COMPANIES ACT, 2019 (ACT 992). SS 237-349

THE COMPANIES ACT, 2019 (ACT 992)

DATE OF ASSENT: 2nd August,  2019.

DATE OF GAZETTE NOFICATION: 2nd August, 2019.

237. Exemption from disclosure by legal practitioners and their clients and bankers and their customers

Sections 228 to 236 do not require disclosure to the Registrar or to an inspector appointed by the Registrar,

 (a) by a legal practitioner of privileged communication made to the legal practitioner in that capacity except as regards the name and address of the client; or

 (b) by the bankers of a body corporate in their capacity as bankers of the body corporate of information relating to the affairs of any of their customers other than the body corporate.

Part T: Arrangements, Compromises, Mergers and Divisions
238. Arrangement or merger by sale of undertaking

(1) Despite any other provisions on arrangements or mergers in this Act, a company may, with a view to effecting an arrangement or merger, resolve by special resolution that,

 (a) the company be put into a voluntary liquidation of members, and

 (b) the liquidator be authorised,

(i) to sell the whole or part of the undertaking or assets of a company to another body corporate, whether a company within the meaning of this Act or not, in this Part called the transferee company, in consideration or part consideration of fully paid shares, debentures or other like interests in the transferee company, and

(ii) to distribute those shares, debentures or other like interests in specie among the members of the company in accordance with their rights in the liquidation.

(2) A sale and distribution in pursuance of a special resolution is binding on the company and the members of the company, and each member shall be deemed co have agreed with the transferee company to accept the fully paid shares, debentures or other like interests to which that member is entitled under the distribution.

(3) For the purposes of subsection (2), if

 (a) within one year from the date of the passage of the special resolution, an order is made under section 219 or for the winding up of the company under the Bodies Corporate (Official Liquidations) Act, 1963(Act180), the arrangement or merger and the sale and distribution shall not be valid unless sanctioned by the Court; or

 (b) a member of the company, by notice in writing addressed to the liquidator and left at the registered office of the company within twenty-eight days after the passage of the resolution, dissents from the arrangement or merger in respect of all of the shares held by that member, the liquidator shall abstain from carrying the resolution into effect or shall purchase the shares at a price to be determined in a manner provided by subsections (4), (5) and (6) of this section.

(4) Where the liquidator elects to purchase the shares of a member who has expressed dissent in accordance with subsections (2) and (3) of this section, the price payable for the shares shall be determined by agreement or, in default of agreement, by a single arbitrator appointed by the Institute of Chartered Accountants in the country in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798).

(5) The price shall be determined by estimating what the member concerned would have received had the whole of the undertaking of the company been sold as a going concern for cash to a willing buyer and the proceeds, less the costs of liquidation, been divided amongst the members in accordance with their rights.

(6) The purchase money shall be paid before the company is dissolved and raised by the liquidator in the manner that may be determined by the special resolution or, in default of a direction in the special resolution, in the manner that the liquidator thinks fit as part of the expenses of the winding-up.

(7) This section does not authorise a variation or an abrogation of the rights of the creditors of the company.

(8) If a company otherwise than under this section

 (a) sells or resolves to sell the whole or a part of the undertaking or assets of the company to another body corporate in consideration or part consideration of shares, debentures or other like interest in that body corporate, and

 (b) resolves to distribute the proceeds in specie among the members of the company, whether in a liquidation or by way of dividend, a member of the company may, by notice in writing addressed to the company and left at the registered office of the company within twenty-eight days after the passage of the resolution authorising the distribution, require the company to abstain from carrying the resolution into effect or to purchase any of the shares of that member at a price to be determined in the manner provided by subsections (4), (5) and (6).

(9) Subsection (8) does not authorise a company to

(a) purchase the shares of the company except in accordance with sections 61 to 66; or

 (b) make a distribution to the shareholders except in accordance with section 72 and sections 75 to 82 or in a liquidation.

239. Arrangement or compromise with Court approval

(1) Where an arrangement or compromise is proposed between a company and the creditors, or any class of the creditors, or members or any class of members of the company, the Court, on application of

 (a) the company or a member or creditor of the company,

 (b) the liquidator in the case of a company being wound up,

 (c) the administrator where an administration order in relation to the company is still in force, or

 (d) any other person interested in the matter may order that meetings of the various classes of members and creditors be summoned in the manner that the Court directs.

(2) Where a majority in number, representing seventy-five percent in value, of each class of members concerned and a majority in number representing seventy-five percent in value of each class of creditors concerned approve the arrangement or compromise, the approval shall be referred to the Registrar by the persons concerned.

(3) The Registrar shall recommend to the Court, the appointment of a reporter who shall be a qualified insolvency practitioner, to investigate the fairness of the arrangement or compromise.

(4) The remuneration of the reporter shall be fixed by the Registrar and the proper expenses of the investigation shall be borne by the company or any other party to the application that the Court orders.

(5) Where the Court, after considering the report, makes an order confirming the arrangement or compromise, with or without modifications, the arrangement or compromise as confirmed is binding on the company and on all members and creditors of the company and its validity shall not subsequently be impeachable in any proceedings.

(6) On the hearing by the Court of the application to confirm the arrangement or compromise, a member or creditor of the company claiming to be affected by the arrangement or compromise is entitled to be represented and to object.

(7) The Court may prescribe the terms that the Court considers fit as a condition of its confirmation including a condition that any member shall be given rights to require the company to purchase the share of the company at a price fixed by the Court or to be determined in a manner provided in the order.

(8) Where the Court is satisfied that the arrangement or compromise involves the transfer of the whole or part of the undertaking or assets of a company to another company, the Court may

 (a) exercise its powers under section 240 or 255; or

 (b) order the transfer in accordance with this Part.

(9) An arrangement or compromise may be carried out in accordance with this section although it could have been accomplished under section 238 or any other provision of this Act.

(10) Despite subsection (9), sections 78 to 82 shall also be complied with if the arrangement or compromise is one which, by virtue of section 78, requires the confirmation of the Court in accordance with those sections.

(11) An order made under subsection (5) of this section shall not have effect until a certified true copy of the order has been delivered to the Registrar who shall register the order and publish it in the Companies Bulletin.

(12) A copy of the order shall be annexed to every copy of the constitution of the company issued by the company after the order has been made.

(13) If a company defaults in complying with subsection (12), 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 in respect of each copy issued contrary to subsection (12).

240. Powers of the Court in facilitating arrangements or compromise

(1) Where an application is made to the Court under section 239 and the Court is satisfied that under the arrangement or compromise the whole or a part of- the undertaking or assets of a company, in this section referred to as a transferor company, is to be transferred to another company, in this section referred to as the transferee company, the Court may, by the order sanctioning the arrangement or compromise or by a subsequent order, make provision for all or any of the following matters:

 (a) the transfer to the transferee company of the whole or a part of the undertaking, assets and liabilities of the transferor company;

 (b) the allotting or appropriation by the transferee company of shares, debentures or other like interests in that company which, under the arrangement or compromise, are to be allotted or appropriated by that company to or for a person;

 (c) the continuation by or against the transferee company of legal proceedings pending by or against a transferor company;

 (d) the dissolution, without winding up, of a transferor company;

 (d) the provision to be made for any person who, within the time and in the manner that the Court directs, dissents from the arrangement or compromise; or

 (e) the incidental, consequential and supplemental matters that are necessary to secure that the arrangement or compromise is fully and effectively carried out.

(2) Where an order under subsection (I) provides for the transfer of property or liabilities

 (a) that property shall, by virtue of the order, be transferred to and vest in, and

 (b) those liabilities shall, by virtue of the order, be transferred to and become liabilities of, the transferee company, and in the case of a property, if the order so directs, shall be freed from a charge which, by virtue of the arrangement or compromise, is co cease to have effect.

(3) Where an order is made under subsection (1), a company in relation to which the order is made shall deliver a certified true copy of the order to the Registrar for registration within twenty-eight days after the making of the order.

(4) Where the company defaults in complying with subsection (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.

(5) In this section,

"property" includes property, rights and powers of every description; and

"liabilities" includes duties of every description although the rights, powers and duties are of a personal character which could not under the general law be assigned or performed vicariously.

241. Mergers

(1) Sections 259 to 274 do not apply where a company, in respect of which an arrangement or compromise is proposed, is being wound up.

(2) Two or more companies referred to in sections 259 to 274 as "the merging companies" may be parties to a merger as defined in this Act and continue as one company.

(3) In sections 259 to 274, a reference to a "merging company" is

(a) in relation to a merger by absorption, to the transferor and transferee companies; and

 (b) in relation to a merger by formation of a new company, to the transferor company.

242. Merger proposal

(1) A merger proposal shall set out the terms of the scheme and provide at least for the following:

 (a) in respect of each transferor company and the transferee company,

(i) the name of the company,

(ii) the address of the registered office of the company, and

(iii) the type of company;

 (b) the number of shares in the transferee company to be allotted to members of a transferor company for a given number of their shares referred to as the "share exchange ratio";

 (c) the amount of any cash payment;

(d) the terms relating to the allotment of shares in the transferee company;

 (e) the date from which the holding of shares in the transferee company will entitle the holders to participate in profits, and any special conditions affecting that entitlement;

(f) the date from which the transactions of a transferor company are to be treated for accounting purposes as being those of the transferee company;

 (g) any rights or restrictions attaching to shares or other securities in the transferee company to be allotted under the scheme to the holders of shares or other securities in a transferor company to which any special rights or restrictions attach, or the measures proposed concerning them;

 (h) the name of the transferee company where it is the same as the name of one of the merging companies;

 (i) the full name and residential address of each director and the secretary of the transferee company;

 (j) the address for service of the transferee company;

 (k) the shareholding structure of the transferee company, specifying the

(i) number of authorised shares of the company; and

(ii) rights, privileges, limitations, and conditions attached to each share of the company;

(l) the manner in which the shares of each transferor company are to be converted into shares of the transferee company;

 (m) where the shares of a transferor company are not to be converted into shares of the transferee company, the consideration that the holders of those shares are to receive instead of shares of the transferee company;

 (n) any payment to be made to a member or director of the transferor company, other than a payment of the kind described in paragraph (m);

 (o) details of any arrangement necessary to complete the merger and to provide for the subsequent management and operation of the transferee company; and

(p) a copy of the proposed constitution of the transferee company, if any

(2) A merger proposal may specify the date on which the merger is intended to become effective.

(3) Where the shares of one of the merging companies are held by or on behalf of another merging company, the merger proposal shall

(a) provide for the cancellation of those shares without payment or for any other consideration when the merger becomes effective; and

 (b) not provide for the conversion of those shares into shares of the transferee company.

243. Approval of merger proposal

(1) The directors of each of the merging companies shall resolve that

 (a) in their opinion, the merger is in the best interest of the company; and

 (b) the directors are satisfied on reasonable grounds that the transferee company shall be solvent immediately after the merger becomes effective.

(2) The directors who vote in favour of a resolution under subsection (1) shall sign a certificate stating

 (a) that, in their opinion, the conditions set out in that subsection have been satisfied; and

 (b) the grounds for the opinion of the directors.

(3) The directors of each of the merging companies shall send to each member of the transferor company, not less than twenty-eight days before the merger is proposed to take effect,

 (a) a copy of the merger proposal;

 (b) copies of the certificates given by the directors of each transferor company;

 (c) a summary of the principal provisions of the constitution of the transferee company, if any;

 (d) a statement that a copy of the constitution of the transferee company shall be supplied to any member of the company upon request;

 (e) a statement setting out the rights of members pursuant to the merger including the number of shares in the transferee company to be allotted to members of a transferor company for a given number of their shares and the amount of any cash payment;

(g) a statement of any material interest of the directors in the proposal, whether in that capacity or otherwise; and

 (h) any other information and explanation that may be necessary to enable a member of the company to understand the nature and implications for the transferor company and its members of the proposed merger.

(4) The directors of each transferor company shall, not less than twenty-eight days before the merger is proposed to take effect,

 (a) send a copy of the merger proposal to every secured creditor of the company; and

 (b) give public notice of the proposed merger, including a statement that

(i) copies of the merger proposal are available, at the registered offices of the merging companies and at any other place as may be specified during normal business hours, for inspection by a member or creditor of a merging company or any other person to whom a merging company owes that obligation; and

(ii) a member or creditor of a transferor company or any other person to whom a merging company owes an obligation to supply a copy of the merger proposal, is entitled to be supplied, free of charge, with a copy of the merger proposal upon request to a merging company.

(5) The merger proposal shall be approved by a majority in number, representing seventy-five percent in value, of each class of

 (a) members of each of the merging companies, present and voting either in person or by proxy at a meeting;

 (b) creditors of each of the merging companies; and

 (c) members or an interest group where the merger proposal or the constitution of a transferor company, requires the approval of that class of members or interest group.

244. Short form merger

(1) A company and one 01 more other companies that are directly or indirectly wholly owned by the company may merge and continue as one company without complying with section 259 or 261 where

 (a) the merger is approved by a resolution of the directors of each of the merging companies; and

 (b) each resolution provides that the

(i) shares of each merging company, other than the transferee company, shall be cancelled without payment or other consideration;

(ii) constitution of the transferee company, shall be the same as the constitution of the transferor company; and

(iii) directors of each of the merging companies are satisfied on reasonable grounds that the transferee company shall be solvent, immediately after the merger becomes effective.

(2) Two or more companies, each of which is directly or indirectly wholly owned by the same company, may merge and continue as one company without complying with section 259 or 261 where

 (a) the merger is approved by a resolution of the directors of each of the merging companies; and

 (b) each resolution provides that

(i) the shares of all but one of the merging companies shall be cancelled without payment or other consideration;

(ii) the constitution of the transferee company, shall be the same as the constitution of the merging company whose shares are not cancelled; and

(iii) the directors are satisfied on reasonable grounds that the transferee company shall, immediately after the merger becomes effective, satisfy the solvency test.

(3) The directors of each of the merging companies shall, not less than twenty-eight days before the merger is proposed to take effect, give written notice of the proposed merger to every secured creditor of the company.

(4) The resolutions approving a merger under this section, taken together, shall be deemed to constitute a merger proposal that has been approved.

(5) The directors who vote in favour of a resolution under subsection (1) or (2), as the case may be, shall sign a certificate stating

(a) that, in their opinion, the conditions set out in subsection (1) or (2) are satisfied; and

 (b) the grounds for the opinion of the directors.

(6) A director who fails to comply with subsection (5) is liable to pay to the Registrar an administrative penalty of three hundred and fifty penalty units.

245. Registration of merger proposal

For the purpose of effecting a merger, the following documents shall be delivered to the Registrar for registration:

 (a) the approved merger proposal;

 (b) any certificate required under subsection (2) of section 244 or subsection (5) of section 245;

 (c) a certificate signed by the directors of each transferor company stating that the merger has been approved in accordance with this Act and the constitution of the company, if any;

 (d) where the transferee company is a new company or the merger proposal provides for a change of the name of the transferee company, a copy of the notice reserving the name, if any, of the company;

 (e) a certificate signed by the directors, or proposed directors of the transferee company staring that, where the proportion of the claims of creditors of the transferee company in relation to the value of the assets of the company is greater than the proportion of the claims of creditors of a transferor company in relation to the value of the assets of char transferor company, no creditor shall be prejudiced by that face;

(f) a document in the prescribed form signed by each of the persons named in the merger proposal as a director or secretary of the transferee company consenting to act as a director or secretary of the company, as the case may be; and

 (g) a report regarding the fairness of the merger and issued by an insolvency practitioner appointed by each company unless dispensed with under section 247

246. Approval of constitution of transferee company formed from a merger

A transferor company shall approve by ordinary resolution, the constitution or draft constitution of a transferee company that is a new company.

