COMPANIES ACT, 2019 (ACT 992). SS 116-236

THE COMPANIES ACT, 2019 (ACT 992)
116. Endorsement of registration on debentures of a series

(1) A company shall endorse on every debenture, being one of a series of debentures, or certificate of debenture stock which is issued by the company and the payment of which is secured by a charge, the following particulars of which are registered under sections 110 to 113:

 (a) a copy of the certificate of registration, or

 (b) a statement that registration has been effected and the date of registration.

(2) Subsection (1) shall not be construed as requiring to be so endorsed a debenture or certificate or debenture stock issued by the company before the charge was created.

(3) A person who knowingly authorises or permits the delivery of a debenture or certificate of debenture stock which is required to be endorsed under this section and which is not so endorsed is liable to pay to the Register an administrative penalty of fifty penalty units.

(4) A person who

(a) endorses or causes to be endorsed on a debenture or certificate of debenture stock a purported copy of a certificate of registration or statement that registration has been effected which chat person knows to be false in a material particular, or

 (b) authorises or permits the delivery of a debenture or certificate of debenture stock bearing an endorsement purporting to be a copy of a certificate of registration or statement that registration has been effected which that person knows to be false in a material particular, commits an offence and is liable on summary conviction to a fine of not less than five hundred penalty units and not more than one thousand penalty units or to a term of imprisonment of not less than two years and not more than five years or to both the fine and imprisonment.

117. Entry of satisfaction upon receipt of discharge

The Registrar, upon receipt of an application in the prescribed form and on satisfactory evidence given with respect to a charge of which particulars have been registered,

 (a) that the debt for which the charge was given has been paid or satisfied in whole or in part, or

 (b) that the whole or part of the property charged has been released from the charge or has ceased to form part of the property of the company or undertaking, shall enter on the register a memorandum of satisfaction in whole or in part, or of the fact that the whole or part of the property has been released from the charge or has ceased to be part of the property of the company, and where the Registrar enters a memorandum of satisfaction in whole, the Registrar shall if required, furnish the company with a copy of the memorandum.

118. Rectification of register of particulars of charges

(1) The Court, on being satisfied

 (a) that the omission to register particulars of a charge within the time required by this Act, or that the omission or mis-statement of the particulars with respect to a charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or members of the company, or

 (b) that on other grounds it is just and equitable to grant relief, may, on the application of the company or a person interested, and on the terms that the Court considers just and expedient, order that the time for registration shall be extended, or that the omission or mis-statement shall be corrected.

(2) When the Court grants an extension of time for registration, the charge shall not, unless the Court otherwise orders, adversely affect a person who, before the date of actual registration of particulars of the charge, has acquired proprietary rights in, or a fixed or floating charge on, the property subject to the charge, and shall be ineffective against the liquidator and the creditors of the company if the winding up of the company commences before the date of actual registration.

119. Registration of enforcement of security

(1) Where a person obtains an order for the appointment of a receiver of property of a company, or appoints a receiver or enters into possession of the property under a power contained in a charge, notice of the fact in the prescribed form shall, within ten days from the date of the order, appointment, or entry into possession, be given to the Registrar who shall enter the fact in the register of the particulars of charges relating to that company.

(2) Where there is a default in giving the notice required under subsection (1), the receiver, the person entering into possession, the company, or an officer of the company who is in default, is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

(3) Where a person appointed receiver of the property of the company ceases to act as receiver, or where a person having entered into possession goes out of possession, that person shall give notice to the Registrar, within ten days of so ceasing to act or to remain in possession, to that effect in the prescribed form.

(4) The Registrar shall enter the notice referred to in subsection (3) in the register of particulars of charges.

(5) A person who defaults in complying with the requirements of subsection (3) is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

(6) The Registrar shall cause a copy of a notice given under this section to be published in the Companies Bulletin.

120. Copies of charges to be kept by company

(1) A company shall keep a copy of every instrument creating a charge of which particulars require to be registered under sections 110 to 113, at the registered office of the company and at any other office in Ghana at which the register of debenture holders is kept; but in the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

(2) The copies are open to inspection during usual business hours, subject to the reasonable restrictions that the company in general meeting may impose.

(3) For the purposes of subsection (2), not less than two hours in each day, other than a Saturday, a Sunday and a public holiday, shall be allowed for inspection by

 (a) a member or creditor of the company without a fee, and

 (b) any other person on payment of a fee, prescribed by the company for each inspection.

(4) Where a company defaults in complying with subsection (1), or if inspection of the copies is refused, the company and every officer of the company that is in default is liable on summary conviction to a fine of not less than two hundred and fifty penalty units and not more than five hundred penalty units, and in the event of refusal, the Court may compel an immediate inspection of the copies.

121. Registration constituting notice

The registration of any particulars under sections 113 to 120 constitutes actual notice of those particulars, but not of the contents of a document referred to in, or delivered with, the particulars to all persons and for all purposes as from the date of registration.

Part M: Registered Office, Publication of Name and Annual Returns
122. Registered office

(1) A company shall within twenty-eight days after its incorporation, have the following to which communications and notices to the company may be addressed:

 (a) a registered office and principal place of business in the Republic with a telephone contact, a post office box, private mail bag or digital address of the registered office; and

 (b) an electronic mail address and the website of the company if available.

(2) Where a company defaults in complying with subsection (1), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

123. Notice of location of registered office

(1) A company shall give notice of the following for purposes of incorporation in accordance with section 13:

 (a) the original registered office of the company, the telephone contact, a post office box, private mail bag or digital address of the registered office; and

 (b) an electronic mail address and the website of the company if available.

(2) Notice of a change in the location of the registered office or of the number of the post office box, digital address or of the electronic mail address shall be given in the prescribed form to the Registrar for registration within twenty-eight days of the change.

(3) The inclusion in the annual return referred to in section 126 of a statement as to the location of the registered office of the company and the number of the post office box, digital address or the electronic mail address of the company does not satisfy the obligation imposed by this section.

(4) Where a company defaults in complying with subsection (2) or (3), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

124. Requirement to change registered office

(1) Subject to the other provisions of this section, a company shall change the registered office where the company is required to do so by the Registrar.

(2) The Registrar may require a company to change the registered office by notice in writing delivered or sent LO the company at the registered office of the company.

(3) The notice shall

 (a) state that the company is required to change the registered office by the date specified in the notice, not being a date that is earlier than twenty-eight days after the date of the notice;

 (b) slate the reason for the required change;

(c) state that the company has the right to appeal to Court; and

 (d) be dated and signed by the Registrar.

(4) A copy of the notice shall be sent to each director of the company.

(5) The company shall change the registered office

 (a) by the date specified in the notice; or

 (b) where the company appeals to the Court and the appeal is dismissed, within seven days of the date of the decision of the Court.

(6) Where a company fails to comply with this section, each director and the Company Secretary commit an offence and are liable on summary conviction to a fine of not more than twenty-five penalty units for each day during which the default continues.

125. Publication of name of company

(1) A company shall,

 (a) paint or affix, and keep painted or affixed, the name of the company on the outside of the registered office and of every office or place in which the business of the company is carried on, in a conspicuous position in letters that are easily legible;

 (b) where the company has a common seal, have the name of the company engraved in legible characters on the seal; and

 (c) have the name of the company accurately mentioned in legible characters at the head of the business letter, invoices, receipts, notices, or any other publication of the company and in the negotiable instruments or orders for money, goods or services purporting to be signed or endorsed by or on behalf of the company.

(2) Where a company defaults in complying with subsection (1), the company and each officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units.

(3) Where an officer of the company or a person purporting to act on behalf of the company uses or authorises the use of a seal purporting to be a seal of the company on which the name is not engraved as required by subsection (1), that officer commits an offence and is liable on summary conviction to a fine of not less than one hundred and twenty-five penalty units and not more than two hundred and fifty penalty units.

(4) Where an officer of the company or any other person signs or endorses or authorises the signing or endorsement on behalf of the company of a negotiable instrument or order for money, goods or services in which the name of the company is not accurately mentioned in accordance with paragraph (c) of subsection (1), that officer or person is personally liable to discharge the obligation thereby incurred unless the obligation is duly discharged by the company or otherwise, but without limiting a right of indemnity which that person may have against the company or any other person.

(5) The use of the following abbreviations:

(a) "Ltd" stands for "Limited",

 (b) "PLC" stands for "Public Limited Company",

 (c) "LBG" stands for "Limited by Guarantee",

 (d) "PRUC" stands for "Private Unlimited Company", or

(e) "PUC" stands for "Public Unlimited Company" is not a breach of this section.

126. Annual return

(1) A company shall, at least once in every year, deliver to the Registrar for registration an annual return including particulars of every member of the company, and every beneficial owner of that company and in the form and relating to the matters prescribed in the Fifth Schedule.

(2) A company need not make an annual return,

(a) in the year of incorporation, or

 (b) in a year ending less than eighteen months after the date of incorporation, so long as the company makes a return within thirty-six days after the first despatch to the members and debenture holders of the statements, accounts, and reports referred to in section 128.

(3) The annual return shall be completed within thirty-six days from the date on which the financial statements, reports of the directors and auditors of the company are sent to the members and debenture holders pursuant to section 128, and signed by at least one director and the Company Secretary in accordance with section 213.

(4) The annual return shall state the position of the company as at the date of the annual general meeting or, if the holding of an annual general meeting is waived in accordance. with subsection (5) of section 157, at the twenty-first day after the despatch of the documents referred to in subsection (3).

(5) The Registrar, after registering the annual return, shall publish in the Companies Bulletin a notice that the annual return in respect of the company has been registered.

(6) In the case of a private company, the annual return shall be accompanied by the documents specified in section 298 and in the case of a public company by the documents specified in section 323.

(7) Where a company defaults in complying with this section, the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

Part N• Accounts and Audit
127. Keeping of accounting records and preparation of financial statements

(1) A company shall keep proper accounting records with respect to the financial position and changes in the accounting records, and with respect to the control of and accounting for assets acquired whether for resale or for use in the business of the company, and, in particular with respect to;

(a) the sums of money received and expended by, or on behalf of, the company and the matters in respect of which the receipt and expenditure takes place;

 (b) the sales and purchases by the company of property, goods and services; and

 (c) the assets and liabilities of the company and the interests of the members in the company.

(2) For the purposes of subsection (1), accounting records which do not give a true and fair view of the state of affairs of the company and are not necessary for the preparation of the proper income statements and statement of financial position in accordance with sections 129 to 135 are not proper accounting records.

(3) The accounting records may be kept by making entries in bound volumes, or, subject to compliance with subsections (2) and (3) of section 293, by a system of electronic recording, or otherwise.

(4) The accounting records shall be kept at the registered office of the company or at any other place in Ghana that the directors consider fit, and shall be open to inspection by the directors, Company Secretary and auditors of the company.

(5) The financial statements of a company shall

 (a) comprise a

(i) statement of financial position,

(ii) statement of comprehensive income,

(iii) statement of cash flows,

(iv) statement of changes in equity, and

(v) summary of significant accounting policies and other explanatory notes to the financial statements; and

 (b) be prepared in compliance with International Financial Reporting Standards adopted by the Institute of Chartered Accountants, Ghana or any other standards approved or adopted by the Institute.

128. Circulation of financial statements and reports

(1) The directors of a company shall, at a date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year at intervals of not more than fifteen months, prepare and send to every member of the company and to every holder of debentures of the company a copy of each of the following documents:

 (a) financial statements prepared and signed in accordance with sections 129 to 135;

 (b) a report by the directors in accordance with section 136; and

 (c) a report by the auditors in accordance with section 13 7.

(2) Subsection (1) does not require a copy of the documents to be sent to a member or debenture holder of whose address the company is unaware, but that member or debenture holder is entitled to be furnished on demand without charge with a copy of the last of the financial statements and reports of directors and auditors.

(3) Unless the holding of an annual general meeting is duly waived by the members in accordance with subsection (5) of section 157, the documents referred to in subsection (1) of this section shall be laid before the company in general meeting.

(4) The Registrar may extend the periods of eighteen months and fifteen months referred to in subsection (1) and, in the circumstances referred to in subsection (8) of section 131, may waive the requirements of this section in respect of a calendar year.

129. First financial statements after incorporation

(1) The financial statements referred to in paragraph (a) of subsection (1) of section 128 shall, in the case of the first financial statements since the incorporation of the company, cover the period since the incorporation of the company and, in any other case, cover the period since the preceding account and shall be made up to a date not earlier than nine months or more from the date on which it is to be sent to members and debenture holders pursuant to section 128.

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

 (a) in the case of an existing company which has not previously prepared the statements specified in subsection (5) of section 127 and which was not required by the constitution of the company to prepare one, the first financial statements need not cover a period commencing earlier than the date of the commencement of this Act; and

 (b) the Registrar may extend the period of nine months.

(3) The date to which the statement of comprehensive income and statement of cash flows is to be made up in accordance with subsection (1) is the end of the financial year of the company.

(4) The statement of comprehensive income and statement of cash flows shall, subject to subsection (4) of section 131, relating to a consolidated financial statement,

(a) give a true and fair view of the profit or loss and other comprehensive income of the company for the period to which the statement relates; and

(b) comply with the requirements of sections 131 to 135 and Part One of the Sixth Schedule.

(5) The Registrar may, on the application or with the consent of the directors of a company, modify in relation to that company, any of the requirements in Part One of the Sixth Schedule for the purpose of adapting those requirements to the circumstances of the company, but a modification shall not derogate from the obligation imposed by paragraph (a) of subsection (4) to give a true and fair view of the profit or loss of the company.

130. Statement of financial position

(1) The statement of financial position as part of the financial statements referred to in paragraph (a) of subsection (1) of section 128 shall give a true and fair view of the state of affairs of the company as at the end of the financial year of the company and shall comply with the requirements of sections 131 to 135 and Part Two of the Sixth Schedule.

(2) The Registrar may, on the application or with the consent of the directors of the company, modify any of the requirements in Part Two of the Sixth Schedule for the purpose of adapting them to the circumstances of the company, but a modification shall not derogate from the obligation imposed by subsection (1) to give a true and fair view of the state of affairs of the company.

131. Consolidated financial statements

(1) At the end of the financial year of a company, this section shall apply where a company has subsidiaries.

(2) Financial statements dealing with the operating results and the state of affairs of the company and the subsidiaries, that is, the consolidated financial statements, shall be sent to the members and debenture holders of the company with the financial statements of the company pursuant to section 128.

(3) The consolidated financial statements shall comprise

(a) statement of financial position,

 (b) statement of comprehensive income,

 (c) statement of changes in equity,

 (d) statement of cash flows, and

 (e) notes to the consolidated financial statements.

(4) The consolidated financial statements shall

 (a) give a true and fair view of the profit or loss and other comprehensive income and of the state of affairs of the company and the subsidiaries dealt with by the consolidated financial statements as a whole, in so far as it concerns the interest of the company; and

(b) be prepared in compliance with International Financial Reporting Standards as adopted by the Institute of Chartered Accountants, Ghana.

(5) The financial statements of the company and the consolidated financial statements, shall comply with the requirements of Part Three of the Sixth Schedule.

(6) The Registrar may, on the application or with the consent of the directors of the company, modify in relation to that company any of the requirements in Part Three of the Sixth Schedule for the purpose of adapting those requirements to the circumstances of the company; but a modification shall not derogate from the obligation imposed by subsection (4) to give a true and fair view of the profit or loss and other comprehensive income and the state of affairs of the company and the subsidiaries as a whole, in so far as it concerns the interests of the company.

(7) Directors of a holding company shall secure that, except where in the opinion of the directors there are good reasons against the company, in which case reasons of the directors shall be stated in a note on the financial statements of the company, the financial year of each of the subsidiaries shall coincide with the financial year of the company, and the consolidated financial statements shall deal with the affairs of the holding company and the subsidiaries for the same financial year.

(8) Where it appears to the Registrar that it is desirable for a holding company or subsidiary company to extend its financial year so that the financial year of the subsidiary may end with that of the holding company, and for that purpose to postpone the despatch of the financial statement and reports referred to in section 128, from one calendar year to another, the Registrar may direct that the despatch of the financial statements by one or other of these companies shall not be required in the earlier years of the calendar.

(9) Where the financial year of a subsidiary does not coincide with that of the holding company, the consolidated financial statements shall, unless the Registrar otherwise directs, deal with the profit or loss and other comprehensive income of the subsidiary, and the state of affairs as at the end of the financial year of the subsidiary ending last before that of the holding company.

132. Particulars of emoluments and pensions of directors

(1) There shall be shown in accordance with this section, in a note to the financial statements of a company, the following information as it is contained in the accounting records of the company, or the company has obtained the information from the persons concerned or has the right to obtain it under section 134, namely, the individual and aggregate amounts of the

 (a) emoluments of the directors;

 (b) pensions of the directors or past directors; and

 (c) emoluments of the directors or past directors in respect of loss of office.

(2) The amount to be shown under paragraph (a) of subsection (1) includes fees, salaries and percentages, expenses, allowances, contributions paid under a pension scheme, and the estimated value of benefits in kind, except benefits of the character and value that are customarily afforded to employees other than directors, paid to, or receivable by, a director in respect of the services of the director as an officer of the company or of an associated company.

