PART II - Distribution Of Capital And Liability Of Members.

Distribution Of Capital

Nature and interest in company

45. The shares or other interest of any member in a company under this Act

shall be personal state, capable of being transferred in manner provided by the

regulations of the company, and shall not be of the nature in real estate; and each

share shall, in case of a company having a capital divided into shares, be

distinguished by its appropriate number.

Definition of "member".

46. The subscribers of the Memorandum of Association of any company

under this Act shall be deemed to have agreed to become members of the

company whose Memorandum they have subscribed, and, upon- the registration

of the Company, shall be entered as members on the register of members

hereinafter mentioned; and every other person who has agreed to become a

member or a company under this Act, and whose name is entered on the register

or members; shall be deemed to be a member of the company.

Transfer by personal representative.

47.Any transfer of the share or other interest of a deceased member of a

company under this Act, made by his personal representative, shall,

notwithstanding such personal representative may not himself be a member, be

of the same validity as if he had been a member at the time of execution of the

instrument of transfer.

Register of members.

48.(1)Every company under this Act shall cause to be kept in one or more

books a register of its members, and there shall be entered therein the following

particulars -

(a)the names and addresses, and the occupations, if any, of the

members of the company, with the addition, in the case of a

company having a capital divided into shares, of a statement

of the shares held by each member, distinguishing each share

by its number, and of the amount paid, or agreed to be

considered as paid, on the shares of each member;

(b)the date at which the name of any person was entered in the

register as a member;

(c)the date at which any person ceased to be a member.

(2)Any company acting in contravention of this section shall incur a penalty

not exceeding twenty-four dollars for every day during which its default in

complying with the provisions of this section continues, and every director or

manager of the company who shall knowingly and wilfully authorize and permit

such contravention shall incur the like penalty.

Annual list of members and summary.

49. (1)Every company having a share capital shall make a list of all

persons who on the 30th day following the date of incorporation of the company

and subsequently on the 30th day of June in every year following the year of

incorporation of the company are members of the company, and of all persons

who have ceased to be members since the date of the last return or, in the case of

the first return, of the incorporation of the company.

(2)The list shall state the names, addresses, and occupations of all past and

present members therein mentioned, and the numbers of shares held by each of

the existing members at the date of the return specifying shares transferred since

the last return or (in the case of the first return) of the incorporation of the

company by persons who are still members and have ceased to be members

respectively and the dates of registration of the transfers, and shall contain a

summary distinguishing between shares issued for cash and shares issued as

fully or partly paid up otherwise than in cash, and specifying the following

particulars: -

(a)the amount of the share capital of the company, and the

number of the shares into which it is divided;

(b)the number of shares taken from the commencement of the

company up to the date of the return;

(c)the amount called up on each share;

(d)the total amount of calls received;

(e)the total amount of calls unpaid;

(f)the total amount of the sums (if any) paid by way of

commission in respect of any shares or debentures, or

allowed by way of discount in respect of any debentures,

since the date of the last return;

(g)the total number of share forfeited;

(h)the total amount of shares or stock for which share warrants

are outstanding at the date of the return;

(i) the total amount of share warrants issued and surrendered

respectively since the date of the last return;

(j)the number of shares or amount of stock comprised in each

share warrant;

(k) the names and addresses of the persons who at the date of

the return are the directors of the company, or occupy the

position of directors, by whatever name called; and

(l)the total amount of debt due from the company in respect of

all mortgages and charges which are required to be registered

with the Registrar under this Act.

(3)The summary shall also (except where the company is a private company)

include -

(a)a statement made up to such date as may be specified in the

statement, in the form of a Balance Sheet, audited by the

company's auditors, and containing a summary of its share

capital, its liabilities and its assets, giving such particulars as

will disclose the general nature of these liabilities and assets,

and how the values of the fixed assets have been arrived at;

(b)a further statement showing what part, if any, of the issued

capital of the company consists of redeemable shares and the

earliest date on which the company has power to redeem

those shares.