247. Exemption from publication of reports and other requirements of law

(1) The Court may, on the application of a merging company, a member of a merging company or a creditor of a merging company, exempt that merging company from the publication of the report, issued by an insolvency practitioner pursuant to paragraph {g) of section 245, or any other requirement under this Act if the Court considers it appropriate.

(2) Despite subsection (1), the requirement for a report issued by an insolvency practitioner may be dispensed with only if the merging companies agree in writing to the dispensation.

248. Certificate of merger

(1) The Registrar shall, within seven days from the date of receipt of the documents referred to under section 245.

 (a) in the case of a merger by absorption, issue a certificate of merger; or

 (b) in the case of a merger by formation of a new company,

(i) enter the particulars of the transferee company in the register; and

(ii) issue a certificate of merger together with a certificate of incorporation.

(2) Where a merger proposal specifies a date on which the merger is intended to become effective, and that date is the same as or later than the date on which the Registrar receives the documents, the certificate of merger and certificate of incorporation issued under subsection (1) shall be expressed to have effect on the date specified in the merger proposal.

249. Effect of certificate of merger

(1) A merger shall be effective on the date shown in the certificate of merger.

(2) Where the name of the transferee company is the same as one of the merging companies, the transferee company shall have the name specified in the merger proposal.

(3) Subject to subsections (4) and (5), the Registrar shall dissolve, without winding up, the merging companies other than the transferee company retained under subsection (2).

(4) The property, rights, powers, and privileges of each of the merging companies which have been dissolved under subsection (3) shall continue to be the property, rights, powers and privileges of the transferee company.

(5) The transferee company shall continue to be liable for the liabilities and obligations of each of the merging companies and a proceeding instituted by or against a transferor company shall be continued by or against the transferee company.

(6) A conviction, ruling, order, or judgment in favour of or against a transferor company may be enforced by or against the transferee company.

(7) A provision of the merger proposal that provides for the conversion of the shares or rights of members in the merging companies shall have effect in accordance with the tenor of the merger proposal.

250. Registers

(1) Subject to this section, where a merger becomes effective, the Registrar or any other person charged with the keeping of books or registers shall not be obliged, solely by reason of the merger becoming effective, to change the name of a transferor company co that of a transferee company in the books or registers or any other document kept by the Registrar or any other authorised institution.

(2) Subject to subsection (3), the presentation to the Registrar or any other person charged with the keeping of a book or register, of any instrument, whether or not comprising an instrument of transfer, by the transferee company

 (a) executed or purporting to be executed by the transferee company;

 (b) relating to any property held immediately before the merger by a transferor company; and

 (c) seating that that property has become the property or the transferee company by virtue of this Part and producing the relevant certificate of merger issued under section 248, shall, in the absence of evidence to the contrary, be sufficient evidence that the property has become the property of the transferee company.

(3) Despite any other enactment or the provisions of any instrument, where a security issued by a person or any rights or interests accrued in respect of a property of any person has, by virtue of this Part, become the property of a transferee company, that person shall,

(a) on presentation of a certificate signed by the chairperson and secretary on behalf of the directors of the transferee company, and

 (a) on the authority of a resolution of the directors of the transferee company stating that that security or any such rights or interests have, by virtue of this Part, become the property of the transferee company, register the transferee company as the holder of that security or as the person entitled to the rights or interests, as the case may be.

251. Powers of Court in respect of a merger proposal

(1) Where the Court is satisfied that giving effect to a merger proposal would unfairly prejudice a member or creditor of a transferor company or any other person to whom a transferor company owes an obligation, the Court may, on the application of that person, make an order

 (a) directing that effect shall not be given to the proposal,

 (b) modifying the proposal in a manner as may be specified in the order,

 (c) directing the company or the directors of the company to reconsider the proposal or any part of it, and

 (d) in relation to the proposal that the Court considers fit, at any time before the date on which the merger becomes effective.

(2) The Court may make an order under subsection (1) on then conditions that the Court considers appropriate.

252. Divisions

A reference in this Part to a company involved in a division, is to the transferor company and any existing transferee company.

253. Modification of sections 240 and 242 to 252 in relation to a company involved in a division

Section 240 and sections 242 to 252 shall apply to a company involved in a division with the necessary modifications unless otherwise stated in this Act.

254. Liability of transferee companies formed from a division

(1) Subject to this section, where a company is involved in a division, each transferee company is jointly and severally liable for any liability transferred to any other transferee company under the scheme to the extent that the other company has defaulted in satisfying that liability.

(2) If a majority in number representing seventy-five percent in value of the creditors or any class of creditors of the transferor company, present and voting either in person or by proxy, at a meeting summoned for the purposes of agreeing to the scheme, agrees to the scheme, subsection (1) does not apply in relation to the liabilities owed to the creditors or that class of creditors.

(3) A transferee company is not liable under this section for an amount greater than the net value transferred to that transferee company under the scheme.

(4) For the purposes of this section, "net value transferred" means the value at the time of the transfer of the property transferred to a transferee company under the scheme less the amount at the date of transfer of the liabilities

255. Powers of Court in facilitating arrangements, compromises, mergers and divisions

(1) Despite any provision of this Act or the constitution of a company, the Court may,

 (a) on the application of a company, or

 (b) with leave of

(i) the Court,

(ii) a member or creditor of a company, order that an arrangement, compromise, merger or division shall be binding on the company, and on any other person or classes of persons as the Court may specify and any such order may be made on the terms and conditions that the Court considers appropriate.

(2) Before making an order under subsection (1), the Court may,

 (a) on the application of

(i) the company,

(ii) a member or creditor of the company,

(iii) any other person who appears to the Court to be interested in the matter, or

 (b) on its own motion, make any one or more of the orders specified in subsection (3).

(3) An order referred to under subsection (2) consist of

(a) an order that notice of the application, together with any information relating to the order as the Court considers appropriate, is given

(i) in a form and manner, and

(ii) to the persons or classes of persons, that the Court may specify;

 (b) an order directing the holding of a general meeting of

(i) the members of a company,

(ii) any class of members of a company determined by the Court,

(iii) the creditors of a company, and

(iv) any class of creditors of a company determined by the Court, to consider and approve in the manner as the Court may specify, the proposed arrangement, compromise, merger or division;

 (c) an order requiring that a report on the proposed arrangement, compromise, merger or division is,

(i) prepared by a person specified by the Court; and

(ii) if the Court considers it appropriate, furnished to the members or any class of members or creditors or any class of creditors of a company or any other person who appears to the Court to be interested;

 (d) an order as to the payment of the costs incurred in the preparation of any such report; and

 (e) an order specifying the person who is entitled to appear and be heard on the application to approve the arrangement, compromise, merger or division.

(4) An order made under this section shall have effect on the date specified in that order.

(5) The directors of the company shall, within fourteen days of an order made by the Court, ensure that a copy of the order is filed with the Registrar for registration.

256. Additional orders of Court

(1) The Court may, for the purpose of giving effect to any arrangement, compromise, merger or division under sections 253 to 257 or by any subsequent order, provide for, and prescribe the terms and conditions relating to

 (a) the vesting of real property, personal property or assets;

 (b) the transfer of rights, powers, interests, liabilities, contracts, or engagements;

 (c) the issue of shares, securities, or policies of any kind;

 (d) the continuation of legal proceedings;

 (e) the dissolution, without winding up, of a transferor company;

(f) the provisions to be made for persons who

(i) voted against the arrangement, compromise, merger or division at any meeting called in accordance with an order made under this Act; or

(ii) appeared before the Court in opposition to the application to approve the arrangement, compromise, merger or division; and

 (g) any other matters that are necessary or desirable to give effect to the arrangement, compromise, merger or division.

(2) The directors of a company concerned shall, within fourteen days of an order being made by the Court, ensure that a copy of the order is filed with the Registrar for registration.

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

257. Interpretation

Under the sections relating to "arrangements, compromises, mergers and divisions", unless the context otherwise requires, 'liabilities' includes duties; and 'property' includes rights and powers of every description.

258. Information on arrangements and compromises, mergers or divisions

(1) Where notice of a resolution to approve an arrangement or compromise under section 239 or any other provision relating to arrangements, compromises, mergers or divisions is sent to members or creditors of a company, there shall be sent also a statement explaining the effect

 (a) of the arrangement or compromise and in particular stating the material interests of the directors of the company, whether as directors or members or creditors of the company or otherwise, and

 (b) on those interests of the arrangement or compromise in so far as it is different from the effect on the like interests of other persons.

(2) In a notice of the resolution which is given by advertisement, there shall be included the statement referred to in subsection (1) or a notification of the place at which, and the manner in which members or creditors to whom the notice is addressed may obtain copies of the statement.

(3) The member or creditor shall, on making an application in the manner indicated in the notice, be furnished by the company, free of charge, with a copy of the statement.

(4) Where the arrangement or compromise affects the rights of debenture holders of the company, the statement shall give the like explanation to the trustees of a deed for securing the debentures as it is required to be given to the directors of the company.

(5) Where a company defaults in complying with a requirement of this section, the company and each officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of seven hundred and fifty penalty units.

(6) For the purposes of subsection (5)

 (a) a liquidator of the company or a trustee of a deed securing debentures of the company is an officer of the company;

 (b) a person is not liable under that subsection if that person shows that the default was due to the refusal of any other person to supply the necessary particulars as to those material interests; and

 (c) that subsection does not derogate from the power of the Court under section 218 or 219 to declare ineffective a special resolution passed pursuant to section 238.

(7) A director of the company and of a trustee for debenture holders of the company, shall give notice to the company of the matters relating to that director or trustee as may be necessary for the purposes of this section, and a director or trustee who defaults in complying with this subsection is liable to pay to the Registrar, an administrative penalty of one hundred and fifty penalty units.

259. Acquiring shares of minority on acquisition of subsidiary company

(1) Where a body corporate, whether a company within the meaning of this Act or not, in this section referred to as the "transferee company", has made an offer to the holders of shares in a company, in this section referred to as the "transferor company", if the conditions specified in subsection (2) are duly fulfilled, the transferee company may compulsorily acquire the shares in the transferor company in the manner specified in this section.

(2) This section applies if,

 (a) the offer by the transferee company is made to the holders of the whole of the shares in the transferor company, other than those already held by the transferee company or any of the associated companies of the transferee company or by nominees for the transferee company or any of the associated companies of the transferee company;

 (b) the consideration for the acquisition is

(i) the allotment of shares in the transferee company, or

(ii) at the option of the holders, a payment of cash;

 (c) the same terms are offered to the holders of the shares to whom the offer is made or, where there are different classes of shares, to the holders of shares of the same class;

 (d) within four months after the making of the offer, it has been accepted in respect of not less than nine-tenths of the whole of the shares and of not less than nine-tenths of the shares of each class, other than shares already held by the transferee company or any of the associated companies of the transferee company or by nominees of the transferee company or any of the associated companies of the transferee company and the holders of those shares are not less than three-fourths in number of the holders of those shares and of each class of those shares.

(3) Where the conditions specified in subsection (2) are fulfilled, the transferee company may, within two months after the conditions are fulfilled, give notice in the prescribed form to a member who has not accepted the offer in respect of the shares of that member that the transferee company desires to acquire those shares.

(4) When the notice under subsection (3) is given, the transferee company is entitled and bound to acquire those shares on the terms of the offer, unless on an application made by the member in accordance with subsection (5), the Court orders otherwise.

(5) At any time within a period of two months from the service of the notice referred to in subsection (3), a member to whom notice has been given in accordance with subsection (3), may apply to the Court and the Court may order that the transferee company shall not be entitled to acquire the share of that holder or that the transferee company shall be bound to acquire those shares on any other terms that the Court may order.

(6) On an application to the Court under subsection (5) the Court, before making an order, may on the recommendation of the Registrar appoint one or more reporters to investigate the fairness of the offer and to report on the fairness to the Court.

(7) The remuneration of the reporters shall be fixed by the Registrar and the remuneration and the proper expenses of the investigation shall be borne by the transferee company or by the applicant or both as the Court shall order.

(8) Where the Court makes an order under subsection (5), that the transferee company shall be bound to acquire the shares concerned on terms different from those of the original offer, the transferee company shall give notice in the prescribed form, of the amended terms, to the other holders of shares of the same class and co the former holders of shares of the same class who accepted the original offer, unless the Court otherwise orders.

(9) At any time within two months of the giving of the notice,

 (a) a member is entitled to require the transferee company to acquire the shares on the same terms as those ordered by the Court, and

 (b) a former member is entitled to require the transferee company to pay or transfer to that former member the additional consideration to which the former member would have been entitled had the shares been acquired onthe terms ordered by the Court.

(10) Where notice is given by the transferee company under subsection (3) and the Court has not, on an application by the member under subsection (5), ordered to the contrary, the transferee company shall,

 (a) on the expiration of two months from the date on which notice is given, or

 (b) if an application by the member under subsection (5) is then pending after that application has been disposed of, transmit a copy of the notice to the transferor company together with an instrument of transfer executed on behalf of the member by a person appointed by the transferee company and on its own behalf by the transferee company, and transfer to the transferor company the shares, or if the member has exercised the cash option, pay to the transferor company the cash, representing the consideration payable by the transferee company for the shares which by virtue of this section the transferee company is entitled to acquire.

(11) After receipt of payment under subsection (l 0), the transferor company shall register the transferee company as the holder of those shares.

(12) The sums of money received by the transferor company under subsection (10) shall be paid into a separate bank account and the sums of money and the shares so received shall be held by the transferor company in trust for the several persons entitled to the shares in respect of which the sums of money and shares were received.

260. Rights of minority on acquisition of subsidiary company

(1) Where, as a result of an offer to the members of a company or any member, shares in that company are transferred to another body corporate, whether a company within the meaning of this Act or in this section called the transferee company, or a nominee of the transferee company and those shares, together with any other shares in the first mentioned company held by the company or a nominee for the transferee company, or by a nominee for, any of the associated companies at the date of the transfer, comprise or include three-fourths of the shares in the first named company or any class of those shares,

 (a) the transferee company shall within one month from the date of the transfer, unless on a previous transfer has already complied with this requirement, give notice of that fact in the prescribed form to the holders of the remaining shares or of the remaining shares of the class; and

 (b) any of those holders may within three months from the giving of the notice to the holder require the transferee company to acquire all or any of the shares of that bolder.

(2) Where a member under subsection (1) requires the transferee company to acquire shares, the transferee company is entitled and bound to acquire those shares on the terms of the offer or on any other terms that may be agreed or as the Court, on the application of the transferee company or the member, may order.

(3) On an application to the Court under subsection (2), the Court may on the recommendation of the Registrar appoint one or more reporters to investigate the fairness of the offer and in that event subsections (6) and (7) of section 259 shall apply.

Part U: Receivers and Managers
261. Eligibility for appointment as receiver or manager

(1) The Registrar may appoint a receiver or manager.

(2) The Registrar shall, in appointing a receiver or a manager, take into account the following:

 (a) professional competence;

 (b) relevant experience in insolvency proceedings; and

(c) ability to manage the case load and ensure quality and timely execution.

