. A company shall be limited by guarantee if—
(a) it is formed on the principle of having the liability of
its members limited by its constitution to such amount as the
members may respectively undertake to contribute to the assets of
the company in the event of its being wound-up;
Company
limited by
guarantee
(b) it is formed for the sole purpose of operating as a charity or
not for profit organization.
26.— (1) A company shall be a State Owned Company if it is State owned
companies
controlled within the meaning of this Act by the Government.
(2) The provisions in this Act pertaining to public companies
shall apply to all State Owned Companies.
(3) The Minister may, where appropriate, and by notice published
in the Gazette, exempt State Owned Companies from the provisions
of this Act.
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Division II—Company Formation
Forming a
company
27. A person may, subject to the provisions of this Act, apply to
incorporate a company in any one of the categories provided for in
sections 23 to 26 of this Act.
Requirements
for
incorporation
28.— (1) An application for incorporation of a company under
this Act shall be sent or delivered to the Registrar, and shall be—
(a) in the prescribed form;
(b) signed by each applicant;
(c) accompanied by—
(i) a document in a form approved by the Registrar, signed
by every person named as a director or secretary, containing his
consent to be a director or secretary;
(ii) a declaration that the person is not disqualified from
being appointed or holding office as a director or secretary of a
company;
(iii) in the case of a company having a share capital, a
document in a form approved by the Registrar, signed by every
person named as a shareholder, or by an agent of that person
authorized in writing, containing that person’s consent to being
a shareholder and to taking the class and number of shares
specified in the document and stating the consideration to be
provided by that shareholder for the issue of those shares;
(iv) in the case of a company limited by guarantee, a
document signed by each person named as a member, or by
an agent of that person authorized in writing, containing the
matters set out in subsection (3);
(v) where the document has been signed by an agent, the
instrument authorizing the agent to sign it;
(vi) a notice reserving a name for the proposed company if
any; and
(vii) where the proposed company is to have a memorandum,
a document certified by at least one applicant that the document
is the company’s memorandum.
(2) Without prejudice to subsection (1), the application shall
state—
(a) the full name and address of each applicant;
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(b) the present full name, any former name and the usual
residential address of every director and of any secretary of the
proposed company;
(c) particulars of any business occupation and directorships of
any public company or subsidiary of a public company held by
each director;
(d) the full name and residential address of every shareholder
of the proposed company, and the number of shares to be issued to
every shareholder and the amount to be paid or other consideration
to be provided by that shareholder for the issue of those same
shares;
(e) the type of company that is being formed;
(f) the registered office of the proposed company;
(g) such other information as may be prescribed;
(h) in the case of a one person company, the full name and
residential address and occupation of the person nominated by
the proposed director to be the secretary of the company pursuant
to section 171 in the event of the death or incapacity of the sole
shareholder and director; and
(i) a declaration made by the applicant that the information
provided in the application is true and correct.
(3) A document submitted under subsection (1) (c) (iv) shall
contain the consent of the person referred to therein to be a
member and shall state a specified amount up to which the
member undertakes to contribute to the assets of the company, in
the event of its being wound up while that person is a member, or
within one year after ceasing to be a member, for payment of the
debts and liabilities of the company contracted before that person
ceases to be a member, and of the costs, charges and expenses
of the winding up, and for the adjustments of the rights among
themselves of the other members who are similarly required to
contribute.
(4) Where a person is a director of one or more subsidiaries of
the same parent company it shall be sufficient for the purposes of
subsection (2) (c) to state that the person is the holder of one or
more directorships in that group of companies and the group may
be described by the name of the parent company with addition of the
word “Group”.
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Incorporation
29. Where the Registrar is satisfied that the application for
incorporation of a company complies with this Act, the Registrar
shall upon payment of the prescribed fee—
Companies
(a) enter the particulars of the company on the register;
(b) assign a unique number to the company as its company
number; and
(c) issue a certificate of incorporation in the prescribed form.
Statement of
capital
30. A company’s statement of capital shall consist of—
(a) the total number of shares of the company;
(b) the aggregate par or nominal values of those shares, issued
before the commencement of this Act;
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the
shares;
(ii) the total number of shares of that class;
(iii) the aggregate par or nominal value of those shares
where applicable; and
(d) the amount paid up and the amount, if any, unpaid on each
share, whether on account of the par or nominal value of the
shares, as applicable or by way of premium.
Certificate of
incorporation
31. A certificate of incorporation of a company issued under
section 29 is conclusive evidence that—
(a) all the requirements of this Act as to incorporation have
been complied with; and
(b) on and from the date of incorporation stated in the certificate,
the company is incorporated under this Act.
Legal
effects of
incorporation
32. A company incorporated under this Act shall be a body
corporate with the name by which it is registered and continues in
existence until it is removed from the register of companies.
Division III—The Constitution of the Company
A company’s
constitution
and its effect
33.— (1) The Memorandum and Articles of a company shall
constitute the constitution of the Company.
(2) The constitution of a company shall be void to the extent that it
contravenes, or is inconsistent with, this Act or any other written law.
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(3) Subject to this Act, the constitution of a company shall have
the effect of a contract—
(a) as between the company and each member or shareholder;
and
(b) as between the members or shareholders themselves.
(4) The rights, powers, duties, and obligations of the company,
the Board, each director, and each shareholder of the company shall
be those set out in this Act except to the extent that they are restricted,
limited or modified by the constitution of the company in accordance
with this Act.
(5) The shareholders of a company may enter into any agreement
with one another concerning any matter relating to the company,
but any such agreement must be consistent with this Act and the
company’s constitution, and any provision of such an agreement that
is inconsistent with this Act or the company’s constitution is void to
the extent of the inconsistency, and the provision shall, to the extent
required, be severed from the agreement and rendered ineffective.
34.— (1) A company may adopt as its constitution the model Power to
model
memorandum and articles of association applicable to it as prescribed adopt
constitution
and default
in the regulations to this Act.
application
model
(2) Where a company does not file a memorandum and articles of of
constitution
association it shall be deemed to have adopted the provisions of the
model memorandum and articles of association.
35.— (1) Any company which was in existence as of the date of Adoption,
and
the coming into effect of this Act or a company incorporated under alteration
revocation of
constitution
this Act may—
(a) by special resolution, adopt the model constitution as
prescribed by the regulations to this Act;
(b) by special resolution and subject to sections 108 and 117
alter or revoke the provisions of its constitution.
(2) Within fourteen days of the adoption of a constitution by a
company, or the alteration or revocation of the constitution of a company,
as the case may be, the Board shall cause a notice in a form approved by
the Registrar to be delivered to the Registrar for registration.
36.— (1) A company shall, on request by a member, provide the Constitutional
documents to
following documents in electronic or hard form—
be provided to
(a) an up-to-date copy of the company’s constitution;
members
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(b) copies of any resolutions or agreements relating to the
company’s constitution that are for the time being in force;
(c) copies of any Court order sanctioning a compromise
agreement or facilitating a reconstruction or takeover;
(d) copies of the certificate of incorporation;
(e) copies of the statement of capital;
(f) in the case of a company limited by guarantee, a copy of the
guarantee statement.
(2) Where a company fails to comply with this section, the
company and every officer of the company who is in default shall be
liable to a fine in accordance with the prevailing schedule of penalties.
Right to
participate
in profits
otherwise than
as member is
void
37. In the case of a company limited by guarantee and not having
share capital, any provision in the articles or in any resolution of the
company, purporting to give a person a right to participate in the
distributable profits of the company is void.
Division IV—Capacity, Powers and Validity of Acts
A company’s
capacity
and power
of directors
to bind the
company
38.— (1) Subject to this Act and to any other enactment, a company
shall have, both within and outside Malaŵi—
(a) full capacity to carry on or undertake any business or
activity, do any act, or enter into any transaction; and
(b) for the purposes of paragraph (a), full rights, powers, and
privileges.
(2) The constitution of a company may contain a provision
relating to the capacity, rights, powers, or privileges of the company
only where such provision restricts the capacity of the company or
those rights, powers, and privileges.
Validity of
company
actions
39. Where the constitution of a company sets out the objects of
the company, there is deemed to be a restriction in the constitution on
carrying on any business or activity that is not within those objects,
unless the constitution expressly provides otherwise.
Dealings
between a
company and
any other
person
40.— (1) A company or a guarantor of an obligation of a company
shall not assert against a person dealing with the company or with
a person who has acquired property, rights, or interests from the
company that—
(a) this Act, in so far as it provides for matters of company
meetings and internal procedure, or the constitution of the
company, has not been complied with;
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(b) a person named as a director or secretary of the company in
the most recent notice received by the Registrar—
(i)
is not a director or secretary of a company;
(ii) has not been duly appointed; or
(iii) does not have authority to exercise a power which a
director of or secretary of a company carrying on business of
the kind carried on by the company customarily has authority
to exercise;
(c) a person held out by the company as a director, secretary,
employee, or agent of the company—
(i)
has not been duly appointed; or
(ii) does not have authority to exercise a power which a
director, secretary, employee, or agent of a company carrying
on business of the kind carried on by the company customarily
has authority to exercise;
(d) a person held out by the company as a director, secretary,
employee, or agent of the company with authority to exercise a
power which a director, secretary, employee, or agent of a company
carrying on business of the kind carried on by the company does
not customarily have authority to exercise, does not have authority
to exercise that power;
(e) a document issued on behalf of a company by a director,
secretary, employee, or agent of the company with actual or usual
authority to issue the document is not valid or not genuine, unless
the person has, or ought to have, by virtue of his position with or
relationship to the company, knowledge of the matters referred to
in paragraphs (a), (b), (c), or (d), as the case may be.
(2) Subsection (1) shall apply even though a person of the kind
referred to in paragraphs (b) to (e) of that subsection acts fraudulently
or forges a document that appears to have been signed on behalf of
the company, unless the person dealing with the company or with
a person who has acquired property, rights, or interests from the
company has actual knowledge of the fraud or forgery.
41. A person shall not be affected by, or deemed to have notice No
or knowledge of, the contents of, the constitution of, or any other constructive
notice
document relating to, a company merely because—
(a) the constitution or document is registered in a register kept
by the Registrar; or
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(b) the constitution or document is available for inspection at
an office of the company.
Common seal
42.— (1) A company may have a common seal but is not obliged
to have one.
(2) A company which has a common seal shall have its name
engraved in legible characters on the seal.
(3) Where a company, or an officer of a company or any person
acting on behalf of the company uses or authorizes the use of a seal
purporting to be a seal of the company on which its name is not
engraved as required by subsection (2) the company or the officer
or person shall be liable to a fine in accordance with the prevailing
schedule of penalties.
Official seal
required
for share
certificates
of public
companies
43.— (1) A public company shall have an official seal for—
(a) sealing securities issued by the company; or
(b) sealing documents created or evidencing paper securities
where so issued.
(2) The official seal—
(a) must have on its face the words “Common Seal”; and
(b) when duly affixed to the document has the same effect as
the company’s Common Seal.
Ratification
of preincorporation
contracts
44.— (1) Notwithstanding any enactment or rule of law, a
pre-incorporation contract may be ratified within such period as may
be specified in the contract, or if no period is specified, then within a
reasonable time after the incorporation of the company in the name
of which, or on behalf of which, it has been made.
(2) A contract that is ratified is as valid and enforceable as if the
company had been a party to the contract when it was made.
(3) A pre-incorporation contract may be ratified by a company
in the same manner as a contract may be entered into on behalf of a
company under this Act.
(4) For the avoidance of doubt, if a pre-incorporation contract
has not been ratified by a company, or validated by the Court, the
company may not enforce it or take the benefit of it.
Division V—Company Names and Registered Office
Application
for reservation
of a name
45.— (1) Notwithstanding any enactment or rule of law, a
pre-incorporation contract may be ratified within such period as may
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be specified in the contract, or if no period is specified, then within a
reasonable time after the incorporation of the company in the name
of which, or on behalf of which, it has been made.
(2) The Registrar shall not reserve a name—
(a) which, or the use of which, would contravene this Act or
any other law;
(b) that is identical or almost identical to a name that the
Registrar has already reserved under this Act; or
(c) that, in the opinion of the Registrar, is offensive.
(3) The Registrar shall inform the applicant by notice in writing—
(a) whether or not the Registrar has reserved the name; and
(b) if the name has been reserved, that unless the reservation
is sooner revoked by the Registrar, the name is available for
incorporation of a company with that name or registration of a
change of name, whichever be the case, for two months after the
date stated in the notice.
(4) The reservation of a name under subsection (3) shall not by
itself entitle the proposed company, the company or foreign company
to be registered under that name, either originally or on a change of
name.
46. The Registrar shall not register a company under a name Availability of
or register a change of the name of a company, unless the name is name
available.
47.— (1) No company including a foreign company shall be Prohibited
and
registered under a name which is identical with that of an existing names
power of the
company, or any statutory body or so nearly resembles that name Registrar
to refuse a
as to be likely to mislead, except where the existing company or company
statutory company is in the course of being dissolved and signifies name
its consent in such manner as the Registrar requires.
(2) Except with the Minister’s written consent, no company
including a foreign company shall be registered under a name which
includes—
(a) the word “Authority”, “Company”, “Corporation”,
“Government”, “Malaŵi”, “National”, “President”, “Presidential”,
“Regional”, “Republic”, “State”, or any other name protected
under the Protected Flag, Emblems and Names Act, or any other Cap. 18:03
word which in the Registrar’s opinion suggests, or is likely to
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suggest, that it enjoys the patronage of the Government or of a
statutory company, or of the Government of any other State;
(b) the word “Municipal” or “Chartered” or any other word
which in the Registrar’s opinion suggests, or is likely to suggest,
connexion with a local authority in Malaŵi or elsewhere;
(c) the word “cooperative”;
(d) the words “Chamber of Commerce”.
(3) Except with the consent of the Registrar, no company
including a foreign company shall be registered by a name which in
the opinion of the Registrar is undesirable or misleading.
Public limited
company’s
requirement to
use plc
48. The name of a public limited liability company shall end with
the words “public limited liability” or “plc”.
Private limited
company’s
requirement to
use limited
49.— (1) Unless expressly exempted by application to the
Registrar under this Act or any other law, the name of a private
limited company shall end with the word “limited” or “ltd”.
(2) A private company may be granted exemption from this
section if—
(a) it is a charity; or
(b) it is exempted from the requirement of subsection (1) by
regulations.
(3) The Registrar may refuse to register a private limited company
by a name that does not include the word “limited” unless a statement
has been delivered to him that the company meets the conditions for
exemption.
(4) The Registrar may accept the statement as sufficient evidence
of the matters stated in it.
Company
limited by
guarantee
requirement to
use limited
50.— (1) Unless expressly exempted by application to the
Registrar under this Act or any other written law, the name of a
company limited by guarantee shall end with the word “limited” or
“ltd”.
(2) A private company limited by guarantee may be granted
exemption from this section if—
(a) it is a charity; or
(b) it is exempted from the requirement of subsection (1) by
regulations.
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(3) The Registrar may refuse to register a private company limited
by guarantee by a name that does not include the word “limited”
unless a statement has been delivered to him that the company meets
the conditions for exemption.
(4) The Registrar may accept the statement as sufficient evidence
of the matters stated in it.
51.— (1) If it appears to the Registrar—
(a) that misleading information has been given for the purpose
of a company’s registration by a particular name; or
Provision of
misleading
information as
to activities
(b) that an undertaking or assurance has been given for that
purpose and has not been fulfilled, the Registrar may direct that
the company change its name.
(2) Any such direction—
(a) must be given within five years of the company’s registration
of that name; and
(b) must specify the period within which the company is to
change its name.
(3) The Registrar may by further direction extend the period
within which the company is to change its name.
(4) Where a company fails to comply with a direction under this
section, the company and every officer of the company who is in
default shall be liable to a fine in accordance with the prevailing
schedule of penalties as issued by the Registrar.
52.— (1) An application to change the name of a company shall— Change of
(a) be in the form duly prescribed by the Registrar;
name
(b) be accompanied by a notice reserving the name if any; and
(c) subject to the constitution of the company, be made by
passing a special resolution to that effect and filing a copy of the
resolution.
(2) Where the Registrar is satisfied that a company has complied
with subsection (1), the Registrar shall—
(a) record the new name of the company;
(b) record the change of name of the company on its certificate
of incorporation;
(c) require the company to cause a notice to that effect to be
published in such manner as the Registrar may direct.
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(3) A change of name of a company shall—
(a) take effect from the date of the certificate issued under
subsection (2); and
(b) not affect the rights or obligations of the company, or legal
proceedings by or against the company, and legal proceedings that
might have been continued or commenced against the company
under its former name may be continued or commenced against it
under its new name.
Direction to
change name
53.— (1) Where the Registrar is satisfied that a company should
not have been registered under a name, the Registrar may serve
written notice on the company to change its name by a date specified
in the notice, being a date not less than twenty-eight days after the
date on which the notice is served.
(2) Where the company does not change its name within the period
specified in the notice, the Registrar may register the company under
a new name chosen by the Registrar, being a name under which the
company may be registered under this Part.
(3) Where the Registrar registers a new name under subsection (2),
he shall record the new name on the certificate of incorporation of the
company and section 52 (3) shall apply in relation to the registration
of the new name as if the name of the company had been changed
under that section.
Requirement
to use
company
name
54.— (1) A company shall ensure that its name is clearly stated—
(a) in every written communication sent by, or on behalf of, the
company; and
(b) on every document issued or signed by, or on behalf of, the
company and which evidences or creates a legal obligation of the
company.
(2) Where the name of a company is incorrectly stated in a
document which evidences or creates a legal obligation of the
company and the document is issued or signed by or on behalf of the
company, every person who issued or signed the document is liable
to the same extent as the company unless—
(a) the person who issued or signed the document proves that
the person in whose favour the obligation was incurred was aware
at the time the document was issued or signed that the obligation
was incurred by the company; or
(b) the Court before which the document is produced is satisfied
that it would not be just and equitable for the person who issued or
signed the document to be so liable.
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(3) For the purposes of subsections (1) and (2) and section 51 a
company may use a generally recognized abbreviation of a word or
words in its name if it is not misleading to do so.
(4) Where, within the period of twelve months immediately
preceding the giving by a company of any public notice, the name of
the company was changed, the company shall ensure that the notice
states—
(a) that the name of the company was changed in that period;
and
(b) the former name or names of the company.
55.— (1) Every company registered or incorporated under this Requirement
company
Act or any other written law prior to the enactment of this Act shall for
to have
a current
continuously maintain at least one office in Malaŵi.
registered
in
(2) Particulars of the registered office shall be provided in office
Malaŵi
incorporation or registration documents of the company.
(3) A change in the particulars of the registered office shall be
effected by filing a notice with the Registrar, together with payment
of the prescribed fee.
Division VI—Alteration of Company Status by Re-registration
56.— (1) A public company may be re-registered as a private Re-registration
of public
company if—
company
as private
(a) a special resolution complying with subsection (2) that it company
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 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 following objection
proceedings confirming the resolution and a copy of that order is
delivered to the Registrar.
(2) The special resolution must alter the constitution so that it no
longer states that the company is to be a public company and must
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make such other alterations in the company’s constitution 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.
Objection to
resolution
for a public
company to be
re-registered
as a private
company
57.— (1) Where a special resolution by a public company to be
re-registered 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 per cent in
nominal value of the company’s stated capital or issued capital as
applicable for companies formed prior to this Act or any class of
shares in the company;
(b) if the company is not limited by shares, by not less than five
per cent of its members; or
(c) by not less than fifty 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 twenty-eight 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 form prescribed by the Registrar of that fact to the
Registrar.
(5) In determining 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 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 he 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
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accordingly of the company’s capital and may make such alterations
in the company’s constitution 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 constitution, the company
shall not without the leave of the Registrar make any such alteration.
(8) An alteration in the constitution made by virtue of an order
under this section, if not made by resolution of the company, shall
be of the same effect as if duly made by resolution and this Act shall
apply accordingly to the constitution as so altered.
(9) A company which fails to comply with subsection (4) or (7)
and any officer of the company who is in default is liable to a fine in
accordance with the prevailing schedule of penalties.
(10) A person aggrieved by a decision of the Registrar made
under this section may appeal to the Court.
58.— (1) If the Registrar is satisfied that a public company may be Certificate of
re-registration
re-registered as a private company, he shall—
from a public
to a private
(a) retain the application and other documents delivered to him company
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 constitution set out in the resolution
under section 56 take effect accordingly.
(3) The certificate is conclusive evidence that—
(a) the requirements of section 56 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.
59.— (1) Subject to this section, a private company, other than a Re-registration
private
company limited by guarantee or a State Owned Company, may be of
company
as a public
re-registered as a public company if—
(a) a special resolution that it should be so re-registered is
passed; and
company
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(b) an application for re-registration is delivered to the
Registrar, together with the documents specified in subsection (4).
(2) The special resolution under subsection (1) shall—
(a) alter the company’s constitution so that it states that the
company is to be a public company;
(b) make such other alterations in the constitution as are
necessary to bring it, in substance and in form, into conformity
with the requirements of this Act with respect to the constitution
of a public company.
(3) The application shall be in the form prescribed by the
Registrar and be signed by a director or secretary of the company
and the documents to be delivered with it shall be—
(a) a copy of the constitution 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 stated 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 60 and
61 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 stated
capital and undistributable reserves.
(4) 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.
(5) 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.
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(6) A private company not being a single member company which
has two or more members at the commencement of this Act, shall not
become a single member company.
60.— (1) This section applies if shares have been allotted by a Consideration
shares
private company between the date as at which the relevant balance for
recently
sheet was prepared and the passing of the special resolution to allotted to be
re-register as a public company and those shares were allotted as valued
fully or partly paid up as to their par or nominal value if issued before
the commencement of this Act or any premium on them otherwise
than in cash.
(2) Subject to this section the Registrar shall not entertain an
application by a private company to re-register as a public company
unless—
(a) the consideration for the allotment has been valued in
accordance with the valuation procedures in Part VII; 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 connexion
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.
(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 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 connexion with the arrangement by a
company or by a nominee of the company which is that company’s
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parent company or subsidiary or a company which is a subsidiary of
its parent company shall be disregarded.
(7) Subsection (2) does not preclude an application by a private
company to be re-registered as a public company if the allotment of
the company’s shares is in connexion 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.
Certificate of
re-registration
from a private
to a public
company
61.— (1) Where the Registrar is satisfied on application by a
private company to re-register as a public company, 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
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 statutory declaration 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) 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 its constitution as set out in the resolution
take effect accordingly.
(4) The certificate shall be conclusive evidence—
(a) that the requirements of this Act in respect of re-registration,
and of matters precedent and incidental thereto, have been
complied with; and
(b) that the company is a public company.
Single
member
company
changing
status
62.— (1) A single member company may increase from a single
member to two or more members if the single member has passed a
resolution to that effect.
(2) Where the membership of a single member company increases
from one to two or more there shall be entered in the company’s
register of members, the name and address of the person who was
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formerly the single member, a statement that the company has
ceased to have only a single member and the date on which the event
occurred.
(3) Where the Registrar is satisfied that a single member company
has satisfied the requirements of this Act the Registrar may re-register
the company as a company with more than one member and shall
issue a certificate of re-registration.
Division VII—Core Requirements for Private Companies
63.— (1) A private company shall not have more than fifty Number of
shareholders
shareholders.
(2) Where two or more of the shareholders in a private company
hold one or more shares jointly, they shall be deemed to be one
shareholder.
64. A private company shall not make any offer to the public to Private
company not
subscribe for its shares or debentures.
permitted
to make a
public offer of
securities
65. A private company shall be exempt from the requirement to Exemption
of a private
keep a register of shareholders under section 145.
company
from the
requirement
to keep a
register of
shareholders
66. A private company may dispense with the holding of Exemption
a private
shareholders’ meetings provided the company’s constitution permits of
company
resolutions which would otherwise require the holding of a meeting from the
requirement
to be passed by not less than seventy-five per cent of the members. to hold
shareholders’
meetings
67. A private company shall not, pursuant to section 42, be Exemption
of a private
required to have a company seal.
company
from the
requirement
to have a
company seal
68.— (1) A private company shall not be required to have a Exemption
of a private
secretary.
company
from the
(2) Anything authorized or required to be given or sent to, or requirement
to have a
served on, the company by being sent to its secretary—
company
(a) may be given or sent to, or served on, the company itself; secretary
and
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(b) if addressed to the secretary shall be treated as addressed to
the company.
(3) Anything else required or authorized to be done by or to the
secretary of the company may be done by or to—
(a) a director; or
(b) a person authorized generally or specifically in that behalf
by the directors.
Permitted
transactions
69. A private company may—
(a) issue shares;
(b) distribute dividends;
(c) repurchase shares;
(d) give financial assistance for the purchase of shares in the
company;
(e) authorize a payment, loan or other benefit to a director, or
enter into any transaction; provided—
(i) it is authorized to do so by a resolution of seventy-five
per cent of the members; and
(ii) is able to satisfy the solvency test.
Directors
of private
companies to
comply with
applicable
corporate
governance
standards
70. The directors of private companies shall be required to comply
with corporate governance standards in force in Malaŵi that apply to
private companies as directed by the Registrar.
Meaning of
“shareholder”
71.— (1) For the purposes of this Act, “shareholder” means—
PART V
Shareholders and Their Rights
(a) a person whose name is entered in the share register, where
applicable, as the holder for the time being of one or more shares
in the company;
(b) until the person’s name is entered in the share register, a
person named as a shareholder in an application for the registration
of a company at the time of incorporation of the company.
(2) Until the person’s name is entered in the share register (where
applicable), a person who is entitled to have his name entered in
the share register, under a registered amalgamation proposal, as a
shareholder in an amalgamated company.
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72.— (1) Subject to the constitution of a company, the liability of Liability of
shareholders
a shareholder to the company shall be limited to—
(a) any amount unpaid on a share held by the shareholder;
(b) any liability to repay a distribution received by the
shareholder to the extent that the distribution is recoverable under
section 107;
(c) any liability expressly provided for in the constitution of
the company;
(d) any liability for calls on shares.
(2) Subject to the constitution of a company, a shareholder shall
not be liable for an obligation of the company by reason only of
being a shareholder.
73.— (1) The Minister may, by order published in the Gazette, Code of
conduct for
publish a code of conduct for shareholders of private companies.
shareholders
of private
(2) The code of conduct shall regulate all the affairs of shareholders companies
of a private company.
(3) Where a company or an officer of the company fails to comply
with the code of conduct, the Court may, in certain circumstances,
direct compliance with a provision of the code conduct and the Court
or the Registrar may impose a fine in accordance with the prevailing
schedule of penalties.
74.— (1) The Minister may by order published in the Gazette, Code of
for
published for a code of conduct for shareholders of public companies. conduct
shareholders
of all public
(2) The code of conduct, shall regulate all the affairs of companies
shareholders of a public company.
(3) Where a company or an officer of the company fails to
comply with the code the Court may in certain circumstances direct
compliance with a provision of the code of conduct and the Court or
the Registrar may impose a fine in accordance with the prevailing
schedule of penalties.
75.— (1) Subject to this section, a subsidiary shall not hold shares Subsidiary
may not
in its holding company.
hold shares
in holding
(2) An issue of shares by a parent company to its subsidiary shall company
be void.
(3) A transfer of shares from a parent company to its subsidiary
shall be void.
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(4) Where a company that holds shares in another company
becomes a subsidiary of that other company, the company may,
notwithstanding subsection (1), continue to hold those shares, but
the exercise of any voting rights attaching to those shares shall be of
no effect.
(5) This section applies to a nominee for a subsidiary in the same
way as it applies to the subsidiary.
Prohibition in
section 75 not
to apply where
a subsidiary
is acting as
personal
representative
or trustee
76. Notwithstanding section 75, nothing shall prevent a subsidiary
from holding shares in its parent company in its capacity as a personal
representative or a trustee unless the parent company or another
subsidiary has a beneficial interest under the trust other than—
(a) any interest that arises by way of security for the purposes
of a transaction made in the ordinary course of the business of
lending money;
(b) any residual interest under a pension scheme or employees’
share scheme or employer’s rights of recovery under a pension
scheme or employees’ share scheme;
(c) any rights that the company or subsidiary has in its capacity
as trustee, including in particular—
(i) any right to recover its expenses or be remunerated out
of the trust property; and
(ii) any right to be indemnified out of the trust property for
any liability incurred by reason of any act or omission in the
performance of its duties as trustee.
Residual
interest under
pension
scheme or
employees’
share
scheme to be
disregarded
for purposes
of section 75
77.— (1) Where shares in a company are held on trust for the
purposes of a pension scheme or employees’ share scheme, there
shall be disregarded for the purposes of section 75 any residual
interest that has not vested in possession.
(2) A “residual interest” means a right of the company or
subsidiary (“the residual beneficiary”) to receive any of the trust
property in the event of—
(a) all the liabilities arising under the scheme having been
satisfied or provided for; or
(b) the residual beneficiary ceasing to participate in the
scheme; or
(c) the trust property at any time exceeding what is necessary
for satisfying the liabilities arising or expected to arise under the
scheme.
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78.— (1) Where shares in a company are held on trust for the Employer’s
of
purposes of a pension scheme or employees’ share scheme, there rights
recovery
shall be disregarded for the purposes of section 75 any charge or lien under pension
scheme or
on, or set-off against, any benefit or other right or interest under the employees’
scheme for the purpose of enabling the employer or former employer share
scheme to be
of a member of the scheme to obtain the discharge of a monetary disregarded
for purposes
obligation due to him from the member.
of section 75
(2) In the case of a trust for the purposes of a pension scheme
there shall also be disregarded any right to receive from the trustee
of the scheme, or as trustee of the scheme to retain, an amount that
can be recovered or retained, under the pension schemes law in force
in Malaŵi.
79.— (1) The prohibition in section 75 does not apply where the Subsidiary
as
shares are held by the subsidiary in the ordinary course of its business acting
authorized
intermediary
as an intermediary.
(2) For this purpose a person is an intermediary if he—
in securities
(a) carries on a bona fide business of dealing in securities;
(b) is a member of or has access to a regulated market; and
(c) does not carry on an excluded business.
(3) The following are excluded businesses—
(a) a business that consists wholly or mainly in the making or
managing of investments;
(b) a business that consists wholly or mainly in, or is carried on
wholly or mainly for the purposes of, providing services to persons
who are connected with the person carrying on the business;
(c) a business that consists in insurance business;
(d) a business that consists in managing or acting as trustee in
relation to a pension scheme, or that is carried on by the manager
or trustee of such a scheme in connexion with or for the purposes
of the scheme;
(e) a business that consists in operating or acting as trustee in
relation to a collective investment scheme, or that is carried on by
the operator or trustee of such a scheme in connexion with and for
the purposes of the scheme.
80. In relation to a company limited by guarantee, the references Application
provisions
in this Part to shares shall be read as references to the interest of its of
to companies
limited by
members as such, whatever the form of that interest.
guarantee
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Application
of this Part
to nominees
acting on
behalf of a
subsidiary
81. The provisions of this Part shall apply to a nominee acting on
behalf of a subsidiary as to the subsidiary itself.
Companies
PART VI
The Shares of a Company
Division I—Legal Nature, Types of Shares and Related Particulars
Legal nature
of shares
82. The shares or other interest of a member in a company shall
be personal property.
Classification
of shares
83.— (1) Subject to any limitation in the constitution of a company
with respect to the number of shares which may be issued and any
pre-emptive rights, a company shall have the power at such times,
and for such consideration as it shall determine, to issue shares.
(2) A company may, where so permitted by its constitution, issue
classes of shares.
Preferences,
rights and
limitations
in respect of
shares
84.— (1) Subject to subsection (2), a share in a company shall
confer on the holder—
(a) the right to one vote on a poll at a meeting of the company
on any resolution;
(b) the right to an equal share in dividends authorized by the
Board;
(c) the right to an equal share in the distribution of the surplus
assets of the company.
(2) Subject to section 96, the rights specified in subsection (1)
may be restricted, limited, altered, or added to by the constitution of
the company or in accordance with the terms on which the shares are
issued.
(3) Without limiting subsection (1), shares in a company may—
(a) be redeemable in accordance with section 112;
(b) confer preferential rights to distributions of capital or
income;
(c) confer special, limited, or conditional voting rights; or
(d) not confer voting rights.
Statement
of rights to
be given to
shareholders
85.— (1) Every company shall issue to a shareholder, on request,
a statement that sets out—
(a) the class of shares held by the shareholder, the total number
of shares of that class issued by the company, and the number of
shares of that class held by the shareholder;
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(b) the rights, privileges, conditions and limitations, including
restrictions on transfer, attaching to the shares held by the
shareholder; and
(c) the rights, privileges, conditions and limitations attaching
to the classes of shares other than those held by the shareholder.
(2) The company shall not be under any obligation to provide a
shareholder with a statement if—
(a) a statement has been provided within the previous six months;
(b) the shareholder has not acquired or disposed of shares since
the previous statement was provided;
(c) the rights attached to shares of the company have not been
altered since the previous statement was provided; and
(d) there are no special circumstances which would make it
unreasonable for the company to refuse the request.
(3) The statement shall not be evidence of title to the shares or
of any of the matters set out in it and the statement shall state in a
prominent place that fact.
86. The shares or any interest of a member in a company are Transferability
of shares
transferable according to its constitution.
87.— (1) Any shares created or issued after the commencement of No par or
nominal value
this Act shall be shares which have no par or nominal value.
shares
(2) Subject to subsection (3), the par or nominal value shares of a
company incorporated prior to the commencement of this Act shall
continue to be shares having a par or nominal value with that value,
denominated in Malaŵi currency, or with the approval of the Registrar,
in a foreign currency attached to those shares being the value carried
by those shares immediately before the commencement of this Act.
(3) Any company incorporated prior to the commencement of
this Act, with par or nominal value shares, may at any time, convert
any class of shares of the company into shares of no par or nominal
value provided that—
(a) all the shares of any one class of shares of the company
consist of either par or nominal value shares or no par or nominal
value shares; and
(b) where all the shares of the company—
(i) are of the one class, the conversion of the shares is
approved by special resolution or by consent in writing of
seventy-five per cent of the shareholders; or
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(ii) comprise more than one class, the conversion of the
shares is approved by the holders of each class to be converted
by special resolution or by consent in writing of seventy-five
per cent of the holders of that class; and
(c) notice of the terms of the conversion is given to the
Registrar for registration within fourteen days of the approval of
the conversion under paragraph (b).
(4) Notwithstanding subsection (1), a company incorporated
prior to the commencement of this Act, may issue shares or a class or
classes of shares having a par or nominal value.
(5) Upon registration of the notice under subsection (3) (c), the
shares in question shall, subject to subsection (6), be deemed to have
been converted into shares of no par or nominal value.
(6) The shares converted under subsection (3) shall not affect the
rights and liabilities attached to such shares and in particular, without
prejudice to the generality of this section, such conversion shall not
affect—
(a) any unpaid liability on such shares; or
(b) the rights of the holders thereof in respect of dividends,
voting or repayment on winding up or a reduction of capital.
(7) Where the share capital of a company is denominated in a
foreign currency, it shall not, without the prior approval of the
Registrar, change the denomination into another currency.
Numbering of
shares
88.— (1) Each share in a company having 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 a company of a particular class are fully paid up and
rank pari passu for all purposes, none of the 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.
Issue of shares
89.— (1) Upon incorporation of the company, any person named
in the application for incorporation as a shareholder shall be deemed
to have been issued with the number of shares specified in the
application.
(2) A company shall have powers to issue shares subject to
section 83.
(3) Shares shall not be treated as being of the same class unless
they rank equally for all purposes.
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90.— (1) A company may by ordinary resolution—
(a) divide or subdivide its shares into shares of a smaller amount
if the proportion between the amount paid, and the amount, if any,
unpaid on each reduced share remains the same as it was in the
case of the share from which the reduced share is derived;
57
Alteration in
number of
shares
(b) consolidate into shares of a larger amount than its existing
shares.
(2) Where shares are consolidated, the amount paid and any unpaid
liability thereon, any fixed sum by way of dividend or repayment to
which such shares are entitled, shall also be consolidated.
(3) Where a company has altered its share capital in a manner
specified in subsection (1), it shall within fourteen days of the date
of the alteration file a notice to that effect with the Registrar.
(4) A notice under subsection (3) shall include particulars with
respect to the classes of shares affected.
91. A public company may, where its constitution so provides, Fractional
issue fractions of shares which shall have corresponding fractional shares
liabilities, limitations, preferences, privileges, qualifications,
restrictions, rights and other attributes as those which relate to the
whole share of the same class or series of shares.
92.— (1) Subject to its constitution, where a company issues Pre-emptive
to new
shares which rank equally with, or in priority to existing shares as rights
issues
to voting or distribution rights, those shares shall be offered to the
holders of existing shares in a manner which would, if the offer were
accepted, maintain the relative voting and distribution rights of those
shareholders.
(2) An offer under subsection (1) shall remain open for acceptance
for a reasonable time, which shall not be less than fourteen days.
93.— (1) Before it issues any shares, the Board shall determine Consideration
issue of
the amount of the consideration for which the shares shall be issued for
shares
and shall ensure that such consideration is fair and reasonable to the
company and to all existing shareholders.
(2) The consideration for which a share is issued may take any
form including payment in cash, promissory notes, contracts for
future services, real or personal property, or other securities of the
company.
94.— (1) Shares shall be deemed not to have been paid for in cash Shares not
except to the extent that the company has actually received cash in paid in cash
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payment of the shares at the time of or subsequently to the agreement
to issue the shares.
(2) Before shares that have already been issued are credited as
fully or partly paid up other than for cash, the Board shall determine
the reasonable present cash value of the consideration and shall
ensure that the present cash value of the consideration is—
(a) fair and reasonable to the company and to all existing
shareholders; and
(b) not less than the amount to be credited in respect of the
shares.
(3) A certificate shall be signed by one of the directors or his
agent authorized in writing describing the consideration in sufficient
detail to identify it and state—
(a) the present cash value of the consideration and the basis for
assessing it;
(b) that the present cash value of the consideration is fair and
reasonable to the company and to all existing shareholders; and
(c) that the present cash value of the consideration is not less
than the amount to be credited in respect of the shares.
(4) The Board shall deliver a copy of a certificate issued under
subsection (3) to the Registrar for registration within fourteen days
of its signature.
(5) Nothing in this section shall apply to the issue of shares in a
company on—
(a) the conversion of any convertible securities; or
(b) the exercise of any option to acquire shares in the company.
(6) Where a shareholder of a company is dissatisfied with the value
in subsection (2) he may apply to the Registrar for an assessment of
the value in accordance with the provisions of Part VII.
(7) An officer who fails to comply with subsection (3) shall be
liable to a fine in accordance with the prevailing schedule of penalties.
(8) Where the Board fails to comply with subsection (4), every
officer of the company shall, be liable to a fine in accordance with
the prevailing schedule of penalties.
Calls on
shares
95. Where a call is made on a share or any other obligation
attached to a share is performed by the shareholder, the company
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shall within fourteen days give notice to the Registrar in a form
approved by him of—
(a) the amount of the call or its value as determined by the
Board under section 94 (2); and
(b) the amount of the stated capital of the company following
the making of the call.
96. The issue by a company of a share that—
(a) increases a liability of a person to the company; or
Consent to
issue shares
(b) imposes a new liability on a person to the company, shall be
void where that person, or his agent who is authorized in writing,
does not consent in writing to becoming the holder of the share
before it is issued.
97. A share is issued when the name of the holder is entered on Time of issue
of shares
the share register where a register is required to be kept.
98.— (1) A company shall not make any distribution to any Board may
authorize
shareholder unless that distribution—
distribution
(a) has been authorized by the Board under subsection (2); and
(b) subject to the constitution, has been approved by the
shareholders by ordinary resolution; and
(c) is made out of profits available for that purpose.
(2) The Board may authorize a distribution at such time and of
such amount as it thinks fit, provided it is of the opinion that the
company shall, upon the distribution being made, satisfy the solvency
test.
(3) The directors who vote in favour of a distribution shall sign a
certificate stating that, in their opinion, the company shall, upon the
distribution being made, satisfy the solvency test.
(4) Where, after a distribution is authorized and before it is made,
the Board ceases to be satisfied that the company shall, upon the
distribution being made, satisfy the solvency test, any distribution
made by the company shall be deemed not to have been authorized.
99.— (1) A public company may only make a distribution—
(a) if the amount of its net assets is not less than the aggregate
of its called up share capital and undistributable reserves, and
Net asset
restriction on
distribution
by public
companies
(b) if, and to the extent that, the distribution does not reduce the
amount of those assets to less than that aggregate.
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(2) For this purpose a company’s “net assets” means the aggregate
of the company’s assets less the aggregate of its liabilities.
(3) A company’s undistributable reserves are—
(a) its share premium account;
(b) its capital redemption reserve;
(c) the amount by which its accumulated, unrealized profits,
so far as not previously utilized by capitalization, exceed its
accumulated, unrealized losses, so far as not previously written
off in a reduction or reorganization of capital duly made;
(d) any other reserve that the company is prohibited from
distributing by any enactment or by its articles.
The reference in paragraph (c) to capitalization shall not include
a transfer of profits of the company to its capital redemption
reserve.
(4) A public company shall not include any uncalled share capital
as an asset in any accounts relevant for purposes of this section.
Reduction of
stated capital
100.—(1) Subject to subsection (3), a company may by special
resolution reduce its stated capital to such amount as it thinks fit.
(2) Public notice of a proposed reduction of a company’s stated
capital shall be given not less than thirty days before the resolution
to reduce its stated capital is passed.
(3) A company may agree in writing with a creditor of the
company that it shall not reduce its stated capital—
(a) below a specified amount without the prior consent of the
creditor; or
(b) unless specified conditions are satisfied at the time of the
reduction.
(4) A resolution to reduce the stated capital passed in breach of
any agreement referred to in subsection (3) shall be invalid and of no
effect.
(5) A company shall not take any action—
(a) to extinguish or reduce a liability in respect of an amount
unpaid on a share; or
(b) to reduce its stated capital for any purpose other than the
purpose of declaring that its stated capital is reduced by an amount
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that is not represented by the value of its assets, unless there are
reasonable grounds on which the directors may determine that,
immediately after the taking of such action, the company will be
able to satisfy the solvency test.
(6) Where—
(a) a share is redeemed at the option of the shareholder under
section 116 or on a fixed date under section 117; or
(b) the company purchases a share under section 109, and
the board is satisfied that as a consequence of the redemption
or purchase, the company would, but for this subsection, fail to
satisfy the solvency test—
(i) the board shall resolve that the stated capital of the
company shall be reduced by the amount by which the company
would so fail to satisfy the solvency test; and
(ii) the resolution of the board shall have effect
notwithstanding subsections (1) to (3).
(7) A company which has reduced its stated capital shall within
fourteen days of the reduction give notice of the reduction to the
Registrar, specifying the amount of the reduction and the reduced
amount of its stated capital.
101.—(1) In relation to a company incorporated before the Application
premiums
commencement of this act, where a company issues shares at a of
received on
premium, whether for cash or otherwise, a sum equal to the aggregate issue of shares
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 stated capital
of a company shall, except as provided in this section, apply as if the
share premium account were stated capital of the company.
(2) The share premium account may, notwithstanding anything
in subsection (1), be applied by the company in paying up un-issued
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.
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(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.
Power to issue
shares at a
discount
102.—(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 shall be authorized by
resolution passed in a general meeting of the company and must
be sanctioned by the Court;
(b) the resolution shall specify the maximum rate of the
discount at which the shares are to be issued;
(c) not less than one year shall have elapsed at the date of
the issue 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 authorizing 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.
Return as to
allotment
103.—(1) Whenever a private company limited by shares makes
any allotment of its shares, the company shall, within sixty days
thereafter, deliver to the Registrar for registration—
(a) a return of the allotments, stating the number and 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 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.
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(2) Where default is made in complying with this section, every
officer of the company who is in default shall be liable to a fine in
accordance with the prevailing schedule of penalties.
Division II—Dividends and Distributions
104.—(1) A dividend shall be a distribution other than a Dividends
distribution to which sections 109 and 124 apply.
(2) The Board shall not authorize a dividend—
(a) in respect of some but not all the shares in a class;
(b) of a greater amount in respect of some shares in a class than
other shares in that class except where—
(i) the amount of the dividend is reduced in proportion to
any liability attached to the shares under the constitution;
(ii) a shareholder has agreed in writing to receive no
dividend, or a lesser dividend than would otherwise be payable;
(c) unless it is paid out of profits.
(3) A public company that proposes to declare a dividend shall
include declaration of dividends as an item on the agenda for the
shareholders’ meeting in the notice to shareholders.
105. Subject to the constitution of the company, the Board may Shares in lieu
issue shares to any shareholders who have agreed to accept the issue of dividends
of shares, wholly or partly, in lieu of a proposed dividend or proposed
future dividends provided that—
(a) the right to receive shares, wholly or partly, in lieu of the
proposed dividend or proposed future dividends has been offered
to all shareholders of the same class on the same terms;
(b) where all shareholders elected to receive the shares in lieu
of the proposed dividend, relative voting or distribution rights, or
both, would be maintained;
(c) the shareholders to whom the right is offered are afforded a
reasonable opportunity of accepting it;
(d) the shares issued to each shareholder are issued on the same
terms and subject to the same rights as the shares issued to all
shareholders in that class who agree to receive the shares; and
(e) the provisions of section 93 are complied with by the
Board.
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Shareholder
discounts
106.—(1) The Board may resolve that the company shall offer
shareholders discounts in respect of some or all of the goods sold or
services provided by the company.
Companies
(2) The Board shall not approve a discount scheme under
subsection (1) unless it has previously resolved that the proposed
discounts are—
(a) fair and reasonable to the company and to all shareholders;
and
(b) made available to all shareholders or all shareholders of the
same class on the same terms.
(3) A discount scheme shall not be approved, or where it had
previously been approved shall not be continued by the Board, unless
it has reasonable grounds to believe that the company satisfies the
solvency test.
(4) Subject to subsection (5), a discount accepted by a shareholder
under a discount scheme approved under this section shall not be a
distribution for the purposes of this Act.
(5) Where—
(a) a discount is accepted by a shareholder under a scheme
approved by the Board; and
(b) after the scheme is approved or the discount was offered,
the Board ceases to be satisfied on reasonable grounds that the
company would satisfy the solvency test, section 107 shall apply
in relation to the discount with such modifications as may be
necessary as if the discount were a distribution that is deemed not
to have been authorized.
Recovery of
distributions
107.—(1) A distribution made to a shareholder at a time when the
company did not, upon distribution being made, satisfy the solvency
test may be recovered by the company from the shareholder unless—
(a) the shareholder received the distribution in good faith and
without knowledge of the company’s failure to satisfy the solvency
test;
(b) the shareholder has altered the shareholder’s position in
reliance on the validity of the distribution; and
(c) it would be unfair to require repayment in full or at all.
(2) Where, in relation to a distribution made to a shareholder—
(a) the procedure set out in section 104 has not been followed; or
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(b) reasonable grounds for believing that the company would
satisfy the solvency test in accordance with section 109 or 124,
as the case may be, did not exist at the time the certificate was
signed,
a director who failed to take reasonable steps to ensure the procedure
was followed or who signed the certificate, as the case may be, shall
be personally liable to the company to repay to the company so much
of the distribution which cannot be recovered from shareholders.
(3) Where, by virtue of section 109 (4) distribution is deemed not
to have been authorized, a director who—
(a) ceases after authorization but before the making of the
distribution to be satisfied on reasonable grounds for believing that
the company would satisfy the solvency test upon the distribution
being made; and
(b) fails to take reasonable steps to prevent the distribution
being made,
shall be personally liable to the company to repay to the company
so much of the distribution which cannot be recovered from
shareholders.
(4) Where, by virtue of section 106 (5) a distribution is deemed
not to have been authorized, a director who fails to take reasonable
steps to prevent the distribution being made shall be personally liable
to the company to repay to the company so much of the distribution
which cannot be recovered from shareholders.
(5) Where, in an action brought against a director or shareholder
under this section, the Court is satisfied that the company could, by
making a distribution of a lesser amount, have satisfied the solvency
test, the Court may—
(a) permit the shareholder to retain; or
(b) relieve the director from liability in respect of, an amount
equal to the value of any distribution that could properly have
been made.
108.—(1) Where a company—
(a) alters its constitution;
(b) acquires shares issued by it; or
Reduction of
shareholder
liability
treated as
distribution
(c) redeems shares under section 115,
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in a manner which would cancel or reduce the liability of a
shareholder to the company in relation to a share held prior to that
alteration, acquisition, or redemption, the cancellation or reduction
of liability shall be treated for the purposes of section 109 as if it
were a distribution and for the purposes of section 104 (2) as if it
were a dividend.
(2) Where a company has altered its constitution, or acquired
shares, or redeemed in a manner which cancels or reduces the
liability of a shareholder to the company in relation to a share held
prior to that alteration, acquisition, or redemption, that cancellation or
reduction of liability shall be treated for the purposes of section 100
as a distribution of the amount by which that liability was reduced.
(3) Where the liability of a shareholder of a share held prior to
that alteration, acquisition, or redemption of that company is—
(a) greater than the liability of that shareholder to the company
in relation to a share or shares into which that share is converted;
or
(b) cancelled by the cancellation of that share in the alteration,
acquisition, or redemption,
the reduction of liability affected by the alteration, acquisition, or
redemption shall be treated for the purposes of section 107 (1) and
(3) as a distribution by the company to that shareholder, whether or
not that shareholder becomes a shareholder of the company, of the
amount by which that liability was reduced.
Division III—Acquisition and Redemption of
Company’s Own Shares
Company may
acquire its
own shares
109.—(1) Subject to subsection (4), a company shall not purchase
or otherwise acquire any of its own shares except—
(a) as provided under sections 110 and 111 or sections 112 to
118;
(b) in the case of a private company, with the unanimous
approval of all shareholders;
(c) with the approval of a unanimous resolution; or
(d) in accordance with an order made by the Court under this
Act.
(2) A company may redeem a share which is a redeemable share
in accordance with sections 112 to 118 but not otherwise.
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(3) Where shares are acquired by a company pursuant to
subsection (1), the stated capital of the class of shares so acquired,
or in the case of a company having par value shares, the nominal
issued share capital, so as to take into account the extent to which the
amount received by the company as stated capital, is reduced by the
company’s acquisition of its own shares.
(4) A company shall not make any payment in whatever form to
acquire any shares issued by the company where there are reasonable
grounds for believing that the company is, or would after the payment,
be unable to satisfy the solvency test.
(5) A company shall not acquire its own shares where, as a result
of such acquisition, there would no longer be any shares on issue
other than convertible shares.
(6) A company shall immediately following the acquisition of
shares by the company give notice to the Registrar of the number
and class of shares acquired.
(7) Where a company fails to comply with subsection (4), the
company and every officer of the company who is in default shall
be liable to a fine in accordance with the prevailing schedule of
penalties.
110.—(1) A company may, subject to—
(a) the approval of the Board; and
Purchase of
own shares
(b) its constitution authorizing it to do so, purchase or otherwise
acquire its own shares.
(2) The company shall not offer or agree to purchase or otherwise
acquire its own shares unless—
(a) the Board is satisfied that—
(i)
the acquisition is in the best interests of the company;
(ii) the terms of the offer or agreement and the consideration
to be paid for the shares are fair and reasonable to the company;
(iii) in any case where the offer is not made to, or the
agreement is not entered into with, all shareholders, the offer or
the agreement, as the case may be, is fair to those shareholders
to whom the offer is not made, or with whom no agreement is
entered into;
(iv) shareholders to whom the offer is made have available
to them any information which is material to an assessment of
the value of the shares; and
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(v) the company shall immediately after the acquisition
satisfy the solvency test; and
(b) the Board has disclosed to shareholders or members or
otherwise has made available to them all information which is
material to the assessment of the value of the shares.
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Disclosure
document
(3) Any offer by a company to purchase or otherwise acquire its
own shares on a securities exchange shall be made in accordance with
the Securities Act, and in accordance with any other law regulating
the securities markets in Malaŵi.
111.—(1) This section shall not apply to—
(a) an offer which—
(i) is made to all shareholders to acquire a proportion of
their shares;
(ii) if accepted, would leave unaffected relative voting and
distribution rights; and
(iii) affords a reasonable opportunity to shareholders to
accept the offer;
(b) an offer to which all shareholders have consented in writing
or which is the subject of unanimous approval by the shareholders;
(c) an offer made pursuant to a unanimous resolution;
Cap. 46:06
(d) an offer where the purchase or acquisition is made on or
any securities exchange whether within or outside Malaŵi is made
in accordance with the Securities Act.
(2) Subject to subsection (1), before an offer is made pursuant
to a resolution under section 110, the company shall send to each
shareholder a disclosure document that complies with subsection (3).
(3) A disclosure document issued under this section shall set
out—
(a) the nature and terms of the offer, and, if made to specified
shareholders only, the names of those shareholders;
(b) the nature and extent of any relevant interest of any director
of the company in any shares which are the subject of the offer;
and
(c) the text of the resolution required by section 110 (2),
together with such further information and explanation as may
be necessary to enable a reasonable shareholder to understand the
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nature and implications for the company and its shareholders of
the proposed acquisition.
(4) A reporting issuer may issue or transfer shares held by the
reporting issuer itself subject to the provisions of the Securities Act. Cap. 46:06
112. A company may issue a redeemable share where—
(a) the constitution of the company makes provision for the
company to issue redeemable shares;
Meaning of
“redeemable”
(b) the shares are fully paid up at the time of redemption; and
(c) the constitution or the terms of issue of the share makes
provision for the redemption of the share—
(i)
at the option of the company;
(ii) at the option of the holder of the share; or
(iii) on a date specified in the constitution or in the terms of
issue of the share for a consideration that is—
(aa) specified;
(bb) to be calculated by reference to a formula; or
(cc) required to be fixed by a suitably qualified person
who is not associated with or interested in the company.
113. The provisions of sections 114 and 118 shall apply to the Application
of this act to
redemption of shares.
redemption of
shares
114.—(1) Redemption of redeemable preference shares shall be Redemption
of redeemable
made only out of—
preference
(a) profits of the company which would otherwise be available
for dividends; or
shares
(b) the proceeds of a fresh issue of shares made for the purposes
of the redemption, before the shares are redeemed, the premium
if any, payable on redemption, shall be provided for out of the
profits of the company or out of the company’s share premium
account.
(2) Where a company has redeemed or is about to redeem any
preference shares under subsection (1) (b), the company may issue
shares up to the 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
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relating to stamp duty be deemed to be increased by the issue of
shares under this subsection.
(3) 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 (3) unless the old shares
are redeemed within one month after the issue of the new shares.
(4) Where shares are redeemed otherwise than out of the proceeds
of a fresh issue, there shall, out of profits which should 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 the company, shall,
except as provided in this section, apply as if the capital redemption
reserve fund were paid-up share capital of the company.
(5) The capital redemption reserve fund may, notwithstanding
anything in this section, be applied by the company in paying up
unissued shares of the company to be issued to members of the
company as fully paid bonus shares.
(6) The redemption of preference shares under this section by a
company shall not be taken as reducing the amount of the company’s
stated or authorized share capital in respect of companies formed
before the commencement of this Act.
Redemption
at option of
company
115. A redemption of a share at the option of the company shall
be deemed to be—
(a) an acquisition by the company of the share for the purposes
of sections 110 (2) and 111; and
(b) a distribution within the meaning of this Act.
Redemption
at option of
shareholder
116.—(1) Where a share is redeemable at the option of the holder
of the share, and the holder gives proper notice to the company
requiring the company to redeem the share—
(a) the company shall redeem the share on the date specified in
the notice, or if no date is specified, on the date of receipt of the
notice;
(b) the share is deemed to be cancelled on the date of
redemption; and
(c) from the date of redemption the former shareholder ranks
as an unsecured creditor of the company for the sum payable on
redemption.
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(2) A redemption under this section—
(a) shall not be a dividend or distribution for the purposes of
this Act; but
(b) shall be deemed to be a distribution for the purposes of
sections 107 (1) and (5).
117.—(1) Subject to this section, if a share is redeemable on a Redemption
on fixed date
specified date—
(a) the company shall redeem the share on that date;
(b) the share shall be deemed to be cancelled on that date; and
(c) from that date the former shareholder shall rank as an
unsecured creditor of the company for the sum payable on
redemption.
(2) A redemption under this section—
(a) shall not be a dividend or distribution for the purposes of
this Act; but
(b) shall be deemed to be a distribution for the purposes of
sections 107 (1) and (5).
118.—(1) Subject to the provisions in this Act in relation to Cancellation
shares
Treasury shares, shares that are acquired or redeemed by a company of
repurchased
under this Act, are deemed to be cancelled immediately on acquisition.
(2) For the purposes of subsection (1), shares are acquired on the
date on which the company would, in the absence of this section,
become entitled to exercise the rights attached to the shares.
119.—(1) Where the share capital of a company is divided into Rights of
of
different classes of shares, and provision is made by the constitution holders
special classes
for authorizing the variation of the rights attached to any class of shares
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 fifteen per cent of the issued
shares of that class, being persons who did not consent to or vote in
favour of the resolution for the variation, may apply to the Court to
have the variation cancelled.
(2) Where an application is made under subsection (1), the
variation shall not have effect unless and until it is confirmed by the
Court.
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(3) An application under this section shall be made by petition
within thirty 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 company shall within thirty 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.
(6) 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 fine in accordance with the prevailing schedule of penalties as
issued by the Registrar.
(7) In this section, “variation” includes abrogation and “varied”
shall be construed accordingly.
Division IV—Treasury Shares
Company may
hold its own
shares
120.—(1) The provisions in this Act on cancellation of shares
repurchased shall not apply to shares acquired by a company pursuant
to section 109 or 110 where—
(a) the constitution of the company expressly permits the
company to hold its own shares;
(b) the Board of the company resolves that the shares concerned
shall not be cancelled on acquisition; and
(c) the number of shares acquired, when aggregated with shares
of the same class held by the company pursuant to this section at
the time of the acquisition, does not exceed fifteen per cent of the
shares of that class previously issued by the company, excluding
shares previously deemed to be cancelled under this Act.
(2) Any share acquired by a company pursuant to section 109 or
110 and, which is held by the company pursuant to subsection (1)
shall be held by the company in itself.
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(3) A share that a company holds in itself under subsection (2)
may be cancelled by the Board resolving that the share is cancelled
and the share shall be deemed to be cancelled on the making of such
a resolution.
121.—(1) The rights and obligations attaching to a share that a Rights and
company holds in itself pursuant to section 120 shall not be exercised obligations
of shares that
company
by or against a company while it holds the share.
holds in itself
(2) Without limiting subsection (1), while a company holds a suspended
share in itself pursuant to section 120, the company shall not—
(a) exercise any voting rights attaching to the share; or
(b) make or receive any distribution authorized or payable in
respect of the share.
122.—(1) Subject to subsection (2), section 93 shall apply to the Reissue of
that
transfer of a share held by a company in itself as if the transfer were shares
company
holds in itself
the issue of the share under section 89.
(2) Subsection (1) shall not apply unless it is specifically provided
in the constitution that the company may transfer the shares so held.
(3) A company shall not make an offer to sell any share it holds in
itself or enter into any obligations to transfer such a share where the
company has received notice in writing of a compromise, merger or
takeover scheme.
123.—(1) A contract with a company for the acquisition by Enforceability
contract to
the company of its shares shall be specifically enforceable against of
repurchase
the company except to the extent that the company would, after shares
performance of the contract, fail to satisfy the solvency test.
(2) The company bears the burden of proving that performance of
the contract would result in the company being unable to satisfy the
solvency test.
(3) Subject to subsection (1), where the company has entered into
a contract for the acquisition by the company of its shares, the other
party to the contract shall, on the conclusion of the contract, become
a creditor and shall—
(a) be entitled to be paid as soon as the company is lawfully
able to do so; or
(b) prior to the removal of the company from the register of
companies, be ranked subordinate to the rights of creditors but in
priority to the other shareholder.
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Division V—Financial Assistance in Connexion with
Purchase of Shares
Restrictions
on giving
financial
assistance
124.—(1) A company shall not give financial assistance directly
or indirectly for the purpose of or in connexion with the acquisition
of its own shares, other than in accordance with this section.
(2) A company may give financial assistance for the purpose of or
in connexion with the acquisition of its own shares if the Board has
previously resolved that—
(a) giving the assistance is in the interests of the company;
(b) the terms and conditions on which the assistance is given
are fair and reasonable to the company and to any shareholders
not receiving that assistance; and
(c) immediately after giving the assistance, the company shall
satisfy the solvency test.
(3) Where the amount of any financial assistance approved
under subsection (2) together with the amount of any other financial
assistance which is still outstanding exceeds ten per cent of the
company’s stated capital, the company shall not give the assistance
unless it first obtains from its auditor or, if it does not have an auditor,
from a person qualified to act as its auditor, a certificate that—
(a) the person has inquired into the state of affairs of the
company; and
(b) there is nothing to indicate that the opinion of the Board the
company shall, immediately after giving the assistance, satisfy the
solvency test, is unreasonable in all the circumstances.
(4) The amount of any financial assistance under this section
shall not be a distribution for the purposes of sections 98 and 104.
(5) For the purposes of this section, the term “financial assistance”
includes giving a loan or guarantee, or the provision of security.
Transactions
not prohibited
by section 124
125. Section 124 shall not apply to—
(a) a distribution, to a shareholder approved under section 98;
(b) the issue of shares by the company;
(c) a repurchase or redemption of shares by the company;
(d) anything done under a compromise under this Act or a
compromise or arrangement approved under this Act; or
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(e) where the ordinary business of a company includes the
lending of money by the company in the ordinary course of
business.
Division VI—Debentures
126.—(1) Where a company issues or agrees to issue debentures Issue of
of the same class in accordance with Part XI, the company shall before debentures
issuing any of the debentures issue a trust deed for securing the issue
of the debentures or a contract with the holders of debentures secured
by a trust deed.
(2) For the purposes of this section, debentures shall not be
deemed to be of the same class where—
(a) they do not rank equally for repayment when any security
created by the debenture is enforced or the company is wound up;
or
(b) different rights attach to them in respect of—
(i)
the rate of, or dates for, payment of interest;
(ii) the dates when, or the instalments by which, the
principal of the debentures shall be repaid, unless the difference
is solely that the class of debentures shall be repaid during a
stated period of time and particular debentures shall be selected
by the company for repayment at different dates during that
period by drawings, ballot or otherwise;
(iii) any right to subscribe for or convert the debentures
into shares or other debentures of the company or any other
company; or
(iv) the powers of the debenture holders to realize any
security.
(3) For the purposes of this section—
(a) the trust deed shall not cover more than one class of
debentures;
(b) any provision contained in the trust deed or any contract
secured by the trust deed is void insofar as it would have the effect
of exempting a trustee of the deed from, or indemnifying him
against, liability for breach of trust; save where a release is given
to a trustee having been agreed upon by more than seventy-five
per cent of debenture holders at a meeting summoned for that
purpose.
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(4) For the avoidance of doubt, secured debentures shall also be
subject to the Personal Property Security Act.
Companies
Specific
performance
127. A contract with a company to take up and pay for debentures
may be enforced by an order of the High Court for specific
performance.
Perpetual
debentures
128. Notwithstanding any other enactment, a condition contained
in a debenture or in an agency deed for securing a debenture, whether
the debenture or agency deed is issued or made before or after the
commencement of this Act, shall not be invalid by reason that the
debentures are thereby made irredeemable only on the happening
of a contingency, however remote, or on the expiration of a period
however long.
Register of
debenture
holders
129.—(1) Every company which issues debentures shall at its
registered office keep a register of debenture holders which shall
contain—
(a) the names and addresses of the debenture holders;
(b) the amount of debentures held by them.
(2) The register shall, except when duly closed pursuant to
subsection (3), be open to the inspection of a debenture holder or a
member.
(3) For the purposes of this section, a register shall be deemed
to be duly closed if closed in accordance with a provision contained
in the constitution, the debenture, the debenture stock certificate,
the trust deed or any other document relating to or securing the
debenture, during such period, not exceeding thirty days in any year,
as is specified in the document.
(4) Every company shall, at the request of a debenture holder or a
member, provide a copy of the register of debenture holders and the
copy need not include any particulars as to a debenture holder other
than his name and address and the debenture held by him.
Reissue of
redeemed
debentures
130.—(1) Where a company has, whether before or after the
commencement of this Act, redeemed a debenture, it shall be subject
to subsection (2)—
(a) unless any provision to the contrary, whether express or
implied, is contained in the constitution or in any contract entered
into by the company; or
(b) unless the company has, by passing a resolution to that effect
or by some other act, manifested its intention that the debentures
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shall be cancelled, have and be deemed always to have had the
power to reissue the debentures by reissuing the same debentures
or by issuing other debentures in their place.
(2) The reissue of a debenture or the issue of one debenture in
place of another under subsection (1) shall not be regarded as the
issue of a new debenture for the purpose of any provision in the
constitution or in any contract entered into by the company limiting
the amount or number of debentures that may be issued by the
company.
(3) After the reissue the person entitled to the debentures shall
have and shall be deemed always to have had the same priorities as
if the debentures had never been redeemed.
(4) Where, whether before or after the commencement of this
Act, a company has given a debenture to secure advances on current
account or otherwise, the debenture shall not be deemed to have
been redeemed by reason that the account of the company with
the debenture holder has ceased to be in debit while the debenture
remains unsatisfied.
PART VII
Registered Valuers
131. Where under any provision of this Act, valuation is required Valuation by
to be made in respect of any property, stocks, shares, debentures, registered
valuers
securities or goodwill or net worth of a company or its assets, it
shall be valued by a person registered as a valuer under this Part and
appointed by the board.
132.—(1) The Minister may by regulation require the Registrar Register of
to maintain a register to be called “The Register of Valuers” in which valuers
shall be entered the names and addresses of persons registered under
subsection (2) as valuers.
(2) Any person with such professional qualifications as may be
prescribed may apply to the Registrar in the prescribed form to be
registered as a valuer under this section, provided that no company
or body corporate shall be eligible to so apply.
(3) Every application under subsection (2) shall be accompanied
by such fee as may be prescribed by the Registrar, and shall contain
a declaration to the effect that the applicant shall—
(a) make an impartial and true valuation of any assets which
may be required to be valued;
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(b) make the valuation in accordance with such rules as may be
prescribed; and
(c) shall not undertake valuation of any assets in which he has
a direct or indirect interest or becomes so interested at any time
during the valuation of the assets.
Practice as
a registered
valuer
133.—(1) No person, either alone or in partnership with any other
person, shall practise, describe or project himself as a registered
valuer for the purposes of this Act or permit himself to be so described
or projected unless he is registered as a valuer, or, as the case may be,
he and all his partners are so registered under this Part.
(2) The report of valuation of any assets by a registered valuer
shall be submitted in such form as may be prescribed.
(3) A registered valuer shall be bound by the prevailing rates of
fees as may be prescribed.
Removal and
restoration
of names of
valuers from
the register
134.—(1) The Registrar may remove the name of any person
from the register of valuers where he is satisfied, after giving that
person a reasonable opportunity of being heard and after such further
inquiry, if any, as he thinks fit—
(a) that his name has been entered in the register by error or on
account of misrepresentation or suppression of a material fact; or
(b) that he has been convicted of any offence and a term of
imprisonment or has been guilty of misconduct in his professional
capacity which, in the opinion of the Registrar, renders his name
unfit to be kept in the register.
(2) The Registrar may on application and on sufficient cause
being shown, restore in the register the name of any person removed
therefrom.