(4)The above list and summary must be contained in a separate part of the

register of members and not later than thirty days of the date of the first return

and not later than the 30th day of September in each year following the year of

incorporation the company shall forward to the Registrar a copy signed by a

director or manager or secretary of the company.

Penalty on company not forwarding list to Registrar.

50.Any company under this Act, having a capital divided into shares, makes

default in complying with the provisions of this Act, with respect to forwarding

such list of members or summary as is hereinbefore mentioned to the Registrar,

such company will incur the penalties specified hereinafter -

Period of DefaultPenalty V per Centum

Not exceeding 1 month 20% fee payable for filing such document.

Exceeding 1 month but 50% of fee payable for filing such

not exceeding 3 months document.

Exceeding 3 months but 100% of fee payable for filing such

not exceeding 12 month document.

Exceeding 12 months 100% of fee payable for filing such

document for each year of default,

and every director and manager of the company who shall knowingly and

wilfully authorize or permit such default shall incur the like penalty.

Company to give notice of consolidation or of conversion

of capital into stock

51.Every company under this Act, having a capital divided into shares, that

has consolidated and divided its capital into shares of larger amount than its

existing shares, or converted any portion of its capital into stock, shall give notice

to the Registrar, of such consolidation, division, or conversion, specifying the

shares so consolidated, divided, or converted.

Effect of conversion of shares into stock.

52.Where any company under this Act, and having a capital divided into

shares, has converted any portion of its capital into stock, and given notice of

such conversion to the Registrar, all the provisions of the provisions of this Act

which are applicable to shares only shall cease as to so much of the capital as is

converted into stock; and the register of members to be forwarded to the

Registrar, shall show the amount of stock held by each member in the list,

instead of the amount of shares and the particulars relating to shares hereinbefore

required.

No trusts on register.

53. No notice of any trust expressed, implied or constructive, shall be entered

on the register, or be receivable by the Registrar, in the case of companies

registered under this Act.

Certificate of shares or stock.

54. A certificate, under the common seal of the company, specifying any share

or shares or stock held by any member of a company, shall be prima facie

evidence of the title of the member to the share or shares or stock therein

specified.

Inspection of register

55.The register of members, commencing from the date of the registration of

the company, shall be kept at the registered office of the company hereinafter

mentioned; except when closed as hereinafter mentioned, it shall during business

hours, but subject to such reasonable restrictions as the company in general

meeting may impose, so that not less than two hours in each day be appointed for

inspection, be open to the inspection of any member gratis, and to the inspection

of any other person on the payment of twenty-four cents, or such less sum as the

company may prescribe, for, each inspection; and every such member or other

person may require a copy of such register, or of any part thereof, or of such list

or summary of members as in hereinbefore mentioned, on payment of twelve

cents for every hundred words required to be copied. If such inspection or copy

is refused, the company shall incur for each refusal a penalty not exceeding nine

dollars and sixty cents for every day during which such refusal continues and

every director and manager of the company who shall knowingly authorize or

permit such refusal shall incur the like penalty; and, in addition to the above

penalty, the Court may, by order, compel an immediate inspection of the register.

Power to close register

56.Any company under this Act may, upon giving notice by advertisement in

the Gazette or other paper used for official notification, and in some paper, if any,

circulating in the Territory, close the register of members for any time or times

not exceeding in the whole thirty days in each year.

Notice of increase of capital and of members to be given to Registrar

57.Where a company has a capital divided into shares, whether such shares

may or may not have been converted into stock, notice of any increase in such

capital beyond the registered capital, and where a company has not a capital

divided into shares, notice of any increase in the number of members beyond the

registered number, shall be given to the Registrar, in the case of an increase in

capital, within thirty days from the date of the passing of the resolution by which

such increase has been authorized; and, in the case of an increase of members,

within thirty days from the time at which such increase of members has been

resolved on or has taken place, and the Registrar shall forthwith record the

amount of such increase of capital or members. If such notice is not given within

the time period aforesaid, the company in default shall incur a penalty not

exceeding one hundred dollars for every day during which such neglect to give

notice continues; and every director and manager of the company who shall

knowingly and wilfully authorize or permit such default shall incur the like

penalty.