(3) The following persons are not eligible to be appointed or to act as receivers or managers of a property or an undertaking of a company:

 (a) an infant;

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

 (c) a body corporate other than the office of the Registrar;

 (d) a person in respect of whom an order has been made under section 177, for as long as the order remains in force unless leave to act as receiver or manager of the property or undertaking of the company concerned has been granted by the Court in accordance with that section; or

 (e) an undischarged bankrupt, unless that bankrupt person has been granted leave to act as receiver or manager of the property or undertaking of the company concerned by the Court by which that person was adjudged bankrupt.

(4) A person is not eligible to be appointed or to act as a receiver or manager unless that person has in the opinion of the Registrar the requisite expertise, skill, and experience to manage and administer a company in receivership.

(5) A director or an auditor of a company is not eligible for appointment as a receiver or manager of a property or an undertaking of that company.

(6) An appointment made in contravention of this section is void and if a person named in subsection (4) or (5) or in paragraphs (a), (c), (d) or (e) of subsection (3) acts as a receiver or manager, that person 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, in the case of an individual, 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.

262. Power to appoint Official Trustee

Where an application is made to the Court to appoint a receiver or manager on behalf of secured creditors or debenture holders of a company which is being wound up under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180), the Official Trustee may be appointed.

263. Duties of receivers

(1) A receiver shall exercise the powers of that receiver in good faith and for proper purpose.

(2) In the exercise of the powers conferred under subsection (1), and section 266, the receiver or manager in the case of a receiver or manager appointed out of Court may give special, but not exclusive, consideration to the interests of those on whose behalf the appointment is made.

(3) Pursuant to subsections (1) and (2), a receiver shall exercise the powers of that receiver with reasonable regard to the interests of

(a) secured creditors,

 (b) the company,

 (c) any person claiming through the company, an interest in the property in receivership,

 (d) unsecured creditors of the company, and

 (e) any surety that may be called on to fulfil obligations of the company.

(4) A receiver that exercises a power of sale of property in receivership shall obtain the best price reasonably obtainable as at the time of sale.

(5) Where a receiver appointed out of Court acts or refrains from acting in accordance with any directions given by the person in whose interests that receiver was appointed, the receiver

 (a) is not in breach of the duty referred to in subsection (3), but

 (b) is still liable for any breach of the duty referred to in subsection (1).

(6) A receiver shall keep money relating to the property in receivership separate from other moneys received in the course of, but not relating to, the receivership and from other moneys held by or under the control of the receiver.

(7) A receiver shall at all times keep accounting records that correctly record and explain the receipts, expenditure and other transactions relating to the property in receivership.

(8) A receiver shall retain accounting records for at least six years after the receivership is determined.

264. Duties of managers

A person appointed manager of the whole or a part of the undertaking of a company shall manage the undertaking with a view to the beneficial realisation of the security of those on whose behalf the appointment is made.

265. Absence of defence or immunity

Despite a provision of any enactment, rule of law or any provision contained in the deed or agreement by or under which a receiver is appointed

 (a) it is not a defence to proceedings against a receiver for a breach of duty in connection with the sale of property that, the receiver was acting as an agent of the company or under a power of attorney from the company; and

 (b) a receiver is not entitled to compensation or indemnity from the property in receivership or the company in respect of any liability incurred by the receiver arising from a breach of the duty in connection with the sale of property.

266. Powers of receivers and managers

(1) A person appointed receiver of a property of a company shall, subject to the rights of any prior in cumbrances

 (a) take possession of and protect the property,

 (b) receive the rents and profits,

 (c) discharge the outgoings in respect of the property, and

 (d) realise the security of those on whose behalf that person is appointed, but unless also appointed manager, that person shall not carry on a business or an undertaking.

(2) From the date of appointment of a receiver or manager, the powers of the directors or liquidators in the voluntary liquidation of a member to deal with the property or undertaking over which the receiver or manager is appointed shall cease until the receiver or manager is discharged.

(3) Where, on the appointment of a receiver or manager, the company is being wound up under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180), or the property concerned is in the hands of any other officer of the Court, the liquidator or officer is not bound to relinquish control of the property to the receiver or manager except under an order of the Court.

267. Receivers and managers appointed by Court

(1) A receiver or manager of a property or an undertaking of a company appointed by the Court is, for the purposes of this Act, an officer of the Court and not of the company and shall act in accordance with the directions and instructions of the Court.

(2) A person appointed manager of the whole or a part of the undertaking of a company shall manage the undertaking with a view to the beneficial realisation of the security of those on whose behalf the appointment is made.

268. Receivers and managers appointed out of Court

(1) A receiver or manager of a property or an undertaking of a company appointed out of Court is, for the purposes of this Act and subject to section 269, an agent of the person or persons on whose behalf the appointment is made.

(2) A receiver or manager who is appointed manager for the whole or a part of the undertaking of a company is, for the purposes of this Act, an officer of that company and stands in a fiduciary relationship to the company, and section 190 shall apply to the manager as if the manager were a director of the company.

(3) The receiver or manager may apply to the Court for directions in relation to a matter arising in connection with the performance of functions under this section; and on that application the Court may give the directions, or make an order declaring the rights of persons before the Court or otherwise, that the Court considers fit.

(4) The Court may, on the application of the company or a liquidator of the company, by order, fix the amount to be paid by way of remuneration to the receiver or manager; and may on an application made by the company or liquidator or by the receiver or manager, vary or amend the order.

(5) The power of the Court under subsection (4) shall, where a previous order has not been made with respect to that power under that subsection,

(a) extend to fixing the remuneration for a period before the making of the order or the application for the order;

 (b) be exercisable although the receiver or manager has died or ceased to act before the making of the order or the application for the order; and

 (c) extend to requiring the receiver or manager or the personal representative of the receiver or manager to account for the excess or that part of the excess that may be specified in the order where the receiver or manager has been paid or has retained for the remuneration payable to the receiver or manager for a period before the making of the order an amount of money in excess of that so fixed for that period.

(6) The power conferred by paragraph (c) of subsection (5) shall not be exercised regarding a period before the making of the application for the order unless, in the opinion of the Court, there are special circumstances making it proper for the power to be so exercised.

269. Liabilities of receivers and managers on contracts

(1) A receiver or manager of a property or an undertaking of a company is personally liable on a contract entered into by the receiver or manager except as the contract otherwise expressly provides.

(2) As regards contracts entered into by the receiver or manager in the proper performance of the functions of office, the receiver or manager, subject to the rights of a prior in cumbrance, is entitled to an indemnity in respect of liability on those contracts out of the property over which the appointment was made to act as receiver or manager.

(3) A receiver or manager appointed out of Court is entitled, as regards contracts entered into by the receiver or manager with the express or implied authority of those making the appointment, to an indemnity in respect of liability on those contracts from those making the appointment to the extent to which the receiver or manager is unable to recover in accordance with subsection (2).

270. Notification that receiver or manager has been appointed

(1) Where a receiver or manager of a property or an undertaking of a company is appointed, notice shall be given to the Registrar in accordance with section 119 and any invoice, order or business letter issued by or on behalf of the company or the receiver or manager or the liquidator of the company, which is a document on or in which the name of the company appears, shall contain a statement that a receiver or manager has been appointed.

(2) Where there is a default in complying with the requirements of subsection (1) relating to invoices, orders or business letters, the company and any officer, liquidator, receiver or manager of the company that is in default 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.

271. Accounts where manager appointed to enforce a floating charge

(1) Where a manager is appointed of the whole or substantially the whole of the undertaking of a company on behalf of the holders of debentures secured by a floating charge, the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) shall apply as regards the submission of a statement of affairs and of periodical accounts by the manager as if the company had been ordered to be wound up under that Act and as if the manager had been appointed liquidator.

(2) A person who defaults in complying with the requirements of subsection (1) commits an offence and is liable on summary conviction to a fine of not less than ten penalty units and not more than twenty-five penalty units for each day during which the default continues.

272. Delivery to Registrar of accounts of receivers

(1) Except where section 271 applies, a receiver or manager of a property of a company shall,

 (a) within one month, or a longer period that the Registrar may allow, after the expiration of the period of twelve months from the date of the appointment and of every subsequent period of twelve months until the receiver or manager ceases to act, deliver to the Registrar for registration an abstract in the prescribed form showing receipts and payments of the receiver or manager during that period of twelve months; or

 (b) within one month, or a longer period that the Registrar may allow, after the receiver or manager ceases to act as receiver or manager, deliver to the Registrar for registration an abstract in the prescribed form showing receipts and payments of the receiver or manager during the period from the end of the twelve months to which the last abstract relates, and the aggregate of those receipts and payments during the whole period of the appointment.

(2) A receiver or manager who defaults in complying with the requirements of subsection (1) commits an offence and is liable on summary conviction to a fine of not more than twenty-five penalty units for each day during which the default continues.

 

273. Enforcement of duties of receivers

(1) Where a receiver or manager of a property or an undertaking of a company,

 (a) having defaulted in filing, delivering or making any return, account, or other document or in giving a notice which the receiver or manager is by a provision of this Act required to file, deliver, make or give, fails to make good the default within twenty-eight days after the service on the receiver or manager, of a notice by the company, member, creditor, liquidator of the company or Registrar requiring the receiver or manager to make good the default, or

 (b) having been appointed out of Court under the powers contained in an instrument, has, after being required at any time by the liquidator of the company so to do, failed to render proper accounts of the receipts and payments of the receiver or manager and to vouch the same and to pay over to the liquidator the amount properly payable to the receiver or manager, the Court may, on an application made for the purpose, make an order directing the receiver or manager to make good the default within the period specified in the order and may provide that, the costs of, and incidental to the application, shall be borne by the receiver or manager.

(2) An application for the purposes of subsection (1) may, in the case of a default mentioned in paragraph (a) of that subsection, be made by the company or a member, creditor or liquidator of the company or by the Registrar, and in the case of a default mentioned in paragraph (b) of that subsection, be made by the liquidator.

Part V: Winding up
274. Modes of winding up

(1) The winding up of a company may be

 (a) by an official liquidation in accordance with the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180), or

 (b) by a private liquidation in accordance with this

(2) The company shall, from the commencement of the winding up cease to carry on business except so far as may be required for the beneficial winding up of the company, but the corporate state and corporate powers of the company shall continue until the company is dissolved.

(3) Where a company is being wound up by way of a private liquidation, any invoice, order or business letter issued by or on behalf of the company or a liquidator of the company or a receiver or manager of a property of the company, which is a document in or on which the name of the company appears, shall contain a statement that the company is being wound up under this Part.

(4) Where default is made in complying with subsection (3), the company and an officer of the company and a liquidator, receiver or manager that is in default commits an offence and is liable on summary conviction to a fine of not less than fifty penalty units and not more than one hundred penalty units.

275. Affidavit of solvency

(1) Where it is proposed to wind up a company by way of a private liquidation, the directors of the company or, in the case of a company having more than two directors, the majority of the directors shall, at a meeting of the directors, make an affidavit to the effect that they have made a full enquiry into the affairs of the company, and that, having done so, they have formed the opinion that the company will be able to pay its debts and liabilities in full within a period of not more than twelve months from the commencement of the winding up that may be specified in the affidavit.

(2) An affidavit made under subsection (1) does not have effect for the purposes of this Act unless,

 (a) it is made within five weeks immediately preceding the date of the passage of the resolution for the winding up of the company by way of private liquidation and is delivered to the Registrar for registration on or before that date; and

 (b) it embodies a statement of the assets and liabilities of the company at the latest practicable date before the making of the affidavit.

(3) A director of a company who makes an affidavit under this section without having reasonable grounds for the opinion that the company will be able to pay its debts and liabilities in full within the period specified in the affidavit, 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 six months and not more than one year or to both the imprisonment and the fine.

(4) Where the company is wound up in pursuance of the resolution for the winding up of the company by way of private liquidation passed within the period of five weeks after the making of the affidavit, but the debts and liabilities of the company are not paid or provided for in full within the period stated in the affidavit, it shall be presumed, until the contrary is proven, that the director did not have reasonable ground for the opinion stated in the affidavit.

276. Procedure on resolution for liquidation

(1) A company may be wound up by way of private liquidation if,

 (a) the company resolves by special resolution that it shall be wound up by way of private liquidation, and

 (b) before the date of the resolution, an affidavit declaring that the company is solvent is made in accordance with section 275.

(2) The private liquidation commences at the time of the passing of the resolution.

(3) Where a company passes a resolution for a private liquidation the company shall, within fourteen days after the passage of the resolution, send to the Registrar a copy of the resolution and the Registrar shall publish the resolution in the Companies Bulletin.

277. Statements and accounts of final financial year

(1) For the purposes of sections 127 to 143, the final financial year of a company in liquidation under this Part ends immediately before the date of the commencement of the winding up, and, subject to subsection (2), the provisions of those sections shall continue to apply to the preparation, auditing and despatch of the statements, accounts and report referred to in those sections.

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

 (a) a copy of the documents referred to in section 128 shall be sent to the liquidator appointed in accordance with section 278 as well as to every member and debenture holder of the company in accordance with section 128; and

 (b) a copy of those documents shall be sent to the persons referred to in paragraph (a) within three months after the date of commencement of the winding up.

278. Resolution for appointment and removal of liquidator

(1) The resolution for the private liquidation of a company shall include the appointment as liquidator of a person named in the resolution and the resolution is not valid for the purposes of this Part unless the person named has previously consented in writing to the appointment.

(2) Where a vacancy occurs by death, resignation or otherwise in the office of liquidator, the company in general meeting may fill the vacancy and for that purpose a general meeting may be convened by a member or if there is more than one liquidator, by the continuing liquidators.

(3) The Court may, on the application of a member of the company or of the Registrar, remove a liquidator and appoint another in the place of the removed liquidator or appoint a liquidator if, for a sufficient cause, a liquidator is not acting.

(4) The company or the Court, shall give notice to the Registrar of the removal or appointment of a liquidator, and the Registrar shall register the notice and publish the notice in the Companies Bulletin.

279. Remuneration of liquidator

For the purposes of a private liquidation, the company shall, in general meeting, fix the remuneration to be paid to a liquidator appointed for the purpose of liquidation and where the appointment of a liquidator is made by the Court the remuneration of the liquidator shall be fixed by the Court.

280. Disqualification of liquidator

(1) The following persons are not eligible to be appointed or to act as liquidators of a company under this Act:

 (a) an infant;

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

 (c) a body corporate;

 (d) a person convicted, whether in Ghana or elsewhere, of an offence involving fraud or dishonesty, or of an offence in connection with the promotion, formation or management of a body corporate; and

 (e) an undischarged bankrupt or any other person subject to insolvency proceedings under the Insolvency Act, 2006 (Act 708).

(2) Despite subsection (1), a person convicted of an offence under paragraph (d) of subsection (1) is eligible to be appointed as a liquidator or to act as a liquidator of a company if ten years or more have passed since the end of the sentence.

(3) A director of a company shall not be eligible for appointment as a liquidator of that company.

(4) An auditor of a company shall not be eligible to be appointed as a liquidator in a private liquidation of that company.

(5) An appointment made in contravention of this section is void.

(6) Where a person named in paragraph (a), (c), (d), or (e) of subsection (1) or in subsection (2) acts as liquidator of a company, that person commits an offence and is liable on summary conviction co a fine of not less than three hundred and twenty-five penalty units and not more than seven hundred and fifty penalty units or in the case of an individual to a tine 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 two years and not more than five years or to both the fine and the imprisonment.