(3) The amount to be shown under paragraph (b) of subsection (1) shall include the pension paid or receivable in respect of services as a director or past director of the company, or in respect of services, while a director of the company, in connection with the management, or as an officer of the company or an associated company, whether that pension is paid to, or receivable by, the director or past director or any other person.

(4) For the purposes of subsection (3), it is not necessary to include a pension paid or receivable under a pension scheme where the contributions are substantially adequate for the maintenance of the scheme.

(5) The amount to be shown under paragraph (c) of subsection (1)shall include

 (a) the sums of moneys paid to or receivable by a director or past director by way of compensation for the loss of office as director of the company or for the loss, while a director of the company, or in connection with that person ceasing to be a director of the company, or of any other office in the company or of an office in an associated company; and

 (b) a sum of money and the value of any other valuable consideration paid or receivable in connection with retirement from office, or as damages for breach of contract of service; and shall be deemed to be paid or received by way of compensation for loss of office.

(6) The amounts to be shown under each paragraph of subsection (1) shall include the relevant sums of money paid by, or receivable from, the company or any other person.

(7) The amounts to be shown under this section for a financial year shall be the sums of money receivable in respect of that year whenever paid or in the case of sums not receivable in respect of a period, the sums paid during that year.

(8) For the purposes of subsection (7), the sums paid in advance of the financial year to which the sums are expressed to relate shall be shown in the accounts for the financial year in which the sums are paid.

(9) Where it is necessary to do so for the purposes of making a distinction required by this section, the directors may apportion, in a manner that the directors think appropriate, the payments between the matters in respect of which they have been paid or are receivable.

133. Particulars of amounts due from officers

(1)  Subject to this section, there shall be separately shown in a note to the financial statements of a company, the following:

 (a) the individual and aggregate amounts of money due to the company or an associated company at the end of the financial year of the company from an officer of the company or an associated company; and

 (b) the maximum amount of money due to the company and an associated company at any time during the financial year of the company from any officer of the company or an associated company.

(2) Where the company or an associated company gives a guarantee or security to a person in respect of an indebtedness of an officer of the company or an associated company, the amount guaranteed or in respect of which the security was given, shall be included in the amounts to be shown under subsection (1).

(3) Despite subsections (1) and (2), the following do not require to be separately shown:

 (a) an indebtedness incurred as a result of a transaction in the ordinary course of business by the company or an associated company unless the indebtedness has not been discharged as and when the payment was due;

 (b) a loan made in the ordinary course of business by a company, the ordinary business of which includes the lending of money; or

 (c) a loan made by the company or an associated company to an officer of the company or associated company if the loan does not exceed five thousand currency points or two percent of the stated capital of the company concerned, whichever is less, and is certified by the directors of the company concerned to have been made in accordance with a practice adopted, or about to be adopted, by that company with respect to loans to those employees.

(4) Paragraphs (b) and (c) of subsection (3) shall not include a loan made by a company under a guarantee from or on security provided by an associated company.

(5) A reference in this section to an associated company includes a company which is an associated company at the end of the financial year of the company, whether or not an associated company at the date of the transaction concerned.

(6) This section does not derogate from section 328 prohibiting loans by public companies to directors of the company or directors of associated companies.

134. Provisions supplemental to sections 127 to 133

(1) A reference in this Act to the financial statements of a company includes the notes on those financial statements and a document annexed to those financial statements giving information which is required by this Act.

(2) A reference in this Act to a statement of comprehensive income of a company limited by guarantee or any other company not trading for profit shall be construed as a reference to statement of comprehensive income and expenditure of the company.

(3) Where a person, who is a director of a company, fails to take the reasonable steps necessary to secure compliance with sections 127 to 133, that person commits an offence and is, in respect of each offence, liable on summary conviction to a fine of not less than two hundred and fifty penalty units and not more than five hundred penalty units or to a term of imprisonment of not less than one year and not more than two years or to both the fine and imprisonment.

(4) For the purposes of subsection (3),

 (a) in proceedings against a person for an offence, that person may as a defence prove that, that person had reasonable cause to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that those provisions were complied with and was in a position to discharge that duty; and

 (b) a person shall not be sentenced to imprisonment for an offence unless, in the opinion of the Court, the offence was committed wilfully.

(5) A director and former director of the company shall give notice in writing to the company of the matters relating to that director or former director that may be necessary to enable the company comply with sections 132 and 133, and if notice is given, the director or former director shall secure that it is brought up and read at the next meeting of the directors after the notice is given.

(6) It is not necessary for a person under subsection (5) to give written notice of loans, guarantees or securities made or given by the company.

(7) A person who defaults in complying with subsection (5) is liable to pay to the Registrar an administrative penalty of two hundred and fifty penalty units.

(8) A company shall give a written notice to an associated company relating to a transaction entered into by the first named company that may be necessary to enable the associated company comply with sections 132 and 133.

(9) Where a company defaults in complying with subsection (8), the company and every officer of the company, that is in default is liable to pay to the Registrar an administrative penalty of two hundred and fifty penalty units.

135. Signing and publication of financial statements

(1) A company shall not issue, publish or circulate a copy of the financial statements unless

 (a) the company attaches to the financial statements, reports of the directors and auditors respectively, as required under sections 136 and 13 7, and

 (b) the financial statements have been approved by the board of directors and, after that approval, signed by two directors on behalf of the board.

(2) Subsection (1) does not prohibit the publication of

(a) a fair and accurate summary of the financial statements and report of the auditors on the financial statements after the financial statements have been approved, and signed on behalf of the board of directors; and

 (b) a fair and accurate summary of the profit or loss and other comprehensive income statements for part of the financial year of the company.

(3) In the event of a breach of subsection (1), the company and every officer of the company that is in default is liable to pay to the Registrar an administrative penalty of one hundred and fifty penalty units.

136. Report of directors

(1) The report of the directors referred to in paragraph (b) of subsection (1) of section 128, shall consist of a report on the

 (a) details on the state of affairs of the company and, if the company is a holding company, on the state of affairs of the company and the subsidiaries of the company as a group, and the amount of money which the directors recommend to be paid by way of dividend,

 (b) particulars of entries in the interests register during the financial year,

 (c) corporate social responsibility of the company and a subsidiary and the amounts spent during the financial year;

 (d) amount payable by way of audit fees; and

 (e) details of steps taken to build the capacity of directors to discharge their duties.

(2) The report shall deal, so far as is material for the appreciation of the state of affairs of the company, with any change during the financial year in the nature of the business of the company or of the associated companies, or in the classes of business in which the company has an interest, whether as a member of another company or otherwise.

(3) The report shall contain a list of bodies corporate in relation to which is fulfilled at the end of the financial year of the company, the condition that

 (a) the body corporate is a subsidiary of the company, or

 (b) although the body corporate is not a subsidiary of the company, the company is beneficially entitled to equity shares of the body corporate conferring the right to exercise more than twenty-five per cent of the votes exercisable at a general meeting of the body corporate.

(4) The list referred to in subsection (3) shall distinguish between bodies corporate falling within paragraphs (a) and (b) of that subsection and shall state as regards each company, the

 (a) name;

  (b) country of incorporation; and

 (c) nature of the business carried on by the company.

(5) If the company is, at the end of the financial year, the subsidiary of another, the report shall also state the name and country of incorporation of the holding company.

(6) If, on an application made by the directors, the Registrar is satisfied that, mention of any of the matters referred to in subsections (2) (3), (4) and (5) would be harmful to the business of the company or any of the associated companies, the Registrar may direct that the matter need not be mentioned in the report of a financial year.

(7) The report shall be approved by the board of directors and signed on behalf of the board by two directors.

(8) A director who fails to take the reasonable steps necessary to comply with this section is liable to pay to the Registrar, an administrative penalty of one hundred and fifty penalty units.

 

137. Report of Auditors

(1) The report by the auditors referred to in paragraph (c) of subsection (1) of section 128, shall

 (a) consist of a report, addressed to the members of the company, by an auditor or auditors duly qualified and appointed as auditors of the company in accordance with sections 138 and 139 on

(i) the accounting records of the company, and

(ii) financial statements of the company as listed in subsection (5) of section 127 and the consolidated financial statements to be sent to the members and debenture holders of the company in accordance with sections 128 and 131; and

(b) contain statements as to the matters mentioned in the Seventh Schedule.

(2) Where, in the case of the accounts, any of the particulars required to be shown under sections 132 and 133 are not shown, the report, in addition to stating that the accounts do not give the information required by this Act, shall contain a statement giving the required particulars so far as the auditors are reasonably able to do so.

(3) The audit of the financial statements shall, in the case of a public or private company be carried out in compliance with international standards on auditing adopted by the Institute of Chartered Accountants, Ghana and it shall be sufficient if the report of the auditor complies with those standards and accords with terminology approved by the Institute of Chartered Accountants, Ghana.

(4) The report shall be open for inspection by a member or debenture holder of the company at the registered office of the company during usual business hours and shall be read at an annual general meeting of the company held within three months after the report is sent to members and debenture holders in accordance with section 128.

138. Qualification of an auditor

(1) A person is qualified for appointment as an auditor of a private or public company, if that person is,

 (a) qualified and licensed in accordance with the Chartered Accountants Act, 1963 (Act 170); and

 (b) not disqualified under subsection (2).

(2) A person is disqualified for appointment as an auditor, if that person is

(a) an officer of the company or of an associated company;

 (b) a partner of, or in the employment of, an officer of the company or of an associated company;

(c) an infant;

 (d) found by a court of competent jurisdiction to be a person of unsound mind;

 (e) a body corporate, except that a member of an incorporated partnership may be appointed in the manner provided by subsection (2) of section 139;

(f) one in respect of whom an order has been made under section 177 so long as the order remains in force unless leave to act as an auditor of the company concerned has been granted by the Court in accordance with that section;

 (g) an undischarged bankrupt, unless that person has been granted leave to act as an auditor of the company concerned by the Court by which the adjudication as bankrupt was made; or

 (h) for the time being disqualified from acting as an auditor of a company by order of the Registrar under subsection (4).

(3) Paragraph (b) of subsection (2) does not disqualify a person from being appointed as an auditor by reason only of the fact that, that person is a partner or in the employment of a person acting as Company Secretary of the company or of an associated company.

(4) The Registrar may, subject to a legislative instrument, disqualify a person otherwise qualified from acting as an auditor of a company and may at any time remove that disqualification.

(5) A person aggrieved by a decision of the Registrar under subsection (4) has a right to appeal to the Court.

(6) A person not qualified for appointment as an auditor who acts as an auditor, commits an offence and is liable on summary conviction to a fine of not less than three hundred and twenty-five penalty units and not more than seven hundred and fifty penalty units and the company by whom that person is appointed and an officer of that company that is in default are liable each to pay to the Registrar an administrative penalty of seven hundred and fifty penalty units

139. Appointment of an auditor

(1) A person shall not be appointed as an auditor of a company unless, that person

(a) has, before the appointment, consented in writing to be appointed; and

 (b) is duly qualified in accordance with section 138.

(2) A partnership firm may be appointed, in the name of the firm, as an auditor of a company, but, whether or not that firm is a body corporate, the appointment shall be deemed to be an appointment of the partners of the firm who, at the time of the appointment, are duly qualified.

(3) Despite a contrary provision in the constitution of a company, an auditor shall be appointed by ordinary resolution of the company and not otherwise.

(4) For the purposes of subsection (3),

 (a) the directors may appoint the first auditors of a company and may fill a casual vacancy in the office of auditor; or

 (b) if a company does not have an auditor for a continuous period of three months the Registrar may appoint an auditor for that company.

(5) An existing auditor shall continue in office until,

 (a) that auditor ceases to be qualified for appointment;

 (b) that auditor resigns from office by notice in writing to the company;

 (c) an ordinary resolution is duly passed at an annual general meeting in accordance with section 141 removing that auditor from office or appointing any other person in place of that auditor as from the conclusion of the annual general meeting; or

 (d) the tenure of that auditor ends; and when a casual vacancy occurs in the office of the auditor, the surviving or continuing auditor may act.

(6) Within fourteen days after the occurrence of a change in the auditors of a company, the company shall give notice of the change in the prescribed form to the Registrar for registration.

(7) For the purposes of subsection (6)

 (a) where a partnership firm has been appointed auditor in the name of the firm, the name and business address of the firm shall be given to the Registrar, and

 (b) a change in the constitution of the firm or of the partners in the firm with respect to an auditor of the company is not a change in the auditors.

(8) Before accepting the appointment as an auditor of a company, the auditor shall communicate with the retiring auditor and request the retiring auditor to make any representations and supply information about the company.

(9) The retiring auditor shall respond to the request and supply the requisite information.

(10) Where a company contravenes a provision of this section or describes as auditor of the company a person who has not been duly appointed, the company and an officer of the company that is in default are liable each to pay to the Registrar an administrative penalty of two hundred and fifty penalty units.

(11) An auditor shall hold office for a term of not more than six years and is eligible for appointment after a cooling-off period of not less than six years.

140. Remuneration of an auditor

(1) The remuneration of an auditor of a company shall be fixed where the auditor is appointed

 (a) by the directors for the period expiring at the conclusion of the next annual general meeting of the company;

 (b) by the Registrar; or

 (c) at a meeting of the company, by ordinary resolution of the company or in a manner that the company by ordinary resolution may determine.

(2) For purposes of full disclosure, the

 (a) company shall clearly state in the financial statements which are accessible and reported to shareholders of the company the remuneration offered to an auditor of the company for any service rendered; and

 (b) remuneration payable to an auditor of the company shall be subject to confirmation by members of the company.

(3) For the purposes of this section, "remuneration" includes the sums of money payable by a company in respect of the expenses of an auditor.

(4) Where a company contravenes a provision of this section, the company and an officer of the company that is in default are liable each to pay to the Registrar an administrative penalty of two hundred and fifty penalty units.

141. Removal of an auditor

(1) A resolution to remove an auditor or to appoint any other person in the place of that auditor is not effective unless,

 (a) a written notice has been given to the company of the intention to pass the resolution, not less than thirty-five days before the general meeting at which the resolution is to be moved and on receipt of the resolution, the company has forthwith sent a copy of the resolution to the auditor concerned;

 (b) the resolution is passed at a general meeting of the company; and

 (c) the company has given the members notice of the resolution at the same time and in the same manner as the company gives notice of meetings or, if that is not practicable, has given the members notice of the resolution in the same manner as notices of meetings are required to be given not less than twenty-one days before the meeting.

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

 (a) if, after notice of the intention to move the resolution is given to the company, an annual general meeting is called for a date thirty-five days or less after the notice has been given to the company, the notice is properly given; and

 (b) in the case of a resolution to remove an auditor appointed by the directors in accordance with subsection (4) of section 139 or to appoint any other person in place of an auditor so appointed, subsection (1) shall have effect with the substitution of fourteen days for thirty-five days in paragraph (a) of subsection (1) and seven days for twenty-one days in paragraph (c) of subsection (1)

(3) The auditor concerned is entitled

 (a )to be heard on the resolution at the meeting; and

 (b) to send to the company a written statement, and the company shall send copies of the statement with every notice of the annual general meeting or, if the statement is received too late, shall forthwith circulate to each person entitled under subparagraph (I) of paragraph l of the Eighth Schedule the notice of the meeting in the same manner as notices of meetings are required to be given.

(4) The company is not required to send or circulate the statement under paragraph (b) of subsection (3),

(a) if the statement is received by the company less than seven days before the meeting; or

 (b) if the Court, on an application made by the company or any other person who claims to be aggrieved, so orders on being satisfied that the statement is unreasonably long or that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; the Court may order the costs of the applicant to be paid in whole or in part by the auditor although the auditor is not a party to the application.

(5) Without limiting the right of the auditor to be heard orally on the resolution, the auditor may, unless the Court makes an order under subsection (4), also require that the written statement by the auditor be read to the meeting.

(6) If the resolution is passed, the resolution shall not take effect until the conclusion of the annual general meeting.

142. Functions of an auditor

(1) An auditor of a company while acting in the performance of functions under this Act, is not an officer or agent of the company, but

(a) stands in a fiduciary relationship to the members of the company as a whole, and

(b) shall act in a manner that a faithful, diligent, careful, and ordinarily skilful auditor would act in the circumstances.

(2) A provision, whether contained in the constitution of a company, or in a contract, or in a resolution of a company, shall not relieve an auditor from

 (a) the duty to act in accordance with subsection (1); or

 (b) a liability incurred as a result of a breach of that duty.

(3) An auditor shall have a right of access at all times to the accounting records and financial statements and vouchers of the company and is entitled to require from the officers of the company the information and explanation that the auditor thinks necessary for the performance of the functions of the auditor.

(4) The auditor of a company is entitled to

 (a) attend a general meeting of the company,

 (b) receive the notices of, and other communications relating to, a general meeting, and

 (c) be heard at a general meeting on any part of the business of the meeting which concerns the auditor.