PART VIII
Share Certification and Transfer
Division I—Securities by Written Instrument
Share
certificate as
evidence of
title
135. A certificate under the common seal of the company
registered in Malaŵi specifying any shares held by any member shall
be prima facie evidence of title of the member to the shares.
Rights to a
lien on shares
136.—(1) Notwithstanding any other law, a company shall, where
the constitution so provides, be entitled to a lien, independently of
and without the necessity for inscription, in priority to any other
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claim, over every issued share, not being a fully paid share, and over
any dividend payable on the share, for all money due by the holder
of that share to the company whether by way of money called or
payable at a fixed time in respect of that share.
(2) In the case of a company, other than a public company, the
constitution may provide for a lien of the same kind as referred to in
subsection (1) over fully paid shares and dividends on those shares
for all money owing by the shareholders to the company.
(3) Subject to subsection (4), a company may, in such manner
as the directors think fit, sell any share on which the company has a
lien.
(4) No sale shall be made unless—
(a) a sum in respect of which the lien exists is presently
payable; and
(b) until the expiry of fourteen days after a written notice,
demanding payment of such part of the amount in respect of
which the lien exists as is presently payable, has been given to
the registered holder for the time being of the share, or the person
entitled to the share by reason of the death or bankruptcy of the
registered holder.
(5) The directors may, to give effect to any sale under
subsection (3), authorize some person to transfer the shares sold to
the purchaser of the shares.
(6) The purchaser referred to in subsection (5) shall be registered
as the holder of the share comprised in any such transfer, and shall not
be bound to see to the application of the purchase money, nor shall
the title of the purchaser to the share be affected by any irregularity
or invalidity in the proceedings relating to the sale.
(7) The proceeds of the sale shall be received by the company
and applied for the payment of such part of the amount in respect of
which the lien exists as is presently payable, and any residue shall,
subject to a like lien for sums not presently payable as existed upon
the share before the sale, be paid to the person entitled to the share at
the date of the sale.
(8) The directors may, where the constitution so provides, decline
to register the transfer of a share on which the company has a lien.
137.—(1) Notwithstanding anything in the constitution of a Requirement
instrument
company, the company may not register a transfer of shares in a for
of transfer
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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 a shareholder any person to whom the right to
any shares in or debentures of the company has been transmitted by
operation of the law.
Procedure on
lodging of
transfer
138. When a transfer of shares in a company has been lodged
with a company, the company must—
(a) either register the transfer;
(b) or give the transferee notice of refusal to register the
transfer, together with reasons for the refusal.
Request of
transfer or for
entry in the
register
139.—(1) On the written request of the transferor of any share,
debenture or other interest in a company, the company shall enter
in the appropriate register 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.
(2) On the written request of the transferor of a share or
debenture or other interest in a company, the company shall by
written notice require the person having the possession, custody
or control of the debenture or share certificate if a certificate has
been issued and the instrument of transfer thereof or either of
them, to deliver it or them to its registered office, within such
period as may be specified in the notice, being not less than seven
nor more than twenty-eight days after the date of the notice, to
have the share certificate or debenture cancelled or rectified and
the transfer entered in the appropriate register or otherwise dealt
with.
(3) Where a person refuses or neglects to comply with a notice
under subsection (2) the transferor may apply to the Registrar to
show cause why the document mentioned in the notice should not be
delivered or produced.
(4) The Registrar may require a person under subsection (3) to
deliver a document referred to in subsection (2) to the company on
such terms or conditions as the Registrar may direct.
(5) A list of all share certificates or debentures called for under
this section and not delivered shall be exhibited at the registered
office of the company and shall be advertised in such newspapers
and at such times as the company thinks fit.
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140. A transfer of the share or other interest of a deceased member Transfer by
of a company made by his personal representative shall, although personal
representatives
the personal representative is not himself or herself a member of the or on the grant
company, be as valid as if he had been a member at the time of the of probate
execution of the instrument of transfer.
141.—(1) The certification by a company of any instrument of Certification
transfer of shares in or debentures of the company shall be taken, as of transfers
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 to 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 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 authorized
to issue certificated instruments of transfer on the company’s
behalf; and
(ii) the certification is signed by a person authorized to
certificate transfers on the company’s behalf or by any officer
or servant either of the company or of a body corporate so
authorized;
(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 authorized
to use the signature or initials for the purpose of certificating
transfers on the company’s behalf.
142.—(1) A company shall, within sixty days after the allotment Duties of
with
of any of its shares, debentures or debenture stock and within two company
respect to
months after the date on which a transfer of the shares, debentures certificates
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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 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 ten 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,
make an order directing the company and any officer of the company
to make good the default within the time specified in the order.
(4) 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.
Transfer of
shares in a
single member
company
143.—(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 changing status by transferring or allotting
shares to more members.
(2) In the case of a transfer of shares or further allotment of shares
the company shall—
(a) pass a special resolution for change of status from a single
member company to a private company and alter its articles
accordingly within thirty days of the transfer of shares or further
allotment of shares; and
(b) appoint and elect one or more additional directors within
fifteen days of the date of passing of the special resolution and
notify the appointment to the Registrar.
(3) In the case of the death of a single member, the company
may either be wound up or change its status from a single member
company by transferring or allotting shares for which—
(a) the nominee director shall transfer the shares in the name of
the legal heirs of the single member within thirty days;
(b) the company shall pass a special resolution for change
of status from a single member company and alter its articles
accordingly within thirty days of the transfer of shares; and
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(c) the members shall appoint or elect one or more additional
directors in accordance with this Act and within fourteen days of
the date of passing of the special resolution notify the appointment
to the Registrar.
(4) In the 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 a single
member and alter its articles accordingly within thirty days of the
transfer of shares; and
(c) appoint an additional director or directors in accordance
with this Act within fourteen days of the date of passing of the
special resolution and notify the appointment within fourteen days
of the date after the appointment.
(5) The persons becoming members due to the transfer or further
allotment of shares, as the case may be, shall pass a special resolution
to make the alterations in the constitution and appoint one or more
additional directors.
(6) Where a single member company changes its status pursuant
to subsection (1), it shall file a notice in writing with the Registrar
within sixty days from the date of passing of the special resolution.
144. Notwithstanding anything provided in this Division as to the Private
requirement to keep a share register a private company shall not be companies
under any obligation to maintain a share register but shall be under
an obligation to keep and maintain proper records of shares and
debentures it has issued and transferred.
145.—(1) A company shall maintain an electronic or hard copy Company to
share
share register which shall record the shares issued by the company maintain
register
and which shall state—
(a) whether, under the constitution of the company or the terms
of issue of the shares, there are any restrictions or limitations on
their transfer; and
(b) the place where any document that contains the restrictions
or limitations may be inspected.
(2) A public company or subsidiary or parent company of a
public company shall maintain a register of substantial shareholders
in which it shall enter the particulars specified in subsection (3) in
respect of every share held by a substantial shareholder or in which
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directly or indirectly he has an interest. Such register may be in
electronic form.
(3) The share register under subsection (1) shall state, with respect
to each class of shares—
(a) the names, in alphabetical order, and the last known address
of each person who is, or has within the last seven years been, a
shareholder;
(b) the number of shares of that class held by each shareholder
within the last seven years; and
(c) the date of any—
(i)
issue of shares to;
(ii) repurchase or redemption of shares from; or
(iii) transfer of shares by or to, each shareholder within the
last seven years, and in relation to the transfer, the name of the
person to or from whom the shares were transferred.
(4) An agent may maintain the share register of the company
provided that the agent is qualified to be the secretary of a public
company in accordance with this Act.
(5) Every company having more than fifty shareholders shall—
(a) unless the share register is in such a form as to constitute in
itself an index, keep an index of the names of the shareholders of
the company; and
(b) within fourteen days from the day on which any alteration
is made in the share register, make any necessary alteration in the
index.
(6) Notwithstanding subsection (5), where a company has more
than fifty shareholders, the Registrar may require the company to
keep the share register in such form as the Registrar deems fit.
(7) The index shall contain sufficient indication to enable the
particulars of each shareholder to be readily found in the register.
Treasury
shares to be
entered on
the register of
shares
146.—(1) Where a company purchases its own shares in
circumstances where section 145 applies, the requirements in
section 145 need not be complied with if the company cancels all of
the shares.
(2) Where a company holds shares as treasury shares, the company
must be entered on the register as the member holding those shares.
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(3) The treasury share register may be in electronic or hard copy
form.
147.—(1) A company’s share register must be capable of search Share register
to be kept
either by electronic means or by physical inspection.
available for
(2) A company must give notice to the Registrar of the place
where its share register is kept available for physical inspection and
of any change in that place.
search
(3) No such notice is required if the register has, at all times since
it came into being, been kept available for physical inspection at the
company’s registered office.
(4) If a company fails to comply with subsection (2) within
fourteen days then the company and every officer of the company
is liable to a fine in accordance with the prevailing schedule of
penalties.
148.—(1) Where kept in hard copy form the principal share Place where
register kept
register shall be kept in Malaŵi.
(2) Where a share register is divided into two or more registers
kept at different places—
(a) the company shall, within fourteen days of the date on
which the share register is divided, by notice in writing inform the
Registrar of the places where the registers are kept;
(b) where the place where a register is kept is altered, the
company shall, within fourteen days of the alteration, by notice in
writing inform the Registrar of the alteration;
(c) a copy of every branch register shall be kept at the same
place as the principal register; and
(d) if an entry is made in a branch register, a corresponding
entry shall be made within fourteen days in the copy of that
register kept with the principal register.
(3) In this section—
“principal register”, in relation to a company, means—
(a) in case the share register is not divided, the share register;
(b) in case the share register is divided into two or more
registers, the register described as the principal register in the last
notice sent to the Registrar.
“branch register” means a register other than the principal register.
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Right to
search and
require copies
149.—(1) The share register and index must be open to search
by—
Companies
(a) any member of the company without charge; and
(b) any other person on payment of such fee as may be
prescribed.
(2) Any person may require a copy of a company’s register of
members, or of any part of it, on payment of such fee as may be
prescribed.
(3) A person seeking to exercise either of the rights conferred by
this section must make a request to the company to that effect.
(4) The request must contain the following information—
(a) in the case of an individual, his name and address;
(b) in the case of an organization, the name and address of an
individual responsible for making the request on behalf of the
organization;
(c) the purpose for which the information is to be used; and
(d) whether the information will be disclosed to any other
person, and if so—
(i)
where that person is an individual, his name and address;
(ii) where that person is an organization, the name
and address of an individual responsible for receiving the
information on its behalf; and
(iii) the purpose for which the information is to be used by
that person.
Public
company’s
secretary’s
duty to keep,
maintain and
supervise
share register
150.—(1) The secretary shall take reasonable steps to ensure
that the share register is properly kept and that share transfers are
promptly entered on it in accordance with section 139.
Power of
Registrar to
rectify share
register
151.—(1) Where the name of a person is wrongly entered in, or
omitted from, the share register of a company, the person aggrieved,
or a shareholder, may apply to the Registrar for rectification of the
share register.
(2) A secretary who fails to comply with subsection (1) is liable
to a fine in accordance with the prevailing schedule of penalties.
(2) On an application under this section the Registrar may order
the rectification of the register.
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(3) On an application under this section, the Registrar may
decide—
(a) any question relating to the entitlement of a person who is
a party to the application to have his name entered in, or omitted
from, the register; and
(b) any question necessary or expedient to be decided for
rectification of the register.
(4) Where a person is aggrieved by any act or decision of the
Registrar under this section, he may appeal to the Court.
152. No notice of any expressed, implied or constructive trust Trusts not to
entered on
shall be entered in the share register or be receivable by the Registrar. be
register
153.—(1) Subject to subsection (2), a public company shall, Share
within twenty-eight days after the issue, or registration of a transfer, certificates
of shares in the company, as the case may be, send a share certificate
to every holder of those shares stating—
(a) the name of the company;
(b) the class of shares held by that person; and
(c) the number of shares held by that person.
(2) Subsection (1) shall not apply in relation to a company the
shares of which have been deposited under a system where title
to securities may be evidenced and transferred without a written
instrument.
(3) A shareholder in a company, not being a company to which
subsection (1) or (2) applies, may apply to the company for a
certificate relating to some or all of the shareholder’s shares in the
company.
(4) On receipt of an application for a share certificate under
subsection (3), the company shall, within twenty-eight days after
receiving the application—
(a) if the application relates to some but not all of the shares,
separate the shares shown in the register as owned by the applicant
into separate parcels, one parcel being the shares to which the
share certificate relates, and the other parcel being any remaining
shares; and
(b) send to the shareholder a certificate stating—
(i)
the name of the company;
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(ii) the class of shares held by the shareholder; and
(iii) the number of shares held by the shareholder to which
the certificate relates.
(5) Notwithstanding section 137, where a share certificate has
been issued, a transfer of the shares to which it relates shall not be
registered by the company unless the instrument of transfer required
by that section is accompanied—
(a) by the share certificate relating to the share; or
(b) by evidence as to its loss or destruction and, if required, an
indemnity in a form required by the Board.
(6) Subject to subsection (1), where shares to which a share
certificate relates are to be transferred, and the share certificate is sent
to the company for registration of the transfer, the share certificate
shall be cancelled and no further share certificate shall be issued
except at the request of the transferee.
(7) This section shall not apply to an investment company either
on issue of a share certificate or on registration of a transfer of shares.
Replacement
of lost or
destroyed
certificates
154.—(1) Subject to subsection (2) where a certificate or other
document of title to a share or a debenture is lost or destroyed,
the company shall on application being made by the owner and
on payment of the prescribed fee issue a duplicate certificate or
document to the owner.
(2) The application shall be accompanied by a written undertaking
that where the certificate or document is found, or received by the
owner, it shall be returned to the company and the directors may
also require the applicant to furnish such indemnity as the directors
consider to be adequate against any loss following the production of
the original certificate or document.
Share register
as evidence of
legal title
155.—(1) Subject to section 151, the entry of the name of a
person in the share register as holder of a share shall be prima facie
evidence that legal title to the share is vested in that person.
(2) A company may treat a shareholder as the only person entitled
to—
(a) exercise the right to vote attaching to the share;
(b) receive notices;
(c) receive a distribution in respect of the share; and
(d) exercise the other rights and powers attaching to the share.
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Division II—Securities Without Written Instrument
156.—(1) In this Part securities shall have the same meaning as Meaning of
securities
in the Securities Act, and or any amendments thereto.
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(2) References to—
(a) title to securities include any legal or equitable interest in
securities;
(b) a transfer of title include a transfer by way of security; and
(c) transfer, without a written instrument include, in relation to
bearer securities, transfer without delivery.
157. The Registrar of Financial Institutions may issue directives Power to issue
directives
providing for—
(a) the title to securities to be evidenced and transferred without
written instrument;
(b) procedures for recording and transferring title to securities;
and
(c) the regulation of those procedures and the persons
responsible for their operation.
PART IX
The Officers of a Company
Division I—Directors and the Board of Directors
158.—(1) For the purposes of this Act, “director”—
(a) includes a person occupying the position of director of the
company by whatever name called; and
Meaning of
“director”
(b) includes an alternate director; but
(c) does not include a receiver.
(2) For the purposes of sections 159 to 222, “directors” includes—
(a) a person in accordance with whose directions or instructions
a person referred to in subsection (1) may be required or is
accustomed to act;
(b) a person in accordance with whose directions or instructions
the Board of the company may be required or is accustomed to act;
(c) a person who exercises or who is entitled to exercise or
who controls or who is entitled to control the exercise of powers
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which, apart from the constitution of the company, would fall to
be exercised by the Board; and
(d) a person to whom a power or duty of the Board has been
directly delegated by the Board with that person’s consent or
acquiescence, or who exercises the power or duty with the consent
or acquiescence of the Board.
(3) For the purposes of sections 159 to 222 a director includes
a person in accordance with whose directions or instructions a
person referred to in subsections (1) and (2) may be required or is
accustomed to act in respect of his duties and powers as a director.
(4) Where the constitution of a company confers a power on
shareholders which is exercisable by the Board, any shareholder
who exercises that power or who takes part in deciding whether to
exercise that power shall be deemed, in relation to the exercise of the
power or any consideration concerning its exercise, to be a director
for the purposes of sections 176 to 182, 220 and 222.
(5) Where the constitution of a company requires a director or the
Board to exercise or refrain from exercising a power in accordance
with a decision or direction of shareholders, any shareholder who
takes part in—
(a) the making of any decision that the power should or should
not be exercised; or
(b) the making of any decision whether to give a direction, as the
case may be, shall be deemed, in relation to the making of any such
decision, to be a director for the purposes of sections 159 to 222.
(6) Subsection (2) shall not include a person to the extent that the
person acts only in a professional capacity.
Powers of
directors
as to the
management
of the
company
159.—(1) The business and affairs of a company shall be managed
by, or under the direction or supervision of, the Board.
(2) The Board shall have all the powers necessary for managing,
and for directing and supervising the management of, the business
and affairs of the company.
(3) Subsections (1) and (2) shall be subject to any modifications,
adaptations, exceptions, or limitations contained in this Act or in the
company’s constitution.
Substantial
transactions
160.—(1) A company shall not enter into a substantial transaction
unless the transaction is—
(a) approved by special resolution; or
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(b) contingent on approval by special resolution.
(2) In this section—
“assets” includes property of any kind, whether tangible or intangible;
“substantial transaction”, in relation to a company, means—
(a) the acquisition of, or an agreement to acquire, whether
contingent or not, assets the value of which is more than seventyfive per cent of the value of the company’s assets before the
acquisition;
(b) the disposition of, or an agreement to dispose of, whether
contingent or not, assets of the company the value of which is
more than seventy-five per cent of the value of the company’s
assets before the disposition; or
(c) a transaction that has or is likely to have the effect of the
company acquiring rights or interests or incurring obligations or
liabilities the value of which is more than seventy-five per cent of
the value of the company’s assets before the transaction.
(3) A company shall not enter into a transaction of the kind referred
to in subsection (1) which involves the acquisition or disposition or
the acquiring of rights, interests or incurring obligations of, in any
case, more than half the value of the company’s assets unless the
transaction is—
(a) approved by ordinary resolution; or
(b) contingent on approval by ordinary resolution, and the
description of a substantial transaction in subsections (2) (a), (b)
and (c) shall, in all respects, apply when determining the nature
of such transaction except that “half of the value” shall be applied
instead of “seventy-five per cent of the value”.
(4) The provisions of subsection (5) shall apply to a transaction
under subsection (3) in the same manner as they apply to a substantial
transaction except that “seventy-five per cent of the value” shall be
applied instead of “half of the value”.
(5) Nothing in paragraph (c) of the definition of “substantial
transaction” in subsection (2) shall apply by reason only of the
company giving, or entering into an agreement to give, a charge
secured over assets of the company, the value of which is more than
seventy-five per cent of the value of the company’s assets for the
purpose of securing the repayment of money or the performance of
an obligation.
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(6) This section shall not apply to a substantial transaction or a
transaction under subsection (3) entered into by a receiver appointed
pursuant to an instrument creating a charge over all or substantially
all of the property of a company.
(7) No lender or other person dealing with a company shall be
concerned to see or inquire whether the conditions of this section
have been fulfilled and no debt incurred or contract entered into
with the company by a person dealing with it shall be invalid or
ineffectual, except in the case of actual notice to that person, at the
time when the debt was incurred or the contract was entered into, that
the company was acting in breach of this section.
(8) This section shall not apply to a collective investment
company licensed by the Registrar of Financial institutions.
Delegation of
powers
161.—(1) The Board of a company may delegate to a committee
of directors, a director or employee of the company, or any other
person, any one or more of the powers conferred on them by the
constitution of the company on such terms and conditions as they
see fit.
(2) A Board that delegates a power under subsection (1) shall be
responsible for the exercise of the power by the delegate as if the
power had been exercised by the Board, unless the Board—
(a) believed on reasonable grounds at all times before the
exercise of the power that the delegate would exercise the power
in conformity with the duties imposed on directors of the company
by this Act and the company’s constitution; and
(b) has monitored, by means of reasonable methods properly
used, the exercise of the power by the delegate.
Division II—Appointment and Removal of Directors
Number of
directors
162.—(1) A private company shall have at least one director.
(2) A public company shall have at least three directors.
(3) A company shall have at least one director who shall be
ordinarily resident in Malaŵi.
Direction for
a company
to make an
appointment
163.—(1) If it appears to the Registrar that a company is in breach
of section 162, the Registrar shall direct the company to comply
with the provisions of this Act on appointment of directors within a
specified period but not later than three months.
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(2) A company shall comply with the direction of the Registrar
by—
(a) making the necessary appointment or appointments; and
(b) giving notice of them in accordance with section 172 before
the end of the period specified in the direction.
(3) A company and every officer of the company who fails
to comply with a direction under this section is liable to a fine in
accordance with the prevailing schedule of penalties.
164.—(1) A company shall appoint a natural person as director.
(2) No person shall be appointed, or hold office, as a director of a
company if he is a person who—
Qualification
and minimum
age for
appointment
as director
(a) is under 18 years of age;
(b) subject to sections 169 (4) to (7), is, in the case of a public
company, over seventy years of age;
(c) is an undischarged bankrupt;
(d) is prohibited from being a director or promoter of or being
concerned or taking part in the management of a company;
(e) is not a natural person save in the case of State Owned
Companies;
(f) has been adjudged to be of unsound mind;
(g) by virtue of the constitution of a company, does not comply
with any qualifications for directors.
(3) A person who is disqualified from being a director but who
acts as a director shall be deemed to be a director for the purposes
of a provision of this Act that imposes a duty or an obligation on a
director of a company.
165. A person shall not be appointed a director of a company Director’s
unless that person has consented in writing to be a director and consent
required
certified that he is not disqualified from being appointed or holding
office as a director of a company.
166.—(1) A person named as a director in an application for Appointment
first and
registration or in an amalgamation proposal shall hold office as a of
subsequent
director from the date of registration or the date the amalgamation directors
proposal is effective, as the case may be, until that person ceases to
hold office as a director in accordance with this Act.
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(2) All subsequent directors of a company shall, unless the
constitution of the company otherwise provides, be appointed by
ordinary resolution.
Court may
appoint
directors
167.—(1) Where—
(a) there are no directors of a company, or the number of directors
is less than the quorum required for a meeting of the Board; and
(b) it is not possible or practicable to appoint directors
in accordance with the company’s constitution or under
section 171 (3), a shareholder or creditor of the company may
apply to the Court to appoint one or more persons as directors
of the company, and the Court may make an appointment if it
considers that it is in the interests of the company to do so.
(2) An appointment shall be made on such terms and conditions
as the Court thinks fit.
Appointment
of directors
of public
company to
be voted on
individually
168.—(1) Subject to the constitution of the company, the
shareholders of a public company shall not vote on a resolution to
appoint a director of the company unless—
(a) the resolution is in respect of the appointment of one
director; or
(b) where the resolution is a single resolution for the
appointment of two or more persons as directors of the company,
a separate resolution that it be so voted on has first been passed
without a vote being cast against it.
(2) A resolution in contravention of subsection (1) shall be void
even though no objection was taken at the time it was passed.
(3) Subsection (2) shall not limit the operation of section 173.
(4) No provision for the automatic reappointment of retiring
directors in default of another appointment shall apply on the passing
of a resolution in contravention of subsection (1).
(5) Nothing in this section shall prevent the election of two or
more directors by ballot or poll.
Removal of
directors
169.—(1) Notwithstanding anything in its constitution or in any
agreement between it and a director, a director of a public company
may be removed from office by an ordinary resolution passed at a
meeting called for that purpose.
(2) Subject to the constitution of a company, a director of a private
company may be removed from office by special resolution passed
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at a meeting called for the purpose that includes the removal of the
director.
(3) The notice of meeting shall state that the purpose of the
meeting is the removal of the director.
(4) The office of director of a public company or of a subsidiary
of a public company shall become vacant at the conclusion of the
annual meeting commencing next after the director attains the age of
seventy years.
(5) Where the office of director has become vacant under
subsection (4), no provision for the automatic reappointment of
retiring directors in default of another appointment shall apply to
that director.
(6) Notwithstanding anything in this section, a person of or over
the age of seventy years may—
(a) by an ordinary resolution of which no shorter notice is
given than that required to be given for the holding of a meeting
of shareholders, be appointed or re-appointed as a director of
that company to hold office until the next annual meeting of the
company or be authorized to continue to hold office as a director
until the next annual meeting of the company; or
(b) in the case of an application for incorporation of a public
company, be appointed with the consent in writing of the proposed
shareholders.
(7) Nothing in this section shall limit or affect the operation of
any provision in the constitution of a company preventing any person
from being appointed a director or requiring any director to vacate
his office at any age below seventy years.
(8) The provisions of the constitution of a company relating to
the rotation and retirement of directors shall not apply to a director
who is appointed or re-appointed pursuant to subsections (5) to (7)
but such provisions of the constitution shall continue to apply to all
other directors of the company.
170.—(1) The office of director of a company shall be vacated if Director
ceasing to
the person holding that office—
hold office
(a) resigns in accordance with subsection (2);
(b) is removed from office in accordance with this Act or the
constitution of the company;
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(c) becomes disqualified from being a director pursuant to
section 164;
(d) becomes disqualified from being a director pursuant to
subsection (4);
(e) dies; or
(f) otherwise vacates office in accordance with the constitution
of the company.
(2) A director of a company may resign office by signing a written
notice of resignation and delivering it to the address for service of the
company.
(3) A notice under subsection (2) shall be effective when it is
received at that address or at a later time specified in the notice.
(4) Notwithstanding the vacation of office, a person who held
office as a director shall remain liable under the provisions of this Act
that impose liabilities on directors in relation to acts and omissions
and decisions made while that person was a director.
Resignation
or death of
last remaining
director
171.—(1) Where a company has only one director, that director
shall not resign office until that director has called a meeting of
shareholders to receive notice of the resignation, and to appoint one
or more new directors.
(2) A notice of resignation given by the sole director of a company
shall not take effect, notwithstanding its terms, until the date of the
meeting of shareholders called in accordance with subsection (1).
(3) Every company which for a continuous period of six months
has been a one person company shall, if it has not already made the
nomination at the time of incorporation, file with the Registrar a
notice nominating a person to be the secretary of the company in the
event of the death of the sole shareholder and director.
(4) A notice under subsection (3) shall state the full name,
residential address and occupation of the person nominated and
shall be accompanied by the consent to act in writing signed by that
person.
(5) The person nominated by a one person company pursuant to
subsection (3) shall assume office as secretary of the company upon
the death of the sole shareholder and director with the responsibility
of calling as soon as practicable a meeting of persons who appear
to be beneficiaries of the deceased’s estate or other personal
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representative of the deceased for the purpose of appointing a new
director or directors.
(6) The secretary shall resign from office at the meeting referred
to in subsection (5) and during the interim period until the meeting
is called shall attend to the filing of any returns that may be required
from the company.
(7) The secretary shall be entitled to be indemnified by the
company in relation to any reasonable costs and expenses of acting
together with the payment of such fee as shall be agreed in writing
with the company at the time of appointment or at any subsequent
time.
(8) Where a person who is the only director and shareholder of a
private company dies, persons who appear to be beneficiaries of the
deceased’s estate, or where he leaves no person who appears to be
a beneficiary of the deceased’s estate, the Registrar may appoint a
director.
(9) Where the persons who appear to be beneficiaries of the
deceased’s estate fail to appoint a director within three months of the
death of the last director, the Registrar may appoint a fit and proper
person to act as director, until the appointment of a director by the
persons who appear to be beneficiaries of the deceased’s estate.
(10) Where a person who is the only director and shareholder of
a private company is unable to manage the affairs of the company by
reason of his mental incapacity, the appointed guardian may act as
director or appoint a person as director.
172.—(1) The Board shall deliver or cause to be delivered to the Notice of
change of
Registrar for registration notice in an approved form of—
directors and
(a) any change in the directors or the secretary of a company or
person nominated pursuant to section 171 (3); or
secretaries
(b) any change in the name or the residential address or other
particulars of a director or secretary of a company or person
nominated pursuant to section 171 (3).
(2) A notice under subsection (1) shall—
(a) specify the date of the change;
(b) include the full name and residential address of every
person who is a director or secretary of the company or person
nominated under section 171 (3) from the date of the notice;
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(c) in the case of the appointment of a new director or secretary,
or person nominated under section 171 (3), be accompanied by the
form of consent and certificate required pursuant to section 165;
and
(d) be delivered to the Registrar within twenty-eight days of—
(i) in the case of an appointment or resignation of a director
or secretary, the date on which the change occurs;
(ii) in the case of the death of a director or secretary or
a change in the name or residential address of a director or
secretary, of the date on which the company becomes aware of
the change.
(3) Where the company fails to comply with this section every
officer of the company who is in default is liable to a fine in
accordance with the prevailing schedule of penalties.
Validity
of acts of
directors
173. The acts of a director shall be valid even though—
(a) the directors’ appointment was defective; or
(b) the director is not qualified for appointment.
Register of
directors
174.—(1) Every company must keep a register of its directors.
(2) The register must contain particulars of each person who is a
director of the company including but not limited to—
(a) names;
(b) address;
(c) nationality;
(d) country of residence;
(e) occupation or profession;
(f) date of birth.
(3) The register must be kept available for search—
(a) at the company’s registered office; or
(b) other designated place.
(4) The company must give notice to the Registrar—
(a) of the place at which the register is kept available for search;
and
(b) of any change in that place.
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(5) The register must be open to the search—
(a) of any member of the company without charge; and
(b) of any other person on payment of such fee as may be
prescribed.
(6) A company or every officer of the company who defaults in
complying with subsection (1), (2) or (3) or defaults for fourteen days
in complying with subsection (4), or refuses a search required under
subsection (5) is liable to a fine in accordance with the prevailing
schedule of penalties.
(7) In the case of a refusal of a search of the register, the Registrar
may by order compel an immediate search of it.
Division III—Core Duties of Directors
175.—(1) The general duties specified in sections 176 to 182 are Scope and
nature of
owed by a director of a company to the company.
general duties
(2) A person who ceases to be a director continues to be subject—
(a) to the duty in section 180 as regards the exploitation of any
property, information or opportunity of which he became aware at
a time when he was a director; and
(b) to the duty in section 181 as regards things done or omitted
by him before he ceased to be a director.
(3) Subsection (2) applies to a former director as to a director,
subject to any necessary adaptations.
(4) The general duties are based on certain common law rules
and equitable principles as they apply in relation to directors and
have effect in place of those rules and principles as regards the duties
owed to a company by a director.
(5) The general duties shall be interpreted and applied in the same
way as common law rules or equitable principles, and regard shall be
had to the corresponding common law rules and equitable principles
in interpreting and applying the general duties.
(6) The general duties apply to shadow directors where, and to
the extent that, the corresponding common law rules or equitable
principles so apply.
176. A director of a company shall—
(a) act in accordance with the company’s constitution; and
Duty to act
within powers
(b) only exercise powers for the purposes for which they are
conferred.
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Duty to
promote the
success of the
company
177.—(1) A director of a company shall act in the way he
considers, in good faith, would be most likely to promote the success
of the company for the benefit of its members as a whole, and in so
doing have regard to factors including—
Companies
(a) the likely consequences of any decision in the long term;
(b) the interests of the company’s employees;
(c) the need to foster the company’s business relationships
with suppliers, customers and others;
(d) the impact of the company’s operations on the community
and the environment;
(e) the desirability of the company maintaining a reputation for
high standards of business conduct; and
(f) the need to act fairly as between members of the company.
(2) Where or to the extent that the purposes of the company
consist of or include purposes other than the benefit of its members,
subsection (1) has effect as if the reference to promoting the success
of the company for the benefit of its members were to achieving
those purposes.
(3) The duty imposed by this section has effect subject to any
written law or rule of law requiring directors, in certain circumstances,
to consider or act in the interests of creditors of the company.
Duty to
exercise
independent
judgment
178.—(1) A director of a company must exercise independent
judgment.
(2) This duty shall not be infringed by the director acting—
(a) in accordance with an agreement duly entered into by the
company that restricts the future exercise of discretion by its
directors; or
(b) in a way authorized by the company’s constitution.
Duty to
exercise
reasonable
care, skill and
diligence
179.—(1) A director of a company shall exercise reasonable care,
skill and diligence.
(2) This means the care, skill and diligence that would be
exercised by a reasonably diligent person with—
(a) the general knowledge, skill and experience that may
reasonably be expected of a person carrying out the functions
carried out by the director in relation to the company; and
(b) the general knowledge, skill and experience that the
director has.
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180.—(1) A director of a company must avoid a situation in Duty to avoid
of
which he has, or can have, a direct or indirect interest that conflicts, conflict
interest
or possibly may conflict, with the interests of the company.
(2) This applies in particular to the exploitation of any property,
information or opportunity and it is immaterial whether the company
could take advantage of the property, information or opportunity.
(3) This duty does not apply to a conflict of interest arising in
relation to a transaction or arrangement with the company.
(4) This duty is not infringed—
(a) if the situation cannot reasonably be regarded as likely to
give rise to a conflict of interest; or
(b) if the matter has been authorized by the directors.
(5) Authorization may be given by the directors—
(a) where the company is a private company and nothing in
the company’s constitution invalidates such authorization, by the
matter being proposed to and authorized by the directors; or
(b) where the company is a public company and its constitution
includes provision enabling the directors to authorize the matter,
by the matter being proposed to and authorized by them in
accordance with the constitution.
(6) The authorization shall be effective only if—
(a) any requirement as to the quorum at the meeting at which
the matter is considered is met without counting the director in
question or any other interested director; and
(b) the matter was agreed to without their voting or would have
been agreed to if their votes had not been counted.
(7) Any reference in this section to a conflict of interest includes
a conflict of interest and duty and a conflict of duties.
181.—(1) A director of a company must not accept a benefit from Duty not to
accept benefits
a third party conferred by reason of—
from third
(a) his being a director; or
parties
(b) his doing, or failure to do, anything as director.
(2) A “third party” means a person other than the company,
an associated body corporate or a person acting on behalf of the
company or an associated body corporate.
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(3) Benefits received by a director from a person by whom his
services as a director or otherwise are provided to the company are
not regarded as conferred by a third party.
(4) This duty is not infringed if the acceptance of the benefit
cannot reasonably be regarded as likely to give rise to a conflict of
interest.
(5) Any reference in this section to a conflict of interest includes
a conflict of interest and duty and a conflict of duties.
Duty to
declare
interest in
proposed
transaction or
arrangement
182.—(1) If a director is in any way, directly or indirectly,
interested in a proposed transaction or arrangement with the
company, he shall declare the nature and extent of that interest to the
other directors.
(2) The declaration may be made—
(a) at a meeting of the directors; or
(b) by notice in writing to the directors.
(3) If a declaration of interest under this section proves to be, or
becomes, inaccurate or incomplete, a further declaration shall be
made.
(4) Any declaration required by this section shall be made before
the company enters into the transaction or arrangement.
(5) This section does not require a declaration of an interest of
which the director is not aware or where the director is not aware
of the transaction or arrangement in question and for this purpose
a director is treated as being aware of matters of which he ought
reasonably to be aware.
(6) A director need not declare an interest—
(a) if it cannot reasonably be regarded as likely to give rise to a
conflict of interest;
(b) if, or to the extent that, the other directors are already aware
of it (and for this purpose the other directors are treated as aware
of anything of which they ought reasonably to be aware); or
(c) if, or to the extent that, it concerns terms of his service
contract that have been or are to be considered—
(i)
by a meeting of the directors; or
(ii) by a committee of the directors appointed for the
purpose under the company’s constitution.
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183.—(1) In a case where—
(a) section 180 is complied with by authorization by the
directors; or
103
Consent,
approval or
authorization
by members
(b) section 182 is complied with, the transaction or arrangement
is not liable to be set aside by virtue of any common law rule
or equitable principle requiring the consent or approval of
the members of the company. This is without prejudice to any
enactment, or provision of the company’s constitution, requiring
such consent or approval.
(2) The application of the general duties is not affected by the
fact that the case also falls within Part IX except that where that Part
applies and—
(a) approval is given under that Part; or
(b) the matter is one as to which it is provided that approval is
not needed, it is not necessary also to comply with section 180 or
section 181.
(3) Compliance with the general duties does not remove the need
for approval under any applicable provision of Part IX.
(4) The general duties—
(a) have effect subject to any rule of law enabling the company
to give authority, specifically or generally, for anything to be done
or not to be done by the directors, or any of them, that would
otherwise be a breach of duty; and
(b) where the company’s articles contain provisions for dealing
with conflicts of interest, are not infringed by anything done or
omitted to be done by the directors, or any of them, in accordance
with those provisions.
(5) The general duties shall have effect except as otherwise
provided or the context otherwise requires, notwithstanding any
enactment or rule of law.
184.—(1) Directors shall comply with any code for corporate Duty to
comply with
governance as may be prescribed.
the prescribed
code of
(2) Where a specific sector code of corporate governance exists, corporate
governance in
directors shall also comply with the provisions of the sector code.
Malaŵi
(3) Any code of corporate governance prescribed under this
section shall be directory in nature but the Court, the Registrar or any
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authority shall be entitled to have regard to such code in interpreting
and applying any of the provisions of this Act.
Civil
consequences
for breach of
general duties
185.—(1) The consequences of breach of sections 176 to 182
shall be the same as would apply if the corresponding common law
rule or equitable principle applied.
(2) The duties in those sections, with the exception of section
179 shall, accordingly, be enforceable in the same way as any other
fiduciary duty owed to a company by its directors.
Division IV—Core Disclosure Obligations in Transactions
Involving Self-Interest
Meaning of
“interested”
186.—(1) Subject to subsection (2), a director of a company shall
be interested in a transaction or arrangement to which the company
is a party where the director—
(a) is a party to, or shall or may derive a material financial
benefit from, the transaction or arrangement;
(b) has a material financial interest in or with another party to
the transaction or arrangement;
(c) is a director, officer, or trustee of another party to, or person
who shall or may derive a material financial benefit from, the
transaction, not being a party or person that is—
(i) the company’s parent company being a parent company
of which the company is a wholly-owned subsidiary;
(ii) a wholly-owned subsidiary of the company; or
(iii) a wholly-owned subsidiary of a parent company of
which the company is also a wholly-owned, subsidiary;
(d) is the parent, child or spouse of another party to, or person
who shall or may derive a material financial benefit from the
transaction; or
(e) is otherwise directly or indirectly materially interested in
the transaction or arrangement.
(2) A director of a company shall not be deemed to be interested
in a transaction or arrangement to which the company is a party if
the transaction or arrangement comprises only the giving by the
company of security to a third party and at the request of that third
party which has no connexion, with the director and in respect of a
debt or obligation, of the company for which the director or another
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person has personally assumed responsibility in whole or in part
under a guarantee, indemnity, or by the deposit of a security.
187.—(1) A director of a company shall, forthwith after becoming Declaration of
aware of the fact that he is interested in a transaction or arrangement interest
or proposed transaction or proposed arrangement with the company,
cause to be entered in the register of interests where it has one, and,
where the company has more than one director, disclose to the Board
of the company—
(a) where the monetary value of the directors’ interest is able to
be quantified, the nature and monetary value of that interest; or
(b) where the monetary value of the directors’ interest cannot be
quantified, the nature and extent of that interest.
(2) A director of a company shall not be required to comply with
subsection (1) where—
(a) the transaction or arrangement or proposed transaction or
proposed arrangement is between the director and the company;
and
(b) the transaction or arrangement or proposed transaction or
proposed arrangement is or is to be entered into in the ordinary
course of the company’s business and on usual terms and
conditions.
(3) For the purposes of subsection (1), a general notice entered
in the interests register or disclosed to the Board to the effect that a
director is a shareholder, director, officer or trustee of another named
company or other person and is to be regarded as interested in any
transaction which may, after the date of the entry or disclosure, be
entered into with that company or person, is a sufficient disclosure of
interest in relation to that transaction.
(4) A failure by a director to comply with subsection (1) shall not
affect the validity of a transaction or arrangement entered into by the
company or the director.
188.—(1) A transaction or arrangement entered into by the Voidability of
company in which a director of the company is interested may be transactions
where no
voided by the company at any time before the expiration of six declaration has
months after the transaction or arrangement is disclosed to all the been made
shareholders, whether by means of the company’s annual report or
otherwise.
(2) A transaction or arrangement shall not be voided where the
company receives fair value under it.
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(3) For the purposes of subsection (2), the question as to whether
a company receives a fair value under a transaction or arrangement
shall be determined on the basis of the information known to the
company and to the interested director at the time the transaction or
arrangement is entered into.
(4) Where a transaction is entered into by the company in the
ordinary course of its business and on usual terms and conditions, the
company shall be presumed to have received a fair value under the
transaction.
(5) For the purposes of this section—
(a) a person seeking to uphold a transaction or arrangement
and who knew or ought to have known of the directors’ interest
at the time the transaction was entered into shall have the onus of
establishing a fair value; and
(b) in any other case, the company shall have the onus of
establishing that it did not receive a fair value.
(6) A transaction or arrangement in which a director is interested
shall only be voided on the ground of the directors’ interest in
accordance with this section or the company’s constitution.
Effect on third
parties
189. The voidability of a transaction or arrangement under
section 188 shall not affect the title or interest of a person in or to
property which that person has acquired where the property was
acquired—
(a) from a person other than the company;
(b) for valuable consideration; and
(c) without knowledge of the circumstances of the transaction
or arrangement under which the person referred to in paragraph
(a) acquired the property from the company.
Application of
sections 188
and 189 in
certain cases
190. Sections 188 and 189 shall not apply in relation to—
(a) remuneration or any other benefit given to a director; or
(b) an indemnity given or insurance provided in accordance
with section 221.
Interested
director may
vote
191. Subject to subsection (2) and to the constitution of the
company, a director of a company who is interested in a transaction or
arrangement entered into, or to be entered into, by the company, may—
(a) in the case of a public company, not vote on any matter
relating to the transaction or arrangement, and if he does vote, his
vote shall not be counted;
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(b) in the case of a private company, vote on any matter relating
to the transaction or arrangement provided he discloses his interest
under section 187;
(c) attend a meeting of directors at which a matter relating to
the transaction or arrangement arises and be included among the
directors present at the meeting for the purpose of a quorum;
(d) sign a document relating to the transaction or arrangement
on behalf of the company; and
(e) do any other thing in his capacity as a director in relation
to the transaction or arrangement, as if the director were not
interested in the transaction or arrangement.
192.—(1) For the purposes of section 193, no account shall be Relevant
interests to be
taken of a relevant interest of a person in a share if—
disregarded in
(a) the ordinary business of the person who has the relevant
interest consists of, or includes, the lending of money or the
provision of financial services, or both, and that person has the
relevant interest only as security given for the purposes of a
transaction or arrangement entered into in the ordinary course of
the business of that person;
certain cases
(b) that person has the relevant interest by reason only of acting
for another person to acquire or dispose of that share on behalf of
the other person in the ordinary course of business of licensed
investment dealer;
(c) that person has the relevant interest solely by reason of being
appointed as a proxy to vote at a particular meeting of members, or
of a class of members, of the company and the instrument of that
person’s appointment is produced before the start of the meeting or
by a time specified in the company’s constitution, as the case may be;
(d) that person—
(i)
is a trustee or a nominee company; and
(ii) has the relevant interest by reason only of acting for
another person in the ordinary course of business of that trustee
or nominee company; or
(e) the person has the relevant interest by reason only that the
person is a bare trustee of a trust to which the share is subject.
(2) For the purposes of subsection (1) (d), a trustee company
is a collective investment scheme licensed under the Financial Cap. 44:05
Services Act.
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(3) For the purposes of subsection (1) (e), a trustee may be a
bare trustee notwithstanding that he is entitled as a trustee to be
remunerated out of the income or property of the trust.
Disclosure of
share dealing
by directors
193.—(1) A person who—
(a) on the coming into operation of this section, is a director of
a public company; or
(b) becomes a director of a public company; and who has
a relevant interest in any shares issued by the company shall
forthwith—
(i) disclose to the board the number and class of shares in
which the relevant interest is held and the nature of the relevant
interest; and
(ii) ensure that the particulars disclosed to the board under
paragraph (2) (a) are entered in the register of interests.
(2) A director of a public company who acquires or disposes of
a relevant interest in shares issued by the company shall forthwith,
after the acquisition or disposition—
(a) disclose to the board—
(i) the number and class of shares in which the relevant
interest has been acquired or the number and class of shares in
which the relevant interest was disposed of, as the case may be;
(ii) the nature of the relevant interest;
(iii) the consideration paid or received; and
(iv) the date of the acquisition or disposition; and
(b) ensure that the particulars disclosed to the board under
paragraph (a) are entered in the interests register.
Restrictions on
share dealing
by directors
194.—(1) Where a director of a company in his capacity as a
director, or an employee of the company or a related company, has
information which is material to an assessment of the value of shares
or other securities issued by the company or a related company,
being information that would not otherwise be available to him, the
director may acquire or dispose of those shares or securities only
where—
(a) in the case of an acquisition, the consideration given for
the acquisition is not less than the fair value of the shares or
securities; or
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(b) in the case of a disposition, the consideration received for
the disposition is not more than the fair value of the shares or
securities.
(2) For the purposes of subsection (1), the fair value of shares or
securities is to be determined on the basis of all information known
to the director or publicly available at the time.
(3) Subsection (1) shall not apply in relation to a share or security
that is acquired or disposed of by a director only as a nominee for the
company or a related company.
(4) Where a director acquires shares or securities in contravention of
subsection (1) (a), the director shall be liable to the person from whom
the shares or securities were acquired for the amount by which the fair
value of the shares or securities exceeds the amount paid by the director.
(5) Where a director disposes of shares or securities in
contravention of subsection (1) (b), the director shall be liable to
the person to whom the shares or securities were disposed of for the
amount by which the consideration received by the director exceeds
the fair value of the shares or securities.
(6) This section shall not apply in relation to a company listed on
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a stock exchange licensed under the Securities Act.
Division V—Transactions Involving Self-Interest which Require the
Disclosure and Approval of Shareholders
195.—(1) This section applies to provision under which the Directors’
long-term
guaranteed term of a directors’ employment—
service
(a) with the public company of which he is a director; or
contracts
(b) where he is the director of a holding company, within the
group consisting of that company and its subsidiaries is, or may
be, longer than two years.
(2) A public company may not agree to such provision unless it
has been approved—
(a) by resolution of the shareholders of the company; and
(b) in the case of a director of a holding company, by resolution
of the shareholders of that company.
(3) The guaranteed term of a directors’ employment is—
(a) the period, if any, during which the directors’ employment—
(i) is to continue, or may be continued otherwise than at the
instance of the company (whether under the original agreement
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or under a new agreement entered into in pursuance of it);
and
(ii) cannot be terminated by the company by notice, or can
be so terminated only in specified circumstances; or
(b) in the case of employment terminable by the company by
notice, the period of notice required to be given, or, in the case of
employment having a period within paragraph (a) and a period
within paragraph (b), the aggregate of those periods.
(4) If more than six months before the end of the guaranteed
term of a directors’ employment the company enters into a further
service contract (otherwise than in pursuance of a right conferred, by
or under the original contract, on the other party to it), this section
applies as if there were added to the guaranteed term of the new
contract the unexpired period of the guaranteed term of the original
contract.
(5) A resolution approving provision to which this section applies
must not be passed unless a memorandum setting out the proposed
contract incorporating the provision is made available to members—
(a) in the case of a written resolution, by being sent or
submitted to every eligible member at or before the time at which
the proposed resolution is sent or submitted to him;
(b) in the case of a resolution at a meeting, by being made
available for inspection by members of the company both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(6) No approval is required under this section on the part of the
shareholders of a body corporate that—
(a) is not a company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
(7) In this section “employment” means any employment under a
directors’ service contract.
(8) If a company agrees to provision in contravention of this
section—
(a) the provision is void, to the extent of the contravention; and
(b) the contract is deemed to contain a term entitling the company
to terminate it at any time by the giving of reasonable notice.
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196.—(1) A public company may not enter into an arrangement Substantial
property
under which—
transactions
(a) a director of the company or of its holding company, or a
person connected with such a director, acquires or is to acquire
from the company, directly or indirectly, a substantial non-cash
asset; or
(b) the company acquires or is to acquire a substantial
non-cash asset, directly or indirectly, from such a director or a
person so connected, unless the arrangement has been approved
by a resolution of the members of the company or is conditional
on such approval being obtained.
(2) If the director or connected person is a director of the company’s
parent company or a person connected with such a director, the
arrangement must also have been approved by a resolution of the
members of the parent company or be conditional on such approval
being obtained.
(3) A company shall not be subject to any liability by reason of a
failure to obtain approval required by this section.
(4) No approval is required under this section on the part of the
members of a body corporate that—
(a) is not a public company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
(5) For the purposes of this section—
(a) an arrangement involving more than one non-cash asset; or
(b) an arrangement that is one of a series involving non-cash
assets,
shall be treated as if they involved a non-cash asset of a value equal
to the aggregate value of all the non-cash assets involved in the
arrangement or, as the case may be, the series.
(6) This section shall not apply to a transaction so far as it
relates—
(a) to anything to which a director of a company is entitled
under his service contract; or
(b) to payment for loss of office.
197.—(1) An asset is a substantial asset in relation to a company Meaning of
if its value exceeds ten per cent of the value of the company’s net “substantial”
assets determined by reference to its most recent audited accounts.
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(2) Whether an asset is a substantial asset may be determined as
at the time the arrangement is entered into.
Exception for
transactions
with
shareholders
or other group
companies
198.—Approval shall not be required for substantial property
transactions—
(a) between a public company and a person in his capacity as a
shareholder of that company; or
(b) for a transaction between—
(i)
a parent company and its wholly-owned subsidiary; or
(ii) two wholly-owned subsidiaries of the same holding
company.
Exception
in case of
company in
winding-up or
administration
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199.—(1) This section shall apply to a public company—
(a) that is being wound up (unless the winding-up is a members’
voluntary winding-up); or
(b) that is in insolvency proceedings within the meaning of the
Insolvency Act.
(2) Approval shall not be required for substantial property
transactions—
(a) on the part of the members of a company to which this
section applies; or
(b) for an arrangement entered into by a company to which this
section applies.
Exception for
transaction
on a licensed
stock
exchange
200.—(1) Approval shall not be required for substantial property
transactions in respect of transactions on a licensed stock exchange
effected by a director, or a person connected with him, through
the agency of a person who in relation to the transaction acts as an
independent broker.
(2) For this purpose—
(a) “independent broker” means a person who, independently
of the director or any person connected with him, selects the
person with whom the transaction is to be effected; and
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Loans and
quasi-loans
to directors
or connected
persons
(b) “licensed stock exchange” has the same meaning as in the
Securities Act.
201.—(1) A public company may not—
(a) make a loan or quasi-loan to a director or a person connected
with a director of the company or of its holding company; or
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(b) give a guarantee or provide security in connexion with a
loan or quasi-loan made by any person to such a director or a
person connected with a director, unless the transaction has been
approved by a resolution of the shareholders of the company.
(2) If the director is a director of the company’s holding company,
the transaction must also have been approved by a resolution of the
shareholders of the holding company.
(3) A resolution approving a transaction to which this section
applies shall not be passed unless a memorandum setting out the
matters mentioned in subsection (4) is made available to members—
(a) in the case of a written resolution, by being sent or
submitted to every eligible member at or before the time at which
the proposed resolution is sent or submitted to him;
(b) in the case of a resolution at a meeting, by being made
available for inspection by members of the company both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(4) The matters to be disclosed shall be—
(a) the nature of the transaction;
(b) the amount of the loan and the purpose for which it is
required; and
(c) the extent of the company’s liability under any transaction
connected with the loan.
(5) No approval shall be required under this section on the part of
the shareholders of a body corporate that—
(a) is not a company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
202.—(1) A “quasi-loan” is a transaction under which one party Meaning of
(“the creditor”) agrees to pay, or pays otherwise than in pursuance “quasi-loan”
and related
of an agreement, a sum for another party (“the borrower”), or agrees expressions
to reimburse, or reimburses, otherwise than in pursuance of an
agreement, expenditure incurred by the borrower—
(a) on terms that the borrower or a person on behalf of the
borrower will reimburse the creditor; or
(b) in circumstances giving rise to a liability on the borrower to
reimburse the creditor.
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(2) Any reference to the person to whom a quasi-loan is made is
a reference to the borrower.
(3) The liabilities of the borrower under a quasi-loan include the
liabilities of any person who has agreed to reimburse the creditor on
behalf of the borrower.
Credit
transactions
203.—(1) A public company to which this section applies may
not—
(a) enter into a credit transaction as creditor for the benefit of
a director of the company or of its holding company, or a person
connected with such a director; or
(b) give a guarantee or provide security in connexion with a
credit transaction entered into by any person for the benefit of
such a director, or a person connected with such a director, unless
the credit transaction, the giving of the guarantee or the provision
of security, as the case may be has been approved by a resolution
of the members of the company.
(2) If the director or connected person is a director of its parent
company or a person connected with such a director, the transaction
must also have been approved by a resolution of the members of the
holding company.
(3) A resolution approving a transaction to which this section
applies must not be passed unless a memorandum setting out the
matters mentioned in subsection (5) is made available to members—
(a) in the case of a written resolution, by being sent or
submitted to every eligible member at or before the time at which
the proposed resolution is sent or submitted to him;
(b) in the case of a resolution at a meeting, by being made
available for inspection by members of the company both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(4) The matters to be disclosed are—
(a) the nature of the transaction;
(b) the value of the credit transaction and the purpose for which
the land, goods or services sold or otherwise disposed of, leased,
hired or supplied under the credit transaction are required; and
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(c) the extent of the company’s liability under any transaction
connected with the credit transaction.
(5) No approval shall be required under this section on the part of
the members of a body corporate that—
(a) is not a public company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
204.—(1) A “credit transaction” is a transaction under which one Meaning
of “credit
party (“the creditor”)—
transactions”
(a) supplies any goods or sells any land under a hire-purchase
agreement or a conditional sale agreement;
(b) leases or hires any land or goods in return for periodical
payments; or
(c) otherwise disposes of land or supplies goods or services
on the understanding that payment, whether in a lump sum or
instalments or by way of periodical payments or otherwise, is to
be deferred.
(2) Any reference to the person for whose benefit a credit
transaction is entered into shall be reference to the person to whom
goods, land or services are supplied, sold, leased, hired or otherwise
disposed of under the transaction.
205.—(1) Approval shall not required under sections 201 and 203 Exceptions for
expenditure
for anything done by a public company—
on company
(a) to provide a director of the company or of its holding
company, or a person connected with any such director, with
funds to meet expenditure incurred or to be incurred by him—
(i)
business, etc
for the purposes of the company; or
(ii) for the purpose of enabling him properly to perform
his duties as an officer of the company, provided the value of
the transaction in question, and the value of any other relevant
transactions or arrangements, do not exceed the prevailing limit
as established by regulations issued by the Registrar.
(b) to provide a director of the company or of its parent company
with funds to meet expenditure incurred or to be incurred by him
in defending any criminal or civil proceedings in connexion with
any alleged negligence, default, breach of duty or breach of trust
by him in relation to the company or an associated company;
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(c) to provide a director of the company or of its parent company
with funds to meet expenditure incurred, or to be incurred, by him
in defending himself—
(i)
in an investigation by a regulatory authority; or
(ii) against action proposed to be taken by a regulatory
authority, in connexion with any alleged negligence, default,
breach of duty or breach of trust by him in relation to the
company or an associated company;
(d) for a company to make a loan, or quasi-loan, enter into a
credit transaction, or to give a guarantee or provide security in
connexion with a loan or quasi-loan, if the aggregate of—
(i)
the value of the transaction; and
(ii) the value of any other relevant transactions or
arrangements, does not exceed the prevailing limit as issued by
the Registrar by way of Order;
(e) for the making of a loan or quasi-loan to an associated body
corporate, or the giving of a guarantee or provision of security in
connexion with a loan or quasi-loan made to an associated body
corporate;
(f) to enter into a credit transaction as creditor for the benefit
of an associated body corporate, or to give a guarantee or provide
security in connexion with a credit transaction entered into by any
person for the benefit of an associated body corporate;
(g) for a money lending company if the transaction or
arrangement is entered into by the company in the ordinary course
of the company’s business, and the value of the transaction is not
greater, and its terms are not more favourable, than it is reasonable
to expect the company would have offered to a person of the same
financial standing but unconnected with the company.
Other relevant
transactions or
arrangements
206.—(1) This section has effect for determining what are “other
relevant transactions or arrangements” for the purposes of any
exception to sections 201 and 203 and in the following provisions
“the relevant exception” means the exception for the purposes of
which that falls to be determined.
(2) Other relevant transactions or arrangements are those
previously entered into, or entered into at the same time as the
transaction or arrangement in question in relation to which the
following conditions are met.
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(3) Where the transaction or arrangement in question is entered
into—
(a) for a director of the company entering into it; or
(b) for a person connected with such a director,
the conditions are that the transaction or arrangement was entered
into for that director, or a person connected with him, by virtue of
the relevant exception by that company or by any of its subsidiaries.
(4) Where the transaction or arrangement in question is entered
into—
(a) for a director of the parent company of the company
entering into it; or
(b) for a person connected with such a director,
the conditions are that the transaction or arrangement was entered
into for that director, or a person connected with him, by virtue
of the relevant exception by the parent company or by any of its
subsidiaries.
(5) A transaction or arrangement entered into by a company that
at the time it was entered into—
(a) was a subsidiary of the company entering into the transaction
or arrangement in question; or
(b) was a subsidiary of that company’s holding company,
shall not be a relevant transaction or arrangement if, at the time the
question arises whether the transaction or arrangement in question
falls within a relevant exception, it is no longer such a subsidiary.
207.—(1) For the purposes of the provision in this Division on The value of
loans, quasi-loans and credit transactions, the value of a transaction transactions
and
arrangements
or arrangement shall be determined as follows—
(a) the value of any other relevant transaction or arrangement
shall be taken to be the value so determined reduced by any amount
by which the liabilities of the person for whom the transaction or
arrangement was made have been reduced;
(b) the value of a loan shall be the amount of its principal;
(c) the value of a quasi-loan is the amount, or maximum
amount, that the person to whom the quasi-loan is made shall be
liable to reimburse the creditor;
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(d) the value of a credit transaction shall be the price that it is
reasonable to expect could be obtained for the goods, services or
land to which the transaction relates if they had been supplied at
the time the transaction is entered into, in the ordinary course of
business and on the same terms apart from price as they have been
supplied, or are to be supplied, under the transaction in question;
(e) the value of a guarantee or security shall be the amount
guaranteed or secured:
(f) if the value of a transaction or arrangement shall not be
capable of being expressed as a specific sum of money—
(i) whether because the amount of any liability arising
under the transaction or arrangement is unascertainable, or for
any other reason; and
(ii) whether or not any liability under the transaction or
arrangement has been reduced, its value is deemed to exceed
the prevailing limit as issued by the Registrar by way of Order.
Payments for
loss of office
208.—(1) For purposes of this section, a “payment for loss of
office” means a payment made to a director or past director of a
company—
(a) by way of compensation for loss of office as director of the
company;
(b) by way of compensation for loss, while director of the
company or in connexion with his ceasing to be a director of it,
of—
(i) any other office or employment in connexion with the
management of the affairs of the company; or
(ii) any office, whether as director or otherwise, or
employment in connexion with the management of the affairs
of any subsidiary or undertaking of the company.
(2) The references to compensation and consideration include
benefits otherwise than in cash and references in this Part to payment
have a corresponding meaning.
(3) For the purposes of sections 210 to 214—
(a) payment to a person connected with a director; or
(b) payment to any person at the direction of, or for the benefit
of, a director or a person connected with him is treated as payment
to the director.
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(4) References in sections 210 to 214 to payment by a person
include payment by another person at the direction of, or on behalf
of, the person referred to.
209.—(1) This section shall apply where, in connexion with any Amounts
to be
such transfer as is mentioned in section 211 or 212, a director of the taken
payments for
loss of office
company—
(a) is to cease to hold office; or
(b) is to cease to be the holder of—
(i) any other office or employment in connexion with the
management of the affairs of the company; or
(ii) any office, as director or otherwise, or employment in
connexion with the management of the affairs of any subsidiary
or undertaking of the company.
(2) If in connexion with any such transfer—
(a) the price to be paid to the director for any shares in the
company held by him is in excess of the price which could at the
time have been obtained by other holders of like shares; or
(b) any valuable consideration is given to the director by a
person other than the company,
the excess or, as the case may be, the money value of the consideration
shall be taken, for the purposes of those sections, to have been a
payment for loss of office.
210.—(1) A public company shall not make a payment for loss Payments by
of office to a director of the company unless the payment has been company
approved by a resolution of the shareholders of the company.
(2) A public company shall not make a payment for loss of
office to a director of its parent company unless the payment has
been approved by a resolution of the shareholders of each of those
companies.
(3) A resolution approving a payment to which this section applies
must not be passed unless a memorandum setting out particulars of
the proposed payment including the amount is made available to the
shareholders of the company whose approval is sought—
(a) in the case of a written resolution, by being sent or submitted
to every eligible shareholder at or before the time at which the
proposed resolution is sent or submitted to him;
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(b) in the case of a resolution at a meeting, by being made
available for inspection by the shareholders both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(4) No approval shall be required under this section on the part of
the members of a body corporate that—
(a) is not a public company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
Payment in
connexion
with
transfer of
undertaking,
etc.
211.—(1) No payment for loss of office may be made by any
person to a director of a public company in connexion with the
transfer of the whole or any part of the undertaking or property of the
company unless the payment has been approved by a resolution of
the shareholder of the company.
(2) No payment for loss of office may be made by any person to
a director of a public company in connexion with the transfer of the
whole or any part of the undertaking or property of a subsidiary of
the company unless the payment has been approved by a resolution
of the members of each of the companies.
(3) A resolution approving a payment to which this section applies
must not be passed unless a memorandum setting out particulars of
the proposed payment including the amount, is made available to the
shareholders of the company whose approval is sought—
(a) in the case of a written resolution, by being sent or
submitted to every eligible member at or before the time at which
the proposed resolution is sent or submitted to him;
(b) in the case of a resolution at a meeting, by being made
available for inspection by the members both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(4) No approval shall be required under this section on the part of
the members of a body corporate that—
(a) is not a public company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
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(5) A payment made in pursuance of an arrangement—
(a) entered into as part of the agreement for the transfer
in question, or within one year before or two years after that
agreement; and
(b) to which the company whose undertaking or property is
transferred, or any person to whom the transfer is made,
shall be privy, is presumed, except in so far as the contrary is shown,
to be a payment to which this section applies.
212.—(1) No payment for loss of office may be made by any Payment in
person to a director of a public company in connexion with a transfer connexion
with share
of shares in the company, or in a subsidiary of the company, resulting transfer
from a takeover bid unless the payment has been approved by a
resolution of the relevant shareholders.
(2) The relevant shareholders are the holders of the shares to
which the bid relates and any holders of shares of the same class as
any of those shares.
(3) A resolution approving a payment to which this section applies
must not be passed unless a memorandum setting out particulars of
the proposed payment including the amount, is made available to the
shareholders of the company whose approval is sought—
(a) in the case of a written resolution, by being sent or
submitted to every eligible member at or before the time at which
the proposed resolution is sent or submitted to him;
(b) in the case of a resolution at a meeting, by being made
available for inspection by the members both—
(i) at the company’s registered office for not less than
fifteen days ending with the date of the meeting; and
(ii) at the meeting itself.
(4) Neither the person making the offer, nor an associate of that
person, shall be entitled to vote on the resolution, but—
(a) where the resolution is proposed as a written resolution,
they are entitled if they would otherwise be so entitled to be sent a
copy of it; and
(b) at any meeting to consider the resolution they are entitled
if they would otherwise be so entitled to be given notice of the
meeting, to attend and speak and if present in person or by proxy
to count towards the quorum.
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(5) If at a meeting to consider the resolution a quorum is not
present, and after the meeting has been adjourned to a later date, a
quorum is again not present, the payment shall for the purposes of
this section, be deemed to have been approved.
(6) No approval shall be required under this section on the part of
shareholders in a body corporate that—
(a) is not a public company registered in Malaŵi; or
(b) is a wholly-owned subsidiary of another body corporate.
(7) A payment made in pursuance of an arrangement—
(a) entered into as part of the agreement for the transfer
in question, or within one year before or two years after that
agreement; and
(b) to which the company whose shares are the subject of the
bid, or any person to whom the transfer is made, is privy,
shall be presumed, except in so far as the contrary is shown, to be a
payment to which this section applies.
Exceptions
for payments
in discharge
of legal
obligations
213.—(1) Approval shall not be required under section 210, 211
or 212 for a payment made in good faith—
(a) in discharge of an existing legal obligation (as defined
below);
(b) by way of damages for breach of such an obligation;
(c) by way of settlement or compromise of any claim
arising in connexion with the termination of a person’s office or
employment; or
(d) by way of pension in respect of past services.
(2) In relation to a payment within section 210 an existing legal
obligation means an obligation of the company, or anybody corporate
associated with it, that was not entered into in connexion with, or
in consequence of, the event giving rise to the payment for loss of
office.
(3) In relation to a payment within section 211 or 212 an existing
legal obligation means an obligation of the person making the
payment that was not entered into for the purposes of, in connexion
with or in consequence of, the transfer in question.
(4) In the case of a payment within both section 210 and
section 211, or within both sections 210 and 212, subsection (2)
above applies and not subsection (3).
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(5) A payment part of which falls within subsection (1) above
and part of which does not is treated as if the parts were separate
payments.
214.—(1) Approval shall not be required under section 210, 211 Exception
for small
or 212 if—
payments
(a) the payment in question is made by the company or any of
its subsidiaries; and
(b) the amount or value of the payment, together with the
amount or value of any other relevant payments, does not exceed
the prevailing small payments limit as issued by the Registrar by
way of Order.
(2) For the purposes of this section, “other relevant payments”
shall be payments for loss of office in relation to which the following
conditions are met.
(3) Where the payment in question is one to which section 210
applies, the conditions are that the other payment was or is paid—
(a) by the company making the payment in question or any of
its subsidiaries;
(b) to the director to whom that payment is made; and
(c) in connexion with the same event.
(4) Where the payment in question is one to which section 210 or
212, applies the conditions shall be that the other payment was paid
in connexion with the same transfer—
(a) to the director to whom the payment in question was made;
and
(b) by the company making the payment or any of its
subsidiaries.
215.—(1) If a payment is made in contravention of section 210— Payments
made without
(a) it shall be held by the recipient on trust for the company approval
making the payment; and
(b) any director who authorized the payment shall be jointly
and severally liable to indemnify the company that made the
payment for any loss resulting from it.
(2) If a payment is made in contravention of section 211, it shall
be held by the recipient on trust for the company whose undertaking
or property is or is proposed to be transferred.
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(3) If a payment is made in contravention of section 212—
(a) it is held by the recipient on trust for persons who have sold
their shares as a result of the offer made; and
(b) the expenses incurred by the recipient in distributing that
sum amongst those persons shall be borne by him and not retained
out of that sum.
(4) If a payment is in contravention of section 210 and
section 211, subsection (2) of this section shall apply rather than
subsection (1).
(5) If a payment is in contravention of section 210 and
section 212, subsection (3) of this section shall apply rather than
subsection (1), unless the Court directs otherwise.
Division VI—Directors’ Service Contracts for Public Companies
Directors’
service
contracts
216.—(1) For the purposes of this Division, a directors’ “service
contract”, in relation to a public company, means a contract under
which—
(a) a director of the company undertakes personally to perform
services (as director or otherwise) for the company, or for a
subsidiary of the company; or
(b) services that a director of the company undertakes
personally to perform are made available by a third party to the
company, or to a subsidiary of the company.