281. Status of liquidator

A liquidator appointed for the purposes of a private liquidation stands in a fiduciary relationship to the company as if that liquidator were a director of the company and accordingly sections 190 to 217 shall, with the necessary modifications apply.

282. Cessation of powers of directors

On the appointment of a liquidator for the purposes of a private liquidation, the powers of the board of directors shall vest in the liquidator and the powers and authority of every director shall cease, except in so far as

 (a) the company in general meeting or the liquidator sanctions their continuance; or

(b) it is necessary to enable the directors to prepare statements and accounts of the company.

283. Powers of liquidator

(1) A liquidator in a private liquidation may exercise the power of the liquidator in an official winding up under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) and any other relevant enactment.

(2) Where several liquidators are appointed, a power given by this Act may be exercised by any one or more of the liquidators as may be determined at the time of their appointment, or, in default of that determination, by a number not less than two.

(3) The Court shall have the same powers in relation to the liquidator in a private liquidation as are by the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) conferred on the Court in relation to official liquidation.

(4) The liquidator may apply to the Court for directions in relation to a matter arising in connection with the performance of the functions of office or to exercise all or any of the powers which the Court might exercise if the company were being wound up under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) and on that application, the Court may give appropriate directions or make an appropriate order.

284. Books and accounts during private liquidation

(1) The liquidator in a private liquidation shall keep

 (a) proper records and accounting records with respect to the

(i) acts and dealings of the liquidator,

(ii) conduct of the winding up, and

(iii) receipts and payments by the liquidator: and

 (b) a distinct account of the trading so long as the liquidator carries on the business of the company.

(2) the event of the winding up continuing for more than a year, the liquidator shall

 (a) summon a general meeting of the company at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within three months of the end of the year or a longer period that the Registrar may allow, and

 (b) lay before the meeting an account of acts and dealings of the liquidator and of the conduct of the winding up during the preceding year and of the trading during the time that the business of the company has been carried on, and within twenty-eight days after the meeting, shall send a copy of the accounts to the Registrar for registration.

(3) When the affairs of the company are fully wound up, the liquidator shall

 (a) prepare and deliver to every member of the company final accounts of the winding up showing how the winding up has been conducted, the result of the trading during the time that the business of the company has been carried on, and how the property of the company has been disposed of, and

 (b) convene a general meeting of the company for the purpose of laying before the company the accounts and of giving an explanation of the accounts.

(4) Within twenty-eight days after the meeting referred to in subsection (3), the liquidator shall deliver to the Registrar for registration, copies of the accounts laid before the meeting and a statement of the holding of the meeting and of the date of the meeting.

(5) Where a quorum was not present at the meeting, the liquidator shall, in place of the statement mentioned, deliver a statement that the meeting was duly convened and that a quorum was not present at the meeting.

(6) The records, books and accounts shall be in the form that the Registrar may prescribe and shall give a true and fair view of the matters recorded in them and of the administration of the affairs of the company and of the winding up.

(7) The accounts referred to in subsections (2) and (3) shall be audited by the auditors of the company before being laid before the company in general meeting in accordance with those subsections, and the auditors shall state in a report annexed to the accounts whether, in their opinion and to the best of their information,

 (a) they have obtained the information and explanations necessary for the purpose of their audit;

 (b) proper books and records have been maintained by the liquidator in accordance with this Act; and

 (c) the accounts are in accordance with the books and records and give

(i) the information required by this Act in the manner required by this Act, and

(ii) a true and fair view of the matters stated in the accounts.

(8) For the purposes of this section, the audit and report of the auditors shall not be required if,

 (a) the liquidator, or one of the liquidators, if more than one, is duly qualified under section 138 for appointment as auditor of a public company; and

 (b) on or after the appointment as liquidator, the company resolved by special resolution that the accounts should not be required to be audited in accordance with subsection (7).

(9) Meetings required to be convened under this section shall be convened and held, so far as may be, in accordance with the provisions of this Act and the constitution of a company relating to general meetings.

(10) The liquidator shall preserve the books and papers of the company and of the liquidator for a period of five years from the dissolution of the company, but after that period, may destroy those books and papers unless the Registrar otherwise directs, in which event, the liquidator shall not destroy them until the Registrar consents in writing.

(11) A liquidator 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 one hundred and twenty-five penalty units and not more than two hundred and fifty penalty units.

(12) For the purposes of this section, the delivery of a document shall be considered as effective if delivered in the

 (a) hard copy form; or

(b) electronic version, supported by evidence of same.

285. Private liquidation account

(1) The liquidator shall open the private liquidation account, with a bank nominated by the company in general meeting for the purposes of the private liquidation.

(2) The receipts and payments by or on behalf of the liquidator in respect of the company shall be credited or debited, to the private liquidation account.

(3) Where, on the application of the company or any other person interested in the liquidation proceedings, it appears to the Court before the termination of the liquidation, that assets have been lost to the estate by reason of a default by the liquidator, the Court may order that the private liquidation account be credited with the sum of money that the Court considers just.

286. Duty of liquidator in case of insolvency

(1) Where in a private liquidation the liquidator is at any time of the opinion that the company may not be able to pay its debts in full within the period stated in the affidavit made under section 275, the liquidator shall forthwith give notice of that fact, together with a statement of the liabilities and assets of the company to the Registrar.

(2) The notice and statement shall be in the prescribed form.

(3) The Registrar, whether or not makes an order under section 5 of the Bodies Corporate (Official Liquidations) Ace, 1963 (Act 180), shall register both the notice and the statement and cause a copy of the notice to be published in the Companies Bulletin and the liquidator shall proceed in the same manner, so far as the provisions are applicable, as a liquidation under an order of the Court pursuant to the Bodies Corporate (Official Liquidations) Act 1963 (Act 180).

(4) Where the liquidator fails to comply with this section, the liquidator is liable to pay to the Registrar, an administrative penalty of seven hundred and fifty penalty units.

287. Stay of proceedings

(1) At any time during the course of a private liquidation and before the dissolution of the company, the company in general meeting may, by special resolution, resolve that, subject to the confirmation of the Court, the liquidation proceedings shall be stayed.

(2) After the passing of the special resolution

 (a) an application may be made to the Court by the liquidator or a member of the company; and

 (b) the Court may, and subject co terms and conditions chat the Court deems fit, order that

(i) the liquidation be stayed,

(ii) the liquidator be discharged, and

(iii) the directors be permitted to resume the management of the company.

(3) At least twenty-eight days before the hearing of the application under subsection (2), written notice of the application shall be given by the applicant to the Registrar, to the directors of the company and to a liquidator of the company, and the Registrar shall publish the notice in the Companies Bulletin.

(4) The Registrar, a director, liquidator, member or creditor of the company is each entitled to appear on the hearing of the application and to call witnesses and give evidence.

(5) Where an order confirming the resolution is made by the Court, the company shall send an official copy of the order to the Registrar and the Registrar shall register the order and publish a copy in the Companies Bulletin and on that publication, the liquidation shall cease and the company shall continue to be a going concern subject to the terms or conditions of the order.

288. Dissolution and restoration of companies

(1) Where the Registrar is satisfied that the winding up of the company is complete, the Registrar shall strike the name of the company off the register and publish the record of the strike off in the Companies Bulletin.

(2) The company is dissolved as at the date of the publication of the notification in the Companies Bulletin.

(3) Where a company is dissolved, the Court may

 (a) at any time within two years after the date of the dissolution, and

 (b) upon an application made for the purpose by the Registrar or by the liquidator of the company or by a former officer, member, or creditor of the company or a person claiming through or under any of them, make an order, on the terms that the Court considers fit, declaring the dissolution void and ordering the name of the company to be restored to the register.

(4) An official copy of an order made under subsection (3) shall be delivered to the Registrar for registration and the Registrar shall publish the copy of the order in the Companies Bulletin and the name of the company shall be restored to the register.

(5) Where registration and publication under subsection (3) takes effect, the company shall be deemed to have continued in existence as if it had not been dissolved, and for the purposes of a period of limitation the period between dissolution and restoration shall not be counted.

(6) The Court may by the order give the directions and make the provisions that seem just for placing the company and any other person in the same position as nearly as may be as if the name of the company had never been struck off.

289. Dissolution without full winding up

(1) Where the Registrar, by reference to personal knowledge, or on information supplied by any officer, member or creditor of a company, has reasonable cause to believe that the company is not carrying on business or is not in operation, the Registrar may by written communication to the company enquire whether the company is carrying on business or is in operation.

(2) Where the Registrar does not receive an answer to the written communication, within two months of the communication, the Registrar may send to the company a second written communication referring to the first written communication, stating that an answer has not been received by the Registrar, and that if an answer is not received to the second written communication within two months from the date of the second written communication, a notice will be published in the Companies Bulletin with a view to striking the name of the company off the register.

(3) Where the Registrar receives an answer from the company to the effect that it is not carrying on business or in operation, or does not within the specified time after sending the second written communication receive an answer to the second written communication, the Registrar may publish in the Companies Bulletin and send to the company by written communication a notice that at the expiration of three months from the date of that notice the name of the company shall, unless cause is shown to the contrary, be struck off the register and the company shall stand dissolved.

(4) Where a company is being wound up and the Registrar has reasonable cause to believe that a liquidator is acting but is not satisfied that the winding up is complete, the Registrar may publish in the Companies Bulletin and send to the company and to the last known place of business of the person last known to have acted as liquidator, a notice as is provided in subsection (3).

(5) At or after the expiration of the time specified in the notice, the Registrar shall, unless cause is shown, strike the name of the company off the register and shall publish the notice of that fact in the Companies Bulletin and on that publication in the Companies Bulletin the company shall stand dissolved.

(6) For the purposes of subsection (5), the liability of every director or other officer and member of the company shall continue and may be enforced as if the company had not been dissolved; but the subsection does not affect the power of the Court to order the winding up of the company.

(7) When the name of a company is struck off the register under this section, at any time within twelve years after the publication in the Companies Bulletin in accordance with subsection (5), the Court may, on application made for this purpose by a liquidator or by a former officer, member or creditor of the company, or by a person claiming through or under any of them, make an order on the terms that the Court considers fit, declaring the dissolution void and ordering the name of the company to be restored to the register and subsection (3) shall apply as if the order was one made under this section.

(8) A notice or written communication to be sent under this section to a company

 (a) may be addressed to

(i) the company at the registered office of the company,

(ii) a company at the last known place of business of the company if an office has not been registered, or

(iii) the care of an officer of the company, or

 (b) may be sent to the person or each of the persons who subscribed to the incorporation of the company addressed to that person at the address mentioned in the subscription lo the incorporation of the company or to the Registrar if there is no officer of the company whose name and address are known.

Part W: Documents
290. Service of documents by company

(1) A document may be served by a company on a member, debenture holder, or director of the company personally, or by sending it through the post in a prepaid letter addressed to that person at the address on the register of members, debenture holders, or directors, or if there is no registered address, at the address, supplied by that person to the company for the giving of notices, or by leaving it for that person with a person apparently over the age of sixteen years at that address.

(2) A document may be served by a company on the joint holders of a share or debenture of the company by serving it on the joint bolder named first in the register of members or debenture holders in respect of the share or debenture.

(3) A document may be served by a company

 (a) on the person on whom ownership of a share or debenture has devolved by reason of that person being a legal personal representative, receiver or trustee in bankruptcy of a member or debenture holder personally,

 (b) by sending it through the post in a prepaid letter addressed to the person by

(i) name,

(ii) title of the representative of the deceased, receiver or trustee of the bankrupt or by any like description at the address supplied for the purpose by that person; or

 (c) by leaving u for the person with a person apparently over the age of sixteen years at the address supplied for the purpose by the person.

(4) Where an address has not been supplied by the person for the purpose of service under this section, the document may be served in a manner which the document might have been served, if the death, receivership or bankruptcy had not occurred.

(5) Where a document is sent by post, service shall be deemed to

 (a) be effected by properly addressing, pre-paying and posting a letter containing the document, and

 (b) have been effected at the expiration of forty-eight hours after the letter containing the document is posted.

(6) The letter need not be despatched by registered post but where it is sent to an address outside Ghana it shall be despatched by air-mail.

(7) The service of a document on a shareholder or creditor includes sending the document by electronic mail, or facsimile machine and service shall be deemed to be effected by

 (a) properly addressing, attaching and mailing the document to the electronic mail address in the case of communication by electronic mail, or

(b) sending the document to a telephone contact used by the person concerned for the transmission of documents by facsimile subject to section 292.

291. Service of documents on company

(1) A document may be served on a company by

 (a) leaving it at, or sending it by post to, the registered office of the company, or the latest office registered by the Registrar as the registered address of the company,

 (b) sending it to the official electronic mail address of the company registered with the Registrar, and

 (c) sending it by facsimile machine to a telephone number used by that company for the transmission of documents by facsimile.

(2) A document to be served by post on a company shall be posted in the time that admits of its being delivered in due course of delivery within the time prescribed for the service of the document.

(3) In proving service it shall be sufficient to prove that a letter containing the document was properly addressed, prepaid and posted, whether or not by registered post.

(4) Where the registered office of a company cannot be traced, service on a director of the company or, if a director cannot be traced in the Republic, on a member of the company, shall be deemed good and effectual service on the company.

(5) Where it is proved that a document was in fact received by the director, managing director or Company Secretary, the document shall be deemed to have been served on the company despite the fact that service may not have been effected in accordance with subsections (1), (2), (3) or (4).

(6) This section does not derogate from a provision in this Act relating to the service of a document, or from the power of a Court to direct how service shall be effected of a document relating to legal proceedings before that Court.

(7) Paragraphs (b) and (c) of subsection (1) shall not apply to the service of legal proceedings on a company except otherwise determined by the Rules of Court.

292. Additional provisions relating to service

(1) Subject to subsection (2), and for the purposes of sections 290 and 291

 (a) where a document is to be served by delivery to a natural person, service shall be made

(i) by handing the document to the person; or

(ii) where the person refuses to accept the document, by bringing it to the attention of, and leaving it in a place accessible to, the person;

 (b) a document sent by facsimile machine is deemed to have been received on the working day following the day on which it was sent; and

 (c) in proving service of a document by facsimile machine, it is sufficient to prove that the document was properly transmitted by facsimile to the person concerned.

(2) Where a liquidator sends documents

 (a) to the last known address of a shareholder or creditor who is a natural person; or

 (b) to the address for service of a shareholder or creditor that is a company, and the documents are returned unclaimed on two consecutive times, the liquidator need not send further documents to the shareholder or creditor but shall forthwith circulate a notice in a daily newspaper of national circulation requesting the shareholder or creditor to convey to the liquidator within ten working days after publication of the notice, the relevant new address.

(3) A document may be sent to a shareholder or creditor by electronic means of communication provided that

 (a) the shareholder or creditor has consented in writing to that form of communication being used by the company or other person providing the communication; and

(b) the shareholder or creditor has provided an electronic address to which such communication may be sent.

(4) Any consent under subsection (3) may be revoked at any time on the provision of five days' notice in writing to the person sending the document.

(5) A document shall not be deemed to have been served or sent or delivered to a person where the person proves that, through no fault on the part of the person, the document was not received within the time specified.

293. Books and registers

(1) A register, minute book or accounting record required by this Act to be kept by a company may be kept by making entries in bound volumes, or by a system of mechanical, electronic or other recording.