(5) The auditor of a company may apply to the Court for directions in relation to a matter arising in connection with the performance of functions under this Act.

(6) On receipt of that application, the Court may give directions that the Court considers just and unless the Court otherwise directs, the costs of the application shall be paid by the company.

143. Auditor to avoid conflict of interest

(1) An auditor of a company shall ensure that in carrying out the duties of an auditor under this Part, the personal judgment of the auditor is not impaired by reason of any relationship with or interest in the company or any of the subsidiaries of the company.

(2) Without limiting subsection (1), a company, person or firm that carries out duties of an auditor shall not engage in any relationship with a client that will result in a conflict of interest between that person or firm and that client including a relationship with a client that will

 (a) place the person or firm in the position of auditing work of that person or firm;

 (b) result in that person or firm acting as management or an employee of the client; or

 (c) place that person or firm in a position of being an advocate for the client.

(3) Subsection (2) applies to the appointment of an auditor who is appointed to perform the services of a receiver

Part 0: Acts by or on behalf of the Company
144. Division of powers between general meeting and board of directors

(1) A company shall act through the members of the company in general meeting or the board of directors or through officers or agents, appointed by, or under authority derived from the members in general meeting or the board of directors.

(2) Subject to this Act, the respective powers of the members in general meeting and the board of directors may be determined by the constitution of a company.

(3) Except as otherwise provided in the constitution of a company, the business of the company shall be managed by the board of directors who may exercise the powers of the company that are not by this Act or the constitution required to be exercised by the members in general meeting.

(4) Unless the constitution of the company otherwise provides, the board of directors when acting within the powers conferred on them by this Act or the constitution of the company, are not bound to comply the directions or instructions of the members in general meeting.

(5) Subject to section 145, the members in general meeting may

 (a) act in a matter if the members of the board of directors are disqualified or are unable to act by reason of a deadlock on the board or otherwise;

 (b) institute legal proceedings in the name of and on behalf of the company if the board of directors refuse or neglect to do so;

 (c) ratify or confirm an action taken by the board of directors; or

 (d) make recommendations to the board of directors regarding an action to be taken by the board.

(6) An amendment of the constitution of a company shall not invalidate a prior act of the board of directors which would have been valid if that amendment had not been made.

145. Major transactions

(1) A company shall not enter into a major transaction unless the transaction is

 (a) approved by special resolution; or

 (b) contingent on approval by special resolution.

(2) For the purposes of this section,

 (a) 'assets' include property of any kind whether tangible or intangible;

 (b) 'major transaction' means

(i) the acquisition of, or an agreement to acquire, whether contingent or otherwise, assets, the value of which is more than seventy-five percent of the value of the assets of the company before the acquisition; or

(ii) the disposition of, or an agreement to dispose of, whether contingent or otherwise, assets of the company the value of which is more than seventy-five percent of the value of the assets of the company before the disposition; or

(iii) a transaction that has or is likely to have the effect of the company acquiring rights or interests or incurring obligations or liabilities, including contingent liabilities, the value of which is seventy-five percent of the value of the assets of the company before the transaction; and

 (c) the assets of the company as regards major transactions under paragraph (b), include the assets of the company and that of the subsidiaries.

(3) The provisions of paragraphs (a) and (b) of subsection (2) shall not affect an agreement entered into by a company to give a charge secured over the assets of that company the value of which is more than seventy-five percent of the assets of the company, for the purpose of securing the repayment of money or the performance of an obligation.

(4) In assessing the value of a contingent liability for the purposes of subparagraph (iii) of paragraph (b) of subsection (2), the directors

 (a) shall have regard to every circumstance that the directors know, or ought to know, affects, or may affect, the value of the contingent liability;

 (b) may rely on estimates of the contingent liability that are reasonable in the circumstances; and

 (c) may take account of

(i) the likelihood of the contingency occurring; and

(ii) any claim the company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(5) The provisions of this section do not apply to a major transaction entered into by a receiver appointed pursuant to an instrument that creates a charge over the whole of or a substantial part of the property of a company.

146. Delegation to committees and managing directors

Except otherwise provided in the constitution of a company, the board of directors may

 (a) exercise their powers through committees consisting of a member or members of the board as the board of directors think fit, and

 (b) from time to time appoint one or more of the members of the board to the office of managing director and may delegate all or any of the powers of the board of directors to that managing director.

147. Acts of the company

(1) An act of the members in general meeting, of the board of directors, or of a managing director while carrying on in the usual way the business of the company, is the act of the company; and accordingly, the company is criminally and civilly liable for that act to the same extent as if the company were a natural person.

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

 (a) the company does not incur civil liability to a person if that person had actual knowledge at the time of the transaction in question that the general meeting, board of directors, or managing director, did not have the power to act in the matter or had acted in an irregular manner or if, having regard to the position with, or relationship to, the company, that person ought to have known of the absence of the power or of the irregularity; or

 (b) if in fact a business is being carried on by the company, the company shall not escape liability for acts undertaken in connection with that business merely because, the business in question was not among the businesses authorised by the constitution of the company.

148. Acts of officers or agents

(1) Except as provided in section 147, the acts of an officer or agent of a company are not acts of the company, unless,

 (a) the company, acting through the members in general meeting, the board of directors, or managing director, has expressly or impliedly authorised that officer or agent to act in the matter; or

 (b) the company, acting under paragraph (a) has represented to the officer or agent as having the authority of the company to act in the matter, in which event the company is civilly liable to a person who has entered into the transaction in reliance on that representation, unless that person had actual knowledge that the officer or agent did not have the authority, or unless, having regard to the position with, or relationship to, the company, that person ought to have known of the absence of authority.

(2) The authority of an officer or agent of the company may be conferred before action is taken by that officer or agent or by subsequent ratification.

(3) The knowledge of action by that officer or agent and acquiescence in that action by

 (a) the members for the time being entitled to attend general meetings of the company,

 (b) the directors for the time being, or

 (c) the managing director for the time being, is equivalent to ratification by the members in general meeting, by the board of directors, or by the managing director.

(4) This section does not derogate from the vicarious liability of a company for the acts of the employees while acting within the scope of their employment.

149. No constructive notice of registered documents

 

Except as provided in section 121, regarding particulars in the register of particulars of charges, a person shall not be deemed to have knowledge of any particulars, documents, or the contents of documents by reason only that those particulars or documents are registered by the Registrar or referred to in any particulars or documents so registered.

150. Presumption of regularity

(1) A person having dealings with a company or with any other person who derives title under the company is entitled to assume that,

 (a) the company has been duly incorporated under this Act;

 (b) a person described in the particulars filed with the Registrar pursuant to sections 13 and 216 as a director, managing director or Company Secretary of the company, or represented by the company, acting through the members in general meeting, board of directors, or managing director, as an officer or agent of the company, has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by a director, managing director, or Company Secretary of a company carrying on business of the type carried on by the company or customarily exercised or performed by an officer or agent of the type concerned;

 (c) the Company Secretary, and any other officer or agent of the company having authority to issue documents or certified copies of documents on behalf of the company has authority to warrant the genuineness of the documents or the accuracy of the copies so issued; or

 (d) a document has been duly authenticated by the company if it.

(i) bears what purports to be the seal of the company attested by what purports to be the signatures of two persons who, in accordance with paragraph (b), can be assumed to be a director and the Company Secretary of the company; or

(ii) is certified by what purports to be the signatures of two directors and the Company Secretary of the company and the company and those deriving title under the document are estopped from denying the truth of that assumption.

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

 (a) a person is not entitled to make any of those assumptions if that person had actual knowledge to the contrary or if, having regard to the position with, or relationship to, the company, that person ought to have known the contrary; or

(b) a person is not entitled to assume that any one or more of the directors of the company has or have been appointed to act as a committee of the board of directors or that an officer or agent of the company has the authority of the company by reason only that the constitution of the company provides that authority to act in the matter, may be delegated to a committee or to an officer or agent.

151. Liability of company not affected by fraud or forgery of officer

Where, in accordance with sections 147 to 150, a company would be liable for the acts of an officer or agent, the company is liable although the officer or agent has acted fraudulently or forged a document purporting to be sealed by, or signed on behalf of, the company.

152. Form of contracts

A contract on behalf of a company may be made, varied or discharged if the contract, if made between individuals would

 (a) by law be required to be in writing under seal, or could be varied or discharged by writing under seal only, or may be made, varied or discharged in writing;

 (b) by law be required to be in writing or to be evidenced in writing by the parties to be charged therewith or could be varied or discharged only by writing or written evidence signed by the parties to be charged, may be made, evidenced, varied or discharged, in writing signed acting under the authority of the company express or implied in the name or on behalf of the company; or

 (c) be valid although made orally only and not reduced to writing or could be varied or discharged orally, may be made, varied or discharged, orally on behalf of the company acting under the authority of the company express or implied as if it were under the seal of the company

153. Bills of exchange and promissory notes

(1) A bill of exchange or promissory note shall be deemed to have been made, accepted, or endorsed, on behalf of a company if made, accepted or endorsed in the name of the company or if expressed to be made, accepted or endorsed on behalf or on account of the company.

(2) The company and the successors are bound if the company is, in accordance with sections 147 to 151, liable for the acts of those who made, accepted or endorsed in the name or on behalf or account, and a signature by a director or the Company Secretary on behalf of the company shall not be deemed to be a signature by procuration for the purposes of section 23 of the Bills of Exchange Act, 1961 (Act 55).

154. Authentication of documents

(1) A document or proceeding requiring authentication by a company may be signed on behalf of the company by an officer of the company.

(2) For the purposes of this section, an "officer" means a director, Company Secretary or any other person authorised by the board of directors or Managing Director of a company to sign a document on behalf of the company.

155. Execution of deeds abroad

(1) A company may, by an instrument in writing executed in accordance with paragraph (d) of subsection (1) of section 150 empower a person generally or in respect of a specified matter, as the attorney to execute deeds on behalf of the company in a place outside the country.

(2) A deed signed by that attorney on behalf of the company in respect of the instrument binds the company.

156. Official seal for use abroad

(1) A company may, by the constitution of the company, authorise for use in a territory, district, or place not located in the country, an official seal which is a fascimile of the common seal of the company with the addition on the face of the seal the name of the territory, district or place where the seal is to be used.

(2) The company may, by writing under the common seal of the company, authorise an agent appointed for that purpose to affix the official seal to a document to which the company is a party in the territory, district or place.

(3) The directors may provide for the safe custody of the seal, which shall only be used by the authority of the board of directors or of a committee of the directors authorised by the board of directors in that behalf, and an instrument to which the seal is affixed shall be signed by a director, and shall be countersigned by the Company Secretary or by a second director or by some other person appointed by the directors for the purpose.

(4) The company may exercise the powers conferred under this section with regard to having an official seal for use abroad, and those powers shall be vested in the board of directors.

(5) A person dealing with an agent of the company in reliance on a writing conferring the authority is entitled to assume that the authority of the agent continues during the period mentioned in the writing or, if a period is not there mentioned, until that person has actual notice of the revocation or determination of the authority.

(6) The person affixing the official seal shall, by writing signed personally by that person, certify on the document to which the seal is affixed, the date on which and the place at which the seal is affixed.

Part P: General Meetings and Resolutions
157. Annual general meetings

(1) Except as provided in subsection (4), a company shall

 (a) in each year hold a general meeting as the annual general meeting of the company in addition to any other meetings in that year, and

 (b) specify the meeting as the annual general meeting in the notice calling the meeting. .

(2) Not more than fifteen months shall elapse between the date of one annual general meeting and the next.

(3) If a company holds the first annual general meeting within eighteen months of incorporation, the company is not required to hold the annual general meeting in the year of incorporation or in the following year.

(4) The annual general meeting shall be held not earlier than twenty-one days after the financial statements, the consolidated financial statements, and the reports of the directors and auditors on the financial statements of the company have been despatched to members and debenture holders of the company in accordance with section 128; and the financial statements, and reports shall be laid before the annual general meeting for consideration.

(5) If the auditors of the company and the members of the company entitled to attend and vote at an annual general meeting agree in writing that an annual general meeting shall be dispensed with in any year, it shall not be necessary for that company to hold an annual general meeting that year.

(6) If the annual general meeting is not held in accordance with subsection (5), the Registrar may, on a motion by the Registrar or on the application of an officer or a member of the company, call, or direct the calling of, an annual general meeting of the company, and may give the ancillary or consequential directions that the Registrar thinks fit, including directions modifying or supplementing, in relation to the venue, calling, holding and conducting of that meeting, the operation of

 (a) section 159,

 (b) paragraphs l to 3 of the Eighth Schedule,

 (c) paragraphs 8, 9, 12, 13 of the Eighth Schedule,

 (d) paragraphs 15 to 19 of the Eighth Schedule, and

 (e) the constitution of the company where applicable.

(7) Where a meeting held in pursuance of subsection (6) is not held in the year in which the default in holding the annual general meeting of the company occurred, the meeting so held shall be treated as the annual general meeting for that year, but shall not be treated as the annual general meeting for the year in which the meeting is held unless, at that meeting, the company resolves that it shall be so treated.

(8) Where a company passes a resolution pursuant to subsection (5) or (7), a copy of the resolution shall, within twenty-eight days of the passage of the resolution, be forwarded to the Registrar for registration.

(9) If an annual general meeting of the company is not held in

 (a) accordance with subsection (1),

 (b) compliance with the directions of the Registrar under subsection (6), or

 (c) compliance with subsection (4), (7) or (8) of this section, the company and every officer of the company that is in default is liable to pay to the Registrar an administrative penalty of one hundred and fifty penalty units.

158. Extraordinary general meetings

(1) An extraordinary general meeting may be convened by the directors whenever the directors think fit.

(2) If at any time there are not within the Republic sufficient directors capable of acting to form a quorum, a director may convene a meeting.

(3) An extraordinary general meeting of a private company may be requisitioned in accordance with section 299 and an extraordinary general meeting of a public company may be requisitioned in accordance with section 324.

159. Place of meetings

Unless the constitution of a company otherwise provides, the general meetings shall be held in the Republic.

160. Notice on proxy

(1) In every case in which a member is entitled to appoint a proxy to attend and vote pursuant to paragraph 9 of the Eighth Schedule to this Act, instead of that member, the notice shall contain with reasonable prominence, a statement that the member has the right to appoint a proxy to attend and vote instead of that member and that, the proxy need not be a member of the company.

(2) If there is a default in complying with this section in respect of a meeting, every officer of the company who is in default is liable to pay to the Registrar an administrative penalty of one hundred and fifty penalty units.

161. Compliance with proxy arrangements

(1) A person shall comply with the proxy arrangements for voting and attendance of meetings in accordance with paragraph 9 of the Eighth Schedule.

(2) An officer of the company who knowingly authorises or permits a breach or non-observance of subparagraphs (g), (h), (i) or (k) of paragraph 9 of the Eighth Schedule, is liable to pay to the Registrar an administrative penalty of two hundred and fifty penalty units; and in the event of a refusal to permit inspection in accordance with subparagraph (g) of paragraph 9 of the Eighth Schedule, the Court may by order compel an immediate inspection.

162. Power of Court to order meeting

(1) If for a good reason it is impracticable to call a meeting of a company in a manner in which meetings of that company may be called, or to conduct the meeting of the company in the manner prescribed by the constitution of the company, the Court may on the application of a director, a member of the company or the Registrar order a meeting of the company to be called, held and conducted in the manner that the Court considers fit.

(2) Where that order is made, the Court may give any ancillary or consequential directions that the court considers expedient.

(3) A meeting called, held and conducted in accordance with the order is, for the purpose of this Act, a meeting of the company duly called, held and conducted.

163. Written resolutions

(1) Except as provided in subsection (5), a resolution in writing signed by all the members for the rime being entitled to attend and vote on the resolution at a general meeting, or being bodies corporate by the duly authorised representatives of the bodies corporate, is as valid and effective, for the purposes of this Act as if the resolution had been passed at the general meeting of the company duly convened and held.

(2) Subsection (I) applies where the company has only one member entitled to vote.

(3) A resolution described as a "special resolution" is a special resolution within the meaning of this Act.

(4) A resolution is passed on the date on which the resolution was signed by the last member to sign, and where the resolution states a date as being the date of the signature by a member, that statement is sufficient evidence that the resolution was signed by that member on that date.

(5) Subsections (1) and (4) do not apply to a resolution to remove an auditor, which can be passed only at a general meeting in accordance with section 141, or to remove a director, which can be passed only at a general meeting in accordance with section 176.

164. Application of provisions on general meetings to class meetings

(1) The provisions on general meetings in accordance with section 163 and the provisions of the Eighth Schedule apply to meetings of a class of members in like manner as they apply to general meetings of companies, but the necessary quorum shall be as set out in subsection (2) and a member of the class present in person or by proxy may demand a poll.

(2) At a meeting of a class of members, the necessary quorum shall be,

 (a) if there are not more than two members of that class, one member present in person or by proxy; or

 (b) in any other case, two members, present in person or by proxy, holding not less than one-third of the total voting rights of that class.

(3) The constitution of a company may provide for a larger, but not for a smaller quorum for the purposes of subsection (2).