(2) The provisions of this Part relating to directors’ service
contracts apply to the terms of a person’s appointment as a director
of a company and are not restricted to contracts for the performance
of services outside the scope of the ordinary duties of a director.
Copy of
contract or
memorandum
of terms to be
available for
inspection
217.—(1) A public company shall keep available for inspection—
(a) a copy of every directors’ service contract with the company
or with a subsidiary of the company; or
(b) if the contract is not in writing, a written memorandum
setting out the terms of the contract.
(2) All the copies and memoranda shall be kept available for
inspection at the company’s registered office.
(3) The copies and memoranda shall be retained by the company
for at least one year from, the date of termination or expiry of the
contract and must be kept available for inspection during that time.
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(4) If default is made in complying with subsection (1), (2)
or (3), or default is made for fourteen days in complying with
subsection (4), an offence is committed by every officer of the
company who is in default.
(5) Every officer of the company who defaults in complying with
subsection (1), (2) or (3), is liable to a fine in accordance with the
prevailing schedule of penalties.
(6) The provisions of this section apply to a variation of a
directors’ service contract as they apply to the original contract.
218.—(1) Every copy or memorandum required to be kept Right of
under section 217 shall be open to inspection by any member of the shareholder
to inspect and
request copy
company without charge.
(2) Any member of the company shall be entitled, on request and
on payment of such fee as may be prescribed, to be provided with a
copy of any such copy or memorandum, and a copy shall be provided
within seven days after the request is received by the company
(3) A person who contravenes this section shall be liable to a fine
in accordance with the prevailing schedule of penalties.
(4) In the case of any such refusal or default the Registrar may
order an immediate inspection or, as the case may be, direct that the
copy required be sent to the person requiring it.
219. A shadow director shall be treated as a director for the Application
to shadow
purposes of the provisions in this Part.
directors
Division VII—Directors’ Liabilities
220.—(1) Every director and officer of a company shall Standard of
care and civil
exercise—
liability of
and
(a) the powers and discharge the duties of his office honestly, directors
officers
in good faith and in the best interests of the company; and
(b) the degree of care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
(2) Where a director or officer of a public company also holds
office as an executive, the director shall exercise that degree of
care, diligence and skill which a reasonably prudent and competent
executive in that position would exercise.
(3) Where a director or officer commits a breach of any duty
under this Division—
(a) the director or officer and every person who knowingly
participated in the breach shall be liable to compensate the
company for any loss it suffers as a result of the breach;
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(b) the director or officer shall be liable to account to the
company for any profit made by the officer as a result of such
breach; and
(c) any contract or other transaction entered into between the
director or officer and the company in breach of those duties may
be rescinded by the company.
(4) A director or officer of a company who makes a business
judgment shall be taken to meet the requirements of subsections (1)
and (2) in respect of the judgment where the director or officer—
(a) makes the judgment in good faith for a proper purpose;
(b) does not have a material personal interest in the subject
matter of the judgment;
(c) informs the company of the subject matter of the judgment
to the extent he reasonably believes to be appropriate; and
(d) reasonably believes that the judgment is in the best interests
of the company.
(5) The directors’ or officer’s belief that the judgment is in the
best interests of the company shall be taken to be a reasonable one
unless the belief is one that no reasonable person in his position
would hold.
(6) In this section “business judgment” means any decision to
take or not take action in respect of a matter relevant to the business
operations of the company.
Indemnity and
insurance
221.—(1) Except as provided in this section, a company shall not
indemnify or directly or indirectly effect insurance for, a director, officer
or employee of the company or a related company in respect of—
(a) liability for any act or omission in his capacity as a director,
officer or employee; or
(b) costs incurred by that director, officer or employee in
defending or settling any claim or proceedings relating to any
such liability.
(2) An indemnity given in breach of this section shall be void.
(3) Subject to its constitution, a company may indemnify a
director, officer or employee of the company or a related company
for any costs incurred by him or the company in respect of any
proceedings—
(a) that relate to liability for any act or omission in his capacity
as a director, officer or employee; and
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(b) in which judgment is given in his favour, or in which he is
acquitted, or which is discontinued or in which he is granted relief
or where proceedings are threatened and such threatened action is
abandoned or not pursued.
(4) Subject to its constitution, a company may indemnify a
director, officer or employee of the company or a related company in
respect of—
(a) liability to any person, other than the company or a related
company, for any act or omission in his capacity as a director,
officer or employee; or
(b) costs incurred by that director, officer or employee in
defending or settling any claim or proceedings relating to any
such liability.
(5) Subsection (4) shall not apply to a director, officer or employee
who exercises his powers honestly and in good faith, in the best
interests of the company and for the respective purposes for which
such powers are explicitly or implicitly conferred.
(6) Subject to its constitution, a company may with the prior
approval of the Board, effect insurance for a director, officer or
employee of the company or a related company in respect of—
(a) liability, not being criminal liability, for any act or omission
in his capacity as a director or employee;
(b) costs incurred by that director or employee in defending or
settling any claim or proceeding relating to any such liability; or
(c) costs incurred by that director or employee in defending
any criminal proceedings—
(i) that have been brought against the director or employee
in relation to any act or omission in that person’s capacity as a
director or employee;
(ii) in which that person is acquitted; or
(iii) in relation to which a nolle prosequi is entered.
(7) The Board shall—
(a) enter or cause to be entered in the register of interests where
the company has one;
(b) record or cause to be recorded in the minutes of directors;
(c) disclose or cause to be disclosed in the annual report, the
particulars of any indemnity given to, or insurance effected for,
any director or employee of the company or a related company.
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(8) Where an insurance is effected for a director or employee of
a company or a related company and the provisions of subsection
(6) or (7) have not been complied with, the director or employee
shall be personally liable to the company for the cost of effecting the
insurance unless the director or employee proves that it was fair to
the company at the time the insurance was effected.
(9) In this section—
“director”—
(a) includes an officer of a company, a management company
or registered agent; and
(b) includes a person formerly holding anyone of these offices.
“effect insurance” includes pay, whether directly or indirectly, the
costs of the insurance;
“employee” includes a former employee;
“indemnify” includes relieve or excuse from liability, whether before
or after the liability arises, and “indemnity” has a corresponding
meaning.
Duty of
directors as to
the company’s
solvency
222.—(1) A director of a company who believes that the company
is unable to pay its debts as they fall due shall forthwith call a
meeting of the Board to consider whether the Board should appoint
a liquidator or an administrator.
(2) Where a meeting is called under this section, the Board shall
consider whether to appoint a liquidator or an administrator, or to
carry on the business of the company.
(3) Where—
(a) a director fails to comply with subsection (1);
(b) at the time of that failure the company was unable to pay its
debts as they fell due; and
(c) the company is subsequently placed in liquidation,
the Court may, on the application of the liquidator or of a creditor of
the company, make an order that the director shall be liable for the
whole or any part of any loss suffered by creditors of the company as
a result of the company continuing to trade.
(4) Where—
(a) at a meeting called under this section the Board does not
resolve to appoint a liquidator or an administrator;
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(b) at the time of the meeting there were no reasonable grounds
for believing that the company was able to pay its debts as they
fell due; and
(c) the company is subsequently placed in liquidation,
the Court may, on the application of the liquidator or of a creditor
of the company, make an order that the directors, other than those
directors who attended the meeting and voted in favour of appointing
a liquidator or an administrator, shall be liable for the whole or any
part of any loss suffered by creditors of the company as a result of the
company continuing to trade.
Division VIII—Company Secretaries
223. A public company shall have a secretary.
Public
company
required to
have secretary
224.—(1) If it appears to the Registrar that a public company is in Direction
breach of section 223, the Registrar shall inform the company that it requiring
public
is in breach of the said provision and require the company to comply company
to appoint
within a specified period of time.
secretary
(2) Where the company is in breach of section 223, the company
shall comply with the direction of the Registrar by making the
necessary appointment, and giving the Registrar notice of it before
the end of the period specified in the direction.
(3) A company of every officer of the company who contravenes
this section commits an offence and is liable to a fine in accordance
with the prevailing schedule of penalties.
225.—(1) It shall be the duty of the directors of a public company Qualifications
secretaries
to take all reasonable steps to ensure that the secretary or each joint of
of public
companies
secretary of the company—
(a) is a person who appears to them to have the requisite
knowledge and experience to discharge the functions of secretary
of the company;
(b) is a person who, by virtue of his holding or having held any
other position or his being a member of any other body, appears
to the directors to be capable of discharging the functions of
secretary of the company; or
(c) has the qualifications specified in subsection (2).
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(2) The qualifications of the secretary include—
(a) that he has held the office of secretary of a public company
for at least three of the five years immediately preceding his
appointment as secretary; or
(b) that he is a member of any professional body of company
secretaries in Malaŵi.
Discharge
of functions
where office
vacant or
secretary
unable to act
226. Where in the case of any public company the office of
secretary is vacant, or there is for any other reason no secretary
capable of acting, anything required or authorized to be done by or
to the secretary may be done—
(a) by or to an assistant or deputy secretary if any; or
(b) if there is no assistant or deputy secretary or none capable
of acting, by or to any person authorized generally or specifically
in that behalf by the directors.
Duty to keep
register of
secretaries
227.—(1) A public company shall keep a register of its secretaries.
(2) The register shall contain the particulars of the person who is,
or persons who are, the secretary or joint secretaries of the company
including but not limited to—
(a) name;
(b) address;
(c) any other relevant information.
(3) The register shall be kept available for inspection at the
company’s registered office.
(4) The register shall be open to the inspection—
(a) of any member of the company without charge; and
(b) of any other person on payment of such fee as may be
prescribed.
(5) A company or every officer of the company who defaults in
complying with subsection (1), (2) or (3), or defaults for fourteen
days in complying with subsection (4), or refuses an inspection
required under subsection (4) is liable to a fine in accordance with
the prevailing schedule of penalties.
(6) In the case of a refusal of inspection of the register, the Court
may by order compel an immediate inspection of it.
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228.—(1) A public company shall, within the period of fourteen Duty to notify
Registrar of
days from—
changes
(a) a person becoming or ceasing to be its secretary or one of
its joint secretaries; or
(b) the occurrence of any change in the particulars contained in
its register of secretaries,
give notice to the Registrar of the change and of the date on which
it occurred.
(2) Notice of a person having become secretary, or one of joint
secretaries, of the public company shall be accompanied by the
consent by that person to act in the relevant capacity.
(3) Where the company fails to comply with this section, every
officer of the company who is in default shall be liable to a fine in
accordance with the prevailing schedule of penalties.
PART X
Accounting Requirements
Division I—General Obligations for all Companies Except
Private Companies
229.—(1) Subject to the other provisions of this section, the Requirement
keep
board of a company shall cause accounting records to be kept that— to
accurate and
complete
(a) correctly record and explain the transactions of the accounting
records
company;
(b) shall at any time enable the financial position of the
company to be determined with reasonable accuracy;
(c) shall enable the directors to prepare financial statements
that comply with this Act; and
(d) shall enable the financial statements of the company to be
readily and properly audited.
230.—(1) A company shall keep its accounting records in Malaŵi. Place where
accounting
(2) A company shall keep its accounting records outside Malaŵi, records shall
be kept
only in accordance with regulations made under this Act.
231.—(1) A company shall at each annual meeting, appoint an Appointment
of auditor
auditor to—
(a) hold office from the conclusion of the meeting until the
conclusion of the next annual meeting; and
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(b) audit the financial statements of the company and, if the
company is required to complete group financial statements, those
group financial statements, for the accounting period next after the
meeting.
(2) The Board of a company may fill any casual vacancy in the
office of auditor, but while the vacancy remains, the surviving or
continuing auditor, if any, may continue to act as auditor.
(3) Where—
(a) at an annual meeting of a company, no auditor is appointed
or reappointed and no notice has been given; or
(b) a casual vacancy in the office of auditor is not filled within
one month of the vacancy occurring, the Registrar may appoint an
auditor.
(4) A company shall, within seven days of the power becoming
exercisable, give written notice to the Registrar of the fact that the
Registrar is entitled to appoint an auditor under subsection (3).
Auditor’s fees
and expenses
232. The fees and expenses of an auditor of a company shall be
fixed—
(a) where the auditor is appointed at a meeting of the company,
by the company at the meeting or in such manner as the company
may determine at the meeting;
(b) where the auditor is appointed by the directors, by the
directors; or
(c) where the auditor is appointed by the Registrar, by the
Registrar.
Appointment
of a
partnership as
auditor
233.—(1) A partnership may be appointed by the firm name to be
the auditor of a company where—
(a) at least one member of the firm is ordinarily resident in
Malaŵi;
(b) all or some of the partners including the partner who is
ordinarily resident in terms of paragraph (a) are qualified for
appointment under section 234;
(c) no member of the firm is indebted to the company or a
related company unless the debt is in the ordinary course of
business;
(d) no member of the firm is—
(i)
an officer or employee of the company; or
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(ii) a partner, or in the employment, of a director or
employee of the company or a related company;
(e) no officer of the company receives any remuneration from
the firm or acts as a consultant to it on accounting or auditing
matters.
(2) The appointment of a partnership by the firm named to be the
auditor of a company shall, notwithstanding section 234, be deemed
to be the appointment of all the persons who are partners in the firm
from time to time whether ordinarily resident or not in Malaŵi at the
date of the appointment.
(3) Where a partnership that includes persons who are not
qualified to be appointed as auditors of a company is appointed
as auditor of a company, the persons who are not qualified to be
appointed as auditors shall not act as auditors of the company.
(4) Where a firm has been appointed as auditor of a company
and the members constituting the firm change by reason of the
death, retirement, or withdrawal of a member or by reason of the
admission of a new member, the firm as newly constituted shall, if
it is not disqualified from acting as auditor of the company by virtue
of subsection (1), be deemed to be appointed under this section as
auditor of the company and that appointment shall be taken to be an
appointment of all persons who are members of the firm as newly
constituted.
(5) A report required to be signed on behalf of a firm appointed
as auditor of a company shall be signed in the firm’s name and in his
own name by a member of the firm who is a qualified auditor.
234.—(1) A person shall not be appointed or act as auditor of a Qualifications
company unless the person is qualified as an auditor under the Public of auditor
Cap. 53:06
Accountants and Auditors Act.
(2) None of the following persons shall be appointed or act as an
auditor of a company—
(a) a director or employee of the company;
(b) a person who is a partner, or in the employment, of a
director or employee of the company;
(c) a liquidator or a person who is a receiver in respect of the
property of the company;
(d) a body corporate;
(e) a person who is not ordinarily resident in Malaŵi;
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(f) a person who is indebted to the company, or to a related
company unless the debt is in the ordinary course of business; or
(g) a person who, by virtue of paragraph (a) or (b), may not be
appointed or act as auditor of a related company.
(3) No person shall—
(a) where he has been appointed auditor of a company, wilfully
disqualify himself, while the appointment continues, from acting
as auditor of the company; or
(b) where he is a member of a firm that has been appointed
auditor of a company, wilfully disqualify the firm while the
appointment continues, from acting as auditor of the company.
Approval of
auditor
Cap. 53:06
Automatic
reappointment
of auditor
235.—(1) Every application by a person to be an auditor for the
purposes of section 234 shall be made in the prescribed form.
(2) The authority prescribed by the Public Accountants and
Auditors Act, may, where it appears to it from an investigation under
this Act that a qualified auditor is not a fit and proper person to
continue to act as a qualified auditor, inquire into the conduct of an
auditor and the authority may, where it is satisfied that the conduct
of the auditor is such as to render him unfit to continue to discharge
the function of a qualified auditor, declare by notice published in
the Gazette that such person is no longer a qualified auditor and on
publication of the notice he shall cease to be a qualified auditor under
this Act.
236.—(1) An auditor of a company, other than an auditor
appointed under section 237, shall be automatically reappointed at
an annual meeting of the company unless—
(a) the auditor is not qualified for appointment; or
(b) the company passes a resolution at the meeting appointing
another person to replace him as auditor; or
(c) the auditor has given notice to the company that he does not
wish to be reappointed.
(2) An auditor shall not be automatically reappointed where the
person to be reappointed becomes incapable of, or disqualified from,
appointment.
Appointment
of first auditor
237.—(1) The first auditor of a company may be appointed by the
directors of the company before the first annual meeting, and, if so
appointed, holds office until the conclusion of that meeting.
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(2) Where the directors do not appoint an auditor under
subsection (1), the company shall appoint the first auditor at a
meeting of the company.
238.—(1) A company shall not remove or appoint a new auditor in Replacement
the place of an auditor who is qualified for reappointment, unless— of auditor
(a) at least twenty-eight days’ written notice of a proposal to do
so has been given to the auditor; and
(b) the auditor has been given a reasonable opportunity to
make representations to the shareholders on the appointment of
another person either, at the option of the auditor, in writing or by
the auditor or his representative speaking at the annual meeting of
shareholders at which it is proposed not to reappoint the auditor
or at a special meeting of shareholders called for the purpose of
removing and replacing the auditor.
(2) An auditor shall be entitled to be paid by the company
reasonable fees and expenses for making the representations to the
shareholders.
(3) Where, on the application of the company or any other
person who claims to be aggrieved by the auditor’s representations
being sent out or being read out at the meeting of shareholders, the
Registrar is satisfied that the rights conferred by subsection (1) are
being abused to secure needless publicity of defamatory matter, the
Registrar may—
(a) order that the auditor’s representations shall not be sent out
or shall, not be read, at the meeting of shareholders; and
(b) order the costs of the application to the Registrar to be paid
in whole or in part by the auditor.
239.—(1) Where an auditor gives the Board of a company written Auditor
seeking
notice that he does not wish to be reappointed, the Board shall, if not
reappointment
or giving
requested to do so by that auditor—
notice of
(a) distribute to all shareholders and to the Registrar, at the resignation
expense of the company, a written statement of the auditor’s
reasons for his wish not to be reappointed; or
(b) permit the auditor or his representative to explain at a
shareholders’ meeting the reasons for his wish not to be reappointed.
(2) An auditor may resign prior to the annual meeting by giving
notice to the company calling on the board to call a special meeting
of the company to receive the auditor’s notice of resignation
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(3) Where a notice is given by an auditor under subsection (2),
the auditor may, at the time of giving his notice to the board, request
the board to distribute a written statement providing him or his
representative with the opportunity to give an explanation on the
same terms as are set out in subsection (1).
(4) Where a written statement is provided for by an auditor under
subsection (3), the provisions of section 239 (3) shall apply to that
statement and explanation.
(5) Where a notice of resignation is given by an auditor under this
section, the appointment of the auditor shall terminate at that meeting
and the business of the meeting shall include the appointment of a
new auditor to the company.
(6) An auditor shall be entitled to be paid by the company
reasonable fees and expenses for making the representations to
shareholders.
Auditor to
avoid conflict
of interest
240. An auditor of a company shall ensure, in carrying out the
duties of an auditor under this Part, that his judgement is not impaired
by reason of any relationship with or interest in the company or any
of its subsidiaries.
Auditor’s
report
241.—(1) The auditor of a company shall make a report to the
shareholders on the financial statements which have been audited.
(2) The auditor’s report shall state—
(a) the scope and limitations of the audit;
(b) whether the auditor has obtained all information and
explanations that the auditor has required;
(c) whether, in the auditor’s opinion, the financial statements
and any group financial statements give a true and fair view of the
matters to which they relate, and where they do not, the respects in
which they fail to do so and whether the financial statements have
been prepared in accordance with IFRS and this Act.
(3) The audit of the financial statements shall be carried out in
accordance with International Standards on Auditing.
Access to
information
242.—(1) The board of a company shall ensure that an auditor
of the company has access at all times to the accounting records and
other documents of the company.
(2) An auditor of a company is entitled to receive from a director
or employee of the company such information and explanations as he
thinks necessary for the performance of his duties as auditor.
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(3) Where the board of a company fails to comply with
subsection (1), every director shall be liable to a fine in accordance
with the prevailing schedule of penalties.
243. The board of a company shall ensure that an auditor of the Auditor’s
attendance at
company—
shareholders’
(a) is permitted to attend a meeting of shareholders of the
company;
meeting
(b) receives the notices and communications that a shareholder
is entitled to receive relating to a meeting of the shareholders;
and
(c) may be heard at a meeting of the shareholders which he
attends on any part of the business of the meeting which concerns
him as auditor.
Division II—General Obligations for Private Companies
244.—(1) A private company need not appoint an auditor, unless General
obligations
exempted by regulations made under this Act.
for private
(2) Where the shareholders of a private company resolve to
appoint an auditor, the appointment and removal of the auditor of a
private company shall, subject to this section be made in accordance
with sections 235 to 239 and the auditor shall carry out the auditor’s
duties in accordance with section 240.
companies
(3) An auditor of a private company may resign by written notice
to the directors.
(4) Where the auditor gives written notice to resign under
subsection (3), the directors shall call a meeting of shareholders
or circulate a resolution to the shareholders as soon as practicable
for the purpose of appointing an auditor in the place of the auditor
who desires to resign and on the appointment of another auditor, the
resignation shall take effect.
(5) Where at, or before, the time for the holding of the annual
meeting of a private company, notice is given to the board of the
company, signed by a shareholder who holds at least five per cent
of the shares of the company, the company shall appoint an auditor
and such resolution shall cease to have effect at the next annual
meeting and the auditor shall thereupon be reappointed unless the
shareholders by unanimous resolution agree not to appoint the
auditor.
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Division III—Financial Statements
Obligation
to prepare
financial
statements
245.—(1) The board of every company shall ensure that, within
six months after the balance sheet date of the company, financial
statements that comply with section 246 are—
(a) completed in relation to the company at its balance sheet
date; and
(b) dated and signed on behalf of the board by two directors of
the company, or, where the company has only one director, by that
director.
(2) The Registrar may, where he considers it appropriate to do so,
extend the period of six months specified in subsection (1).
Content
and form
of financial
statements
246.—(1) Subject to the other provisions of this section, the
financial statements of a company shall present a true and fair view
of the state of affairs of the company at the balance sheet date and of
its profit or loss and cash flows for the accounting period.
(2) The financial statements shall—
(a) be prepared in accordance with IFRS; and
(b) comply with any requirement which applies to the
company’s financial statements under any other enactment.
(3) The financial statements of a private company shall comply
with any Orders made under this Act or any accounting standards
issued by a prescribed body or authority, or with IFRS or the IFRS
for SME’s.
Financial
statements to
be prepared
in Malaŵi
currency
247.—(1) Subject to the other provisions of this section, a
company shall present its financial statements in the Malaŵi currency.
(2) The Registrar may approve the presentation by a company of
its financial statements in a foreign currency where the Registrar is
satisfied—
(a) that the company’s principal operational activity during the
accounting year in question has been undertaken in that foreign
currency; and
(b) that the presentation of the financial statements in that
foreign currency provides a true and fair view of the company’s
affairs.
Presentation of
group financial
statements
248. The board of a company that has, on the balance sheet
date of the company, one or more subsidiaries, shall, in addition to
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complying with section 246, ensure that within six months after the
balance sheet date, it prepares group financial statements.
249.—(1) Subject to the other provisions of this section, the Content and
of group
group financial statements shall present a true and fair view of the form
financial
state of affairs of the group at the balance sheet date and of its profit statements
or loss and cash flows for the accounting period.
(2) Except in the case of private companies the group financial
statements shall—
(a) be prepared in accordance with IFRS; and
(b) comply with any requirement which applies to the group’s
financial statements under any other enactment.
(3) The group financial statements of a private company shall
comply with any Orders made under this Act or any accounting
standards issued by the prescribed body or authority, or with IFRS or
the IFRS for SME’s.
(4) Where a subsidiary becomes a subsidiary of a company during
the accounting period to which the group financial statements relate,
the consolidated profit and loss statement shall relate to the profit or
loss of the subsidiary for each part of that accounting period during
which it was a subsidiary, and not to any other part of that accounting
period.
250. A member of, or holder of debentures of, a public company Right of
or
is entitled to be provided, on demand and without charge, with a member
debenture
copy of the company’s last financial statements together with any holder of
a public
directors’ report and auditor’s report on those financial statements. company
Division IV—Filing of Annual Report and Accounts for
Companies than Private Companies
to copies
of financial
statements and
reports
251.—(1) For the purposes of this Division, the annual report and Obligation
prepare an
accounts shall comprise a directors’ report, the financial statements to
annual report
and accounts
and the auditor’s report.
(2) Subject to subsections (3) and (4), the Board of every company
shall, within six months after the balance sheet date of the company,
prepare an annual report and accounts.
(3) The shareholders of a private company may resolve by
unanimous resolution that this section shall not apply to the company.
(4) This section does not apply to a one person company.
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Content of
directors’
report
252.—(1) A directors’ report is required for all public companies.
It shall be in writing and be dated and, subject to subsection (3) shall
set out—
Companies
(a) so far as the board reasonably believes is material for the
shareholders to have an appreciation of the state of the company’s
affairs and is not harmful to the business of the company or of any
of its subsidiaries, any change during the accounting period in—
(i) the nature of the business of the company or any of its
subsidiaries; or
(ii) the classes of business in which the company has an
interest, whether as a shareholder of another company or
otherwise; and
(b) (i) the names of the persons who, at any time during the
financial year, were directors of the company;
(ii) particulars of entries in the register of interests made
during the accounting period;
(iii) with respect to the accounting period, the amount which
represents the total of the remuneration and benefits received,
or due and receivable, from the company by—
(aa) executive directors of the company engaged in
the full-time or part-time employment of the company,
including all bonuses and commissions receivable by
them as employees; and
(bb) in a separate statement, non-executive directors of
the company ;
(iv) in the case of a holding company, with respect to the
accounting period, the amount which represents the total of
the remuneration and benefits received, or due and receivable,
from the parent company and from its subsidiaries by—
(aa) executive directors of the parent company
engaged in the full-time or part-time employment of the
holding company, including all bonuses and commission
receivable by them as employees; and
(bb) in a separate statement, non-executive directors of
the holding company;
(c) state the total amount of donations made by the company
and any subsidiary during the accounting period;
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(d) state the amounts payable by the company to the person or
firm holding office as auditor of the company as audit fees and, as
a separate item, fees payable by the company for other services
provided by that person or firm; and
(e) be signed on behalf of the board by two directors of the
company or, where the company has only one director, by that
director.
(2) The information to be disclosed under subsection (1) (b)
shall be—
(a) the term of the directors’ service contract with its date of
expiry;
(b) any notice period for termination of the contract;
(c) particulars of any provisions for predetermined
compensation on termination exceeding one year’s salary and of
any benefits including benefits in kind.
(3) A company that is required to include group financial
statements in its annual report shall include, in relation to each of
its subsidiaries, the information specified in paragraphs (b) to (e) of
subsection (1).
253.—(1) Subject to subsection (2), the Board of a company shall Sending
cause a copy of the annual report and accounts to be sent to every annual
report and
shareholder of the company not less than fourteen days before the accounts to
date fixed for holding the annual meeting of the shareholders and shareholders
such delivery may be made by electronic means.
(2) The board of a company shall not be required to send an
annual report and accounts to a shareholder where—
(a) the shareholder has given notice in writing to the company
waiving the right to be sent a copy of the annual report and
accounts or copies of annual reports and accounts of the company
generally; and
(b) the shareholder has not revoked that notice.
254. Subject to the constitution of a company, the failure to Failure to
an annual
send an annual report and accounts, notice, or other documents to a send
report and
shareholder in accordance with this Act shall not affect the validity of accounts
proceedings at a meeting of the shareholders of the company where
the failure to do so was accidental.
255. Every company, other than a private company, shall ensure Filing of
report
that, within twenty-eight days after the annual report and accounts of annual
and accounts
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the company and of the group are required to be signed, the annual
report and accounts are filed with the Registrar.
Division V—Annual Return
Annual return
256.—(1) Subject to subsection (3), every company shall, once in
every year, file with the Registrar for registration an annual return
which may be in electronic form.
(2) Subject to subsection (3), the annual return shall be completed
and filed with the Registrar within twenty-eight days of the date of
the annual meeting of the company.
(3) A company which keeps a branch register outside Malaŵi
shall comply with the requirements of subsection (2) within eight
weeks after the dates referred to in subsection (2).
(4) The annual return shall be signed by a director or secretary.
(5) The annual return shall contain the information set out in
the regulations save that where the matters required to be stated are
in each case unchanged from the last preceding annual return, the
company may present a “No change return” in which it is certified
by a director or secretary of the company that there is no change with
respect to any of the matters stated from, the last preceding annual
return.
(6) A company may not make an annual return in the calendar
year of its incorporation.
(7) A public company which—
(a) has more than five hundred members; and
(b) provides reasonable accommodation and facilities at a
place approved by the Registrar for persons to inspect and take a
list of its members and particulars of shares transferred,
shall not, unless the Registrar otherwise directs, be required to
include a list of members with the annual return where a certificate
by the secretary is included that the company is of a kind to which
this subsection applies.
PART XI
Public Offerings of Securities
Public offers
of securities in
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257. All public offers of securities shall be made in accordance
with the Securities Act.
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258. An offer or invitation to make an offer of securities to the Meaning of a
“public offer”
public shall be construed as including—
(a) offering securities to a section of the public, however
selected, whether selected as clients, employees, or a purchaser of
goods from the offeror or a promoter of the securities, or being the
holder of securities previously issued by the issuer or promoter of
the securities;
(b) offering the securities to individual members of the public
selected at random; or
(c) offering the securities to a person if the person became
known to the offeror as a result of an advertisement made by or on
behalf of the offeror or that was intended or likely to result in the
public seeking further information or advice about an investment
opportunity or services.
259. An offer or invitation to make an offer of securities or Meaning of a
“private offer”
debentures shall be construed as a private offer if—
(a) an offer of securities where the amount subscribed for the
securities by each person to whom the securities are offered is not
more than the prevailing limit as established by the Registrar of
Financial Institutions;
(b) an offer of securities which is restricted to persons who are
directors or executive officers of the company making the offer or
are close relatives or business partners or close business associates
of such director or executive officer;
(c) an offer of securities which is restricted to persons referred
to in paragraph (a) and to a body corporate in which an executive
officer or a close relative or business partner or associate of the
kind referred to in paragraph (b) have a controlling interest;
(d) an offer of securities where no consideration is paid or
provided in respect of the issue or allotment of the securities;
(e) an offer to enter into an underwriting agreement;
(f) an issue or allotment of securities to not more than one
hundred persons who are professional investors or experienced
investors as may be defined by the Registrar of Financial
Institutions where the securities are allotted as a result of
an invitation or offer made personally to that person or those
persons; or
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(g) an offer made to acquire all of the shares in a company which
provides ownership of the whole of the assets and undertaking of
a business enterprise or to acquire the whole of the undertaking
and assets of a partnership or trust and which offer is capable of
acceptance by and restricted to not more than ten persons and each
person has reasonably available to him or her the financial and
other information needed by that person to make a reasonably
informed investment decision.
General duty
of disclosure
in a prospectus
260.—(1) A prospectus shall contain all such necessary information
as investors and their professional advisers would reasonably require,
and reasonably expect to find there, for the purpose of making an
informed assessment of—
(a) the assets and liabilities, financial position, profits and
losses, and prospects of the issuer of the securities; and
(b) the rights attaching to the securities, and “necessary
information” means information which a person considering
acquiring the securities of the kind in question would be likely to
need in order not to be misled about any material facts which it is
essential for him to know to make an informed assessment.
(2) The prospectus shall contain information or documents as
may be necessary in respect of—
(a) the terms of the offer including, the identity of any
underwriter and the method of the offer;
(b) information about the business and operations of the issuer;
(c) the identity of directors, senior management, promoters
and auditors;
(d) capitalization and indebtedness of the issuer;
(e) risk factors;
(f) securities market data regarding any trading history of the
issuer’s shares;
(g) use of the proceeds of the offer;
(h) details of pending litigation;
(i) management discussion and analysis of the financial
condition and results of the company’s business operations;
(j) a forecast of estimated profit or loss for the year ending
immediately before the date of the prospectus and the year ending
immediately after the date of the prospectus;
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(k) a certificate from the issuer’s auditor stating any changes
in directors and auditors during the last three years, indicating the
reasons for any changes; and
(l) audited financial statements for the years and periods as
required by the Registrar of Financial Institutions.
(3) The prospectus shall be signed by the company’s senior
management or persons performing similar functions accompanied
by a duly verified resolution of the board of directors. Any written
consent of an expert named as having certified any part of the
prospectus or any document used in that connexion must also be
delivered to the Registrar of Financial Institutions.
PART XII
Arrangements, Compromises and Reconstructions;
Mergers and Divisions and Takeovers
Division I—Arrangements, Compromises and Reconstructions
261. In this Division, unless the context otherwise requires—
“arrangement” includes a reorganization of the share capital of the
company by the consolidation of shares of different classes or
by the division of shares into shares of different classes or by
both those methods;
Interpretation
in this
Division
“company” includes a foreign company registered under Part XV;
“compromise” means a compromise between a company and its
creditors, including a compromise—
(a) cancelling all or part of a debt of the company; or
(b) varying the rights of its creditors or the terms of a debt; or
(c) relating to an alteration of a company’s constitution that
affects the likelihood of the company being able to pay a debt;
“creditor” includes—
(a) a person who, in a liquidation, would be entitled to claim
that a debt is owing to that person by the company; and
(b) a secured creditor;
“merger” means where two or more companies amalgamate
and continue as one company, which may be one of the
amalgamating companies, or may be a new company.
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Power to
refer any
compromise to
the Court
262.—(1) Where a compromise or arrangement is proposed
between a company and its creditors or any class of them or between
the company and its members or any class of them, the proposed
compromise shall be subject to the Insolvency Act and the Court
may, on the application of the company or of any creditor or member
of the company, or, in the case of a company being wound up, of the
liquidator, order a meeting of the creditors or class of creditors, or of
the members of the company or class of members, as the case may
be, in accordance with that Act.
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(2) Where a compromise or arrangement proposed under
subsection (1) relates to a public company, that proposed compromise
or arrangement is subject to the requirements of a stock exchange
licensed under the Securities Act.
(3) If a majority in number representing seventy-five per cent in
value of the creditors or class of creditors, present and voting either
in person or by proxy at that meeting, agree to any compromise or
arrangement, the compromise or arrangement shall be binding on all
the creditors or the class of creditors, or on the members or class of
members, as the case may be, and also on the company.
(4) Any order made under subsection (3) shall have no effect until
a copy of the order has been delivered to the Registrar for registration,
and a copy of every such order shall be annexed to every copy of the
constitution of the company issued after the order has been made.
(5) Upon the hearing by the Court of the application to sanction the
compromise or arrangement any member or creditor of the company
claiming to be affected thereby shall be entitled to be represented and
to object.
(6) The Court may prescribe such terms as it thinks fit as a
condition of its sanction including a condition that any members
shall be given rights to require the company to purchase their shares
at a price fixed by a registered valuer under Part VII.
(7) If a company defaults in complying with subsection (4), the
company and every officer of the company who is in default shall
be liable to a fine in accordance with the prevailing schedule of
penalties.
Information
as to
compromises
with creditors
and members
263.—(1) Where a meeting of creditors or any class of creditors
or of members or any class of members is summoned under
section 262 there shall—
(a) with every notice summoning the meeting which is sent
to a creditor or member, be sent also a statement explaining the
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effect of the compromise or arrangement and in particular stating
any material interests of the directors of the company, whether as
directors or as members or as creditors of the company or otherwise,
and the effect thereon of the compromise or arrangement, insofar
as it is different from the effect on the like interests of other
persons; and
(b) in every notice summoning the meeting which is given by
advertisement, be included either such a statement as aforesaid
or a notification of the place at which and the manner in which
creditors or members entitled to attend the meeting may obtain
copies of such a statement.
(2) Where the compromise or arrangement affects the rights of
debenture holders of the company, the statement shall give the like
explanation as respects the debenture holders of the company or any
trustees of any instrument for securing the issue of the debentures as
it is required to give as respects the company’s directors.
(3) Where a notice given by advertisement includes a notification
that copies of a statement explaining the effect of the compromise
or arrangement proposed can be obtained by creditors or members
entitled to attend the meeting, every such creditor or member shall,
on making application in the manner indicated by the notice be
furnished by the company free of charge with a copy of the statement.
(4) Where a company makes default in complying with any
requirement of this section, the company and every officer of the
company who is in default shall be liable to a fine in accordance
with the prevailing schedule of penalties; and for the purpose of
this subsection any liquidator of the company and any trustee of an
instrument for securing the issue of debentures of the company shall
be deemed to be an officer of the company.
(5) A person shall not be liable under subsection (4) if that person
shows that the default was due to the refusal of any other person to
supply the necessary particulars as to his interests.
(6) It shall be the duly of any director of the company and of any
trustee for debenture holders of the company to give notice to the
company of such matters relating to himself as may be necessary for
the purposes of this section, and any person who makes default in
complying with this subsection shall be liable to a fine in accordance
with the prevailing schedule of penalties.
264.—(1) Where an application is made to the Court under Provisions for
section 262 for the sanctioning of a compromise or arrangement reconstructions
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proposed and it is shown to the Court that the compromise or
arrangement has been proposed for the purposes of or in connexion
with a scheme for the reconstruction of any company or companies
or the amalgamation of any two or more companies, and that under
the scheme the whole or any part of the undertaking or the property
of any company concerned in the scheme (in this section referred to
as “a transferor company”) is to be transferred to another company
(in this section referred to as “the transferee company”), the Court
may, either by the order sanctioning the compromise or arrangement
or by any subsequent order, make provision for all or any of the
following matters—
(a) the transfer to the transferee company of the whole or any
part of the undertaking and of the property or liability of any
transferor company;
(b) the allotting or appropriation by the transferee company
of any shares, debentures, policies or other like interest in that
company which under the compromise or arrangement are to be
allotted or appropriated by that company to or for any person;
(c) the continuation by or against the transferee company of any
legal proceedings pending by or against any transferor company;
(d) the dissolution, without winding-up, of any transferor
company;
(e) the provision to be made for any persons who, within such
time and in such manner as the Court directs, dissent from the
compromise or arrangement; and
(f) such incidental, consequential and supplemental matters as
are necessary to secure that the reconstruction or amalgamation
shall be fully and effectively carried out.
(2) Where an order under this section provides for the transfer of
property or liabilities, that property shall, by virtue of the order, be
transferred to and vest in, and those liabilities shall, by virtue of the
order, be transferred to and become the liabilities of, the transferee
company, and in the case of any property, if the order so directs,
be freed from any charge which is by virtue of the compromise or
arrangement to cease to have effect.
(3) Where an order is made under this section, every company
in relation to which the order is made shall cause a copy thereof to
be delivered to the Registrar for registration within twenty-one days
after the making of the order, and if default is made in complying
with this subsection, the company and every officer of the company
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who is in default shall be liable to a fine in accordance with the
prevailing schedule of penalties.
(4) In this section the expression “property” includes property
rights and powers of every description and the expression “liabilities”
includes duties of every description.
Division II—Mergers and Divisions
265.—(1) This Division shall apply where—
(a) a compromise or arrangement is proposed between a public
company and—
(i)
Application of
this Division
its creditors or any class of them; or
(ii) its members or any class of them, for the purposes of,
or in connexion with, a scheme for the reconstruction of any
company or companies or the amalgamation of any two or
more companies;
(b) the scheme involves—
(i)
a merger; or
(ii) a division; and
(c) the consideration for the transfer (or each of the transfers)
envisaged is to be shares in the transferee company (or one or
more of the transferee companies) receivable by members of the
transferor company (or transferor companies), with or without any
cash payment to members.
(2) In this Division—
(a) a “new company” means a company formed for the
purposes of, or in connexion with, the scheme; and
(b) an “existing company” means a company other than one
formed for the purposes of, or in connexion with, the scheme.
(3) This Division shall not apply where the company in respect
of which the compromise or arrangement is proposed is being
wound-up.
(4) The Court shall not sanction any compromise or arrangement
under Division I of this Part unless the requirements of this Division
have been complied with.
266.—(1) The scheme involves a merger where under the Mergers and
merging
scheme—
companies
(a) the undertaking, property and liabilities of one or more
public companies, including the company in respect of which the
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compromise or arrangement is proposed, are to be transferred to
another existing public company (a “merger by absorption”); or
(b) the undertaking, property and liabilities of two or more
public companies, including the company in respect of which the
compromise or arrangement is proposed, are to be transferred to
a new company, whether or not a public company, (a “merger by
formation of a new company”).
(2) References in this Division to “the merging companies” are—
(a) in relation to a merger by absorption, to the transferor and
transferee companies;
(b) in relation to a merger by formation of a new company, to
the transferor companies.
Draft terms of
a merger
267.—(1) A draft of the proposed terms of the scheme shall be
drawn up and adopted by the directors of the merging companies.
(2) The draft terms shall give particulars of at least the following
matters—
(a) in respect of each transferor company and the transferee
company—
(i) its name;
(ii) the address of its registered office; and
(iii) whether it is a company limited by shares or a company
limited by guarantee;
(b) the number of shares in the transferee company to be
allotted to members of a transferor company for a given number
of their shares (the “share exchange ratio”) and the amount of any
cash payment;
(c) the terms relating to the allotment of shares in the transferee
company;
(d) the date from, which the holding of shares in the transferee
company will entitle the holders to participate in profits, and any
special conditions affecting that entitlement;
(e) the date from, which the transactions of a transferor
company are to be treated for accounting purposes as being those
of the transferee company;
(f) any rights or restrictions attaching to shares or other
securities in the transferee company to be allotted under the
scheme to the holders of shares or other securities in a transferor
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company to which any special rights or restrictions attach, or the
measures proposed concerning them;
(g) any amount of benefit paid or given or intended to be paid
or given—
(i) to any of the experts referred to in section 271 the
expert’s report; or
(ii) to any director of a merging company, and the
consideration for the payment of benefit.
(3) The requirements in subsections (2) (b), (c) and (d) shall be
subject to section 277 circumstances in which certain particulars are
not required.
268.—(1) The directors of each of the merging companies shall Publication of
draft terms of
deliver a copy of the draft terms to the Registrar.
a merger
(2) The Registrar shall publish in the Gazette notice of receipt by
him from that company of a copy of the draft terms.
(3) The notice shall be published at least one month before the
date of any meeting of that company summoned for the purpose of
approving the scheme.
269.—(1) The scheme shall be approved by a majority in number, Approval of
of
representing seventy-five per cent in value, of each class of members members
a merging
of each of the merging companies, present and voting either in person company
or by proxy at a meeting.
(2) This requirement shall be subject to section 279 with respect
to circumstances in which meetings of members are not required.
270.—(1) The directors of each of the merging companies shall Directors’
report of
draw-up and adopt a report.
a merging
(2) The report shall consist of—
company
(a) the statement required by section 267; and
(b) insofar as that statement does not deal with the following
matters, a further statement—
(i) setting out the legal and economic grounds for the draft
terms, and in particular for the share exchange ratio; and
(ii) specifying any special valuation difficulties.
(3) The requirement in this section is subject to section 277 with
respect to circumstances in which reports are not required.
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Expert’s report
on a merger
271.—(1) An expert’s report shall be drawn up on behalf of each
of the merging companies.
Companies
(2) The report required shall be a written report on the draft terms
to the members of the company.
(3) The Court may, on the joint application of all the merging
companies, approve the appointment of a joint expert to draw-up a
single report on behalf of all those companies, provided that where
no such appointment is made, there shall be a separate expert’s report
to the members of each merging company drawn up by a separate
expert appointed on behalf of that company.
(4) The expert shall be a person who is eligible for appointment
as a statutory auditor.
(5) The expert’s report shall—
(a) indicate the method or methods used to arrive at the share
exchange ratio;
(b) give an opinion as to whether the method or methods used
are reasonable in all the circumstances of the case, indicate the
values arrived at using each such method and (if there is more than
one method) give an opinion on the relative importance attributed
to such methods in arriving at the value decided on;
(c) describe any special valuation difficulties that have arisen;
(d) state whether in the expert’s opinion the share exchange
ratio is reasonable.
(6) The expert (or each of them) shall have—
(a) the right of access to all such documents of all the merging
companies; and
(b) the right to require from the companies’ officers all such
information, as he thinks necessary for the purposes of making his
report.
(7) The requirement in this section shall be subject to section 277
with respect to circumstances in which reports are not required.
Supplementary
272.—(1) If the last annual accounts of any of the merging
accounting
companies
relate to a financial year ending more than seven months
statement for a
merger
before the first meeting of the company summoned for the purposes
of approving the scheme, the directors of that company shall prepare
a supplementary accounting statement.
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(2) The statement shall consist of—
(a) a balance sheet dealing with the state of affairs of the
company as at a date not more than three months before the draft
terms were adopted by the directors; and
(b) where the company would be required to prepare group
accounts if that date were the last day of a financial year, a
consolidated balance sheet dealing with the state of affairs of the
company and the undertakings that would be included in such a
consolidation.
(3) The requirements of this Act as to the balance sheet forming
part of a company’s annual accounts, and the matters to be included
in notes to it, apply to the balance sheet required for an accounting
statement under this section, with such modifications as are necessary
by reason of its being prepared otherwise than as at the last day of a
financial year.
273.—(1) The members of each of the merging companies shall, Inspection of
documents on
during the period specified below, be able—
a merger
(a) to inspect at the registered office of that company copies
of the documents listed below relating to that company and every
other merging company; and
(b) to obtain copies of those documents or any part of them on
request free of charge.
(2) The period referred to above is the period—
(a) beginning one month before; and
(b) ending on the date of, the first meeting of the members,
or any class of members, of the company for the purposes of
approving the scheme.
(3) The documents referred to above shall be—
(a) the draft terms;
(b) the directors’ explanatory report;
(c) the expert’s report;
(d) the company’s annual accounts and reports for the last
three financial years ending on or before the first meeting of the
members, or any class of members, of the company summoned for
the purposes of approving the scheme; and
(e) any supplementary accounting statement required by
section 272.
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(4) The requirements of subsections (3) (b) and (c) shall be
subject to section 277 with respect to circumstances in which reports
are not required.
Approval of
constitution
of a new
transferee
company on a
merger
274. In the case of a merger by formation of a new company, the
constitution of the transferee company, or a draft of them, must be
approved by ordinary resolution of the transferor company or, as the
case may be, each of the transferor companies.
Protection
of holders of
securities to
which special
rights are
attached in a
merger
275.—(1) The scheme shall provide that where any securities of
a transferor company other than shares, to which special rights are
attached are held by a person otherwise than as a member or creditor
of the company, that person is to receive rights in the transferee
company of equivalent value.
(2) Subsection (1) shall not apply if—
(a) the holder has agreed otherwise; or
(b) the holder is, or under the scheme is to be, entitled to have
the securities purchased by the transferee company on terms that
the Court considers reasonable.
No allotment
of shares to
transferor
company or its
nominee in a
merger
276. The scheme shall not provide for shares in the transferee
company to be allotted to a transferor company or its nominee in
respect of shares in the transferor company held by it, or its nominee.
Circumstances
in which
certain
particulars and
reports are not
required in a
merger
277.—(1) This section shall apply in the case of a merger by
absorption where all of the relevant securities of the transferor
company or, if there is more than one transferor company, of each of
them are held by or on behalf of the transferee company.
(2) The draft terms of the scheme need not give the particulars
mentioned in section 267 (2) (b), (c) or (d).
(3) The provisions of section 263 with respect to the explanatory
statement to be circulated or made available shall not apply.
(4) The requirements of section 270 with respect to the directors’
explanatory report, and section 271 with respect to the expert’s
report, shall not apply.
(5) The requirements of section 273 as to inspection of documents
so far as relating to any document required to be drawn up under the
provisions mentioned in subsection (3) shall not apply.
(6) In this section, “relevant securities”, in relation to a company,
means shares or other securities carrying the right to vote at general
meetings of the company.
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278.—(1) This section shall apply in the case of a merger by Circumstances
which a
absorption where ninety per cent or more of the relevant securities of in
meeting of
the transferor company, or, if there is more than one transferor company, members of
the transferee
of each of them, are held by or on behalf of the transferee company.
company is
not required in
(2) It shall not be necessary for the scheme to be approved at a a merger
meeting of the members, or any class of members, of the transferee
company if the Court is satisfied that the following conditions have
been complied with—
(a) Condition One: The publication of notice of receipt of the
draft terms by the Registrar took place in respect of the transferee
company at least one month before the date of the first meeting
of members, or any class of members, of the transferor company
summoned for the purpose of agreeing to the scheme.
(b) Condition Two: The members of the transferee company
were able during the period beginning one month before, and
ending on, that date—
(i) to inspect at the registered office of the transferee
company copies of the documents listed in section 273 (3) (a),
(d) and (e) relating to that company and the transferor company
(or, if there is more than one transferor company, each of them);
and
(ii) to obtain copies of those documents or any part of them
on request free of charge.
(c) Condition Three—
(i) one or more members of the transferee company, who
together held not less than five per cent of the paid-up capital of
the company which carried the right to vote at general meetings
of the company (excluding any shares in the company held as
treasury shares) would have been able, during that period, to
require a meeting of each class of members to be called for the
purpose of deciding whether or not to agree to the scheme; and
(ii) no such requirement was made.
(3) In this section, “relevant securities”, in relation to a company,
means shares or other securities carrying the right to vote at general
meetings of the company.
279.—(1) This section applies in the case of a merger by absorption Circumstances
which no
where all of the relevant securities of the transferor company (or, if in
members’
there is more than one transferor company, of each of them) are held meetings are
required in a
by or on behalf of the transferee company.
merger
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(2) It shall not be necessary for the scheme to be approved at
a meeting of the members, or any class of members, of any of
the merging companies if the Court is satisfied that the following
conditions have been complied with—
(a) Condition One: Publication of notice of receipt of the draft
terms by the Registrar of the company took place in respect of all
the merging companies at least one month before the date of the
Court’s order.
(b) Condition Two: Members of the transferee company were
able during the period beginning one month before, and ending
on, that date—
(i) to inspect at the registered office of that company copies
of the documents listed in section 273 relating to that company
and the transferor company (or, if there is more than one
transferor company, each of them); and
(ii) to obtain copies of those documents or any part of them
on request free of charge.
(c) Condition Three—
(i) that one or more members of the transferee company,
who together held not less than five per cent of the paid-up
capital of the company which carried the right to vote at general
meetings of the company (excluding any shares in the company
held as treasury shares) would have been able, during that
period, to require a meeting of each class of members to be
called for the purpose of deciding whether or not to agree to the
scheme; and
(ii) no such requirement was made.
(3) In this section, “relevant securities”, in relation to a company,
means shares or other securities carrying the right to vote at general
meetings of the company.
Other
circumstances
in which
meetings of
members of
transferee
company are
not required in
a merger
280. In the case of any merger by absorption, it is not necessary
for the scheme to be approved by the members of the transferee
company if the Court is satisfied that the following conditions have
been complied with—
(a) Condition One: Publication of notice of receipt of the draft
terms by the Registrar took place in respect of that company at
least one month before the date of the first meeting of members,
or any class of members, of the transferor company or, if there is
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more than one transferor company, any of them, summoned for
the purposes of agreeing to the scheme.
(b) Condition Two: Members of that company were able during
the period beginning one month before, and ending on, the date of
any such meeting—
(i) to inspect at the registered office of that company copies
of the documents specified in section 273 (3) relating to that
company and the transferor company, or, if there is more than
one transferor company, each of them, and
(ii) to obtain copies of those documents or any part of them
on request free of charge.
(c) Condition Three: that—
(i) one or more members of that company, who together
held not less than five per cent of the paid-up capital of the
company which carried the right to vote at general meetings
of the company (excluding any shares in the company held as
treasury shares) would have been able, during that period, to
require a meeting of each class of members to be called for
the purpose of deciding whether or not to agree to the scheme;
and
(ii) no such requirement was made.
Division III—Mergers and Divisions for Public and
Private Companies
281.—(1) The scheme shall involve a division where under the Divisions and
scheme the undertaking, property and liabilities of the company in companies
involved in a
respect of which the compromise or arrangement is proposed are to division
be divided among and transferred to two or more companies each of
which is either—
(a) an existing public company; or
(b) a new company, whether or not a public company.
(2) References in this Division to the companies involved in the
division are to the transferor company and any existing transferee
companies.
282.—(1) A draft of the proposed terms of the scheme shall be Draft terms
a division
drawn up and adopted by the directors of each of the companies of
scheme
involved in the division.
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(2) The draft terms shall give particulars of at least the following
matters—
(a) in respect of the transferor company and each transferee
company—
(i)
its name;
(ii) the address of its registered office; and
(iii) whether it is a company limited by shares or a company
limited by guarantee;
(b) the number of shares in a transferee company to be allotted
to members of the transferor company for a given number of their
shares (the “share exchange ratio”) and the amount of any cash
payment;
(c) the terms relating to the allotment of shares in a transferee
company;
(d) the date from which the holding of shares in a transferee
company will entitle the holders to participate in profits, and any
special conditions affecting that entitlement;
(e) the date from which the transactions of the transferor
company are to be treated for accounting purposes as being those
of a transferee company;
(f) any rights or restrictions attaching to shares or other
securities in a transferee company to be allotted under the scheme
to the holders of shares or other securities in the transferor
company to which any special rights or restrictions attach, or the
measures proposed concerning them;
(g) any amount of benefit paid or given or intended to be paid
or given—
(i) to any of the experts referred to in section 286 the
expert’s report; or
(ii) to any director of a company involved in the division,
and the consideration for the payment of benefit.
(3) The draft terms shall further—
(a) give particulars of the property and liabilities to be
transferred, to the extent that these are known to the transferor
company, and their allocation among the transferee companies;
(b) make provision for the allocation among and transfer to the
transferee companies of any other property and liabilities that the
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transferor company has acquired or may subsequently acquire;
and
(c) specify the allocation to members of the transferor company
of shares in the transferee companies and the criteria upon which
that allocation is based.
283.—(1) The directors of each company involved in the division Publication of
draft terms of
shall deliver a copy of the draft terms to the Registrar.
a division
(2) The Registrar shall publish in the Gazette notice of receipt by
him from that company of a copy of the draft terms.
(3) That notice shall be published at least one month before the
date of any meeting of that company summoned for the purposes of
approving the scheme.
(4) The requirements in this section shall subject to section 296.
284.—(1) The compromise or arrangement shall be approved by Approval of
of
a majority in number, representing seventy-five per cent in value, members
companies
of each class of members of each of the companies involved in the involved in the
division, present and voting either in person or by proxy at a meeting. division
(2) Requirement in subsection (1) shall be subject to sections 293
and 294 as to the circumstances in which a meeting of members is
not required.
285.—(1) The directors of the transferor and each existing Directors’
explanatory
transferee company shall draw up and adopt a report.
report for a
(2) The report shall consist of—
division
(a) the statement required by section 263 as to the explaining
the effect of the compromise or arrangement; and
(b) insofar as the statement does not deal with the following
matters, a further statement—
(i) setting out the legal and economic grounds for the draft
terms, and in particular for the share exchange ratio and for the
criteria on which the allocation to the members of the transferor
company of shares in the transferee companies was based; and
(ii) specifying any special valuation difficulties.
(3) The report shall further state—
(a) whether a report has been made to any transferee company
in relation to any valuation of non-cash consideration for shares;
and
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(b) if so, whether that report has been delivered to the Registrar
of companies.
(4) The requirement in this section shall be subject to section 295
as to an agreement to dispense with reports.
Expert’s report
in a division
286.—(1) An expert’s report shall be drawn up on behalf of each
company involved in a division.
(2) The report required under subsection (1) shall be a written
report on the draft terms to the members of the company.
(3) The Court may, on the joint application of the companies
involved in the division, approve the appointment of a joint expert to
draw up a single report on behalf of all those companies. If no such
appointment is made, there shall be a separate expert’s report to the
members of each company involved in the division drawn up by a
separate expert appointed on behalf of that company.
(4) The expert shall be a person who is eligible for appointment
as a statutory auditor.
(5) The expert’s report shall—
(a) indicate the method or methods used to arrive at the share
exchange ratio;
(b) give an opinion as to whether the method or methods used
are reasonable in all the circumstances of the case, indicate the
values arrived at using each such method and, if there is more than
one method, give an opinion on the relative importance attributed
to such methods in arriving at the value decided on;
(c) describe any special valuation difficulties that have arisen;
(d) state whether in the expert’s opinion the share exchange
ratio is reasonable.
(6) The expert or each of them has—
(a) the right of access to all such documents of the companies
involved in the division; and
(b) the right to require from the companies’ officers all such
information, as he thinks necessary for the purposes of making his
report.
(7) The requirement in this section shall be subject to section 295
an agreement to dispense with reports.
Supplementary
287.—(1) If the last annual accounts of a company involved in
accounting
the
division relate to a financial year ending more than seven months
statement in a
division
before the first meeting of the company summoned for the purposes
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of approving the scheme, the directors of that company must prepare
a supplementary accounting statement.
(2) That statement shall consist of—
(a) a balance sheet dealing with the state of affairs of the
company as at a date not more than three months before the draft
terms were adopted by the directors; and
(b) where the company would be required to prepare group
accounts if that date were the last day of a financial year, a
consolidated balance sheet dealing with the state of affairs of the
company and the undertakings that would be included in such a
consolidation.
(3) The requirements of this Act as to the balance sheet forming
part of a company’s annual accounts, and the matters to be included
in notes to it, apply to the balance sheet required for an accounting
statement under this section, with such modifications as are necessary
by reason of its being prepared otherwise than as at the last day of a
financial year.
(4) The requirement in this section shall be subject to section 296
as to an agreement to dispense with reports.
288.—(1) The members of each company involved in the division Inspection of
documents in
shall be entitled be able, during the period specified below—
a division
(a) to inspect at the registered office of that company copies
of the documents listed below relating to that company and every
other company involved in the division; and
(b) to obtain copies of those documents or any part of them on
request free of charge.
(2) The period referred to above is the period—
(a) beginning one month before; and
(b) ending on the date of, the first meeting of the members,
or any class of members, of the company for the purposes of
approving the scheme.
(3) The documents referred to above are—
(a) the draft terms;
(b) the directors’ explanatory report;
(c) the expert’s report;
(d) the company’s annual accounts and reports for the last
three financial years ending on or before the first meeting of the
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members, or any class of members, of the company summoned for
the purposes of approving the scheme; and
(e) any supplementary accounting statement required by
section 287.
(4) The requirements in subsections (3) (b), (c) and (e) are
subject to section 295 and agreement to dispense with reports and
section 296 the power of the Court to exclude certain requirements.
Report on
material
changes of
assets of
transferor
company in a
division
289.—(1) The directors of the transferor company shall report—
(a) to every meeting of the members, or any class of members,
of that company summoned for the purpose of agreeing to the
scheme; and
(b) to the directors of each existing transferee company, any
material changes in the property and liabilities of the transferor
company between the date when the draft terms were adopted and
the date of the meeting in question.
(2) The directors of each existing transferee company shall, in
turn—
(a) report those matters to every meeting of the members, or
any class of members, of that company summoned for the purpose
of agreeing to the scheme; or
(b) send a report of those matters to every member entitled to
receive notice of such a meeting.
(3) The requirement in this section shall be subject to section 295
as to an agreement to dispense with reports.
Approval of
constitution of
new transferee
company in a
division
290. The constitution of every new transferee company, or a draft
of them, shall be approved by ordinary resolution of the transferor
company.
Protection
of holders of
securities to
which special
rights attach in
a division
291.—(1) The scheme shall provide that where any securities of
the transferor company other than shares to which special rights are
attached are held by a person otherwise than as a member or creditor
of the company, that person shall to receive rights in a transferee
company of equivalent value.
(2) Subsection (1) shall not apply if—
(a) the holder has agreed otherwise; or
(b) the holder is, or under the scheme is to be, entitled to have
the securities purchased by a transferee company on terms that the
Court considers reasonable.
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292. The scheme shall not provide for shares in a transferee No allotment
shares to
company to be allotted to the transferor company or its nominee of
a transferor
in respect of shares in the transferor company held by it or its company or its
nominee in a
nominee.
division
293.—(1) This section shall apply in the case of a division where Circumstances
which a
all of the shares or other securities of the transferor company carrying in
meeting of
the right to vote at general meetings of the company are held by or on members of
transferor
behalf of one or more existing transferee companies.
company is
not required in
(2) It shall not be necessary for the scheme to be approved by a a division
meeting of the members, or any class of members, of the transferor
company if the Court is satisfied that the following conditions have
been complied with.
(3) Condition One: Publication of notice of receipt of the draft
terms by the Registrar took place in respect of all the companies
involved in the division at least one month before the date of the
Court’s order.
(4) Condition Two: Members of every company involved in the
division were able during the period beginning one month before,
and ending on, that date—
(a) to inspect at the registered office of their company copies of
the documents listed in section 288 (3) relating to every company
involved in the division; and
(b) to obtain copies of those documents or any part of them on
request free of charge.
(5) Condition Three: is that—
(a) one or more members of the transferor company, who
together held not less than five per cent of the stated capital of the
company (excluding any shares in the company held as treasury
shares) would have been able, during that period, to require a
meeting of each class of members to be called for the purpose of
deciding whether or not to agree to the scheme; and
(b) no such requirement was made.
(6) Condition Four: The directors of the transferor company have
sent—
(a) to every member who would have been entitled to receive
notice of a meeting to agree to the scheme (had any such meeting
been called); and
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(b) to the directors, of every existing transferee company, a
report of any material change in the property and liabilities of
the transferor company between the date when the terms were
adopted by the directors and the date one month before the date of
the Court’s order.
Circumstances
in which a
meeting of
members of
a transferee
company are
not required in
a division
294.—(1) In the case of a division, it is not necessary for the
scheme to be approved by the members of a transferee company if the
Court is satisfied that the following conditions have been complied
with in relation to that company.
(2) Condition One: Publication of notice of receipt of the draft
terms by the Registrar took place in respect of that company at least
one month before the date of the first meeting of members of the
transferor company summoned for the purposes of agreeing to the
scheme.
(3) Condition Two: Members of that company were able during
the period beginning one month before, and ending on, that date—
(a) to inspect at the registered office of that company copies
of the documents specified in section 288 (3) relating to that
company and every other company involved in the division; and
(b) to obtain copies of those documents or any part of them on
request free of charge.
(4) Condition Three: that—
(a) one or more members of that company, who together held
not less than five per cent of the stated capital of the company
which carried the right to vote at general meetings of the company,
excluding any shares in the company held as treasury shares,
would have been able, during that period, to require a meeting
of each class of members to be called for the purpose of deciding
whether or not to agree to the scheme; and
(b) no such requirement was made.
(5) Conditions One and Two shall be subject to section 296 as to
the power of the Court to exclude certain requirements.
Agreement to
dispense with
reports in a
division
295.—(1) If all members holding shares in and all persons holding
other securities of, the companies involved in the division, being
shares or securities that carry a right to vote in general meetings of
the company in question, so agree, the following requirements set
out in subsection (2) shall not apply.
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(2) The requirements that may be dispensed with under this
section are the requirements of sections 285, 286, 287, 289 and 288
so far as relating to any document required to be drawn up under
sections 285, 286, 287 and 289.
(3) For the purposes of this section—
(a) the members, or holders of other securities, of a company;
and
(b) whether shares or other securities carry a right to vote in
general meetings of the company,
shall be determined as at the date of the application to the Court
under section 296.
296.—(1) In the case of a division, the Court may by order, direct Power of
Court to
that—
exclude
certain
(a) in relation to any company involved in the division, the requirements
in a division
requirements of section 283 and section 288; and
(b) in relation to an existing transferee company, section 294
relating to circumstances in which meeting of members of
transferee company are not required, shall have effect with the
omission of conditions one and two specified in that section, if the
Court is satisfied that the following conditions will be fulfilled in
relation to that company—
(A) Condition One: Members of that company will have
received, or will have been able to obtain free of charge, copies
of the documents listed in section 288—
(i) in time to examine them before the date of the first
meeting of the members, or any class of members, of that
company summoned for the purposes of agreeing to the
scheme; or
(ii) in the case of an existing transferee company where
in the circumstances described in section 294 no meeting
is held, in time to require a meeting as mentioned in
subsection (4) of that section.
(B) Condition Two: Creditors of that company will have
received or will have been able to obtain free of charge copies
of the draft terms in time to examine them—
(i) before the date of the first meeting of the
members, or any class of members, of the company
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summoned for the purposes of agreeing to the
scheme; or
(ii) in the circumstances mentioned in subsection
(2) (b), at the same time as the members of the company.
(C) Condition Three: No prejudice would be caused to
the members or creditors of the transferor company or any
transferee company by making the order in question.
Division IV—The Takeover Panel
The takeover
Panel
297.—(1) The Minister may, by regulation, establish a body
known as the Panel on Takeovers and Mergers (“the Panel”) which
is to have the functions conferred on it by or under this Part.
(2) The Panel may do anything that it considers necessary or
expedient for the purposes of, or in connexion with, its functions.
(3) The Panel may make arrangements for any of its functions to
be discharged by—
(a) a committee or subcommittee of the Panel; or
(b) an officer or member of staff of the Panel, or a person acting
as such.
Panel rules
298.—(1) The Minister may make rules for the Panel—
(a) for or in connexion with the regulation of—
(i) takeover bids;
(ii) merger transactions; and
(iii) transactions not falling within subparagraph (i) or (ii)
that have or may have, directly or indirectly, an effect on the
ownership or control of companies;
(b) for or in connexion with the regulation of things done
in consequence of, or otherwise in relation to, any such bid or
transaction;
(c) about cases where—
(i) any such bid or transaction is, or has been, contemplated
or apprehended; or
(ii) an announcement is made denying that any such bid or
transaction is intended.
(2) The rules may—
(a) make different provision for different purposes;
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(b) make provision subject to exceptions or exemptions;
(c) contain incidental,
transitional provision;
supplemental,
consequential
or
(d) authorize the Panel to dispense with or modify the
application of rules in particular cases and by reference to any
circumstances.
(3) The rules made by virtue of paragraph (d) shall require the
Panel to give reasons for acting as mentioned in that paragraph.
(4) The rules may contain provision conferring power on the
Panel to impose sanctions on a person who—
(a) acts in breach of rules; or
(b) fails to comply with a direction given by virtue of
section 300.
(5) The rules may provide for fees or charges to be payable to the
Panel for the purpose of meeting any part of its expenses.
(6) The rules shall be made available to the public, with or without
payment, in whatever way the Panel thinks appropriate.
(7) A person shall not to be taken to have contravened a rule if
he shows that at the time of the alleged contravention, the text of the
rule had not been made available as required by subsection (6).
(8) The Panel may promulgate or adopt a code of practice on the
conduct of takeovers and mergers.
299.—(1) The Panel may give rulings on the interpretation, Panel rulings
application or effect of the rules.
(2) To the extent and in the circumstances specified in the rules,
and subject to any review or appeal, a ruling shall have binding
effect.
300. Rules may contain provision conferring power on the Panel Directions
to give any direction that appears to the Panel to be necessary in
order—
(a) to restrain a person from acting or continuing to act in
breach of rules;
(b) to restrain a person from doing or continuing to do a
particular thing, pending determination of whether that or any
other conduct of his is or would be a breach of rules;
(c) otherwise to secure compliance with rules.
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Power to
require
documents and
information
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301.—(1) The Panel may by notice in writing require a person—
(a) to produce any documents that are specified or described in
the notice;
(b) to provide, in the form and manner specified in the notice,
such information as may be specified or described in the notice.
(2) A requirement under subsection (1) shall be complied with—
(a) at a place specified in the notice; and
(b) before the end of such reasonable period as may be so
specified.