(2) Where the register, minute book or accounting record is not kept by making entries in bound volumes, adequate precautions shall be taken for guarding against the risk of falsification that might arise from the method of recording and for facilitating discovery and retrieval.

(3) Where a system of recording is adopted, adequate arrangements shall be made for making the information in the recording available in an intelligible form to a person lawfully inspecting the register, minute book or accounting record.

(4) Where there is a default in complying with subsection (2) or (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.

Part X: Invitations to the Public
294. Control of public invitations

(1) A person shall not make an invitation to the public,

 (a) to acquire or dispose of any shares or debentures of a company, or

 (b) to deposit money with a company for a fixed period or payable at call, whether bearing or not bearing interest, unless the company concerned is a public company and the appropriate provisions contained in Part A of Chapter Four are duly complied with.

(2) Subsection (1) does not render unlawful the sale of shares or debentures by or under the supervision of the Court.

(3) Where an invitation to the public is made in breach of subsection (1), the person who made the invitation and an officer of a body corporate who made the invitation each commits an offence and is liable on summary conviction

 (a) in the case of a body corporate, to a fine of not less than five hundred penalty units and not more than one thousand penalty units, and

 (b) in any other case 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 one year and not more than two years or to both the fine and imprisonment.

(4) Where as a result of an invitation to the public in breach of subsection (I), a person acquires or disposes of shares or debentures or deposits money with a company, that person is entitled to rescind the transaction and in addition to or instead of rescinding, may recover compensation for a loss sustained by that person from a person who is liable, whether convicted or not, in respect of the breach.

(5) Where, in accordance with subsection (4), a person claims to rescind a transaction, that person shall do so with reasonable promptitude and is not entitled to rescind a transaction with the company or to recover compensation from the company unless that person takes steps to rescind before the commencement of the winding up of the company.

295. Meaning of "invitations to the public"

(1) For the purposes of this Act, an invitation is made to the public if an offer or invitation to make an offer is

 (a) advertised or disseminated in the Republic by newspaper, broadcasting, cinematograph, electronic communication or any other means;

 (b) made to or circulated among persons whether selected as members or debenture holders of the company concerned or as clients of the persons making or circulating the invitation or in any other manner;

 (c) made to one or more persons on the terms that the person or persons to whom it is made may renounce or assign the benefit of the invitation or of shares or debentures to be obtained under the invitation in favour of any other person; or

 (d) made to one or more persons to acquire shares or debentures dealt in on a stock exchange or in respect of which the invitation states that application has been or will be made for permission to deal in those shares or debentures on a stock exchange subject to subsection (5).

(2) Subsection (1) does not require an invitation to be treated as made to the public if the invitation can properly be regarded in all the circumstances as being a domestic concern of the persons making and receiving it.

(3) For the purposes of subsection (1), an invitation made by or on behalf of a private company exclusively to the existing shareholders and debenture holders of the company, which is not greater in number than is prescribed by subsection (5) of section 7 and its existing employees is not an invitation to the public unless the invitation is of the type referred to in paragraph (c) or (d) of subsection (1).

(4) For the purposes of subsection (1), the issue of a form of application for shares or debentures or of a form to be completed on the deposit of money with a company is an invitation to acquire those shares or debentures or to deposit money.

(5) For the purposes of sections 329 to 342 the expression "invitation to the public" bears the meaning assigned to it in this section but an invitation made on behalf of an external or non-Ghanaian company, exclusively to its existing shareholders and debenture holders, which is not greater in number than is prescribed by subsection (5) of section 7, and its existing employees is not an invitation to the public unless the invitation is of the type referred to in paragraph (c) or (d) of subsection (1).

296. Offers for sale deemed to be made by company

(1) Where a company allots or agrees to allot any of the shares or debentures of the company to a person with a view to the public being invited to acquire any of those shares or debentures, for the purposes of this Act, an invitation so made is an invitation to the public made by the company as well as by the person actually making the invitation.

(2) A person who acquires any of the shares or debentures in response to the invitation under subsection (l) is an allottee from the company of those shares or debentures.

(3) For the purposes of subsection (1), where

 (a) an invitation to the public is made in respect of shares or debentures within six months after the allotment or agreement to allot, or

 (b) at the date when the invitation to the public was made, the whole consideration to be received by the company in respect of the shares or debentures had not been so received, it shall be assumed, unless the contrary is proven, that the allotment or an agreement to allot was made by the company with a view to an invitation to the public being made in respect of those shares or debentures.

(4) This section applies to an invitation to the public made in respect of shares or debentures of external and non-Ghanaian companies.

CHAPTER THREE

ADDITIONAL PROVISIONS APPLICABLE TO PRIVATE

COMPANIES ONLY

297. Default in complying with conditions constituting a private company

(1) Where a private company defaults in complying with a condition by virtue of its incorporation as required by section 7, sections 323 and 328 shall apply to the company as if the company were a public company.

(2) When the Court is satisfied that the failure to comply with a condition, specified in subsection (1), was accidental or due to inadvertence or to any other sufficient cause, or that on other grounds it is just and equitable to grant relief, the Court may, on the application of the company or an officer or a member of the company, and on the terms and conditions that the Court considers just and expedient, order that the company be relieved of the consequences of the default.

298. Documents to be annexed to the annual return of a private company

(1) With the annual return required by section 126, a private company shall send to the Registrar for registration,

 (a) a certification that the company has not, since the date of the last return, or, in the case of the first return, since the date of incorporation of the company, issued an invitation to the public to acquire shares or debentures of the company or to deposit money with the company; and

 (b) a certification that the number of members and debenture holders of the company does not exceed fifty or that an excess over fifty consists solely of persons who are genuinely in the employment of the company and persons, who, having been formerly genuinely in the employment, of the company were, while in that employment, and have continued after the determination of that employment to be, members or debenture holders of the company.

(2) In addition to complying with subsection (1), a private company shall send to the Registrar for registration,

 (a) a copy of every statement of financial position and consolidated financial statements circulated to the members and debenture holders pursuant to section 128 during the period to which the return relates, and a copy of the report of the directors and of the report of the auditors accompanying those accounts; or

 (b) a written statement by the auditors of the company that, to the best of the .knowledge and belief of the auditors, the financial statements and reports referred to in section 128 have been sent to the members and debenture holders in accordance with that section; and

 (c) a copy of the report so sent; and

 (d) a certificate that to the best of the knowledge and belief of the persons signing the certificate, a body corporate is not or has not been at any time beneficially interested, otherwise than by way of security, in an issued share of the company, or that if a body corporate is or has been so interested, it is an exempted body corporate as defined in subsection (6).

(3) The certification required by paragraphs (a) and (b) of subsection (1) and paragraph (b) of subsection (2) shall be signed by a director and by the Company Secretary.

(4) The copies required by paragraph (a) of subsection (2) shall be certified by a director and by the Company Secretary to be true copies.

(5) The copy of the report of the auditors required by paragraph (b) of subsection (2) shall be certified by the auditors to be a true copy and the statement referred to in that paragraph shall be signed by the auditors.

(6) For the purposes of this section, a body corporate is an exempted body corporate if,

 (a) it is not a public company;

 (b) it has not ac any time issued an invitation to the public to acquire any of its shares or debentures or to deposit money with the body corporate; and

 (c) at all times since it became beneficially interested in any shares of the company,

(i) it has not had more than fifty members and debenture holders, not including persons who are genuinely in the employment of the body corporate and persons who, having been formerly genuinely in the employment of the company were, while in that employment, and continued after the determination of that employment to be, members or debenture holders of the company; and

(ii) another body corporate, other than an exempted body corporate, has not been beneficially interested, other than by way of security, in any issued shares of the body corporate.

299. Requisitioning extraordinary general meetings of a private company

(1) The directors of a private company, despite a provision in the constitution of chat private company, shall duly convene an extraordinary general meeting of the company on the requisition of

 (a) two or more members of the company or a single member holding not less than one-tenth of the shares of the company; or

 (b) in the case of a company limited by guarantee, one-tenth of the total voting rights of the members of the company.

(2) The requisition shall stale the nature of the business to be transacted at the meeting and shall be signed by the requisitionists and sent to or delivered at the registered office of the company.

(3) If the directors do not, within seven days from the date of receipt of the requisition at the registered office of the company, proceed duly to convene a meeting for a date not later than twenty-eight days after the receipt of the requisition, the requisitionists or any of them may themselves convene a meeting, but a meeting so convened shall be held within four months from that date.

(4) The reasonable expenses incurred by the requisitionists by reason of the failure of the directors to duly convene a meeting shall be repaid to the requisitionists by the company and the sum of money so repaid shall be retained by the company out of the fees or other remuneration of the directors who were in default.

(5) For the purposes of this section, the directors have not proceeded duly to convene a meeting if they do not, within seven days after the receipt of the requisition at the registered office, cause notices of the meeting, to transact the business specified in the requisition, to be given in accordance with paragraphs 1 to 3 of the Eighth Schedule.

300. Appointment and removal of directors of private companies

(1) The appointment and removal of directors of a private company may, subject to sections 171 to 176, be regulated by the registered constitution of the company.

(2) In the absence of a contrary provision in a registered constitution of the company, each of the existing directors shall continue to hold office until the director vacates office under section 175, or is removed under section 176.

(3) A company may at any time by ordinary resolution fill a vacancy in the number of directors and may at any time by ordinary resolution increase the number of directors, but the total number of directors shall not exceed the maximum prescribed by the registered constitution of that company if it has one.

301. Unanimous agreement by shareholders

(1) Where all shareholders of a private company agree to or concur in any action which has been taken or is to be taken by the company

 (a) the taking of that action is deemed to be validly authorised by the company despite any provision in the registered constitution of the company; and

 (b) the provisions in any of the constitutions referred to in the Second, Third and Fourth Schedules shall not apply in relation to that action.

(2) Without limiting the matters which may be agreed to or concurred in under subsection (1), that subsection shall apply where all the shareholders of a private company agree to or concur in

 (a) the issue of shares by the company;

 (b) the making of a distribution by the company;

 (c) the repurchase or redemption of shares in the company;

 (d) the giving of financial assistance by a company for the purpose of, or in connection with, the purchase of shares in the company;

 (e) the payment of remuneration to a director, or the granting of a loan co a director or a member or the conferral of any other benefit on a director or member;

 (f) the making of a contract between an interested director or a member and the company;

 (g) the entry into a major transaction; or

 (h) the ratification after the event of any action which could have been authorised under this section.

302. Conversion of private company to public company

(1) A private company shall be converted into a public company

 (a) if the company alters its capacity to operate as a private company, and

 (b) where the company alters its registered constitution in a manner that is appropriate to a public company and not required in order to constitute a private company.

(2) Within twenty-eight days after the date of the special resolution to alter its capacity to operate as a private company or alter the registered constitution, the company shall deliver to the Registrar for registration a copy of the resolution in accordance with section 165.

(3) The Registrar shall publish notice of the conversion of the company in the Companies Bulletin.

(4) Where there is a default in complying with subsection (l) or (2), the company and an officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units.

CHAPTER FOUR

ADDITIONAL PROVISIONS APPLICABLE TO PUBLIC

COMPANIES ONLY

Part A: Prospectuses and Statements in lieu of Prospectus
303. Statement in lieu of prospectus

(1) A public company shall, within twenty-eight days after incorporation, or after its conversion from a private company in accordance with section 302, deliver to the Registrar for registration a statement in lieu of prospectus, signed by every person who is named in the statement as a director or a proposed director of the company or by the agent of that person authorised in writing, in the form and containing the particulars set out in Part One of the Ninth Schedule and, in the cases mentioned in Part Two of that Schedule, accompanied by the financial statements and reports specified in the Schedule.

(2) A copy of the statement in lieu of prospectus shall be delivered to the Commission.

(3) A statement in lieu of prospectus delivered under subsection (l) shall, where the persons making the report specified in Part Two of the Ninth Schedule have made any adjustments as are mentioned in paragraph 27 of that Schedule, have endorsed on the statement or attached to the statement a written statement signed by those persons setting out the adjustments and giving the reason for the adjustments.

(4) Where a company contravenes subsection (1), or (3), the company and an officer of the company who is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units.

(5) Where a statement in lieu of prospectus delivered to the Registrar under subsection (1) includes an untrue statement or omits truthfully to state any of the particulars required to be stated by virtue of the Ninth Schedule then,

 (a) a person, which expression for the purposes of this subsection does not include the company itself, who authorised the delivery of the statement in lieu of prospectus for registration 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 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, unless that person proves that the untrue or omitted statement was immaterial or that that person had reasonable grounds to believe and did, up to the time of delivery for registration of the statement in lieu of prospectus, believe that the untrue statement was true;

 (b) an allottee who acquired shares or debentures in the company in reliance on the statement in lieu of prospectus, and who was misled by the untrue statement or omission, is entitled to rescind the allotment of those shares or debentures and to recover from a person guilty of an offence under paragraph (a) whether convicted or not, compensation for a loss which the allottee has suffered by reason of that reliance; or

(c) a person who acquires shares or debentures in the company from an allottee in reliance on the statement in lieu of prospectus, and who was misled by the untrue statement or omission, is entitled to recover from a person guilty of an offence under paragraph (a), whether convicted or not, compensation for a loss which that person has suffered by reason of that reliance.

304. Prospectus on invitations to the public to acquire or dispose of securities

(1) Despite section 294, an invitation to the public to acquire or dispose of any shares or debentures of a public company may be made if,

 (a) within six months before the making of the invitation there has been delivered to the Commission for examination and approval by the Commission in accordance with section 308, a prospectus relating to the shares or debentures complying in all respects with relevant provisions of sections 305 to 307 and that prospectus has been registered with the Registrar;

 (b) except as provided in subsection (2) of this section, a person to whom the invitation is made is supplied with a true copy of the prospectus at the time when the invitation is first made to that person; and

 (c) a copy of the prospectus states on its face that it has been approved by the Commission and the date of the approval indicated.

(2) Electronic media with the prior consent in writing of the Commission or a newspaper may publish an advertisement or otherwise a summary of the contents of a prospectus, duly approved in accordance with section 308, so long as the summary

 (a) does not contain a form of application for any shares or debentures which has not been approved by the Commission or, in respect of shares or debentures dealt in or to be dealt in on an approved stock exchange by that stock exchange; and

 (b) states with reasonable prominence where copies of the full prospectus may be obtained and the fact that it has been approved and the date of approval.

 

305. General and restricted invitations to the public

(1) Except as provided in section 306, where the invitation invites the public to acquire shares or debentures of a public company, the prospectus referred to in section 304 shall state the matters specified in Part One of the Tenth Schedule and set out the reports specified in Part Two of that Schedule.

(2) Subsection (1) shall not apply to,

(a) an invitation by a company in respect of shares or debentures of that company or any of the associated companies made solely to the existing shareholders or debenture holders of that company; or

(b) an invitation by a company in respect of shares or debentures of that company which are in all respects uniform with shares or debentures of that company previously issued and for the time being dealt in on an approved stock exchange.

(3) A prospectus relating to an invitation to the public to acquire or dispose of shares or debentures of a public company, which is an invitation not falling within subsection (l) because it does not invite the public to acquire shares or debentures, or because it is excluded from the ambit of that subsection by virtue of subsection (2) need not state the matters or set out the reports specified in the Tenth Schedule.