165. Registration of copies of certain resolutions

(1) A certified true copy of a special resolution of a general meeting or of a class of members and of a resolution

 (a) to which a specified proportion of a class of members have consented in writing, and

 (b) which would not have been effective for the purpose, unless the written consent had been given, without the passing of a special resolution, shall be forwarded to the Registrar for registration within twenty-eight days after the passing of the resolution or the making of the copy.

(2) The copy shall be printed, typewritten, or be in some other legible form acceptable to the Registrar.

(3) A copy of a special resolution of a general meeting of the company for the time being in force shall be embodied in or annexed to a copy of the constitution of the company after the passing of the resolution, but where the sole effect of the special resolution is to amend a constitution, this subsection is sufficiently complied with if a copy of the constitution adopted after the passing of the resolution embodies the effect of the amendment and refers to the date of the passing of the special resolution.

(4) Where a company fails to comply with this section, the company and every officer of the company that is in default is liable to pay to the Registrar an administrative penalty of twenty-five penalty units for each default.

166. Minutes of general meetings

(1) A company shall cause minutes of the proceedings of general meetings and meetings of a class of members to be entered in a book or books kept for the purpose.

(2) A minute under subsection (1), if purporting to be signed by the chairperson of the meeting at which the proceedings took place or of the next succeeding meeting, is sufficient evidence of the proceedings.

(3) Where minutes have been made in accordance with this section, until the contrary is proven, the meeting shall be deemed to be duly held, convened and conducted.

(4) Where a company fails to comply with subsection (1), the company and each officer of the company that is in default is liable to pay to the Registrar an administrative penalty of two hundred and fifty penalty units.

167. Inspection of minutes books

(1) The books containing the minutes of proceedings of a general meeting or class meetings of a company shall be kept at the registered office of the company and shall, during business hours, subject to reasonable restrictions that the constitution of a company may impose, be open to the inspection of a member without charge.

(2) Not less than two hours in each day other than a Saturday or a Sunday or a public holiday shall be allowed for inspection under subsection (1).

(3) A member is entitled to be furnished at a cost determined by the company, within ten days after the member has made a request in that behalf to the company, with a copy of the minutes.

(4) If an inspection required under this section is refused or if a copy required under this section is not sent within the proper time, the company and every officer of the company that is in default is liable in respect of each default to pay to the Registrar an administrative penalty of twenty-five penalty units for each day during which the default continues and the Court may, by order, compel an immediate inspection or furnishing of a copy.

168. Circulars of members

(1) A company shall circulate resolutions of members and supporting circulars and circulars of members in accordance with paragraphs 5 and 6 of the Eighth Schedule.

(2) Despite subsection (1), a company is not required to circulate a resolution or statement in accordance with paragraph 5 or 6 of the Eighth Schedule if, on application of the company or of any other  person who claims to be aggrieved, the Court is satisfied that the rights conferred by paragraph 5 or 6 of the Eighth Schedule are being abused to secure needless publicity for defamatory matter.

(3) The Court may order the costs of the company to be paid in whole or in part by the member making the request, although that member is not a party to the application.

(4) Where a company defaults in complying with subsection (1), every officer of the company who is in default is liable to pay to the Registrar an administrative penalty of one hundred and fifty penalty units.

169. Proceedings at meetings

Except as otherwise provided by the constitution of a company, the provisions specified in the Eighth Schedule shall govern the proceedings at meetings of a company except to the extent that, the registered constitution of the company makes provision for the matters that are expressed in that Schedule to be subject to the registered constitution of the company.

Part Q: Directors, Company Secretary and Other Officers of a Company
170. Meaning of "directors"

(1) For the purposes of this Act "directors" means those persons, by whatever name called, who are appointed to direct and administer the business of the company.

(2) A person, not being a duly appointed director of a company,

 (a) who holds out as a director or knowingly allows to be held out as a director of that company, or

 (b) on whose directions or instructions the duly appointed directors are accustomed to act, is subject to the same duties and liabilities as if that person were a duly appointed director of the company.

(3) Subsection (2) shall not derogate from the duties or liabilities of the duly appointed directors, including the duty not to act on the directions or instructions of any other person.

(4) Where a person, who is not a duly appointed director of a company, holds out as a director or knowingly allows to be held out as a director of the company, or if the company holds out that person, or knowingly allows that person to hold out as a director of the company, that person or the company, is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units.

(5) For the purposes of subsections (2), (3) and (4), a person who is described as director of a company, whether the description is qualified by the word "local", "special", "executive": or in any other way, shall be deemed to be held out as a director of that company.

171. Number of directors

(1) A company incorporated after the commencement of this Act shall have at least two directors, one of these directors being ordinarily resident in Ghana.

(2) If at any time the number of directors is less than two in contravention of subsection (1), and the company continues to carry on business for more than four weeks after that time, the company, the director and each member of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the company so carries on business after the expiration of the four weeks without having at least two directors.

(3) Every director and every member of the company who is cognisant of the fact that the company is carrying on business with fewer than two directors are jointly and severally liable for the debts and liabilities of the company incurred during that time.

(4) Subject to this section, the number of directors may be fixed by, or in accordance with, the constitution of the company.

172. Appointment of directors and filling of vacancy

(1) The first directors of a company shall be named in an application for incorporation.

(2) A person shall not be appointed as a director of a company unless the person has, before the appointment

 (a) made a statutory declaration submitted to the company and subsequently filed with the Registrar to the effect that, the person has not within the preceding five years of the application for incorporation been

(i) charged with or convicted of a criminal offence involving fraud or dishonesty;

(ii) charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company; or

(iii) a director or senior manager of a company that has become insolvent or if the person has been, the date of the insolvency and the particular company; and

 (b) consented in writing to be a director and filed the consent within twenty-eight days.

(3) Subject to this section and to sections 173 and 174, the appointment of directors shall be regulated

 (a) by section 300 in the case of a private company, and

 (b) by sections 325 and 326 in the case of a public company except as otherwise provided in the constitution of a company.

(4) The constitution of a company may provide for the appointment of a director or directors by a class of shareholders, debenture holders, creditors, employees or any other person.

(5) Despite a provision to the contrary in the constitution of a company, a casual vacancy in the number of directors may be filled by,

 (a) the continuing directors or director although the number of directors may have been reduced below that fixed as the necessary quorum of directors; or

 (b) an ordinary resolution of the company in general meeting.

(6) In exercising the power to fill a vacancy under subsection (5), the directors shall observe the rules laid down in sections 190 and 191 and shall not appoint a person to be a director unless the directors have taken reasonable steps to satisfy themselves of the integrity and suitability of the person to be a director of the company.

(7) Where the casual vacancy filled under subsection (5) is one which, under the terms of the constitution of a company, should be filled by an appointment by a class of shareholders, debenture holders, creditors, employees, or any other person, the director appointed by the continuing directors or by an ordinary resolution of the company in general meeting, shall cease to hold office as soon as any other director is duly appointed in accordance with the constitution.

(8) In the event that

 (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 constitution of the company 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 the Court considers that it is in the interest of the company to do so.

(9) An appointment by the Court under subsection (8) may be made on such terms and conditions as the Court considers fit.

173. Qualification of directors

(1) The following persons are not qualified to be appointed or to act as directors of a company:

 (a) an infant;

 (b) a person adjudged to be of unsound mind;

 (c) a body corporate;

 (d) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of a company as a result of an order made under section 177 so long as the order remains in force unless leave to act as director bas been granted by the Court in accordance with that section; and

 (e) an undischarged bankrupt, unless that bankrupt has been granted leave to act as director by the Court by which that person was adjudged bankrupt.

(2) Where a person specified in subsection (1), other than a body corporate, or a person of unsound mind, acts as a director of a company or agrees to be appointed a director, that person commits an offence and is liable on summary conviction to a fine of not less than five hundred penalty units and not more than one thousand penalty units or to a term of imprisonment of not less than two years and not more than five years or to both the fine and the imprisonment.

(3) Where a body corporate acts as a director or agrees to be appointed a director, the body corporate and every officer of that body that knowingly permitted the body corporate so to act or to be appointed is liable to pay to the Registrar, an administrative penalty of one thousand penalty units.

(4) Where a company appoints a person as director in contravention of this section, the company and every director of the company that is in default is liable to pay to the Registrar, an administrative penalty of one thousand penalty units.

(5) The constitution of a company may provide that, classes of persons additional to those provided in subsection (1) are incompetent to be directors of the company.

174. Share qualification of a director

(1) Except as otherwise provided in the constitution of a company, a director is not required to be a member of the company or hold a share in the company.

(2) Where the constitution of a company requires a director to hold a specified share qualification, every director shall obtain that qualification within two months after appointment as director or a shorter period that may be fixed by the constitution.

(3) The office of director shall be vacated if the director fails to hold the specified share qualification within two months after appointment or if at any time after the expiration of that period that person ceases to hold that qualification.

(4) Where a company amends the constitution so as to introduce or increase the requirement of a share qualification, every director holding office at the date of the amendment shall have two months within which to obtain the qualification and shall not vacate office under this section unless that director fails to do so.

(5) A person who vacates office under this section is not qualified to be re-appointed a director of the company until that person has obtained the qualification.

175. Vacation of office of director

(1) The office of director shall be vacated if the director

 (a) becomes incompetent to act as a director by virtue of section 173,

 (b) ceases to hold office by virtue of section 174, or

 (c) resigns from office by notice in writing to the company.

(2) The constitution of a company may provide for the termination or vacation of office in circumstances additional to those specified in subsection (1).

176. Removal of directors

(1) Subject to section 327 and to this section, a company may by ordinary resolution at a general meeting remove from office all or any of the directors despite anything in the constitution of that company or in an agreement with the director.

(2) A resolution to remove a director shall not be moved at a general meeting unless notice of the intention to move the resolution has been given to the company not less than thirty-five days before the meeting at which the resolution is to be moved.

(3) If after notice of the intention to move the resolution is given to the company, a meeting is called for a date thirty-five days or less after the notice has been given, the notice is properly given for the purposes of subsection (2).

(4) The company shall give the members notice of the resolution at the same time and in the same manner as the company gives notice of meeting or, if that is not practicable, shall give the members notice of the resolution in the same manner as notices of meetings are required to be given not less than twenty-one days before the meeting.

(5) On receipt of notice of an intended resolution to remove a director under this section, the company shall immediately send a copy of the notice to the director concerned and that director, whether or not is a member of the company, is entitled,

 (a) to be heard on the resolution at the meeting; and

 (b) to send to the company a written statement, copies of which the company shall send with each notice of the general meeting or, if the statement is received too late, shall immediately circulate to each person entitled under subparagraph (f)of paragraph 1 of the Eighth Schedule, to notice of the meeting in the same manner as notices of meetings are required to be given.

(6) The company is not required to send or circulate the statement if

 (a) the statement is received by the company less than seven days before the meeting; or

 (b) the Court, on an application by the company or any other person who claims to be aggrieved, so orders on being satisfied that

(i) the statement is unreasonably long, or

(ii) the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the Court may order the costs of the applicant to be paid in whole or in part by the director although the director is not a party to the application.

(7) Without limiting the rights of the director to be heard orally on the resolution, the director may, unless the Court makes an order, also require that the written statement by the director be read to the meeting.

(8) A vacancy created by the removal of a director under this section, if not filled at the meeting at which the director is removed, may be filled as a casual vacancy in accordance with section 172.

(9) This section does not deprive a director who has a service agreement with the company of a right to

(a) compensation to which the director may lawfully be entitled under that agreement on the termination of the directorship, or

 (b) damages if the removal from the directorship constitutes a breach of the service agreement.

177. Restraining fraudulent persons from managing companies

(1) Where,

 (a) a person is convicted, whether in the Republic or elsewhere, of

(i) an offence involving fraud or dishonesty,

(ii) an offence in connection with the promotion, formation or management of a body corporate,

(iii) an offence involving insider dealing, or

(iv) any other criminal offence which is not a misdemeanour;

 (b) a person is adjudged bankrupt whether in the Republic or elsewhere;

 (c) a person has been culpable of a criminal offence, whether convicted or not, in relation to a body corporate or of fraud or breach of duty in relation to a body corporate;

 (d) it appears that a person is debarred by the competent authority from being a member of a recognised professional body as the result of a disciplinary inquiry; or

 (e) there is an ongoing investigation by a criminal investigating body or by the Registrar or the equivalent in a foreign jurisdiction regarding the matters in paragraphs (a) to (d);

the Court, on its own motion or on the application of a person referred to in subsection (6), may order that that person shall not, without the leave of the Court, be a director of, or in any way, whether directly or indirectly, be concerned or take part in the management of a company or act as auditor, receiver or liquidator of a company for the period specified in the order.

(2) Without limiting subsection (1), a person is automatically disqualified for appointment as director or to act as a director of a company for a period of five years if that person has

 (a) been convicted within the last five years of an offence involving fraud or dishonesty, or relating to the promotion, formation or running of a company,

 (b) has been a director or senior executive of a company that has become insolvent within the last five years on account of or partly as a result of the culpable activities of that director, or

 (c) has been disqualified to act as Company Secretary, receiver, manager or liquidator of a company.

(3) Where a person referred to in paragraph (a) of subsection (2) is subsequently subject to a

 (a) second conviction, that person shall be automatically disqualified for a period of ten years; and

 (b) third conviction, that person shall be permanently disqualified as a director or to act as a director.

(4) An order under paragraph (a) of subsection (1) may be made by a court in the country before which the person is convicted.

(5) A person referred to in paragraph (a) of subsection (2) may apply to the Court for re-instatement before the expiration of the ten year automatic disqualification period imposed under subsection (3).

(6) An application for an order under this section may be made by

 (a) any member or officer of the company,

 (b) a person who can demonstrate an interest in the case,

 (c) the Registrar or by the Official Trustee,

 (d) the trustee in bankruptcy of the person concerned, or

 (e) by the liquidator of a body corporate.

(7) A person who intends to apply for an order under this section shall give not less than twenty-eight days written notice of that intention to the person against whom the order is sought, and to the Registrar.

(8) On the hearing of an application under this section, the applicant, the person against whom the order is sought, the Registrar and the Official Trustee may appear, and give evidence and call witnesses.

(9) A person against whom an order is made under this section who intends to apply for leave to act as a director or in the management of a company shall give at least twenty-eight days written notice of that intention to the Registrar, and the Registrar, the Official Trustee, and that person on whose application the order was made or who appeared at the hearing at which the order was made, may appear and give evidence and call witnesses and draw the attention of the Court to any relevant matters.

(10) Where an order is made or leave is granted under this section, the Court making the order or granting leave shall forward a copy to the Registrar who shall publish a summary of the order in the Companies Bulletin.

(11) The Registrar shall maintain a register of orders made under this section and shall enter in the register, particulars of each order and of the leave granted.

(12) The register shall be open to the inspection of a person on payment of a fee determined by the Registrar for each inspection.

(13) A person who acts in contravention of an order made under this section commits an offence and is liable on summary conviction, in respect of each offence to a fine of not less than two hundred and fifty penalty units and not more than five hundred penalty units or to a term of imprisonment of not less than one year and not more than two years or to both the fine and the imprisonment.

(14) For the purpose of this section

 (a) "insider dealing" means buying or selling securities in a company by persons who have access to non-public information about the company; and,

 (b) "senior executive" means an employee who acts in the top hierarchy of the management of the company.

178. Duty of director to report disqualification

(1) On becoming aware of the disqualification to act as director, the director concerned shall immediately report the disqualification to the Board, and the Company Secretary in writing.

(2) A director who refuses to disclose or misreports the disqualification within twenty-one days of the disqualification, commits an offence and is liable on summary conviction to a fine of not less than five hundred penalty units and not more than one thousand penalty units or to a term of imprisonment of not less than two years and not more than five years or to both the fine and the imprisonment.

(3) A vacancy created by the disqualification of a director under this section, may be filled as a casual vacancy in accordance with section 172.

179. Duty of company to fill vacancy of disqualified director

(1) Where a company ceases to have the minimum number of directors, the board of directors of the company shall fill the vacancy of a disqualified director in accordance with section 172.

(2) The board of directors shall deliver or cause to be delivered to the Registrar for registration, notice in an approved form of the change in the directors of chat company as a result of a disqualification of a director.

(3)The notice shall be delivered to the Registrar within twenty-eight days after the company becomes aware of the disqualification or the relevant court order is made and shall be accompanied with

 (a) a statutory declaration of the new director, to be a director; and

 (b) a consent form signed by the new director to signify acceptance to be a director.

(4) If the company contravenes the provisions of this section, the company and any director and member of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the company so carries on business after the expiration of the specified period without filling the vacancy and subsequently notifying the Registrar.

180. Substitute directors

(1) Except as otherwise provided in the constitution of a company, a company may appoint substitute directors in accordance with this section.

(2) A substitute director is one who is appointed to act as a deputy for another named director and as the substitute in the absence of that director.

(3) A substitute director shall not be counted as a director for the purposes of a provision in this Act or the constitution of a company prescribing a minimum or maximum number of directors, other than a provision relating to quorum.