(3) This section shall apply only to documents and information
reasonably required in connexion with the exercise by the Panel of
its functions.
(4) The Panel may require—
(a) any document produced to be authenticated; or
(b) any information provided whether in a document or
otherwise to be verified, in such manner as it may reasonably
require.
(5) The Panel may authorize a person to exercise any of its powers
under this section.
(6) A person exercising a power by virtue of subsection (5) shall,
if required to do so, produce evidence of his authority to exercise the
power.
(7) The production of a document in pursuance of this section
shall not affect any lien that a person has on the document.
(8) The Panel may take copies of or extracts from a document
produced in pursuance of this section.
(9) A reference in this section to the production of a document
includes a reference to the production of—
(a) a hard copy of information recorded otherwise than in hard
copy form; or
(b) information in a form from which a hard copy can be readily
obtained.
(10) A person is not required by this section to disclose documents
or information in respect of which a claim to legal professional
privilege could be maintained in legal proceedings.
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302.—(1) This section shall apply to information—
(a) relating to the private affairs of an individual; or
169
Restrictions
on disclosure
of information
(b) relating to any particular business, that is provided to the
Panel in connexion with the exercise of its functions.
(2) No such information may, during the lifetime of the individual
or so long as the business continues to be carried on, be disclosed
without the consent of that individual or (as the case may be) the
person for the time being carrying on that business.
(3) Subsection (2) shall not apply to any disclosure of information
that—
(a) is made for the purpose of facilitating the carrying out by
the Panel of any of its functions; or
(b) such information as the Minister may by regulation permit
as likely to facilitate the exercise of a function of a public nature;
or have the effect of permitting disclosures to be made to a body
other than one that exercises functions of a public nature in a
country outside Malaŵi;
(4) Subsection (2) shall not apply to—
(a) the disclosure by the Registrar under this Act, Registrar of
Financial Institutions, or a licensed stock exchange, of information
disclosed to it by the Panel in reliance of subsection (3);
(b) the disclosure of such information by anyone who has
obtained it directly or indirectly from an authority within
subsection (4) (a); or
(c) any other person or body that exercises functions of a public
nature, under legislation in a country other than Malaŵi that are
similar to the Panel’s functions or those of the Registrar and of the
Registrar of Financial Institutions.
(5) This section shall not prohibit the disclosure of information if
the information is or has been available to the public from any other
source.
303.—(1) Any person who discloses information in contravention Contravention
of the
of section 302 commits an offence, unless—
restrictions on
disclosure of
(a) he did not know, and had no reason to suspect, that the information
information had been provided as mentioned in section 302; or
(b) he took all reasonable steps and exercised all due diligence
to avoid the commission of the offence.
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(2) A person convicted of an offence under this section shall be
liable to imprisonment for two years and a fine as shall be determined
by the Court taking into account the gravity of the offence.
Panel’s duty of
cooperation
304.—(1) The Panel shall take such steps as it considers
appropriate to cooperate with—
(a) the Registrar, the Registrar of Financial Institutions, and a
licensed stock exchange;
(b) any other person or body that exercises functions of a
public nature, under legislation in any country outside Malaŵi that
appear to the Panel to be similar to its own functions or those under
paragraph (a).
(2) Cooperation may include the sharing of information that the
Panel is not prevented from disclosing.
Appeals
305. An appeal against the decision of the Panel shall lie to the
Court.
Failure to
comply with
rules about bid
documentation
306.—(1) This section shall apply where a takeover bid is made
for a company that is publicly traded on a licensed exchange in
Malaŵi.
(2) Where an offer document published in respect of the bid does
not comply with offer document rules, an offence is committed by—
(a) the person making the bid; and
(b) where the person making the bid is a body of persons, any
director, officer or member of that body who caused the document
to be published.
(3) A person shall be in contravention of subsection (2) only if—
(a) he knew that the offer document did not comply, or was
reckless as to whether it complied; and
(b) he failed to take all reasonable steps to secure that it did
comply.
(4) Where a response document published in respect of the bid
does not comply with response document rules, by any director or
other officer of the company referred to in subsection (1) who—
(a) knew that the response document did not comply, or was
reckless as to whether it complied; and
(b) failed to take all reasonable steps to secure that it did
comply shall have contravened subsection (2).
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(5) Where there is a contravention of subsection (2) (b) or (4) by
a company or other body corporate (“the relevant body”)—
(a) subsection (2) (b) has effect as if the reference to a director,
officer or member of the person making the bid included a
reference to a director, officer or member of the relevant body;
(b) subsection (4) has effect as if the reference to a director or
other officer of the company referred to in subsection (1) included
a reference to a director, officer or member of the relevant body.
(6) A person who contravenes the requirements of this section
shall be liable to a fine in accordance with the prevailing schedule of
penalties.
307. The Panel shall be capable of—
(a) bringing proceedings under this Division in its own name;
Panel as party
to proceedings
(b) bringing or defending any other proceedings in its own
name.
308. If, on the application of the Panel, the Court is satisfied—
(a) that there is a reasonable likelihood that a person will
contravene a rule-based requirement; or
Enforcement
by the Court
(b) that a person has contravened a rule-based requirement or a
disclosure requirement,
the Court may make any order it thinks fit to secure compliance with
the requirement.
309.—(1) Neither the Panel, nor any person within subsection (2), Exemption
liability
is to be liable in damages for anything done or omitted to be done from
in damages
in, or in connexion with, the discharge or purported discharge of the
Panel’s functions.
(2) A person is within this subsection if—
(a) he is or is acting as, a member, officer or member of staff of
the Panel; or
(b) he is a person authorized under section 298.
(3) Subsection (1) does not apply if the act or omission is shown
to have been in bad faith.
310.—A statement made by a person in response to—
(a) a requirement under section 301 (1); or
Privilege
against to
be selfincrimination
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(b) an order made by the Court under section 308 to secure
compliance with such a requirement may not be used against him
in criminal proceedings in which he is charged with an offence to
which this subsection applies.
Meaning of
“takeover
offer”
Division V—Takeover Offers
311.—(1) For the purposes of this Part, an offer to acquire
shares in a company is a “takeover offer” if the conditions set out in
subsections (2) and (3) are satisfied in relation to the offer.
(2) The first condition is that it is an offer to acquire—
(a) all the shares in a company; or
(b) where there is more than one class of shares in a company,
all the shares of one or more classes, other than shares that at the
date of the offer are already held by the offeror.
(3) The second condition is that the terms of the offer are the
same—
(a) in relation to all the shares to which the offer relates; or
(b) where the shares to which the offer relates include shares of
different classes, in relation to all the shares of each class.
(4) In subsections (1) to (3), “shares” means shares, other than
relevant treasury shares, that have been allotted on the date of the
offer.
(5) A takeover offer may include among the shares to which it
relates—
(a) all or any shares that are allotted after the date of the offer
but before a specified date;
(b) all or any relevant treasury shares that cease to be held as
treasury shares before a specified date;
(c) all or any other relevant treasury shares.
(6) In this section—
“relevant treasury shares” means shares that—
(a) are held by the company as treasury shares on the date of
the offer; or
(b) become shares held by the company as treasury shares after
that date but before a specified date;
“specified date” means a date specified in or determined in accordance
with the terms of the offer.
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(7) Where the terms of an offer make provision for their revision
and for acceptances on the previous terms to be treated as acceptances
on the revised terms, then, if the terms of the offer are revised in
accordance with that provision—
(a) the revision is not to be regarded for the purposes of this
Part as the making of a fresh offer; and
(b) references in this Division to the date of the offer are
accordingly to be read as references to the date of the original
offer.
312.—(1) The reference in section 311 (2) to shares already held Shares already
by the
by the offeror includes a reference to shares that he has contracted to held
offeror
acquire, whether unconditionally or subject to conditions being met.
This is subject to subsection (2).
(2) The reference in section 311 (2) to shares already held by the
offeror shall not include a reference to shares that are the subject of a
contract—
(a) intended to secure that the holder of the shares will accept
the offer when it is made; and
(b) entered into—
(i)
by deed and for no consideration;
(ii) for consideration of negligible value; or
(iii) for consideration consisting of a promise by the offeror
to make the offer.
(4) The condition in section 311 (2) shall be treated as satisfied
where—
(a) the offer does not extend to shares that associates of the
offeror hold or have contracted to acquire whether unconditionally
or subject to conditions being met; and
(b) the condition would be satisfied if the offer did extend to
those shares.
313.—(1) The condition in section 311 (3) on terms of offer to be Cases where
treated
the same for all shares or all shares of particular classes, is treated as offer
as being in the
same terms
satisfied where subsection (2) or (3) below applies.
(2) This subsection shall apply where—
(a) shares carry an entitlement to a particular dividend which
other shares of the same class, by reason of being allotted later, do
not carry;
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(b) there is a difference in the value of consideration offered for
the shares allotted earlier as against that offered for those allotted
later;
(c) that difference merely reflects the difference in entitlement
to the dividend; and
(d) the condition in section 311 (3) would be satisfied but for
that difference.
(3) This subsection shall apply where—
(a) the law of a country outside Malaŵi—
(i) precludes an offer of consideration in the form, or any
of the forms, specified in the terms of the offer (“the specified
form”); or
(ii) precludes it except after compliance by the offeror with
conditions with which he is unable to comply or which he
regards as unduly onerous;
(b) the persons to whom an offer of consideration in the
specified form is precluded are able to receive consideration in
another form that is of substantially equivalent value; and
(c) the condition in section 311 (3) would be satisfied but for
the fact that an offer of consideration in the specified form to those
persons is precluded.
Shares to
which an offer
relates
314.—(1) Where a takeover offer is made and, during the period
beginning with the date of the offer and ending when the offer can no
longer be accepted, the offeror acquires or unconditionally contracts
to acquire any of the shares to which the offer relates but does not do
so by virtue of acceptances of the offer, those shares shall be treated,
for the purposes of this Division, as excluded from those to which the
offer relates.
(2) For the purposes of this Division, shares that an associate of
the offeror holds or has contracted to acquire, whether at the date of
the offer or subsequently, shall not be treated as shares to which the
offer relates, even if the offer extends to such shares.
In this subsection “contracted” means contracted unconditionally
or subject to conditions being met.
(3) This section is subject to section 316 (8) and (9).
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315.—(1) Where there are holders of shares in a company to Effect of
of
whom an offer to acquire shares in the company is not communicated, impossibility
communicating
that does not prevent the offer from being a takeover offer for the or accepting an
offer
purposes of this Division if—
(a) those shareholders have no registered address in Malaŵi;
(b) the offer was not communicated to those shareholders in
order not to contravene the law of a country outside Malaŵi; and
(c) the offer is published in the Gazette, or a notice is published
in the Gazette, specifying the address a website containing the
offer.
(2) Where an offer is made to acquire shares in a company and
there are persons for whom, by reason of the law of a country outside
Malaŵi, it is impossible to accept the offer, or more difficult to do
so, that does not prevent the offer from being a takeover offer for the
purposes of this Division.
(3) It is not to be inferred—
(a) that an offer which is not communicated to every holder of
shares in the company cannot be a takeover offer for the purposes
of this Part unless the requirements of paragraphs (a) to (c) of
subsection (1) are met; or
(b) that an offer which is impossible, or more difficult, for
certain persons to accept cannot be a takeover offer for those
purposes unless the reason for the impossibility or difficulty is the
one mentioned in subsection (2).
“Squeeze-out”
316.—(1) Subsection (2) shall apply in a case where a takeover Right of
offeror to buy
offer does not relate to shares of different classes.
out minority
(2) If the offeror has, by virtue of acceptances of the offer,
acquired or unconditionally contracted to acquire—
shareholder
(a) not less than ninety per cent in value of the shares to which
the offer relates; and
(b) in a case where the shares to which the offer relates are
voting shares, not less than ninety per cent of the voting rights
carried by those shares, he may give notice to the holder of any
shares to which the offer relates which the offeror has not acquired
or unconditionally contracted to acquire that he desires to acquire
those shares.
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(3) Subsection (4) applies in a case where a takeover offer relates
to shares of different classes.
(4) If the offeror has, by virtue of acceptances of the offer,
acquired or unconditionally contracted to acquire—
(a) not less than ninety per cent in value of the shares of any
class to which the offer relates; and
(b) in a case where the shares of that class are voting shares,
not less than ninety per cent of the voting rights carried by those
shares, he may give notice to the holder of any shares of that class
to which the offer relates which the offeror has not acquired or
unconditionally contracted to acquire that he desires to acquire
those shares.
(5) In the case of a takeover offer which includes among the
shares to which it relates—
(a) shares that are allotted after the date of the offer; or
(b) relevant treasury shares within the meaning of section 320
that cease to be held as treasury shares after the date of the offer,
the offeror’s entitlement to give a notice under subsection (2) or
(4) on any particular date shall be determined as if the shares to
which the offer relates did not include any allotted, or ceasing to
be held as treasury shares, on or after that date.
(6) Subsection (7) applies where—
(a) the requirements for the giving of a notice under
subsection (2) or (4) are satisfied; and
(b) there are shares in the company which the offeror, or an
associate of his, has contracted to acquire subject to conditions
being met, and in relation to which the contract has not become
unconditional.
(7) The offeror’s entitlement to give a notice under subsection (2)
or (4) shall be determined as if—
(a) the shares to which the offer relates included shares falling
within subsection (6) (b); and
(b) in relation to shares falling within that paragraph, the words
“by virtue of acceptances of the offer” in subsection (2) or (4)
were omitted.
(8) Where—
(a) a takeover offer is made;
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(b) during the period beginning with the date of the offer and
ending when the offer can no longer be accepted, the offeror
acquires or unconditionally contracts to acquire any of the
shares to which the offer relates, but does not do so by virtue of
acceptances of the offer; and
(c) subsection (10) shall apply,
then for the purposes of this section those shares are not excluded by
section 314 (1) from those to which the offer relates, and the offeror
is treated as having acquired or contracted to acquire them by virtue
of acceptances of the offer.
(9) Where—
(a) a takeover offer is made;
(b) during the period beginning with the date of the offer and
ending when the offer can no longer be accepted, an associate of
the offeror acquires or unconditionally contracts to acquire any of
the shares to which the offer relates; and
(c) subsection (10) shall apply,
then for the purposes of this section those shares are not excluded by
section 314 (2) from those to which the offer relates.
(10) This subsection shall apply if—
(a) at the time the shares are acquired or contracted to be acquired
as mentioned in subsection (8) or (9) as the case may be, the value
of the consideration for which they are acquired or contracted to
be acquired (“the acquisition consideration”) does not exceed the
value of the consideration specified in the terms of the offer; or
(b) those terms are subsequently revised so that when the
revision is announced the value of the acquisition consideration,
at the time mentioned in paragraph (a), no longer exceeds the
value of the consideration specified in those terms.
317.—(1) A notice under section 316 must be given in the Further
provisions
prescribed manner.
about notices
given under
(2) No notice may be given under section 316 (2) or (4) after the section 316
end of—
(a) the period of three months beginning with the day after the
last day on which the offer can be accepted; or
(b) the period of six months beginning with the date of the
offer, where that period ends earlier and the offer is one to which
subsection (3) below applies.
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(3) At the time when the offeror first gives a notice under
section 316 in relation to an offer, he must send to the company—
(a) a copy of the notice; and
(b) a statutory declaration by him in the prescribed form,
stating that the conditions for the giving of the notice are satisfied.
(4) Where the offeror is a company whether or not a company
within the meaning of this Act the statutory declaration must be
signed by a director.
(5) Where a person fails to send a copy of a notice or a statutory
declaration as required by subsection (3), or makes such a declaration
for the purposes of that subsection knowing it to be false or without
having reasonable grounds for believing it to be true he shall be liable
to a fine in accordance with the prevailing schedule of penalties.
(6) It is a defence for failing to send a copy of a notice as required
by subsection (3) for a person to prove that he took reasonable steps
for securing compliance with that subsection.
Effect of
notice under
section 316
318.—(1) Subject to section 323 this section applies where the
offeror gives a shareholder a notice under section 316.
(2) The offeror is entitled and bound to acquire the shares to
which the notice relates on the terms of the offer.
(3) Where the terms of an offer are such as to give the shareholder
a choice of consideration, the notice must give particulars of the
choice and state—
(a) that the shareholder may, within six weeks from the date of
the notice, indicate his choice by a written communication sent to
the offeror at an address specified in the notice; and
(b) which consideration specified in the offer will apply if he
does not indicate a choice.
(4) Subsection (3) applies whether or not any time-limit or other
conditions applicable to the choice under the terms of the offer can
still be complied with.
(5) If the consideration offered to or as the case may be chosen by
the shareholder—
(a) is not cash and the offeror is no longer able to provide it; or
(b) was to have been provided by a third party who is no longer
bound or able to provide it, the consideration is to be taken to
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consist of an amount of cash, payable by the offeror, which at the
date of the notice is equivalent to the consideration offered or as
the case may be chosen.
(6) At the end of six weeks from the date of the notice the offeror
shall immediately—
(a) send a copy of the notice to the company; and
(b) pay or transfer to the company the consideration for the
shares to which the notice relates.
Where the consideration consists of shares or securities to be
allotted by the offeror, the reference in paragraph (b) to the transfer
of the consideration shall be read as a reference to the allotment of
the shares or securities to the company.
(7) If the shares to which the notice relates are registered, the
copy of the notice sent to the company under subsection (6) (a) must
be accompanied by an instrument of transfer executed on behalf of
the holder of the shares by a person appointed by the offeror. On
receipt of that instrument the company must register the offeror as
the holder of those shares.
(8) If the shares to which the notice relates are transferable by the
delivery of warrants or other instruments, the copy of the notice sent
to the company under subsection (6) (a) must be accompanied by a
statement to that effect. On receipt of that statement the company
must issue the offeror with warrants or other instruments in respect
of the shares, and those already in issue in respect of the shares
become void.
(9) The company shall hold any money or other consideration
received by it under subsection (6) (b) on trust for the person who,
before the offeror acquired them, was entitled to the shares in respect
of which the money or other consideration was received.
319.—(1) This section shall apply where an offeror pays or Further
provisions
transfers consideration to the company under section 318 (6).
about
consideration
(2) The company shall pay into a separate bank account that held on trust
complies with subsection (3)—
(a) any money it receives under paragraph (b) of section 318
(6); and
(b) any dividend or other sum accruing from any other
consideration it receives under that paragraph.
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(3) A bank account complies with this subsection if the balance
on the account—
(a) bears interest at an appropriate rate; and
(b) can be withdrawn by such notice (if any) as is appropriate.
(4) If—
(a) the person entitled to the consideration held on trust by
virtue of section 318 (9) cannot be found; and
(b) subsection (5) applies, the consideration, together with any
interest, dividend or other benefit that has accrued from it, shall be
paid into Court.
(5) This subsection shall apply where—
(a) reasonable enquiries have been made at reasonable intervals
to find the person; and
(b) twelve years have elapsed since the consideration was
received, or the company is wound-up.
(6) If the person entitled to the consideration held on trust by
virtue of section 318 (9) cannot be found and subsection (5) applies—
(a) the trust terminates;
(b) the company or, if the company is wound up, the liquidator
must sell any consideration other than cash and any benefit other
than cash that has accrued from the consideration; and
(c) a sum representing—
(i)
the consideration so far as it is cash;
(ii) the proceeds of any sale under paragraph (b); and
(iii) any interest, dividend or other benefit that has accrued
from the consideration, must be deposited in the name of the
Registrar of the Court in a separate bank account complying
with subsection (3) and the receipt for the deposit must be
transmitted to the Registrar of the Court.
Right of
minority
shareholder to
be bought out
by offeror
“Sell-out”
320.—(1) Subsections (2) and (3) shall apply in a case where a
takeover offer relates to all the shares in a company.
(2) For this purpose a takeover offer relates to all the shares in
a company if it is an offer to acquire all the shares in the company
within the meaning of section 311.
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(3) The holder of any voting shares to which the offer relates who
has not accepted the offer may require the offeror to acquire those
shares if, at any time before the end of the period within which the
offer can be accepted—
(a) the offeror has by virtue of acceptances of the offer acquired
or unconditionally contracted to acquire some but not all of the
shares to which the offer relates; and
(b) those shares, with or without any other shares in the
company which he has acquired or contracted to acquire whether
unconditionally or subject to conditions being met—
(i) amount to not less than ninety per cent in value of
all the voting shares in the company, or would do so but for
section 327 (1); and
(ii) carry not less than ninety per cent of the voting rights in
the company (or would do so but for section 327 (1)).
(4) The holder of any non-voting shares to which the offer relates
who has not accepted the offer may require the offeror to acquire
those shares if, at any time before the end of the period within which
the offer can be accepted—
(a) the offeror has by virtue of acceptances of the offer acquired
or unconditionally contracted to acquire some but not all of the
shares to which the offer relates; and
(b) those shares, with or without any other shares in the
company which he has acquired or contracted to acquire whether
unconditionally or subject to conditions being met, amount to not
less than ninety per cent in value of all the shares in the company
or would do so but for section 327 (1).
(5) If a takeover offer relates to shares of one or more classes and
at any time before the end of the period within which the offer can be
accepted—
(a) the offeror has by virtue of acceptances of the offer acquired
or unconditionally contracted to acquire some but not all of the
shares of any class to which the offer relates; and
(b) those shares, with or without any other shares of that
class which he has acquired or contracted to acquire whether
unconditionally or subject to conditions being met—
(i) amount to not less than ninety per cent in value of all the
shares of that class; and
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(ii) in a case where the shares of that class are voting shares,
carry not less than ninety per cent of the voting rights carried
by the shares of that class, the holder of any shares of that class
to which the offer relates who has not accepted the offer may
require the offeror to acquire those shares.
(6) For the purposes of subsections (3) to (5), in calculating ninety
per cent of the value of any shares, shares held by the company as
treasury shares are to be treated as having been acquired by the
offeror.
(7) Subsection (8) applies where—
(a) a shareholder exercises rights conferred on him by
subsection (3), (4) or (5);
(b) at the time when he does so, there are shares in the company
which the offeror has contracted to acquire subject to conditions
being met, and in relation to which the contract has not become
unconditional; and
(c) the requirement imposed by subsection (3) (b), (4) (b) or
(5) (b) (as the case may be) would not be satisfied if those shares
were not taken into account.
(8) The shareholder is treated for the purposes of section 322
as not having exercised his rights under this section unless the
requirement imposed by paragraph (b) of subsection (3), (4) or (5) as
the case may be would be satisfied if—
(a) the reference in that paragraph to other shares in the company
which the offeror has contracted to acquire unconditionally or
subject to conditions being met were a reference to such shares
which he has unconditionally contracted to acquire; and
(b) the reference in that subsection to the period within which
the offer can be accepted were a reference to the period referred to
in section 321 (2).
(9) A reference in section 320 (3) (b), (4) (b), (5) (b), (7) or (8)
to shares which the offeror has acquired or contracted to acquire
includes a reference to shares which an associate of his has acquired
or contracted to acquire.
Further
provision
about rights to
be bought out
by offeror
321.—(1) Rights conferred on a shareholder by subsection (3),
(4) or (5) of section 320 are exercisable by a written communication
addressed to the offeror.
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(2) Rights conferred on a shareholder by section 320 (3), (4) or
(5) shall not be exercisable after the end of the period of three months
from—
or
(a) the end of the period within which the offer can be accepted;
(b) if later, the date of the notice that must be given under
subsection (3) below.
(3) Within one month of the time specified in subsection (2), (3)
or (4) (as the case may be) of that section, the offeror must give any
shareholder who has not accepted the offer notice in the prescribed
manner of—
(a) the rights that are exercisable by the shareholder under that
subsection; and
(b) the period within which the rights are exercisable.
If the notice is given before the end of the period within which
the offer can be accepted, it shall state that the offer is still open
for acceptance.
(4) Subsection (3) shall not apply if the offeror has given the
shareholder a notice in respect of the shares in question under
section 316.
(5) Where a person fails to comply with subsection (3), he shall
be liable to a fine in accordance with the prevailing schedule of
penalties.
(6) It shall be a defence to failure to comply with subsection (3)
for a person to prove that he took reasonable steps for securing
compliance with that subsection.
322.—(1) Subject to section 323, this section applies where a Effect of right
be bought
shareholder exercises his rights under section 320 in respect of any to
out
shares held by him.
(2) The offeror shall be entitled and bound to acquire those shares
on the terms of the offer or on such other terms as may be agreed.
(3) Where the terms of an offer are such as to give the shareholder
a choice of consideration—
(a) the shareholder may indicate his choice when requiring the
offeror to acquire the shares; and
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(b) the notice given to the shareholder under section 321 (3)—
(i) must give particulars of the choice and of the rights
conferred by this subsection; and
(ii) may state which consideration specified in the offer will
apply if he does not indicate a choice.
The reference in subsection (2) to the terms of the offer is to
be read accordingly.
(4) Subsection (3) shall apply whether or not any time-limit or
other conditions applicable to the choice under the terms of the offer
can still be complied with.
(5) If the consideration offered to, or as the case may be, chosen
by, the shareholder—
(a) is not cash and the offeror is no longer able to provide it; or
(b) was to have been provided by a third party who is no longer
bound or able to provide it,
the consideration is to be taken to consist of an amount of cash,
payable by the offeror, which at the date when the shareholder
requires the offeror to acquire the shares is equivalent to the
consideration offered or as the case may be chosen.
Applications
to the Court
323.—(1) Where a notice is given under section 316 to a
shareholder the Court may, on an application made by him, order—
(a) that the offeror is not entitled and bound to acquire the
shares to which the notice relates; or
(b) that the terms on which the offeror is entitled and bound to
acquire the shares shall be such as the Court thinks fit.
(2) An application under subsection (1) must be made within six
weeks from the date on which the notice referred to in that subsection
was given.
If an application to the Court under subsection (1) is pending at
the end of that period, section 318 (6) shall not have effect until the
application has been disposed of.
(3) Where a shareholder exercises his rights under section 320 in
respect of any shares held by him, the Court may, on an application
made by him or the offeror, order that the terms on which the offeror
is entitled and bound to acquire the shares shall be such as the Court
thinks fit.
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(4) On an application under subsection (1) or (3)—
(a) the Court may not require consideration of a higher value
than that specified in the terms of the offer (“the offer value”) to
be given for the shares to which the application relates unless the
holder of the shares shows that the offer value would be unfair;
(b) the Court may not require consideration of a lower value
than the offer value to be given for the shares.
(5) No order for costs or expenses may be made against a
shareholder making an application under subsection (1) or (3) unless
the Court considers that—
(a) the application was unnecessary, improper or vexatious;
(b) there has been unreasonable delay in making the
application; or
(c) there has been unreasonable conduct on the shareholder’s
part in conducting the proceedings on the application.
(6) A shareholder who has made an application under
subsection (1) or (3) shall give notice of the application to the offeror.
(7) An offeror who is given notice of an application under
subsection (1) or (3) shall give a copy of the notice to—
(a) any person, other than the applicant, to whom a notice has
been given under section 316; and
(b) any person who has exercised his rights under section 320.
(8) An offeror who makes an application under subsection (3)
shall give notice of the application to—
(a) any person to whom a notice has been given under
section 315;
(b) any person who has exercised his rights under section 320.
(9) Where a takeover offer has not been accepted to the extent
necessary for entitling the offeror to give notices under subsection (2)
or (4) of section 316 the Court may, on an application made by him,
make an order authorizing him to give notices under that subsection
if it is satisfied that—
(a) the offeror has after reasonable enquiry been unable to
trace one or more of the persons holding shares to which the offer
relates;
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(b) the requirements of that subsection would have been met if
the person, or all the persons, mentioned in paragraph (a) above
had accepted the offer; and
(c) the consideration offered is fair and reasonable.
(10) The Court may not make an order under subsection (9)
unless it considers that it is just and equitable to do so having regard,
in particular, to the number of shareholders who have been traced but
who have not accepted the offer.
Joint offers
324.—(1) In the case of a takeover offer made by two or more
persons jointly, this Division has effect in accordance with this
section.
(2) The conditions for the exercise of the rights conferred by
section 316 shall be satisfied—
(a) in the case of acquisitions by virtue of acceptances of the
offer, by the joint offerors acquiring or unconditionally contracting
to acquire the necessary shares jointly;
(b) in other cases, by the joint offerors acquiring or
unconditionally contracting to acquire the necessary shares either
jointly or separately.
(3) The conditions for the exercise of the rights conferred by
section 320 shall be satisfied—
(a) in the case of acquisitions by virtue of acceptances of the
offer, by the joint offerors acquiring or unconditionally contracting
to acquire the necessary shares jointly;
(b) in other cases, by the joint offerors acquiring or contracting,
whether unconditionally or subject to conditions being met, to
acquire the necessary shares either jointly or separately.
(4) Subject to the following provisions, the rights and obligations
of the offeror under sections 316 to 322 are respectively joint rights
and joint and several obligations of the joint offerors.
(5) A provision of sections 316 to 323 that requires or authorizes
a notice or other document to be given or sent by or to the joint
offerors is complied with if the notice or document is given or sent
by or to any of them.
(6) The statutory declaration required by section 317 (4) shall be
made by all of the joint offerors and, where one or more of them is a
company, signed by a director of that company.
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(7) In sections 311 to 314, 316 (9), 318 (6), 320 (8) and 325
references to the offeror are to be read as references to the joint
offerors or any of them.
(8) In section 318 (7) and (8) references to the offeror shall be
read as references to the joint offerors or such of them as they may
determine.
(9) In sections 318 (5) (a) and 322 (5) (a) references to the offeror
being no longer able to provide the relevant consideration are to be
read as references to none of the joint offerors being able to do so.
(10) In section 323 references to the offeror shall be read as
references to the joint offerors, except that—
(a) an application under subsection (3) or (9) may be made by
any of them; and
(b) the reference in subsection (9) (a) to the offeror having
been unable to trace one or more of the persons holding shares
shall be read as a reference to none of the offerors having been
able to do so.
325.—(1) In this Division, “associate”, in relation to an offeror, Associates
means—
(a) a nominee of the offeror;
(b) a holding company, subsidiary or fellow subsidiary of the
offeror or a nominee of such a holding company, subsidiary or
fellow subsidiary;
(c) a body corporate in which the offeror is substantially
interested;
(d) a person who is, or is a nominee of, a party to a share
acquisition agreement with the offeror; or
(e) where the offeror is an individual, his spouse or civil partner
and any minor child or step-child of his.
(2) For the purposes of subsection (1) (b), a company shall be a
fellow subsidiary of another body corporate if both are subsidiaries
of the same body corporate but neither is a subsidiary of the other.
(3) For the purposes of subsection (1) (c) an offeror shall have a
substantial interest in a body corporate if—
(a) the body or its directors are accustomed to act in accordance
with his directions or instruction; or
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(b) he is entitled to exercise or control the exercise of one-third
or more of the voting power at general meetings of the body.
(4) For the purposes of subsection (1) (d) an agreement shall be a
share acquisition agreement if—
(a) it is an agreement for the acquisition of, or of an interest in,
shares to which the offer relates;
(b) it includes provisions imposing obligations or restrictions
on any one or more of the parties to it with respect to their use,
retention or disposal of such shares, or their interests in such
shares, acquired in pursuance of the agreement, whether or not
together with any other shares to which the offer relates or any
other interests of theirs in such shares; and
(c) it is not an excluded agreement under subsection (5).
(5) An agreement shall be an “excluded agreement”—
(a) if it is not legally binding, unless it involves mutuality in
the undertakings, expectations or understandings of the parties to
it; or
(b) if it is an agreement to underwrite or sub-underwrite an
offer of shares in a company, provided the agreement is confined
to that purpose and any matters incidental to it.
(6) The reference in subsection (4) (b) to the use of interests in
shares is to the exercise of any rights or of any control or influence
arising from those interests including the right to enter into an
agreement for the exercise, or for control of the exercise, of any of
those rights by another person.
(7) In this section—
(a) “agreement” includes any agreement or arrangement;
(b) references to provisions of an agreement include—
(i) undertakings, expectations or understandings operative
under an arrangement; and
(ii) any provision whether express or implied and whether
absolute or not.
Convertible
securities
326.—(1) For the purposes of this Division, securities of a
company are treated as shares in the company if they are convertible
into or entitle the holder to subscribe for such shares. References to
the holder of shares or a shareholder are to be read accordingly.
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(2) Subsection (1) shall not to be read as requiring any securities
to be treated—
(a) as shares of the same class as those into which they are
convertible or for which the holder is entitled to subscribe; or
(b) as shares of the same class as other securities by reason
only that the shares into which they are convertible or for which
the holder is entitled to subscribe are of the same class.
327.—(1) For the purposes of this Division, debentures issued by Debentures
a company to which subsection (2) applies are treated as shares in the carrying
voting rights
company if they carry voting rights.
(2) This subsection applies to a company that has voting shares,
or debentures carrying voting rights, which are admitted to trading
on a regulated market.
(3) In this Part, in relation to debentures treated as shares by
virtue of subsection (1)—
(a) references to the holder of shares or a shareholder are to be
read accordingly;
(b) references to shares being allotted are to be read as
references to debentures being issued.
328.—(1) In this Part—
“the company” means the company whose shares are the subject of
a takeover offer;
Interpretation
in this Part
“date of the offer” means—
(a) where the offer is published, the date of publication;
(b) where the offer is not published, or where any notices of
the offer are given before the date of publication, the date when
notices of the offer (or the first such notices) are given; and
references to the date of the offer are to be read in accordance
with section 311 (7) (revision of offer terms) where that applies;
“non-voting shares” means shares that are not voting shares;
“offeror” means, subject to section 324, the person making a takeover
offer;
“voting rights” means rights to vote at general meetings of
the company, including rights that arise only in certain
circumstances;
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“voting shares” means shares carrying voting rights.
(2) For the purposes of this Part, a person contracts unconditionally
to acquire shares if his entitlement under the contract to acquire
them is not, or is no longer, subject to conditions, or if all conditions
to which it was subject have been met, a reference to a contract
becoming unconditional shall be read accordingly.
PART XIII
Winding-up and Liquidation
Application of
329. The provisions of the Insolvency Act, apply to all companies
the Insolvency
incorporated
or registered under this Act.
Act
Cap. 11:01
Winding-up
Cap. 11:01
330. A company may be wound up in accordance with the
provisions of the Insolvency Act, where the company meets the
requirements of that Act.
PART XIV
Remedies and Enforcement
Power to
appoint
inspectors
Cap. 46:06
Division I—Company Investigations
331.—(1) The Minister, the Registrar or the Registrar of Financial
Institutions where the company’s securities are publicly traded
within the meaning of the Securities Act, may appoint one or more
competent inspectors to investigate the affairs of a company and to
report on them in such manner as he may direct.
(2) The appointment may be made if it appears that there are
circumstances suggesting—
(a) that the company’s affairs have been or are being conducted
with intent to defraud its creditors or the creditors of any other
person, or otherwise for a fraudulent or unlawful purpose, or
in a manner which is unfairly prejudicial to some part of its
members; or
(b) that any actual or proposed act or omission of the company
including an act or omission on its behalf is, or would be
prejudicial, or that the company was formed for any fraudulent or
unlawful purpose; or
(c) that persons concerned with the company’s formation or
the management of its affairs have in connexion therewith been
guilty of, misfeasance or other deceitful misconduct towards it or
towards its members; or
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(d) that the company’s members have not been given all the
information with respect to its affairs which they might reasonable
expect;
(e) any other circumstances that warrant an investigation of the
company’s affairs.
332. The Minister or the Registrar of Financial Institutions where Power to make
the company’s securities are publicly traded within the meaning of the regulations
for the
Securities Act, shall make regulations providing for the investigation investigation
of companies
of companies.
Cap. 46:06
333.—(1) The expenses of an investigation shall be defrayed in Cost of
the first instance by the company and subsequently be recovered investigations
from persons found liable as a result of the investigation.
(2) A person convicted on a prosecution instituted as a result of
the investigation, shall be ordered to pay, in whole or in part, the
costs of the investigation.
(3) No prosecution for an offence under this section shall be
instituted except by, or with the written consent of, the Director of
Public Prosecutions.
(4) Where under subsection (3) the Director of Public Prosecutions
withholds consent to any prosecution under this Act, he shall—
(a) provide to the Minister, or the Registrar of Financial
Institutions reasons in writing, devoid of any consideration other
than those of fact and the law, for the withholding of that consent;
and
(b) inform the Legal Affairs Committee of Parliament of his
decision within thirty days of the decision.
334.—(1) An inspector who makes an investigation under Report of
section 331, may, and if so directed by the Minister, the Registrar or inspector
the Registrar of Financial Institutions, make interim reports.
(2) A copy of the inspector’s final report shall be forwarded to the
Registrar and to the registered office of the company.
(3) The Minister, the Registrar or the Registrar of Financial
Institutions may, where he is of the opinion that it is necessary in the
public interest to do so, cause the report to be published provided that
where the report is not so published reason therefor shall be given in
writing to the Legal Affairs Committee of Parliament within thirty
days of the decision.
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(4) Where, from a report of an inspector, it appears to the
Minister, the Registrar or the Registrar of Financial Institutions that
proceedings ought in the public interest to be brought by a company
dealt with by the report—
(a) for the recovery of damages in respect of any fraud,
misfeasance or other misconduct in connexion with—
(i)
the promotion or formation of that company; or
(ii) the management of its affairs; or
(b) for the recovery of any property of the company which has
been misapplied or wrongly retained, the Minister or Registrar of
Financial Institutions may direct the Registrar to bring proceedings
for that purpose in the name of the company.
(5) Where proceedings are brought in the public interest under
subsection (4) the Registrar may, if he is not the party commencing
the proceedings, if he so wishes, intervene as an interested party in
any such proceedings.
(6) Where from a report of an inspector it appears that any
qualified auditor—
(a) has been guilty of misconduct; or
Cap. 53:06
(b) has conducted an audit in a manner which renders him in
the opinion of the inspector unfit to be a qualified auditor, the
Minister shall refer the matter to the Institute prescribed by the
Public Accountants and Auditors Act for action.
(7) Where from a report of an inspector it appears to the Registrar
that in the case of any public company or private company—
(a) the use of—
(i)
a parent company or any subsidiary company;
(ii) shares with restricted voting rights or special rights; or
(iii) any voting trust or arrangement, by any member
has been made in order to confer or maintain control in that
company; and
(b) such control unfairly discriminates against or is unfairly
prejudicial to other members of the company, the Registrar may
apply to the Court under section 343 for an order under that
section.
(8) A report of inspectors appointed under section 331 shall, if
certified by the Registrar as a true copy, be admissible in any legal
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proceedings as evidence of the opinion of inspectors in relation to
any matter contained in the report.
335. If in the course of an investigation, it appears to the inspectors Duty to
with
that they may need information from a person, body corporate, cooperate
inspectors
association, statutory or enforcement body, it shall be under duty to
cooperate with the inspectors.
336. The Minister shall have powers to suspend or terminate an Power to
or
investigation if it appears that the matters in respect of which an terminate
suspend any
investigation was commenced are the subject of criminal or civil investigation
in relation to a
proceedings.
company
Division II—Proceedings by Shareholders and Directors
337.—(1) Subject to subsection (3), the Court may, on the Derivative
application of a shareholder or director of a company, grant leave to actions
that shareholder or director to—
(a) bring proceedings in the name and on behalf of the
company or its subsidiary; or
(b) intervene in proceedings to which the company or
any related company is a party for the purpose of continuing,
defending, or discontinuing the proceedings on behalf of the
company or its subsidiary, as the case may be.
(2) Without prejudice to subsection (1), in determining whether
to grant leave under that subsection, the Court shall have regard
to—
(a) the likelihood of the proceedings that may follow;
(b) the costs of the proceedings in relation to the relief
likely to be obtained;
(c) any action already taken by the company or its subsidiary
to obtain relief;
(d) the interests of the company or its subsidiary in the
proceedings being commenced, continued, defended, or
discontinued, as the case may be.
(3) Leave to bring proceedings or intervene in proceedings may
be granted under subsection (1), only where the Court is satisfied
that either—
(a) the company or related company does not intend to bring,
continue or defend, or discontinue, the proceedings, as the case
may be; or
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(b) it is in the interests of the company or its subsidiary that the
conduct of the proceedings should not be left to the directors or to
the determination of the shareholders as a whole.
(4) Notice of the application shall be served on the company or its
subsidiary.
(5) The company or related company—
(a) may appear and be heard; and
(b) shall inform the Court, whether or not it intends to bring,
continue, defend, or discontinue the proceedings, as the case
may be.
(6) Except as provided for in this section, a shareholder or director
of a company is not entitled to bring or intervene in any proceedings
in the name of, or on behalf of, a company or its subsidiary.
Cost of
derivative
action to
be met by
company
338. The Court shall, on the application of the shareholder or
director to whom leave was granted under section 337 to bring or
intervene in the proceedings, order that the whole or part of the
reasonable costs of bringing or intervening in the proceedings,
including any costs relating to any settlement, compromise, or
discontinuance approved under section 337, shall be met by the
company unless the Court considers that it would be unjust or
inequitable for the company to bear those costs.
Powers of
Court where
leave granted
339. The Court may, at any time, make any order it thinks fit in
relation to proceedings brought by a shareholder or a director or in
which a shareholder or director intervenes, as the case may be, with
leave of the Court under section 337, and without prejudice to the
generality of this section may—
(a) make an order authorizing the shareholder or any other
person to control the conduct of the proceedings;
(b) give directions for the conduct of the proceedings;
(c) make an order requiring the company or the directors to
provide information or assistance in relation to the proceedings;
(d) make an order directing that any amount ordered to be paid
by a defendant in the proceedings shall be paid, in whole or part, to
former and present shareholders of the company or its subsidiary
instead of to the company or the related company.
Compromise,
settlement or
withdrawal
of derivative
action
340. No proceedings brought by a shareholder or a director or in
which a shareholder or a director intervenes, as the case may be, with
leave of the Court under section 337, may be settled or compromised
or discontinued without the approval of the Court.
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341.—(1) A shareholder or former shareholder may bring an Personal
by
action against a director and in the case of section 145, a secretary, actions
shareholders
against
for breach of a duty owed to him as a shareholder.
(2) An action may not be brought under subsection (1) to recover
any loss in the form of a reduction in the value of shares in the
company or a failure of the shares to increase in value by reason only
of a loss suffered, or a gain forgone, by the company.
directors
(3) For the purposes of subsection (1), the duties set out in
sections 150, 187 and 342 are duties owed to shareholders while the
duties of directors set out in sections 176 to 180 are duties owed to
the company and not to shareholders.
342. Any shareholder of a company may bring an action against Personal
by
the company for breach of a duty owed by the company to him as a actions
shareholders
against
shareholder.
company
343.—(1) Any shareholder or former shareholder of a company, Unfairly
or any other entitled person, who considers that the affairs of a prejudicial
conduct
company have been, or are being, or are likely to be, conducted in a
manner that is, or any act or acts of the company have been, or are,
or are likely to be, oppressive, unfairly discriminatory, or unfairly
prejudicial to that person in that capacity or in any other capacity,
may apply to the Court for an order under this section.
(2) The provisions of this Division shall apply to a person who is
not a member of a company but to whom shares in the company have
been transferred or transmitted by operation of law as they apply to a
member of a company.
(3) Where, on an application under this section, the Court
considers that it is just and equitable to do so, it may make such
order as it thinks fit including, without prejudice to the generality of
this subsection, an order—
(a) requiring the company or any other person to acquire the
shareholder’s shares; or
(b) requiring the company or any other person to pay
compensation to a person; or
(c) regulating the future conduct of the company’s affairs; or
(d) altering or adding to the company’s constitution; or
(e) appointing a receiver of the company; or
(f) directing the rectification of the records of the company; or
(g) putting the company into liquidation; or
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(h) setting aside action taken by the company or the Board in
breach of this Act or the constitution of the company.
(4) No order may be made against the company or any other
person under subsection (2) unless the company or that person is a
party to the proceedings in which the application is made.
(5) Where an order is made under this section the Court shall
record on the order the date and time at which the order is made.
Remedies
344.—(1) If the Court is satisfied that a petition under
sections 341 to 343 is well founded, it may make such order as it
thinks fit for giving relief in respect of the matters complained of.
(2) Without prejudice to the generality of subsection (1), the
Court’s order may—
(a) regulate the conduct of the company’s affairs in the future;
(b) require the company—
(i) to refrain from doing or continuing an act complained
of; or
(ii) to do an act that the petitioner has complained it has
omitted to do;
(c) authorize civil proceedings to be brought in the name and
on behalf of the company by such person or persons and on such
terms as the Court may direct;
(d) require the company not to make any, or any specified,
alterations in its articles without the leave of the Court;
(e) provide for the purchase of the shares of any members of
the company by other members or by the company itself and, in
the case of a purchase by the company itself, the reduction of the
company’s capital accordingly.
False or
misleading
statements
provided
under this Act
Division III—Penalties
345.—(1) Any person who, with respect to a document required
by or for the purposes of this Act—
(a) makes, or authorizes the making of, a statement that is false
or misleading in a material particular knowing it to be false or
misleading; or
(b) omits, or authorizes the omission of, any matter knowing
that the omission makes the document false or misleading in a
material particular, commits an offence and shall, on conviction,
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be liable to imprisonment for a term not exceeding five years and
a fine as shall be determined by the Court taking into account the
gravity of the offence.
(2) Any director or employee of a company who knowingly
makes or furnishes, or authorizes or permits the making or furnishing
of, a statement or report that relates to the affairs of the company, that
is false or misleading in a material particular, to—
(a) a director, employee, auditor, shareholder, debenture
holder, or trustee for debenture holders of the company;
(b) a liquidator, liquidation committee, or receiver or manager
of property of the company; or
(c) where the company is a subsidiary, a director, employee, or
auditor of its holding company, commits an offence and shall, on
conviction, be liable to imprisonment for five years and a fine as
shall be determined by the Court taking into account the gravity of
the offence.
346.—(1) If any business of a company is carried on with intent Fraudulent
to defraud creditors of the company or creditors of any other person, trading
or for any fraudulent purpose, every person who is knowingly a party
to the carrying on of the business in that manner commits an offence.
(2) Subsection (1) shall apply whether or not the company has
been, or is, in the course of being, wound-up.
(3) A person guilty of an offence under this section shall be liable,
on conviction, to imprisonment for ten years and a fine as shall
be determined by the Court taking into account the gravity of the
offence.
347.—(1) A person shall be disqualified from acting as a director Director’s
disqualification
of a company if—
(a) a Court order is issued against that person by reason of
mental incapacity; or
(b) subject to subsection (2), the person—
(i)
has been declared bankrupt or insolvent by the Court;
(ii) is prohibited by any other law from serving as a director
of a company;
(iii) has been removed from an office of trust, on the grounds
of misconduct involving dishonesty; or
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(iv) has been convicted and imprisoned or fined for theft,
fraud, forgery, perjury or an offence—
(aa) involving fraud, misrepresentation or dishonesty;
(bb) in connexion with the promotion, formation or
management of a company.
(2) A disqualification in terms of subsection (2) (b) (iii) or (iv)
shall expire at the later of—
(a) five years after the date of removal from office; or
(b) the completion of the sentence imposed for the relevant
offence, as the case may be.
(3) Notwithstanding subsection (1), a person may act as a director
of a private company if all of the shares of that company are held by
that disqualified person alone, or by—
(a) that disqualified person; and
(b) persons related to that disqualified person, and each such
person has consented in writing to that person being a director of
the company.
(4) A notice of the disqualification shall be published in newspapers
of general circulation and in the Gazette and the Registrar may make
the notice available in electronic form.
Grounds for
removal from
the register of
companies
Division IV—Removal from the Register of Companies
348.—(1) Subject to the other provisions of this section, the
Registrar shall remove a company from the register of companies
where—
(a) the company is an amalgamating company, other than an
amalgamated company, on the day on which the Registrar issues a
certificate of amalgamation under this Act; or
(b) the Registrar is satisfied that—
(i) the company has ceased to carry on business; and
(ii) there is no other reason for the company to continue in
existence; or
(c) the company has been put into liquidation, and—
(i) no liquidator is acting; or
(ii) the Registrar has not been furnished with information
within six months from the date on which the liquidation of the
company is completed; or
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(d) the Registrar receives a request, in a form approved by him,
from—
(i) a shareholder authorized to make the request by a
special resolution of shareholders entitled to vote and voting on
the question; or
(ii) the Board or any other person, where the constitution
of the company so requires or permits, that the company
be removed from the register on any grounds specified in
subsection (2); or
(e) a liquidator sends or delivers to the Registrar information
indicating completion of the liquidation process.
(2) A request that a company be removed from the register under
subsection (1) (d) may be made on the grounds—
(a) that the company has ceased to carry on business, has
discharged in full its liabilities to all its known creditors, and has
distributed its surplus assets in accordance with its constitution
and this Act; or
(b) that the company has no surplus assets after paying its debts
in full or in part, and no creditor has applied to the Court for an
order putting the company into liquidation.
(3) A request that a company be removed from the register under
subsection (1) (d) shall be accompanied by a written notice from the
Malaŵi Revenue Authority stating that there is no objection to the
company being removed from the register.
(4) The Registrar shall not remove a company from the register
under subsection (1) (b) unless—
(a) the Registrar has issued a notice; and
(b) the company has satisfied the Registrar that it is carrying
on business or that reasons exist for the company to continue in
existence.
(5) The Registrar shall not remove a company from the register
under subsection (1) (c) or (e) unless—
(a) the Registrar is satisfied that notice of intention to remove the
company from the register has been given under section 349; and
(b) the Registrar—
(i) is satisfied that no person has objected to the removal
under section 350; or
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(ii) where an objection to the removal has been received,
has complied with section 351.
Requirement
for the
Registrar
to give the
company
notice of
intention
349.—(1) Before removing a company from the register under
section 348 (1) (b), the Registrar shall—
(a) give notice to the company in accordance with
subsection (2);
(b) give notice of the matters set out in subsection (3) to any
person who is entitled to register a charge; and
(c) give notice in the Gazette of the matters set out in
subsection (3).
(2) The notice to be given under subsection (1) (a) shall—
(a) state the section under, and the grounds on, which it is
intended to remove the company from the register; and
(b) state that, unless—
(i) by the date specified in the notice, which shall not be less
than twenty-eight days after the date of the notice, the company
satisfies the Registrar by notice in writing that it is still carrying
on business or there is other reason for it to continue in
existence; or
(ii) the Registrar shall not proceed to remove the company
from the register under section 351, the company shall be
removed from the register.
(3) The notice to be given under subsections (1) (b) and (c) shall
specify—
(a) the name of the company and its registered office;
(b) the section under, and the grounds on, which it is intended
to remove the company from the register; and
(c) the date by which an objection to the removal under
section 348 shall be delivered to the Registrar, which shall not be
less than twenty-eight days after the date of the notice.
Objection to
removal from
the register
350.—(1) Where a notice is given of an intention to remove a
company from the register, any person may deliver to the Registrar,
not later than the date specified in the notice, an objection to the
removal on grounds that—
(a) the company is still carrying on business or there is other
reason for it to continue in existence;
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(b) the company is a party to legal proceedings;
(c) the company is in receivership, or liquidation, or both;
(d) the person is a creditor, or a shareholder, or a person who
has an undischarged claim against the company;
(e) the person believes that there exists, and intends to pursue,
a right of action on behalf of the company under this Act; or
(f) for any other reason, it would not be just and equitable to
remove the company from the register.
(2) Where a person delivers an objection under subsection (1)—
(a) the person shall at the same time, serve a copy of same on
the company;
(b) file proof of the ground of objection with the Registrar
within six weeks of the date of the objection and shall, at the same
time, serve a copy thereof on the company.
(3) Where a person fails to comply with subsection (2), the
objection delivered under subsection (1) shall be deemed to have
lapsed.
(4) For the purposes of subsection (1) (d)—
(a) a claim by a creditor against a company is not an
undischarged claim where—
(i) the claim has been paid in full;
(ii) the claim has been paid in part under a compromise
entered into under this Act or by being otherwise compounded
to the reasonable satisfaction of the creditor;
(iii) the claim has been paid in full or in part by a receiver
or a liquidator in the course of a completed receivership or
liquidation; or
(iv) a receiver or a liquidator has notified the creditor that the
assets of the company are not sufficient to enable any payment
to be made to the creditor; and
(b) a claim by a shareholder or any other person against a
company is not an undischarged claim unless—
(i) payment has been made to the shareholder or that person
in accordance with a right under the company’s constitution or
this Act to receive or share in the company’s surplus assets; or
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(ii) a receiver or liquidator has notified the shareholder or
that person that the company has no surplus assets.
Duties of
Registrar
where
objection
received
351.—(1) Where an objection to the removal of a company from
the register is made on a ground specified in section 350 (1) (a), (b),
or (c), the Registrar shall not proceed with the removal unless the
Registrar is satisfied that—
(a) the objection has been withdrawn;
(b) any facts on which the objection is based are not, or are no
longer, correct; or
(c) the objection is frivolous or vexatious.
(2) Where an objection to the removal of a company from the
register is made on a ground specified in section 350 (1) (d), (e), or
(f), the Registrar shall give notice to the person objecting that, unless
notice of an application to the Court by that person for an order—
(a) that the company be put into liquidation; or
(b) that, on any ground specified in section 350, the company
shall not be removed from the register, is served on the Registrar
not later than twenty-eight days after the date of the notice, the
Registrar intends to proceed with the removal.
(3) Where—
(a) notice of an application to the Court under subsection (2) is
not served on the Registrar;
(b) the application is withdrawn; or
(c) on the hearing of such an application, the Court refuses
to grant either an order putting the company into liquidation or
an order that the company not be removed from the register, the
Registrar shall proceed with the removal.
(4) Every person who makes an application to the Court under
subsection (2) shall give the Registrar notice in writing of the
decision of the Court within seven days of the decision.
(5) The Registrar shall send—
(a) a copy of an objection under section 350;
(b) a copy of a notice given by or served on the Registrar under
this section; and
(c) where the company is removed from the register, notice of
the removal, to a person who sent or delivered to the Registrar
a request that the company be removed from the register under
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section 348 (1) (d) or, while acting as liquidator, sent or delivered
to the Registrar the documents referred to in section 348 (1) (e).
352.—(1) Any property which, immediately before the removal Circumstances
of a company from the register of companies, had not been distributed where
property of
or disclaimed, shall vest in a Consolidated Fund established by the the company
removed from
Registrar with effect from the removal of the company from the the register
vests in the
register.
(2) The Registrar shall, forthwith on becoming aware of the
vesting of the property—
state
(a) inform the Registrar of the High Court; and
(b) give public notice in daily newspapers in wide circulation
in Malaŵi, of the vesting, setting out the name of the former
company and particulars of the property.
(3) Where any property is vested in the Consolidated Fund under
this section, a person who would have been entitled to receive all or
part of the property, or payment from the proceeds of its realization,
if it had been in the hands of the company immediately before the
removal of the company from the register of companies, or any other
person claiming on behalf of that person, may apply to the Court for
an order—
(a) vesting all or part of the property in that person; or
(b) for payment to that person of compensation of an amount
not greater than the value of the property.
(4) On an application made under subsection (3), the Court may—
(a) decide any question concerning the value of the property,
the entitlement of any applicant to the property or to compensation,
and the apportionment of the property or compensation among
two or more applicants;
(b) order that the hearing of two or more applications be
consolidated;
(c) order that an application be treated as an application on
behalf of all persons, or all members of a class of persons, with an
interest in the property; or
(d) make an ancillary order.
(5) Any compensation ordered to be paid under subsection (3)
shall be paid out of the Consolidated Fund without further
appropriation.
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(6) For purposes of this section, “property” includes leasehold
rights and all other rights vested in or held on behalf of or on trust for
the company prior to its removal (referred to as “former company”)
but does not include property held by the former company on trust
for any other person.
General power
to restore to
the register
353.—(1) A company shall be restored to the register of companies
when a notice signed by the Registrar stating that the company is
restored to the register is registered under this Act.
(2) A company that is restored to the register shall be deemed to
have continued in existence as if it had not been removed from the
register.
Division V—Dormant Companies
Meaning
of dormant
company
354.—(1) For the purposes of this Part, a company—
(a) shall be a dormant company for any period during which
no significant accounting transaction occurs in relation to the
company; and
(b) shall cease to be a dormant company when any significant
accounting transaction occurs in relation to the company.
(2) In this Part—
(a) no significant accounting transaction shall be deemed to
have occurred unless it is a transaction which is required to be
entered in the accounting records of the company;
(b) a significant accounting transaction shall not include—
(i) any transaction which arises from the issue to a subscriber,
of shares in the company in respect of the application for
incorporation;
(ii) the payment of bank charges, licence fees or any other
compliance costs.
Company may
be recorded
in the register
as dormant
company
355.—(1) Where a company has—
(a) been dormant from the time of its formation; or
(b) has been dormant since the end of its previous accounting
period, and is not required to prepare group accounts for that
period, the company may, by a special resolution passed at a
meeting of shareholders of the company at any time after copies
of the annual accounts and reports for that year have been duly
sent to shareholders, declare itself to be a dormant company.
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(2) A company shall not declare itself to be a dormant company
where it is a company formed for the business of banking or insurance.
(3) The company shall, within fourteen days of the passing of
the special resolution referred to in subsection (1), give notice to the
Registrar of the passing of that resolution and the Registrar shall, on
receipt of that resolution for registration, record the company in the
register as being a dormant company.
(4) Where a company which has declared itself to be a dormant
company under subsection (1) ceases to be dormant, the company
shall, within fourteen days of any significant accounting transaction
taking place which has resulted in the company ceasing to be
dormant, give notice to the Registrar that the company has ceased to
be dormant.
(5) Where the Registrar receives a notice under subsection (4), he
shall enter in the register of companies the fact that the company has
ceased to be dormant.
356. Any company, which is recorded by the Registrar as being a Exemption
dormant company, shall, for so long as it continues to be a dormant available
to dormant
companies
company—
(a) be exempted from the requirement of having its accounts
audited; and
(b) be exempted from the payment of specified fees.
PART XV
Foreign Companies
357. Notwithstanding the generality of section 358, this Part shall Application of
apply to a foreign company only if it has a place of business or is this Part
carrying on business in Malaŵi.
358. For the purposes of this Part—
(a) a reference to a foreign company carrying on business in
Malaŵi includes a reference to the foreign company—
Meaning of
carrying on
business
(i) establishing or using a share transfer office or a share
registration office in Malaŵi; or
(ii) administering, managing, or dealing with property
in Malaŵi as an agent, or personal representative, or trustee,
and whether through its employees or an agent or in any other
manner;
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(b) a foreign company shall not be held to carry on business in
Malaŵi merely because in Malaŵi it—
(i) is or becomes a party to a legal proceeding or settles a
legal proceeding or a claim or dispute;
(ii) holds meetings of its directors or shareholders or carries
on other activities concerning its internal affairs;
(iii) maintains a bank account;
(iv) effects a sale of property through an independent
contractor;
(v) solicits or procures an order that becomes a binding
contract only if the order is accepted outside Malaŵi;
(vi) creates evidence of a debt or creates a charge on property;
(vii) secures or collects any of its debts or enforces its rights
in relation to securities relating to those debts;
(viii) conducts an isolated transaction that is completed
within a period of thirty-one days, not being one of a number of
similar transactions repeated from time to time; or
(ix) invests its funds or holds property.
Availability of
name before
carrying on
business
359.—(1) A foreign company shall not carry on business in
Malaŵi on or after the commencement of this Act unless the name of
the foreign company is available.
(2) A foreign company registered under this Part that carries on
business in Malaŵi shall not change its name unless the name is
available.
(3) Sections 16 to 20 shall apply, subject to any necessary modifications
to the reservation of the name, if any, of a foreign company, in the
same way as they apply to the registration of companies under this Act
and to the change of names of companies registered under this Act.
(4) Where a foreign company contravenes this section, the
company and every director of the company commits an offence and
is liable to a fine as provided in the prevailing schedule of penalties.
Registration
of foreign
companies
360.—(1) Every foreign company shall, within thirty days after it
establishes a place of business or commences to carry on business in
Malaŵi, file with the Registrar—
(a) a duly authenticated copy of the certificate of its
incorporation or registration in its place of incorporation or origin
or a document of similar effect;
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(b) a duly authenticated copy of its constitution, charter, statute
or memorandum and articles or other instrument constituting or
defining its constitution;
(c) a list of its directors containing similar particulars with
respect to directors as are, by this Act, required to be contained in
the register of the directors and secretaries of a company;
(d) where the list includes directors resident in Malaŵi who
are members of the local Board of directors of the company, a
memorandum duly executed by or on behalf of the foreign
company stating the powers of the local directors;
(e) a memorandum of appointment or power of attorney under
the seal of the foreign company or executed on its behalf in
such manner as to be binding on the company, stating the names
and addresses of two or more persons resident in Malaŵi, not
including a foreign company, authorized to accept on its behalf
service of process and any notices required to be served on the
company;
(f) notice of the situation of its registered office in Malaŵi
and, unless the office is open and accessible to the public during
ordinary business hours on each day, other than Saturdays and
public holidays, the days and hours during which it is open and
accessible to the public; and
(g) a declaration made by the authorized agents of the company.
(2) Where a memorandum of appointment or power of attorney
filed under subsection (1) (e) is executed by a person on behalf of
the company, a duly authenticated copy of the deed or document
by which that person is authorized to execute the memorandum of
appointment or power of attorney shall be filed.
(3) Where a foreign company has complied with subsection (1),
the Registrar shall, subject to section 363 register the company under
this Part and shall issue a certificate in the prescribed form.
(4) Where any document required to be submitted in not in the
English language, the Registrar may require a copy of the document
translated into English language and duly authenticated in accordance
with the Authentication of Documents Act.
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361.—(1) A foreign company shall have a registered office in Registered
and
Malaŵi to which all communications and notices may be addressed office
authorized
and which shall be open and accessible to the public for not less than agents
four hours on every day other than a Saturday, Sunday or a public
holiday.
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(2) An authorized agent shall, until he ceases to be such in
accordance with subsection (4)—
(a) continue to be the authorized agent of the company;
(b) be answerable for the doing of all such acts, matters and
things as are required to be done by the company by or under this
Act.
(3) A foreign company or its authorized agent may file with the
Registrar a written notice stating that the authorized agent has ceased
to be the authorized agent or shall cease to be the authorized agent on
a date specified in the notice.
(4) The authorized agent in respect of whom the notice has been
filed shall cease to be an authorized agent—
(a) on the expiry of a period of twenty-one days after the date
of filing of the notice or on the date of the appointment of another
authorized agent, the memorandum of whose appointment has
been filed in accordance with subsection (5), whichever is earlier;
or
(b) where the notice states a date on which he or she is to so
cease and the date is later than the expiry of that period, on that
date.
(5) Where an authorized agent ceases to be the authorized agent
and the company is then without an authorized agent in Malaŵi, the
company shall, where it continues to carry on business or has a place
of business in Malaŵi, within twenty-one days after the authorized
agent ceased to be one, appoint an authorized agent.
(6) On the appointment of a new authorized agent the company
shall file with the Registrar a memorandum of the appointment.
Return of
alterations
362.—(1) Where any change or alteration is made in—
(a) the constitution, charter, statutes, memorandum or articles
or other instrument filed;
(b) the directors;
(c) the authorized agents or the address of an authorized agent;
(d) the situation of the registered office in Malaŵi or of the
days or hours during which it is open and accessible to the public;
(e) the address of the registered office in its place of
incorporation or origin;
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(f) the name of the company; or
(g) the powers of any directors resident in Malaŵi who are
members of the local Board of directors, the foreign company
shall, within thirty days file with the Registrar particulars of the
change or alteration.
(2) Where a foreign company increases its stated share capital
or authorized share capital as applicable, it shall, within thirty days
file with the Registrar a notice of the amount from which and of the
amount to which it has been so increased.
(3) Where a foreign company not having a stated share capital
increases the number of its members beyond the registered number it
shall, within thirty days file with the Registrar a notice of the increase.
(4) Where an order is made by a Court under any law in force
in the country in which a foreign company is incorporated which
corresponds to orders made under Part XII, the company shall,
within thirty days, file with the Registrar a copy of the order.
363. On the registration of a foreign company under this Part or Registrar’s
the filing with the Registrar of particulars of a change or alteration certificate
in a matter referred to in section 362 the Registrar shall issue a
certificate to that effect.
364. A failure by a foreign company to comply with section 164 Validity of
and section 347 shall not affect the validity or enforceability of any transactions
not affected
transaction entered into by the foreign company.
365.—(1) Every foreign company shall, in every calendar year— Financial
(a) make out a balance sheet and profit and loss account in such
form, containing such particulars including documents relating to
every subsidiary company of the foreign company, as under the
provisions of this Act it would, if it had been a company within the
meaning of this Act, have been required to make; and
statements
(b) deliver a copy of those documents to the Registrar.
(2) The Minister may, by order, direct that, in the case of any
foreign company or class of foreign companies, the requirements
of subsection (a) shall not apply, or shall apply subject to such
exceptions and modifications as may be specified.
366. A foreign company shall file with the Registrar in each year Notice by
at the time its financial statements are filed, a notice containing foreign
company of
particulars with respect to the business being carried out by the particulars of
its business in
company in Malaŵi.
Malaŵi
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Name and
country of
incorporation
367.—(1) Except with the written consent of the Minister, a
foreign company shall not be registered by a name or an altered name
that, in the opinion of the Registrar, is undesirable or is a name, or
a name of a kind, that he has directed the Registrar not to accept for
registration.
Companies
(2) No foreign company shall use in Malaŵi any name other than
that under which it is registered.
(3) Every foreign company shall—
(a) conspicuously exhibit on the outside of every office or place
where it carries on business in Malaŵi the name of the company
and the country in which it is incorporated, in letters easily legible
in English characters, and also in the characters of the language
or one of the languages in general use in the locality in which the
office or place is situate;
(b) cause the name of the company and of the country in
which the company is incorporated, to be stated in legible English
characters in all business and other official publications of the
company; and
(c) if the liability of the members of the company is limited,
cause notice of that fact—
(i) to be stated in every such prospectus in all business and
other official publications of the company, in legible English
characters; and
(ii) to be conspicuously exhibited on the outside of every
office or place where it carries on business in Malaŵi, in legible
English characters and also in legible characters of the language
or one of the languages in general use in the locality in which
the office or place is situate.
Branch
registers
368.—(1) Subject to the other provisions of this section, a foreign
company which has a share capital and has a shareholder resident
in Malaŵi shall keep at its registered office in Malaŵi or at some
other place in Malaŵi a branch register for the purpose of registering
shares of shareholders resident in Malaŵi who apply to have the
shares registered therein.
(2) The company shall not be obliged to keep a branch register
until after the expiry of two months from the receipt by it of a written
application by a shareholder resident in Malaŵi for registration of his
shares.
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(3) This section shall not apply to a foreign company which by
its constitution prohibits an invitation to the public to subscribe for
shares in the company.
(4) (a) Every branch register shall be kept in the manner
provided by section 145 and any transfer shall be effected in the
same manner.
(b) Every transfer registered at its registered office in Malaŵi
shall be binding on the company and the Court shall have the same
powers in relation to rectification of the register as it has under
section 151.
(5) Where a foreign company opens a branch register, it shall,
within fourteen days of the date the branch register is opened, file
with the Registrar a notice to that effect specifying the address where
the register is kept.
(6) Where any change is made in the place where the register is
kept or where the register is discontinued, the company shall, within
fourteen days of the date of the change, file with the Registrar a
notice to that effect.