(4) The prospectus referred to in subsection (3) shall not contain an untrue statement and, if the shares or debentures to which the prospectus relate are dealt in on a stock exchange, whether in the Republic or elsewhere, or if an application has been, or is being made to a stock exchange for permission to deal in those shares or debentures the prospectus, shall

(a) state that the shares or debentures are dealt in on that stock exchange or that application has been or is to be made for permission to deal in those shares or debentures on that stock exchange;

(b) state whether or not that stock exchange is an approved stock exchange within the meaning of this Act; and

(c) contain the particulars and information required by that stock exchange; and in any other case shall state that the shares or debentures are not dealt in on a stock exchange.

(5) An invitation falling within

(a) subsection (1) is in this Act described as a general invitation ;and

(b) subsection (3) is in this Act described as a restricted invitation.

306. Certificates of exemption

(1) Where it is proposed to make a general invitation to the public to acquire shares or debentures of a public company, the Commission may, on the request of the applicant, grant exemption in respect of compliance with any of the requirements of the Tenth Schedule, having regard to the proposals as stated in the request as to the size and other circumstances of the invitation, compliance with the requirements of the Tenth Schedule would be burdensome.

(2) A certificate of exemption specified in this section shall state that having regard to the proposals as stated in the request as to the size and other circumstances of the invitation, compliance with the requirements of the Tenth Schedule would be unduly burdensome.

(3) Where a certificate of exemption is granted and the proposals are adhered to, a prospectus containing the particulars and information required by the Commission if duly published in the manner required by the Commission, shall be deemed to be a prospectus complying with the Tenth Schedule

307. Consent of expert

(1) Where a prospectus relating to an invitation to the public in respect of shares or debentures of a public company, whether a general invitation or a restricted invitation, includes a statement purporting to be made by an expert, the prospectus shall not be delivered for approval unless,

(a) the expert has given a written consent, and has not, before delivery of the prospectus for examination and approval in accordance with section 308, withdrawn the consent, to the publication of the prospectus with the inclusion of the statement in the form and context in which it is included; and

(b) a statement that the expert has given and not withdrawn the consent appears in the prospectus.

(2) Where, after delivery of the prospectus to the Commission for examination and approval, the expert withdraws the consent, the person who delivered the prospectus for approval shall immediately notify the Commission.

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

308. Registration of prospectus

(1) A prospectus delivered to the Commission pursuant to section 304 shall be delivered in triplicate.

(2) Where a general invitation is being made by or on behalf of a company in respect of the shares or debentures of the company, one copy of the prospectus delivered to the Commission shall be signed by every person who is named in the invitation as a director or proposed director of the company or by the agent of that person authorised in writing as well as being signed, in the manner referred to in subsections (3) and (4),by or on behalf of any other person also making the invitation.

(3) In every case one copy of the prospectus so delivered shall be signed by the person making the invitation or by the agent of that person authorised in writing.

(4) Where the person making the invitation is a firm or body corporate, it is sufficient if the prospectus is signed by or on behalf of the firm or body corporate by not less than half the partners or by not less than two directors of the body corporate, and any of those partners or directors may sign by the agent of that partner or director authorised inwriting.

(5) One copy of the prospectus so delivered shall have endorsed on it or attached to it,

(a) a consent of an expert required by section 307; and

(b) in the case of a prospectus relating to a general invitation, a certified copy or  translation of each of the documents required to be available for inspection in accordance with paragraph 45 of the Tenth Schedule, or, where a certificate of exemption has been granted pursuant to section 306required to be available for inspection under the regulations of the approved stock exchange but if a copy or translation of the document has already been delivered by the company to the Registrar for registration, the Registrar may dispense with the need to endorse or attach a further copy of the document, where in the opinion of the Registrar, the copy originally delivered is readily identifiable and accessible.

(6) Where the prospectus relates to shares or debentures dealt in on an approved stock exchange or states that application has been or will be made to an approved stock exchange for permission to deal in the shares or debentures to which the prospectus relates, there shall be delivered to the Commission with the prospectus a certificate by or on behalf of that approved stock exchange that

(a) the prospectus has been scrutinised by the stock exchange; and

(b) its requirements relating to the contents of the document have been satisfied; and the Registrar shall register the prospectus within forty-eight hours of the approval by the Commission of the prospectus.

(7) In a case which does not fall within subsection (5) or (6), the Registrar may, for the purposes of reaching an opinion on whether a prospectus

(a) does not comply with this Act,

(b) contains an untrue statement,

(c) omits to state a material fact,

(b) is otherwise incomplete or misleading, refer the prospectus to the Commission for the opinion of the Commission, and the Commission shall give its opinion within twenty-one days after the reference, in relation to the prospectus.

(8) A copy of a prospectus which has been delivered for registration in accordance with this section shall state at its head the following:

"A copy of this prospectus has been delivered to the Securities and Exchange Commission in accordance with subsection (8) of section 308 of the Companies Act, 2019 (Act 992). For the financial soundness of the company or the value of the securities on offer investors are advised to consult a dealer, investment adviser or any other professional for the appropriate advice.".

(9) For the purposes of this Act, and until the contrary is shown, the first publication of the prospectus is the date of registration.

309. Waiting period

(1) For the purposes of this Act, "waiting period" means a period of twenty-one days after the first publication of a registered prospectus or a longer period that is stated in the prospectus as the period before the expiration of which applications, offers or acceptance sin response to the prospectus will not be accepted or treated as binding.

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

(a) where the shares or debentures to which the invitation relates are dealt in on a stock exchange or where the prospectus states that application has been or will be made for permission to deal in the shares or debentures on a stock exchange, and

(b) to comply with the requirements of that stock exchange it is necessary to advertise the prospectus in one or more daily newspapers of national circulation, then unless the prospectus is advertised there has not been a publication of the prospectus.

(3) A binding contract or legally enforceable obligation shall not be entered into in response to an invitation to the public in respect of the shares or debentures of a public company until after the expiration of the offer period, and an application, offer or acceptance by a person in response to the invitation is revocable by that person at any time before the expiration of the offer period.

(4) Subsection (3) does not invalidate a genuine underwriting agreement in respect of those shares or debentures.

310. Withdrawal of applications after the offer period

Where a general invitation is made to the public in respect of the shares or debentures of a public company, an application for the shares or debentures is not revocable during a period of seven days immediately after the expiration of the offer period unless, before the expiration of the period of seven days, a person responsible for the prospectus has, in accordance with section 313, given public notice having the effect under that section of excluding or limiting the responsibility of the person giving it.

311. Invitations in respect of securities to be dealt in on a stock exchange

(1) Where a prospectus, issued in connection with a general or restricted invitation to the public to acquire shares or debentures in a public company states that application has been or will be made for permission for the shares or debentures to be dealt in on a stock exchange, an agreement to acquire those shares or debentures made in pursuance of that prospectus shall become void if the application is refused by that stock exchange or if permission to deal in the shares or debentures is not granted within twenty-eight days after the expiration of the offer period.

(2) Where an agreement becomes void in accordance with subsection(1), the person or persons making the invitation shall forth with repay and restore without interest the money and other property received from a person in response to the invitation.

(3) Where the money or other property is not repaid or restored in accordance with subsection (2) within eight days after it becomes repayable or returnable, the person or persons making the invitation and, in the case of a body corporate, the directors of that body corporate is or are jointly and severally liable to repay that money or restore that property with interest at the yearly interest rate of a ninety-one day government treasury bill on the amount or value from the expiration of the eighth day.

(4) A director is not liable under subsection (3) if the director proves that the default in the repayment of the money was not due to the misconduct or negligence of the director.

(5) So long as the person making the invitation may become liable to repay the money in accordance with subsection (2), the moneys received in response to the invitation shall be kept in a separate bank account and shall be held on trust to give effect to this section; and where there is a default in complying with this subsection, the persons making the invitation and, in the case of a body corporate, every officer of the body corporate who is in default is liable to pay to the Registrar, an administrative penalty of seven hundred and fifty penalty units.

312. Minimum subscription

(1) Where a public company makes a general invitation to the public to subscribe for any of the shares or debentures of the company, the amount of money payable on application for the shares or debentures shall not be less than twenty per cent of the subscription price.

(2) Unless, within twenty-eight days of the expiration of the offer period, the amount stated in the prospectus as the minimum amount of money which, in the opinion of the directors, must be raised in order to provide for the matters specified in subparagraph (b) of paragraph 22of the Tenth Schedule, in this section called the minimum subscription, has been subscribed and the amount payable on application for the minimum subscription has been paid to and received by the company, an agreement to subscribe for those shares or debentures shall become void at the expiration of the twenty-eight days.

(3) Where an agreement becomes void in accordance with subsection (2), the company shall repay without interest the moneys received from any persons in response to the invitation.

(4) If the money is not repaid in accordance with subsection (3)within eight days after it becomes repayable, the directors of the company are jointly and severally liable to repay that money with interest at the yearly interest rate of a ninety-one day government treasury bill on the amount or value from the expiration of the eighth day.

(5) A director is not liable under subsection (4) if the director proves that the default in the repayment of the money was not due to the misconduct or negligence of the director.

(6) So long as the company may become liable to repay the money in accordance with subsection (3), the moneys received in response to the invitation shall be kept in a separate bank account and shall be held on trust to give effect to this section and where there is a default in complying with this subsection the company and every officer of the company who is in default is liable to pay to the Registrar, an administrative penalty ofseven hundred and fifty penalty units.

313. Civil remedy for mis-statements or omissions in a prospectus

(1) Where a prospectus published in connection with a general or restricted invitation to the public in respect of shares or debentures of a public company contains an untrue statement or omits to state any of the particulars or to set out any of the reports which, under this Act, it is required to state or set out, subject to this section, a person specified in subsection (2) is liable to pay compensation to the persons who acquire or dispose of the shares or debentures on the faith of the prospectus for the loss they may have sustained by reason of the untrue statement or omission.

(2) Subject to this section, the following persons are liable to pay compensation in accordance with subsection (1):

(a) a person making the invitation to which the prospectus relates;

(b) a person who was a director of a body corporate making the invitation at the time when the prospectus was published;

(c) where the invitation was made by the company to whose shares or debentures the invitation relates,

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

(ii) a promoter of the company who was a party to the preparation of the prospectus; and

(d) a person who, pursuant to section 307 bas consented to the publication of the prospectus containing a statement by that person as an expert.

(3) A person is not liable under subsections (1) and (2) if that person proves

(a) that as regards an untrue statement, not purporting to be made on the authority of an expert, other than that person, or of a public official document or statement, that person had reasonable grounds to believe and did believe up to the time of the publication of the prospectus or, where a waiting period applies, up to the expiration of the waiting period, that the statement was true;

(b) that as regards an omission, that person was not cognizant of the omission up to the time of the publication of the prospectus or, where a waiting period is applicable, up to the expiration of the waiting period;

(c) that as regards an untrue statement purporting to be a statement by an expert, other than that person, or contained in what purports to be a copy of or extract from a report or valuation of an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation, and chat that person had reasonable grounds to believe and did believe up to the time of the publication of the prospectus that the person making the statement was competent to make it and had given the consent required by section 307 and had not withdrawn that consent before the date of registration of the prospectus;

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

(e) that after the publication of the prospectus but before the expiration of a waiting period that person, on becoming aware of an untrue statement in the prospectus or omission from the prospectus withdrew the consent given to the prospectus and gave reasonable public notice of the withdrawal and of the reason for the withdrawal; or

(f) that the prospectus was published without the knowledge of, and that, on becoming aware of the publication, that person forthwith gave reasonable public notice that it was published without the knowledge of that person.

(4) A person specified in subparagraph (i) of paragraph (c) of subsection (2) is not liable under subsections (1) and (2) if that person proves that having consented to being named as a director or as having agreed to become a director the consent was withdrawn before the registration of the prospectus and that it was published without the authority or consent of that person.

(5) A person specified in paragraph (d) of subsection (2) is not liable under subsections (1) and (2) of this section,

(a) if the untrue statement or omission was not made by that person;

(b) if that person proves

(i) that as regards an untrue statement made by that person, that person was competent to make the statement and had reasonable grounds to believe and did believe, up to the date of publication of the prospectus or, where a waiting period applies, up to the expiration of the waiting period, that the statement was true;

(ii) that having given the consent under section 307 that person withdrew the consent in writing before delivery of the prospectus for registration; or

(iii) that, after delivery of the prospectus for registration but before publication of the prospectus, or, where a waiting period applies, before the expiration of the waiting period, that person, on becoming aware of the untrue statement or omission, withdrew the consent in writing and gave reasonable public notice of the withdrawal, and of the reason for the withdrawal.

(6) Where,

(a) a person is named in a prospectus as a director of a company or as having agreed to become a director of a company, and that person has not consented to become a director or has withdrawn that consent before the publication of the prospectus and has not authorised or consented to the publication, or

(b) the consent of a person is required under section 307 to the publication of the prospectus and that person has not given that consent or has withdrawn the consent before the publication of the prospectus, a person making the invitation to which the prospectus relates and a person who was a director of a body corporate making the invitation at the time when the prospectus was published, except a person without whose knowledge or consent the prospectus was published, is liable to indemnify the person referred to in paragraph (a) or (b) of this subsection against the damages, costs and expenses to which that person may be made liable by reason of the name having been inserted in the prospectus or of the inclusion in the prospectus of a statement purporting to be made by that person as an expert, or in contesting legal proceedings brought against that person in respect of the prospectus

314. Recission for misstatements in a prospectus

(1) Where a person acquires shares or debentures of a public company from that company or disposes of shares or debentures of a public company to that company as a result of an untrue statement of a material fact made, whether innocently or fraudulently, in a prospectus published in connection with an invitation to the public made by or on behalf of that company, that person is, subject to subsection (2), entitled to rescind the acquisition or disposition of the shares or debentures.

(2) A person is not entitled to rescission unless that person claims to rescind with reasonable promptitude after discovering that the untrue statement was made and, in any case, before the commencement of the winding up of the company.

315. Voting rights of shares offered to the public

(1) An invitation shall not be made to the public to acquire shares in a public company unless the voting rights attached to the shares of the company are stated as required by sections 52 and 53.

(2) Where a person makes an invitation to the public in breach of subsection (1), that person is liable to pay to the Registrar, an administrative penalty of one thousand penalty units and if the invitation is made by or on behalf of the company, the company and each officer of the company who is in default, is liable to a like penalty.

316. Public invitations to deposit money with public companies
317. Prohibition of waiver and notice clauses

A condition purporting to require or bind a person to waive compliance with a section of this Part, or purporting to affect that person with notice of a contract, document or matter, not specifically referred to in a prospectus or statement in lieu of prospectus, advertisement or circular, is void.

318. Criminal liability for mis-statements

(1) Where a prospectus, an advertisement or a circular published in relation to an invitation to the public to acquire or dispose of shares or debentures of a company or to deposit money with a company,

 (a) contains an untrue statement, or

 (b) omits truthfully to state any of the matters which, under section of this Part, it is required to state, a person who authorised the publication of the prospectus, advertisement or circular 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 one year and not more than two years or to both the fine and imprisonment, or in the case of a body corporate to a fine of not less than five hundred penalty units and not more than one thousand penalty units, unless that person proves that, the untrue or omitted statement was immaterial or that, that person had reasonable grounds to believe and did believe, up to the time of publication of the prospectus that, the statement was true.

(2) For the purposes of subsection (1), a person has not authorised the publication of a prospectus by reason only of that person having given the consent required by section 307 and the Registrar has not authorised the publication of an advertisement or circular by reason of the Registrar having given the consent referred to in section 316.