Remedy for improper entry, or omission of entry, in register.

58.If the name of any person is, without sufficient cause entered in or omitted

from the register of members of any company under this Act, or if default is

made or unnecessary delay takes place in entering on the register the fact of any

person having ceased to be a member of the company, the person or member

aggrieved, or any member of the company, or the company itself, may apply to

the Court for an order that the register may be rectified; and the Court may either

refuse such application, with or without cost, to be paid by the applicant, or may,

if satisfied of the justice of the case, make an order for the rectification of the

register, and may direct the company to pay all the costs of such motion,

application or petition, and any damages the party aggrieved may have sustained.

The Court may, in any proceeding under this section, decide on any question

relating to the title of any person who is a party to such proceeding to have his

name entered in or omitted from the register, whether such question arises

between two or more members or alleged members, or between any members or

alleged members and the company, and generally the Court may in any such

proceeding decide any question that it may be necessary or expedient to decide

for the rectification of the register: Provided that the Court may direct an issue to

be tried, on the trial of which any question of law may be raised for the decision

of the Court of Appeal.

Notice to Registrar of rectification of register.

59.Whenever any order has been made rectifying the register, in the case of a

company hereby required to send a list of its members to the Registrar, the Court

shall, by order, direct that due notice of such rectification be given to the

Registrar.

Register to be evidence.

60.The register of members shall be prima facie evidence of any matters by

this Act directed or authorized to be inserted therein.

Reserve capital of company, how provided.

61.(1) An unlimited company may, by the resolution passed by the members

when assenting to registration as a limited company under this Act, and for the-

purpose of such registration or otherwise, increase the nominal amount of its

capital by increasing the nominal amount of each of its shares: Provided that no

part of such increased capital shall be capable of being called up, except in the

event, and for the purposes, of the company being wound up.

(2)In cases where no such increase of nominal capital may be resolved upon,

an unlimited company may, by such resolution as aforesaid, provide that a

portion of its uncalled capital shall not be capable of being called up except in the

event, and for the purposes of the company being wound up.

(3)A limited company may, by special resolution, declare that any portion of

its capital which has not been already called up shall not be capable of being

called up, except in the event, and for the purposes, of the company being wound

up; and, thereupon, such portion of capital shall not be capable of being called up,

except in the event, and for the purposes, of the company being wound up.

Liability Of Members

Liability of present and past members of company.

62.In the event of a company formed under this Act being wound up, every

present and past member of such company shall be liable to contribute to the

assets of the company to an amount sufficient for payment of the debts and

liabilities of the company, and the costs, charges, and expenses of the winding

up, and for the payment of such sums as may be required for the adjustment of

the rights of the contributories amongst themselves, with the qualifications

following, that is to say -

(a)No past member shall be liable to contribute to the assets of

the company if he has ceased to be a member for a period of

one year or upwards prior to the commencement of the

winding up;

(b)No past member shall be liable to contribute in respect of any

debt or liability of the company contracted after the time at

which he ceased to be a member;

(c)No past member shall be liable to contribute to the assets of

the company unless it appears to the Court that the existing

members are unable to satisfy the contributions required to be

made by them in pursuance of this Act;

(d) In the case of a company limited by shares, no contribution

shall be required from any member exceeding the amount, if

any, unpaid on the shares in respect of which he is liable as a

present or past member;

(e) In the case of a company limited by guarantee, no

contribution shall be required from any member exceeding

the amount of the undertaking entered into on his behalf by

the Memorandum of Association;

(f) Nothing in this Act contained shall invalidate any provision

contained in any contract whereby the liability of individual

members upon any such contract is restricted, or whereby the

funds of the company are alone made liable in respect of such

contract;

(g)No sum due to any member of a company, in his character of

a member, by way of dividends, profits or otherwise, shall be

deemed to be a debt of the company, payable to such

member, in a case of competition between himself and any

other creditor not being a member of the company; but any

such sum may be taken into account, for the purposes of final

adjustment of the rights of the contributories amongst

themselves.