(4) A substitute director is not entitled to vote at a meeting of directors or a committee of directors at which the director for whom that person is a substitute is present.

(5) Subject to subsections (3) and (4), a substitute director is a full director of the company for all purposes and shall be appointed and may be removed in the same way as directors are required to be appointed and removed.

(6) Subject to subsections (3) and (4) a substitute director shall not cease to be a director by reason of the fact that the director for whom that person is a substitute ceases to be a director.

181. Alternate directors

(1) Except as otherwise provided in the constitution of a company, a director may, appoint another director or any other person approved by a resolution of the board of directors, as an alternate director to act as a director in respect of a period not exceeding six months in which that director is absent from the Republic or unable for a reason to act as a director.

(2) The appointment shall be in writing signed by the appointor and appointee and lodged with the company.

(3) An alternate director so appointed

 (a) is, for the period of the appointment, and for all purposes, a director and officer of the company and not the agent of the appointor;

 (b) shall not be required to hold a share qualification although, under the constitution of the company, directors may be so required;

 (c) is not entitled to appoint an alternate director; and

 (d) shall not be counted as a director for the purposes of a provision of this Act or the constitution of a company relating to the minimum or maximum number of directors, other than a provision relating to quorum.

(4) The company is not liable to pay additional remuneration by reason of the appointment of an alternate director.

(5) The registered constitution of a company may provide that

 (a) the alternate director shall be entitled to receive from the company during the period of the appointment, the remuneration to which the appointer, but for the appointment, would have been entitled, and

 (b) the appointor shall not be entitled to remuneration for that period.

(6) In the absence of a provision in the registered constitution referred to in paragraph (b) of subsection (5), the alternate director is not entitled to be remunerated otherwise than by the director appointing the alternate director.

(7) An alternate director who is personally a director, shall have an additional vote for each director for whom the alternate director acts as alternate director at every meeting of the directors.

(8) The appointment of an alternate director shall cease

 (a) at the expiration of the period for which the appointment was made,

 (b) if the appointer gives written notice to that effect to the company,

 (c) if the appointer ceases for any reason to be a director, or

 (d) if the alternate director resigns by notice in writing to the company.

(9) Until the cessation of the appointment of an alternate director, both the appointer and appointee are and may act as directors of the company, but an alternate director, unless personally a director, shall not attend or vote at a meeting of the directors or a committee of directors at which the appointer is present.

182. Residence of directors in the country

(1) At least one director of the company shall at all times be resident in the Republic.

(2) In the event of a wilful breach of subsection (1), the company and every director of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

(3) The rights of the company concerned under or arising out of a contract made during the time that a director of the company is not resident in the Republic are not enforceable by action or any other legal proceedings.

(4) For the purposes of subsection (3)

 (a) the company may apply to the Court for relief against the disability imposed by subsection (3) and the Court, on being satisfied chat it is just and equitable to grant relief, may grant the relief generally or as regards a particular contract and on the conditions that the Court may impose;

 (b) the rights of any other party as against the company, or any other person in respect of the contract are not limited; and

(c) if an action or a proceeding is commenced by any other party against the company to enforce the rights of that party in respect of the contract, subsection (3) does not preclude the company from enforcing in that action or proceeding by way of counterclaim, set off or otherwise, the rights that the company may have against that party in respect of that contract.

183. Executive directors

Except as otherwise provided in the constitution of a company,

 (a) a director may hold any other office or place of profit under the company, other than the office of an auditor, in conjunction with the office of director;

 (b) the directors may from time to time appoint one or more of their body to any other office for the period and on the terms that the directors may determine and, subject to the terms of an agreement entered into in a particular case, may revoke the appointment;

 (c) subject to compliance with section 185 and subject to section 214, that office may be remunerated by way of salary, commission, share of profits, participation in pension and retirement schemes, or partly in one way and partly in another, as the directors may determine; and

(d) in exercising the powers under this section, the directors shall observe the rules laid down in sections 190 and 191 and, in particular, in determining the amount of remuneration, shall satisfy themselves that the amount of the remuneration is reasonably related to the value of the services of the holder of the office.

184. Managing directors

Except as otherwise provided in the constitution of a company,

 (a) the directors may from time to time appoint one or more of their body to the office of managing director and section 183 shall apply to that appointment;

 (b) the appointment of a managing director shall be automatically determined if the holder of the office ceases from a cause to be a director and, unless the agreement entered into in a particular case otherwise provides, the determination shall not constitute a breach of the contract with the company; and

 (c) the directors may entrust to and confer on a managing director any of the powers exercisable by them on the terms and with the restrictions that the directors think fit, and collaterally with, or to the exclusion of the powers of the directors and, subject to the terms o an agreement entered into in a particular case, may from time to time revoke or vary all or any of those powers.

185. Remuneration and other benefits of directors

(1) Subject to this section, the fees and any other remuneration including salary payable to the directors in whatever capacity, shall be determined from time to time by ordinary resolution of the company, and not by a provision in an agreement.

(2) The fees payable to the directors as directors shall be determined from time to time by ordinary resolution of the company and not in any other way.

(3) Unless otherwise resolved, the fees payable to directors accrue from day to day and the directors are entitled to be paid the travelling and other expenses properly incurred by the directors in attending and returning from meetings of the directors or a committee of the directors or general meeting of the company or otherwise in connection with the business of the company.

(4) Where a director holds any other office or place of profit under the company in accordance with section 183 or 184, the terms of the appointment may provide for the remuneration in respect of the appointment but that director is not entitled to a remuneration additional to the fees to which that person is entitled as director unless the terms of the appointment to that office have been approved by ordinary resolution of the company.

(5) The registered constitution of a company may make provision for benefits payable to directors including

(a) compensation for loss of employment as director or former director;

(b) insurance benefits; and

 (c) other indemnities.

186. Publication of names of directors

(1) A company incorporated in the country shall state in legible characters in the trade circulars and business letters of the company on or in which the name of the company appears,

 (a) the present forenames and surname; and

(b) any former forenames or surname of every director, including substitute directors appointed in accordance with section 180 but excluding alternate directors appointed in accordance with section 181.

187. Prohibition of assignment of offices

A provision in the constitution of a company or in an agreement purporting to empower

 (a) a director co assign the office of that director, or

(b) any other officer to assign the office of that officer to another person is void.

188. Proceedings and minutes of meetings of directors

(1) The directors of a company shall meet at least once every six months in each year to consider financial and operational affairs of the company.

(2) Subject to a contrary provision in the constitution of a company,

 (a) the directors may

(i) meet together in the country or elsewhere for the despatch of business,

(ii) adjourn and otherwise regulate the meetings of the directors as the directors think fit, and

(iii) delegate any of the powers of the directors to committees consisting of the member or members of their body that the directors think fit; but a committee so formed shall in the exercise of the powers so delegated conform to the regulations that may be imposed on the committee by the directors;

 (b) a director may, and the Company Secretary on the requisition of a director shall, at any time summon a meeting of directors, and a director being a member of a committee may, and the Company Secretary on the requisition of that director shall, at any time summon a meeting of the committee;

 (c) it is necessary to give notice of a meeting of directors or of a committee of directors to a director for the time being absent from the country;

 (d) the quorum necessary for the transaction of business of the directors and of a committee of directors may be fixed by the directors, and unless so fixed shall be two, or, in the case of a one-person committee, one;

 (e) except as provided in paragraph (1), a business shall not be transacted in the absence of a quorum although a quorum was present at the commencement of the meeting;

 (f) the continuing directors may act despite a vacancy in their body but, if and so long as the number of directors is reduced below the number fixed as the necessary quorum, the continuing directors or director may act for four weeks after the number is so reduced, but after the four weeks may act only for the purpose of increasing the number of directors to that number or of summoning a general meeting of the company and for no other purpose;

 (g) the directors and a committee of directors may elect a chairperson of their meetings and determine the period for which the chairperson is to hold office, but if a chairperson is not elected, or if at a meeting, the chairperson is not present within five minutes after the time appointed for holding the meeting, those present may choose one of their number to be chairperson of the meeting;

 (h) questions arising at a meeting of the directors or a committee of directors shall be decided by a majority of votes and in the case of an equality of votes the chairperson shall have second or casting vote;

 (i) attendance and voting by proxy is not permitted at meetings of directors or committees of directors; and

 (j) a resolution in writing, signed by the directors for the time being entitled to receive notice of a meeting of the directors, or of a committee of directors, is as valid and effectual as if it had been passed at a meeting of the directors or a committee of directors duly convened and held.

(3) A company shall cause minutes of the proceedings of meetings of the directors and a committee of directors to be entered in a book or books kept for the purpose.

(4) A minute kept under subsection (1), if purporting to be signed by the chairperson of the meeting at which the proceedings took place or of the next succeeding meeting, is prima facie evidence of the proceedings.

(5) Where minutes have been kept in accordance with this section, until the contrary is proved, the meeting is duly convened, held and conducted and the appointments of directors are valid.

(6) Where a company fails to comply with subsection (1), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units.

189. Limitations on the powers of directors

(1) Subject to this Act, the directors of a company with shares shall not, without the approval of

 (a) an ordinary resolution of the company,

(i) issue any new or unissued shares, other than treasury shares, in the company unless the shares have first been offered on the same terms and conditions to all the existing shareholders or to all the holders of the shares of the class or classes being issued in proportion as nearly as may be to their existing holdings;

(ii) make voluntary contributions to a charitable or any other fund, other than pension funds for the benefit of employees of the company or an associated company, of the amounts the aggregate of which will, in a financial year of the company, not exceed two per cent of the retained earnings of the company at the end of the preceding financial year; or

(b) a special resolution, pursue a major transaction under section 145.

(2) A resolution of the company shall not be effective as approving a transaction as is referred to in subparagraph (i) of paragraph (a) of subsection (1), unless the resolution authorises in terms the specific transaction proposed by the directors.

(3) A resolution of the company shall not be effective as approving a transaction as is referred to in paragraph (b) of subsection (1), if passed more than one year before the issue of the shares, unless the issue is in accordance with a scheme for the time being in force relating to the issue of shares to or for the benefit of persons genuinely in the employment of the company or any of the associated companies.

(4) Subsection (3) shall not apply to a public company which has some or all of the equity shares of that public company being dealt in on an approved stock exchange.

(5) Despite a provision of this Act or in the constitution of a company, or in a resolution of the company in general meeting, new or unissued shares or treasury shares shall not be issued to a director or past director of the company or of an associated company or to the nominee of that director or to a body corporate controlled by that director, unless the shares have first been offered on the same terms and conditions to

 (a) all the existing shareholders,

 (b) all the holders of the shares of the class or classes being issued in proportion to their existing holdings, or

 (c) to members of the public in the case of a public company.

(6) Subsection (5) may be disapplied with the approval of an ordinary resolution of a public company if some or all of the equity shares of that public company are dealt in on an approved stock exchange or in respect of which an application has been made to an approved stock exchange for permission to deal in those shares.

(7) For the purposes of subsection (5), a body corporate is controlled by a director if the body corporate or the directors of the body corporate arc accustomed to act in accordance with the directions or instructions of that director or a nominee of that director or if at a general meeting of the body corporate, that director or a nominee of that director is entitled to exercise or control the exercise of one-third or more of the voting powers.

(8) This section does not prohibit,

 (a) the issue of shares under a genuine underwriting agreement, or

 (b) the issue to a director at a fair price payable in cash of the shares, if under the constitution of the company, that director is required to hold by way of share qualification.

(9) Except as otherwise provided in the constitution of a company, the directors of a company with shares shall not, without the approval of an ordinary resolution of the company, exercise the powers of the company to borrow money or to charge any of the assets of the company where the moneys to be borrowed or secured, together with the amount remaining undercharged of moneys already borrowed or secured, apart from temporary loans obtained from the bankers of the company in the ordinary course of business, will exceed the stated capital for the time being of the company.

(10) A person dealing with the company in good faith or registering a disposition of, or title to, property shall not be concerned to see whether the conditions of this section have been fulfilled, and sections 14 7 to 151 shall apply to a transaction of the type ref erred to in this section although the conditions have not been fulfilled.

190. Duties of directors

(1) A director of a company stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in a transaction with or on behalf of the company.

(2) A director shall always act in what the director believes is the best interest of the company as a whole so as to preserve the assets, further the business, and promote the purposes for which the company was formed, in the manner that a faithful, diligent, careful and ordinarily skilful director would act in the circumstances and in doing so shall have regard to

(a) the likely consequence of any decision in the long term,

 (b) the impact of the operations of the company on the community and the environment, and

 (c) the desirability of the company maintaining a reputation for high standards of business conduct.

(3) A director of a company shall

 (a) act in accordance with the constitution of a company, and

 (b) only exercise powers for the purposes for which the powers are conferred.

(4) In considering whether a particular transaction or course of action is in the best interests of the company as a whole, a director may consider the interests of the employees, as well as the members, of the company, and, where appointed by, or as representative of, a special class of members, employees, or creditors may give special, but not exclusive, consideration to the interests of that class.

(5) A director shall exercise independent judgment.

(6) A provision, whether contained in the constitution of a company, or in a contract, or in a resolution of a company shall not relieve a director from the duty to act in accordance with this section or relieve the director from a liability incurred as a result of a breach of a provision of this section.

191. Exercise of powers of directors

(1) The directors shall not, without the approval of an ordinary resolution of the company, exceed the powers conferred on the directors by this Act, and the constitution of the company, or exercise those powers for a purpose different from that for which those powers were conferred, although the directors may believe the exercise of those powers is in the best interests of the company.

(2) Where a director

 (a) fails to take reasonable steps to comply with subsection (1), or

 (b) acts or omits to act in contravention of subsection (1), the director is personally liable to pay to the company or to any other person, the amount of moneys lost to the company or to the other person or the monetary value of the damages caused to, or suffered by, the company or that person as a result of the failure, act or omission of the director.

(3) Where the directors

 (a) fail to take reasonable steps to comply with subsection (1), or

 (b) act or omit to act in contravention of subsection (1), the directors are jointly and severally liable to pay to the company or to any other person, the amount of moneys lost to the company or to that other person, or the monetary value of the damages caused to, or suffered by, the company or that other person as a result of the failure, act or omission of the directors.

(4) An amount of money due and payable by virtue of subsection (2) or (3) may be recovered as a civil debt by the company or that other person.

(5) This section is in addition to, and not in derogation of, sections 192 and 193.

192. Conflicts of duty and interest

(1) Despite a provision in the constitution of a company to the contrary, a director shall not, without the consent of the company in accordance with section 193, place that director in a position in which the duties of the director to the company conflicts or may conflict with the personal interests or the duties to other persons, and in particular, without that consent, a director shall not,

 (a) use to the advantage of that director any money or property of the company or use, otherwise than in accordance with section 198, any confidential information or special knowledge obtained by that director in the capacity of director;

 (b) be interested directly or indirectly, otherwise than merely as a shareholder or debenture holder in a public company, in a business which competes with that of the company; or

 (c) be personally interested, directly or indirectly, in a contract or any other transaction entered into by the company except as provided by section 194.

(2) The duty of a director to avoid conflict is not infringed if

 (a) the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or

 (b) the matter has been authorised by the directors.

(3) Authorisation may be given by the directors

 (a) where the company is a private company and nothing in the constitution of the company invalidates the authorisation, by the matter being proposed to and authorised by the directors; or

 (b) where the company is a public company and the constitution of the company includes provisions enabling the directors to authorise the matter, by the matter being proposed to and authorised by the directors in accordance with the constitution.

(4) The authorisation is 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 the voting of the directors or would have been agreed to if the votes of the directors had not been counted.

(5) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.

193. Consent of company

(1) For the purposes of section 192, the company does not consent unless, after full disclosure of the material facts, including the nature and extent of the interests of the directors, the transaction concerned has been specifically authorised by an ordinary resolution of the company which has been agreed to by the members of the company entitled to attend and vote at a general meeting or has been passed at a general meeting at which neither the director concerned nor the holders of the shares in which the director is beneficially interested, directly or indirectly, have voted as members on the resolution.

(2) Consent in accordance with subsection (1) may be given before or after the occurrence of the transaction to which the consent relates.

(3) A resolution of the company ratifying a transaction or a series of related transactions which has or have already taken place shall not be effective for the purposes of subsection (2) unless the resolution was passed not later than fifteen months after the date when the transaction or the first of those transactions took place.

194. Contracts in which directors are interested

(1) Except as otherwise provided in the constitution of a company, a director, despite section 192 is entitled to enter into a contract with the company and, subject to compliance with section 190 and with subsections (2) to (7) of this section, the contract or any other contract by the company in which a director is in any way interested, shall not be liable to be avoided nor is a director liable to account for a profit made by reason of the director holding that office or of the fiduciary relationship so established.

(2) A director who is directly or indirectly, interested in a contract or proposed contract entered into or to be entered into by or on behalf of the company shall declare the nature and extent of the interest at a meeting of the directors of the company.