319. Commission to waive or modify the application of Part A of Chapter Four

(1) Despite any other provision of this Act, the Commission may waive or modify the requirements of a provision of Part A of Chapter Four in relation to an invitation to the public to acquire or dispose of shares or debentures of a company or to deposit money with the company for a fixed period or payable at call whether bearing or not bearing interest.

(2) An invitation and a prospectus relating to that invitation shall be deemed to comply with this Act to the extent that the Commission has waived or modified any of the requirements.

Part B: Dividends and Transfers
320. Limitation on liability of members in public companies to restore illegal dividends

Where a public company pays a dividend in contravention of subsection (1) of section 72, a member of the company is not liable to restore to the company the amount received by the member in respect of the dividend if the member proves that, at the time when the member received the money, the member did not know that the payment contravened the subsection.

321. Interim dividends

(1) The directors of a public company with shares may, unless the registered constitution of the company otherwise provides, pay to the member of the company interim dividends on account of dividends to be declared by the company in accordance with section 76.

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

 (a) a dividend shall not be paid in contravention of subsection (1) of section 72; and

 (b) if a payment is made in contravention of subsection (l) of section 72, the person specified in subsection (2) of section 72 is liable to restore the money to the company with interest in accordance with the subsection as qualified by this section.

322. Restrictions on the transferability of securities of public companies

(1) Despite subsection (2) of section 98, the constitution of a public company shall not impose a restriction on the right to transfer shares of the company and if the constitution purports to impose that restriction, it shall be void.

(2) Subsection (1) shall not,

 (a) prohibit a restriction on the right to transfer shares on which there is an unpaid liability; or

 (b) preclude a company from refusing to register a transfer of shares to a person who is an infant or to a person found by a court of competent jurisdiction to be of unsound mind.

(3) Despite subsection (2) of section 100, a public company shall not issue a debenture of the company which imposes a restriction on the right to transfer the debenture and if the debenture purports to contain that restriction, it shall be ineffective.

Part C: Documents Accompanying Annual Returns
323. Documents to be annexed to annual returns of a public company

The annual return of a public company required by section 126 shall be accompanied by a copy, certified by a director and the Company Secretary to be a true copy, of each statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, report of directors and report of auditors sent to members and debenture holders of the company in accordance with section 128 during the period to which the return relates.

Part D: Extraordinary General Meetings
324. Extraordinary general meetings of public companies

(1) The directors of a public company, despite anything in the constitution of that company, shall on the requisition of members of the company holding not less than one-twentieth of the shares of the company, or, in the case of a company limited by guarantee, members of the company representing not less than one-twentieth of the total voting rights of the members of the company, forthwith proceed duly to convene an extraordinary general meeting of the company.

(2) The requisition shall

 (a) state the nature of the business to be transacted at the meeting, and

 (b) be signed by the requisitionists and sent to or deposited at the registered office of the company.

(3) The requisition may consist of several documents in the like form each signed by one or more requisitionists.

(4) If the directors do not, within twenty-eight days from the date of receipt of the requisition at the registered office of the company,  proceed duly to convene a meeting for a date not later than twenty-eight days after the receipt, the requisitionists, or any of them, may themselves convene a meeting but a meeting so convened shall not be held after the expiration of four months from that date.

(5) The reasonable expenses incurred by the requisitionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitionists by the company, and the sum of money so repaid shall be retained by the company out of the fees or other remuneration of any of the directors who were in default.

(6) For the purposes of this section, the directors have not proceeded duly to convene a meeting if they do not, within twenty-eight days of the receipt of the requisition at the registered office, give notices of the meeting to transact the business specified in the requisition in accordance with paragraphs l to 3 of the Eighth Schedule.

Part E: Directors
325. Rotation of directors of a public company

Subject to sections 172 to 176 and sections 326 and 327and except as otherwise provided in a registered constitution of a company, the following rules shall apply to the retirement and appointment of directors of a public company:

 (a) at the first annual general meeting of the company every director shall retire from office, and at the annual general meeting in every subsequent year one-third of the directors for the time being or, if the number of directors is not three or a multiple of three, then the number nearest one-third, shall retire from office;

 (b) the directors to retire in every year shall be those who have served longest in office since their last election, but, as between persons who became directors on the same day those to retire shall, unless the directors otherwise agree among themselves, be determined by lot;

 (c) a director appointed to the office of managing director shall not, while holding that office, be subject to retirement by rotation or be taken into account in determining the rotation of retirement of directors;

 (d) a retiring director is eligible for re-election;

 (e) the company, at the annual general meeting at which a director retires as provided in this section, may fill the vacated office by electing a person to that office, and in default the retiring director shall, if offering to stand for reflection, be deemed to have been re-elected unless at the meeting it is expressly resolved not to fill the vacated office or unless a resolution for the re-election of the director has been put to the meeting and lost;

 (f) a person is not eligible for election to the office of director unless not less than three days and not more than twenty-eight days before the date appointed for the general meeting, a notice in writing

(i) of the intention to propose that person for election, signed by a member entitled to attend and vote at the meeting; and

(ii) of the consent to be elected as a director, signed by the person proposed, is lodged at the registered office of the company; and

 (g) on an increase or a decrease in the number of directors, the company may, by ordinary resolution determine in what rotation the increased or decreased number is to retire from office.

326. Voting for directors of a public company

(1) At a general meeting of a public company, other than a company limited by guarantee, a resolution for the appointment of two or more persons as directors of the company by a single resolution shall not be moved unless a resolution that it shall be so moved has first been carried unanimously.

(2) A resolution moved in contravention of subsection (1) is void, whether or not the resolution being so moved was objected to at that time.

(3) For the purposes of this section, a resolution approving appointments or nominating persons for appointment shall be treated as a resolution for appointment.

(4) This section shall not apply where a registered constitution of a company provides for cumulative voting in accordance with section 327.

327. Cumulative voting for directors of a public company

(1) The registered constitution of a public company may provide that directors shall be elected by cumulative voting.

(2) Where the registered constitution of a company provides for cumulative voting,

 (a) although there is a provision to the contrary in the constitution of the company, the minimum number of directors of the company shall not be less than three and the whole of the directors, including a managing director, shall retire from office at each annual general meeting;

 (b) the votes of each member shall, for the purposes of electing directors to fill the resulting vacancies, be multiplied by the number of vacancies;

 (c) a member may cast the resulting votes of that member in favour of one candidate for election or may distribute the resulting votes among as many candidates as that member thinks fit;

 (d) the candidates receiving the highest number of votes up to the number of directors to be elected, shall be declared elected;

(e) despite section 176, unless the whole board of directors is removed by an ordinary resolution duly passed in accordance with that section, a director may not be removed under that section if the votes cast against the removal would, when multiplied by the total number of directors, have been sufficient to secure the return of that director at an election of the whole board conducted in accordance with the rules contained in paragraphs (a), (b), (c) and (d) of this subsection.

328. Prohibition of loans by public companies to directors

(1) A public company shall not grant a loan to a person who is a director or a director of an associated company, or enter into a guarantee or provide a security in connection with a loan made to that person by any other person.

(2) Subsection (1) does not apply,

 (a) to the making of a loan to an associated company or the entering into a guarantee or the providing of a security in connection with a loan made to an associated company by any other person; or

 (b) subject to subsection (3), in the case of a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, to anything done by the company in the ordinary course of that business.

(3) Paragraph (b) of subsection (2) does not authorise the making of loans or the entering into a guarantee or the providing of a security, unless the total amount lent, guaranteed and secured in respect of loans to those persons does not exceed one per cent of the net assets of the company.

(4) Where a company defaults in complying with this section, the company and any officer of the company that is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units, and the directors authorising the making of the loan or the entering into the guarantee or the providing of the security are jointly and severally liable to indemnify the company against the loss arising from the default.

(5) For the purpose of subsection (3), "net assets" means the assets less the liabilities of the company as shown in the last audited statement of financial position of the company.

CHAPTER FIVE

PROVISIONS APPLICABLE TO EXTERNAL COMPANIES

329. Meaning of "external company"

(1) Sections 330 to 342 apply to external companies as defined in this section.

(2) An external company is a body corporate formed outside the Republic which, has an established place of business in the country.

(3) The expression "established place of business" means a branch, management, share, transfer, or registration office, factory, mine, or any other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of the body corporate or maintains a stock of merchandise belonging to that body corporate from which the agent regularly fills orders on behalf of the body corporate.

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

 (a) a body corporate does not have an established place of business in the Republic merely because the body corporate carries on business dealings in the Republic through a genuine broker or general commission agent acting in the ordinary course of business as a broker or general commission agent; or

 (b) the fact that a body corporate has a subsidiary which is incorporated, resident, or carrying on business in the Republic, whether through an established place of business or otherwise, does not of itself constitute the place of business of that subsidiary, an established place of business of that body corporate.

330. Documents to be delivered to Registrar by external company

(1) An external company which establishes a place of business in the country shall, within one month of the establishment of the place of business, deliver to the Registrar for registration

 (a) a copy of the certificate of incorporation and where applicable a copy of the constitution, charter, statutes, regulations, memorandum and articles, or any other instrument constituting or defining the constitution of the company, in a language acceptable to the Registrar;

 (b) a statement duly notarised in the jurisdiction of origin of the company giving the following particulars regarding the company:

(i) the name;

(ii) the nature of business or businesses or other main objects of the company, if any;

(iii) the present forename and surname and a former forename or surname, and the address and business occupation of one person or more persons, in this Act referred to as a local manager, authorised to manage the business of the company in the Republic;

(iv) if the company has shares, the number and nominal value of the authorised and issued shares, the amount paid up on the shares and the amount remaining payable on the shares distinguishing between the amounts paid and payable in cash and the amounts paid and payable otherwise than in cash;

(v) the address of the registered or principal office or website in the country of incorporation;

(vi) the address of the principal place of business in Ghana including an electronic mail address, digital address, the post office box number and the telephone contact; and

(vii) the name and address in Ghana of a person, in this Act referred to as a process agent, authorised by the company co accept service of process and other documents on behalf of the company; and

 (c) a statement duly notarised in the jurisdiction of origin of the company giving the following particulars regarding the beneficial owners of the company:

(i) the full name and any former or alternate name;

(ii) the date and place of birth;

(iii) the telephone number;

(iv) the nationality and national identity number or passport number or any other appropriate identification;

(v) the residential and postal address;

(vi) the nature of the interest including the details of any legal, financial, security, debenture or informal arrangement giving rise to the beneficial ownership; and

(vii) a confirmation as to whether the beneficial owner is a politically exposed person; and

 (d) the particulars, and copies, of the charges on the property of the company that are required to be delivered for registration in accordance with section 337, or, if there are no charges, a statement in the prescribed form to that effect.

(2) The Registrar shall register the documents in the register of external companies and publish the particulars contained in the statement referred to in paragraph (b) of subsection (1) in the Companies Bulletin.

(3) For the purposes of paragraphs (b) and (c) of subsection (1)

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

 (b) reference to a former name does 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 woman, the name by which she was known before the marriage.

331. Notice of alteration of registered particulars

(1) Where an alteration is made in the certificate of incorporation and where applicable a copy of the constitution, charter, statutes, regulations, memorandum and articles, or any other instrument referred to in paragraph (a) of subsection (1) of section 330, the company shall deliver to the Registrar for registration, notice in the prescribed form giving details of the alteration within two months of the effective date of the alteration.

(2) Where an alteration is made in any of the particulars contained in the statement referred to in paragraph {b) or (c) of subsection (1) of section 330, the company shall deliver to the Registrar for registration notice in the prescribed form giving details of the alteration within the times prescribed by subsection (3) or (4).

(3) In the case of an alteration in any of the particulars referred to in subparagraph (i), (ii), (iv) or (v) of paragraph (b) or (c) of subsection (1) of section 330, the notice required by subsection (2) shall be delivered to the Registrar within two months after the effective date of the alteration.

(4) In the case of an alteration in any of the particulars referred to in subparagraph (iii), (vi) or (vii) of paragraph (b) of subsection (1) of section 330, the notice required by subsection (2) shall be delivered to the Registrar within twenty-eight days of the date of the alteration, and the Registrar shall publish the particulars in the notice in the Companies Bulletin.

332. Local manager

(1) An external company may appoint a person as the local manager of the external company in a statement or notice delivered to the Registrar under this Act.

(2) A person is eligible to be appointed a local manager of an external company if that person is eligible to be appointed a director of a company formed in the Republic under this Act.

(3) The acts of a person registered as the local manager of an external company while carrying on the business in the Republic of that company shall bind the company unless the local manager does not have authority so to act, and the person with whom the local manager was dealing had actual knowledge of the absence of authority, or, having regard to the position of the local manager with or relationship to the company, ought to have known of the absence of authority.

(4) The scope of authority of the local manager shall be filed with the Registrar.

333. Service on external company

(1) A process or any other document shall be sufficiently served on an external company if

 (a) delivered or sent through an electronic address provided by the company to the Registrar or delivered or sent by post to the person last registered as the process agent of the company at the last registered address of that agent, even if the process agent refuses to accept service or the company has ceased to maintain a place of business in the Republic; or

 (b) sent by facsimile machine to a telephone number used for the transmission of documents by facsimile at the registered office of the company, or address for service or the head office or principal place of business of the company.

(2) Subsection (1) does not apply to service of a document,

 (a) if the company was struck off the register of external companies under section 340 more than six years previously;

 (b) if one person was last registered as process agent and that person is dead or, in the case of a body corporate, dissolved; or

 (c) if two or more persons were last registered as process agents and each of those persons is dead, or in the case of a body corporate, dissolved.

(3) Where,

 (a) a registration of the name and address of a person as the process agent of an external company has not been effected, or

 (b) subsection (1) does not apply by reason of paragraph (b) or

 (c) of subsection (2), a process or any other document shall be sufficiently served on the company if delivered or sent by post to a place of business of the company in the Republic or, if the company has ceased to have a place of business in the Republic, to the registered office or principal place of business of the company in the country of incorporation.

(4) A document co be served by post on an external company shall be posted within a period that will admit of the document being delivered in due course of delivery within the time prescribed for the service of the document.

(5) In proving service, it shall be sufficient to prove that a letter containing the document was properly addressed, prepaid, and posted, whether or not by registered post.

(6) Where it is proved that a document was in face received by

 (a) a local manager or a process agent,

 (b) the board of directors of the external company, or

 (c) the managing director or Company Secretary of the external company, the document shall be deemed to have been served on that company although service may not have been effected in accordance with subsections(4) and (5).

(7) This section shall not derogate from the power of a Court co direct how service shall be effected of a document relating to legal proceedings before that Court.

334. Financial statements of external company

(1) An external company shall, once in every year at intervals of not more than fifteen months, make out and deliver to the Registrar for registration, a statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, in the form and containing the particulars of financial statements which, under paragraph (a) of subsection (1) of section 128, the directors would have been required to send to the members and debenture holders of the company if it were a company formed in Ghana under this Act.

(2) The Registrar may accept for registration statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows prepared in the form required under the law of the place of the incorporation of the company if, in the opinion of the Registrar, the financial statements give substantially the same, or greater, information as that required to be given in the financial statements referred to in section 128.

(3) The financial statements mentioned in subsection (1) shall be in the English language.