(7) Where a company or corporation is entitled under a law of
the place of incorporation of a foreign company to give notice to
a dissenting shareholder in that foreign company that it desires to
acquire any of his shares registered on a branch register kept in
Malaŵi, this section shall cease to apply to that foreign company
until—
(a) the shares have been acquired; or
(b) the company or corporation has ceased to be entitled to
acquire the shares.
(8) On application made in that behalf by a member resident in
Malaŵi, the foreign company shall register in its branch register the
shares held by a member which are registered in any other register
kept by the company.
(9) On application made in that behalf by a member holding
shares registered in a branch register, the foreign company shall
remove the shares from the branch register and register them in such
other register within Malaŵi as is specified in the application.
(10) Part III of this Act shall apply with such adaptations and
modifications as may be necessary to the register and branch register
of a foreign company.
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(11) A branch register shall be prima facie evidence of any matters
under this Part directed or authorized to be inserted therein.
(12) A certificate under the seal of a foreign company or signed
by a director of the company specifying any shares held by any
shareholder of that company and registered in the branch register
shall be prima facie evidence of the title of the shareholder to the
shares and the registration of the shares in the branch register.
Cessation of
business in
Malaŵi
369.—(1) Where a foreign company ceases to have a place of
business or to carry on business in Malaŵi, it shall, within seven
days of the date of the cessation, file with the Registrar a notice
to that effect, and as from the day on which the notice is filed, its
obligation to file any document other than a document that ought to
have been filed shall cease, and the Registrar shall on the expiry of
three months after the filing of the notice remove the name of the
company from his or her register.
(2) Where a foreign company goes into liquidation or is dissolved
in its place of incorporation or origin—
(a) every person who immediately before the commencement
of the liquidation proceedings was an authorized agent shall,
within one month after the commencement of the liquidation or
the dissolution, file or cause to be filed with the Registrar a notice
to that effect and, where a liquidator is appointed, notice of the
appointment; and
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(b) the liquidator shall, until a liquidator for Malaŵi is
appointed by the Court, under the Insolvency Act, have the powers
and functions of a liquidator for Malaŵi.
(3) A liquidator of a foreign company appointed under the
provisions of the Insolvency Act, shall—
(a) before any distribution of the foreign company’s assets is
made, by advertisement in a newspaper circulating generally in
each country where the foreign company had been carrying on
business before the liquidation and where no liquidator has been
appointed for that place, invite all creditors to make their claims
against the foreign company within a reasonable time before the
distribution;
(b) not, subject to subsection (7), without leave of the Court,
pay out any creditor to the exclusion of any other creditor;
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(c) unless the Court otherwise directs, only recover and realize
the assets of the foreign company in Malaŵi and shall, subject
to paragraph (b) and to subsection (7), pay the net amount so
recovered and realized to the liquidator of that foreign company
in the place where it was formed or incorporated after paying
any debts and satisfying any liabilities incurred in Malaŵi by the
foreign company.
(4) Where a foreign company has been wound up so far as its
assets in Malaŵi are concerned and there is no liquidator for the
place of its incorporation or origin, the liquidator may apply to the
Court for directions as to the disposal of the net amount recovered
under subsection (3).
(5) On receipt of a notice from an authorized agent, that the
company has been dissolved, the Registrar shall remove the name of
the company from his register.
(6) Where the Registrar has reasonable cause to believe that
a foreign company has ceased to carry on business or to have a
place of business in Malaŵi, Division IV of Part XIII shall, with
such adaptations and modifications as may be necessary, apply to a
foreign company as they apply to a company.
370. For the purposes of this Part—
(a) the expression “certified” means certified in the prescribed
manner to be a true copy or a correct translation;
Interpretation
in this Part
(b) the expression “director”, in relation to a foreign company,
has the same meaning as in section 158 of this Act; and
(c) the expression “place of business” includes a share transfer
or share registration office.
371. No person shall issue, circulate or distribute in Malaŵi Prospectus
any prospectus offering to subscribe for securities of a company
incorporated or to be incorporated outside Malaŵi, whether the
company has or has not established, or when formed will or will not
establish, a place of business in Malaŵi save than in accordance with
Part XI of this Act.
PART XVI
Service of Documents
372.—(1) A document in any legal proceedings may be served on
a company—
Service of
documents
on company
in legal
proceedings
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(a) by delivery to a person named as a director of the company
on the register of companies;
(b) by delivery to an employee of the company at the company’s
head office or principal place of business;
(c) by leaving it at the company’s registered office or address
for service;
(d) by serving it in accordance with any directions as to service
given by the Court having jurisdiction in the proceedings; or
(e) in accordance with an agreement made with the company.
(2) The methods of service specified in subsection (1) are,
notwithstanding any other enactment, the only methods by which
a document in legal proceedings may be served on a company in
Malaŵi.
Service
of other
documents on
company
373. A document, other than a document in any legal proceedings,
may be served on a company—
(a) by any of the methods set out in section 372 (1) (a), (b), (c)
or (e);
(b) by posting it to the company’s registered office or address
for service or delivering it to a post office box which the company
is using at the time;
(c) by sending it by facsimile machine to a telephone number
used for the transmission of documents by facsimile at the
company’s registered office or address for service or its head
office or principal place of business.
Service of
documents
on foreign
company
in legal
proceedings
374.—(1) A document in any legal proceedings may be served on
a foreign company in Malaŵi as follows—
(a) by delivery to a person named in the register as a director of
the foreign company and who is resident in Malaŵi;
(b) by delivery to a person named in the register as being
authorized to accept service in Malaŵi of documents on behalf of
the foreign company;
(c) by delivery to an employee of the foreign company at the
foreign company’s place of business in Malaŵi or, if the foreign
company has more than one place of business in Malaŵi, at the
foreign company’s principal place of business in Malaŵi;
(d) by serving it in accordance with any directions as to service
given by the Court having jurisdiction in the proceedings; or
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(e) in accordance with an agreement made with the foreign
company.
(2) The methods of service specified in subsection (1) are
notwithstanding any other enactment, the only methods by which a
document in legal proceedings may be served on a foreign company
in Malaŵi.
375. A document other than a document in any legal proceedings, Service
of other
may be served on a foreign company—
documents
on foreign
(a) by any of the methods set out in section 372 (1) (a), (b), (c) company
or (e);
(b) by posting it to the address of the foreign company’s
principal place of business in Malaŵi or delivering it to a post
office box which the foreign company is then using at the time; or
(c) by sending it by facsimile machine to a telephone number
used for the transmission of documents by facsimile at the
principal place of business in Malaŵi of the foreign company.
376.—(1) A notice, statement, report, accounts, or other document Service of
on
to be sent to a shareholder or creditor who is a natural person may— documents
shareholders
(a) be delivered to that person;
and creditors
(b) be posted to that person’s address or delivered to a post
office box which that person is using at the time;
(c) be sent by facsimile machine to a telephone number used
by that person for the transmission of documents by facsimile; or
(d) subject to subsection (5), be sent by email or other electronic
form of communication to the address provided by that person for
the transmission of documents by electronic means.
(2) A notice, statement, report, accounts, or other document to
be sent to a shareholder or creditor that is a company or a foreign
company may be sent by any of the methods of serving documents
referred to in section 374 or 376 as the case may be.
(3) A notice, statement, report, accounts, or other document to be
sent to a creditor that is a body corporate, not being a company or a
foreign company, may—
(a) be delivered to a person who is a principal officer of the
body corporate;
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(b) be delivered to an employee of the body corporate at
the principal office of principal place of business of the body
corporate;
(c) be delivered in such manner as the Court directs;
(d) be delivered in accordance with an agreement made with
the body corporate;
(e) be posted to the address of the principal office of the body
corporate or delivered to a box at a document exchange which the
body corporate is using at the time;
(f) be sent by facsimile machine to a telephone number used
for the transmission of documents by facsimile at the principal
office or principal place of business of the body corporate; or
(g) subject to subsection (5), be sent by email or other electronic
form of communication to the address provided by that person for
the transmission of documents by electronic means.
(4) Where a liquidator sends documents—
(a) to the last known address of a shareholder or creditor who
is a natural person; or
(b) to the address for service of a shareholder or creditor that
is a company and the documents are returned unclaimed three
consecutive times, the liquidator need not send further documents
to the shareholder or creditor until the shareholder or creditor
gives notice to the company of his new address.
(5) A document may be sent under subsection (1) (d) or (3) (g) by
electronic means of communication provided that—
(a) the shareholder has consented in writing to that form
of communication being used by the company or other person
providing the communication; and
(b) the shareholder or creditor has provided an electronic
address to which such communication may be sent.
Additional
provisions
relating to
service
(6) Any consent under subsection (5) may be revoked at any time
on the provision of five days’ notice in writing to the person sending
the document.
377.—(1) Subject to subsection (2), for the purposes of
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sections 372 to 376—
(a) where a document is to be served by delivery to a natural
person, service shall be made—
(i) by handing the document to the person; or
(ii) where the person refuses to accept the document, by
bringing it to the attention of, and leaving it in a place accessible
to, the person;
(b) a document posted or delivered to a post office box is
deemed to be received within seven days, or any shorter period as
the Court may determine in a particular case, after it is posted or
delivered;
(c) a document sent by facsimile machine is deemed to have
been received on the working day following the day on which it
was sent;
(d) in proving service of a document by post or by delivery to a
post office box it shall be sufficient to prove that—
(i) the document was properly addressed;
(ii) all postal or delivery charges were paid; and
(iii) the document was posted or was delivered to any
document exchange facility;
(e) in proving service of a document by facsimile machine, it is
sufficient to prove that the document was properly transmitted by
facsimile to the person concerned.
(2) A document shall not be deemed to have been served or sent
or delivered to a person where the person proves that, through no
fault on the person’s part, the document was not received within the
time specified.
PART XVII
Miscellaneous
378.—(1) No company, association or partnership consisting of Prohibition
large
more than twenty persons shall be formed for the purpose of carrying of
partnerships
on any business that has for its object the acquisition of gain by the
company, association or partnership, or by the individual members
thereof, unless it is registered as a company under this Act, or is
formed in pursuance of any other enactment.
(2) Subsection (1) shall not apply to the formation of any
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association, or partnership for carrying on any regulated professions.
Jurisdiction
379. The High Court of Malaŵi shall have jurisdiction to try an
offence under this Act and any subsidiary enactment made under
this Act.
Periodic
information to
the Minister
of Lands
on status of
shareholding
of companies
in Malaŵi
380.—(1) The Registrar shall, at the beginning of each calendar
year, furnish the Minister of Lands with information regarding the
status of shareholding of companies in Malaŵi.
(2) The information under subsection (1) shall include—
(a) membership of the company;
(b) nationality of the members of the company; and
(c) whether the company is Malaŵian or foreign owned.
General
penalty
381. A person who is convicted of an offence under this Act
for which no specific penalty is provided shall be liable to a fine
of K5,000,000, or to an amount equivalent to the financial gain
generated by the offence or the loss suffered due to the offence as the
case may be, whichever is greater.
Regulations,
rules, etc.
382.—(1) The Minister may make regulations for carrying out or
giving effect to the provisions of this Act.
(2) Without prejudice to the generality of subsection (1), the
regulations may prescribe—
(a) forms;
(b) time periods;
(c) information required;
(d) fees;
(e) access to confidential information;
(f) model memorandum articles of association for companies;
(g) the keeping of accounting records outside Malaŵi by
companies;
(h) procedures relating to the exercise by the Registrar of any
powers conferred on him;
(i) electronic registration of companies and filing of documents;
and
(j) such other matters as are necessary or conducive for the
better carrying out of the provisions of this Act.
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(3) The Chief Justice may make rules with respect to proceedings,
and the practice and procedures of the Court under this Act.
(4) Notwithstanding section 21 (e) of the General Interpretation Cap. 1:01
Act, the regulations or rules made under this section may create
offences in respect of any contraventions of the regulations or rules
and may, for any such offences, impose a fine of up to K5,000,000,
and to imprisonment for twelve months.
(5) The Registrar of Financial Institutions may issue directives
for any matter required to be prescribed by him under this Act.
383.—(1) The Companies Act is hereby repealed.
(2) Any subsidiary legislation made under the Act repealed by
subsection (1) in force immediately before the commencement of
this Act—
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Cap. 46:03
(a) shall remain in force, unless in conflict with this Act, and
shall be deemed to be subsidiary legislation made under this Act;
and
(b) may be replaced, revoked, or amended by subsidiary
legislation made under this Act.
(3) Any approval given, or authorization granted, and in force or
any act or thing done under the Act repealed by subsection (1), shall
be deemed to have been given, granted or done under the relevant
provisions of this Act, and any such approval or authorization shall
remain valid for the period specified therein.
(4) Any fee, charge or any sum paid or unpaid under the
Companies Act repealed by subsection (1) shall, in respect of the Cap. 46.03
corresponding period, be deemed to have been paid or unpaid under
the provisions of this Act.
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[Subsidiary]
Companies
Companies (Shareholder’s Code of Conduct) Order
SUBSIDIARY LEGISLATION
COMPANIES (SHAREHOLDER’S CODE
OF CONDUCT) ORDER
G.N. 27/2016
under ss. 73 and 74
Citation
1. This Order may be cited as the Companies (Shareholder’s
Code of Conduct) Order.
Scope of the
Order
2. This Order prescribes codes of conduct for shareholders of a
private and public companies under sections 73 and 74.
Codes of
conduct for
shareholders
Schedule
3.—(a) The code of conduct for shareholders of a private company
shall be as prescribed in Part A of the Schedule to this Order.
Schedule
(b) The shareholder’s code of conduct for public company
shall be as prescribed in Part B of the Schedule to this Order.
para. 3
SCHEDULE
PART A
Code of Conduct for Shareholders of a Private Company This Code
is applicable to all Private Companies
Interpretation
Exemption
from holding
an annual
general
meeting
Resolution
of a private
company to
comply with
the Act
1. Any term used in this Code, and which has been defined in the Act has
the meaning ascribed to that term under the Act.
2. A private company need not hold an annual general meeting.
3.—(1) Where a private company elects to hold an annual general
meeting, the procedures relating to meetings under the Act shall apply
accordingly.
(2) A resolution of a private company shall be validly passed at a general
meeting if—
(a) a notice of the meeting and of the resolution is given to the
members; and
(b) the meeting is held and conducted in accordance with the
provisions of this Act and the company’s constitution.
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[Subsidiary]
4.—(1) A private company shall, where requested, send a copy of its Circulation
of resolutions
resolutions to every eligible member—
and related
(a) by hard copy to the member’s last known address; or
expenses
(b) in electronic format to a member’s electronic address.
(2) The expenses of a company in complying with subsection (1) shall
be met by the members who request the circulation of the resolution unless
the company resolves otherwise.
(3) Electronic address means any address or number used for the
purposes of sending or receiving documents or information by electronic
means.
5. Where in the provisions of this Code a reference is made to a resolution Resolution
an
of a company which is not specified, the resolution shall be deemed to be deemed
ordinary
an ordinary resolution unless the company’s constitution require a higher resolution
unless
majority or unanimity, in which case it shall be a special resolution.
specified
6.—(1) An ordinary resolution means a resolution passed by a simple Ordinary
majority of votes cast by such members of the company, as being entitled resolution
to do so, voting in person or by proxy at a general meeting, or such higher
majority as is required by the company’s resolution.
(2) Anything that may be done by ordinary resolution may also be done
by special resolution.
7.—(1) A special resolution means a resolution passed by a majority Special
of seventy-five per cent or, if a higher majority is required by a company’s resolutions
constitution, that higher majority, of the votes of those shareholders entitled
to vote and voting on the matter which is the subject of the resolution.
(2) The notice for a meeting to pass a special resolution shall include the
text of the resolution and specify the intention to propose the resolution as
a special resolution.
(3) At any meeting at which a special resolution is passed, a declaration
by the chairperson that the resolution is so passed, shall, unless a poll is
demanded, be conclusive evidence of that fact without proof of the number
or proportion of the votes recorded in favour or against the resolution.
(4) All special resolutions under this Code may be rescinded only by a
special resolution except where the resolution relates to the liquidation of
the company.
8.—(1) The manner of voting in a meeting of a private company shall Voting to be
by show of
be by the show of hands.
hands or poll
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Companies (Shareholder’s Code of Conduct) Order
(2) A declaration by a chairperson of a meeting that a resolution is
carried by the requisite majority shall be conclusive evidence of that fact
unless a poll is demanded.
(3) A poll may be demanded either before or after a vote is taken on a
resolution by—
(a) a shareholder or shareholders representing not less than ten per
cent of the total voting rights of all shareholders having the right to vote
at a meeting;
(b) a shareholder or shareholders holding shares in a company that
confer a right to vote at a meeting and on which the aggregate amount
paid up is not less than ten per cent of the total amount paid up on all
shares that confer that right; or
(c) a chairperson of the meeting.
(4) The chairperson may withdraw a poll.
(5) A poll shall be taken in such manner as the chairperson directs and
the result shall be deemed to be the resolution of the meeting at which the
poll is demanded.
(6) With a poll, votes shall be counted according to the votes attached
to the shares of each shareholder present in person or by proxy and
voting.
(7) A chairperson of a shareholders’ meeting shall not be entitled to a
casting vote.
Proxies and
electronic
voting
9.—(1) A shareholder may exercise the right to vote by being present in
person or by appointing a proxy or by voting electronically.
(2) A proxy form shall be sent with each notice calling a meeting of the
company.
(3) A proxy for a shareholder may attend and be heard at a meeting of
shareholders as if the proxy was the shareholder.
(4) A proxy shall be appointed by notice in writing signed by the
shareholder and the notice shall state whether the appointment is for a
particular meeting or a specified term.
(5) No proxy shall be effective in relation to a meeting unless—
(a) a copy of the notice of appointment is produced before the start
of the meeting; and
(b) any power of attorney, or other authority under which the proxy
is signed, is produced.
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(6) An instrument appointing a proxy shall be in writing under the
hand of the appointer or of his agent duly authorized in writing or, in
the case of a company, under the hand of an officer or of an agent duly
authorized.
(7) An instrument appointing a proxy shall be in the following
form—
I/We .................................... of ........................, being shareholders of
the above named company, hereby appoint ............................... or failing
him/her, ........................ of ........................ as my/our proxy to vote for me/
us at the meeting of the company to be held on ........................ and at any
adjournment of the meeting.
Signed this ........................ day of ........................, 20.....
(8) A constitution of a company may provide that the instrument
appointing a proxy shall not be effective unless it is produced by a specified
time before the start of a meeting where the time specified is not earlier than
twenty-four hours before the start of the meeting.
(9) Where a company sets up an electronic interface in the conduct of its
meetings, any member absent who follows the proceedings by way of such
electronic communication shall also vote accordingly.
10.—(1) In the case of joint holders of shares of a company, only a vote Votes of joint
of
of a senior holder who votes, or any proxies duly authorized by him, may holders
shares
be counted by the company.
(2) For the purposes of this section, a senior holder of a share is
determined by the order in which the names of the joint holders appear in
the register of members.
(3) Subsections (1) and (2) have effect subject to any provision of the
company’s constitution.
11. Nothing in this section shall affect—
(a) any of the provisions of a company’s constitution—
(i) requiring an objection to a person’s entitlement to vote on a
resolution to be made in accordance with the constitution; and
Determination
of the
entitlement
to vote in the
constitution
(ii) for the determination of any such objection to be final and
conclusive; or
(b) the grounds on which such a determination may be questioned in
legal proceedings.
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Duty to keep
records of
meetings and/
or resolutions
12.—(1) A company shall cause to be kept, as part of its records, the
minutes of all its meetings as well as resolutions that are passed in those
meetings in electronic or hard copy format.
(2) All the records of the company shall be kept for at least ten years
from the time when they are created.
(3) This section shall apply notwithstanding any contrary provision in
any constitution adopted by a company.
PART B
Code of Conduct for Shareholders of a Public Company This Code
is applicable to All Public Companies
Interpretation
1. Any term used in this Code, and which has been defined in the Act,
has the meaning ascribed to that term in the Act.
Annual
general
meeting
2.—(1) Every public company shall in each year hold an annual general
meeting in addition to any other meetings held in that year.
(2) If a company fails to comply with subsection (1), the company and
every officer of the company in default shall be liable to a fine in accordance
with the prevailing schedule of penalties prescribed under section 5 (2) of
the Act.
Resolutions
at general
meetings
3. A resolution of the members of a company shall be deemed to be
validly passed at a general meeting if—
(a) a notice of the meeting and of the resolution is given; and
(b) the meeting is held and conducted in accordance with the
provisions of this Part and the company’s constitution.
Director
may call for
a general
meeting
4. A director of a public company shall have power to call a general
meeting of the company for the better carrying into effect the provisions of
this Code and for the conduct of the company’s business.
Members may
requisition
for a general
meeting
5.—(1) The members of a company may requisition a general meeting
of the company from the directors.
(2) The members required to requisition a meeting pursuant to
subsection (1) shall include—
(a) in the case of a company having share capital, members
representing at least ten per cent of such of the paid-up capital of
the company as carries the right of voting at general meetings of the
company; or
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(b) in the case of a company not having a share capital, members who
represent at least ten per cent of the total voting rights of all the members
having a right to vote at general meetings.
(3) A requisition for a meeting under this section shall—
(a) state the general nature of the business to be dealt with at the
meeting; and
(b) may include the text of a resolution that may properly be
moved and is intended to be passed at the meeting, provided that such
resolution—
(i) shall not be inconsistent with any enactment or the company’s
constitution;
(ii) shall not be defamatory of any person; or
(iii) shall not be frivolous or vexatious.
(4) A requisition for a meeting under this section—
(a) may be in electronic or hard copy format; and
(b) shall be signed by the person or persons making it.
6.—(1) Once the members of a company have requisitioned for a Directors
to call for
general meeting—
meetings
requisitioned
(a) the directors of the company shall call for the general meeting by members
of the company within twenty-one days from the date of receipt of the
requisition; and
(b) the meeting shall be held on a date not more than twenty-eight
days after the date of the notice convening the meeting.
(2) Where a requisition involves a resolution proposed to be passed at a
meeting, such resolution shall be included in a notice of the meeting.
(3) Where a proposed resolution is intended to be a special resolution,
the directors shall comply with the required notice for such meeting as may
be provided in this Code or in the company’s constitution.
7.—(1) Where directors of a company fail or neglect to call for a general Members to call
meetings
meeting as provided in sections 5 and 6, the members who requisitioned for
where directors
for the meeting or any of them representing more than one half of the total are in default
voting rights of all of them, may themselves call for a general meeting.
(2) A general meeting called under this section shall be on a date not
more than three months after the date on which the directors received the
requisition to call for the meeting.
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(3) A general meeting under this section shall be called in the same
manner as, and as nearly as possible to, that in which meetings are required
to be called by the directors.
(4) A company shall reimburse all reasonable expenses incurred by the
members who call for the meeting by reason of the failure of the directors
to so call.
Power of court
to order for
a company
meeting
8.—(1) A court may on its own motion or on the application—
(a) of a director of the company; or
(b) of a member of the company who would be entitled to vote at the
meeting,
order for a meeting of a company to be called, held and conducted in any
manner that the court shall deem fit.
(2) The power of the court under this section shall be exercised where,
for any reason it is impracticable—
(a) to call for a meeting of a company in any manner in which
meetings of that company may be called; or
(d) to conduct a meeting in the manner prescribed by the company’s
constitution or this Code.
(3) A meeting called, held and conducted in accordance with an order
under the powers referred to in this section shall, for all intents and purposes,
be deemed to be a meeting of the company duly called, held and conducted.
Notice of
meetings
9.—(1) Notice of a general meeting of a company shall be given either—
(a) in hard copy format; or
(b) in electronic format.
(2) The notice of a general meeting of a company shall among others
state—
(a) the time and date of the meeting;
(b) the place of the meeting; and
(c) the general nature of the business to be dealt with at the meeting.
(3) Subsection (2) shall have effect subject to the provisions of the
company’s constitution.
Receipt of
notice of
meetings
10.—(1) It shall be the right of—
(a) every member of the company; and
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(b) every director,
to receive the notices of all the meetings of the company.
(2) A member under this section includes any person who is entitled to
a share in consequence of the death or bankruptcy of a member, where the
company has been notified of such entitlement.
(3) This section has effect subject to the provisions of the company’s
constitution as well as the other written laws.
11.—(1) Where a special notice of a resolution is required, the resolution Resolutions
shall not be effective unless notice of the intention to move it has been given requiring
special notice
to the company at least twenty-eight days before the meeting at which it is
moved.
(2) The company shall, where practicable, give its members notice of
any such resolution in the same manner and at the same time as it gives
notice of the meeting.
(3) Where the notice under subsection (2) is not practicable, the
company shall give its members a notice of at least fourteen days before
the meeting—
(a) by advertisement in a newspaper of wide circulation; or
(b) in any other manner as provided by the company’s constitution.
(4) If, after notice of the intention to move a resolution under this section
has been given to a company, a meeting is called for a date twenty-eight
days or less after the notice has been given, the notice is deemed to have
been properly given, though not given within the time required.
12.—(1) Where a company gives notice of—
(a) a general meeting; or
(b) a resolution intended to be moved at a general meeting,
Accident
failure to
give notice of
resolution or
meeting
any accidental failure to give notice to one or more persons shall be
disregarded for the purpose of determining whether notice of the meeting or
resolution, as the case may be, is duly given.
13.—(1) Members of a company may require the company to circulate Members’
to
to members of the company entitled to receive notice of a general meeting a power
requisition for
statements
statement of not more than one thousand words with respect to—
(a) a matter referred to in a proposed resolution to be dealt with at
that meeting; or
(b) other business to be dealt with at that meeting.
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(2) A company shall circulate a statement once it has received requests
to do so from members representing at least five per cent of the total voting
rights of all the members who have a relevant right to vote.
(3) In subsection (2), a “relevant right to vote” means—
(a) in relation to a statement with respect to a matter referred to in
a proposed resolution, a right to vote on that resolution at a meeting to
which the request relates; and
(b) in relation to any other statement, a right to vote at the meeting to
which the requests relate.
(4) A request under this section—
(a) may be in hard copy or in electronic format;
(b) shall identify a statement to be circulated;
(c) shall be authenticated by a person or persons making it; and
(d) shall be received by the company at least one week before the
meeting to which it relates.
Duty of a
company
to circulate
statement
14.—(1) A company that is required under this section to circulate a
statement shall send a copy of it to each member of the company entitled to
receive a notice of the meeting—
(a) in the same manner as the notice of the meeting; and
(b) at the same time as, or as soon as reasonably practicable after, it
gives notice of the meeting.
(2) Subsection (1) has effect subject to sections 16 and 17.
(3) If a company fails to comply with this section, the company and
every officer of the company in default shall be liable to a fine in accordance
with the prevailing schedule of penalties prescribed under section 5 of
the Act.
Expenses of
circulating
statements
15.—(1) Expenses of a company in complying with section 14 need not
be paid by the members who requested the circulation of the statement if—
(a) the meeting to which the requests relates is an annual general
meeting of a public company; and
(b) sufficient requests to require the company to circulate the
statement are received before the end of the financial year preceding the
meeting.
(2) In any other cases—
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(a) the expenses of the company in complying with that section 14
shall be paid by members who requested the circulation of the statement
unless the company resolves otherwise; and
(b) unless the company has previously so resolved, it is not bound to
comply with paragraph 14 unless there is deposited with or tendered to it,
not later than one week before the meeting, a sum reasonably sufficient
to meet its expenses in doing so.
16. A company shall not circulate a members’ statement where, on an Application
to circulate
application by the company or another person who claims to be aggrieved, not
members’
statement
a court is satisfied that a statement has been properly circulated.
17.—(1) Subject to the provisions of the company’s constitution, three Quorum at
meetings
persons present at a meeting shall form a quorum, unless—
(a) each person is only present because he is authorized to act as
the representative of a company in relation to the meeting, and they are
representatives of the same company; or
(b) each is only present because he is appointed as proxy of a member
in relation to the meeting, and they are proxies of the same member.
(2) For the purposes of this section, a “person” means—
(a) an individual who is a member of the company;
(b) a person authorized to act as a representative of a company in
relation to the meeting; or
(c) a person appointed as proxy of a member in relation to the
meeting.
18.—(1) A member may be elected to be a chairperson of a general Chairperson
of a general
meeting by a resolution of the company passed at the meeting.
meeting
(2) Subsection (1) is subject to any provision of the company’s
constitution that states who may or may not be a chairperson.
19.—(1) On a vote on a resolution at a meeting on a show of hands, a Voting by
show of hands
declaration by a chairperson that the resolution—
(a) has or has not been passed; or
(b) has passed with a particular majority,
is conclusive evidence of that fact without proof of the number
or proportion of the votes recorded in favour of or against the
resolution.
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(2) An entry in respect of a declaration under this section in minutes of
the meeting is conclusive evidence of that fact.
(3) This section shall not have effect if a poll is demanded in respect of
a resolution and the demand is not subsequently withdrawn.
Right to
demand a poll
20.—(1) A provision of a company’s constitution is void insofar as it
purports to exclude a right to demand a poll at a general meeting on any
question other than—
(a) election of a chairman of the meeting; or
(b) an adjournment of the meeting.
(2) A provision of a company’s constitution is void insofar as it purports
to make ineffective a demand for a poll on any such question which is
made—
(a) by not less than five members having the right to vote on the
resolution; or
(b) by a member or members representing not less than ten per cent
of the total voting rights of all the members having the right to vote on
the resolution, excluding any voting rights attached to any shares in the
company held as treasury shares; or
(c) by a member or members holding shares in the company
conferring a right to vote on the resolution, being shares on
which an aggregate sum has been paid up equal to not less than
ten per cent of the total sum paid up on all the shares conferring that
right, excluding shares in the company conferring a right to vote on the
resolution which are held as treasury shares.
Voting on a
poll
21. On a poll taken at a general meeting of a company, a member entitled
to more than one vote need not, if he votes, use all his votes or cast all the
votes he uses in the same way.
Representation
of company at
meetings
22.—(1) If a company is a member of another company, it may, by a
resolution of its directors or other governing body, authorize a person or
persons to act as its representative or representatives at any meeting of the
company.
(2) Where a company authorizes only one person under subsection (1),
the authorized person is entitled to exercise the same powers on behalf
of the company as the company would exercise if it were an individual
member of the other company.
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(3) Where a company authorizes more than one person under
subsection (1), any one of them is entitled to exercise the same powers
on behalf of the company as the company would exercise if it were an
individual member of the other company.
(4) Where a company authorizes more than one person and more than
one of them purport to exercise a power under subsection (3)—
(a) if they purport to exercise the power in the same way, the power
is treated as exercised in that way; and
(b) if they do not purport to exercise the power in the same way, the
power is treated as not exercised.
23.—(1) A member of a company is entitled to appoint another person Appointment
as his proxy to exercise all or any of his rights to attend and to speak and of proxies
vote at a meeting of the company.
(2) In the case of a company having a share capital, a member may
appoint more than one proxy in relation to a meeting, provided that each
proxy is appointed to exercise the rights attached to a different share or
shares held by him.
24.—(1) Every notice calling a meeting of a company shall contain, Notice of
meeting
with reasonable prominence, a statement informing the member of—
to contain
(a) his rights to appoint proxies; and
statement of
rights
(b) any more extensive rights conferred by the company’s constitution
to appoint more than one proxy.
(2) Failure to comply with this section shall not affect the validity of the
meeting or of anything done at the meeting.
(3) If a company fails to comply with subsection (1), the company and
every officer of the company in default shall be liable to a fine in accordance
with the prevailing schedule of penalties prescribed under section 5 of
the Act.
25.—(1) If for the purposes of a meeting there are issued at the Companycompany’s expense invitations to members to appoint as proxy a specified sponsored
invitations
person or a number of specified persons, the invitations shall be issued to all to appoint
proxies
members entitled to vote at the meeting.
(2) Subsection (1) shall be considered to be complied with if—
(a) there is issued to a member, at his request, a form of appointment
naming the proxy or a list of persons willing to act as proxy; and
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(b) the form or list referred to in paragraph (a) is available on request
to all members entitled to vote at the meeting.
(3) If subsection (1) is contravened in relation to a meeting, every officer
of the company who is in default commits an offence.
(4) A company and every officer of a company, who contravenes
subsection (1), commit an offence and shall be liable to a fine in accordance
with the prevailing schedule of penalties prescribed under section 5 of
the Act.
Notice
required of
appointment
of proxy
26.—(1) This section applies to—
(a) appointment of a proxy; and
(b) any document necessary to show the validity of, or otherwise
relating to, the appointment of a proxy.
(2) Any provision of a company’s constitution is void insofar as it
purports to require an appointment of a proxy to be made or a document
to be received by the company or another person earlier than the following
time—
(a) in the case of a meeting or adjourned meeting, forty-eight hours
before the time for holding the meeting or adjourned meeting;
(b) in the case of a poll taken more than forty-eight hours after it was
demanded, twenty-four hours before the time appointed for the taking of
the poll; and
(c) in the case of a poll taken not more than forty-eight hours after it
was demanded, the time at which it was demanded.
(3) In calculating the periods mentioned in subsection (2), no account
shall be taken of any part of a day that is not a working day.
Chairing
meetings
27.—(1) A proxy may be elected to be a chairperson of a general meeting
by a resolution of the company passed at the meeting.
(2) Subsection (1) is subject to any provision of the company’s
constitution that states who may or who may not be a chairperson.
A proxy may
demand a poll
28.—(1) The appointment of a proxy to vote on a matter at a meeting
of a company authorizes the proxy to demand, or join in demanding, a poll
on that matter.
(2) A demand
paragraph (1)—
by
a
proxy
(a) as a demand by the member;
counts
for
the
purposes
of
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(b) as a demand by a member representing the voting rights that the
proxy is authorized to exercise; and
(c) as a demand by a member holding the shares to which those rights
are attached.
29.—(1) This section applies to a notice that the authority of a person to Notice for
act as proxy is terminated (in this Code otherwise referred to as the “notice termination
of a proxy’s
authority
of termination”).
(2) The termination of the authority of a person to act as a proxy shall
not affect—
(a) whether he counts in deciding whether there is a quorum at a
meeting;
(b) the validity of anything he does as a chairman of a meeting; or
(c) the validity of a poll demanded by him at a meeting, unless the
company receives notice of the termination before commencement of
the meeting.
(3) Termination of authority of a person to act as a proxy shall not affect
the validity of a vote given by that person, unless the company receives
notice of the termination—
(a) before commencement of a meeting or adjourned meeting at
which the vote is given; or
(b) in the case of a poll taken more than forty-eight hours after it is
demanded, before the time appointed for taking the poll.
(4) If a company’s constitution requires or permits members to give
notice of termination to a person other than the company, the references in
this section to the company receiving notice have the effect as if they were
or, as the case may be, include a reference to that person.
(5) Subject to subsection (6), the applicability of subsections (2)
and (3) is subject to any provision of the company’s constitution which
has the effect of requiring notice of termination to be received by the
company or another person at a time earlier than that specified in those
subsections.
(6) Any provision of the company’s constitution is void insofar as it
purports to require notice of termination to be received by the company or
another person earlier than the following time—
(a) in the case of a meeting or adjourned meeting, forty-eight hours
before the time for holding the meeting or adjourned meeting;
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(b) in the case of a poll taken more than forty-eight hours after it was
demanded, twenty-four hours before the time appointed for the taking of
the poll; and
(c) in the case of a poll taken not more than forty hours after it was
demanded, the time at which it was demanded.
(7) In calculating the periods mentioned in subsections (3) (b) and (6),
no account shall be taken of any part of a day that is not a working day.
Resolution
passed at
adjourned
meeting
30. Where a resolution is passed at an adjourned meeting of a company,
the resolution is for all purposes to be treated as having been passed on the
date on which it was in fact passed, and is not to be deemed passed on any
earlier date.
Sending
documents
relating to
meetings in
electronic
31.—(1) Where a company has given an electronic address in a notice
calling a meeting, it agrees that any document or information relating to
proceedings at the meeting may be sent by electronic means to that address
subject to any conditions or limitations specified in the notice.
(2) Where a company has given an electronic address—
(a) in an instrument of proxy sent out by the company in relation to
the meeting; or
(b) in an invitation to appoint a proxy issued by the company in
relation to the meeting,
it is deemed to have agreed that any document or information relating to
proxies for that meeting may be sent by electronic means to that address,
subject to any conditions or limitations specified in the notice.
(3) In subsection (2), documents relating to proxies include—
(a) the appointment of a proxy in relation to a meeting;
(b) any document necessary to show validity of, or otherwise relating
to, the appointment of a proxy; and
(c) notice of the termination of the authority of a proxy.
(4) In this section “electronic address” means any address or number
used for the purposes of sending or receiving documents or information by
electronic means.
Application to
class meetings
32.—(1) The provisions of this Code apply, with any necessary
modifications, and subject to subsections (2) and (3), in relation to a
meeting of holders of a class of shares as they apply in relation to a general
meeting.
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(2) Sections 6 to 9 of this Code do not apply in relation to a meeting of
holders of a class of shares—
(3) The following provisions, in addition to those mentioned in
subsection (2), shall not apply to a meeting in connexion with the variation
of rights attached to a class of shares (a “variation of class rights meeting”)—
(a) section 18; and
(b) section 21.
(4) A quorum for a variation of class rights meeting is—
(a) for a meeting other than an adjourned meeting, two persons
present holding at least one-third of the issued shares of the class in
question, excluding any shares of that class held as treasury shares; and
(b) for an adjourned meeting, one person present holding shares of
the class in question.
(5) For the purposes of subsection (4), where a person is present by a
proxy or proxies, he is treated as holding only the shares in respect of which
those proxies are authorized to exercise voting rights.
(6) At a variation of class rights meeting, any holder of shares of the
class in question present may demand a poll.
(7) For the purposes of this section—
(a) any amendment of a provision contained in a company’s
constitution for the variation of the rights attached to a class of shares,
or the insertion of any such provision into the constitution is itself to be
treated as a variation of those rights; and
(b) a reference to variation of rights attached to a class of shares shall
include reference to their abrogation.
33.—(1) Every company shall keep records in electronic or hard copy Duty to keep
records of
format comprising—
meetings and
(a) copies of all resolutions of members passed otherwise than at
general meetings; and
resolutions
(b) minutes of all proceedings of general meetings.
(2) The records shall be kept for at least ten years from the date of the
resolution, meeting or decision as appropriate.
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COMPANIES (PANEL ON TAKEOVERS
AND MERGERS) RULES
ARRANGEMENT OF RULES
RULE
PART I
Preliminary
1. Citation
2. Interpretation
3. Application of these Rules
PART II
Designation of the Panel on Takeovers and Mergers
4. Competition and Fair Trading Commission to be Panel
PART III
General
5. Equality of treatment to shareholders
6. Duties and responsibilities of directors
7. Standard of care and responsibility
8. Joint and several responsibility of directors
9. Duty of confidentiality
PART IV
Conduct of Offer
10. Firm intention to the board of the offeree
11. Contents of a firm intention
12. No defensive tactics
13. Public announcement
14. Offer document
15. Pricing mechanism
16. Upward revision of price
17. Filing of the offer document
18. Communication of the offer document to shareholders
19. Reply document of an offeree
20. Communication to the Panel and publications
21. Offer period
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RULE
PART V
Independent Adviser
22. Appointment of an independent adviser
23. Functions of an independent adviser
24. Consultation of the report by shareholders
25. Recommendation of directors to shareholders
PART VI
Restrictions on Dealings
26. Restrictions on dealings before an offer
27. Restrictions on dealings during the offer period
28. Restrictions on dealings by offeror during non-cash offers
29. No withdrawal of offer without approval
PART VII
Variation of an Offer
30. Variation of offer
PART VIII
Conditional and Unconditional Offers
31. Conditional and unconditional offers
32. Period for acceptance when an offer becomes or is declared
unconditional
PART IX
Mandatory Offer
33. Mandatory offer
34. Waiver of a mandatory offer
35. Mandatory offer to be unconditional
PART X
Delay Before Subsequent Offer
36. Delay
PART XI
Dissenting Shareholders
37. Notice to dissenting shareholders
38. Request for statement
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RULE
39. Compulsory acquisition
40. Application to court
41. Protection of minority shareholders
PART XII
Exemptions
42. Exemptions from these Rules
43. Application for exemptions
44. Communication of the decision of the Panel
PART XIII
Enforcement
45. Panel’s powers in respect of compliance with these Rules
46. Determinations
47. Variations, revocation and suspension
48. Temporary restraining orders
49. Permanent compliance orders
50. Witnesses and counsel to have privileges of witnesses and
counsel in court
PART XIV
Procedures of the Panel
51. Receiving evidence
52. Admissibility of evidence
53. Manner of giving evidence
54. Power to summon witnesses
55. Witness’s expenses
56. Panel may accept undertakings
57. Enforcement of undertakings
58. Panel may hear proceedings in private
59. Power to make confidentiality orders
PART XV
Miscellaneous
60. Transfer of shares and settlement of consideration
61. Fees
62. Costs
63. Civil debt
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FIRST SCHEDULE
SECOND SCHEDULE
THIRD SCHEDULE
FOURTH SCHEDULE
FIFTH SCHEDULE
COMPANIES (PANEL ON TAKEOVERS
AND MERGERS) RULES
G.N. 28/2016
under s. 298 (1)
PART I
Preliminary
1. These Rules may be cited as the Companies (Panel on Citation
Takeovers and Mergers) Rules.
Interpretation
2. In these Rules, unless the context otherwise requires—
“Commission” means the Competition and Fair Trading Commission
established by section 4 of the Competition and Fair Trading Cap. 48:09
Act;
“custodian” means a person who, in the ordinary course of business,
holds securities directly or indirectly on behalf of the beneficial
owner of the securities;
“dissenting shareholder” means a shareholder who has not assented
to the offer and a shareholder who has failed or refused to
transfer his shares to the offeror in accordance with the terms
of the offer;
“effective control” means the holding of securities by any person,
either individually or together with a person acting in concert,
which will result in that person, either individually or together
with a person acting in concert, having the right to exercise, or
control the exercise of, more than thirty per cent of the rights
attached to the voting shares of a company;
“engaging in conduct” means doing or refusing to do an act, and
includes—
(a) omitting to do an act; or
(b) making it known that an act will or will not be done;
“exchange of securities offer” means an offer in which the
consideration includes securities of the offeror;
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“firm intention” means a communication in writing, as referred to in
rule 10;
“independent adviser” means an adviser whom the Panel considers as
independent and who is approved by the Panel for the purposes
of these Rules;
“offer” means an offer to which these Rules apply for voting securities
and any other securities to which the offer is required to extend
under these Rules;
“offer document” means the offer document as referred to in rule 14;
“offeree” means—
(a) before an offer is made, a person who holds securities in
a target company that has received a takeover notice relating to
those securities; or
(b) after an offer is made, a person to whom an offer is made;
“offeror” means the person by or on whose behalf the offer is made
or is to be made;
“offer period” means the period from the time the offer document has
been communicated to a shareholder of an offeree pursuant to
rule 18 until the lapse of the offer or the closing date pursuant
to rule 20;
“offer price” means the price per share offered by the offeror to the
shareholder of the offeree;
“person acting in concert” means individuals who, or companies
which, pursuant to an agreement or understanding, whether
formal or informal, cooperate, through the acquisition by
any of them of shares in a company, to obtain or consolidate
effective control of that company;
“reply document” means the reply document of the offeree as referred
to in rule 19;
“reporting issuer” has the same meaning as in the Act;
“target company” means a company—
(a) whose voting securities are the subject of an offer; or
(b) that has received a takeover notice; and
“voting right” means a currently exercisable right to cast a vote at
meetings of shareholders of a company or security holders
of another body corporate, not being a right to vote that is
exercisable only in one or more of the following circumstances—
(a) during a period in which a payment or distribution or part
of a payment or distribution in respect of the security that confers
the voting right is in arrears or some other default exists;
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(b) on a proposal that affects rights attached to the security that
confers the voting right;
(c) on a proposal to put the company or body corporate into
liquidation or voluntary administration;
(d) on a proposal for the disposal of the whole, or a material
part, of the property, business, and undertaking of the company or
body corporate;
(e) during liquidation or voluntary administration of the
company or body corporate;
(f) in respect of a special, immaterial, or remote matter that is
inconsequential to control of the company or body corporate.
3.—(1) These Rules apply to a company that—
(a) is a party to a listing agreement with a registered exchange
and that has securities that confer voting rights quoted on the
registered exchange’s securities market; or
Application of
these Rules
(b) was within paragraph (a) at any time during the period of
twelve months before a date or the occurrence of an event referred
to in these Rules; or
(c) has ten or more shareholders and ten or more share parcels;
(2) These Rules shall continue to apply to a transaction or an
event regulated under these Rules even if a company that previously
satisfied subparagraph (1) (c) ceases to have ten or more shareholders
and ten or more share parcels.
(3) These Rules shall apply despite any provision to the contrary
in any agreement, constitution of a company or similar document
relating to another body corporate, resolution of the security holders
of a company or of any other body corporate, deed, or otherwise.
(4) In this rule, shareholder means a shareholder holding a
security that confers a voting right.
PART II
Designation of the Panel on Takeovers and Mergers
4. For the purpose of section 297 of the Act, the Commission Competition
Fair
shall perform the functions of the Panel on Takeovers and Mergers and
Trading
and shall exercise all the functions and powers conferred on the Commission
to be Panel
Panel under the Act, until such a date as the Minister shall, by notice
published in the Gazette, appoint for the Commission to cease to
perform such functions.
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Equality of
treatment to
shareholders
Duties and responsibilities
of directors
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PART III
General
5.—(1) An offeror shall provide equal and fair treatment to all
shareholders of the same class of an offeree, whether in relation to
the consideration to be paid for their shares, the information to be
supplied to them pursuant to these Rules, or otherwise.
(2) An offeree shall make available all information about
companies involved in an offer to all shareholders at the same time
and in the same manner.
(3) An offeree shall give all shareholders full, complete and timely
information to enable them to make an informed decision concerning
the merits or demerits of an offer.
(4) The obligations of an offeror towards shareholders of an
offeree shall, for the purposes of these Rules, be no less than its
obligations towards its own shareholders.
6. Directors of an offeree shall, at all times when advising or
informing the shareholders about a takeover—
(a) act only in their capacity as directors without regard to any
personal or family interests;
(b) have regard only to the interests of the shareholders,
employees and creditors; and
(c) act in good faith.
Standard
of care and
responsibility
7.—(1) A person who issues a document or a statement in relation
to a firm intention or an offer or during an offer period shall satisfy
the highest standard of accuracy and the information given shall be
adequately and fairly presented.
(2) The standard required by subrule (1) shall apply whether the
document is issued by the offeror or the offeree, or by an adviser on
its behalf, or by any other person in relation to an offer.
Joint and
several
responsibility
of directors
8.—(1) All documents issued in connexion with a takeover by
an offeror or an offeree shall contain a statement signed by all the
respective directors.
(2) The statement in subrule (1) shall contain—
(a) an undertaking by the directors that they jointly and
severally accept full responsibility for the accuracy of the
information contained in the documents;
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(b) a confirmation by the directors that having made all
reasonable inquiries and to the best of their knowledge, opinions
expressed in the document have been arrived at after due and
careful consideration; and
(c) confirmation that there are no other facts omitted from
the document, which omission would make any statement in the
document misleading.
9. A person involved in an offer shall take such measures as are Duty of
necessary to prevent the creation of a false market in the shares confidentiality
of either the offeror or the offeree and ensure that confidentiality
is maintained at all times until a public announcement is made in
accordance with these Rules.
PART IV
Conduct of Offer
10. The offeror shall communicate its firm intention to make an Firm intention
the board of
offer to the board of the offeree, to the Panel and to the relevant to
the offeree
securities exchange, as the case may be.
11.—(1) A firm intention shall contain—
(a) the proposed terms of the offer;
Contents of a
firm intention
(b) the identity of the offeror or any person acting in concert;
(c) a confirmation by the board of the offeror that sufficient
financial resources are available to satisfy the acceptance of the
offer and where the offer includes non-cash consideration, that all
reasonable measures have been taken to secure full payment of the
shares acquired;
(d) details of any existing holding of shares by the offeror in
the offeree, including—
(i) shares which are owned or controlled by the offeror; and
(ii) shares which are owned or controlled by any person
acting in concert with the offeror;
(e) details of any agreement which exists between the offeree
and the offeror or any person acting in concert in relation to the
relevant shares, irrespective of whether or not any dealings have
taken place; and
(f) all conditions which relate to the acceptances to which the
offer is to be subject.
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(2) Notwithstanding subrule (1), the Panel may request any other
information which shall be communicated to the offeree.
No defensive
tactics
12.—(1) Where a firm intention of an offer has been communicated
to the board of an offeree or where the board of an offeree has reason
to believe that an offer may be imminent, the board of the offeree or
any member thereof shall not engage in any action in relation to the
offeree’s affairs which may directly or indirectly result in—
(a) the offer being frustrated; or
(b) the shareholders of the offeree being denied an opportunity
to decide on the merits of an offer.
(2) Notwithstanding subrule (1), the board of an offeree may,
with the approval of the shareholders of the offeree in a meeting—
(a) issue shares;
(b) issue or grant options in respect of any unissued shares;
(c) create, issue or permit the creation or issue of any securities
carrying rights of conversion into, or subscription for the shares
of the offeree;
(d) sell, dispose of or acquire or agree to sell, dispose of or
acquire assets of a material amount, or otherwise than in the
ordinary course of business;
(e) enter into contracts, including service contracts, otherwise
than in the ordinary course of business; or
(f) cause the offeree, any of its subsidiaries or associated
companies to purchase or redeem any shares in the offeree or
provide financial assistance for any such purchase.
Public
announcement
13.—(1) A public announcement is required to be published
forthwith—
(a) by a board of an offeree, when a firm intention is made;
(b) by a board of an offeree, when there is undue movement in
its share price or in the volume of shares traded, whether or not
there is a firm intention;
(c) by an offeror where, before a firm intention has been made
under rule 10, there is undue movement in its share price or in the
volume of share turnover, and the Panel has reasonable cause to
believe that it is the offeror’s action which has led to the situation;
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(d) by an offeror, upon an acquisition that gives rise to an
obligation to make an offer under rule 33;
(e) by a board of an offeree, when an offeror has withdrawn its
offer; or
(f) by an offeror or a board of the offeror upon direction being
given by the Panel.
(2) The public announcement shall contain details as specified in
rule 11.
(3) The public announcement shall be made—
(i) in the case of a company listed on an exchange in the
manner required by that exchange for immediate public release
after receiving the approval from the Panel; or
(ii) in any other case, in newspapers of general circulation
in Malaŵi.
14. An offer document shall contain the information specified in Offer
the First Schedule to these Rules together with any other relevant document
First Schedule
information that may enable shareholders of the offeree to reach an
informed decision.
Pricing
15.—(1) An offeror shall determine an offer price.
mechanism
(2) Where an offeree is listed on a securities exchange, an offer
price shall be the sum of any premium and of the highest of—
(a) a price paid by an offeror or a person acting in concert with
the offeror for any acquisition, including by way of allotment in a
public issue, if any, during the six months period prior to the date
of public announcement;
(b) a price paid by an offeror under a preferential allotment
made to him or to a person acting in concert at any time during
the twelve months period up to the date of closure of the offer; or
(c) an average of the weekly high and low of the closing prices
of the shares of the offeree as listed on the securities exchange
where the shares of the offeree are most frequently traded during
the six months preceding the date of public announcement.
(3) Where an offeree is not listed on a securities exchange, the
offer document shall contain information as to the means by which
the offeror has determined the offer price.
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(4) An offeror shall ensure that the means referred to in
subrule (3), shall be fair and reasonable.
Upward
revision of
price
16.—(1) Where an offeror or any person acting in concert with
the offeror purchases shares in an offeree during an offer period at a
price higher than an offer price, the offeror shall increase the offer to
not less than the highest price paid for any shares so acquired.
(2) An offeror shall make a public announcement immediately
following an acquisition giving rise to an obligation under subrule
(1) stating the number of shares acquired.
Filing of
the offer
document
17. Where a decision to make an offer has been made, an offeror
shall file a copy of the offer document with the Panel and the relevant
securities exchange and shall pay the relevant fee to the Panel as
specified in the Second Schedule to these Rules.
Second
Schedule
Communica18. Except where the Panel otherwise directs, an offeror shall,
tion of the
within
fourteen days of filing a copy of an offer document with the
offer document
to shareholders Panel and relevant securities exchange, communicate a copy of the
offer document by registered post or by any other expedient means
of delivery to the shareholders of an offeree.
Reply
document of
an offeree
Third
Schedule
19. The board of an offeree shall communicate to its shareholders,
within twenty-one days of the date of the posting by an offeror of an
offer document, a reply document containing—
(a) any information set out in the Third Schedule to these
Rules;
(b) any other information that it considers relevant to enable its
shareholders to reach an informed decision.
Communication to the
Panel and
publications
20.—(1) An offeror shall immediately inform the Panel and the
securities exchange when an offer—
(a) has been revised or extended; or
(b) has expired,
and shall, within five days of informing the Panel, make a public
announcement to that effect in at least two daily newspapers of
general circulation in Malaŵi.
(2) The public announcement referred to in subrule (1), shall state
the number of shares which the offeror or any person acting in concert
with the offeror has or controls before the offer period, the number of
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shares for which acceptance of the offer has been received, and the
number of shares otherwise acquired by the offeror and any person
acting in concert with him during the offer period.
(3) The public announcement made under this rule shall specify
the percentages of the relevant classes of share capital, and the
percentages of rights attached to voting shares, represented by the
numbers.
21.—(1) Subject to subrule (2), an offer shall be open for at least Offer
thirty-five days and shall not exceed sixty days following the date of period
communication of the offer document to the shareholders pursuant
to rule 18.
(2) The Panel may, upon application and payment of the fee
prescribed in the Second Schedule to these Rules, provide for an Second
Schedule
extension of the offer period as it deems fit.
PART V
Independent Adviser
22.—(1) Following communication of the offer document Appointment
an
pursuant to rule 18, a board of an offeree shall, in the interests of its of
independent
shareholders, appoint an independent adviser, who shall be qualified adviser
and have the competence and experience necessary to—
(a) understand the type of arrangement proposed;
(b) evaluate consequences of the arrangement;
(c) assess effects of the arrangement on the value of securities
and on rights and interests of a holder of any securities, or a
creditor of the company; and
(d) express opinion, exercise judgment and make decisions
impartially.
(2) An independent adviser shall not—
(a) have any relationship with the company or with a proponent
of the arrangement, such as would lead a reasonable and informed
third party to conclude that the integrity, impartiality or objectivity
of that person is compromised;
(b) have had any relationship contemplated in paragraph (a)
within the immediately preceding two years; or
(c) be related to a person who has or has had a relationship
contemplated in paragraph (a) or (b) above.
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(3) Where a board of an offeree has appointed an independent
adviser, it shall, within four days of such appointment, notify the
Panel of the appointment.
(4) The Panel may, if it deems fit, direct the board of an offeree to
remove any person appointed as independent adviser.
Functions
of an
independent
adviser
23.—(1) An independent adviser shall—
(a) advise a board of an offeree as to whether the offer is fair
and reasonable;
(b) carry out or cause to be carried out a valuation of an offeree;
and
Fourth
Schedule
(c) submit a report to board of the offeree, which report
shall be in the Form prescribed in the Fourth Schedule to these
Rules.
(2) The report submitted by an independent adviser pursuant to
subrule (1) (c) shall be in writing and shall contain the advice, the
valuation and the method of valuation used, including reasons and
assumptions made.
(3) A summary of the report, submitted by an independent adviser
pursuant to subrule (1) (c), shall be attached to a reply document as
specified in rule 19.
(4) A full report and any summary of a report of an independent
adviser shall include—
(a) a statement of qualifications and expertise of the
independent adviser;
(b) a statement that the independent adviser has no conflict of
interest that might affect his ability to provide an unbiased report;
and
(c) a statement that the summary of the report is fair and not
misleading, where applicable.
(5) Notwithstanding paragraph (b) of subrule (1), a Panel may
direct a board of the offeree to appoint an independent valuer.
Consultation
of the
report by
shareholders
24. The report of the independent adviser shall be kept at the
registered office of the offeree and be made available for consultation
upon request by any shareholder or by any person authorized in
writing by a shareholder.
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25.—(1) Directors of an offeree shall consider a report of an Recomof
independent adviser and make a recommendation in good faith to mendation
directors to
shareholders
the shareholders.
(2) Where there is a divergence of views among directors of an
offeree as on the merits of an offer, a statement of the divergent views
shall be attached to the reply document.
PART VI
Restrictions on Dealings
26.—(1) No dealings of any kind in the shares of the offeree Restrictions
dealings
shall be made by any person who has confidential and price sensitive on
before an offer
information concerning the offer between the time when there is reason
to believe that an offer or a revised offer is contemplated, on the one
hand, and the public announcement of the offer or revised offer, or of
the termination of the takeover discussions, on the other hand.
(2) A restriction under subrule (1) shall not apply to an offeror, or
a person acting in concert with the offeror, if such dealings are made
for the purposes of an offer, unless the offeror or the person acting in
concert with the offeror is a director or employee of the offeree.
27. An offeror or a person acting in concert with the offeror shall Restrictions
dealings
not enter into any agreement relating to the purchase or sale of shares on
during the
offer period
of an offeree at any time during offer period.
28. Where consideration offered for shares of an offeree consists Restrictions
dealings by
only of shares of an offeror which are traded on a securities exchange, on
offeror during
the offeror, or any person acting in concert with the offeror shall not non-cash
offers
engage in any purchase of the shares of the offeror for the duration
of offer period unless the offeror declines to proceed with the offer.
29. Except with the prior approval of the Panel, any offer, No withdrawal
offer
which has been made in accordance with these Rules, shall not be of
without
approval
withdrawn.
PART VII
Variation of an Offer
30.—(1) Subject to prior approval of the Panel, an offer may be Variation of
varied in terms of the consideration offered for the shares proposed offer
to be acquired where—
(a) a cash sum is offered, by increasing the amount of that sum;
(b) shares are offered, by increasing the number of those shares;
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(c) debentures are offered, by increasing the rate of interest
payable under those debentures or by increasing the amount of
those debentures;
(d) an option to acquire unissued shares is offered, by
increasing the number of unissued shares that may be acquired
under that option; and
(e) a combination of any of the above is offered, by increasing
the amount or value of any component of the offer.
(2) Where the consideration offered for the shares to be acquired
under an offer is varied under subrule (1), all the shareholders of the
offeree shall be entitled to receive the consideration as so varied.
(3) Subject to the prior approval of the Panel and pursuant to
rule 20, an offeror may vary an offer by extending the period during
which it remains open.
(4) In the event of a variation of an offer, the offeror shall give to
the offeree and its shareholders notice of the variation by post or by
any other expedient means.
(5) Subject to rule 20, the revised offer shall remain open for at
least fourteen days from the day of the notice of the variation.
(6) An offeror shall vary an offer not later than seven days after
the communication of the reply document by the board of the offeree
to the shareholders of the offeree pursuant to rule 18.
Conditional
and
unconditional
offers
Period for
acceptance
when an offer
becomes or
is declared
unconditional
PART VIII
Conditional and Unconditional Offers
31.—(1) Except with the prior approval of the Panel, a voluntary
offer to acquire all voting shares shall be conditional upon the offeror
having received acceptances in respect of voting shares which,
together with voting shares acquired or agreed to be acquired before
or during the takeover offer, will result in the offeror and any person
acting in concert with the offeror, holding more than fifty per cent of
the voting shares of an offeree.
(2) If an offer under subrule (1) is conditional, an offer document
shall specify the last date when the offeror can declare the takeover
offer unconditional.
32. Upon a conditional offer becoming or being declared
unconditional, it shall remain open for acceptance for not less than
fourteen days thereafter.
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PART IX
Mandatory Offer
33.—(1) A person shall make an offer under subrule (2) where— Mandatory
(a) before the commencement of these Rules, that person,
either individually or together with a person acting in concert with
him—
offer
(i) holds more than thirty per cent of rights attached to
voting shares of a company; and
(ii) acquires or contracts to acquire additional voting shares
of the company;
(b) that person, either individually or together with a person
acting in concert with him, acquires effective control of a
company; or
(c) following a dealing in securities of a company, that person,
either individually or together with a person acting in concert with
him, acquires the right to exercise, or control the exercise of, more
than fifty per cent of rights attached to the voting shares of the
company.
(2) Subject to subrule (1), a person shall make an offer in
accordance with these Rules, on all voting shares of the offeree not
already held by the offeror.
(3) Where a person makes an offer under subrule (2), he shall
immediately make a public announcement pursuant to rule 13.
(4) The Panel and the relevant securities exchange shall be
notified of any public announcement made under subrule (3).
34.—(1) The requirement to make a mandatory offer, pursuant to Waiver of a
mandatory
rule 33, may be waived by Panel—
offer
(a) upon a change in control as a result of a restructuring of
the offeree;
(b) where the Panel deems that an offer is unfair or contradictory
to the market’s interests; or
(c) in any other case as the Commission may deem fit.
(2) The Panel shall consider an application for waiver under
subrule (1) subject to payment of the relevant fee as specified in the
Second Schedule to these Rules.
Second
Schedule
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Mandatory
offer to be
unconditional
35. Notwithstanding rule 31, a mandatory offer shall not be
subject to any condition.
Delay
Second
Schedule
Second
Schedule
PART X
Delay Before Subsequent Offer
36.—(1) Except with the prior approval of the Panel and subject
to the payment of the relevant fee as specified in the Second Schedule
to these Rules, where a person, either individually or together with a
person acting in concert with that person, has made an offer and the
offer has been withdrawn, that person, or a person acting in concert
with him, shall not, within twelve months of the date on which such
offer is withdrawn or lapses, make a subsequent offer to an offeree.
(2) Except with the prior approval of the Panel and subject to the
payment of relevant fee as specified in the Second Schedule to these
Rules, where a person, either individually or together with a person
acting in concert with that person, has or is deemed to have effective
control of a company, that person shall not, within six months of
the closure of any previous offer made by him to the offeree which
became or was declared unconditional, make a subsequent offer to
the offeree.
PART XI
Dissenting Shareholders
Notice to
37.—(1) For the purposes of this Part, an offer means an offer to
dissenting
acquire
all voting shares in a company other than voting shares that
shareholders
at the date of the offer are already held by an offeror.
(2) When an offeror has, by virtue of acceptance of an offer,
acquired or contracted to acquire not less than ninety per cent of the
voting shares to which the offer relates, he may give notice to any
dissenting shareholder that he intends to acquire his voting shares.
(3) A notice under subrule (2) may be given within twenty-eight
days from the last day on which the offer shall be accepted and shall
Fifth Schedule be in the manner prescribed in the Fifth Schedule to these Rules.
(4) Where an offeror has not issued a notice pursuant to subrule (2),
he shall within twenty-eight days from the last day on which the offer
shall be accepted, inform any dissenting shareholder of his rights
provided under rule 41.
(5) At the time when an offeror is giving a notice under subrule (2),
he shall furnish to the offeree a copy of the notice.
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38.—(1) Any dissenting shareholder may request a statement in Request for
writing from the offeror within fourteen days of giving notice under statement
rule 37.
(2) A statement requested under subrule (1), shall contain details
of other dissenting shareholders as shown in the shareholders’
register.
(3) An offeror shall, within fourteen days of the request under
subrule (1), provide a statement in writing to the dissenting
shareholder.
39. Unless there is an application to court under rule 40, an Compulsory
offeror shall acquire the shares of any dissenting shareholder on the acquisition
same terms as for the approving shareholders within twenty days of
issue once of a notice.
40. Where a notice is given under rule 37, any dissenting Application to
shareholder may make an application by motion to court for an order court
within twenty-one days of the date on which the notice was given.
41. Where an offeror, by virtue of acceptance of an offer, has Protection
minority
acquired or contracted to acquire not less than ninety per cent of of
shareholders
the rights attached to voting shares to which the offer relates, any
dissenting shareholder may require the offeror to acquire his shares,
within twenty-eight days from the day after which the dissenting
shareholder has been informed under rule 37.
PART XII
Exemptions
42. The Panel may, subject to such terms and conditions, grant an Exemptions
these
exemption from any requirement of these Rules where it is satisfied from
Rules
that such an exemption would be appropriate in the circumstances.
43.—(1) An offeror may apply to the Panel for exemption under Application
for exemptions
rule 42.
(2) The application shall contain details of the proposed
acquisition and the grounds on which the exemption is being sought.
(3) The offeror shall, along with the application referred to in
subrule (2), pay the relevant fee as specified in the Second Schedule Second
Schedule
to these Rules.
44.—(1) The Panel shall notify the applicant of its decision within Communication of the
fourteen days of the date of its decision.
decision of the
Panel
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(2) The Panel may grant exemptions or impose any terms and
conditions to the exemptions as it deems fit.
(3) The Chief Executive Officer of the Panel may publish a
decision by notice, where he is satisfied on reasonable grounds, that
it is urgent and necessary to do so.
PART XIII
Enforcement
Panel’s powers
45.—(1) The Panel may at any time, if it considers that a person
in respect of
has
not acted or is not acting or intends not to act in violation of the
compliance
with these
Act or these Rules, after giving that person such written notice of the
Rules
meeting as the Panel considers appropriate in the circumstances, but
in no case exceeding seven days, hold a meeting for the purpose of
determining whether to exercise its powers under these Rules.
(2) Where the Panel gives a notice under subrule (1), it may make
a temporary restraint order to expire on the close of Government
business on the second day after the date for which the meeting was
convened.
(3) For the purposes of this Part “contravene the Act or these Rules
or not acting in compliance with the Act or these Rules” includes—
(a) a contravention of the Act or these Rules or a term or
condition of an exemption from these Rules;
(b) an attempt to contravene the Act or these Rules or a term or
condition of an exemption from these Rules; or
(c) aiding, abetting, counselling, or procuring any other person
to contravene the Act or these Rules or a term or condition of an
exemption from these Rules; or
(d) inducing, or attempting to induce, any other person,
whether by threats or promises or otherwise, to contravene the
Act or these Rules or a term or condition of an exemption from
these Rules; or
(e) being in any way, directly or indirectly, knowingly
concerned in, or a party to, the contravention by any other person
of these Rules or a term or condition of an exemption from these
Rules; or
(f) conspiring with any other person to contravene these Rules
or a term or condition of an exemption from these Rules.
Determinations
46.—(1) Following the meeting specified in rule 45, the Panel
may make a determination whether it is satisfied that a person has
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acted or is acting or intends to act in compliance with the Act or these
Rules.
(2) If the Panel makes a determination under subrule (1), the
Panel shall, as soon as it is reasonably practicable, give written notice
of its reasons for the determination to the person the determination
concerns.
(3) Where the Panel makes a determination on reasonable grounds
under subrule (1) (b), the Panel may, at any time before the close of
the second day after the date for which the meeting was convened—
(a) make a temporary restraint order relating to the
non-compliance with the Act and these Rules that shall expire on
the close of such day as shall be specified in the order, not being a
day that is later than twenty-one days after the date on which the
temporary restraining order is made;
(b) make an order continuing any temporary restraining order
relating to the non-compliance with the Act and these Rules made
under rule 45 (2) until the close of such day as may be specified in
the order, not being a day that is later than twenty-one days after
the date on which the temporary restraining order is made;
(c) make a permanent compliance order relating to the
non-compliance with the Act and these Rules;
(d) if it makes any order under this subrule, also make an order
extending, for a reasonable time, the period for which a takeover
offer must remain open.