(3) In the case of a proposed contract, the declaration required by subsection (2) to be made by a director shall be made

 (a) at the meeting of the directors at which the question of entering into the contract is first taken into consideration, or

 (b) if the director was not at the date of that meeting interested in the proposed contract, at the next meeting after the director became so interested, and in a case where the director becomes interested in a contract after it is made, the declaration shall be made at the first meeting of the directors held after the director becomes so interested.

(4) For the purposes of this section, a general notice in writing given to the directors of the company by a director to the effect that the director is a member of a specified company or firm, and is to be regarded as interested in a contract which may, after the date of the notice, be made with that company or firm, is a sufficient declaration of interest in relation to a contract or proposed contract so made or to be made, if

 (a) the notice states the nature and extent of the interest of the director in that company or firm;

 (b) at the time the question of confirming or entering into a contract is first taken into consideration the extent of the interest of the director in that company or firm is not greater than is stated in the notice;

 (c) the general notice is not effective unless it is given at a meeting of the directors, or the director giving the notice takes reasonable steps to secure that it is brought up and read at the next meeting of directors after the notice is given; and

 (d) the general notice is not effective for more than twelve months but may from time to time be renewed.

(5) A director of a company shall not enter into a contract on behalf of the company in which the director knows or has knowledge, that any other director of the company or an associated company is materially interested, whether directly or indirectly, until a resolution has been passed by the directors approving the contract.

(6) In the case of a proposed contract in which the director is interested, the director shall, before the consideration of the matter, disclose the nature and extent of the interest of the director in the proposed contract at a meeting of directors or by written notice given to the directors and shall cause that interest to be registered in the Interests Register and to be disclosed to the Board of the company in accordance with section 195.

(7) A director shall neither be present nor vote in respect of a contract or an arrangement at a meeting in which that director is materially interested or be counted in the quorum required for that business.

(8) Subsection (7) shall not apply to

 (a) an arrangement for giving a director a security and indemnity in respect of money lent by the director to obligations undertaken by the director for the benefit of the company;

 (b) an arrangement for the giving by the company of a security to a third party in respect of a debt or obligation of the company for which the director personally has assumed responsibility in whole or in part under a guarantee or indemnity or by the deposit of a security; or

 (c) a contract by a director to subscribe for or underwrite shares or debentures of the company.

(9) A copy of a declaration made and of a notice given in pursuance of this section shall, within three days after the making or giving of the declaration or notice, be entered in a book kept for this purpose.

(10) For the purposes of this section, an interest merely as holder of debentures, or of not more than two per cent of the shares or a class of shares, of a public company is not a material interest.

195. Disclosure of interest by directors

(1) A director of a company who has an interest that is likely to create a conflict of interest between that director and the company shall

 (a) cause to be entered that interest in the Interests Register established under section 196; and

 (b) disclose that interest to the Board of the company at a meeting or by written notice given to the directors immediately after becoming aware of the fact of that interest.

(2) The director shall disclose the nature and extent of the interest.

(3) A director who fails to comply with a provision of this section commits an offence and is liable on summary conviction to a fine of not less than two hundred and fifty penalty units and not more than five hundred penalty units.

196. Company to maintain Interests Register

(1) A company shall maintain an Interests Register which shall record the interests that directors disclose under subsection (6) of section 194.

(2) The Interests Register shall state the place where any document that contains the details of the interest may be inspected.

(3) The Interests Register shall be kept at the same place as the register of members maintained in accordance with section 35.

(4) The Interests Register shall be opened for inspection during business hours, subject to the reasonable restriction that the constitution of the company may impose.

(5) The Interests Register shall be open for inspection

(a) not less than two hours in each day, other than a Saturday, a Sunday or a public holiday; and

 (b) during the continuance of a general meeting to a person attending the meeting.

(6) The provisions of this section shall not apply if the members of a company by ordinary resolution so determine.

(7) Where a company or an officer of a company fails to comply with this section, the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units and if an inspection required under subsection (5) is refused, the Court may by order compel an immediate inspection of the register.

197. Directors to act professionally

Except as otherwise provided in the constitution of a company, a director may, despite section 192, act personally or by the firm of that director in a professional capacity for the company, except as auditor, and the director or the firm of the director is entitled to proper remuneration for professional services as if the director were not a director, provided that disclosure is made under subsection (6) of section 194.

198. Use of company information

(1) A director of a company who has information in the capacity of that director as a director or employee of the company, being information that would not otherwise be available to that director, shall not disclose that information to any person, or make use of or act on the information, except

 (a) for the purposes of the company;

 (b) as required by law;

 (c) in accordance with subsection (2); or

 (d) in any other circumstances

(i) authorised by the constitution of that company; or

(ii) approved by the company by a written resolution circulated to all the members and signed by three fourths of all members entitled to attend and vote on the resolution at a general meeting; or

(iii) approved by the company by an ordinary resolution of the company passed at a general meeting at which neither the director concerned, nor the holder of any share in which the director is beneficially interested, directly or indirectly, has voted as member on the resolution or where the holder has voted and the vote is not counted.

(2) The approval under subparagraph (iii) of paragraph (d) may be given before or after the occurrence of the transaction to which the approval relates.

(3) The Board may authorise a director to disclose, make use of, or act on information where the board is satisfied that to do so is not likely to affect the company.

(4) A director of a company may, if authorised by the Board under subsection (3), disclose information to

 (a) a person whose interests the director represents; or

 (b) a person in accordance with whose directions or instructions the director may be required or is accustomed to act in relation to the powers and duties of the director, subject to the director entering the particulars of the authorization and the name of the person to whom the information is disclosed in the Interests Register.

(5) Any monetary gain made by a director from the use of information which a director has in the capacity of that director as a director shall be accounted for to the company.

199. Civil liabilities for breach of duty

Where a director commits a breach of duty under sections 190 to 192,

 (a) the director and any other person who knowingly participated in the breach are liable to compensate the company for the loss the company suffers as a result of the breach;

 (b) the director shall account to the company for a profit made by the director as a result of the breach; and

 (c) a contract or any other transaction entered into between the director and the company in breach of that duty may be rescinded by the company.

200. Legal proceedings to enforce liabilities

(1) Proceedings may be instituted by the company or by a member of the company to

 (a) enforce the liabilities referred to in section 199;

 (b) restrain a threatened breach of a duty under sections 190 to 192; or

 (c) recover from a director of the company a property of the company.

(2) Proceedings may be instituted by the company on the authority of the board of directors or of a receiver and manager or liquidator of the company, or of an ordinary resolution of the company which has been agreed to by the members of the company entitled to attend and vote at a general meeting or has been passed at a general meeting.

(3) Subject to subsection (5) of section 19 and at a general meeting for the purposes of subsection (2), neither the proposed defendants nor the holders of shares in which all or any of them are beneficially interested shall vote on the resolution and if all or any of them do vote, the votes shall not be counted.

(4) After an investigation of the affairs of the company, proceedings may pursuant to section 234 be instituted in the name of the company by the Registrar.

(5) Where proceedings are instituted by a member, that member may either bring a derivative action under section 20 l or a representative action under section 205 on behalf of that member and all other members, except members who are defendants to the action, and shall join the company as a defendant; and to that representative action the provisions of section 349, shall apply.

(6) The Court, on the application of a defendant,

 (a) may stay proceedings by the member if satisfied that, in all the circumstances, including the participation of that member in the transaction complained of, and the circumstances in which that member became a member, it is inequitable that the member should be allowed to have the conduct of the action,

 (b) may order the member to give security for payment of the costs of the defendants, and

 (c) may direct that the action or any part of the action shall be heard in chambers.

(7) A period of limitation shall not apply to proceedings under this section, but in those proceedings the Court may relieve a director from liability in whole or in part and on the terms that, in all the circumstances including lapse of time, the Court considers it equitable so to do.

(8) In proceedings under this section the Court may, in the interest of justice, order that a sum of money found to be payable by a defendant shall be restored, in whole or in part, to members or former members of the company instead of to the company.

(9) Where the Court makes an order, the Court may order that the necessary enquiries shall be made to ascertain the identity of the members and former members concerned and may give the consequential directions that may be necessary or expedient.

(10) Proceedings under this section shall not be discontinued, settled or compromised without the approval of the Court after notice of the proposed discontinuance, settlement or compromise has been given to all members of the company and to the Registrar in the manner that the Court directs.

(11) Within the time prescribed by the notice, a member of the company and the Registrar may appear and call the attention of the Court to the matters which seem relevant and may give evidence and call witnesses.

(12) Where the Court does not approve the discontinuance or compromise, the Court may give the conduct of the action to a member willing to continue the proceedings, or to the Registrar in the name of the company, making the consequential orders regarding the parties to the action or otherwise that may be necessary or expedient.

201. Derivative actions

(1) Subject to subsection (3), the Court may, on the application of a member or director of a company, grant leave to that member or director to

 (a) bring proceedings in the name and on behalf of the company or a subsidiary of the company; 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 a subsidiary of the company, as the case may be.

(2) Without limiting subsection (1), in determining whether lO 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 a subsidiary of the company to obtain relief, and

 (d) the interests of the company or a subsidiary of the company 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 only where the Court is satisfied that either

(a) the company or related company does not intend to bring, diligently continue or defend, or discontinue, the proceedings, as the case may be; or

 (b) it is in the interests of the company or a subsidiary of the company chat the conduct of the proceedings should not be left to the directors or to the determination of the members as a whole.

(4) Notice of the application shall be served on the company or a subsidiary of the company.

(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 member 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 a subsidiary of the company.

202. Costs of derivative action to be met by company
    1. The Court shall, on the application of the member or director to whom leave was granted under section 201 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 201, shall be met by the company unless the Court considers that it would be unjust or inequitable for the company to bear those costs.
203. Powers of Court where leave is granted

the Court may,

 (a) at any time, make any order it considers fit in relation to proceedings brought by a member or a director or in which a member or director intervenes, as the case may be, with leave of the Court under subsection (3) of section 20 l, and

 (b) without limiting the generality of this section,

(i) make an order authorising the member or any other person to control the conduct of the proceedings;

(ii) give directions for the conduct of the proceedings;

(iii) make an order requiring the company or the directors to provide information or assistance in relation to the proceedings; or

(iv) 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 members of the company or a subsidiary of the company instead of the company or the related company.

204. Compromise, settlement or withdrawal of derivative action

Where proceedings in which a member or a director intervenes, as the case may be, with leave of the Court are brought under subsection (5) of section 201, the proceedings shall not be settled or compromised or discontinued without the approval of the Court.

205. Representative actions

Where, under a section of this Act, it is provided that if legal proceedings are instituted by a person, that person shall sue in a representative capacity on behalf of the person and any other member of a class,

 (a) that person may commence proceedings in that representative capacity without obtaining the consent and approval of any other member of the class represented and, subject to paragraph (b) of this section, that person shall have the sole conduce of the action and any other member of the class shall not be regarded as a party to the proceedings or liable for the costs of the proceedings;

 (b) a member of the class represented may at any time before final judgement apply to the Court for leave co be made a party to the proceedings whether as co-plaintiff or otherwise and the Court may grant leave on the terms regarding the conduct of the action or otherwise that it considers fit; and if the leave is granted the applicant shall become a party to the proceedings and liable accordingly to have an order for costs made against that applicant;

 (c) a judgement given in the action shall bind and inure to the benefit of the members of the class represented, whether or not they have intervened in the proceedings in accordance with paragraph (b) of this section;

 (d) the proceedings shall not be dismissed, settled or compromised without the leave of the Court which may order that notice of the proposed dismissal, settlement or compromise shall be given to the members of the class represented and any other persons;

 (e) the proceedings under this section shall be supplemented by the provisions of section 200; and

(f) this section shall not affect the validity of an agreement between the members of the class represented, relating to contribution towards the costs of the party or parties suing in a representative capacity.

206. Payments to directors for loss of office

(1) A company shall not make a payment to a director or former director of the company or an associated company,

 (a) by way of compensation for loss of an office in the company or an associated company, or

 (b) as consideration for or in connection with retirement from office of that director or former director, without particulars of the proposed payment, including the amount of the payment, being disclosed to the members of the company and the proposal being approved by an ordinary resolution of the company agreed to or passed in the manner provided by section 193.

(2) A payment shall not be made, whether by the company or otherwise, to a director or former director of a company in connection with the transfer of the whole or a part of the undertaking or property of the company or an associated company, whether the payment is expressed to be by way of compensation for loss of office or otherwise, unless particulars of the proposed payment, including the amount of the payment have been disclosed to the members of the company and the proposal approved by an ordinary resolution of the company agreed to or passed in the manner provided by section 193.

(3) Where a payment is made in contravention of this section, the amount of the payment shall be regarded as money of the company used by a director for the advantage of the director within the meaning of section 192.

207. Payments to directors in connection with take-over bids

(1) An offer for the acquisition of shares of a company may be made on the terms that the offer is available for acceptance,

 (a) by the members of the company or by the holders of shares of the class to which the offer relates, or

 (b) by the holders of shares which, together with the shares already owned beneficially by the person making the offer or by a body corporate in which that person is the controlling member, confer the right to exercise or control the exercise of not less than one third of the voting power at a general meeting of the company.

(2) Where an offer for the acquisition of shares is made under subsection (1), and in connection with that offer it is proposed that a payment shall be made or a payment has been made to a director or former director of the company or an associated company, over and above the receipt by the director or former director in respect of the same price as may be receivable by other holders of the shares of the same class, that director or former director shall take reasonable steps to secure that, particulars of the payment are included in or sent with the notice of the offer made for their shares which is given to the shareholders.

(3) Where

 (a) the director or former director fails to take the reasonable steps, or

 (c) a person who has been properly required by that director or former director to include the particulars in or send them with the notice fails to do so, that director or former director or that person acting on the directives of the director or former director under paragraph (b) commits an offence and is liable on summary conviction to a fine of not less than two hundred penalty units and not more than four hundred penalty units.

(4) The payment shall be distributed in the manner provided by subsection (5) unless

 (a) the requirements of subsection (1) are complied with, and

 (b) the making of the payment is, before the transfer of shares in pursuance of the offer, approved by an ordinary resolution,

(i) agreed to by the holders of the shares to which the offer relates, or

(ii) passed at a meeting, summoned for that purpose by notice complying with subsection (7), of the holders at which neither the director concerned nor the holders of the shares in which the director or former director is beneficially interested, directly or indirectly, have voted on the resolution.

(5) Where a payment is to be distributed in accordance with subsection (4), the person making or proposing to make the payment and the director or former director to whom it is made or proposed to be made are jointly and severally liable to distribute the payment among the persons who have sold their shares as a result of the offer in proportion to the number of shares sold by them, and if a director or Former director receives the payment, that director or Former director shall hold the payment in trust for those persons.

(6) For the purposes of subsection (5),

(a) the expenses incurred in distributing the payment shall be borne by the persons liable to make the distribution and not retained out of the payment;

 (b) if, in proceedings instituted before the expiration of three months from the first transfer of shares in pursuance of the offer, the Court awards or approves the payment of damages to the director or former director for breach or a valid service agreement, the amount of the damages, but not the costs or expenses incurred in connection with proceedings, shall be paid to or retained by the director or former director out of the payment and only the balance of the payment shall be distributable.

(7) The notice of a general meeting summoned for the purposes of subsection ( 4) shall be convened, held and conducted as nearly as may be in accordance with this Act or the constitution of a company relating to general meetings of the company.

(8) The notices convening the meeting shall state that if the resolution approving the payment is not passed, the payment will be distributable among the persons who have sold their shares in pursuance of the offer except to the extent that the Court may award or approve the payment to the director or former director concerned with damages for breach of a valid service agreement.

(9) An offer referred to in subsection ( 1) shall not be made conditional on approval of a payment or proposed payment to a director or former director and, if an offer is expressed to be made subject to that condition, the condition is void.

(10) For the purposes of paragraph (b) of subsection (1),

 (a) where the offer is made by a body corporate, the shares are owned beneficially by that body corporate if the shares are owned beneficially by the body corporate or by any of its associated companies or by any controlling member of the body corporate; and

 (b) a person is a controlling member of a body corporate if that body corporate or directors of that body corporate are accustomed to act in accordance with the directions or instructions of that person or a nominee of that person or if, at a general meeting of that body corporate, that person is entitled to exercise or control the exercise of one-third or more of the voting power.

208. Provisions supplemental to sections 206 and 207

(1) For the purposes of sections 206 and 207 and of this section, the expression "payment" includes a benefit or an advantage whether in cash or in kind.

(2) Sections 206 and 207 shall not render unlawful, or apply to, the payment of damages awarded or approved by a court of competent jurisdiction for breach of a valid service agreement or the genuine payment of a pension or superannuation benefit in respect of past services in accordance with a valid service agreement.

(3) For the purposes of subsection ( 4) of section 207 and of subsection (2) of this section, a service agreement is not valid if the service agreement has been entered into in contemplation of a transfer referred to in subsection (2) of section 206 or of an offer referred to in subsection (1) of section 207 and unless the contrary is proven, the service agreement shall be deemed to have been entered into in contemplation of that transfer or offer if the service agreement is made within one year before or contemporaneously with, or at any time after the date of the agreement to transfer or the making of the offer.