(4) Although the statement of financial position and the statement of comprehensive income prepared in the form required under the law of the place of the incorporation of the company do not give substantially as much information as that required in the statement of financial position referred to in section 130, the Registrar may, nevertheless agree to accept the financial statements for registration in compliance with subsection (1) but in that event, subject co subsection (7), the company shall also deliver co the Registrar for registration, in the English language

 (a) a statement of comprehensive income, made out as nearly as may be in the form and containing the particulars required by section 129 and giving a true and fair view of the profit or loss, during the period co which the statement relates, on the operations of the company in the Republic as if the operations had been conducted by a separate company formed in the Republic under this Act;

 (b) a statement as at the end of the financial year of the company showing the assets of the company locally situated in the Republic classified, distinguished and valued in accordance with section 130 and Part Two of the Sixth Schedule, and the nature and amount of the specific charges on the assets; and

 (c) a report on the account and statement referred to in paragraphs (a) and (b) of this subsection by an auditor qualified in accordance with section 138 stating that in the opinion of the auditor and to the best of the information available the accounts and statements are in accordance with the books and records of the company and give the information required by this Act in the manner required and give a true and fair view of the matters stated.

(5) Subsection (4) does not apply to a company which,

 (a) has at any time made in the Republic an invitation to the public to acquire any of shares or debentures of the company or to deposit money with the company; or

 (b) has issued shares or debentures which are for the time being dealt in on a stock exchange in the Republic.

(6) In the statement of comprehensive income referred to in paragraph (a) of subsection (4), the company is entitled to make the apportionments and to add the notes and explanations that, in the opinion of the company, are necessary or desirable in order to give a true and fair view of the profit or loss on the operations of the company in the Republic and for this purpose may debit a reasonable rate of interest on capital employed in the Republic.

(7) Although the Registrar agrees to accept a statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows under subsection (4), the Registrar may waive compliance with paragraphs (a), (b) and (c) of that subsection or any of those paragraphs if satisfied that compliance with any of them is impracticable having regard to the nature of the operations of the company in the Republic.

(8) In relation to the accounts and statements referred to in this section, the Registrar shall have the same powers to modify the requirements of Parts One, Two and Three of the Sixth Schedule as the Registrar has in relation to companies formed in the Republic under this Act.

(9) The Minister may, in the public interest and by legislative instrument, modify in relation to an external company any of the requirements in this section for purpose of adapting them to the circumstances of the external company but a modification shall not derogate from the obligations imposed by this section to give a true and fair view of the profit or loss of the company.

335. Obligation to state name of external company

(1) An external company shall,

 (a) conspicuously exhibit on every place where it carries on business in Ghana the company name, the country in which the company is incorporated, and, if the liability of the members is limited, the fact that it is so limited; and

 (b) state the name of the company and of the country in which the company is incorporated and if the liability of the members is limited that fact that it is so limited, in legible letters at the head of the business letters of the company despatched in Ghana.

(2) Where the name of the company is in a foreign language, the requirements of this section relating to the name of the company are fulfilled if the company exhibits and states a translation of the name in a language acceptable to the Registrar.

(3) The fact that the word "limited", or its equivalent in a foreign language, forms part of the name of the company is not sufficient compliance with the obligations imposed by this section relating to the exhibition and stating of the fact that the liability of the members is limited.

336. Publication of names of local managers

(1) An external company shall, in its trade circulars and business letters on or in which the name of the company appears and which are despatched in the Republic by or on behalf of the company, state in legible letters with respect to each local manager,

 (a) the present forename or initial and the present surname of the local manager, and

 (b) any former forename or surname of the local manager.

(2) If special circumstances exist which render it in the opinion of the Registrar expedient that an exemption should be granted, the Registrar may, in consultation with the Board, grant, subject to the conditions specified in the Companies Bulletin, exemption from the obligations imposed by this section in respect of a company.

(3) Subsection (3) of section 330 applies to this section.

337. Registration of particulars of charges

(1) Part L of Chapter Two extends to charges on property in the Republic which are, or have been, created, and to charges on property in the Republic which is acquired, by an external company.

(2) For the purposes of subsection (1), particulars of charges created before the date when the external company had an established place of business in the Republic, shall be deemed to be duly registered if particulars of those charges are duly delivered to the Registrar for registration in accordance with section 330 and the failure to register any of the charges shall not affect the validity of the charge.

338. Winding up of external company

(1) Where, in the case of an external company,

 (a) a winding up order is made by a court of the country in which the company is incorporated, or

 (b) a resolution is passed or other appropriate proceedings are taken in that country to lead to the voluntary winding up of the company, or

 (c) the company is dissolved or otherwise ceases to exist according to the law of the country in which it was incorporated, the local manager or process agent of the company shall, within twenty-four hours after that event, give notice in the prescribed form of that event to the Registrar who shall register same and publish the particulars contained in the notice in the Companies Bulletin, and in any other medium.

(2) Where an event referred to in paragraph (a) or (b) of subsection (1) has occurred, the local manager of the company shall, on every invoice, order or business letter issued in the Republic by or on behalf of the company, which is a document on or in which the name of the company appears, indicate in legible letters to the effect that the company is being wound up in the country where it is incorporated.

(3) Where a person has served the Registrar with a notice in accordance with section (1), that person shall cease to carry on business or purport to carry on business on behalf of a company specified in subsection (1).

(4) A person who in the Republic carries on, or purports to carry on, business on behalf of the company after the date on which it was dissolved or has otherwise ceased to exist in the country in which it was incorporated, is liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which that person continues so to do.

(5) This section does not derogate from the provisions of the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) enabling an external company, whether or not the external company has been dissolved or has otherwise ceased to exist according to the law of the country in which it was incorporated, to be wound up under that Act.

(6) A liquidator of an external company or a person exercising the powers and functions of such a liquidator shall

 (a) before any distribution of the assets of the external company is made, by advertisement in a newspaper circulating generally in each country where the external company had been carrying on business before the liquidation and where no liquidator has been appointed for that place, invite all creditors to make their claims against the external company within a reasonable time before the distribution;

 (b) nor, subject to the provisions of the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180), without leave of the Court, pay out any creditor to the exclusion of any other creditor; and

 (c) unless the Court otherwise directs, only recover and realise the assets of the external company in Ghana and shall subject to paragraph (b) and to the provisions of the Bodies Corporate (Official Liquidations Act) 1963, (Act 180) pay the net amount so recovered and realised to the liquidator of that external company for the place where the external company was formed or incorporated after paying any debts and satisfying any liabilities incurred in Ghana by the external company.

(7) Where an external company has been wound up so far as the assets of the external company in Ghana are concerned and there is no liquidator for the place of the incorporation or origin of the company, the liquidator may apply to the Court for directions as to the disposal of the net amount recovered under paragraph (c) of subsection (6).

(8) Where a report has been made by an inspector under this Act regarding an external company, the Registrar may apply to the Court for an order for the winding-up of the affairs of the company in so far as they relate to the assets of the company in Ghana.

(9) Where on an application, an order is made for the affairs of the company to be wound up, so far as assets in Ghana are concerned, the company shall not carry on business or establish or keep a place of business in Ghana unless the Court directs otherwise.

339. Winding up of external company in specified business

In the case of an external company that is

 (a) a deposit-taking business under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930);

 (b) a collective investment scheme; or

 (c) a life insurance company under the Insurance Act, 2006 (Act 724) the Court, shall, after providing for all interested parties to have the opportunity of being heard, determine whether the assets of the company in Ghana should be segregated in order to first effect payment rateably of the debts of the company in Ghana and the amounts payable to depositors, investors in the mutual fund company and life insurance beneficiaries, in priority to any payment being made in relation to debts and liabilities to other parties outside Ghana.

340. Cessation of business of external company

(1) Where an external company ceases to have an established place of business in the Republic, it shall within twenty-eight days after so ceasing, give notice of the cessation to the Registrar in the prescribed form in duplicate and the Registrar shall register the cessation and publish a copy of the notice in the Companies Bulletin.

(2) The Registrar shall then strike the name of the company off the register of external companies.

(3) After notice is given to the Registrar in accordance with subsection (1) and so long as the company does not have an established place of business in the Republic except as provided in subsection (6), a person shall not be under an obligation to deliver a document relating to the company to the Registrar pursuant to sections 329 to 338.

(4) Where the Registrar has reasonable cause to believe that an external company has ceased to have a place of business in the Republic, the Registrar may send by registered post to the registered local manager and process agent and, if more than one, to all of those persons, a letter enquiring whether the company is maintaining an established place of business in the Republic.

(5) Where the Registrar receives an answer to the effect that the company has ceased to have an established place of business in the Republic or does not, within three months, receive a reply, the Registrar may strike the name of the company off the register of external companies.

(6) At any time within six years after the date on which the company was struck off, the register of external companies under subsections (1) and (2) or (4) and (5), a person has the right to inspect the documents relating to that company.

(7) During the six years after the date on which the company was struck off the register of external companies, the company shall, despite subsection (3) continue to be under the obligation imposed by section 331 to give notice of an alteration in the names of the process agent of the company.

341. Penalties and disabilities

(1) Where an external company or a local manager or process agent of an external company fails to comply with any of the obligations imposed on that external company or that local manager or process agent by sections 330 to 337, the external company and a local manager or process agent that is in default is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units or, in the case of a continuing default, five penalty units for each day during which the default continues.

(2) Where there is a default in delivering to the Registrar a document for registration pursuant to sections 330 to 340, the rights of the external company concerned under or arising out of a contract made in the Republic during the time that the default continues shall not be enforceable by action or any other legal proceedings.

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

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

 (b) that subsection does not affect the rights of any other parties against the external company in respect of the contract;

 (c) if an action or a proceeding is commenced by any other party against the external company to enforce the rights of that party in respect of that contract, subsection (2) shall not preclude the external company from enforcing in that action or proceeding by way of counterclaim, set off or otherwise, the rights that external company has against that party in respect of that contract.

342. Control of public invitations relating to external companies

(1) Where a person makes in the country an invitation to the public to acquire or dispose of shares or debentures of an external company or to deposit money with an external company for a fixed period or payable at call, whether bearing or not bearing interest, subject to any other provisions of this Act, Part X of Chapter Two and Part A of Chapter four shall apply as if the external company were a public company within the meaning of this Act.

(2) An invitation and a prospectus relating to that invitation shall be deemed to comply with this Act to the extent that the Commission has waived or modified any of the requirements.

(3) Where the invitation to the public is a general invitation within the meaning of section 305, the prospectus, in addition to complying with the Tenth Schedule subject to the modifications made in accordance with subsection (2) and subject to section 306, shall also contain particulars with respect to

 (a) the instrument constituting or defining the constitution of the company;

 (b) the enactments, or provisions having the force of an enactment, by or under which the incorporation of the company was effected;

 (c)a n address in the Republic where copies of the documents referred to in paragraphs (a) and (b) or, if those documents are in a foreign language, certified translations of those documents can be inspected; and

 (d) the date on which and the country in which the company was incorporated.

(4) A prospectus registered and an advertisement or a circular published in connection with that invitation shall state the country in which the external company is incorporated and the address of the principal place of business in the Republic.

(5) Unless this section is complied with, the making of the invitation is a breach of section 294.

343. Control of public invitations relating to other non-Ghanaian companies

(1) For the purposes of this section and of section 295 the expression "non-Ghanaian company" means an association incorporated or to be incorporated outside the Republic which is not an external company as defined in section 329.

(2) Where a person makes in Ghana an invitation to the public which is,

 (a) a general invitation, as defined by section 305 to acquire shares or debentures of a non-Ghanaian company, or

 (b) an invitation to deposit money with a non-Ghanaian company for a fixed period or payable at call whether bearing or not bearing interest, subject to any other provision of this Act, Part X of Chapter Two and Part A of Chapter Four shall apply as if the non-Ghanaian company were a public company within the meaning of this Act, and subsections (2) and (3) of section 342 apply as if that company were an external company.

(3) A prospectus, an advertisement or a circular registered or published in connection with that invitation shall state the country in which the non-Ghanaian company is incorporated and, if the liability of the members is limited shall so state.

(4) Unless this section is complied with, the making of the invitation is a breach of section 294.

(5) Sections 313, 314, 317 and 318 shall apply in relation to an invitation to the public to acquire or dispose of any shares or debentures of a non-Ghanaian company, whether or not an invitation of the types referred to in subsection (2) and sections 316, 317 and 318 shall apply in relation to an invitation to the public to deposit money with a non-Ghanaian company, as if the company were a public company within the meaning of this Act.

CHAPTER SIX-SUPPLEMENTARY

Part A: Miscellaneous Offences

344. Inducing persons to invest

(1) A person who by a statement, promise or forecast which is untrue, misleading, false or deceptive induces or attempts to induce another person co enter into or offers to enter into,

 (a) an agreement for or with a view to acquiring, disposing of, or underwriting, securities, or lending or depositing money to or with a body corporate, or

 (b) an agreement the purpose or purported purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities, commits an offence and is liable on summary conviction to a term of imprisonment of not less than three years and not more than seven years unless the accused person proves that the accused person had reasonable grounds to believe and did believe that the statement was true or that the promise or forecast was not misleading, false or deceptive.

(2) A person who, by a dishonest concealment of material facts induces or attempts to induce another person to enter into any of the transactions referred to in subsection (1) commits an offence and on summary conviction is subject to the punishment prescribed by subsection (1).

345. Penalty for false statements

(1) A person who in any return, report, certificate, account, or other document required under a provision of this Act to be sent to the Registrar wilfully makes a false statement, knowing it to be false, 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 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.

(2) Subsection (1) does not affect the liability of a body corporate or any other person under any other section of this Act or any other enactment but the penalties imposed by this section shall be alternative, and not additional, to the penalties imposed by the other section or enactment.

346. Penalty for improper use of "incorporated" or "limited"

Where any person trades or carries on business in the Republic under a name or title of which

 (a) the words "incorporated", "corporation" or any contraction or imitation of those words or an equivalent in any other language forms part, or

 (b) the word "limited" or a contraction or an imitation of those words or an equivalent in any other language is the last word, that person is, unless duly incorporated under this Act or any other enactment and, where "limited" or a contraction or an imitation of that word is the last word, unless duly incorporated with limited liability, liable to pay to the Registrar, an administrative penalty of twenty-five penalty units for each day during which that name or title has been or is used.

347. Publication of misleading statements regarding shares or capital

(1) A body corporate shall not state the number of the authorised or issued shares or the amount of the stated capital in any notice, advertisement, business letter or other publication of the body corporate unless the statement includes with equal prominence accurate particulars of the number of shares issued, and of the stated and paid up capital of the body corporate.

(2) In the event of a breach of subsection (1), the body corporate and an officer of the body corporate that is in default is liable to pay to the Registrar, an administrative penalty of seven hundred and fifty penalty units.

Part B: Legal Proceedings
348. Costs in actions by limited companies

Where a body corporate with limited liability is the plaintiff in legal proceedings the Court may, if it appears by credible evidence that there is reason to believe that the body corporate will be unable to pay the costs if the defendant is successful, require sufficient security to be given for the costs, and may stay the proceedings until the security is given.

349. Contribution between joint wrongdoers

(1) Where more than one officer of a body corporate or any other persons are liable to pay damages, costs, compensation, debt, or monetary penalty under, or in respect of a breach of a section of this Act, the persons shall have a right of contribution amongst themselves.

(2) In an action to enforce liability or in an action to recover contribution, the Court may award contribution on the terms that it considers equitable in all the circumstances and may exempt a person from liability to make contribution, or direct that the contribution to be recovered from any persons shall amount to a complete indemnity.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close