(4) If the Panel makes an order under this rule, the Panel—
(a) shall immediately give written notice to the person to whom
the order is directed of the terms and conditions of the order; and
(b) shall, as soon as is reasonably practicable, also give that
person written notice of the reasons for the order; and
(c) may also give notice to any other person of those matters.
(5) An order made under this rule may be made on any terms and
conditions that the Panel thinks fit.
47.—(1) The Panel may vary an order in the same way as it may Variations,
revocation and
be made under rule 46.
suspension
(2) The Panel may revoke or suspend an order on the terms and
conditions it thinks fit.
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Temporary
restraining
orders
48. For the purposes of rules 45 and 46, a temporary restraining
order is an order for one or more of the following purposes—
(a) restraining a person from acquiring securities in the target
company concerned or any interest in or rights relating to such
securities;
(b) restraining a person from disposing of securities in the
target company concerned or any interest in or rights relating to
such securities;
(c) restraining a person from exercising the right to vote
attaching to securities in the target company concerned or any
other right relating to such securities;
(d) restraining a person from taking any action, including from
making any statement or distributing any document that is or that
may reasonably be expected to constitute a contravention of these
Rules;
(e) directing the target company concerned not to make any
payments in respect of any securities;
(f) directing the target company concerned not to register the
transfer or transmission of any securities;
(g) directing the target company concerned not to issue or allot
securities to any person; or
(h) securing compliance with any such order, an order directing
a person to do or refrain from doing a specified act.
Permanent
compliance
orders
49. For the purposes of rules 45 and 46, a permanent compliance
order is an order for one or more of the following purposes—
(a) prohibiting or restricting a person from making any
statement or distributing any document that is or that may
reasonably be expected to constitute a contravention of the Act
or rules;
(b) directing a person to disclose in accordance with the order
information for the purpose of securing compliance with the Act
or these Rules;
(c) directing a person to publish, at the person’s own expense,
in the manner and at the times specified in the order, corrective
statements that are specified in or are to be determined in
accordance with the order; or
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(d) securing compliance with any of those orders, an order
directing a person to do or refrain from doing a specified act.
50.—(1) A person shall have the same privileges in relation to Witnesses
counsel
providing information and documents to, and answering questions and
to have
before, the Panel, a member, officer, or employee of the Panel, or privileges of
witnesses and
a person authorized by the Panel, as witnesses have in proceedings counsel in
court
before a court.
(2) A person appearing as counsel before the Panel, or a member,
officer, or employee of the Panel, shall have the same privileges as
counsel have in proceedings before a court.
(3) A person has the same privileges in relation to providing
information and documents to the Registrar, as witnesses have in
proceedings before a court.
PART XIV
Procedures of the Panel
51.—(1) The Panel may receive evidence through a member, Receiving
evidence
officer, or employee of the Panel, or any two or more of them.
(2) If a person who is summoned to give evidence requests that
the evidence be received at a meeting of the Panel, then subrule (1)
shall not apply, and the evidence must be received at a meeting of
the Panel.
52. The Panel may receive in evidence, whether admissible in a Admissibility
court of law or not, any statement, document, information, or matter of evidence
that, in the opinion of the person receiving it, may assist the Panel in
dealing effectively with any matter before it.
53.—(1) The Panel may receive evidence—
(a) given on oath;
Manner
of giving
evidence
(b) if the person receiving the evidence thinks it is appropriate,
given by a written statement verified on oath; or
(c) given by audio-visual communication, if the Panel and the
person giving the evidence agree.
(2) A member, officer, or an employee of the Panel may administer
an oath for the purpose of a person giving evidence on oath.
54.—(1) A member of the Panel may issue a summons to a person Power to
requiring that person to appear before the Panel, or a member, officer, summon
witnesses
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or employee of the Panel, in relation to any matter before the Panel
and to do any of the following—
(a) give evidence; or
(b) provide any documents or information that are in the
person’s possession or control and that are relevant to the matter:
Provided that in the case of a body corporate, the body corporate
shall appear by its authorized representative.
(2) The summons must be in writing, signed by a member of the
Panel, and state—
(a) the date and time when, and the place where, the person
must attend;
(b) the documents or information that a person is required to
provide, either generally, specifically, or by class, nature, content,
or effect;
(c) the person’s right to request that the person do give evidence
at a meeting of the Panel; and
(d) the penalty for failing to attend.
(3) A summons may be served—
(a) in the case of a natural person, by delivering it personally
to the person summoned or by leaving it at his or her usual place
of residence or business at least twenty-four hours before his
attendance is required; or
(b) in the case of a body corporate, by leaving it at the body
corporate’s usual place of business at least twenty-four hours
before its attendance is required.
Witness’s
expenses
55.—(1) If a person has appeared as a witness, whether summoned
or not, the Panel may, if it thinks fit, order any sum to be paid to that
witness for his expenses.
(2) That sum payable under subrule (1) shall not exceed the
amount that would be payable to the witness if his attendance had
been as a witness for the State in a criminal case in accordance with
regulations for the time being in force for the payment of witnesses
for the State in criminal cases.
Panel may
accept
undertakings
56.—(1) A Panel may accept a written undertaking given by, or
on behalf of, a person in connexion with a matter in relation to which
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the Panel is exercising any of its powers or performing any of its
functions under the Act or these Rules.
(2) A person may withdraw or vary the undertaking with the
consent of the Panel.
57.—(1) If the Panel considers that a person who has given an Enforcement
undertaking under rule 56 has breached a term of that undertaking, of
undertakings
the Panel may apply to the court for an order under subrule (2) below.
(2) A court may make any of the following orders if it is satisfied
that a person has breached a term of the undertaking—
(a) an order directing a person to comply with that term;
(b) an order directing a person to pay an amount not exceeding
the amount of any financial benefit that the person has obtained
directly or indirectly and that is reasonably attributable to the
breach;
(c) any order that the court thinks appropriate directing the
person to compensate any other person who has suffered loss,
injury, or damage as a result of the breach; or
(d) an order for any consequential relief that the court thinks
appropriate.
58. The Panel may decide whether to hold any meeting or any Panel
may hear
part of a meeting in public or in private.
proceedings in
private
59.—(1) The Panel may, on its own initiative or on the application Power to make
confidentiality
of any person, make an order prohibiting—
orders
(a) the publication or communication of any information,
document, or evidence that is provided or obtained in connexion
with any inquiry or other proceedings of the Panel; or
(b) the giving of evidence involving any such information,
document, or evidence.
(2) The Panel may make an order under subrule (1) on the terms
and conditions, that it thinks fit.
(3) An order under subrule (1) may be expressed to have effect
from the commencement of any inquiry or other proceedings of the
Panel to the end of that inquiry or proceedings.
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Transfer of
shares and
settlement of
consideration
Companies
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PART XV
Miscellaneous
60.—(1) Where an offeree is listed on a securities exchange,
consideration for the shares shall be paid in accordance with any
enactment, the rules of the relevant securities exchange and the rules
of the relevant clearing and settlement facility.
(2) Where an offeree is not listed on a securities exchange, transfer
of the shares shall be made in accordance with the provisions of any
enactment and consideration for the shares shall be paid within three
days from the receipt of the duly signed acceptance and transfer.
Fees
Second
Schedule
61. The fees set out in the Second Schedule to these Rules shall
be paid to the Panel.
Costs
62. The Panel may require payment to it of the costs incurred by
it in holding any meeting under rules 45 and 46.
Civil debt
63. The Panel may recover any money payable as a civil debt
by a party responsible for payment under these Rules for any fees
payable.
FIRST SCHEDULE
Information to be Contained in an Offer Document
The offer document shall contain the following statements in a prominent
position – “OFFER MADE BY OFFEROR TO THE SHAREHOLDERS
OF OFFEREE”
r. 14
Offer document on the takeover scheme proposed by the offeror for the
shareholders of offeree whereby the offeror offers to the shareholders of
the offeree to purchase their shares in offeree for a cash consideration of
K .................. per share or alternatively in the case of non-cash consideration,
the exchange of share ratio.
This Document is Important and Requires your
Immediate Attention
(i) “If you are in doubt as to any aspect of this offer, you should
consult a professional adviser.”
(ii) The shareholders of an offeree shall be registered at the close
of business on a date, to be eligible for the offer.
(iii) An Acceptance and Transfer Form is attached with respect to
your shareholding in offeree. To signify your acceptance, please sign
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the form and return it to the offeror, through the address of offeror at
latest, by ......................... [date].
(iv) Last date for acceptance of the offer is ...................... [date].
Disclaimer
This offer document is not a prospectus. This offer document sets out the
terms of the offer made by the offeror and has been prepared in compliance
with the laws of Malaŵi.
Panel on Takeovers Disclaimer
The no objection of the Panel for circulation of this offer document shall
not in any way imply that the Panel has conveyed its approval, or otherwise,
vouched for the financial soundness, accuracy or opinion expressed in this
offer document with regards to this offer.
Directors Statement
The board of the offeror accepts full responsibility for the correctness
of the information contained in the offer document, and having made all
reasonable enquiries, states that to the best of its knowledge and belief,
there is no material fact, the omission of which would make any statement
herein, whether of fact or opinion, misleading.
Documents Available for Inspection
The original of the offer document is available for inspection during the
normal business hours at the registered office of the offeror at an address of
the offeror. The document shall include the following information, along
with any further information which may be necessary and relevant to enable
the shareholders to make an informed decision—
1. The Offeror
The name and address of the offeror, any adviser or any other person
who may be acting for the offeror, and any person acting in concert with
the offeror. If either the offeror or any person acting in concert with
the offeror is a company, the names and addresses of its directors and
controlling shareholders.
2. Other parties related to the offer
The names and addresses of the parties to any agreement, arrangement or
understanding for the transfer of any shares to any other persons pursuant
to the offer, together with particulars of all shares held by such persons in
the offeree, or a statement that no such shares are held.
3. Offer date and closing date
The date the offer is open for acceptance, its duration and the date and
time of the closing of the offer.
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4. Intention of the offeror—
(a) the offeror’s intention regarding the continuation of the business
of the offeree;
(b) the offeror’s intention regarding any major changes to be
introduced in the business, including any redeployment of the fixed
assets of the offeree;
(c) the long-term commercial justification for the proposed offer;
(d) the offeror’s intention with regard to the continued employment
of the employees of the offeree and of its subsidiaries; and
(e) the object and purpose of the acquisition of shares and future
plans, including disclosures of intended disposal of any assets in the
succeeding two years except in the ordinary course of business and
details about implementation of future plans.
5. Shareholdings and dealings—
(a) the shareholdings of the offeror in the offeree;
(b) the shareholdings of the directors of the offeror in the offeree;
(c) the shareholdings of any person acting in concert in the offeree;
(d) the shares in the offeror and in the offeree owned or controlled
by a person with whom the offeror or any person acting in concert has
any arrangement, or any other agreement or understanding, formal or
informal, of whatever nature, which might be an inducement to deal or
refrain from dealing.
If in any of the above categories, there is no shareholding, this fact shall
be expressly stated.
Details including dates and prices of any dealing in shares made by
any person, mentioned within the above categories taking place during
the period beginning six months prior to the offer period until the
communication of the offer document.
If no such dealings have taken place, this fact shall be expressly stated.
6. Dividend entitlement
Precise particulars of the shares in respect of which the offer is made and
a statement whether they are to be acquired cum or ex any dividend or
other distribution which has been or may be declared.
7. Offer price of offeree’s shares
Detailed explanation of the mechanisms through which the offer price
was reached.
8. Cash resources for offer
Where the offer is in cash, or includes an element of cash, the offer
document shall include a confirmation by an adviser that the resources
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available to the offeror are sufficient to satisfy full acceptance of the
offer.
9. Exchange of securities offer—
(a) in the case of an exchange of securities offer the following
information about the offeror—
(i) for the last three financial years, turnover, net profit or loss
before and after taxation, the charge for tax, exceptional items, minority
interests, dividends, earnings per share and dividends per share;
(ii) a statement of the assets and liabilities shown in the last
published audited accounts;
(iii) all material changes in the financial or trading position of
the offeror subsequent to the last published audited accounts or a
statement that there are no known material changes;
(iv) details relating to the items referred to in (i) above in respect
of any interim statement or preliminary public announcement made
since the last published audited accounts; and
(v) significant accounting policies together with any points
from the notes to the accounts which are of major relevance to an
appreciation of the figures;
(b) where, because of a change in accounting policy, figures are
not comparable to a material extent, this shall be disclosed and the
approximate amount of the resultant variation shall be stated;
(c) the Panel may require that the offer document contains a
description of the financing arrangements, if any.
10. Arrangements in connexion with offer—
(a) details of any benefit which will be given to any director of the
offeree as compensation for loss of office or otherwise in connexion with
the offer;
(b) details of any agreement or arrangement between the offeror and
any of the directors of the offeree or any person which is conditional on
the outcome of the offer or otherwise connected with the offer.
11. Regulatory obligations
A statement of the obligations of the offeror and the rights of the shareholders
of the offeree under these Rules and any other relevant enactments.
12. Further information in cases of exchange of securities offers
The following additional information shall be given by the offeror when
it is offering its securities in exchange for the securities of the offeree—
(a) the nature and particulars of its business;
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(b) the date and country of its incorporation;
(c) the address of its registered office in Malaŵi;
(d) the stated capital and any options outstanding in respect thereof,
and the rights of the shareholders in respect of capital, dividends and
voting;
(e) whether or not the shares being offered will rank in pari passu
with the existing issued shares of the company, and if not, a precise
description of how the shares will rank for dividends and capital;
(f) the number of shares issued since the end of the last financial year
of the company;
(g) the highest and lowest closing market prices in respect of the
offeror’s shares with the relevant dates during the period commencing
six months preceding the commencement of the offer period and ending
on the day prior to the posting of the offer document;
(h) details of any restructuring of capital during the two financial
years preceding the date of the offer;
(i) details of any bank overdrafts or loans, or other similar
indebtedness, mortgages, security interests, or guarantees or other
material contingent liabilities of the offeror and any of its subsidiaries,
or, if there are no such liabilities, a statement to that effect;
(j) details of any litigation to which the company is, or may become,
a party;
(k) details of every material contract entered into by the offeror and
its subsidiaries not more than two years before the date of the offer,
not being a contract entered into in the ordinary course of the business
carried on or intended to be carried on by the company;
(l) how and when the documents of title to the securities will be
issued; and
(m) whether and in what manner the emoluments of the directors of
the offeror will be affected by the acquisition of the offeree or by any
other associated transaction. If there will be no effect, this fact shall be
expressly stated.
13. Disclaimer
(1) The offeror shall in clear terms include, in the offer document, the
following statement “to the best of my/our knowledge and belief, after
making proper enquiry, the information contained in or accompanying the
takeover notice of the offer document is, in all material respect true and
correct and not misleading, whether by omission of any information or
otherwise, and includes all the information required to be disclosed by the
offeror under the Companies (Panel of Takeover and Mergers) Rules.
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(2) Where the offeror is a company or corporate body, the statement
under paragraph (1) shall be signed by at least two directors.
SECOND SCHEDULE
Prescribed Fees Payable to the Panel
Activity
rr. 17, 21 (2), 34 (2),
43 (3) and 61
Fee payable
K
1. Filing of the offer document with Panel . .
0.25 of the value of
the offer subject to a
maximum of
K500,000
2. Extension of the offer period
..
..
50,000
3. Waiver of the mandatory offer
..
..
100,000
4. Application for making a subsequent offer
100,000
5. Application for exemptions
100,000
..
..
THIRD SCHEDULE
r. 19
Information to be Contained in the Reply Document
The reply document of the offeree shall include the following information,
along with any other information which may be necessary and relevant to
enable the shareholders to make an informed decision—
1. Views of offeree’s board—
(a) whether the directors of the offeree recommend that the
shareholders shall accept or reject the offer, with reasons for the
recommendation;
(b) the summary of the report of the independent adviser as to
whether the offer is fair and reasonable and the reasons thereof;
(c) whether the directors and any person dealing directly on their
behalf intends to accept the offer.
2. Directors’ interests in the offeree—
(a) the aggregate shareholdings in the offeror and in the offeree in
which the directors of the offeree have an interest shall be stated;
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(b) if any securities in the offeree have been purchased or sold
by the directors of the offeree within six months prior to the public
announcement of the offer, details of the numbers, prices and dates shall
be given.
3. Shareholdings in the offeror—
(a) the shareholdings of the offeree, the offeree’s holding company or
any of its subsidiaries in the offeror shall be disclosed;
(b) if any shares in the offeror have been purchased or sold by such
persons within six months before the public announcement of the offer,
details of the numbers, prices and dates shall be given.
4. Stated capital of offeree—
(a) the stated capital and the rights of the shareholders in respect of
capital, dividends and voting;
(b) the number of shares issued since the end of the last financial year
of the offeree;
(c) if any of the securities of the offeree are not listed on a securities
exchange, any information available as to the number and price of
transactions which have taken place during the period commencing six
months preceding the commencement of the offer period shall be stated.
5. Financial information—
(a) the following information about the offeree—
(i) audited financial statements for the last three years;
(ii) all material changes in the financial or trading position or
prospects of the company subsequent to the last published audited
accounts or a statement that there are no known material changes;
(iii) any interim statement or preliminary public announcement
made since the last published audited accounts; and
(iv) significant accounting policies together with any points
from the notes to the accounts which are of major relevance to an
appreciation of the figures.
(b) where, because of a change in accounting policy, figures are
not comparable to a material extent, this shall be disclosed and the
approximate amount of the resultant variation shall be stated.
6. Material contracts
Details of every material contract entered into by the offeree and its
subsidiaries more than two years before the date of the offer, not being
a contract entered into in the ordinary course of business carried on or
intended to be carried on by the company.
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7. Arrangements affecting directors—
(a) details of any benefit to be given to any director of the offeree as
compensation for loss of office or otherwise in connexion with the offer;
(b) details of any agreement between any director of the offeree
and any other person that is conditional on the outcome of the offer or
otherwise connected with the offer;
(c) details of any material contract entered into by the offeror in
which any director of the offeree has any interest.
8. Directors’ service agreement
Details of any existing service contracts between the offeree or any of its
subsidiaries or associated companies and directors of the offeree which
have more than twelve months to terminate, or which have been entered
into or amended within six months before the public announcement of
the offer.
FOURTH SCHEDULE
r. 23 (1) (c)
Information that must be Contained in the Report
of the Independent Adviser
1. Identity of adviser
The name of the adviser.
2. Adviser’s qualifications and expertise
A statement of the adviser’s qualifications and expertise.
3. No conflict of interest
A statement that the adviser has no conflict of interest that could affect
the adviser’s ability to provide an unbiased report.
4. Statement in relation to rule 23 report and further rule 23 report—
(1) This clause applies to a report that is required under rule 23 (a rule 23
report) or a further rule 23 report obtained under rule 30 (a further rule 23
report).
(2) A rule 23 report must contain the following statement in a prominent
position at the front of the report—
Purpose of report—
1. This report is not a report on the merits of the offer.
2. This report has been obtained by the offeror.
3. The purpose of this report is solely to compare the consideration
and terms offered for the different classes of securities, and to
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certify as to the fairness and reasonableness of that consideration
and terms as between the different classes.
4. A separate independent adviser’s report on the merits of the offer,
commissioned by the directors of [name of target company], must
accompany [name of target company]’s target company statement.
5. The offer should be read in conjunction with this report and the
separate independent adviser’s report on the merits of the offer.
(3) A further rule 23 report must contain the following statement in a
prominent position at the front of the report—
Purpose of report—
1. This report is not a report on the merits of the offer as varied by the
variation notice dated [date of variation notice].
2. This report has been obtained by [name of offeror] in connexion
with the variation to the offer.
3. The purpose of this report is solely to compare the consideration
and terms offered for the different classes of securities, and to
certify as to the fairness and reasonableness of that consideration
and terms as between the different classes.
4. The offer should be read in conjunction with this report and the
separate independent adviser’s report on the merits of the offer
(which you will have received with [name of target company]’s
target company statement).
5. Explanation for further rule 23 report if the report is a further
rule 23 report, an explanation of why the further rule 23 report is
required in addition to the rule 23 report.
r. 37 (3)
FIFTH SCHEDULE
Notice to Dissenting Shareholder
To ....................
An offer was made on the ....................... day of ........................... 20........
by ...................................................................................................................
........................................................................................................................
........................................................................................................................
.................................................................................................... (the offeror)
for K ...................... per share in .....................................................................
........................................................................................................................
........................................................................................................................
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(the offeree) ...................................................................................................
(the offeror) has, within the relevant time period specified in rule 37 of
the Companies (Panel on Takeovers and Mergers) Rules, satisfied the
conditions contained in Part XI of the Companies (Panel on Takeovers
and Mergers) Rules, ........................................ (the offeror) gives notice
that he now intends to exercise his right under Part X of the Companies
(Panel on Takeovers and Mergers) Rules, to acquire shares held by you in
............................................ (the offeree). If you do not make application to
court (see below) ................. (the offeror) will acquire your shares on the
following terms:
........................................................................................................................
........................................................................................................................
........................................................................................................................
Note: You are entitled under rule 40 of the Companies (Panel on Takeover
and Mergers) Rules, to make application to court within twenty-one days of the
date of this notice for an order stating that either ............................................
(the offeror) shall not be entitled and bound to acquire your shares or that
different terms to those of the offer shall apply to the acquisition. If you are
contemplating such an action you may wish to seek legal advice.
Signed ............................................ Date ............................................
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G.N. 29/2016
COMPANIES (CORPORATE GOVERNANCE)
REGULATIONS
under s. 382 (1)
Citation
1. These Regulations may be cited as the Companies (Corporate
Governance) Regulations.
Interpretation
2. In these Regulations—
“Malaŵi Code II” means the Code of Best Practice in Corporate
Governance launched on 1st June 2010 by the Institute of
Directors (Malaŵi) and where applicable includes sector
specific guidelines such as the incorporated Micro, Small
and Medium Enterprises guidelines, listed companies
guidelines, parastatal organizations guidelines, member based
organizations guidelines unless inconsistent with the Act or
any Regulations made under the Act.
Application
of the Malaŵi
Code II
Schedule
3. The Malaŵi Code II as set out in the Schedule to these
Regulations shall apply.
reg. 3
SCHEDULE
1. Owners
The owners of an organization shall be understood as those who constitute
the supreme authority of the organization, for example, Government,
shareholders, holding or parent organization, and others. There may be a
sole owner of the organization. The shareholders or the members might
exercise their ownership role in the annual general meeting (or general
assembly). The owners may entrust trustees to take on the ownership role
on their behalf or there may be another ownership arrangement appropriate
to the type of organization.
2. Boards
The board, often called board of directors, is a body of elected or appointed
members who jointly oversee and direct the affairs of an organization. The
body sometimes has a different name, such as board of trustees, board of
governors, board of managers, governing board, governing council, board
of commissioners, and others. It is often simply referred to as the “board.”
A board’s activities are determined by the powers, duties, and
responsibilities delegated to or conferred on it by the owners of the
organization and/or as specified by laws and regulations applicable to the
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type of organization. While the “owners” constitute the supreme authority of
the organization, they confer the supreme governing role to the board. The
board therefore is the main governing body situated between the owners
and the executive management of the organization.
3. Member of the board
A member of the board shall be understood as any individual elected
to or appointed as member of the board as defined in paragraph 2, such as
directors, members of governing councils, and others.
4. Private, public and not for profit sectors
Private sector is that part of the economy which is both run for private
profit and is not controlled by the state. It includes family owned businesses,
private companies, micro, CMK small and medium Enterprises, as well as
the informal sector.
Public sector, sometimes referred to as the state sector, is a part of the
state that deals with the production, delivery and allocation of goods and
services by and for the government or its citizens, whether national, regional
or local/municipal. It includes state owned enterprises, parastatal and public
authorities or commissions.
Not for profit sector is that part of the economy where organizations are
not for profit and are not part of the government. This sector is also called
the third sector, in reference to the private sector and the public sector, or the
civic sector emphasizing the sector’s relationship to civil society. It includes
non-governmental organizations (NGOs), community based organizations
and other related organizations.
1. Compliance with the Malaŵi Code II
1.1 The Malaŵi Code II is concerned with the establishment of an
environment conducive to enabling organizations to grow, thrive, survive
and create sustainable development for Malaŵi, whilst acting as good
corporate citizens.
1.2 These overarching provisions (OPs) should thus be applied in all
organizations be they large, medium or small, in the private, public or not
for profit sector.
1.3 Organizations in their annual or directors reports should state
whether the Malaŵi Code II has been adhered to or, if not, explain with
reasons in what respects it has not been adhered to.
2. Owners
The owners of the organization shall—
2.1 Jointly and severally protect, preserve and actively exercise the
supreme authority of their organization.
2.2 Ensure that only competent and reliable persons with appropriate
knowledge, skills and experience are elected or appointed to the board.
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2.3 Decide the term to be served by non-executive members of the board
and ensure that the board is refreshed on a regular basis; bringing new and
unbiased viewpoints into discussions and decision-making.
2.4 Foster constructive relationships with the board in order to facilitate
the success and sustainability of the organization.
2.5 Ensure that the board is constantly held accountable and responsible
for the efficient and effective governance of the organization.
2.6 Change the chairman and/or the composition of a board that does
not perform to expectations or in accordance with the mandate of the
organization.
2.7 Ensure that their organization acts as a good corporate citizen, and
in a sustainable manner, taking into consideration, as appropriate, the views
of stakeholders.
2.8 Comply with all applicable pieces of legislation.
2.9 Respect the fiduciary duties of the members of the board.
2.10 Ensure that the level of remuneration for members of the board and
top management is sufficient to attract and retain the quality and calibre of
individuals needed to run the organization successfully.
2.11 The majority of owners and the members of the board should
appropriately respect the rights of minority owners. The organization’s
affairs may not be conducted in a manner which is unfairly prejudicial to
the interests of minority owners and/or to the purpose of the organization.
3. Board Structure
3.1 The unitary (or one tier) board structure, comprising executive and
non-executive directors, rather than the dual (or two tier) board structure
adopted in some countries, is considered appropriate for Malaŵi as it
provides greater interaction among all board members when dealing with
matters such as strategic planning, performance, standards of conduct,
resource allocation and communication with stakeholders.
3.2 While the size of the board shall be determined by the organization,
and shall vary from organization to organization, the size should be such
that it ensures that the organization operates effectively.
4. The Role of the Board
The board shall—
4.1 Ensure that the organization complies with all relevant laws,
regulations and codes, including the Malaŵi Code II, and, if appropriate,
ask executive management to report periodically on such compliance.
4.2 Exercise leadership, enterprise, integrity and sound judgment in
directing the organization; so as to achieve sustainable success for the
organization.
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4.3 Determine the organization’s mission, values and objectives and
ensure that a strategy is in place to achieve these and hold management
accountable for its implementation.
4.4 Ensure that appropriate procedures and practices, to protect the
organization’s assets, resources and reputation, are in place and are effective.
4.5 Develop a board charter, based on the organization’s constitution,
articles of association, and the laws and regulations that apply to the
organization, in which roles and responsibilities are clearly defined.
4.6 Retain full and effective control over the organization.
4.7 Ensure that decisions on material matters are in the hands of the
board. The board shall have a definition of materiality on matters such as
the acquisition and disposal of assets, investments, capital projects and
authority levels. The level or definition of materiality is a matter for each
organization to decide.
4.8 Define the responsibilities of, and requirements for, reporting by
executive management and monitor their performance.
4.9 Ensure that plans are in place for orderly succession of members of
the board and of the chief executive officer.
4.10 Ensure that every member of, the board is able to play a full and
constructive role in the affairs of the organization.
4.11 Develop policies and processes to avoid or minimize conflict of
interest.
4.12 As part of its decision making process, take into consideration wider
societal interests and other circumstances affecting how the organization
fulfills its license to operate.
4.13 Ensure that a dialogue, based on mutual understanding of the
objectives of the organization, exists between the board itself and the
owners of the organization.
4.14 Ensure that it acts in the best interests of the organization and that
in doing so it meets the organization’s purpose.
4.15 Meet regularly. Each board should decide how regularly it needs
to meet to discharge its duties, having regard to the organization’s own
circumstances.
4.16 On the appointment and throughout the duration of tenure of its
members ensure that the members are able to devote sufficient time to their
responsibilities as members of the board.
4.17 Ensure that its members have among them the right mix of
expertise, experience, skills and knowledge appropriate to the organization.
4.18 Ensure that it is adequately informed and where necessary invite
executive management to clarify and/or provide additional information.
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4.19 Ensure that its members are of sufficient calibre to bring independent
judgment to bear on issues of strategy, performance, resources, standards of
conduct, and evaluation of performance.
4.20 Ensure that the integrated reporting by the organization is accurate
and truthful, at the time of disclosure.
4.21 Consider the use of alternative dispute resolution as a method of
resolving disputes arising both within the organization and between the
organization and other parties. Alternative dispute resolution comprises,
among others, open communication, win-win arrangements, negotiations,
mediation and arbitration.
5. Board Evaluation
5.1 It is good practice for boards to evaluate annually the mix of skills
and experience of their members as well as the board’s performance and
processes. The level of evaluation would depend on the type of organization.
Large organizations may also consider evaluating the chairman, other
members of the board, board sub-committees and the chief executive
officer.
5.2 Organizations should agree in advance the type of evaluation suitable
for their organization and how to measure and report it in the organization’s
directors or annual report.
6. Board Sub-Committees
6.1 Boards may find it useful to establish board sub-committees to
deal with matters that can best be dealt with in a small forum. The number
and nature of sub-committees will depend on the type of organization. All
sub-committees when established should be given, in writing, clear terms
of reference.
6.2 Decisions of each sub-committee should be communicated to the
board as recommendations for its further consideration.
6.3 When constituting sub-committees, the board shall ensure that the
sub-committees members have the appropriate balance of skills, experience,
independence and knowledge of the organization and the sub-committees’
terms of reference to discharge their duties and responsibilities effectively.
6.4 Sub-committees shall also be provided with sufficient and
appropriate resources to undertake their duties.
7. The Chairman
7.1 The chairman should preferably be non-executive.
7.2 The roles of the chairman and the chief executive officer shall
preferably be separate, but where they are combined, it is important that
the chairman encourages proper deliberation of all matters requiring the
board’s attention and obtains optimum input from all members of the
board.
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7.3 The chairman shall ensure that all board members are as fully
informed as possible on any issue on which a decision is to be made and
afford each board member a reasonable opportunity to contribute to the
board’s deliberations.
7.4 It is the responsibility of the chairman, following a board evaluation,
to recommend to the owners the removal of board members who do not
contribute effectively to the board.
7.5 Where the chairman is appointed by the board, the members of the
board should ensure that only a person that can add value is appointed to
the position. The organization should determine the length of service of the
chairman.
7.6 Where the chairman is required to exercise a casting vote, he shall
use it objectively.
8. Members of the Board
In carrying out their functions, members of the board shall—
8.1 Exercise reasonable care, skill and diligence. This means the care,
skill and diligence that would be exercised by a reasonably diligent person
with—
(a) the general knowledge, skill and experience that may reasonably
be expected of a person carrying out the functions of a member of the
board of the organization; and
(b) the general knowledge, skill and experience that the member has.
8.2 Both during and after their tenure of office, avoid using privileged
information for their own personal benefit or that of other people associated
with them.
8.3 Ensure that they devote sufficient time to their responsibilities.
8.4 Be diligent in discharging their duties to the organization, endeavour
to attend meetings regularly and be prepared and able where necessary, to
express disagreement with colleagues on the board including the chairman
and the chief executive officer.
8.5 Be truthful and disclose all the information at their disposal to enable
the board to make an informed decision.
8.6 At the expense of the organization, be entitled to seek independent
professional advice about the affairs of the organization. Before seeking
independent professional advice, however, the member concerned shall
discuss and clear the matter with the chairman or the company secretary.
If to approach either of them is inappropriate in the circumstances of
the matter, the board member must act within the best interests of the
organization.
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9. Non-Executive Members of the Board
Non-executive members of the board shall—
9.1 Be independent in character and judgment, even where there are
relationships or circumstances which are likely to affect, or could appear to
affect the judgment of the members of the board.
9.2 Not take part in the day-to-day management of the organization.
9.3 Not have any benefits from the organization other than their fees
and other approved expenses. All sitting allowances are deemed to be part
of fees.
9.4 Not undertake any advisory work for the organization unless that
work has been approved in advance by the board and is limited in scope and
time in order not to compromise the non-executive status of that member
and to avoid any conflict of interest.
9.5 Be of sufficient calibre to bring independent judgment to bear on
issues of strategy, performance, resources, standards of conduct, and
evaluation of performance.
9.6 Constructively challenge and contribute to the development of
strategy.
9.7 Scrutinize the performance of management in meeting agreed goals
and objectives, and monitor the reporting of performance.
9.8 Satisfy themselves that financial information is accurate and that
financial controls and systems of risk management are robust and sound.
9.9 Be responsible for ensuring that plans are in place to ensure the
long term sustainability of the organization. In this regard, they may have a
role in appointing and, where necessary, removing senior management and
determining their levels of remuneration.
10. Appointment of Members of the Board
10.1 The appointment of the board shall be appropriate for the
organization taking into account good governance and the requirements for
the organization to meet its goals and to ensure its long-term sustainability.
10.2 Appointments to the board should be planned with strategic
considerations and objectives of the organization in mind.
10.3 The selection process must be managed by considering a balanced
mix of experience and skills needed to add value to the strategic role of the
board. Depending on the type of organization, the selection process may
also consider appropriate diversity of gender and/or social and economic
background.
10.4 An organization shall make appointments to the board on merit.
10.5 The term served by both executive and non-executive members of
the board should be decided by the organization; taking into account the
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period that could reasonably be perceived to materially interfere with the
member’s ability to act in the best interest of the organization’s goals and
long-term sustainability.
10.6 Where appointments to the board are done at an annual general
meeting or general assembly, owners should be provided with a list of
candidates from whom to elect members of the board.
11. Remuneration of Members of the Board
11.1 Remuneration of members of the board shall be appropriate to the
organization and should take into account the long term sustainability of the
organization.
11.2 There shall be a formal and transparent process for determining
remuneration of members of the board and of top management.
11.3 Non-executive members of the board shall receive fees at levels
that reflect time invested commitment, performance and responsibilities.
Organizations may however choose for an arrangement where members
of the board are fully committed to the mission of the organization and
therefore agree to work pro bono.
11.4 An organization shall disclose, at least on an aggregate basis, in its
director’s or annual report, the remuneration, bonuses and other benefits
received by members of the board. What is to be disclosed shall represent
the total cost to the organization.
11.5 When considering appointing executive members of the board, the
board should seek proper legal advice in relation to termination clauses to
avoid the risk of paying excessive amounts on termination of service.
12. Training and Development of Members of the Board
12.1 Members of the board need proper knowledge of the organizations
for which they are responsible. They should acquire a broad knowledge
of—
12.1.1 The business of the organization so that they can provide
meaningful direction to it;
12.1.2 The statutory and regulatory requirements affecting the
direction of the organization and the environment in which the
organization operates; and
12.1.3 Their role, duties, responsibilities, and obligations as well as
board practices and procedures.
12.2 The board, in developing training needs, should take into account
any training needs identified during a board evaluation.
12.3 The board shall ensure that new members undergo a tailored
induction programme, particularly if the new members have no previous
board experience.
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12.4 Every member of the board shall keep abreast of both practical
and theoretical developments affecting the environment in which the
organization operates as well as to ensure that their expertise and
experience remain relevant to the board and to the organization. Members
of the board shall be regularly exposed to matters relevant to legal reforms,
corporate governance, changing corporate environment, risks, opportunities
and other matters that may be of interest in the execution of their
duties.
12.5 Executive members of the board shall be encouraged by their
organization to take non-executive appointments in other organizations.
However, the number of non-executive appointments shall not be such
that the member’s executive responsibilities to their own organization are
adversely affected.
13. The Company Secretary
13.1 All organizations, where required by law, shall ensure that they
have access to a competent company secretary to render company secretarial
services to the organization. The appointment and removal of the company
secretary shall be a matter for the board as a whole.
13.2 The company secretary shall among other duties, be responsible for
advising the chairman and the board on the implementation of the Malaŵi
Code II.
13.3 All members of the board shall have access to advice and services
of the company secretary.
13.4 The company secretary shall be responsible for ensuring effective
information flows between the board and top management and between the
board and its sub-committees.
13.5 Wherever possible, the role of the chief executive officer and that
of the company secretary shall be separated.
14. Related Party Transactions
14.1 Organizations shall identify, manage and document related party
transactions.
14.2 The following are related parties—
(a) a member of the board or of the key management personnel of
the organization;
(b) any other person that significantly controls or influences the
organization;
(c) any close member of the family (such as the individual’s domestic
partner and children, children of the individual’s domestic partner
and other dependants of the individual or of the individual’s domestic
partner) of any individual referred to in (a) or (b);
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(d) any entity controlled or significantly influenced by the
organization or by any individual referred to in (a) or (b);
(e) any entity under joint control with the organization; or
(f) any entity that significantly controls or influences the organization.
14.3 A related party transaction shall be understood as a transfer
of resources, services or obligations between related parties and the
organization, regardless of whether or not a price is charged. This
includes, among others, purchases or sales of goods, property and other
assets; rendering or receiving of services, leases, transfers of research and
development; transfers under licence agreements, financial arrangements
(including loans and equity contributions in cash or in kind), provision of
guarantees or collateral, commitments to do something if a particular event
occurs or does not occur in the future, including executory contracts, among
other things.
14.4 Owners shall be informed of any related party transaction that
may significantly affect the current and/or future financial position,
the performance, the capacity, the opportunities and/or the risks of
the organization. Such disclosure shall explain what the nature of the
transactions is and how the potential conflicts of interest or other risks for
the organization are being avoided and/or mitigated.
15. Risk Management and Internal Controls
15.1 The board shall be responsible for the governance of risk.
15.2 The board should regularly review the organization’s risks, risk
appetite and tolerance, and ensure that it has endeavoured to put in place
measures to minimize or avert any identified risks. The board shall also
regularly review the appropriateness of these measures.
15.3 The board of an organization that relies heavily on information
technology (computer) systems shall ensure that appropriate back-up
measures are adopted and that measures are put in place to safeguard all
information stored by the organization.
16. Ethics
Organizations shall—
16.1 ensure that they act ethically; and
16.2 consider developing a code of ethics aimed at fostering an ethical
culture within their organization.
Where adopted, a code of ethics shall—
16.2.1 commit the organization to the highest standards of behaviour;
16.2.2 be developed with the full participation of all parties expected
to abide by it;
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16.2.3 receive total commitment from the board and the chief
executive officer of the organization; and
16.2.4 be sufficiently detailed as to give a clear guide to the expected
standards of behaviour of all employees.
16.3 Allow African “umunthu” values to thrive within the ethical
framework of the organization. Relationships within the organization
and with its stakeholders shall therefore also be guided by the following
concepts: thoroughly valuing others and, in doing so, valuing ourselves,
cooperation, kinship and belonging within the community.
17. Good Citizenship
17.1 An organization as well as being an economic entity is also a citizen
of Malaŵi and as such has a moral and social standing within Malaŵian
society, with all the responsibilities attached to that status. As such, when
making decisions, an organization shall consider the impact of its decisions
on its stakeholders (both internal and external), the environment and society
as a whole.
18. Sustainability
18.1 Organizations shall conduct their operations in a manner that meets
existing needs without compromising the ability of future generations to
meet their needs. It means having regard to the impact that the organizations’
operations have on the environment, economic and social life of the
community in which it operates. This shall include its supply chain, that
is to say, access to the resources and raw materials it needs to carry out its
operations.
18.2 Organizations shall report on how they have both positively and
negatively impacted on the environment and on the economic and social
life of the community in which they operate and how they believe they
can improve the positive and eradicate or lessen the negative aspects in the
coming year.
19. External Communications
19.1 Society is currently demands greater transparency, accountability
and responsibility from organizations. Organizations should consider
making regular, timely, balanced and understandable statements about their
activities, performance and future prospects.
19.2 Organizations shall, where it is in their best interests, disclose
publicly their reasons for making decisions which may appear compromised
due to a perceived conflict of interest of the members making the decision.
20. Integrated Reporting and Auditing
20.1 Organizations shall produce financial statements appropriate to
them. To the extent possible the financial statements should be prepared in
accordance with nationally recognized standards.
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20.2 Where there is a requirement for auditing the financial statements,
the audit shall be done by an independent external auditor, who is provided
with the opportunity to raise matters directly with the board.
20.3 Sustainability reporting and disclosure shall be integrated with the
organization’s financial reporting.
20.4 The financial statements of the organization shall also comply with
any obligation to disclose related party transactions, as is, for their type of
organization, specified in laws, regulations, directives or guidelines.
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COMPANIES (MODEL ARTICLES AND
MEMORANDA) REGULATIONS
ARRANGEMENT OF REGULATIONS
REGULATION
PART I
Preliminary
1. Citation
PART II
Model Articles and Memoranda
2. Model articles of a private company limited by shares
3. Model articles of a public company
4. Model articles of a company limited by guarantee
5. Model memorandum of a company limited by shares
6. Model memorandum of a company limited by guarantee
G.N. 30/2016
COMPANIES (MODEL ARTICLES AND
MEMORANDA) REGULATIONS
under s. 382
Citation
Model articles
of a private
company
limited
by shares
Schedule
PART I
Preliminary
1. These Regulations may be cited as the Companies (Model
Articles and Memoranda) Regulations.
PART II
Model Articles and Memoranda
2. The articles of association of a private company limited by
shares shall be in accordance with Table A in the Schedule to these
Regulations.
Model articles
of a public
company
Schedule
3. The articles of association of a public company shall be in
accordance with Table B in the Schedule to these Regulations.
Model articles
of a company
limited by
guarantee
Schedule
4. The articles of association of a company limited by guarantee
shall be in accordance with Table C in the Schedule to these
Regulations.
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5. The memorandum of association of a company limited by Model
shares shall be in accordance with Table D in the Schedule to these memorandum
of a company
limited
Regulations.
by shares
Schedule
6. The memorandum of association for a company limited by Model
guarantee shall be in accordance with the form in Table E in the memorandum
of a company
limited by
Schedule to these Regulations.
guarantee
Schedule
SCHEDULE
TABLE A
reg. 2
MODEL ARTICLES OF A PRIVATE COMPANY LIMITED BY SHARES
ARTICLE
PART I
Preliminary
1. Interpretation
2. Liability of members
PART II
Director’s Powers and Responsibilities
3. Director’s general authority
4. Shareholder’s reserve power
5. Delegation by a director
6. Committees
7. Collective decisions by directors
8. Unanimous decisions
9. Calling of directors’ meeting
10. Participation in directors’ meetings
11. Quorum for directors’ meetings
12. Chairing of directors’ meetings
13. Casting vote
14. Conflict of interest
15. Records of decisions to be kept
16. Directors may make rules
17. Methods of appointing directors
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ARTICLE
18. Termination of director’s appointment
19. Director’s remuneration
20. Director’s expenses
PART III
Shares and Distributions
21. All shares to be fully paid-up
22. Powers to issue different classes of shares
23. Company not bound by less than absolute interests
24. Share certificates
25. Replacement of share certificates
26. Share transfers
27. Transmission of shares
28. Exercise of transmittees’ rights
29. Transmittees bound by prior notices
30. Procedure for declaring dividends
31. Payment of dividends and other distributions
32. No interest on distributions
33. Unclaimed distributions
34. Non-cash distributions
35. Waiver of distributions
36. Authority to capitalize and appropriation of capitalized sums
PART IV
Decision-Making by Shareholders
37. Attendance and speaking at general meetings
38. Quorum for a general meeting
39. Chairing general meetings
40. Attendance and speaking by directors and non-shareholders
41. Adjournment
42. Voting: general
43. Errors and disputes
44. Poll votes
45. Content of proxy notices
46. Delivery of proxy notice
47. Amendment to resolutions
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ARTICLE
PART V
Administrative Arrangements
48. Means of communication to be used
49. Company seals
50. No right to inspect accounts and other records
51. Provision for employees on cessation of business
52. Indemnity
53. Insurance
PART I
Preliminary
Interpretation
1.—(1) In these Articles, unless the context requires otherwise—
“articles” means the company’s articles of association;
“bankruptcy” includes individual insolvency proceedings;
“chairman” has the meaning given in article 12;
“chairman of the meeting” has the meaning given in article 39;
“director” means a director of the company, and includes any person
occupying the position of director, by whatever name called;
“distribution recipient” has the meaning given in article 31;
“document” includes, unless otherwise specified, any document sent or
supplied in electronic form;
“fully paid” in relation to a share, means that the nominal value and any
premium to be paid to the company in respect of that share have been
paid to the company;
“holder” in relation to shares means the person whose name is entered in the
register of members as the holder of the shares;
“instrument” means a document in hard copy form;
“ordinary resolution” has the meaning given in section 2 of the Act;
“paid” means paid or credited as paid;
“participate” in relation to a directors’ meeting, has the meaning given in
article 10;
“proxy notice” has the meaning given in article 45;
“shareholder” means a person who is the holder of a share;
“shares” means shares in the company;
“special resolution” has the meaning given in section 2 of the Act;
“subsidiary” has the meaning given in section 2 of the Act;
“transmittee” means a person entitled to a share by reason of the death or
bankruptcy of a shareholder or otherwise by operation of law; and
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“writing” means the representation or reproduction of words, symbols or
other information in a visible form by any method or combination of
methods, whether sent or supplied in electronic form or otherwise.
(2) Unless the context otherwise requires, other words or expressions
contained in these Articles bear the same meaning as in the Act as in force
on the date when these Articles become binding on the company.
Liability of
members
Director’s
general
authority
Shareholder’s
reserve power
2. Liability of the members is limited to the amount, if any, unpaid on
the shares held by them.
PART II
Director’s Powers and Responsibilities
3. Subject to the articles, a director shall be responsible for the
management of the company’s business, for which purpose he may exercise
all the powers of the company.
4.—(1) A shareholder may, by special resolution, direct the directors to
take, or refrain from taking, specified action.
(2) A special resolution passed pursuant to paragraph (1) shall not
invalidate anything which the directors have done before the passing of the
resolution.
Delegation by
a director
5.—(1) A director may delegate any of the powers which are conferred
on him under these Articles—
(a) to such person or committee;
(b) by such means including by power of attorney;
(c) to such an extent;
(d) in relation to such matters or territories; and
(e) on such terms and conditions,
as he thinks fit.
(2) Where a director specifies in writing, any delegation of powers under
this article may authorize further delegation of the director’s powers by any
person to whom they are delegated.
(3) A director may revoke any delegation of powers made under this
article, in whole or part, or alter its terms and conditions.
Committees
6.—(1) Committees to which a director delegates any of his powers
shall follow procedures which are based, insofar as they are applicable, on
provisions of these Articles that govern the taking of decisions by directors.
(2) Directors of a company may make rules of procedure for all or any
committees, which prevail over rules derived from the articles if they are
not consistent with them.
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7.—(1) The general rule about decision-making by directors is that any Collective
by
decision of the directors shall be either a majority decision at a meeting or a decisions
directors
decision taken in accordance with Article 8.
(2) The general rule under this Article shall not apply, if—
(a) the company only has one director; and
(b) no provision of the Articles requires it to have more than one
director.
(3) Where the general rule does not apply as envisaged in paragraph (2),
the director may take decisions without regard to any of the provisions of
the articles relating to directors’ decision-making.
8.—(1) A decision of the directors is taken in accordance with this Unanimous
article when all eligible directors indicate to each other by any means that decisions
they share a common view on a matter.
(2) Such a decision may take the form of a resolution in writing, copies
of which have been signed by each eligible director or to which each eligible
director has otherwise indicated agreement in writing.
(3) References in this article to eligible directors are to directors who
would have been entitled to vote on the matter had it been proposed as a
resolution at a directors’ meeting.
(4) A decision may not be taken in accordance with this article if the
eligible directors would not have formed a quorum at such a meeting.
9.—(1) Any director may call a directors’ meeting by giving a notice of Calling of
directors’
the meeting to the directors or by authorizing the company secretary, if any, ameeting
to give such notice.
(2) Notice of any directors’ meeting shall indicate—
(a) its proposed date and time;
(b) where it shall take place; and
(c) if it is anticipated that directors participating in the meeting will
not be in the same place, how it is proposed that they should communicate
with each other during the meeting.
(3) Notice of a directors’ meeting shall be given to each director, but
need not be in writing.
(4) Notice of a directors’ meeting need not be given to directors who
waive their entitlement to notice of that meeting, by giving notice to that
effect to the company not more than seven days after the date on which the
meeting is held. Where such notice is given after the meeting has been held,
that shall not affect the validity of the meeting, or of any business conducted
at the meeting.
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Participation
in directors’
meetings
10.—(1) Directors participate in a directors’ meeting, or part of a
directors’ meeting, when—
(a) the meeting has been called and takes place in accordance with
these Articles; and
(b) the directors can each communicate to the others any information
or opinions they have on any particular item of the business of the
meeting.
(2) In determining whether directors are participating in a directors’
meeting, the location of a particular director and the mode which the
directors communicate to each other is irrelevant.
(3) If all the directors participating in a meeting are not at the same
place, they may decide that the meeting shall be treated as taking place
wherever any of them is.
Quorum for
directors’
meetings
11.—(1) At a directors’ meeting, unless a quorum is participating, no
proposal shall be voted on, except a proposal to call another meeting.
(2) The quorum for directors’ meetings may be fixed from time to time
by a decision of the directors, but it shall never be less than two, and unless
otherwise fixed it shall be two.
(3) If the total number of directors for the time being is less than the
quorum required, the directors shall not take any decision other than a
decision—
(a) to appoint further directors; or
(b) to call a general meeting so as to enable the shareholders to
appoint further directors.
Chairing of
directors’
meetings
12.—(1) The directors may appoint a director to chair their meetings.
(2) The person so appointed for the time being is known as the chairman.
(3) The directors may terminate the chairman’s appointment at any time.
(4) If the chairman is not participating in a directors’ meeting within ten
minutes of the time at which it was to start, the participating directors shall
appoint one of themselves to chair the meeting.
Casting vote
13.—(1) If the numbers of votes for and against a proposal are equal, the
chairman or other director chairing the meeting has a casting vote.
(2) Paragraph (1) shall not apply if, in accordance with the articles,
the chairman or other director is not to be counted as participating in the
decision-making process for quorum or voting purposes.
Conflict of
interest
14.—(1) Subject to paragraph (2), where a proposed decision of the
directors is concerned with an actual or proposed transaction or arrangement
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with the company in which a director is interested, that director shall not to
be counted as participating in the decision-making process for quorum or
voting purposes.
(2) A director who is interested in an actual or proposed transaction
or arrangement with the company shall be counted as participating
in the decision-making process for quorum and voting purposes
when—
(a) the company, by an ordinary resolution, excludes the application
of the provision of the articles which would otherwise prevent a
director from being counted as participating in the decision-making
process;
(b) the director’s interest cannot reasonably be regarded as likely to
give rise to a conflict of interest; or
(c) the director’s conflict of interest arises from a permitted cause.
(3) For the purpose of this article, the following are permitted
causes—
(a) a guarantee given, or to be given, by or to a director in respect
of an obligation incurred by or on behalf of the company or any of its
subsidiaries;
(b) subscription, or an agreement to subscribe, for shares or other
securities of the company or any of its subsidiaries, or to underwrite,
sub-underwrite, or guarantee subscription for any such shares or
securities; and
(c) arrangements pursuant to which benefits are made available
to employees and directors or former employees and directors of the
company or any of its subsidiaries which do not provide special benefits
for directors or former directors.
(4) For the purpose of this article, references to proposed decisions
and decision-making processes include any directors’ meeting or part of a
directors’ meeting.
(5) Subject to paragraph (6), if a question arises at a meeting of directors
or of a committee of directors as to the right of a director to participate in the
meeting, or part of the meeting, for voting or quorum purposes, the question
may, before the conclusion of the meeting, be referred to the chairman
whose ruling in relation to any director other than the chairman shall be
final and conclusive.
(6) If any question as to the right to participate in the meeting, or part
of the meeting, arises in respect of the chairman, the question shall be
decided by a decision of the directors at that meeting, for which purpose the
chairman is not to be counted as participating in the meeting, or that part of
the meeting, for voting or quorum purposes.
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Records of
decisions to be
kept
15. The directors shall ensure that the company keeps a record, in
writing, for at least ten years from the date of recording the decision, of
every unanimous or majority decision taken by the directors.
Directors may
make rules
16. Subject to the articles, the directors may make any rule which they
think fit about how they make decisions, and about how such rules are to be
recorded or communicated to directors.
Methods of
appointing
directors
17.—(1) Any person who is willing to act as a director, and is permitted
by law to do so, may be appointed to be a director—
(a) by ordinary resolution; or
(b) by a decision of the directors.
(2) In any case where, as a result of death, the company has no
shareholders and no directors, the personal representatives of the last
shareholder to have died have the right, by notice in writing, to appoint a
person to be a director.
(3) For the purposes of paragraph (2), where two or more shareholders
die in circumstances rendering it uncertain who was the last to die, a younger
shareholder is deemed to have survived an older shareholder.
Termination
of director’s
appointment
18. A person ceases to be a director as soon as—
(a) that person ceases to be a director by virtue of any provision of
the Act or is prohibited from being a director by law;
(b) a bankruptcy order is made against that person;
(c) a composition is made with that person’s creditors generally in
satisfaction of that person’s debts;
(d) a registered medical practitioner who is treating that person gives
a written opinion to the company stating that that person has become
physically or mentally incapable of acting as a director and may remain
so for more than three months;
(e) by reason of that person’s mental health, a court makes an order
which wholly or partly prevents that person from personally exercising
any powers or rights which that person would otherwise have; or
(f) a notification is received by the company from the director that the
director is resigning from office, and such resignation has taken effect in
accordance with its terms.
Director’s
remuneration
19.—(1) Directors may undertake any services for the company that the
directors decide.
(2) Directors are entitled to such remuneration as the directors
determine—
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(a) for their services to the company as directors; and
(b) for any other service which they undertake for the company.
(3) A director’s remuneration may take any form and may include any
arrangements in connexion with the payment of a pension, allowance or
gratuity, or any death, sickness or disability benefits, to or in respect of that
director.
(4) Unless the directors decide otherwise, directors’ remuneration
accrues from day-to-day.
(5) Unless the directors decide otherwise, directors are not accountable
to the company for any remuneration which they receive as directors or
other officers or employees of the company’s subsidiaries or of any other
body corporate in which the company is interested.
20. The company may pay any reasonable expenses which the directors Director’s
expenses
properly incur in connexion with their attendance at—
(a) meetings of directors or committees of directors;
(b) general meetings; or
(c) separate meetings of the holders of any class of shares or of
debentures of the company, or otherwise in connexion with the exercise
of their powers and the discharge of their responsibilities in relation to
the company.
PART III
Shares and Distributions
21.—(1) No share shall be issued for less than the aggregate of its All shares
be fully
nominal value and any premium to be paid to the company in consideration to
paid-up
for its issue.
(2) This does not apply to shares taken on the formation of the company
by the subscribers to the company’s memorandum.
22.—(1) Without prejudice to the rights attached to any existing share, Powers to
different
the company may issue shares with such rights or restrictions as may be issue
classes of
determined by ordinary resolution.
share
(2) The company may issue shares which are to be redeemed, or are
liable to be redeemed at the option of the company or the holder, and the
directors may determine the terms, conditions and manner of redemption of
any such shares.
23. Except as required by any written law or these Articles—
(a) no person shall be recognized by the company as holding any
share upon any trust; and
Company not
bound by less
than absolute
interests
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(b) the company is not in any way to be bound by or recognize any
interest in a share other than the holder’s absolute ownership of it and all
the rights attaching to it.
Share
certificates
24.—(1) The company shall issue each shareholder, free of charge,
with one or more certificates in respect of the shares which that shareholder
holds.
(2) Every share certificate shall specify—
(a) in respect of how many shares, of what class, it is issued;
(b) the nominal value of those shares;
(c) that the shares are fully paid; and
(d) any distinguishing numbers assigned to them.
(3) No share certificate may be issued in respect of shares of more than
one class.
(4) If more than one person holds a share, only one share certificate may
be issued in respect of it.
(5) A share certificates shall—
(a) have affixed to them the company’s common seal; or
(b) be otherwise executed in accordance with the Act.
Replacement
of share
certificates
25.—(1) If a certificate issued in respect of a shareholder’s shares is—
(a) damaged or defaced; or
(b) said to be lost, stolen or destroyed,
the shareholder shall entitled to be issued with a replacement certificate in
respect of the same shares.
(2) A shareholder exercising the right to be issued with a replacement
certificate under this article—
(a) may at the same time exercise the right to be issued with a single
certificate or separate certificates;
(b) shall return the certificate which shall be replaced to the company
if it is damaged or defaced; and
(c) shall comply with such conditions as to evidence, indemnity and
the payment of a reasonable fee as the directors may decide.
Share transfers
26.—(1) Shares may be transferred by means of an instrument of
transfer in any usual form or any other form approved by the directors,
which is executed by or on behalf of the transferor.
(2) No fee may be charged for registering any instrument of transfer or
other document relating to or affecting the title to any share.
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(3) The company may retain any instrument of transfer which is
registered.
(4) The transferor remains the holder of a share until the transferee’s
name is entered in the register of members as holder of it.
(5) The directors may refuse to register the transfer of a share, and if
they do so, the instrument of transfer shall be returned to the transferee with
the notice of refusal, unless they suspect that the proposed transfer may be
fraudulent.
27.—(1) If title to a share passes to a transmittee, the company may Transmission
of shares
recognize the transmittee only as having title to that share.
(2) A transmittee who produces such evidence of entitlement to shares
as the directors may properly require—
(a) may, subject to the articles, choose either to become the holder of
those shares or to have them transferred to another person; and
(b) pending any transfer of the shares to another person, has the same
rights as the holder had.
(3) A transmittee shall not have a right to attend or vote at a general
meeting, or agree to a proposed written resolution, in respect of shares
to which he is entitled, by reason of the holder’s death or bankruptcy or
otherwise, unless he becomes the holder of those shares.
28.—(1) A transmittee who wish to become a holder of shares to which Exercise of
transmittees’
he has become entitled, shall notify the company in writing of that wish.
rights
(2) If the transmittee wishes to have a share transferred to another
person, the transmittee shall execute an instrument of transfer in respect
of it.
(3) Any transfer made or executed under this article shall be treated as
if it were made or executed by the person from whom the transmittee has
derived rights in respect of the share, and as if the event which gave rise to
the transmission had not occurred.
29. If a notice is given to a shareholder in respect of shares and a Transmittees
by prior
transmittee is entitled to those shares, the transmittee is bound by the notice bound
notices
if it was given to the shareholder before the transmittee’s name has been
entered in the register of members.
30.—(1) The company may, by ordinary resolution, declare dividends, Procedure
for declaring
and the directors may decide to pay interim dividends.
dividends
(2) A dividend shall not be declared unless the directors have made a
recommendation as to its amount. Such a dividend shall not exceed the
amount recommended by the directors.
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(3) No dividend may be declared or paid unless it is in accordance with
shareholders’ respective rights.
(4) Unless a shareholders’ resolution to declare, or directors’ decision to
pay, a dividend, or the terms on which shares are issued, specify otherwise,
it shall be paid by reference to each shareholder’s holding of shares on the
date of the resolution or decision to declare or pay it.
(5) If the company’s share capital is divided into different classes, no
interim dividend may be paid on shares carrying deferred or non-preferred
rights if, at the time of payment, any preferential dividend is in arrears.
(6) The directors may pay at intervals any dividend payable at a fixed
rate if it appears to them that the profits available for distribution justify the
payment.
(7) If the directors act in good faith, they shall not incur any liability
to the holders of shares conferring preferred rights for any loss they may
suffer by the lawful payment of an interim dividend on shares with deferred
or non-preferred rights.
Payment of
dividends
and other
distributions
31.—(1) Where a dividend or other sum, which is a distribution, is
payable in respect of a share, it shall be paid by one or more of the following
means—
(a) transfer to a bank or building society account specified by the
distribution recipient either in writing or as the directors may otherwise
decide;
(b) sending a cheque made payable to the distribution recipient by
post to the distribution recipient at the distribution recipient’s registered
address, if the distribution recipient is a holder of the share, or in any
other case, to an address specified by the distribution recipient either in
writing or as the directors may otherwise decide;
(c) sending a cheque made payable to such person by post to such
person at such address as the distribution recipient has specified either in
writing or as the directors may otherwise decide; or
(d) any other means of payment as the directors agree with the
distribution recipient either in writing or by such other means as the
directors decide.
(2) In these Articles, “distribution recipient” means, a share in respect of
which a dividend or other sum is payable—
(a) to the holder of the share; or
(b) if the share has two or more joint holders, to whichever of them is
named first in the register of members; or
(c) if the holder is no longer entitled to the share by reason of death or
bankruptcy, or otherwise by operation of law, to the transmittee.
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32. The company may not pay interest on any dividend or other sum No interest on
distributions
payable in respect of a share unless otherwise provided by—
(a) the terms on which the share was issued; or
(b) the provisions of another agreement between the holder of that
share and the company.
33.—(1) All dividends or other sums which are—
(a) payable in respect of shares; and
Unclaimed
distributions
(b) unclaimed after having been declared or become payable,
may be invested or otherwise made use of by the directors for the benefit of
the company until claimed.
(2) Payment of any dividends or other sum into a separate account shall
not make the company a trustee in respect of it.
(3) A distribution recipient is no longer entitled to a dividend or other
sum and consequently the dividend ceases to remain owing by the company
if—
(a) twelve years have passed from the date on which a dividend or
other sum became due for payment; and
(b) the distribution recipient has not claimed the dividend.
34.—(1) Subject to the terms of issue of the share in question, the Non-cash
company may, by ordinary resolution on the recommendation of the distributions
directors, decide to pay all or part of a dividend or other distribution payable
in respect of a share by transferring non-cash assets of equivalent value,
including, without limitation, shares or other securities in any company.
(2) For the purposes of paying non-cash distribution, the directors may
make whatever arrangements they think fit, including, where any difficulty
arises regarding the distribution—
(a) fixing the value of any assets;
(b) paying cash to any distribution recipient on the basis of that value
in order to adjust the rights of recipients; and
(c) vesting any assets in trustees.
35. Distribution recipients may waive their entitlement to a dividend Waiver of
or other distribution payable in respect of a share by giving the company distributions
notice in writing to that effect, but if—
(a) the share has more than one holder; or
(b) more than one person is entitled to the share, whether by reason
of the death or bankruptcy of one or more joint holders, or otherwise,
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the notice is not effective unless it is expressed to be given, and signed, by
all the holders or persons otherwise entitled to the share.
Authority to
capitalize and
appropriation
of capitalized
sums
36.—(1) The directors may, if they are so authorized by an ordinary
resolution—
(a) decide to capitalize any profits of the company, whether or not
they are available for distribution, which are not required for paying a
preferential dividend, or any sum standing to the credit of the company’s
share premium account or capital redemption reserve; and
(b) appropriate any sum which they so decide to capitalize
(a “capitalized sum”) to the persons who would have been entitled to it
if it were distributed by way of dividend (the “persons entitled”) and in
the same proportions.
(2) Capitalized sums shall be applied—
(a) on behalf of the persons entitled; and
(b) in the same proportions as a dividend would have been distributed
to them.
(3) Any capitalized sum may be applied in paying up new shares of a
nominal amount equal to the capitalized sum which are then allotted and
credited as fully paid to the persons entitled or as they may direct.
(4) A capitalized sum which has been appropriated from profits available
for distribution may be applied in paying up new debentures of the company
which are then allotted and credited as fully paid to the persons entitled or
as they may direct.
(5) The directors may—
(a) apply capitalized sums in accordance with paragraphs (3) and (4)
partly in one way and partly in another;
(b) make such arrangements as they think fit to deal with shares
or debentures becoming distributable in fractions under this article,
including the issuing of fractional certificates or the making of cash
payments; and
(c) authorize any person to enter into an agreement with the company
on behalf of all the persons entitled which is binding on them in respect
of the allotment of shares and debentures to them under this article.
Attendance
and speaking
at general
meetings
PART IV
Decision-Making by Shareholders
37.—(1) A person is able to exercise the right to speak at a general
meeting when that person is in a position to communicate to all those
attending the meeting, during the meeting, any information or opinions
which that person has on the business of the meeting.
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(2) A person is able to exercise the right to vote at a general meeting
when—
(a) that person is able to vote, during the meeting, on resolutions put
to the vote at the meeting; and
(b) that person’s vote can be taken into account in determining
whether or not such resolutions are passed at the same time as the votes
of all the other persons attending the meeting.
(3) The directors may make whatever arrangements they consider
appropriate to enable those attending a general meeting to exercise their
rights to speak or vote at the meeting.
(4) In determining attendance at a general meeting, it is immaterial
whether any two or more members attending meeting are at the same place.
(5) Two or more persons who are not at the same place attend a general
meeting if their circumstances are such that if they have, or were to have,
rights to speak and vote at that meeting, they are, or would be able, to
exercise them.
38. No business other than the appointment of the chairman of the Quorum for
general
meeting shall be transacted at a general meeting if the persons attending it ameeting
do not constitute a quorum.
39.—(1) If the directors have appointed a chairman, the chairman shall Chairing
general
preside at general meetings if present and willing to do so.
meetings
(2) If the directors have not appointed a chairman, or if the chairman is
unwilling to chair the meeting or is not present within ten minutes of the
time at which a meeting was due to start—
(a) the directors present; or
(b) if no directors are present,
the meeting shall appoint a director or shareholder to chair the meeting, and
the appointment of the chairman of the meeting shall be the first business
of the meeting.
(3) The person chairing a meeting in accordance with this article is
referred to as “the chairman of the meeting”.
40.—(1) Directors may attend and speak at general meetings, whether Attendance
and speaking
or not they are shareholders.
by directors
non(2) The chairman of the meeting may permit other persons who are and
shareholders
not—
(a) shareholders of the company; or
(b) otherwise entitled to exercise the rights of shareholders in relation
to general meetings,
to attend and speak at a general meeting.
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Adjournment
41.—(1) If the persons attending a general meeting within half an hour
of the time at which the meeting was due to start do not constitute a quorum,
or if during a meeting a quorum ceases to be present, the chairman of the
meeting shall adjourn it.
(2) The chairman of the meeting may adjourn a general meeting at
which a quorum is present if—
(a) the meeting consents to an adjournment; or
(b) it appears to the chairman of the meeting that an adjournment
is necessary to protect the safety of any person attending the meeting
or ensure that the business of the meeting is conducted in an orderly
manner.
(3) The chairman of the meeting shall adjourn a general meeting if
directed to do so by the meeting.
(4) When adjourning a general meeting, the chairman of the meeting
shall—
(a) either specify the time and place to which it is adjourned or state
that it shall continue at a time and place to be fixed by the directors; and
(b) have regard to any directions as to the time and place of any
adjournment which have been given by the meeting.
(5) Where the continuation of an adjourned meeting is to take place
more than fourteen days after it was adjourned, the company shall give
at least seven clear days’ notice of it, excluding the day of the adjourned
meeting and the day on which the notice is given—
(a) to the same persons to whom notice of the company’s general
meetings is required to be given; and
(b) containing the same information which such notice is required to
contain.
(6) No business may be transacted at an adjourned general meeting
which could not properly have been transacted at the meeting if the
adjournment had not taken place.
Voting:
general
42. A resolution put to the vote of a general meeting shall be decided
on a show of hands unless a poll is duly demanded in accordance with the
articles.