Company may have some shares fully paid and others not.

63.Nothing contained in this Act shall be deemed to prevent any company

under this Act, if authorized by its regulations as originally framed, or as altered

by special resolution, from doing any one or more of the following things -

(a) making arrangements on the issue of shares for a difference

between the holders of such shares in the amount of calls to

be paid, and in the time of payment-of such calls;

(b) accepting from any member of the company who assents

thereto the whole or part of the amount remaining unpaid on

any share or shares held by him, either in discharge of the

amount of a call payable in respect of any other share or

shares held by him, or without any call having been made;

(c) paying dividends in proportion to the amount paid up in each

share in cases where a larger amount is paid up on some

shares than on others.

Manner in which shares are to be issued and held

64. Every share in any company shall be deemed and taken to have been

issued and to be held subject to the payment of the whole amount thereof in cash,

unless the same shall have been otherwise determined by a contract duly made in

writing and filed with the Registrar within thirty days of the issue of such shares:

Provided that in case of default in delivering to the Registrar within thirty days of

such issue of any document required to be delivered by this section, the company

or any officer liable for default may apply to the Court for relief, and the Court, if

satisfied that the omission to deliver was accidental or due to inadvertence or that

it is just and equitable to grant relief may make an order extending the time for

the delivery of the document for such period as the Court may think proper.

Transfer may be registered at request of transferor.

65.A company shall, on the application of the transferor of any share or

interest in the company enter in its register of members the name of the transferee

of such share or interest, in the same manner and subject to the same conditions

as if the application for such entry were made by the transferee.

Share Warrants To Bearer

Warrant of limited shares fully paid up may be issued in name of bearer

66.In the case of a company limited by shares, the company, if authorized so

to do by its regulations as originally framed, or as altered by special resolution,

and subject to the provisions of such regulations, may, with respect to any share

which is fully paid up, or with respect to stock, issue under their common seal a

warrant stating that the bearer of the warrant is entitled to the share or shares of

stock therein specified, and may provide, by coupons or otherwise, for the

payment of the future dividends on the share or shares of stock included in such

warrant, hereinafter referred to as a share warrant.

Effect of share warrant

67.A share warrant shall entitle the bearer of such warrant to the shares or

stock specified in it and such shares or stock may be transferred by the delivery

of the share warrant.

Re-registration of bearer of a share warrant in the register

68.The bearer of a share warrant shall, subject to the regulations of the

company, be entitled, on surrendering such warrant for cancellation, to have his

name entered as a member in the register of members, and the company shall be

responsible for any loss incurred by any person by reason of the company

entering in its register of members the name of any bearer of a share warrant in

respect of the shares or stock specified therein without the share warrant being

surrendered and cancelled.

Regulations of the company may make the

bearer of a share warrant a member

69.The bearer of a share warrant may, if the regulations of the company so

provide, be deemed to be a member of the company within the meaning of this

Act, either to the full extent or for such purposes as may be prescribed by the

regulations: Provided that the bearer of a share warrant shall not be qualified in

respect of the shares or stock specified in such warrant for being a director or

manager of the company in cases where such a qualification is prescribed by the

regulations of the company.

Entries in register where share warrant issued

70.(1)On the issue of a share warrant in respect of any share or stock, the

company shall strike out of its register of members the name of the member

then entered therein as holding such share or stock, as if he had ceased to be a

member, and shall enter in the register the following particulars -

(a)the fact of the issue of the warrant;

(b) a statement of the shares or stock included in the warrant,

distinguishing each share by its number;

(c)the date of the issue of the warrant.

(2)Until the warrant is surrendered, the above particulars shall be deemed to

be the particulars which are required by section 48 to be entered in the register of

members of a company; and on the surrender of a warrant, the date of such

surrender shall be entered as if it were the date at which a person ceased to be a

member.