(4) For the purposes of sections 206 and 207,

 (a) a payment, which is not a remuneration properly payable in accordance with section 185, is received by a director or former director within a period of one year before, or two years after the date of the agreement to make the transfer referred to in subsection (2) of section 206 or of the date of making an offer referred to in subsection ( 1) of section 207, and

(b) the company or the person to whom the transfer or by whom the offer was made was privy to the making of the payment, the payment shall be deemed to have been received by the director or former director in connection with the transfer or offer unless the director or former director proves that, the payment would have been  received by the director or former director whether or not the transfer or offer had been made.

209. Duties of directors in sales or purchases of securities of the company

(1) Where a director of a company, having acquired as a director of the company special information which may substantially affect the value of the shares or debentures of the company or an associated company, buys or sells those shares or debentures without disclosing that information to the seller or purchaser of the shares or debentures, the purchase or sale is voidable at the option of the seller or purchaser within twelve months after the date of the agreement to sell or buy.

(2) For the purposes of subsection (1), the shares or debentures bought or sold shall be deemed to have been bought or sold by a director if the interest of the director in the shares or debentures would normally require recording in relation to that director in the register maintained in accordance with section 210, unless it is proven that the sale or purchase was not made by that director or on the instructions or advice of that director or on the instructions or advice of any other person to whom that director had disclosed a special information affecting the value of the shares or debentures obtained by that director in the capacity as director of the company.

(3) This section does not affect the right of the company to proceed against a director for breach of sections 192 and 198.

210. Register of holdings of directors

(1) A company sha11 keep a register showing, in respect of each director of the company,

 (a) the number and description of shares in the company or an associated company; and

 (b) the amount of the debentures of the company or an associated company of which that director is the holder or in which that director has, directly or indirectly, a beneficial interest or right to acquire, or of which that director has an option to buy or sell.

(2) Despite subsection (1), the register need not include shares in a body corporate which is the wholly owned subsidiary of another body corporate.

(3) The nature and extent of the interest of a director in the shares or debentures recorded in relation to that director in the register shall, if the director so requires, be indicated in the register.

(4) Where the shares or debentures fail to be or cease to be recorded in the register in relation to a director by reason of a transaction entered into after the commencement of this Act, and while that director is a director, the register shall also show the date of, and the price or any other consideration for the transaction; and where there is an interval between the agreement for that transaction and the completion of the transaction, the date shown shall be that of the agreement.

(5) The register shall be kept at the same place as the register of members maintained in accordance with section 35, and shall be open to inspection during business hours, subject to the reasonable restrictions that the constitution of that company may impose, by a member or debenture holder or a former member or debenture holder or by the auditor of the company or by the Registrar.

(6) Not less than two hours in each day, other than a Saturday, a Sunday or a public holiday, shall be allowed for inspection.

(7) The register shall be produced at the commencement of a general meeting of the company and remain open and accessible during the continuance of the meeting to a person attending the meeting.

(8) A director of the company shall give notice to the company of the matters relating to that director that may be necessary for the purposes of complying with subsections (l) and (4).

(9) The notice shall be in writing and shall be given within twenty-eight days after the commencement of this Act and within twenty-eight days after the occurrence of a transaction which requires recording.

(10) If the notice is not given at a meeting of directors, the director who should have given it shall take reasonable steps to secure that the notice is brought up and read at the next meeting of directors after the notice is given.

(11) Where a director fails to comply with subsections (8), (9) and (10), that director is liable to pay to the Registrar,

 (a) an administrative penalty of five hundred penalty units; and

 (b) five hundred penalty units for each day that the failure occurs.

(12) Where a person fails to comply with subsection (1), (4), (5), (6) or (7), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units and if an inspection required under subsections (5) and (7) is refused, the Court may by order compel an immediate inspection of the register.

(13) The company shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon enquiry as to, the right of a person in relation to any shares and debentures.

(14) For the purposes of this section, a director is beneficially interested in shares or debentures if a body corporate holds the shares or debentures, or has a right in or over the shares or debentures, and that body corporate or the directors of that body corporate are accustomed to act in accordance with those directions or instructions of the director, or that director is entitled to exercise or control the exercise of one-third or more of the voting power at a general meeting of that body corporate.

211. Company Secretary

(1) A company shall have a Company Secretary who shall possess the qualification specified in subsection (3).

(2) The Company Secretary may be a body corporate except that the body corporate must have as one of its promoters, subscribers, directors or operating officers, a person who is qualified to be a Company Secretary.

(3) The directors shall not appoint a person as a Company Secretary unless that person

 (a) has obtained a professional qualification or a tertiary level qualification that enables that person to have the requisite knowledge and experience to perform the functions of a Company Secretary,

 (b) has held office, before the appointment, as a Company Secretary trainee or has been articled under the supervision of a qualified Company Secretary for a period of at least three years,

 (c) is a member in good standing of

(i) the Institute of Chartered Secretaries and Administrators, or

(ii) the Institute of Chartered Accountants, Ghana,

 (d) having been enrolled to practice, is in good standing as a barrister or solicitor in the Republic, or

 (e) by virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions of secretary of the company.

(4) For the purpose of paragraph (a) of subsection (3), a professional or tertiary level qualification is a discipline with an offering in company law practice and administration.

(5) Unless the constitution of a company otherwise provides, the Company Secretary shall be appointed by the directors for the term, at the remuneration and on the conditions that the directors consider fit, and may be removed by them, subject to the right of the Company Secretary to claim damages from the company if removed in breach of contract.

(6) Where a company carries on business for more than six months without a Company Secretary, the company and every officer of the company that is in default is liable to pay to the Registrar an administrative penalty of twenty-five penalty units for each day that the company continues to carry on business without a Company Secretary after the expiration of the period of six months.

(7) An act required or authorised to be done by or to the Company Secretary may, if the office is vacant or there is not for any other reason, a person capable of acting as Company Secretary, be done by or to an assistant or a deputy Company Secretary or any other officer of the company appointed by the directors to be acting Company Secretary.

(8) The Company Secretary shall, before assuming office, lodge with the company for onward transmission to the Registrar, the written consent to serve as a Company Secretary.

212. Duties of a Company Secretary

The duties of a Company Secretary include

 (a) assisting the Board to comply with the constitution of the company and with any relevant enactment;

 (b) keeping the books and records of the company;

 (c) ensuring that the minutes of the meetings of the shareholders and the directors are properly recorded in the form required by this Act;

 (d) preparing and issuing out notices in the name of the company;

 (e) ensuring that the annual financial statements of the company are despatched to every person entitled to the statements as required by this Act;

(f) ensuring that all statutory forms and returns are duly filed with the Registrar;

 (g) maintaining the statutory registers of the company;

 (h) providing the Board with guidance as to the duties, responsibilities and powers of the Board and on the changes and development in the laws affecting the operation of companies;

 (i) informing the Board of legislation relevant to or affecting meetings of shareholders and directors and their failure to comply with the legislation and reporting accordingly at any meeting; and

 (j) advising the directors on their responsibilities as directors.

213. Avoidance of acts in dual capacity as director and Company Secretary

Where a person acts as both director and Company Secretary of a company, a provision requiring or authorising an act to be done by or to a director and a Company Secretary shall not be considered as done if the act is done by or to that person acting in both capacities.

 

214. Prohibition of tax-free payments

(1) A company shall not pay a director or Company Secretary of the company remuneration free of income tax or otherwise calculate that remuneration by reference to or varying the amount of the income tax payable by the director or Company Secretary.

(2) A provision contained in

 (a) the constitution of a company;

 (b) a resolution of a company or of the directors of a company; or

(c) a contract entered into by a company for the payment of remuneration shall have effect as if the provision requires the payment as a gross sum, subject to income tax, of the net sum for which the provision actually requires.

215. Register of directors and Company Secretary

(1) A company shall keep at the registered office of the company

 (a) a register of the directors of the company; and

 (b) a register of the Company Secretaries.

(2) The register of directors referred to in subsection (1) shall include a record of substitute directors appointed in accordance with section 180 but shall not include a record of alternate directors appointed in accordance with section 181.

(3) The register shall contain with respect to each director,

 (a) the present forenames and surname;

 (b) any former forename or surname;

 (c) the usual residential address;

 (d) the business occupation; and

 (e) particulars of any other directorships, other than alternate directorships held by the director.

(4) The register shall contain with respect to the Company Secretary or, where there are joint Company Secretaries, with respect to each of them,

 (a) in the case of an individual, the particulars required by paragraphs (a) to (d) of subsection (3); and

 (b) in the case of a body corporate, its corporate name and registered or principal office.

(5) Where au the partners in a firm are joint Company Secretaries, the name and principal office of the firm may be stated instead of the residential address of each partner.

(6) The register shall, during business hours, subject to the reasonable restrictions that the company may by the constitution of the company impose, be open to the inspection of a member of the company without charge and any other person on payment of a prescribed fee, for each inspection.

(7) Not less than two hours in each day, other than a Saturday, Sunday or a public holiday shall be allowed for inspection under subsection (6).

(8) If an inspection required under this section is refused or where there is a default in compliance with subsection (1), (2), (3) or (4), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units and in the case of a refusal the Court may by order compel an immediate inspection of the register.

(9) For the purposes of this section and of sections 186 and 216,

 (a) in the case of a person usually known by a title different from the surname, the expression "surname" means that title; and

 (b) references to a former name do not include,

(i) in the case of a person usually known by a title, the name by which that person was known before the succession to that title;

(ii) a name changed or disused before the person bearing the name attained the age of eighteen years or changed or disused for a period of not less than twenty years; or

(iii) in the case of a married person, the name by which that person was known before the marriage.

216. Registration of particulars of directors and Company Secretaries

(1) A company shall, within twenty-eight days of a change occurring among the directors or in the Company Secretary or in any of the particulars contained in the register, other than those required under paragraph (e) of subsection (3) of section 215, send to the Registrar for registration notification in the prescribed form of the change, specifying the date of the change.

(2) Where a company defaults in complying with subsection (1), the company and every officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which the default continues.

(3) A director or Company Secretary who resigns from office is in default unless notification of the resignation is duly given to the company.

217. General saving of existing law relating to officers

The rights, duties and liabilities of officers and agents of companies shall continue to be governed by the rules of the common law and equity relating to principal and agent, and master and servant except in so far as those rules are not inconsistent with the express provisions of this Act.

Part R: Protection against Illegal or Oppressive Action
218. Injunction or declaration in the event of illegal or irregular activity

(1) The Court on the application of a member may by injunction restrain the company,

 (a) from doing an act or entering into a transaction which is illegal or beyond the power or capacity of the company or which infringes a provision of the constitution of the company, or

 (b) from acting on a resolution not properly passed in accordance with this Act or the constitution of the company, and may declare that act, transaction or resolution already done, entered into, or passed to be void.

(2) Subsection (1) does not derogate from the protection afforded by a provision of this Act to a person dealing with the company.

(3) In relation to acts beyond the capacity or power of the company, this section is subject to section 19 and does not limit its application.

(4) The right afforded to a member to apply to the Court, does not limit the right that member may have to institute proceedings against a director of the company pursuant to section 200 or to apply to the Court under section 219.

(5) In proceedings by a member under this section, the Court may order the member to give security for the costs of the company and may direct that the application shall be heard in chambers.

219. Remedy against oppression

(1) A member or debenture holder of a company or, in a case falling within section 234, the Registrar may apply to the Court for an order under this section on the ground that

 (a) the affairs of the company arc being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders or in disregard of the proper interests of those members, shareholders, officers, or debenture holders of the company; or

 (b) an act of the company has been done or is threatened or that a resolution of the members, debenture holders or a class of them has been passed or is proposed which unfairly discriminates against, or is otherwise unfairly prejudicial to, one or more of the members or debenture holders.

(2) Where on the application, the Court is of opinion that either of the grounds set out in subsection (1) is established, the Court may, with a view to bringing to an end or remedying the matters complained of, make an appropriate order; and, without limiting the effect of this subsection, the Court may by order,

 (a) direct or prohibit an act or cancel or vary a transaction or resolution;

 (b) regulate the conduct of the affairs of the company in future; or

 (c) provide for the purchase of the shares or debentures of any members or debenture holders of the company by other members or debenture holders of the company or by the company itself; and in the case of purchase of shares by the company without regard to the limitations imposed by sections 61 to 65, other than subsections (4), (5) and (6) of section 61.

(3) Where an order under this section makes an amendment in or addition to any provisions of the constitution of a company, then, despite anything in this Act but subject to the provisions of the order, the company shall not without the leave of the Court, make a further amendment in or addition to the constitution inconsistent with the provisions of the order.

(4) An official copy of an order under this section amending or adding to the constitution of the company shall, within twenty-eight days after the making of the order, be delivered by the company to the Registrar for registration.

(5) Where a company defaults in complying with subsection (4), the company and an officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units.

(6) On an application under this section by a member or debenture holder of the company, the Court may order the applicant to give security for the costs of the company and may direct that the application shall be heard in chambers.

220. Member requiring company to purchase shares

(1) Despite sections 64 and 65 a member may require a company to purchase the shares of that member where members of a company by special resolution resolve to

 (a) amend the constitution of the company with a view to varying or dispensing with the business activities or objects of the company;

 (b) approve

(i) a major transaction under section 145;

(ii) an arrangement, compromise, merger or division of the company under Part T of Chapter Two of this Act; OT

(iii) the variation of class rights under section SO.

(2) A sale and distribution in pursuance of a special resolution under subsection (1) is binding on the company.

(3) A member of the company is entitled to have the shares of that member bought under the provisions of this Act, only if that member voted wholly against the resolution for matters specified in subsection (1).

(4) A special resolution pursuant to paragraph (a) and paragraphs (b) (i), (ii) and (iii) of subsection (I), may only be rescinded by a special resolution.

(5) For the purposes of

 (a) subsection (2), if within one year from the date of the passage of the special resolution, the company has been unable to carry out the proposed objects or any of the business activities specified in paragraph (b)of subsection (1), a member is entitled to apply to have the respective shares reinstated; and

(b) this section, a "special resolution" is deemed to include, in the case of a variation of class rights, the prior written consent of the holders of at least three-fourths of the issued shares of the class of shares affected.

221. Notice requiring purchase of shares

(1) A member of a company who requires the company to purchase the shares of that member under section 220 shall, within fourteen days of the passage of the resolution at a meeting of the members of the company, give written notice to the company requiring the company to purchase those shares.

(2) On receipt of the nonce, the Board shall

 (a) arrange for the purchase of the shares by the company;

 (b) arrange for some other person to purchase the shares;

 (c) arrange for the resolution to be rescinded in accordance with subsection (4) of section 220; or

 (d) apply to the Court for an order exempting the Board from the purchase of the shares of the member.

(3) The Board shall within twenty-eight days upon receipt of the notice give written notice to the member of the decision of the Board.

222. Purchase of shares by company

(1) Where the Board agrees under paragraph (a) of subsection (2) of section 221 to the purchase of the shares by the company, it shall within seven days of issuing notice under subsection (3) of section 221,

 (a) state a fair and reasonable price as at the close of business on the day before the day the resolution is passed for the shares to be acquired; and

 (b) give written notice of the price to the member.

(2) A member who considers that the price stated by the Board is not fair and reasonable, shall forthwith, but at any rate, not later than fourteen days after receipt of the notice, give written notice of the objection to the company.

(3) Where the member agrees to the price stated by the Board without objection, the company shall, on the date the company and the member mutually agree, or in the absence of any agreement, as soon as practicable, purchase all the shares at the stated price.

223. Determination of fair and reasonable price for purchase of shares by company

(1) Where a member raises an objection to the price of shares stated by the board of directors under subsection (2) of section 222, the company shall

 (a) pay to the member concerned, a provisional price in respect of each share equal to the price stated by the Board of directors, and

 (b) refer the matter to an auditor to determine a fair and reasonable price for the shares within seven days.

(2) When the payment of the provisional price is made, the member concerned shall take the steps required to transfer the shares to the company.

(3) Where after fourteen days, the auditor is unable to determine a fair and reasonable price for the shares,

 (a) the member concerned and the Board shall each appoint an arbitrator; and

 (b) the member and the Board shall agree on an umpire.

(4) The company shall bear the costs for the appointment of an arbitrator under subsection (3).

(5) Where the member and Board are unable to agree on the appointment of a third arbitrator as umpire, the Court may appoint the umpire.

(6) A reference to arbitration under this section, shall be deemed to be a submission to arbitration in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798).

(7) The arbitrator shall expeditiously determine a fair and reasonable price for the shares on the day before the date on which the members determined by special resolution authorising the respective action under subsection (1) of section 220 excluding any appreciation or depreciation directly or indirectly induced by the action or the proposal.

(8) The price determined by the arbitrator shall be binding on the company and the member concerned.

(9) Where the price of shares to be determined are listed on a Stock Exchange or traded on a stock market, the arbitrator shall determine the price for the shares as being the price at which shares of that kind are traded on the Stock Exchange or stock market as at the close of business on the day before the date on which the members determined by special resolution for the authorising of the respective action excluding any appreciation or depreciation directly or indirectly induced by the action or the proposal unless a price determined in accordance with this subsection would be clearly unfair, in all the circumstances to the member concerned.’