Errors and
disputes
43.—(1) No objection may be raised to the qualification of any person
voting at a general meeting except at the meeting or adjourned meeting at
which the vote objected to is tendered, and every vote not disallowed at the
meeting is valid.
(2) Any such objection shall be referred to the chairman of the meeting,
whose decision shall be final.
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44.—(1) A poll on a resolution may be demanded—
299
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Poll votes
(a) in advance of the general meeting where it shall be put to the
vote; or
(b) at a general meeting, either before a show of hands on that
resolution or immediately after the result of a show of hands on that
resolution is declared.
(2) A poll may be demanded by—
(a) the chairman of the meeting;
(b) the directors;
(c) two or more persons having the right to vote on the resolution; or
(d) a person or persons representing not less than one tenth of the
total voting rights of all the shareholders having the right to vote on the
resolution.
(3) A demand for a poll may be withdrawn if—
(a) the poll has not yet been taken; and
(b) the chairman of the meeting consents to the withdrawal.
(4) Polls shall be taken immediately and in such manner as the chairman
of the meeting directs.
45.—(1) Proxies may only validly be appointed by a notice in writing (a Content of
proxy notices
“proxy notice”) which—
(a) states the name and address of the shareholder appointing the
proxy;
(b) identifies the person appointed to be that shareholder’s proxy and
the general meeting in relation to which that person is appointed;
(c) is signed by or on behalf of the shareholder appointing the proxy,
or is authenticated in such manner as the directors may determine; and
(d) is delivered to the company in accordance with the articles and
any instructions contained in the notice of the general meeting to which
they relate.
(2) The company may require proxy notices to be delivered in a
particular form, and may specify different forms for different purposes.
(3) Proxy notices may specify how the proxy appointed under them shall
vote or that the proxy is to abstain from voting on one or more resolutions.
(4) Unless a proxy notice indicates otherwise, it shall be treated as—
(a) giving the person appointed under it as a proxy discretion on how
to vote on any ancillary or procedural resolutions put to the meeting;
and
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(b) appointing that person as a proxy in relation to any adjournment
of the general meeting to which it relates as well as the meeting itself.
Delivery of
proxy notice
46.—(1) A person who is entitled to attend, speak or vote either on
a show of hands or on a poll at a general meeting remains so entitled in
respect of that meeting or any adjournment of it, even though a valid proxy
notice has been delivered to the company by or on behalf of that person.
(2) An appointment under a proxy notice may be revoked by delivering
to the company a notice in writing given by or on behalf of the person by
whom or on whose behalf the proxy notice was given.
(3) A notice revoking a proxy appointment shall only take effect if it is
delivered before the start of the meeting or adjourned meeting to which it
relates.
(4) If a proxy notice is not executed by the person appointing the proxy,
it shall be accompanied by written evidence of the authority of the person
who executed it to execute it on the appointor’s behalf.
Amendment to
resolutions
47.—(1) An ordinary resolution to be proposed at a general meeting
may be amended by ordinary resolution if—
(a) notice of the proposed amendment is given to the company in
writing by a person entitled to vote at the general meeting at which it
shall be proposed not less than forty-eight hours before the meeting
shall take place or such later time as the chairman of the meeting may
determine; and
(b) the proposed amendment does not, in the reasonable opinion of
the chairman of the meeting, materially alter the scope of the resolution.
(2) A special resolution to be proposed at a general meeting may be
amended by ordinary resolution, if—
(a) the chairman of the meeting proposes the amendment at the
general meeting at which the resolution shall be proposed; and
(b) the amendment does not go beyond what is necessary to correct a
grammatical or other non-substantive error in the resolution.
(3) If the chairman of the meeting, acting in good faith, wrongly decides
that an amendment to a resolution is out of order, the chairman’s error does
not invalidate the vote on that resolution.
Means of
communication to be used
PART V
Administrative Arrangements
48.—(1) Subject to the articles, anything sent or supplied by or to the
company under the articles may be sent or supplied in any way in which the
Act provides for documents or information which are authorized or required
by any provision of the Act to be sent or supplied by or to the company.
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(2) Subject to the articles, any notice or document to be sent or supplied
to a director in connexion with the making of decisions by directors
may also be sent or supplied by the means by which that director has
asked to be sent or supplied with such notices or documents for the time
being.
(3) A director may agree with the company that notices or documents
sent to that director in a particular way are to be deemed to have been
received within a specified time of their being sent, and for the specified
time to be less than forty-eight hours.
49.—(1) Any common seal may only be used by the authority of the Company
seals
directors.
(2) The directors may decide by what means and in what form any
common seal shall be used.
(3) Unless otherwise decided by the directors, if the company has a
common seal and it is affixed to a document, the document shall also be
signed by at least one authorized person in the presence of a witness who
attests the signature.
(4) For the purposes of this article, an authorized person shall be—
(a) any director of the company;
(b) the company secretary, if any; or
(c) any person authorized by the directors for the purpose of signing
documents to which the common seal is applied.
50. Except as provided by any written law or authorized by the directors No right
inspect
or an ordinary resolution of the company, no person is entitled to inspect to
accounts and
any of the company’s accounting or other records or documents merely by other records
virtue of being a shareholder.
51. The directors may decide to make provision for the benefit Provision for
on
of persons employed or formerly employed by the company or employees
cessation of
any of its subsidiaries, other than a director or former director or business
shadow director in connexion with the cessation or transfer to any
person of the whole or part of the undertaking of the company or that
subsidiary.
52.—(1) Subject to paragraph (2), a relevant director of the company Indemnity
or an associated company may be indemnified out of the company’s assets
against—
(a) any liability incurred by that director in connexion with any
negligence, default, breach of duty or breach of trust in relation to the
company or an associated company;
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(b) any liability incurred by that director in connexion with the
activities of the company or an associated company in its capacity as a
trustee of an occupational pension scheme; or
(c) any other liability incurred by that director as an officer of the
company or an associated company.
(2) This article does not authorize any indemnity which would be
prohibited or rendered void by any provision of the Act or by any other
written law.
(3) In this article—
(a) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate; and
(b) a “relevant director” means any director or former director of the
company or an associated company.
Insurance
53.—(1) The directors may decide to purchase and maintain insurance,
at the expense of the company, for the benefit of any relevant director in
respect of any relevant loss.
(2) In this article—
(a) a “relevant director” means any director or former director of the
company or an associated company;
(b) a “relevant loss” means any loss or liability which has been or
may be incurred by a relevant director in connexion with that director’s
duties or powers in relation to the company, any associated company
or any pension fund or employees’ share scheme of the company or
associated company; and
(c) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate.
TABLE B
reg. 3
MODEL ARTICLES FOR A PUBLIC COMPANY
ARTICLE
PART I
Preliminary
1. Interpretation
2. Liability of members
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PART II
Director’s Powers and Responsibilities
3. Directors’ general authority
4. Members’ reserve power
5. Delegation by directors
6. Committees
7. Directors to take decisions collectively
8. Calling a directors’ meeting
9. Participation in directors’ meetings
10. Quorum for directors’ meetings
11. Meetings where total number of directors less than quorum
12. Chairing directors’ meetings
13. Voting at directors’ meeting: general rules
14. Chairman’s casting vote at directors’ meetings
15. Alternates voting at directors’ meetings
16. Conflict of interest
17. Proposing directors’ written resolutions
18. Adoption of directors’ written resolutions
19. Directors’ discretion to make further rules
20. Methods of appointing directors
21. Retirement of directors by rotation
22. Termination of directors’ appointment
23. Directors’ remuneration
24. Directors’ expenses
25. Appointment and removal of alternates
26. Rights and responsibilities of alternate directors
27. Termination of alternate directorship
PART III
Decision-Making by Members
28. Members can call general meeting if not enough directors
29. Attendance and speaking at general meetings
30. Quorum for general meetings
31. Chairing general meetings
32. Attendance and speaking by directors and non-members
33. Adjournment
34. Voting: general
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ARTICLE
35. Errors and disputes
36. Demanding a poll
37. Procedure on a poll
38. Content of proxy notices
39. Delivery of proxy notice
40. Amendments to resolutions
41. No voting of shares on which money owed to company
42. Class meetings
PART IV
Shares and Distributions
43. Powers to issue different classes of shares
44. Payment of commissions on subscription for shares
45. Company not bound by less than absolute interests
46. Certificates to be issued except in certain cases
47. Contents and execution of share certificates
48. Consolidated share certificates
49. Replacement share certificates
50. Uncertificated shares
51. Share warrants
52. Company’s lien over partly paid shares
53. Enforcement of the company’s lien
54. Call notices
55. Liability to pay calls
56. When call notice need not be issued
57. Failure to comply with call notice: automatic consequences
58. Notice of intended forfeiture
59. Directors’ power to forfeit shares
60. Effects of forfeiture
61. Procedure following forfeiture
62. Surrender of shares
63. Transfer of certificated shares
64. Transfer of uncertificated shares
65. Transmission of shares
66. Transmittees’ rights
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ARTICLE
67. Exercise of transmittees’ rights
68. Transmittees bound by prior notices
69. Procedure for disposing of fractions of shares
70. Procedure for declaring dividends
71. Calculation of dividends
72. Payment of dividends and other distributions
73. Deductions from distributions in respect of sums owed to the
company
74. No interest on distributions
75. Unclaimed distributions
76. Non-cash distributions
77. Waiver of distributions
78. Authority to capitalize and appropriation of capitalized sums
PART V
Miscellaneous Provisions
79. Means of communication to be used
80. Failure to notify contact details
81. Company seals
82. Destruction of documents
83. No right to inspect accounts and other records
84. Provision for employees on cessation of business
85. Indemnity
86. Insurance
PART I
Preliminary
Interpretation
1.—(1) In these Articles, unless the context requires otherwise—
“alternate” or “alternate director” has the meaning given in article 25;
“appointor” has the meaning given in article 25;
“articles” means the company’s articles of association;
“bankruptcy” includes individual insolvency proceedings;
“call” has the meaning given in article 54;
“call notice” has the meaning given in article 54;
“certificate” means a paper certificate (other than a share warrant) evidencing
a person’s title to specified shares or other securities;
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“certificated” in relation to a share, means that it is not an uncertificated
share or a share in respect of which a share warrant has been issued
and is current;
“chairman” has the meaning given in article 12;
“chairman of the meeting” has the meaning given in article 31;
“company’s lien” has the meaning given in article 52;
“director” means a director of the company, and includes any person
occupying the position of director, by whatever name called;
“distribution recipient” has the meaning given in article 72;
“document” includes, unless otherwise specified, any document sent or
supplied in electronic form;
“fully paid” in relation to a share, means that the nominal value and any
premium to be paid to the company in respect of that share have been
paid to the company;
“holder” in relation to shares means the person whose name is entered in
the register of members as the holder of the shares, or, in the case of
a share in respect of which a share warrant has been issued (and not
cancelled), the person in possession of that warrant;
“instrument” means a document in hard copy form;
“lien enforcement notice” has the meaning given in article 53;
“member” has the meaning given in section 2 of the Act;
“ordinary resolution” has the meaning given in section 2 of the Act;
“paid” means paid or credited as paid;
“participate” in relation to a directors’ meeting, has the meaning given in
article 9;
“partly paid” in relation to a share means that part of that share’s nominal
value or any premium at which it was issued has not been paid to the
company;
“proxy notice” has the meaning given in article 38;
“securities seal” has the meaning given in article 47;
“shares” means shares in the company;
“special resolution” has the meaning given in section 2 of the Act;
“subsidiary” has the meaning given in section 2 of the Act;
“transmittee” means a person entitled to a share by reason of the death or
bankruptcy of a shareholder or otherwise by operation of law;
“uncertificated” in relation to a share means permitting title to shares to be
evidenced and transferred without a certificate; and
“writing” means the representation or reproduction of words, symbols or
other information in a visible form by any method or combination
of methods, whether sent or supplied in electronic form or
otherwise.
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(2) Unless the context otherwise requires, other words or expressions
contained in these Articles bear the same meaning as in the Act as in force
on the date when these Articles become binding on the company.
2. The liability of the members is limited to the amount, if any, unpaid Liability of
members
on the shares held by them.
PART II
Director’s Powers and Responsibilities
3. Subject to the articles, the directors are responsible for the management Directors’
of the company’s business, for which purpose they may exercise all the general
authority
powers of the company.
4.—(1) The members may, by special resolution, direct the directors to Members’
reserve power
take, or refrain from taking, specified action.
(2) No such special resolution invalidates anything which the directors
have done before the passing of the resolution.
5.—(1) Subject to the articles, the directors may delegate any of the Delegation by
directors
powers which are conferred on them under the articles—
(a) to such person or committee;
(b) by such means, including by power of attorney;
(c) to such an extent;
(d) in relation to such matters or territories; and
(e) on such terms and conditions,
as they think fit.
(2) If the directors so specify, any such delegation may authorize
further delegation of the directors’ powers by any person to whom they are
delegated.
(3) The directors may revoke any delegation in whole or part, or alter its
terms and conditions.
6.—(1) Committees to which the directors delegate any of their powers Committees
shall follow procedures which are based as far as they are applicable on
those provisions of the articles which govern the taking of decisions by
directors.
(2) The directors may make rules of procedure for all or any committees,
which prevail over rules derived from the articles if they are not consistent
with them.
7. Decisions of the directors may be taken—
(a) at a directors’ meeting; or
Directors to
take decisions
collectively
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(b) in the form of a directors’ written resolution.
8.—(1) Any director may call a directors’ meeting.
(2) The company secretary shall call a directors’ meeting if a director
so requests.
(3) A directors’ meeting shall be called by giving notice of the meeting
to the directors.
(4) Notice of any directors’ meeting shall indicate—
(a) its proposed date and time;
(b) where it shall take place; and
(c) if it is anticipated that directors participating in the meeting will
not be in the same place, how it is proposed that they should communicate
with each other during the meeting.
(5) Notice of a directors’ meeting shall be given to each director, but
need not be in writing.
(6) Notice of a directors’ meeting need not be given to directors who
waive their entitlement to notice of that meeting, by giving notice to that
effect to the company not more than seven days after the date on which the
meeting is held. Where such notice is given after the meeting has been held,
that shall not affect the validity of the meeting, or of any business conducted
at it.
Participation
in directors’
meetings
9.—(1) Subject to the articles, directors participate in a directors’
meeting, or part of a directors’ meeting, when—
(a) the meeting has been called and takes place in accordance with
these Articles; and
(b) they can each communicate to the others any information
or opinions they have on any particular item of the business of the
meeting.
(2) In determining whether directors are participating in a directors’
meeting, it is irrelevant where any director is or how they communicate
with each other.
(3) If all the directors participating in a meeting are not in the same
place, they may decide that the meeting shall be treated as taking place
wherever any of them is.
Quorum for
directors’
meetings
10.—(1) At a directors’ meeting, unless a quorum is participating, no
proposal shall be voted on, except a proposal to call another meeting.
(2) The quorum for directors’ meetings may be fixed from time to time
by a decision of the directors, but it shall never be less than two, and unless
otherwise fixed it is two.
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11.—(1) This article applies where the total number of directors for the Meetings
where total
time being is less than the quorum for directors’ meetings.
number of
directors less
(2) If there is only one director, the director may appoint sufficient than quorum
directors to make up a quorum or call a general meeting to do so.
(3) If there is more than one director—
(a) a directors’ meeting may take place, if it is called in accordance
with the articles and at least two directors participate in it, with a view to
appointing sufficient directors to make up a quorum or calling a general
meeting to do so; and
(b) if a directors’ meeting is called but only one director attends at
the appointed date and time to participate in it, that director may appoint
sufficient directors to make up a quorum or call a general meeting to
do so.
12.—(1) The directors may appoint a director to chair their meetings.
(2) The person so appointed for the time being is known as the chairman.
Chairing
directors’
meetings
(3) The directors may appoint other directors as deputy or assistant
chairman to chair directors’ meetings in the chairman’s absence.
(4) The directors may terminate the appointment of the chairman,
deputy or assistant chairman at any time.
(5) If neither the chairman nor any director appointed generally
to chair directors’ meetings in the chairman’s absence is participating
in a meeting within ten minutes of the time at which it was to
start, the participating directors shall appoint one of themselves to
chair it.
13.—(1) Subject to these Articles, a decision is taken at a directors’ Voting at
directors’
meeting by a majority of the votes of the participating directors.
meeting:
(2) Subject to these Articles, each director participating in a directors’ general rules
meeting shall have one vote.
(3) Subject to these Articles, if a director has an interest in an actual or
proposed transaction or arrangement with the company—
(a) the director and the director’s alternate may not vote on any
proposal relating to it:
Provided that this does not preclude the alternate from voting in
relation to that transaction or arrangement on behalf of another appointor
who does not have such an interest.
14.—(1) If the numbers of votes for and against a proposal are equal, Chairman’s
vote
the chairman or other director chairing the meeting shall have a casting casting
at directors’
vote.
meetings
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(2) Paragraph (1) shall not apply if, in accordance with the articles,
the chairman or other director is not to be counted as participating in the
decision-making process for quorum or voting purposes.
Alternates
voting at
directors’
meetings
15. A director who is also an alternate director has an additional vote on
behalf of each appointor who is—
(a) not participating in a directors’ meeting; and
(b) would have been entitled to vote if they were participating in it.
Conflict of
interest
16.—(1) If a directors’ meeting, or part of a directors’ meeting, is
concerned with an actual or proposed transaction or arrangement with the
company in which a director is interested, the director shall not be counted
as participating in that meeting, or part of a meeting, for quorum or voting
purposes.
(2) Where paragraph (3) applies, a director who is interested in an actual
or proposed transaction or arrangement with the company shall be counted
as participating in a decision at a directors’ meeting, or part of a directors’
meeting, relating to it for quorum and voting purposes.
(3) This paragraph shall apply when—
(a) the company by ordinary resolution disapplies the provision of
the articles which would otherwise prevent a director from being counted
as participating in, or voting at, a directors’ meeting;
(b) the director’s interest cannot reasonably be regarded as likely to
give rise to a conflict of interest; or
(c) the director’s conflict of interest arises from a permitted cause.
(4) For the purposes of this article, the following are permitted causes—
(a) a guarantee given, or to be given, by or to a director in respect
of an obligation incurred by or on behalf of the company or any of its
subsidiaries;
(b) subscription, or an agreement to subscribe, for shares or other
securities of the company or any of its subsidiaries, or to underwrite, subunderwrite, or guarantee subscription for any such shares or securities;
and
(c) arrangements pursuant to which benefits are made available
to employees and directors or former employees and directors of the
company or any of its subsidiaries which do not provide special benefits
for directors or former directors.
(5) Subject to paragraph (6), if a question arises at a meeting of directors
or of a committee of directors as to the right of a director to participate
in the meeting (or part of the meeting) for voting or quorum purposes,
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the question may, before the conclusion of the meeting, be referred to the
chairman whose ruling in relation to any director other than the chairman
shall be final and conclusive.
(6) Where any question as to the right to participate in the meeting or
part of the meeting arises in respect of the chairman, the question shall be
decided by a decision of the directors at that meeting, for which purpose the
chairman shall not be counted as participating in the meeting or that part of
the meeting for voting or quorum purposes.
17.—(1) Any director may propose a directors’ written resolution.
(2) The company secretary shall propose a directors’ written resolution
if a director so requests.
Proposing
directors’
written
resolutions
(3) A directors’ written resolution shall be proposed by giving notice of
the proposed resolution to the directors.
(4) Notice of a proposed directors’ written resolution shall indicate—
(a) the proposed resolution; and
(b) the time by which it is proposed that the directors should
adopt it.
(5) Notice of a proposed directors’ written resolution shall be given in
writing to each director.
(6) Any decision which a person giving notice of a proposed directors’
written resolution takes regarding the process of adopting that resolution
shall be taken reasonably in good faith.
18.—(1) A proposed directors’ written resolution shall be adopted Adoption
directors’
when all the directors who would have been entitled to vote on the of
written
resolution at a directors’ meeting have signed one or more copies of resolutions
it, provided that those directors would have formed a quorum at such a
meeting.
(2) It is immaterial whether any director signs the resolution before or
after the time by which the notice proposed that it should be adopted.
(3) Once a directors’ written resolution has been adopted, it shall be
treated as if it had been a decision taken at a directors’ meeting in accordance
with these Articles.
(4) A company secretary shall ensure that the company keeps a record,
in writing, of all directors’ written resolutions for at least ten years from the
date of their adoption.
19. Subject to the articles, the directors may make any rule which they Directors’
to
think fit about how they take decisions, and about how such rules are to be discretion
make further
recorded or communicated to directors.
rules
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Methods of
appointing
directors
20. Any person who is willing to act as a director, and is permitted by
law to do so, may be appointed to be a director—
(a) by ordinary resolution; or
(b) by a decision of the directors.
Retirement of
directors by
rotation
21.—(1) At the first annual general meeting of a company, all directors
shall retire from office.
(2) At every subsequent annual general meeting any directors—
(a) who have been appointed by the directors since the last annual
general meeting; or
(b) who were not appointed or reappointed at one of the preceding
two annual general meetings,
shall retire from office and may offer themselves for reappointment by the
members.
Termination
of directors’
appointment
22. A person ceases to be a director as soon as—
(a) that person ceases to be a director by virtue of any provision of
the Act or is prohibited from being a director by law;
(b) a bankruptcy order is made against that person;
(c) a composition is made with that person’s creditors generally in
satisfaction of that person’s debts;
(d) a registered medical practitioner who is treating that person gives
a written opinion to the company stating that that person has become
physically or mentally incapable of acting as a director and may remain
so for more than three months;
(e) by reason of that person’s mental health, a court makes an order
which wholly or partly prevents that person from personally exercising
any powers or rights which that person would otherwise have; or
(f) notification is received by the company from the director that the
director is resigning from office as director, and such resignation has
taken effect in accordance with its terms.
Directors’
remuneration
23.—(1) A director may undertake any services for the company that the
directors decide.
(2) A director shall be entitled to such remuneration as the directors
determine—
(a) for their services to the company as directors; and
(b) for any other service which they undertake for the company.
(3) Subject to these Articles, a director’s remuneration may—
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(a) take any form; and
(b) include any arrangements in connexion with the payment of a
pension, allowance or gratuity, or any death, sickness or disability
benefits, to or in respect of that director.
(4) Unless the directors decide otherwise, directors’ remuneration
accrues from day-to-day.
(5) Unless the directors decide otherwise, directors are not accountable
to the company for any remuneration which they receive as directors or
other officers or employees of the company’s subsidiaries or of any other
body corporate in which the company is interested.
24. The company may pay any reasonable expenses which the directors Directors’
expenses
properly incur in connexion with their attendance at—
(a) meetings of directors or committees of directors;
(b) general meetings; or
(c) separate meetings of the holders of any class of shares or of
debentures of the company, or otherwise in connexion with the exercise
of their powers and the discharge of their responsibilities in relation to
the company.
25.—(1) Any director (the “appointor”) may appoint as an alternate Appointment
removal
any other director, or any other person approved by resolution of the and
of alternates
directors, to—
(a) exercise that director’s powers; and
(b) carry out that director’s responsibilities, in relation to the taking
of decisions by the directors in the absence of the alternate’s appointor.
(2) Any appointment or removal of an alternate shall be effected by
notice in writing to the company signed by the appointor, or in any other
manner approved by the directors.
(3) The notice shall—
(a) identify the proposed alternate; and
(b) in the case of a notice of appointment, contain a statement signed
by the proposed alternate that the proposed alternate is willing to act as
the alternate of the director giving the notice.
26.—(1) An alternate director has the same rights, in relation to any Rights and
directors’ meeting or directors’ written resolution, as the alternate’s responsibilities
of alternate
appointor.
directors
(2) Except as the articles specify otherwise, alternate directors—
(a) are deemed for all purposes to be directors;
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(b) are liable for their own acts and omissions;
(c) are subject to the same restrictions as their appointors; and
(d) are not deemed to be agents of or for their appointors.
(3) A person who is an alternate director but not a director—
(a) may be counted as participating for the purposes of determining
whether a quorum is participating (but only if that person’s appointor is
not participating); and
(b) may sign a written resolution (but only if it is not signed or to be
signed by that person’s appointor) and no alternate may be counted as
more than one director for such purposes.
(4) An alternate director shall not be entitled to receive any remuneration
from the company for serving as an alternate director except such part of the
alternate’s appointor’s remuneration as the appointor may direct by notice
in writing made to the company.
Termination
of alternate
directorship
27. An alternate director’s appointment as an alternate terminates—
(a) when the alternate’s appointor revokes the appointment by notice
to the company in writing specifying when it shall terminate;
(b) on the occurrence in relation to the alternate of any event which,
if it occurred in relation to the alternate’s appointor, would result in the
termination of the appointor’s appointment as a director;
(c) on the death of the alternate’s appointor; or
(d) when the alternate’s appointor’s appointment as a director
terminates, except that an alternate’s appointment as an alternate does
not terminate when the appointor retires by rotation at a general meeting
and is then reappointed as a director at the same general meeting.
PART III
Decision-Making by Members
Members can
call general
meeting if
not enough
directors
28. Where—
(a) the company has fewer than two directors; and
(b) the director (if any) is unable or unwilling to appoint sufficient
directors to make up a quorum or to call a general meeting to do so,
then two or more members may call a general meeting (or instruct the
company secretary to do so) for the purpose of appointing one or more
directors.
Attendance
and speaking
at general
meetings
29.—(1) A person is able to exercise the right to speak at a general
meeting when that person is in a position to communicate to all those
attending the meeting, during the meeting, any information or opinions
which that person has on the business of the meeting.
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(2) A person is able to exercise the right to vote at a general meeting
when—
(a) that person is able to vote, during the meeting, on resolutions put
to the vote at the meeting; and
(b) that person’s vote can be taken into account in determining
whether or not such resolutions are passed at the same time as the votes
of all the other persons attending the meeting.
(3) The directors may make whatever arrangements they consider
appropriate to enable those attending a general meeting to exercise their
rights to speak or vote at it.
(4) In determining attendance at a general meeting, it is immaterial
whether any two or more members attending it are in the same place as
each other.
(5) Two or more persons who are not in the same place as each other
attend a general meeting if their circumstances are such that if they have
(or were to have) rights to speak and vote at that meeting, they are
(or would be) able to exercise them.
30. No business other than the appointment of the chairman of the Quorum
general
meeting shall be transacted at a general meeting if the persons attending it for
meetings
do not constitute a quorum.
31.—(1) Where the directors have appointed a chairman, the chairman Chairing
general
shall chair general meetings if present and willing to do so.
meetings
(2) Where the directors have not appointed a chairman, or if the chairman
is unwilling to chair the meeting or is not present within ten minutes of the
time at which a meeting was due to start—
(a) the directors present; or
(b) if no directors are present, the meeting,
shall appoint a director or member to chair the meeting, and the appointment
of the chairman of the meeting shall be the first business of the meeting.
(3) The person chairing a meeting in accordance with this article is
referred to as “the chairman of the meeting”.
32.—(1) Directors may attend and speak at general meetings, whether Attendance
and speaking
or not they are members.
by directors
non(2) The chairman of the meeting may permit other persons who are and
members
not—
(a) members of the company; or
(b) otherwise entitled to exercise the rights of members in relation to
general meetings,
to attend and speak at a general meeting.
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Adjournment
33.—(1) If the persons attending a general meeting within half an hour
of the time at which the meeting was due to start do not constitute a quorum,
or if during a meeting a quorum ceases to be present, the chairman of the
meeting must adjourn it.
(2) The chairman of the meeting may adjourn a general meeting at
which a quorum is present if—
(a) the meeting consents to an adjournment; or
(b) it appears to the chairman of the meeting that an adjournment
is necessary to protect the safety of any person attending the meeting
or ensure that the business of the meeting is conducted in an orderly
manner.
(3) The chairman of the meeting shall adjourn a general meeting if
directed to do so by the meeting.
(4) When adjourning a general meeting, the chairman of the meeting
shall—
(a) either specify the time and place to which it is adjourned or state
that it shall continue at a time and place to be fixed by the directors; and
(b) have regard to any directions as to the time and place of any
adjournment which have been given by the meeting.
(5) If the continuation of an adjourned meeting shall take place more
than fourteen days after it was adjourned, the company must give at least
seven clear days’ notice of it, excluding the day of the adjourned meeting
and the day on which the notice is given—
(a) to the same persons to whom notice of the company’s general
meetings is required to be given; and
(b) containing the same information which such notice is required to
contain.
(6) No business may be transacted at an adjourned general meeting
which could not properly have been transacted at the meeting if the
adjournment had not taken place.
Voting:
general
34. A resolution put to the vote of a general meeting shall be decided
on a show of hands unless a poll is duly demanded in accordance with the
articles.
Errors and
disputes
35.—(1) No objection may be raised to the qualification of any person
voting at a general meeting except at the meeting or adjourned meeting at
which the vote objected to is tendered, and every vote not disallowed at the
meeting is valid.
(2) Any such objection shall be referred to the chairman of the meeting
whose decision shall be final.
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36.—(1) A poll on a resolution may be demanded—
(а) in advance of the general meeting where it shall be put to the
vote; or
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Demanding
a poll
(b) at a general meeting, either before a show of hands on that
resolution or immediately after the result of a show of hands on that
resolution is declared.
(2) A poll may be demanded by—
(a) the chairman of the meeting;
(b) the directors;
(c) two or more persons having the right to vote on the resolution; or
(d) a person or persons representing not less than one tenth of the
total voting rights of all the members having the right to vote on the
resolution.
(3) A demand for a poll may be withdrawn if—
(a) the poll has not yet been taken; and
(b) the chairman of the meeting consents to the withdrawal.
37.—(1) Subject to the articles, polls at general meetings shall be taken Procedure on
a poll
when, where and in such manner as the chairman of the meeting directs.
(2) The chairman of the meeting may appoint scrutineers (who need
not be members) and decide how and when the result of the poll shall be
declared.
(3) The result of a poll shall be the decision of the meeting in respect of
the resolution on which the poll was demanded.
(4) A poll on—
(a) the election of the chairman of the meeting; or
(b) a question of adjournment,
shall be taken immediately.
(5) Other polls shall be taken within thirty days of their being
demanded.
(6) A demand for a poll shall not prevent a general meeting from
continuing, except as regards the question on which the poll was
demanded.
(7) No notice need be given of a poll not taken immediately if the time
and place at which it shall be taken are announced at the meeting at which
it is demanded.
(8) In any other case, at least seven days’ notice shall be given specifying
the time and place at which the poll shall be taken.
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Content of
proxy notices
38.—(1) Proxies may only validly be appointed by a notice in writing (a
“proxy notice”) which—
(a) states the name and address of the member appointing the proxy;
(b) identifies the person appointed to be that member’s proxy and the
general meeting in relation to which that person is appointed;
(c) is signed by or on behalf of the member appointing the proxy, or
is authenticated in such manner as the directors may determine; and
(d) is delivered to the company in accordance with the articles and
any instructions contained in the notice of the general meeting to which
they relate.
(2) The company may require proxy notices to be delivered in a
particular form, and may specify different forms for different purposes.
(3) A proxy notice may specify how the proxy appointed under
it shall vote or that the proxy is to abstain from voting on one or more
resolutions.
(4) Unless a proxy notice indicates otherwise, it shall be treated as—
(a) giving the person appointed under it as a proxy discretion on how
to vote on any ancillary or procedural resolutions put to the meeting; and
(b) appointing that person as a proxy in relation to any adjournment
of the general meeting to which it relates as well as the meeting itself.
Delivery of
proxy notice
39.—(1) Any notice of a general meeting shall specify the address or
addresses (“proxy notification address”) at which the company or its agents
will receive proxy notices relating to that meeting, or any adjournment of it,
delivered in hard copy or electronic form.
(2) A person who is entitled to attend, speak or vote (either on a show
of hands or on a poll) at a general meeting remains so entitled in respect of
that meeting or any adjournment of it, even though a valid proxy notice has
been delivered to the company by or on behalf of that person.
(3) Subject to paragraphs (4) and (5), a proxy notice shall be delivered
to a proxy notification address not less than forty-eight hours before the
general meeting or adjourned meeting to which it relates.
(4) In the case of a poll taken more than forty-eight hours after it is
demanded, the notice shall be delivered to a proxy notification address not
less than twenty-four hours before the time appointed for the taking of the
poll.
(5) In the case of a poll not taken during the meeting but taken not more
than forty-eight hours after it was demanded, the proxy notice shall be
delivered—
(a) in accordance with paragraph (3); or
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(b) at the meeting at which the poll was demanded to the chairman,
secretary or any director.
(6) An appointment under a proxy notice may be revoked by delivering
a notice in writing given by or on behalf of the person by whom or
on whose behalf the proxy notice was given to a proxy notification
address.
(7) A notice revoking a proxy appointment only takes effect if it is
delivered before—
or
(a) the start of the meeting or adjourned meeting to which it relates;
(b) in the case of a poll not taken on the same day as the meeting
or adjourned meeting the time appointed for taking the poll to which it
relates.
(8) Where a proxy notice is not signed by the person appointing the
proxy, it shall be accompanied by written evidence of the authority of the
person who executed it to execute it on the appointor’s behalf.
40.—(1) An ordinary resolution to be proposed at a general meeting Amendments
to resolutions
may be amended by ordinary resolution if—
(a) notice of the proposed amendment is given to the company
secretary in writing by a person entitled to vote at the general meeting
at which it shall be proposed not less than forty-eight hours before the
meeting is to take place or such later time as the chairman of the meeting
may determine; and
(b) the proposed amendment does not, in the reasonable opinion
of the chairman of the meeting, materially alter the scope of the
resolution.
(2) A special resolution to be proposed at a general meeting may be
amended by ordinary resolution, if—
(a) the chairman of the meeting proposes the amendment at the
general meeting at which the resolution shall be proposed; and
(b) the amendment does not go beyond what is necessary to correct a
grammatical or other non-substantive error in the resolution.
(3) If the chairman of the meeting, acting in good faith, wrongly decides
that an amendment to a resolution is out of order, the chairman’s error shall
not invalidate the vote on that resolution.
41. No voting rights attached to a share may be exercised at any general No voting
shares on
meeting, at any adjournment of it, or on any poll called at or in relation to of
which money
it, unless all amounts payable to the company in respect of that share have owed to
company
been paid.
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Class meetings
42. The provisions of the articles relating to general meetings apply,
with any necessary modifications, to meetings of the holders of any class
of shares.
Powers to
issue different
classes of
shares
PART IV
Shares and Distributions
43.—(1) Subject to these Articles, but without prejudice to the
rights attached to any existing share, the company may issue shares
with such rights or restrictions as may be determined by ordinary
resolution.
(2) The company may issue shares which are to be redeemed, or are
liable to be redeemed at the option of the company or the holder, and the
directors may determine the terms, conditions and manner of redemption of
any such shares.
Payment of
commissions
on
subscription
for shares
44.—(1) The company may pay any person a commission in
consideration for that person—
(a) subscribing, or agreeing to subscribe, for shares; or
(b) procuring, or agreeing to procure, subscriptions for shares.
(2) Any such commission may be paid—
(a) in cash, or in fully paid or partly paid shares or other securities, or
partly in one way and partly in the other; and
(b) in respect of a conditional or an absolute subscription.
Company not
bound by less
than absolute
interests
45. Except as required by law, a person shall not be recognized by the
company as holding any share upon any trust, and except as otherwise
required by law or the articles, the company shall not in any way be bound
by or recognize any interest in a share other than the holder’s absolute
ownership of it and all the rights attaching to it.
Certificates
to be issued
except in
certain cases
46.—(1) The company shall issue each member with one or more
certificates in respect of the shares which that member holds.
(2) This article does not apply to—
(a) uncertificated shares;
(b) shares in respect of which a share warrant has been issued; or
(c) shares in respect of which the Act permits the company not to
issue a certificate.
(3) Except as otherwise specified in these Articles, all certificates shall
be issued free of charge.
(4) No certificate may be issued in respect of shares of more than one
class.
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(5) If more than one person holds a share, only one certificate may be
issued in respect of it.
47.—(1) Every certificate shall specify—
(a) in respect of how many shares, of what class, it is issued;
(b) the nominal value of those shares;
Contents and
execution
of share
certificates
(c) the amount paid up on them; and
(d) any distinguishing numbers assigned to them.
(2) Every certificate shall—
(a) have affixed to it the company’s common seal or an official seal
which is a facsimile of the company’s common seal with the addition on
its face of the word “Securities” (a “securities seal”); or
(b) be otherwise executed in accordance with the Act.
48.—(1) Where a member’s holding of shares of a particular class Consolidated
share
increases, the company may issue that member with—
certificates
(a) a single, consolidated certificate in respect of all the shares of a
particular class which that member holds; or
(b) a separate certificate in respect of only those shares by which that
member’s holding has increased.
(2) When a member’s holding of shares of a particular class is reduced,
the company shall ensure that the member is issued with one or more
certificates in respect of the number of shares held by the member after that
reduction. But the company need not, in the absence of a request from the
member, issue any new certificate if—
(a) all the shares which the member no longer holds as a result of the
reduction; and
(b) none of the shares which the member retains following the
reduction were, immediately before the reduction, represented by the
same certificate.
(3) A member may request the company, in writing, to replace—
or
(a) the member’s separate certificates with a consolidated certificate;
(b) the member’s consolidated certificate with two or more separate
certificates representing such proportion of the shares as the member
may specify.
(4) When the company complies with such a request it may charge such
reasonable fee as the directors may decide for doing so.
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(5) A consolidated certificate shall not be issued unless any certificates
which it shall replace have first been returned to the company for
cancellation.
Replacement
share
certificates
49.—(1) Where a certificate issued in respect of a member’s shares
is—
(a) damaged or defaced; or
(b) said to be lost, stolen or destroyed,
the member is entitled to be issued with a replacement certificate in respect
of the same shares.
(2) A member exercising the right to be issued with such a replacement
certificate—
(a) may at the same time exercise the right to be issued with a single
certificate or separate certificates;
(b) shall return the certificate which shall be replaced to the company
if it is damaged or defaced; and
(c) shall comply with such conditions as to evidence, indemnity and
the payment of a reasonable fee as the directors decide.
Uncertificated
shares
50.—(1) In this article, the “relevant rules” means—
(a) any applicable provision of the Act about the holding, evidencing
of title to, or transfer of shares other than in certificated form; and
(b) any applicable legislation, rules or other arrangements made
under or by virtue of such provision.
(2) The provisions of this article have effect subject to the relevant
rules.
(3) Any provision of the articles which is inconsistent with the relevant
rules shall be disregarded, to the extent that it is inconsistent, whenever the
relevant rules apply.
(4) Any share or class of shares of the company may be issued or held
on such terms, or in such a way, that—
or
(a) title to it or them is not, or shall not be, evidenced by a certificate;
(b) it or they may or shall be transferred wholly or partly without a
certificate.
(5) The directors have power to take such steps as they think fit in
relation to—
(a) the evidencing of and transfer of title to uncertificated shares
(including in connexion with the issue of such shares);
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(b) any records relating to the holding of uncertificated shares;
(c) the conversion of certificated shares into uncertificated shares; or
(d) the conversion of uncertificated shares into certificated shares.
(6) The company may, by notice to the holder of a share, require the
share—
(a) if it is uncertificated, to be converted into certificated form;
and
(b) if it is certificated, to be converted into uncertificated form,
to enable it to be dealt with in accordance with the articles.
(7) Where—
(a) the articles give the directors power to take action, or require
other persons to take action, in order to sell, transfer or otherwise dispose
of shares; and
(b) uncertificated shares are subject to that power, but the power
is expressed in terms which assume the use of a certificate or other
written instrument, the directors may take such action as is necessary
or expedient to achieve the same results when exercising that power in
relation to uncertificated shares.
(8) In particular, the directors may take such action as they consider
appropriate to achieve the sale, transfer, disposal, forfeiture, re-allotment or
surrender of an uncertificated share or otherwise to enforce a lien in respect
of it.
(9) Unless the directors otherwise determine, shares which a member
holds in uncertificated form shall be treated as separate holdings from any
shares which that member holds in certificated form.
(10) A class of shares shall not be treated as two classes simply because
some shares of that class are held in certificated form and others are held in
uncertificated form.
51.—(1) The directors may issue a share warrant in respect of any fully Share warrants
paid share.
(2) A share warrant shall be—
(a) issued in such form; and
(b) executed in such a manner as the directors may decide.
(3) A share represented by a share warrant may be transferred by
delivery of the warrant representing it.
(4) The directors may make provision for the payment of dividends in
respect of any share represented by a share warrant.
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(5) Subject to these Articles, the directors may decide the conditions on
which any share warrant is issued. In particular, they may—
(a) decide the conditions on which new warrants are to be issued in
place of warrants which are damaged or defaced, or said to have been
lost, stolen or destroyed;
(b) decide the conditions on which bearers of warrants are entitled to
attend and vote at general meetings;
(c) decide the conditions subject to which bearers of warrants may
surrender their warrant so as to hold their shares in certificated or
uncertificated form instead; and
(d) vary the conditions of issue of any warrant from time to time,
and the bearer of a warrant is subject to the conditions and procedures
in force in relation to it, whether or not they were decided or specified
before the warrant was issued.
(6) Subject to the conditions on which the warrants are issued from time
to time, bearers of share warrants have the same rights and privileges as
they would if their names had been included in the register as holders of the
shares represented by their warrants.
(7) The company shall not in any way be bound by or recognize any
interest in a share represented by a share warrant other than the absolute
right of the bearer of that warrant to that warrant.
Company’s
lien over
partly paid
shares
52.—(1) The company shall have a lien (“the company’s lien”) over
every share which is partly paid for any part of—
(a) that share’s nominal value; and
(b) any premium at which it was issued, which has not been paid to
the company, and which is payable immediately or at some time in the
future, whether or not a call notice has been sent in respect of it.
(2) The company’s lien over a share—
(a) takes priority over any third party’s interest in that share; and
(b) extends to any dividend or other money payable by the company
in respect of that share and (if the lien is enforced and the share is sold
by the company) the proceeds of sale of that share.
(3) The directors may at any time decide that a share which is or would
otherwise be subject to the company’s lien shall not be subject to it, either
wholly or in part.
Enforcement
of the
company’s
lien
53.—(1) Subject to the provisions of these Articles, if—
(a) a lien enforcement notice has been given in respect of a share;
and
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(b) the person to whom the notice was given has failed to comply
with it,
the company may sell that share in such manner as the directors decide.
(2) A lien enforcement notice—
(a) may only be given in respect of a share which is subject to the
company’s lien, in respect of which a sum is payable and the due date for
payment of that sum has passed;
(b) shall specify the share concerned;
(c) shall require payment of the sum payable within fourteen days of
the notice;
(d) shall be addressed either to the holder of the share or to a person
entitled to it by reason of the holder’s death, bankruptcy or otherwise;
and
(e) shall state the company’s intention to sell the share if the notice
is not complied with.
(3) Where shares are sold under this article—
(a) the directors may authorize any person to execute an instrument
of transfer of the shares to the purchaser or a person nominated by the
purchaser; and
(b) the transferee is not bound to see to the application of the
consideration, and the transferee’s title is not affected by any irregularity
in or invalidity of the process leading to the sale.
(4) The net proceeds of any such sale (after payment of the costs of sale
and any other costs of enforcing the lien) shall be applied—
(a) first, in payment of so much of the sum for which the lien exists
as was payable at the date of the lien enforcement notice; and
(b) second, to the person entitled to the shares at the date of the sale,
but only after the certificate for the shares sold has been surrendered to
the company for cancellation or a suitable indemnity has been given for
any lost certificates, and subject to a lien equivalent to the company’s
lien over the shares before the sale for any money payable in respect of
the shares after the date of the lien enforcement notice.
(5) A statutory declaration by a director or the company secretary that
the declarant is a director or the company secretary and that a share has been
sold to satisfy the company’s lien on a specified date—
(a) is conclusive evidence of the facts stated in it as against all
persons claiming to be entitled to the share; and
(b) subject to compliance with any other formalities of transfer
required by the articles or by law, constitutes a good title to the share.
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Call notices
54.—(1) Subject to the articles and the terms on which shares are allotted,
the directors may send a notice (a “call notice”) to a member requiring the
member to pay the company a specified sum of money (a “call”) which is
payable in respect of shares which that member holds at the date when the
directors decide to send the call notice.
(2) A call notice—
(a) may not require a member to pay a call which exceeds the
total sum unpaid on that member’s shares, whether as to the share’s
nominal value or any amount payable to the company by way of
premium;
(b) shall state when and how any call to which it relates shall be paid;
and
(c) may permit or require the call to be paid by installments.
(3) A member shall comply with the requirements of a call notice, but no
member is obliged to pay any call before fourteen days have passed since
the notice was sent.
(4) Before the company has received any call due under a call notice,
the directors may—
(a) revoke it wholly or in part; or
(b) specify a later time for payment than is specified in the notice, by
a further notice in writing to the member in respect of whose shares the
call is made.
Liability to
pay calls
55.—(1) Liability to pay a call is not extinguished or transferred by
transferring the shares in respect of which it is required to be paid.
(2) Joint holders of a share are jointly and severally liable to pay all calls
in respect of that share.
(3) Subject to the terms on which shares are allotted, the directors may,
when issuing shares, provide that call notices sent to the holders of those
shares may require them—
(a) to pay calls which are not the same; or
(b) to pay calls at different times.
When call
notice need
not be issued
56.—(1) A call notice need not be issued in respect of sums which are
specified, in the terms on which a share is issued, as being payable to the
company in respect of that share, whether in respect of nominal value or
premium—
(a) on allotment;
(b) on the occurrence of a particular event; or
(c) on a date fixed by or in accordance with the terms of issue.
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(2) Where the due date for payment of such a sum has passed and it
has not been paid, the holder of the share concerned shall be treated in all
respects as having failed to comply with a call notice in respect of that sum,
and shall be liable to the same consequences as regards the payment of
interest and forfeiture.
57.—(1) Where a person is liable to pay a call and fails to do so by the Failure to
comply with
call payment date—
call notice:
(a) the directors may issue a notice of intended forfeiture to that automatic
consequences
person; and
(b) until the call is paid, the person shall pay the company interest on
the call from the call payment date at the relevant rate.
(2) For the purposes of this article—
(a) the “call payment date” is the time when the call notice states that
a call is payable, unless the directors give a notice specifying a later date,
in which case the ‘‘call payment date” is that later date;
(b) the “relevant rate” is—
(i) the rate fixed by the terms on which the share in respect of
which the call is due was allotted;
(ii) such other rate as was fixed in the call notice which required
payment of the call, or has otherwise been determined by the directors;
or
(iii) if no rate is fixed in either of these ways, five per cent per
annum.
(3) The relevant rate shall not exceed by more than five percentage points
the base lending rate most recently set by the Reserve Bank of Malaŵi.
(4) The directors may waive any obligation to pay interest on a call
wholly or in part.
58. A notice of intended forfeiture—
(a) may be sent in respect of any share in respect of which a call has
not been paid as required by a call notice;
Notice of
intended
forfeiture
(b) shall be sent to the holder of that share or to a person entitled to it
by reason of the holder’s death, bankruptcy or otherwise;
(c) shall require payment of the call and any accrued interest by a
date which is not less than fourteen days after the date of the notice;
(d) shall state how the payment shall be made; and
(e) shall state that if the notice is not complied with, the shares in
respect of which the call is payable will be liable to be forfeited.
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Directors’
power to
forfeit shares
59. If a notice of intended forfeiture is not complied with before the
date by which payment of the call is required in the notice of intended
forfeiture, the directors may decide that any share in respect of which it was
given be forfeited, and the forfeiture shall include all dividends or other
moneys payable in respect of the forfeited shares and not paid before the
forfeiture.
Effects of
forfeiture
60.—(1) Subject to these Articles, the forfeiture of a share
extinguishes—
(a) all interests in that share, and all claims and demands against the
company in respect of it; and
(b) all other rights and liabilities incidental to the share as between
the person whose share it was prior to the forfeiture and the company.
(2) Any share which is forfeited in accordance with the articles—
(a) is deemed to have been forfeited when the directors decide that
it is forfeited;
(b) is deemed to be the property of the company; and
(c) may be sold, re-allotted or otherwise disposed of as the directors
think fit.
(3) Where a person’s shares have been forfeited—
(a) the company shall send the person notice that forfeiture has
occurred and record it in the register of members;
(b) the person ceases to be a member in respect of those shares;
(c) the person shall surrender the certificate for the shares forfeited to
the company for cancellation;
(d) that person remains liable to the company for all sums payable by
that person under the articles at the date of forfeiture in respect of those
shares, including any interest, whether accrued before or after the date
of forfeiture; and
(e) the directors may waive payment of such sums wholly or in part
or enforce payment without any allowance for the value of the shares
at the time of forfeiture or for any consideration received on their
disposal.
(4) At any time before the company disposes of a forfeited share, the
directors may decide to cancel the forfeiture on payment of all calls and
interest due in respect of it and on such other terms as they think fit.
Procedure
following
forfeiture
61.—(1) If a forfeited share is to be disposed of by being transferred,
the company may receive the consideration for the transfer and the directors
may authorize any person to execute the instrument of transfer.
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(2) A statutory declaration by a director or the company secretary that
the declarant is a director or the company secretary and that a share has been
forfeited on a specified date—
(a) is conclusive evidence of the facts stated in it as against all
persons claiming to be entitled to the share; and
(b) subject to compliance with any other formalities of transfer
required by the articles or by law, constitutes a good title to the share.
(3) A person to whom a forfeited share is transferred shall not be bound
to see to the application of the consideration, if any, nor is that person’s
title to the share affected by any irregularity in or invalidity of the process
leading to the forfeiture or transfer of the share.
(4) If the company sells a forfeited share, the person who held it prior to
its forfeiture is entitled to receive from the company the proceeds of such
sale, net of any commission, and excluding any amount which—
(a) was, or would have become, payable; and
(b) had not, when that share was forfeited, been paid by that person
in respect of that share:
Provided that no interest is payable to such a person in respect of such
proceeds and the company is not required to account for any money earned
on them.
62.—(1) A member may surrender any share—
(a) in respect of which the directors may issue a notice of intended
forfeiture;
Surrender of
shares
(b) which the directors may forfeit; or
(c) which has been forfeited.
(2) The directors may accept the surrender of any such share.
(3) The effect of surrender on a share is the same as the effect of
forfeiture on that share.
(4) A share which has been surrendered may be dealt with in the same
way as a share which has been forfeited.
63.—(1) Certificated shares may be transferred by means of an Transfer of
instrument of transfer in any usual form or any other form approved by the certificated
shares
directors, which is executed by or on behalf of—
(a) the transferor; and
(b) if any of the shares is partly paid, the transferee.
(2) No fee may be charged for registering any instrument of transfer or
other document relating to or affecting the title to any share.
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(3) The company may retain any instrument of transfer which is
registered.
(4) The transferor remains the holder of a certificated share until the
transferee’s name is entered in the register of members as holder of it.
(5) The directors may refuse to register the transfer of a certificated
share if—
(a) the share is not fully paid;
(b) the transfer is not lodged at the company’s registered office or
such other place as the directors have appointed;
(c) the transfer is not accompanied by the certificate for the shares to
which it relates, or such other evidence as the directors may reasonably
require to show the transferor’s right to make the transfer, or evidence
of the right of someone other than the transferor to make the transfer on
the transferor’s behalf;
(d) the transfer is in respect of more than one class of share; or
(e) the transfer is in favour of more than four transferees.
(6) Where the directors refuse to register the transfer of a share, the
instrument of transfer shall be returned to the transferee with the notice of
refusal unless they suspect that the proposed transfer may be fraudulent.
Transfer of
uncertificated
shares
64. A transfer of an uncertificated share shall not be registered if it is in
favour of more than four transferees.
Transmission
of shares
65.—(1) Where title to a share passes to a transmittee, the company may
only recognize the transmittee as having any title to that share.
(2) Nothing in these Articles releases the estate of a deceased member
from any liability in respect of a share solely or jointly held by that member.
Transmittees’
rights
66.—(1) A transmittee who produces such evidence of entitlement to
shares as the directors may properly require—
(a) may, subject to these Articles, choose either to become the holder
of those shares or to have them transferred to another person; and
(b) subject to these Articles, and pending any transfer of the shares to
another person, has the same rights as the holder had.
(2) A transmittee shall not have the right to attend or vote at a general
meeting in respect of shares to which they are entitled, by reason of the
holder’s death or bankruptcy or otherwise, unless they become the holders
of those shares.
Exercise of
transmittees’
rights
67.—(1) Transmittees who wish to become the holders of shares to
which they have become entitled shall notify the company in writing of
that wish.
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(2) If the share is a certificated share and a transmittee wishes to have it
transferred to another person, the transmittee shall execute an instrument of
transfer in respect of it.
(3) If the share is an uncertificated share and the transmittee wishes to
have it transferred to another person, the transmittee shall—
(a) procure that all appropriate instructions are given to effect the
transfer; or
(b) procure that the uncertificated share is changed into certificated
form and then execute an instrument of transfer in respect of it.
(4) Any transfer made or executed under this article shall be treated as
if it were made or executed by the person from whom the transmittee has
derived rights in respect of the share, and as if the event which gave rise to
the transmission had not occurred.
68. If a notice is given to a member in respect of shares and a transmittee Transmittees
by prior
is entitled to those shares, the transmittee is bound by the notice if it was bound
notices
given to the member before the transmittee’s name has been entered in the
register of members.
69.—(1) This article applies where—
(a) there has been a consolidation or division of shares; and
(b) as a result, members are entitled to fractions of shares.
Procedure for
disposing of
fractions of
shares
(2) The directors may—
(a) sell the shares representing the fractions to any person including
the company for the best price reasonably obtainable;
(b) in the case of a certificated share, authorize any person to execute
an instrument of transfer of the shares to the purchaser or a person
nominated by the purchaser; and
(c) distribute the net proceeds of sale in due proportion among the
holders of the shares.
(3) Where any holder’s entitlement to a portion of the proceeds of sale
amounts to less than a minimum figure determined by the directors, that
member’s portion may be distributed to an organization which is a charity
for the purposes of any written laws.
(4) A person to whom the shares are transferred shall not be obliged to
ensure that any purchase money is received by the person entitled to the
relevant fractions.
(5) The transferee’s title to the shares shall not be affected by any
irregularity in or invalidity of the process leading to their sale.
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Procedure
for declaring
dividends
70.—(1) The company may by ordinary resolution declare dividends,
and the directors may decide to pay interim dividends.
(2) A dividend shall not be declared unless the directors have made a
recommendation as to its amount. Such a dividend shall not exceed the
amount recommended by the directors.
(3) No dividend may be declared or paid unless it is in accordance with
members’ respective rights.
(4) Unless the members’ resolution to declare or directors’ decision to
pay a dividend, or the terms on which shares are issued, specify otherwise,
it shall be paid by reference to each member’s holding of shares on the date
of the resolution or decision to declare or pay it.
(5) If the company’s share capital is divided into different classes, no
interim dividend may be paid on shares carrying deferred or non-preferred
rights if, at the time of payment, any preferential dividend is in
arrears.
(6) The directors may pay at intervals any dividend payable at a fixed
rate if it appears to them that the profits available for distribution justify the
payment.
(7) If the directors act in good faith, they shall not incur any liability
to the holders of shares conferring preferred rights for any loss they may
suffer by the lawful payment of an interim dividend on shares with deferred
or non-preferred rights.
Calculation of
dividends
71.—(1) Except as otherwise provided by these Articles or the rights
attached to shares, all dividends shall be—
(a) declared and paid according to the amounts paid up on the shares
on which the dividend is paid; and
(b) apportioned and paid proportionately to the amounts paid up
on the shares during any portion or portions of the period in respect of
which the dividend is paid.
(2) If any share is issued on terms providing that it ranks for dividend as
from a particular date that share ranks for dividend accordingly.
(3) For the purposes of calculating dividends, no account shall be taken
of any amount which has been paid up on a share in advance of the due date
for payment of that amount.
Payment of
dividends
and other
distributions
72.—(1) Where a dividend or other sum which is a distribution is
payable in respect of a share, it shall be paid by one or more of the following
means—
(a) transfer to a bank account specified by the distribution recipient
either in writing or as the directors may otherwise decide;
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(b) sending a cheque made payable to the distribution recipient by
post to the distribution recipient at the distribution recipient’s registered
address (if the distribution recipient is a holder of the share), or (in any
other case) to an address specified by the distribution recipient either in
writing or as the directors may otherwise decide;
(c) sending a cheque made payable to such person by post to such
person at such address as the distribution recipient has specified either in
writing or as the directors may otherwise decide; or
(d) any other means of payment as the directors agree with the
distribution recipient either in writing or by such other means as the
directors decide.
(2) In the articles, “the distribution recipient” means, in respect of a
share in respect of which a dividend or other sum is payable—
(a) the holder of the share;
(b) if the share has two or more joint holders, whichever of them is
named first in the register of members; or
(c) if the holder is no longer entitled to the share by reason of death or
bankruptcy, or otherwise by operation of law, the transmittee.
73.—(1) If—
(a) a share is subject to the company’s lien; and
(b) the directors are entitled to issue a lien enforcement notice in
respect of it,
Deductions
from
distributions
in respect of
sums owed to
the company
they may, instead of issuing a lien enforcement notice, deduct from any
dividend or other sum payable in respect of the share any sum of money
which is payable to the company in respect of that share to the extent that
they are entitled to require payment under a lien enforcement notice.
(2) The sums of money deducted under paragraph (1), shall be used to
pay any of the sums payable in respect of that share.
(3) The company shall notify the distribution recipient in writing of—
(a) the fact and amount of any such deduction;
(b) any non-payment of a dividend or other sum payable in respect of
a share resulting from any such deduction; and
(c) how the money deducted has been applied.
74. The company may not pay interest on any dividend or other sum No interest on
distributions
payable in respect of a share unless otherwise provided by—
(a) the terms on which the share was issued; or
(b) the provisions of another agreement between the holder of that
share and the company.
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Unclaimed
distributions
Companies
Companies (Model Articles and Memoranda) Regulations
75.—(1) All dividends or other sums which are—
(a) payable in respect of shares; and
(b) unclaimed after having been declared or become payable,
may be invested or otherwise made use of by the directors for the benefit of
the company until claimed.
(2) The payment of any such dividend or other sum into a separate
account shall not make the company a trustee in respect of it.
(3) If—
(a) twelve years have passed from the date on which a dividend or
other sum became due for payment; and
(b) the distribution recipient has not claimed it,
the distribution recipient shall no longer be entitled to that dividend or other
sum and it shall cease to remain owing by the company.
Non-cash
distributions
76.—(1) Subject to the terms of issue of the share in question, the
company may, by ordinary resolution on the recommendation of the
directors, decide to pay all or part of a dividend or other distribution payable
in respect of a share by transferring non-cash assets of equivalent value
including, without limitation, shares or other securities in any company.
(2) If the shares in respect of which such a non-cash distribution is paid
are uncertificated, any shares in the company which are issued as a non-cash
distribution in respect of them shall be uncertificated.
(3) For the purposes of paying a non-cash distribution, the directors may
make whatever arrangements they think fit, including, where any difficulty
arises regarding the distribution—
(a) fixing the value of any assets;
(b) paying cash to any distribution recipient on the basis of that value
in order to adjust the rights of recipients; and
(c) vesting any assets in trustees.
Waiver of
distributions
77. Distribution recipients may waive their entitlement to a dividend
or other distribution payable in respect of a share by giving the company
notice in writing to that effect, but if—
(a) the share has more than one holder; or
(b) more than one person is entitled to the share, whether by
reason of the death or bankruptcy of one or more joint holders, or
otherwise,
the notice is not effective unless it is expressed to be given, and signed, by
all the holders or persons otherwise entitled to the share.
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78.—(1) The directors may, if so authorized by an ordinary resolution— Authority to
capitalize and
(a) decide to capitalize any profits of the company whether or not appropriation
capitalized
they are available for distribution, which are not required for paying a of
sums
preferential dividend, or any sum standing to the credit of the company’s
share premium account or capital redemption reserve; and
(b) appropriate any sum which they so decide to capitalize
(a “capitalized sum”) to the persons who would have been entitled to it
if it were distributed by way of dividend (the “persons entitled”) and in
the same proportions.
(2) The sums capitalized under paragraph (1), shall be applied—
(a) on behalf of the persons entitled; and
(b) in the same proportions as a dividend would have been distributed
to them.
(3) Any capitalized sum may be applied in paying up new shares of
a nominal amount equal to the capitalized sum which are then allotted
credited as fully paid to the persons entitled or as they may direct.
(4) A capitalized sum which was appropriated from profits available for
distribution may be applied—
(a) in or towards paying up any amounts unpaid on existing shares
held by the persons entitled; or
(b) in paying up new debentures of the company which are then
allotted credited as fully paid to the persons entitled or as they may
direct.
(5) Subject to these Articles, the directors may—
(a) apply capitalized sums in accordance with paragraphs (3) and (4)
partly in one way and partly in another;
(b) make such arrangements as they think fit to deal with shares or
debentures becoming distributable in fractions under this article including
the issuing of fractional certificates or the making of cash payments; and
(c) authorize any person to enter into an agreement with the company
on behalf of all the persons entitled which is binding on them in respect
of the allotment of shares and debentures to them under this article.
PART V
Miscellaneous Provisions
79.—(1) Subject to these Articles, anything sent or supplied by or to the Means of
company under the articles may be sent or supplied in any way in which communication to be used
the Act, provides for documents or information which are authorized or
required by any provision of that Act to be sent or supplied by or to the
company.
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(2) Subject to these Articles, any notice or document to be sent or
supplied to a director in connexion with the taking of decisions by directors
may also be sent or supplied by the means by which that director has asked
to be sent or supplied with such notices or documents for the time being.
(3) A director may agree with the company that notices or documents
sent to that director in a particular way are to be deemed to have been
received within a specified time of their being sent, and for the specified
time to be less than forty-eight hours.
Failure to
notify contact
details
80.—(1) If—
(a) the company sends two consecutive documents to a member over
a period of at least twelve months; and
(b) each of those documents is returned undelivered, or the
company receives notification that it has not been delivered,
that member ceases to be entitled to receive notices from the
company.
(2) A member who has ceased to be entitled to receive notices from
the company becomes entitled to receive such notices again by sending the
company—
(a) a new address to be recorded in the register of members; or
(b) if the member has agreed that the company should use a means
of communication other than sending things to such an address, the
information that the company needs to use that means of communication
effectively.
Company
seals
81.—(1) Any common seal may only be used by the authority of the
directors.
(2) The directors may decide by what means and in what form any
common seal or securities seal shall be used.
(3) Unless otherwise decided by the directors, if the company has a
common seal and it is affixed to a document, the document shall also be
signed by at least one authorized person in the presence of a witness who
attests the signature.
(4) For the purposes of this article, an authorized person is—
(a) any director of the company;
(b) the company secretary; or
(c) any person authorized by the directors for the purpose of signing
documents to which the common seal is applied.
(5) If the company has an official seal for use abroad, it may only be
affixed to a document if its use on that document, or documents of a class to
which it belongs, has been authorized by a decision of the directors.
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(6) If the company has a securities seal, it may only be affixed to
securities by the company secretary or a person authorized to apply it to
securities by the company secretary.
(7) For the purposes of these Articles, references to the securities seal
being affixed to any document include the reproduction of the image of that
seal on or in a document by any mechanical or electronic means which has
been approved by the directors in relation to that document or documents of
a class to which it belongs.
82.—(1) The company shall be entitled to destroy—
(a) all instruments of transfer of shares which have been registered,
and all other documents on the basis of which any entries are made in the
register of members, from six years after the date of registration;
Destruction of
documents
(b) all dividend mandates, variations or cancellations of dividend
mandates, and notifications of change of address, from two years after
they have been recorded;
(c) all share certificates which have been cancelled from one year
after the date of the cancellation;
(d) all paid dividend warrants and cheques from one year after the
date of actual payment; and
(e) all proxy notices from one year after the end of the meeting to
which the proxy notice relates.
(2) If the company destroys a document in good faith, in accordance
with the articles, and without notice of any claim to which that document
may be relevant, it is conclusively presumed in favour of the company
that—
(a) entries in the register purporting to have been made on the basis
of an instrument of transfer or other document so destroyed were duly
and properly made;
(b) any instrument of transfer so destroyed was a valid and effective
instrument duly and properly registered;
(c) any share certificate so destroyed was a valid and effective
certificate duly and properly cancelled; and
(d) any other document so destroyed was a valid and effective
document in accordance with its recorded particulars in the books or
records of the company.
(3) This article shall not impose on the company any liability which it
would not otherwise have if it destroys any document before the time at
which this article permits it to do so.
(4) In this article, references to the destruction of any document include
a reference to its being disposed of in any manner.
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No right
to inspect
accounts and
other records
83. Except as provided by any written law or authorized by the directors
or an ordinary resolution of the company, no person shall be entitled to
inspect any of the company’s accounting or other records or documents
merely by virtue of being a member.
Provision for
employees on
cessation of
business
84. The directors may decide to make provision for the benefit of
persons employed or formerly employed by the company or any of its
subsidiaries, other than a director or former director or shadow director, in
connexion with the cessation or transfer to any person of the whole or part
of the undertaking of the company or that subsidiary.
Indemnity
85.—(1) Subject to paragraph (2), a relevant director of the company
or an associated company may be indemnified out of the company’s assets
against—
(a) any liability incurred by that director in connexion with any
negligence, default, breach of duty or breach of trust in relation to the
company or an associated company;
(b) any liability incurred by that director in connexion with the
activities of the company or an associated company in its capacity as a
trustee of an occupational pension scheme; and
(c) any other liability incurred by that director as an officer of the
company or an associated company.
(2) This article shall not authorize any indemnity which would be
prohibited or rendered void by any provision of the Act or by any other law.
(3) In this article—
(a) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate; and
(b) a “relevant director” means any director or former director of the
company or an associated company.
Insurance
86.—(1) The directors may decide to purchase and maintain insurance,
at the expense of the company, for the benefit of any relevant director in
respect of any relevant loss.
(2) In this article—
(a) a “relevant director” means any director or former director of the
company or an associated company;
(b) a “relevant loss” means any loss or liability which has been or
may be incurred by a relevant director in connexion with that director’s
duties or powers in relation to the company, any associated company
or any pension fund or employees’ share scheme of the company or
associated company; and
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(c) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate.
TABLE C
reg. 4
MODEL ARTICLES FOR COMPANY LIMITED BY GUARANTEE
ARTICLE
PART I
Preliminary
1. Interpretation
2. Liability of members
PART II
Directors’ Powers and Responsibilities
3. Director’s general authority
4. Members’ reserve power
5. Delegation by directors
6. Committees
Decision-Making by Directors
7. Director to take decisions collectively
8. Unanimous decisions
9. Calling a directors’ meeting
10. Participation in directors’ meeting
11. Quorum for directors’ meeting
12. Chairing of directors’ meetings
13. Casting vote
14. Conflict of interest
15. Records of decisions to be kept
16. Directors’ discretion to make further rules
17. Methods of appointing directors
18. Termination of director’s appointment
19. Directors’ remuneration
20. Directors’ expenses
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ARTICLE
PART III
Members, Becoming and Ceasing to be a Member
21. Applications for membership
22. Termination of membership
23. Attendance and speaking at general meetings
24. Quorum for general meetings
25. Chairing general meetings
26. Attendance and speaking by directors and non-members
27. Adjournment
28. Voting: general
29. Errors and disputes
30. Poll votes
31. Content of proxy notices
32. Delivery of proxy notice
33. Amendments to resolutions
PART IV
Administrative Arrangements
34. Means of communication to be used
35. Company seals
36. No right to inspect accounts and other records
37. Provision for employees on cessation of business
38. Indemnity
39. Insurance
Interpretation
PART I
Preliminary
1.—(1) In these Articles, unless the context requires otherwise—
“articles” means the company’s articles of association;
“bankruptcy” includes individual insolvency proceedings;
“chairman” has the meaning given in article 12;
“chairman of the meeting” has the meaning given in article 25;
“director” means a director of the company, and includes any person
occupying the position of director, by whatever name called;
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“document” includes, unless otherwise specified, any document sent or
supplied in electronic form;
“member” has the meaning given in section 2 of the Act;
“ordinary resolution” has the meaning given in section 2 of the Act;
“participate” in relation to a directors’ meeting, has the meaning given in
article 10;
“proxy notice” has the meaning given in article 31;
“special resolution” has the meaning given in section 2 of the Act;
“subsidiary” has the meaning given in section 2 (5) of the Act; and
“writing” means the representation or reproduction of words, symbols or
other information in a visible form by any method or combination of
methods, whether sent or supplied in electronic form or otherwise.