Particulars to be contained in annual summary

71.After the issue by the company of a share warrant, the annual summary

required by section 49, shall contain the following particulars: the total amount of

shares or stock for which share warrants are outstanding at the date of the

summary, and the total amount of share warrants which have been issued and

surrendered respectively since the last summary was made, and the number of

shares or amount of stock comprised in each warrant.

Penalties on persons committing forgery

72.Whosoever forges, or alters, or offers, utters, disposes of, or puts off,

knowing the same to be forged or altered, any share warrant or coupon,, or any

document purporting to be share warrant or coupon, issued in pursuance of this

Act, or demands or endeavours to obtain or receive any share or interest of or in

any company under this Act, or to receive any dividend or money payable in

respect thereof, by virtue of any such forged or altered share warrant, coupon or

document, purporting as aforesaid, knowing the same to be forged or altered,

with intent in any of the cases aforesaid to defraud, shall be guilty of felony, and

shall be liable to be imprisoned for any term not exceeding two years with or

without hard labour.

Penalties on person falsely personating owner of shares

73.Whosoever falsely and deceitfully personates any owner of any share or

interest of or in any company, or of any share warrant or coupon issued in

pursuance of this Act, and thereby obtains or endeavours to obtain any such share

or interest, or share warrant or coupon, or receives or endeavours to receive any

money due to any such owner, as if such offender were the true and lawful

owner, shall be guilty of felony, and shall be liable to be imprisoned for any term

not exceeding two years with or without hard labour.

Penalties on persons engraving plates, etc.

74.Whosoever, without lawful authority or excuse, the proof whereof shall be

on the party accused, engraves or makes upon any plate, wood, stone or other

material any share warrant or coupon, purporting to be a share warrant or coupon

issued or made by any particular company under and in pursuance of this Act, or

to be a blank share warrant, or coupon issued or made as aforesaid or to be a part

of such a share warrant or coupon, or uses any such plate, wood, stone or other

material, for the making or printing any such share warrant or coupon, or any

such blank share warrant or coupon or any part thereof respectively, or

knowingly has in his custody or possession any such plate, wood, stone, or other

material, shall be guilty of felony, and shall be liable to be imprisoned for any

term not exceeding two years with or without hard labour.

Contracts

Contracts how made

75.(1)Contracts on behalf of any company under this Act may be made as

follows, that is to say -

(a)Any contract which, if made between private persons, would

be by law required to be in writing, and, if made according to

the law in the Territory, to be under seal, may be made on

behalf of the company in writing under the common seal of

the company, and such contract may be in the same manner

varied or discharged;

(b) Any contract which, if made between private persons, would

be by law required to be in writing, and signed by the parties

to be charged therewith, may be made on behalf of the

company in writing signed by any person acting under the

express or implied authority of the company, and such

contract may in the same manner be varied or discharged;

(c)Any contract which, if made between private persons, would

by law be valid, although made by parole only, and not

reduced into writing, may be made by parole on behalf of the

company by any person acting under the express or implied

authority of the company, and such contract may be in the

same way varied or discharged.

(2)All contracts made according to the provisions herein contained shall be

effectual in law, and shall be binding upon the company and their successors, and

all other parties thereto their heirs, executors, or administrators as the case may

be.

Prospectus, etc. to specify dates and names of parties to any contract made prior to issue of such prospectus, etc.

76.Every prospectus of a company, and every notice inviting persons to

subscribe for shares in any joint stock company, shall specify the dates and the

names of the parties to any contract entered into by the company, or the

promoters, directors, or trustees thereof, before the issue of such prospectus or

notice, whether subject to adoption by the directors or the company, or otherwise;

and any prospectus or notice not specifying the same shall be deemed fraudulent

on the part of the promoters, directors, and officers of the company knowingly

issuing the same, as regards any person taking shares in the company on the faith

of such prospectus, unless he shall have had notice of such contract.