(10) Where the price determined in accordance with a provision of this section

 (a) exceeds the provisional price, the company shall immediately pay the outstanding balance to the respective member; or

 (b) is less than the provisional price paid, the company may recover from the respective member the excess paid.

(11) The arbitrator may award interest on any balance payable or in excess to be repaid under subsection (10) at the rate that the arbitrator thinks fit, having regard to whether the provisional price paid or the reference to arbitration, as the case may be, was reasonable.

224. Application to Court for exemption on grounds of insolvency

(1) A company shall apply to the Court for an order exempting the company from the obligation to purchase the shares of the company, where

 (a) a notice is given to the company under section 221;

 (b) the Board has resolved that the purchase by the company of the shares to which the notice relates would result in the company becoming insolvent as defined in the First Schedule; and

 (c) the company has, following reasonable efforts to do so, been unable to arrange for the shares to be purchased by another person in accordance with paragraph (b) of subsection (2) of section 221.

(2) Where the Court is satisfied that the purchase of the shares would result in the company becoming insolvent and the company has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with paragraph (b) of subsection (2) of section 221, the Court may make

(a) an order exempting the company from the obligation to purchase the shares;

 (b) an order suspending the obligation to purchase the shares; or

 (c) any other order that the court considers fit, including an order referred to in subsection (2) of section 227.

225. Purchase of shares by third party

(1) Section 222 shall apply to the purchase of shares by a person with whom the company has entered into an arrangement for purchase in accordance with paragraph (b) of subsection (2) of section 221 subject to the necessary modification.

(2) Every holder of shares that are to be purchased in accordance with the arrangement shall be indemnified by the company in respect of loss suffered by reason of the failure by the person who has agreed to purchase the shares to purchase them at the price nominated or fixed by arbitration, as the case may be.

226. Reinstatement of shares

(1) Where a former member wishes for shares to be reinstated pursuant to subsection (5) of section 220, the former member shall give written notice to the company within twenty-eight days after the one year period requiring the repurchase of the shares by that former member.

(2) On the receipt of the notice, the Board shall within seven days notify the former member in writing if the Board agrees to the purchase and indicate a specific date for payment of the price of the shares.

(3) Within seven days after receipt of a notice under subsection (2), the former member shall make payment for the shares at the purchase price of the shares at the time that former member received payment for those shares.

(4) The former member who applies to the company for reinstatement of shares is entitled to receive the correlative dividends or other distributions made during the one year period.

(5) When payment for the shares is made by the former member under subsection (3), the company shall

 (a) forthwith deliver to that former member an executed instrument of transfer of the shares together with any relevant share certificate; or

 (b) take the necessary steps required to transfer the shares to that former member.

227. Application to court for exemption

(1) A company to which a notice has been given under section 221, may apply to the Court for an order exempting the company from the obligation to purchase the shares to which the notice relates, on the grounds that

 (a) the purchase would be disproportionately damaging to the company;

 (b) the company cannot reasonably be required to finance the purchase; or

 (c) it would not be just and equitable to require the company to purchase the shares.

(2) On an application under this section, the Court may make an order to relieve the company in whole or in part and on the terms that the Court considers fit from the liability to purchase the shares if in the circumstances, including lapse of time, the Court considers it equitable to do so.

(3) An order of the Court under subsection (2) may include

 (a) setting aside a resolution of the members;

 (b) directing the company to take, or refrain from taking, any action specified in the order; or

 (c) requiring the company to pay compensation to the members affected.

Part S. Inspection and Investigation of Companies
228. Enquiries by the Registrar

(1) In order to ensure that the provisions of sections 127 to 137 regarding the maintenance and auditing of accounts are being duly complied with, the Registrar may by written order call on a company to produce for the inspection of the Registrar all or any of the books of the company.

(2) Where it appears to the Registrar that there are circumstances suggesting, in relation to a company, that

 (a) a provision of this Act is not being complied with, or

 (b) a document which the company is required to send to the Registrar under this Act does not disclose a full and fair statement of the matters to which the document purports to relate, or

 (c) the business of the company is being conducted with intent to defraud creditors of the company or the creditors of any other person or otherwise for a fraudulent or unlawful purpose, or

 (d) the business of the company is being conducted or the powers of the directors are being exercised in a manner oppressive to a part of the members or debenture holders or in disregard of their proper interests as members, shareholders, officers or debenture holders, or

 (e) persons concerned with the formation or the management of the affairs of the company have in connection with the formation or management been guilty of a breach of duty towards the company or members of the company, or

(f) the members of the company have not been given the information with respect to its affairs that the member might reasonably expect, the Registrar may by written order call on the company to produce for the inspection of the Registrar all or any of the books of the company or to furnish in writing the information or explanation that the Registrar may specify in the order.

(3) Where the Registrar makes an order under subsection (1) or (2), the company shall comply with the order within the time specified in the order, and the persons who are or have been officers of the company shall so far as it lies within their power, produce the books or furnish the information or explanation.

(4) Where the company defaults in complying with subsection (3), the company and an officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units and if an officer or former officer of the company defaults in complying with subsection (3), that officer is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units.

(5) Unless the books, information, or explanations produced or given to the Registrar in accordance with this section satisfy the Registrar that further action is not needed, the Registrar shall

 (a) proceed in accordance with section 234, or

 (b) report the circumstances in writing to the Court.

229. Appointment of inspector under order of the Court

(1) The Court may order the Registrar to appoint one or more inspectors to investigate the affairs of a company and to report on the affairs to the Registrar in the manner that the Court directs,

 (a) on a report by the Registrar after enquiries by the Registrar in accordance with section 228;

 (b) on the application of the Registrar; or

 (c) on the application of not less than one hundred members, or of members holding not less than one-tenth of the issued shares, or of members not less than one-tenth in number of the total members.

(2) Where the application is made under paragraph (c) of subsection (1),

 (a) the application shall be supported by the evidence that the Court requires for the purpose of showing that the applicants have good reason for requiring the investigation;

 (b) the Court may, before ordering the appointment of an inspector, require the applicants to give security to an amount determined by the Court for payment of the costs of the investigation; and

 (c) at least fourteen days previous notice of the application shall be given to the Registrar who shall be entitled to be represented at the hearing and to give evidence and call witnesses.

(3) An application under this section shall be heard in chambers and at least fourteen days previous notice of the application shall be given to the company which shall be entitled to be represented at the hearing and to give evidence and call witnesses.

230. Appointment of inspector on special resolution of the company

The Registrar shall appoint one or more competent inspectors to investigate the affairs of a company and to report on the affairs to the Registrar in the manner that the Registrar directs if the company by special resolution declares that the affairs ought to be investigated by an inspector appointed by the Registrar.

231. Power to carry investigation into the affairs of associated companies

Where an inspector appointed under section 229 or section 230 to investigate the affairs of a company finds it necessary for the purposes of the investigation to investigate also the affairs of any other body corporate which is or has at any relevant time been an associated company, the inspector may do so, and shall report on the affairs of the other body corporate so far as the inspector considers the results of the investigation relevant to the investigation of the affairs of the first mentioned company.

232. Production of documents and evidence

(1) The officers and agents of the company and the officers and agents of any other body corporate whose affairs are investigated by virtue of section 231

 (a) shall produce to the inspectors the books and the documents of or relating to the company or the other body corporate which are in the custody or power of those officers and agents, or

 (b) shall otherwise give to the inspectors the assistance in connection with the investigation which the officers and agents are reasonably able to give.

(2) An inspector may examine on oath the officers and agents of the company or other body corporate in relation to the business of the company or that other body corporate and may administer an oath accordingly.

(3) Where an officer or agent of the company or other body corporate,

(a) destroys or refuses to produce to the inspectors a book or document which is the duty of that officer or agent under this section so to produce, or

 (b) refuses to answer a question which is put to that officer or agent by the inspectors with respect to the affairs of the company or other body corporate, the inspectors may certify the facts in writing to the Court, and the Court may inquire into the case, and after hearing the witnesses who may be produced against or on behalf of the alleged offender, and after hearing the statement which may be offered in defence, punish the offender, where found liable, as if the offender had been guilty of contempt of the Court.

(4) Where an inspector considers it necessary for the purposes of the investigation that a person whom the inspector does not have a power to examine on oath should be so examined, the inspector may apply to the Court and the Court may order that person to attend and be examined on oath before the Court on a matter relevant to the investigation.

(5) On examination,

 (a) the inspector may take part personally or be represented by a legal practitioner;

 (b) the Court may put the questions that the Court considers appropriate to the person examined; and

 (c) the person examined shall answer the questions that the Court may put or allow to be put to that person who may at a personal cost employ a legal practitioner, who shall be at liberty to put to that person questions that the Court may consider just for the purpose of enabling that person to explain or qualify an answer given by that person; and notes of the examination shall be taken down in writing, and shall be read over co or by, and signed by, the person examined, and may be used in evidence against that person.

(6) Despite anything in paragraph (c) of subsection (5), the Court may allow costs to the person examined, and the costs so allowed shall be paid as part of the expenses of the investigation.

(7) In this section, a reference to officers or to agents includes past, as well as present, officers or agents, and for the purposes of this section, "agents" in relation to a company or other body corporate includes the bankers or legal practitioners of the company or other body corporate and a person employed by the company or other body corporate as auditor.

233. Report of inspectors

(1) The inspectors may, and, if so directed by the Registrar, shall, make interim reports to the Registrar, and upon the conclusion of the investigation, shall make a final report to the Registrar.

(2) The report shall be written or printed, as the Registrar directs.

(3) The Registrar may cause the report to be printed and published, and shall, unless in the opinion of the Registrar, it is undesirable in the public interest,

 (a) forward a copy of the report made by the inspectors to the registered office of the company;

(b) furnish a copy of the report on request and on payment of a reasonable charge, to any other person who is a member of the company or of any other body corporate dealt with in the report by virtue of section 231 or, whose interests as a creditor of the company or of that other body corporate appear to the Registrar to be affected;

 (c) where the inspectors are appointed under section 229, furnish a copy of the report to the Court; and

 (d) where the inspectors are appointed under paragraph (c) of subsection (1) of section 229, furnish, at the request of the applicants for the investigation, a copy of the report to them.

(4) A copy of the report authenticated by the seal of the Registrar is admissible in legal proceedings as evidence of the opinion of the inspectors in relation to a matter contained in the report.

234. Proceedings after investigations

Where as a result of information obtained in accordance with section 228, or as a result of a report made under section 233, it appears to the Registrar that,

 (a) a person may have committed an offence for which that person is criminally liable, the Registrar shall refer the matter to the Attorney-General for necessary action;

 (b) a company ought to be wound up or that an application should be made to the Court under section 219, the Registrar may petition the Court to wind up the company, if the Registrar thinks it just and equitable to do so, or may apply to the Court under section 219; or

 (c) proceedings ought in the public interest to be brought by a company against a director or former director of a company under section 200 or against a person to recover property, damages or compensation to which a body corporate is entitled, the Registrar may bring proceedings for that purpose in the name of the company or body corporate but, subject to section 235 shall indemnify the company or body corporate against the costs or expenses incurred by the company or body corporate in connection with those proceedings.

235. Expenses of investigations

(1) The expenses of, and incidental to, an investigation by the Registrar under section 228 or by inspectors appointed by the Registrar under section 229 or 230 shall be defrayed in the first instance by the Registrar, but the following persons are, to the extent mentioned, liable to repay the Registrar:

 (a) a person who is convicted on a prosecution instituted by virtue of paragraph (a) of section 234, or who is ordered to restore property or pay damages or compensation in proceedings brought by virtue of paragraph (c) of section 234 may in the same proceedings be ordered to pay the expenses to the extent specified in the order;

 (b) a body corporate in whose name proceedings are brought by virtue of paragraph (c) of section 234 is liable to the amount or value of any sums of money or property recovered by the body corporate as a result of those proceedings, and the expenses shall be a first charge on those sums or property; or

 (c) a body corporate dealt with by the report of an inspector appointed under section 229 or 230 and the applicants, other than the Registrar, for the investigation where the inspector was appointed under section 229 is liable to the extent that the Registrar shall direct.

(2) The report of an inspector may, if the inspector deems fit, and shall if the Registrar so directs, include a recommendation as to the directions which the inspector considers appropriate to be given under paragraph (c) of subsection (1).

(3) For the purposes of this section, the costs or expenses incurred by the Registrar in connection with proceedings brought under paragraph (b) or (c) of section 234 shall be treated as expenses of the investigation giving rise to the proceedings.

(4) As between the persons specified in paragraphs (a), (b) and  (c) of subsection (1) of this section, liability to repay the Registrar shall be borne, to the extent to which these persons are respectively liable under the paragraphs specified, in the first instance by those liable under paragraph (a), by those liable under paragraph (b), and finally by those liable under paragraph (c).

236. Request for information on persons interested in shares or debentures

(1) Where it appears to the Registrar that there is reasonable cause to investigate the ownership of any shares in or debentures of a company, or where the directors of a company so request in writing, the Registrar may carry out the investigation or by written order appoint one or more inspectors to carry out the investigation in a manner provided by this section.

(2) The Registrar or an inspector appointed by the Registrar may require a person whom the Registrar or the inspector has reasonable cause to believe,

 (a) to be or to have been interested in those shares or debentures, or

 (b) to act or to have acted in relation to those shares or debentures as the agent or adviser of a person interested in those shares or debentures, to give the Registrar or inspector information which that person has or can reasonably be expected to obtain as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who act or have acted on their behalf in relation to the shares and debentures.

(3) For the purposes of this section, a person has an interest in a share or debenture if that person has a right to acquire or dispose of the share or debenture, or an interest in or right to vote in respect of the share or debenture, or if the consent of that person is necessary for the exercise of any of the rights of other persons interested in the share or debenture, or if other persons interested in the share or debenture can be required or are accustomed to exercise their rights in accordance with the instructions of that person.

(4) A person who fails to give information required of that person under this section, or who, in giving that information makes a statement which is false, commits an offence and is liable on summary conviction to a fine of not less than three hundred and twenty-five penalty units and not more than seven hundred and fifty penalty units or to a term of imprisonment of not less than three months and not more than six months or to both the fine and imprisonment unless, in the case of a false statement, it is proven that that person believed on reasonable grounds that the statement was true.

(5) Where it appears to the Registrar that there is difficulty in finding out the relevant facts about those shares or debentures, whether issued or to be issued, and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to give accurate information as required by this section, the Registrar may by order direct that the shares or debentures shall, until further order, be subject to the restrictions imposed by subsection (6).

(6) Where shares or debentures are directed to be subject to the restrictions imposed by the direction referred to in subsection (5),

 (a) a transfer of those shares or debentures or of the right to be issued with those shares or debentures and an issue of those shares or debentures is void;

 (b) voting rights shall not be exercisable in respect of those shares or debentures;

 (c) further shares or debentures shall not be issued in respect of those shares or debentures or in pursuance of an offer made to the holders of those shares or debentures; and

 (d) except in a liquidation, a payment shall not be made of the sums of money due from the company on those shares or debentures.

(7) Where the Registrar makes an order directing that shares or debentures shall be subject to the restrictions, or refuses to make an order directing that they shall cease to be subject to those restrictions, a person having an interest in the shares or debentures may apply to the Court and the Court may direct that the shares or debentures shall cease to be subject to those restrictions or any of them.

(8) A person who,

 (a) exercises or purports to exercise a right to dispose of shares or debentures which, to the knowledge of that person, are for the time being subject to the restrictions or any of them, or of a right to be issued with those shares or debentures,

 (b) votes, whether as holder or proxy, or appoints a proxy to vote in respect of shares or debentures which, to the knowledge of that person are for the time being subject to the restriction, those voting rights shall not be exercisable in respect of those shares or debentures, or

 (c) being the holder of shares or debentures fails to notify of the restrictions any other holder or proxy for a holder whom that holder does not know to be aware of the restrictions, commits an offence and is liable on summary conviction to a fine of not less than three hundred and twenty-five penalty units and not more than seven hundred and fifty penalty units or to a term of imprisonment of not less than three months and not more than six months or to both the fine and imprisonment, and where shares or debentures in a company are issued in contravention of the restriction, the company and every officer of the company that is in default is liable to a fine of not more than seven hundred and fifty penalty units.

(9) A prosecution shall not be instituted under subsection (8) except by, or with the consent of, the Attorney-General.

(10) Where an inspector is appointed to carry out an investigation under this section, the inspector shall report in writing to the Registrar on the result of the investigation.

(11) The Registrar may

 (a) furnish to a person or the persons who the Registrar thinks fit, a copy of the report referred to in subsection (I 0), or of part or parts of the copy and may cause the copy or those parts of the copy to be printed and published;

 (b) divulge to a person or the persons who the Registrar thinks fit, any information obtained by the Registrar as a result of the investigation of the Registrar or the inspector and may publish that information.

(12) The expenses of an investigation under this section shall be defrayed by the Registrar.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close