(2) Unless the context otherwise requires, other words or expressions
contained in these Articles bear the same meaning as in the Act, as in force
on the date when these Articles become binding on the company.
2. The liability of each member is limited to the amount, being the Liability of
amount that each member undertakes to contribute to the assets of the members
company in the event of its being wound up while he is a member or within
one year after he ceases to be a member, for—
(a) payment of the company’s debts and liabilities contracted before
he ceases to be a member;
(b) payment of the costs, charges and expenses of winding up; and
(c) adjustment of the rights of the contributories among themselves.
PART II
Directors’ Powers and Responsibilities
3. Subject to the articles, the directors are responsible for the management Director’s
of the company’s business, for which purpose they may exercise all the general
authority
powers of the company.
4.—(1) The members may, by special resolution, direct the directors to Members’
reserve power
take, or refrain from taking, specified action.
(2) No such special resolution invalidates anything which the directors
have done before the passing of the resolution.
5.—(1) Subject to these Articles, the directors may delegate any of the Delegation by
directors
powers which are conferred on them under these Articles—
(a) to such person or committee;
(b) by such means including by power of attorney;
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(c) to such an extent;
(d) in relation to such matters or territories; and
(e) on such terms and conditions as they think fit.
(2) If the directors so specify, any such delegation may authorize
further delegation of the directors’ powers by any person to whom they are
delegated.
(3) The directors may revoke any delegation in whole or part, or alter its
terms and conditions.
Committees
6.—(1) Committees to which the directors delegate any of their powers
shall follow procedures which are based as far as they are applicable on
those provisions of the articles which govern the taking of decisions by
directors.
(2) The directors may make rules of procedure for all or any committees,
which prevail over rules derived from the articles if they are not consistent
with them.
Director to
take decisions
collectively
Decision-Making by Directors
7.—(1) The general rule about decision-making by directors is that any
decision of the directors shall be either a majority decision at a meeting or a
decision taken in accordance with article 8.
(2) If—
(a) the company only has one director; and
(b) no provision of the articles requires it to have more than one
director,
the general rule shall not apply, and the director may take decisions without
regard to any of the provisions of the articles relating to directors’ decisionmaking.
Unanimous
decisions
8.—(1) A decision of the directors is taken in accordance with this
article when all eligible directors indicate to each other by any means that
they share a common view on a matter.
(2) A decision referred to in paragraph (1) may take the form of a
resolution in writing, copies of which have been signed by each eligible
director or to which each eligible director has otherwise indicated agreement
in writing.
(3) References in this article to eligible directors are to directors who
would have been entitled to vote on the matter had it been proposed as a
resolution at a directors’ meeting.
(4) A decision may not be taken in accordance with this article if the
eligible directors would not have formed a quorum at such a meeting.
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9.—(1) Any director may call a directors’ meeting by giving notice of Calling a
the meeting to the directors or by authorizing the company secretary, if any, directors’
meeting
to give such notice.
(2) Notice of any directors’ meeting shall indicate—
(a) its proposed date and time;
(b) where it shall take place; and
(c) if it is anticipated that directors participating in the meeting will
not be in the same place, how it is proposed that they should communicate
with each other during the meeting.
(3) Notice of a directors’ meeting shall be given to each director, but
need not be in writing.
(4) Notice of a directors’ meeting need not be given to directors who
waive their entitlement to notice of that meeting, by giving notice to that
effect to the company not more than seven days after the date on which the
meeting is held. Where such notice is given after the meeting has been held,
that shall not affect the validity of the meeting, or of any business conducted
at it.
10.—(1) Subject to these Articles, directors participate in a directors’ Participation
in directors’
meeting, or part of a directors’ meeting, when—
meeting
(a) the meeting has been called and takes place in accordance with
the articles; and
(b) they can each communicate to the others any information
or opinions they have on any particular item of the business of the
meeting.
(2) In determining whether directors are participating in a directors’
meeting, it is irrelevant where any director is or how they communicate
with each other.
(3) If all the directors participating in a meeting are not in the same
place, they may decide that the meeting shall be treated as taking place
wherever any of them is.
11.—(1) At a directors’ meeting, unless a quorum is participating, no Quorum for
directors’
proposal shall to be voted on, except a proposal to call another meeting.
meeting
(2) The quorum for directors’ meetings may be fixed from time to time
by a decision of the directors, but it shall never be less than two, and unless
otherwise fixed it is two.
(3) If the total number of directors for the time being is less than the
quorum required, the directors shall not take any decision other than a
decision—
(a) to appoint further directors; or
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(b) to call a general meeting so as to enable the members to appoint
further directors.
Chairing of
directors’
meetings
12.—(1) The directors may appoint a director to chair their meetings.
(2) The person so appointed for the time being shall be known as the
chairman.
(3) The directors may terminate the chairman’s appointment at any
time.
(4) If the chairman is not participating in a directors’ meeting within ten
minutes of the time at which it was to start, the participating directors shall
appoint one of themselves to chair it.
Casting vote
13.—(1) If the numbers of votes for and against a proposal are equal, the
chairman or other director chairing the meeting shall have a casting vote.
(2) Paragraph (1) shall not apply if, in accordance with the articles,
the chairman or other director is not to be counted as participating in the
decision-making process for quorum or voting purposes.
Conflict of
interest
14.—(1) If a proposed decision of the directors is concerned with an
actual or proposed transaction or arrangement with the company in which a
director is interested, that director shall not to be counted as participating in
the decision-making process for quorum or voting purposes.
(2) Where paragraph (3) applies, a director who is interested in an actual
or proposed transaction or arrangement with the company shall be counted
as participating in the decision-making process for quorum and voting
purposes.
(3) This paragraph applies when—
(a) the company by ordinary resolution disapplies the provision of
the articles which would otherwise prevent a director from being counted
as participating in the decision-making process;
(b) the director’s interest cannot reasonably be regarded as likely to
give rise to a conflict of interest; or
(c) the director’s conflict of interest arises from a permitted
cause.
(4) For the purposes of this article, the following are permitted causes—
(a) a guarantee given, or to be given, by or to a director in respect
of an obligation incurred by or on behalf of the company or any of its
subsidiaries;
(b) subscription, or an agreement to subscribe, for securities of the
company or any of its subsidiaries, or to underwrite, sub-underwrite, or
guarantee subscription for any such securities; and
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(c) arrangements pursuant to which benefits are made available
to employees and directors or former employees and directors of the
company or any of its subsidiaries which do not provide special benefits
for directors or former directors.
(5) For the purposes of this article, references to proposed decisions
and decision-making processes include any directors’ meeting or part of a
directors’ meeting.
(6) Subject to paragraph (7), if a question arises at a meeting of directors
or of a committee of directors as to the right of a director to participate in the
meeting or part of the meeting for voting or quorum purposes, the question
may, before the conclusion of the meeting, be referred to the chairman
whose ruling in relation to any director other than the chairman shall be
final and conclusive.
(7) If any question as to the right to participate in the meeting or part of
the meeting should arise in respect of the chairman, the question shall be
decided by a decision of the directors at that meeting, for which purpose the
chairman shall not be counted as participating in the meeting or that part of
the meeting for voting or quorum purposes.
15. The directors shall ensure that the company keeps a record, in Records of
to be
writing, for at least ten years from the date of the decision recorded, of decisions
kept
every unanimous or majority decision taken by the directors.
16. Subject to these Articles, the directors may make any rule which Directors’
to
they think fit about how they take decisions, and about how such rules are discretion
make further
to be recorded or communicated to directors.
rules
17.—(1) Any person who is willing to act as a director, and is permitted Methods of
appointing
by law to do so, may be appointed to be a director—
directors
(a) by ordinary resolution; or
(b) by a decision of the directors.
(2) In any case where, as a result of death, the company has no members
and no directors, the personal representatives of the last member to have
died shall have the right, by notice in writing, to appoint a person to be a
director.
(3) For the purposes of paragraph (2), where two or more members die
in circumstances rendering it uncertain who was the last to die, a younger
member is deemed to have survived an older member.
18. A person shall cease to be a director as soon as—
(a) that person ceases to be a director by virtue of any provision of
the Act or is prohibited from being a director by law;
Termination
of director’s
appointment
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(b) a bankruptcy order is made against that person;
(c) a composition is made with that person’s creditors generally in
satisfaction of that person’s debts;
(d) a registered medical practitioner who is treating that person gives
a written opinion to the company stating that that person has become
physically or mentally incapable of acting as a director and may remain
so for more than three months;
(e) by reason of that person’s mental health, a court makes an order
which wholly or partly prevents that person from personally exercising
any powers or rights which that person would otherwise have;
(f) notification is received by the company from the director that the
director is resigning from office, and such resignation has taken effect in
accordance with its terms.
Directors’
remuneration
19.—(1) Directors may undertake any services for the company that the
directors decide.
(2) Directors shall be entitled to such remuneration as the directors
determine—
(a) for their services to the company as directors; and
(b) for any other service which they undertake for the company.
(3) Subject to these Articles, a director’s remuneration may—
(a) take any form; and
(b) include any arrangements in connexion with the payment of a
pension, allowance or gratuity, or any death, sickness or disability
benefits, to or in respect of that director.
(4) Unless the directors decide otherwise, directors’ remuneration
accrues from day to day.
(5) Unless the directors decide otherwise, directors shall not be
accountable to the company for any remuneration which they receive as
directors or other officers or employees of the company’s subsidiaries or of
any other body corporate in which the company is interested.
Directors’
expenses
20. The company may pay any reasonable expenses which the directors
properly incur in connexion with their attendance at—
(a) meetings of directors or committees of directors;
(b) general meetings; or
(c) separate meetings of the holders of debentures of the company,
or otherwise in connexion with the exercise of their powers and the
discharge of their responsibilities in relation to the company.
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PART III
Members, Becoming and Ceasing to be a Member
21. A person shall not become a member of the company unless—
(a) that person has completed an application for membership in a
form approved by the directors; and
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membership
(b) the directors have approved the application.
22.—(1) A member may withdraw from membership of the company by Termination of
membership
giving seven days’ notice to the company in writing.
(2) Membership shall not be transferable.
(3) A person’s membership terminates when that person dies or ceases
to exist.
23.—(1) A person shall be able to exercise the right to speak at a general Attendance
speaking
meeting when that person is in a position to communicate to all those and
at general
attending the meeting, during the meeting, any information or opinions meetings
which that person has on the business of the meeting.
(2) A person shall be able to exercise the right to vote at a general
meeting when—
(a) that person is able to vote, during the meeting, on resolutions put
to the vote at the meeting; and
(b) that person’s vote can be taken into account in determining
whether or not such resolutions are passed at the same time as the votes
of all the other persons attending the meeting.
(3) The directors may make whatever arrangements they consider
appropriate to enable those attending a general meeting to exercise their
rights to speak or vote at it.
(4) In determining attendance at a general meeting, it is immaterial
whether any two or more members attending it are in the same place as
each other.
(5) Two or more persons who are not in the same place as each other
attend a general meeting if their circumstances are such that if they have or
were to have rights to speak and vote at that meeting, they are (or would be)
able to exercise them.
24. No business other than the appointment of the chairman of the Quorum
general
meeting shall be transacted at a general meeting if the persons attending it for
meetings
do not constitute a quorum.
25.—(1) Where the directors have appointed a chairman, the chairman Chairing
general
shall chair general meetings if present and willing to do so.
meetings
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(2) Where the directors have not appointed a chairman, or if the chairman
is unwilling to chair the meeting or is not present within ten minutes of the
time at which a meeting was due to start—
(a) the directors present; or
(b) if no directors are present,
the meeting shall appoint a director or member to chair the meeting, and
the appointment of the chairman of the meeting shall be the first business
of the meeting.
(3) The person chairing a meeting in accordance with this article shall
be referred to as “the chairman of the meeting”.
Attendance
and speaking
by directors
and nonmembers
26.—(1) Directors may attend and speak at general meetings, whether
or not they are members.
Adjournment
27.—(1) If the persons attending a general meeting within half an hour
of the time at which the meeting was due to start do not constitute a quorum,
or if during a meeting a quorum ceases to be present, the chairman of the
meeting shall adjourn it.
(2) The chairman of the meeting may permit other persons who are not
members of the company to attend and speak at a general meeting.
(2) The chairman of the meeting may adjourn a general meeting at
which a quorum is present if—
(a) the meeting consents to an adjournment; or
(b) it appears to the chairman of the meeting that an adjournment
is necessary to protect the safety of any person attending the meeting
or ensure that the business of the meeting is conducted in an orderly
manner.
(3) The chairman of the meeting shall adjourn a general meeting if
directed to do so by the meeting.
(4) When adjourning a general meeting, the chairman of the meeting
shall—
(a) either specify the time and place to which it is adjourned or state
that it shall continue at a time and place to be fixed by the directors; and
(b) have regard to any directions as to the time and place of any
adjournment which have been given by the meeting.
(5) If the continuation of an adjourned meeting is to take place more
than fourteen days after it was adjourned, the company shall give at least
seven clear days’ notice of it, excluding the day of the adjourned meeting
and the day on which the notice is given—
(a) to the same persons to whom notice of the company’s general
meetings is required to be given; and
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(b) containing the same information which such notice is required to
contain.
(6) Business may not be transacted at an adjourned general meeting
which could not properly have been transacted at the meeting if the
adjournment had not taken place.
28. A resolution put to the vote of a general meeting shall be decided Voting:
on a show of hands unless a poll is duly demanded in accordance with the general
articles.
29.—(1) An objection may not be raised to the qualification of any person Errors and
voting at a general meeting except at the meeting or adjourned meeting at disputes
which the vote objected to is tendered, and every vote not disallowed at the
meeting is valid.
(2) Any such objection shall be referred to the chairman of the meeting
whose decision is final.
30.—(1) A poll on a resolution may be demanded—
Poll votes
(a) in advance of the general meeting where it shall be put to the
vote; or
(b) at a general meeting, either before a show of hands on that
resolution or immediately after the result of a show of hands on that
resolution is declared.
(2) A poll may be demanded by—
(a) the chairman of the meeting;
(b) the directors;
(c) two or more persons having the right to vote on the resolution; or
(d) a person or persons representing not less than one tenth of the
total voting rights of all the members having the right to vote on the
resolution.
(3) A demand for a poll may be withdrawn if—
(a) the poll has not yet been taken; and
(b) the chairman of the meeting consents to the withdrawal.
(4) A poll shall be taken immediately and in such manner as the chairman
of the meeting directs.
31.—(1) A proxy may only validly be appointed by a notice in writing Content of
proxy notices
(a “proxy notice”) which—
(a) states the name and address of the member appointing the
proxy;
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(b) identifies the person appointed to be that member’s proxy and the
general meeting in relation to which that person is appointed;
(c) is signed by or on behalf of the member appointing the proxy, or
is authenticated in such manner as the directors may determine; and
(d) is delivered to the company in accordance with the articles and
any instructions contained in the notice of the general meeting to which
they relate.
(2) The company may require proxy notices to be delivered in a
particular form, and may specify different forms for different purposes.
(3) A proxy notice may specify how the proxy appointed under it shall
vote or that the proxy shall abstain from voting on one or more resolutions.
(4) Unless a proxy notice indicates otherwise, it shall be treated as—
(a) allowing the person appointed under it as a proxy discretion
as to how to vote on any ancillary or procedural resolutions put to the
meeting; and
(b) appointing that person as a proxy in relation to any adjournment
of the general meeting to which it relates as well as the meeting itself.
Delivery of
proxy notice
32.—(1) A person who is entitled to attend, speak or vote, either on
a show of hands or on a poll, at a general meeting remains so entitled in
respect of that meeting or any adjournment of it, even though a valid proxy
notice has been delivered to the company by or on behalf of that person.
(2) An appointment under a proxy notice may be revoked by delivering
to the company a notice in writing given by or on behalf of the person by
whom or on whose behalf the proxy notice was given.
(3) A notice revoking a proxy appointment only takes effect if it is
delivered before the start of the meeting or adjourned meeting to which it
relates.
(4) Where a proxy notice is not executed by the person appointing the
proxy, it shall be accompanied by written evidence of the authority of the
person who executed it to execute it on the appointor’s behalf.
Amendments
to resolutions
33.—(1) An ordinary resolution to be proposed at a general meeting
may be amended by ordinary resolution if—
(a) notice of the proposed amendment is given to the company in
writing by a person entitled to vote at the general meeting at which it
shall be proposed not less than forty-eight hours before the meeting
shall take place, or such later time as the chairman of the meeting may
determine; and
(b) the proposed amendment does not, in the reasonable opinion of
the chairman of the meeting, materially alter the scope of the resolution.
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(2) A special resolution to be proposed at a general meeting may be
amended by ordinary resolution, if—
(a) the chairman of the meeting proposes the amendment at the
general meeting at which the resolution shall be proposed; and
(b) the amendment does not go beyond what is necessary to correct a
grammatical or other non-substantive error in the resolution.
(3) If the chairman of the meeting, acting in good faith, wrongly decides
that an amendment to a resolution is out of order, the chairman’s error shall
not invalidate the vote on that resolution.
PART IV
Administrative Arrangements
34.—(1) Subject to these Articles, anything sent or supplied by or to the Means of
company under the articles may be sent or supplied in any way in which the communication
to be used
Act provides for documents or information which are authorized or required
by any provision of that Act to be sent or supplied by or to the company.
(2) Subject to the articles, any notice or document to be sent or supplied
to a director in connexion with the taking of decisions by directors may also
be sent or supplied by the means by which that director has asked to be sent
or supplied with such notices or documents for the time being.
(3) A director may agree with the company that notices or documents
sent to that director in a particular way are to be deemed to have been
received within a specified time of their being sent, and for the specified
time to be less than forty-eight hours.
35.—(1) A common seal of a company may only be used by the authority Company
seals
of the directors.
(2) The directors may decide by what means and in what form any
common seal shall be used.
(3) Unless otherwise decided by the directors, if the company has a
common seal and it is affixed to a document, the document shall also be
signed by at least one authorized person in the presence of a witness who
attests the signature.
(4) For the purposes of this article, an authorized person is—
(a) any director of the company;
(b) the company secretary, if any; or
(c) any person authorized by the directors for the purpose of signing
documents to which the common seal is applied.
36. Except as provided by law or authorized by the directors or an No right
inspect
ordinary resolution of the company, a person shall not be entitled to inspect to
accounts and
any of the company’s accounting or other records or documents merely by other records
virtue of being a member.
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Provision for
employees on
cessation of
business
37. The directors may decide to make provision for the benefit of
persons employed or formerly employed by the company or any of its
subsidiaries, other than a director or former director or shadow director, in
connexion with the cessation or transfer to any person of the whole or part
of the undertaking of the company or that subsidiary.
Indemnity
38.—(1) Subject to paragraph (2), a relevant director of the company
or an associated company may be indemnified out of the company’s assets
against—
(a) any liability incurred by that director in connexion with any
negligence, default, breach of duty or breach of trust in relation to the
company or an associated company;
(b) any liability incurred by that director in connexion with the
activities of the company or an associated company in its capacity as a
trustee of an occupational pension scheme; or
(c) any other liability incurred by that director as an officer of the
company or an associated company.
(2) This article shall not authorize any indemnity which would be
prohibited or rendered void by any provision of the Act or by any other
written law.
(3) In this article—
(a) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate; and
(b) a “relevant director” means any director or former director of the
company or an associated company.
Insurance
39.—(1) The directors may decide to purchase and maintain insurance,
at the expense of the company, for the benefit of any relevant director in
respect of any relevant loss.
(2) In this article—
(a) a “relevant director” means any director or former director of the
company or an associated company;
(b) a “relevant loss” means any loss or liability which has been or
may be incurred by a relevant director in connexion with that director’s
duties or powers in relation to the company, any associated company
or any pension fund or employees’ share scheme of the company or
associated company; and
(c) companies are associated if one is a subsidiary of the other or
both are subsidiaries of the same body corporate.
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TABLE D
353
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reg. 5
A MEMORANDUM OF ASSOCIATION OF
A COMPANY LIMITED BY SHARES
1. The name of the company is ................................................. Limited.
2. The business which the company is authorized to carry on is restricted
as follows—
Or [The business which the company is authorized to carry on is
unrestricted].
3. The liability of the members is limited.
4. The capital of the company is ............................................
5. The company is a public company.
[The company is a private company and accordingly—
(a) the number of members of the company (exclusive of persons
who are bona fide in the employment of the company and persons who,
having been formerly bona fide in the employment of the company, were
while in that employment, and have continues after the employment to
be, members of the company) is limited to fifty;
(b) the company is prohibited from making any invitation to the
public to acquire any of its shares or debentures; and
(c) the right to transfer shares in the company is restricted by its
articles of association.]
We the several persons whose names and addresses are subscribed,
wish to be formed into a company in pursuance of this memorandum of
association.
Name of each subscriber
Authentication by each subscriber
Date:...................
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TABLE E
reg. 6
MEMORANDUM OF ASSOCIATION OF COMPANY LIMITED BY GUARANTEE
1. The name of the company is ..........................................................
2. The objects for which the company is established are—
(a) .........................................
(b) .........................................
(c) ................................., etc.
3. The income and property of the company shall be applied solely towards
the promotion of the object of the company, and no portion thereof paid or
transferred directly or indirectly to the members of the company except as
may be permitted by law.
4. The liability of the members is limited.
5. Each member of the company undertakes to contribute to the
assets of the company in the event of its being wound up while he is a
member for the payment of dents and liabilities of the company and of
the costs of winding up and for the adjustment of the rights of members
among themselves such amount as may be required not exceeding
............... Kwacha.
6. If upon the winding up or dissolution of the company there remains after
the discharge of all its debts and liabilities any property of the company, such
property shall not be distributed among the members but shall be transferred
to some other company limited by guarantee having objects similar to the
objects to the object of the company or applied to some charitable object,
such other company or charity to be determined by an ordinary resolution
of members in general meeting prior to the dissolution.
Name of each subscriber
Date:...................
Authentication by each
subscriber
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COMPANIES REGULATIONS
ARRANGEMENT OF REGULATIONS
REGULATION
PART I
Preliminary
1. Citation
2. Interpretation
PART II
General
3. Office hours
4. Forms
5. Fees
6. Penalties for failure to deliver documents to the Registrar within
prescribed time
7. General requirements for documents
8. Email address to be provided if using online service
9. Reservation of names
10. Translations
11. Requirements for preparation of concise annual reports
12. Keeping accounting records outside Malaŵi
13. Audit for private companies
PART III
Company Names
14. Permitted characters
15. Exemption from requirement as to use of “limited”
16. Use of a name already existing in the Registrar’s index
17. Treatment of similar names in the Registrar’s index
18. Interpretation and permitted characters
19. Interpretation and proposed same name
PART IV
Foreign Companies
20. Particulars of the company
21. Annual return
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REGULATION
22. Foreign company may register as a company
23. Registered valuer
24. Execution of documents by a company
FIRST SCHEDULE
SECOND SCHEDULE
G.N. 6/2017
COMPANIES REGULATIONS
under s. 382
Citation
Interpretation
Office hours
Forms
First Schedule
PART I
Preliminary
1. These Regulations may be cited as the Companies Regulations.
2. In these Regulations, unless the context otherwise provides—
“Registrar” shall mean the Registrar of Companies appointed under
section 3 of the Act.
PART II
General
3. The office of the Registrar shall be open to the public for the
transaction of business on every working day, during such hours as
the Registrar may fix from time to time, either generally or in any
particular case.
4.—(1) The Forms set out in the First Schedule to these
Regulations shall be used for the respective purposes prescribed in
the Act, and the particulars contained in those Forms are prescribed
as the particulars required under the Act.
(2) Where a prescribed form continues on two or more pages, the
following heading shall appear at the top of each of the pages—
Name of Company/Proposed Company .........................................
Company No/Name Reservation No ..............................................
(Delete as appropriate)
Fees
Second
Schedule
5. The fees set out in Part I of the Second Schedule to these
Regulations shall be payable to the Registrar in respect of the matters
to which they relate.
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6.—(1) Subject to subregulation (2), the amounts specified in Penalties
failure
Part II of the Second Schedule to these Regulations shall be payable for
to deliver
by way of penalty for failure to deliver a document to the Registrar documents to
the Registrar
within the time prescribed by the Act.
within
prescribed
(2) Where any document is delivered to the Registrar after the time
time specified in the Act in respect of the document, and the Registrar Second
Schedule
is satisfied that the omission to deliver the document within the time
limit was accidental or due to inadvertence, or that it is just and
equitable to do so, he may remit wholly or partly the fee payable in
respect of the late delivery of the document.
7.—(1) All documents prepared to be registered or to be delivered, General
requirements
sent, or forwarded to the Registrar shall be legible.
for documents
(2) Where a document is required to be signed—
(a) the signature shall be an original signature; and
(b) the name of the signatory shall be legibly typed, printed,
stamped, or written below the original signature.
8.—(1) Where an application for registration of a company is Email address
be provided
registered, delivered, sent, or forwarded to the Registrar using an to
if using online
service
online service—
(a) an email address for communication with the person
who registers, delivers, sends, or forwards the application to the
Registrar shall be provided with the application; and
(b) an email address for communication with the company
shall be provided with the application.
(2) Where an annual return for a company is registered, delivered,
sent, or forwarded to the Registrar using an online service—
(a) an email address for communication with the person who
registers, delivers, sends, or forwards the annual return to the
Registrar shall be provided with the annual return; and
(b) an email address for communication with the company
shall be provided with the annual return.
(3) In this regulation, “online service” means a service provided
by, or on behalf of, the Registrar that allows documents to be
registered, delivered, sent, or forwarded to the Registrar by means
of Internet.
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Reservation of
names
9.—(1) A reservation of a name of a company that is proposed
to be registered or in respect of a proposed change of a name of an
existing company, as the case may be, shall not give an applicant, or
any proposed or existing company in respect of which the application
is made, any proprietary right or interest in the name.
(2) On issuance of a notice to reserve a name, the Registrar shall
advise an applicant in writing that the reservation of name shall not
give the applicant, or any proposed or existing company in respect
of which the application is made, any proprietary right or interest in
the name.
Translations
10.—(1) A translation into the English language of any document
evidencing incorporation of a company or a foreign company or of
any instrument constituting or defining the constitution of a company
or a foreign company, or any other document to be delivered to the
Registrar for registration under the Act, shall be in accordance with
the Authentication of Documents Act.
(2) The Registrar may permit translations which are not certified
in accordance with the requirement under subregulation (1), to be
delivered to him upon such conditions as he thinks fit.
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Requirements
for preparation
of concise
annual reports
11. Every concise annual report for a company shall, for the
purposes of sections 251 to 255 of the Act—
(a) be in writing;
(b) be dated;
(c) be signed on behalf of the board by two directors of the
company or, if the company has only one director, by that director;
and
(d) describe, so far as the board believes is material for the
shareholders to have an appreciation of the state of the company’s
affairs and will not be harmful to the business of the company or
of any of its subsidiaries, any change during the accounting period
in—
(i) the nature of the business of the company or any of its
subsidiaries; or
(ii) the classes of business in which the company has
an interest, whether as a shareholder of another company or
otherwise.
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12. Accounting records of foreign companies or subsidiaries of Keeping
foreign companies may be kept outside Malaŵi except for accounting accounting
records
outside
records that—
Malaŵi
(a) disclose, with reasonable accuracy, the financial position
of the company;
(b) enable the preparation, in accordance with the Act, of
the company’s financial statements and any group financial
statements and any other document required under the Act or any
other written law, to be sent to, and kept at, a place in Malaŵi; or
(c) may be required by any legal authority in Malaŵi.
13.—(1) A private company with an annual turnover of twenty Audit for
million Kwacha or less shall be exempted from having audited accounts. private
companies
(2) Subject to any other written law, a company limited by
guarantee with an annual income of twenty million Kwacha or less
shall be exempted from having audited accounts.
PART III
Company Names
14.—(1) This Part sets out the characters, signs, symbols and Permitted
punctuation that may be used in the name of a company registered characters
under the Act (the “permitted characters”).
(2) The following permitted characters may be used in any part
of the name—
(a) any character, sign or symbol set out in English alphabet;
(b) 0, 1, 2, 3, 4, 5, 6, 7, 8 or 9 or corresponding Roman numerals;
(c) full stop, comma, colon, semi-colon or hyphen; and
(d) any other punctuation.
(3) The signs and symbols referred to in subregulation (2) may be
used but not as one of the first three permitted characters of the name.
(4) A name of a company shall not consist of more than fifty
permitted characters.
15.—(1) A private company limited by guarantee shall be exempt Exemption
from the requirement of section 49 of the Act (requirement to have from
requirement
name ending with “limited” or permitted alternative) so long as it as to use of
“limited”
meets the following two conditions—
(a) if the objects of the company are promotion or regulation of
commerce, art, science, education, religion, charity, any profession
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and other not for profit objective and anything incidental or
conducive to any of those objects; and
(b) if the company’s articles—
(i) require its income to be applied in promoting its objects;
(ii) prohibit the payment of dividends, or any return of
capital, to its members; and
(iii) require all the assets that would otherwise be available
to its members generally to be transferred on its winding up
either—
(A) to another body with objects similar to its own; or
(B) to another body the objects of which are the
promotion of charity and anything incidental or conducive
thereto, whether or not the body is a member of the company.
Use of a
name already
existing in the
Registrar’s
index
16.—(1) A company may be registered under the Act by a
proposed name which is similar to a name that is already in the
Registrar’s index of company names (proposed same name), if the
following conditions are met—
(a) the company or other body whose name already appears
in the Registrar’s index of company names (“Body X”) consents
to the proposed same name being the name of the other company
(“Company Y”);
(b) Company Y forms, or is to form, part of the same group as
Body X; and
(c) Company Y provides to the Registrar a copy of a statement
made by Body X indicating—
(i) the consent of Body X as referred to in paragraph (a); and
(ii) that Company Y forms, or is to form, part of the same
group as Body X.
(2) If the proposed name is to be taken by a company which has
not yet been incorporated, a copy of such statement to that effect
shall be provided to the Registrar instead by the person who delivers
to the Registrar the application for registration of the company (and
the reference in subregulation (1) to the conditions in paragraphs (a)
and (b) of the subregulation (1) shall be read accordingly).
(3) The Registrar may accept the statement referred to in
paragraph (c) of subregulation (1) as sufficient evidence that
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the conditions referred to in subregulation (1) (a) and (b) have
been met.
(4) Where the consent referred to in subregulation (1) (a) is given
by Body X, a subsequent withdrawal of that consent shall not affect
the registration of Company Y by that proposed same name.
17. In determining whether a name is the same as another name Treatment
similar
appearing in the Registrar’s index of company names, the Registrar of
names in the
may disregard any word, expression or abbreviation that are Registrar’s
index
commonly used in the English language.
18. Regulation 14 (2) and (3) and regulation 15 apply to the name Interpretation
permitted
of an FOREIGN company which is registered by that company under and
characters
Part XV of the Act (Foreign Companies) as they apply to the name of
a company formed and registered under the Act.
19.—(1) Regulation 16 applies to the proposed same name of Interpretation
proposed
a foreign company as it applies to the proposed same name of a and
same name
company formed and registered under the Act.
(2) in this regulation “proposed same name” has the same
meaning as in regulation 16.
PART IV
Foreign Companies
20. A foreign company shall deliver to the Registrar the following Particulars of
the company
particulars—
(a) the company’s name;
(b) the company’s legal form;
(c) if it is registered in the country of its incorporation, the
identity of the register in which it is registered and the number
with which it is so registered;
(d) a list of its directors and secretary, containing—
(i) with respect to each director, name, physical and postal
address, nationality and country of residence; and
(ii) with respect to the secretary (or where there are joint
secretaries, with respect to each of them) name, physical and
postal address, nationality and country of residence;
(e) the extent of the powers of the directors or secretary to
represent the company in dealings with third parties and in legal
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proceedings, together with a statement as to whether they may
act alone or must act jointly and, if jointly, the name of any other
person concerned;
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(f) whether the company is a financial institution within the
meaning of the Financial Services Act;
(g) notice of the situation of its registered office in Malaŵi;
(h) a memorandum of appointment or power of attorney under
the seal of the foreign company or executed on its behalf in such
manner as to be binding on the company, stating the names and
addresses of two or more persons resident in Malaŵi, not including
a foreign company, authorized to accept on its behalf service of
process and any notices required to be served on the company;
(i) where the list includes directors resident in Malaŵi who
are members of the local board of directors of the company, a
memorandum duly executed by or on behalf of the foreign
company stating the powers of the local directors;
(j) a duly authenticated copy of the certificate of its
incorporation or registration in its place of incorporation or origin
or a document of similar effect; and
(k) a duly authenticated copy of its constitution, charter, statute
or memorandum and articles or other instrument constituting or
defining its constitution.
Annual return
21.—(1) A foreign company that carries on business in Malaŵi
shall ensure that the Registrar receives each year no later than three
months after its financial year, an annual return in the prescribed form
confirming that the information on the foreign register in respect of
the foreign company referred to in the return is correct at the date of
the return.
(2) The annual return shall be dated as at a day within the month
during which the return is required to be received by the Registrar.
Foreign
company may
register as a
company
22.—(1) A foreign company may be registered as a company
under this Act if—
(a) the company is authorized to transfer its incorporation
under the law of the country in which it is incorporated;
(b) the company has complied with the requirements of that
law in relation to the transfer of its incorporation;
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(c) if that law does not require its shareholders, or a specified
proportion of them, to consent to the transfer of its incorporation, the
transfer has been consented to by not less than seventy-five per cent
of its shareholders entitled to vote and voting in person or by proxy
at a meeting of which not less than twenty-one days’ notice is given
specifying the intention to transfer the company’s incorporation.
(2) A foreign company shall not be registered as a company under
this Act if any insolvency proceedings have commenced or about to
commence against it, in Malaŵi or elsewhere.
(3) A foreign company which has been registered as a company
under the Act shall be deregistered if it would not satisfy the solvency
test immediately after registered under this Act, satisfy the solvency
test under the Act.
23.—(1) For the purposes of section 131 of the Act, a person shall Registered
valuer
not be registered as a valuer unless the person—
(a) is a chartered accountant under the Public Accountants
and Auditors Act, or any other qualifications acceptable to the Cap. 53:06
Registrar;
(b) has been continuously in practice for a period of ten years;
and
(c) is not disqualified under section 134 of the Act.
(2) The Registrar shall, every year in July, publish in the Gazette
names of registered valuers.
Execution of
24.—(1) A company shall execute its documents by—
documents by
(a) affixing its common seal, where it has a common seal; or a company
(b) affixing the signatures of its authorized signatories in
accordance with subregulation (2) and (3), where the company
does not have a common seal.
(2) A document shall be validly executed by a company if it is
signed on behalf of the company by—
(a) two authorized signatories; or
(b) a director of a company in the presence of a witness who
attests to the signature.
(3) For the purposes of subregulation (2), the following shall be
authorized signatories—
(a) every director of the company; and
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(b) in the case of public company, the secretary or any joint
secretary of the company.
(4) A document signed in accordance with subregulation (2)
and (3), and expressed, in whatever words, to be executed by the
company shall have the same effect as if the document has been
executed under the common seal of the company.
(5) A document shall be deemed to have been executed by a
company in favour of a purchaser if it purports to be executed in
accordance in subregulation (2) and (3).
(6) In subregulation (5), a “purchaser” means one who takes
otherwise than by gift, in good faith and for valuable consideration.
(7) Where a document is to be signed by a person on behalf of
more than one company, it shall not be duly signed by that person for
the purposes of this regulation, unless the person signs it separately
in each capacity.
(8) Reference in this regulation to a document being, or purporting
to be, signed by a director or secretary, shall be construed, in the
case where that office is held by a firm, as references to its being, or
purporting to be, signed by an individual authorized by the firm to
sign on its behalf.
(9) This regulation applies to a document that is, or purports to
be, executed by a company in the name of, or on behalf of, another
person, whether or not that person is also a company.
(10) A document shall be validly executed as a deed by a company
for the purposes of any written law if—
(a) it is executed by the company; and
(b) it is delivered as a deed.
(11) For the purposes of subregulation (10), a document is
presumed to be delivered upon its being executed unless a contrary
intention is proved.
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FIRST SCHEDULE
FORM 1
APPLICATION FOR REGISTRATION OF A COMPANY
Section 28 (1) of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information
required, attach a separate sheet containing the information set out in the
prescribed format.]
Name of Proposed Company: ........................................................................
Reservation Number/ Proposed Company Number: ......................................
Address of Registered Office: ........................................................................
........................................................................................................................
........................................................................................................................
Address for Service: .....................................................................................
........................................................................................................................
ostal address to which communication from the Registrar may be sent
P
........................................................................................................................
Email: ............................................................................................................
Completed by: ...............................................................................................
Address: ........................................................................................................
........................................................................................................................
Telephone: .....................................................................................................
Email: ............................................................................................................
Facsimile: ......................................................................................................
The following persons are the directors of the proposed company:
Full legal name:* ...........................................................................................
Residential address: .......................................................................................
Email address [optional]: ..............................................................................
Shares:
The following persons are the shareholders of the proposed company:
........................................................................................................................
*Please give first name(s) followed by surname is BLOCK letters.
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Full legal name:* ...........................................................................................
Address:† ......................................................................................................
Number of shares [please indicate if shares are held jointly.]:
........................................................................................................................
........................................................................................................................
Total number of shares:
The following documents accompany this form:
1. The notice of name reservation.
2. Memorandum of association.
3. The consent and certificate of every director. [Please use form 2 for this
purpose.]
4. The consent of every shareholder. [Please use form 3 for this purpose.]
5. The written authority of the agent that signed the form of consent referred
to in paragraph 4 above. [Delete if inapplicable.]
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
[If there is more than one applicant, each must sign and provide full legal
name and address in the prescribed format.]
*In the case of a natural person, please give first name(s) followed by surname in BLOCK
letters.
†In the case of a natural person, please give residential address. In the case of a body corporate,
please give the address of its office or, if it does not have a registered office, of its principal
place of business.
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FORM 2
CONSENT AND CERTIFICATE OF A DIRECTOR OR DIRECTORS OF A PROPOSED COMPANY
Section 28 of the Companies Act (Cap. 46:03)
[If there is more than one director, attach a separate sheet or sheets with
the consent and certificate of the additional director or directors set out in
the prescribed format.]
Name of Proposed Company: ........................................................................
Reservation Number/ Proposed Company Number: ......................................
Director’s First Name(s): ...............................................................................
Director’s Surname: ......................................................................................
Date of Birth: .................................................................................................
[Please ensure your full legal name is provided—initials are not allowed.]
[Please read the disqualification details below.]
I consent to be a director of the above proposed company and certify that I
am not disqualified from being appointed or holding office as a director of
a company.
Signature: ......................................................................................................
Name of signatory: ........................................................................................
Director’s residential address: .......................................................................
DISQUALIFICATION DETAILS
Please ensure that you are not disqualified from being a director of this
company before signing this consent form.
A person cannot be a director of a company if he is any of the following—
(a) under eighteen years of age or over seventy years of age;
(b) an undischarged bankrupt or of unsound mind; or
(c) a prohibited person from being a director or promoter of, or being
concerned or taking part in the management of, a company under any
statutory provisions.
A person who is not a natural person cannot be a director of a company.
For more information refer to section 164 of the Companies Act.
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
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Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 3
CONSENT OF A SHAREHOLDER OR SHAREHOLDERS OF PROPOSED COMPANY
Section 28 of the Companies Act (Cap. 46:03)
[If there is more than one shareholder, attach a separate sheet or sheets
with the consent of the additional shareholder or shareholders set out
in the prescribed format. If there is insufficient space on the form to
supply the information required, attach a separate sheet containing the
information set out in the prescribed format.]
Name of Proposed Company: ........................................................................
Reservation Number/Proposed Company Number: ......................................
Shareholder’s full legal name: .......................................................................
Number of shares: ............................... Class of shares: ................................
The person named above consents to being a shareholder of the above
proposed company and to taking the class and number of shares specified.
Signature: ......................................................................................................
Name of signatory: ........................................................................................
Shareholder’s address details: .......................................................................
IMPORTANT INFORMATION
• Initials of the person’s name are not allowed. Full legal names must
be provided.
• If the shareholder is a natural person, please give a residential address.
If the shareholder is a body corporate, please give the address of its
registered office or, if it does not have a registered office, the address
of its principal place of business.
• If shares are held jointly by 2 or more persons, the consent of each of
those persons must be provided in the prescribed format.
• If this consent form has been signed by an agent, it must be accompanied
by the instrument authorizing the agent to sign it.
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
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Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 4
APPLICATION FOR RESERVATION OF A COMPANY NAME
Section 45 of the Companies Act (Cap. 46:03)
Name of Proposed Company: ........................................................................
Reservation Number/Proposed Company Number: ......................................
Type of Company: Local/Foreign (Delete as appropriate)
Signature of applicant: ...................................................................................
Date: ..............................................................................................................
Full legal name of applicant: ..........................................................................
IMPORTANT INFORMATION
The Registrar shall not reserve a name—
• the use of which would contravene a written law; or
• that is identical or almost identical to the name of another company; or
• that is identical or almost identical to a name that has already been
reserved and that is still available for registration; or
• that, in the opinion of the Registrar, is offensive.
The Registrar will advise the applicant by written notice as to whether or
not the Registrar has reserved the name. If the name has been reserved,
then, unless the reservation is sooner revoked by the Registrar, the name
is available for registration of a company with that name or on a change of
name for twenty working days after the date stated in the notice.
A company name reservation does not provide any proprietary rights or
interests in the name.
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
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FORM 5
APPLICATION TO CHANGE A NAME OF A COMPANY
Section 52 of the Companies Act (Cap. 46:03)
Company No: ................................................................................................
Existing Name of the Company: ....................................................................
Proposed Name of Company: ........................................................................
Reservation No: .............................................................................................
[This application must be made by a director of the company with
the approval of its board or by a person authorized by the company’s
constitution.]
This application is accompanied by the notice reserving the proposed name
of the company.
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
Signature .......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 6
NOTICE OF ADOPTION, ALTERATION, OR REVOCATION OF CONSTITUTION
Sections 34 and 35 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
The above company has (tick)—
..................... adopted a constitution
..................... altered its constitution
..................... revoked its constitution
..................... revoked its constitution and adopted
the new attached constitution.
Date: .....................
Date: .....................
Date: .....................
Date: .....................
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Please insert the date on which the company adopted, altered, or revoked its
constitution (as the case may be).
A copy of the constitution as adopted/†alteration to the constitution† is
attached to this notice.
†Delete if inapplicable.
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
Completed by :
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address ..........................................................................................................
........................................................................................................................
FORM 7
NOTICE OF ISSUE OF SHARES AND OF APPROVAL FOR ISSUE ITS OF SHARES
Sections 83, 89, 96, 102 and 119 of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information
required, attach a separate sheet containing the information set out in the
prescribed format.]
Company Name: ............................................................................................
Company No: ................................................................................................
Issue of shares:
Shares prior to this issue: ..................................... (a)
Set out in the table below are particulars of the issue of shares by the above
company.
Date of issue: ................................. Number of shares: .................................
Total shares issued in this issue: .............................. (b)
Total company shares (a + b = c): ............................... (c)
Approval:
[Complete only if shares cannot be issued by reason of any limitation or
restriction in the company’s constitution.]
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Set out in the table below are the particulars of the approval by shareholders
to the issue of shares by the above company.
Number of shares: ................... Terms of approval of issue (if any): ................
Date of approval: ...........................................................................................
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 8
NOTICE OF PURCHASE OR ACQUISITION BY COMPANY OF ITS OWN SHARES
Section 109 of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information
required, attach a separate sheet containing the information set out in the
prescribed format.]
Company Name: ............................................................................................
Company No: ................................................................................................
Set out in the table below are particulars of the purchase or acquisition by
the above company of its own shares.
Name of person(s) from whom shares purchased or acquired: ..........................
Number of shares purchased or acquired: ......................................................
Date of purchase or acquisition: ....................................................................
Cancelled Shares (tick if applicable): ................................
Treasury Shares (tick if applicable): ..................................
Total Number of Shares after cancellation: ..........................
Signature of director/authorized person: .....................................................
Full legal name of director/authorized person: ..........................................
Date: ..............................................................................................................
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Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 9
CONSENT AND CERTIFICATE OF A DIRECTOR
Section 165 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
Director’s First Name(s): ...............................................................................
Director’s Surname: ......................................................................................
[Please ensure your full legal name is provided—initials are not allowed.]
[Please read the disqualification details below.]
I consent to be a director of the above company and certify that I am
not disqualified from being appointed or holding office as a director of a
company.
Signature: ......................................................................................................
Name of signatory: ........................................................................................
Date of appointment: .....................................................................................
Director’s residential address: .......................................................................
DISQUALIFICATION DETAILS
Please ensure that you are not disqualified from being a director of this
company before signing this consent form.
A person cannot be a director of a company if he or she is any of the
following:
(d) under 18 years of age or over 70 years of age; or
(e) an undischarged bankrupt or of unsound mind; or
(f) prohibited from being a director or promoter of, or being
concerned or taking part in the management of, a company under any
statutory provisions.
A person who is not a natural person cannot be a director of a company.
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For more information refer to section 164 of the Companies Act.
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 10
NOTICE OF CHANGE OF DIRECTORS AND PARTICULARS OF DIRECTORS
Section 172 of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information
required, attach a separate sheet containing the information
set out in the prescribed format.]
Company Name: ............................................................................................
Company No: ................................................................................................
*Director(s) ceasing to hold office:
[Please provide director’s full legal name.]
First name(s): ....................................... Surname: .........................................
Residential address: .......................................................................................
Date on which director ceased to hold office: ................................................
*Complete only if applicable.
*Appointment of new director(s)
[Please provide director’s full legal name.]
First name(s): ....................................... Surname: .........................................
Residential address: .......................................................................................
Email [optional]: ................................ Date of appointment: ...........................
[In the case of the appointment of a new director, the consent and certificate
of the new director must be attached to this Form. Please use Form 9 for
this purpose.]
*Complete only if applicable.
*Change of name or residential address of director
[Attach separate sheets for multiple entries.]
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Director’s Surname: ......................................................................................
Former Surname: ...........................................................................................
Director’s First Name: ...................................................................................
Former First Name: .......................................................................................
Address: ........................................................................................................
Former Address: ............................................................................................
Date of Change: .............................................................................................
Set out below are the names and residential addresses of every person who
is a director of the company from the date of this notice.
Full legal name*: ...........................................................................................
Residential address: .......................................................................................
*Please give first name(s) followed by surname in BLOCK letters.
Signature of director/authorized person: .......................................................
Dated: ............................................................................................................
Full legal name of director/authorized person: ..............................................
[This form cannot be signed by a resigned director.]
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 11
NOTICE OF CHANGE OF REGISTERED OFFICE OR ADDRESS FOR SERVICE
Section 55 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
Address for New Registered Office: ..............................................................
........................................................................................................................
The change in the address for service of the company takes effect on:
........................................................................................................................
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IMPORTANT INFORMATION
• Refer to section 55 of the Companies Act.
• A company must have a registered office and an address for service in
Malaŵi.
• The address for service may be the company’s registered office or
another place.
• If the registered office or the address for service is at the offices of any
firm of accountants, legal practitioners, or any other person, you must
state that the company’s registered office or its address for service is
at the offices of that firm or person and also state the particulars of the
location in any building of those offices.
• If the registered office or the address for service is not at the offices
of any such firm or person but is located in a building occupied by
persons other than the company, you must state the particulars of its
location in the building.
Note: The change in registered office or the change in address for service
takes effect on a date stated in this notice not being a date that is earlier than
five working days after this notice is registered.
Postal address to which communication from the Registrar may be sent:
........................................................................................................................
Email: ............................................................................................................
Signature of director/authorized person: .......................................................
Dated: ............................................................................................................
Full legal name of director/authorized person: ..............................................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
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FORM 12
ANNUAL RETURN
Section 256 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
Address for communication
[This is the postal address to which communication from the Registrar will
usually be sent.]
Current address: .............................................................................................
........................................................................................................................
Updated address: ...........................................................................................
........................................................................................................................
Email reminder
[To receive a reminder by email instead of by paper, provide your email
address here.]: ...............................................................................................
........................................................................................................................
Address of registered office:
[This address must be a physical address and not a P.O. Box, Private Bag,
or document exchange address.]
Current address: .............................................................................................
........................................................................................................................
Updated address: ...........................................................................................
........................................................................................................................
Address for service [This address must be a physical address and not a
P. O. Box, Private Bag, or document exchange address.]
Current address: .............................................................................................
........................................................................................................................
Updated address: ...........................................................................................
........................................................................................................................
Company Directors:
Full legal name: .............................................................................................
Residential address: ......................................................................................
Share parcels
Total number of shares: .....................................
[Please give in the table below the names and addresses of, and the number
of shares held by, the persons holding the 10 largest numbers of shares. If
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the company is not a party to a listing agreement with a registered exchange,
please give the names and addresses of and the number of shares held by,
the other shareholders of the company on a separate sheet or sheets set out
in the prescribed manner.]
[Please tick the box if the company has more than 10 share parcels.]
Number of Shares
in Share Parcel
Full Legal Name
of Shareholder
Address of Shareholder
If the shareholder is a natural person, please give a residential address. If
the shareholder is a body corporate, please give the address of its registered
office or, if it does not have a registered office, the address of its principal
place of business.
Note: If the trustees of a trust (for example, a family trust) the names of
all the trustees must be shown and the shares recorded as being jointly held
by them.
Auditor and Annual Meeting:
Specify the date of the last annual meeting or resolution in lieu of a
meeting: ...............................................
Did the shareholders pass a unanimous resolution not to appoint an auditor
for the current year? Yes/No (delete as applicable)
If you answered yes to the question above, specify the date of the
resolution: ...............................................
Date of Annual Return [This is the date within the month that your return is
due to be filed.] ...............................................
Authorized signature
I certify that the particulars contained in this annual return are correct.
Name of director/authorized person: .............................................................
Signature of director/authorized person: .......................................................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
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FORM 13
REQUEST TO REMOVE COMPANY FROM THE REGISTER
Section 348 (1) (d) of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
I, [Full Legal Name], being a shareholder authorized by special resolution
of the above company to make this application/* a director authorized by
the board of the above company to make this application/* a person required
or permitted by the constitution to make this application*, request that the
above company be removed from the register.
The grounds on which this request is made are—
*The company has ceased to carry on business, has discharged in full its
liabilities to all its known creditors, and has distributed its surplus assets in
accordance with its constitution and the Companies Act.
or
*The company has no surplus assets after paying its debts in full or in
part, and no creditor has applied to the court under for an order putting the
company into liquidation.
The following documents accompany this request:
1. A written notice from the Malaŵi Revenue Authority stating that the
Commissioner General has no objection to the company being removed
from the Malaŵi register.
2. A copy of the special resolution of shareholders under section 348 (1) (d) (i)
of the Companies Act.*
[*Delete as applicable.]
Signature of shareholder/* director/* authorized person*: .............................
........................................................................................................................
Full legal name of shareholder/* director/* authorized person *: .....................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
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FORM 14
NOTICE OF CHANGE OF NAME OF A FOREIGN COMPANY
Section 359 (3) of the Companies Act (Cap. 46:03)
Registered Name of Foreign Company: ........................................................
Company No: ................................................................................................
The above company has changed its name to: ...............................................
Name Reservation No: ..................................................................................
Effective Date: ...............................................................................................
Note: This is the date of change in the country of incorporation.
This notice is accompanied by the notice reserving the name of the company.
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
FORM 15
APPLICATION FOR REGISTRATION OF A FOREIGN COMPANY IN THE REGISTER
Section 360 of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information required,
attach a separate sheet containing the information set out in the prescribed
format.]
Company Name: ............................................................................................
Company No: ................................................................................................
Country Where Incorporated: ........................................................................
Date on which company commenced carrying on business in Malaŵi:
........................................................................................................................
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Contact Name and Address for Communication:
Full Name: .....................................................................................................
Address: ........................................................................................................
........................................................................................................................
Email: ............................................................................................................
Directors:
The following persons are the directors of the company at the date of this
application:
Full legal name:* ...........................................................................................
Residential address: .......................................................................................
Email address [optional]: ..............................................................................
*Please give first name(s) followed by surname in BLOCK letters.
Persons authorized to accept service:
The following person/* persons* resident/* incorporated* in Malaŵi is/*
are* authorized to accept service in Malaŵi of documents on behalf of the
company:
*Delete if inapplicable.
Full legal name*: ...........................................................................................
Address†: ......................................................................................................
The following documents accompany this application:
1. Any document that evidences the incorporation of the company.
2. A copy of the instrument constituting or defining the constitution of the
company.
3. The notice of name reservation.
4. If the documents referred to in 1 and 2 above are not in English, a
translation of the documents certified in accordance with regulation 10 of
the Companies Regulations.
Signed by or on behalf of the foreign company: ............................................
Date: ..............................................................................................................
Full legal name of signatory: .........................................................................
*In the case of natural person, please give first name(s) followed by surname in BLOCK letters.
†This address must be a physical address in Malaŵi and not a P. O. Box or Private Bag address.
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FORM 16
NOTICE OF ALTERATION OF CONSTITUTION OF FOREIGN COMPANY, CHANGE OF DIRECTORS, CHANGE OF PLACE OF BUSINESS, OR CHANGE IN PERSONS AUTHORIZED TO ACCEPT SERVICE
Section 362 of the Companies Act (Cap. 46:03)
[If there is insufficient space on the form to supply the information
required, attach a separate sheet containing the information set out in the
prescribed format.]
Company Name: ............................................................................................
Company No: ................................................................................................
ALTERATION TO CONSTITUTION OF FOREIGN COMPANY
[Complete only if applicable.]
The instrument constituting/* defining the constitution of* the above
company was altered on: ...............................................................................
A copy of the document by which the alteration was made is attached.
*Delete if inapplicable.
CHANGE IN ADDRESS OF PLACE OF BUSINESS OR PRINCIPAL PLACE OF BUSINESS OF FOREIGN COMPANY
[Complete only if applicable.]
Old address: ...................................................................................................
New address of place of business or principal place of business in Malaŵi:
........................................................................................................................
........................................................................................................................
ADDRESS FOR COMMUNICATION
Old address: ...................................................................................................
[Please complete if the FOREIGN company has a new address for
communications from the Registrar.]: ...........................................................
CHANGE IN DIRECTOR’S DETAILS
[Complete only if applicable.]
Director(s) ceasing to hold office [Please provide director’s full legal name.]
First name(s): ........................................... Surname: .....................................
Residential address: .......................................................................................
Date on which director ceased to hold office: ................................................
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Appointment of new director(s) [Please provide director’s full legal name.]
First name(s): ................................................ Surname: ................................
Residential address: .......................................................................................
Email [optional]: ...................................... Date of appointment: ....................
CHANGE OF NAME OR RESIDENTIAL ADDRESS OF DIRECTOR
[Attach separate sheet in the prescribed format for multiple entries.]
Director’s Surname: ......................................................................................
Director’s Former Surname: ..........................................................................
Director’s First Name(s): ...............................................................................
Director’s Former First Name(s): ..................................................................
Residential Address: ......................................................................................
Former Residential Address: .........................................................................
Effective date of change of name or of residential address: ...............................
Set out below is a full list of the current directors of the company (including
new appointments) at the date this notice is signed.
Full legal name*: ...........................................................................................
Residential address: .......................................................................................
CHANGE IN PERSONS AUTHORIZED TO ACCEPT SERVICE IN MALAŴI OF DOCUMENTS ON BEHALF OF FOREIGN COMPANY
[Complete only if applicable.]
Person ceasing to be authorized to accept service:
Full name:* ....................................................................................................
Address:* ......................................................................................................
Date appointed: ................... Email address [optional]: .................................
Appointment of person authorized to accept service
Full name:* ....................................................................................................
Address:* ......................................................................................................
Date appointed: .................... Email address [optional]: ................................
*In the case of a natural person, give a residential address. In the case of a body corporate,
please give the address of its registered office or, if it does not have a registered office, the
address of its principal place of business.
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DETAILS OF ANY OTHER PERSONS AUTHORIZED TO ACCEPT SERVICE IN MALAŴI OF DOCUMENTS ON BEHALF OF THE FOREIGN COMPANY AT THE DATE ON WHICH THIS NOTICE IS SIGNED
Full legal name:* ...........................................................................................
Address: ........................................................................................................
Email address [optional]: ..............................................................................
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
Completed by:
Signature: ......................................................................................................
Date: ..............................................................................................................
Full legal name: .............................................................................................
Address: ........................................................................................................
........................................................................................................................
*In the case of a natural person, please give a residential address. In the case of a body
corporate, please give the address of its registered office or, if it does not have a registered
office, the address of its principal place of business.
FORM 17
ANNUAL RETURN OF A FOREIGN COMPANY
Section 256 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
Date of annual return: ....................................................................................
Address of place of business or principal place of business in Malaŵi:
........................................................................................................................
........................................................................................................................
Person authorized to accept service in Malaŵi of documents on behalf of
the company
Name: ............................................................................................................
Address: ........................................................................................................
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[If more than one person is authorized to accept service in Malaŵi,
information about only one of those persons must be provided.]
Address for communication: .........................................................................
DIRECTORS
Full legal name:* ...........................................................................................
Residential address: .......................................................................................
Email address [optional]: ..............................................................................
The information on the foreign register in respect of the above company is
correct at the date of this return.
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
FORM 18
NOTICE BY A FOREIGN COMPANY OF INTENTION TO CEASE TO CARRY ON BUSINESS IN MALAŴI
Section 369 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
The above company will cease to carry on business in Malaŵi on: ..................
Public notice under section 369 of the Companies Act of the intention of
the above company to cease to carry on business in Malaŵi was given on
............................................................................................
Note: Public notice (under section 369 of the Act) of the company’s
intention to cease carrying on business in Malaŵi must have been given at
least 3 months before this notice is given to the Registrar.
Signature of director/authorized person: .......................................................
Date: ..............................................................................................................
Full legal name of director/authorized person: ..............................................
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FORM 19
APPLICATION BY A FOREIGN COMPANY TO REGISTER AS A COMPANY
Section 360 of the Companies Act (Cap. 46:03)
Company Name: ............................................................................................
Company No: ................................................................................................
[If company is already on a foreign companies register.]
Country in which company is incorporated: ..................................................
The following documents must accompany this application:
1. A certified copy of the certificate of incorporation of the foreign
company or any other similar document that evidences the incorporation of
the foreign company.
2. A certified copy of the documents defining the constitution of the foreign
company.
3. A statutory declaration by a director or authorized person that the foreign
company is not prevented from being registered as a company under the
Companies Act.
4. A completed application to register a company under the Companies Act.
5. If any document referred to above is not in English, a translation of the
document certified in accordance with the Companies Regulations.
Signature of director: .....................................................................................
Date: ..............................................................................................................
Full legal name of director: ............................................................................
FORM 20
APPLICATION FOR REGISTRATION AS A VALUER
Section 134 of the Companies Act (Cap. 46:03)
This form, in duplicate, should be forwarded to the Registrar of Companies
Post Office Box 100 Blantyre, accompanied by the prescribed fee
(PLEASE TYPE OR PRINT)
I .....................................................................................................................
Full Name
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Occupation of: ...............................................................................................
Postal Address: ..............................................................................................
........................................................................................................................
Physical Address: ..........................................................................................
hereby make application for registration as a valuer, under section 134
of the Companies Act, by virtue of my qualifications, which include not
less than ten years’ practical experience in Malaŵi; and I do solemnly and
sincerely declare that:
1. I was born on ............... /............... / ............... at .....................................
Place of birth
2. I seek registration under section 134 of the Companies Act and the
qualifications entitling me to such registration are the following:
(i) Academic/Educational
...................................................................................................................
...................................................................................................................
( State recognized certificates held and request your university to forward
a certified copy of academic record directly to Registrar)
(ii) Evidence of practical experience is to accompany this application
...................................................................................................................
...................................................................................................................
3. For evidence that I am of good character and reputation, reference
may be made to the following persons, viz. (State names, addresses and
occupations of no less than three persons)
Name: ............................................................................................................
Occupation: ...................................................................................................
Address: ........................................................................................................
4. I have not been convicted of an indictable offence punishable by
imprisonment for a term of two years or upwards and I have not been
convicted of an offence which would tend to dishonour me in the public
estimation.
And I make this solemn declaration, conscientiously believing the same to
be true, by virtue of the Oaths Affirmations and Declarations Act.
Signature of Applicant: ..................................................................................
(Before Commissioner for Oaths)
For Office Use
Approved/Rejected
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Reason for Rejection
........................................................................................................................
........................................................................................................................
........................................................................................................................
........................................................................................................................
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Registrar
SECOND SCHEDULE
PART I
Fees Payable to Registrar of Companies
K
For an application to register a company under section 28 (1)
of the Act
..
..
..
..
..
For an application to reserve the name of a company under
section 45 (1) of the Act . .
..
..
..
For registration of an annual return under section 256 (1) of
the Act . .
..
..
..
..
..
For registration of documents to effect an amalgamation under
the Act . .
..
..
..
..
..
For an application to restore a company to the Malaŵi register
under section 353 of the Act
..
..
..
For an application to register a foreign company under section
360 (1) of the Act . .
..
..
..
..
For registration of an annual return by a foreign company
under the Act
..
..
..
..
..
For inspection under section 12 (1) of the Act of any number of
documents contained in a single file that is part of the Malaŵi
register or the foreign register
..
..
..
For certification of a copy of or extract from any document
For a copy of, or extract from, a document that is part of the
Malaŵi register or the foreign register, in addition to any fee
for certifying the copy or extract—
(a) if a photocopy is made by a member of the public
using a photocopy machine provided for public use, for
each A4 sheet . .
..
..
..
..
50,000
10,000
10,000
50,000
50,000
100,000
10,000
5,000
1,000
500
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Companies Regulations
(b) if a photocopy is made by the Registrar, for each A4
sheet . .
..
..
..
..
..
For any other electronic search
..
..
Registration of any other document . .
..
For Application as Registration as a Valuer . .
389
500
2,000
10,000
500,000
PART II
Schedule of Penalties
AMOUNTS PAYABLE TO THE REGISTRAR OF COMPANIES BY WAY OF PENALTY
1. For the delivery of a document after the time specified in the Act in
respect of that document (whether or not any other fee is payable and in
addition to any other fee payable)—
(a) if delivered not later than 25 working days after the
time prescribed
..
..
..
..
(b) if delivered more than 25 working days after the
time prescribed
..
..
..
..
50,000
100,000
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Companies
Companies (Shareholder Actions) Rules
COMPANIES (SHAREHOLDER ACTIONS) RULES
ARRANGEMENT OF RULES
RULE
1. Citation
2. Application
3. Derivative claim
4. Presentation of petition
5. Service of petition
6. Return of petition
7. Advertisement of the order
G.N. 7/2017
COMPANIES (SHAREHOLDER ACTIONS) RULES
under s. 382 (3)
Citation
1. These Rules may be cited as the Companies (Shareholder
Actions) Rules.
Application
2.—(1) These Rules apply in relation to petitions presented to the
Court under Division II, Part XIV of the Act.
(2) Except where they are inconsistent with the Act and these
Rules, the rules of procedure applicable in the High Court or the
Supreme Court of Appeal shall apply with necessary changes to
proceedings under Division II, Part XIV of the Act.
Derivative
claim
3.—(1) This rule shall apply where a company or other
incorporated body is alleged to be entitled to claim a remedy and
a petition is filed by one or more members of the company or other
incorporated body for it to be given that remedy (a “derivative
claim”).
(2) A company or other incorporated body for whose benefit a
remedy is sought shall be a respondent to a derivative claim under
this rule.
(3) After a petition has been issued under subrule (1), the petitioner
shall apply, by way of summons, to the Court for leave to continue
the derivative claim under section 337 (2) and (3) of the Act, and
shall not take any other step in the proceedings except—
(a) as provided by subrule (5); or
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(b) where the Court grants leave.
(4) An application under subrule (3) shall be supported by written
evidence.
(5) The petition, summons and written evidence in support of
the summons, shall be served on the respondent within a period
within which the petition is to be served and, in any event, at least
fourteen days before a Court is to hear the application.
(6) Where a Court grants the petitioner leave to continue the
derivative claim, the respondent shall file his defence within
fourteen days of being granted leave or such period as the Court may
specify.
(7) The Court may order a company or other incorporated body
to indemnify the petitioner against any liability in respect of costs
incurred in a claim under section 338 of the Act.
Presentation
4.—(1) All shareholder actions shall be by way of petition.
of petition
(2) The petition shall specify the grounds on which it is presented
and the nature of the relief which is sought by the petitioner, and
shall be delivered to the Court for filing with sufficient copies for
service under rule 5.
(3) The Court shall fix a date, time and venue for a hearing (the
“return day”) on which, unless the Court otherwise directs, the
petitioner and any respondent including the company shall attend
before the High Court Registrar or a Judge for directions to be given
in relation to the procedure on the petition.
(4) At the time of fixing the return day, the Court shall return to
the petitioner sealed copies of the petition for service, each endorsed
with the return day and the time of hearing.
(5) For avoidance of doubt, leave shall not be required for any
other shareholder action other than a derivative claim.
5.—(1) The petitioner shall, at least fourteen days before the Service of
petition
return day, serve a sealed copy of the petition on the company.
(2) In the case of a petition based upon section 343 of the Act,
the petitioner shall also, at least fourteen days before the return day,
serve a sealed copy of the petition on every respondent named in
the petition.
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Return of
petition
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Companies
Companies (Shareholder Actions) Rules
6. On the return day, or at any time after the return day, the Court
shall give such directions as it considers appropriate with respect to
the following matters—
(a) service of the petition on any person, whether in connexion
with the date, time, and venue of a further hearing, or for any other
purpose;
(b) whether points of claim and defence are to be delivered;
(c) whether, and if so by what means, the petition is to be
advertised;
(d) the manner in which any evidence is to be adduced at any
hearing before a Judge and in particular, but without prejudice to
the generality of the foregoing, as to—
(i) the taking of evidence wholly or in part by witness
statement or orally;
(ii) the cross-examination of any persons making a witness
statement; and
(iii) the matters to be dealt with in evidence;
(e) any other matter affecting the procedure on the petition or
in connexion with the hearing and disposal of the petition; and
(f) such orders, if any, including an order of stay of execution
of judgment for any period, as the Court considers appropriate,
with a view to mediation or other alternative dispute resolution
mechanisms.
Advertisement
of the order
7. Where the Court considers that an order made under
paragraph (f) of rule 6 should be advertised, it shall give directions
as to the manner and time of the advertisement.