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Trinidad and Tobago Companies Act

COMPANY LAWS OF TRINIDAD AND TOBAGO

An Act to revise and amend the law relating to companies and to provide for related and consequential matters.

PART I - PRELIMINARY

Short title

1. This Act may be cited as the Companies Act.

Commencement. 68/1997.

2. This Act came into operation on 15th April 1997.

Prohibited associations.

3. No association, society, body or other group consisting of more than ten persons may be formed for the purpose of carrying on any trade or business for gain unless it is—

(a) incorporated under this Act;

(b) formed under some other written law; or

PART II - CONSTRUCTION AND INTERPRETATION OF ACT

Interpretation. [5 of 1997].

4. In this Act, unless the context otherwise requires—

“affairs” means, in relation to any company or other body corporate, the relationship among the company or body corporate, its affiliates and the shareholders, directors and officers thereof, but does not include any businesses carried on by the companies or other bodies corporate;

“affiliate” means an affiliated body corporate within the meaning of section 5;

“articles” means, unless qualified, the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of continuance, articles of re-organisation, articles of dissolution, and articles of revival;

“associate”, when used to indicate a relationship with any person, means—

(a) a body corporate of which that person beneficially owns or controls, directly or indirectly, either shares or securities currently convertible into shares, carrying more than twenty per cent of the voting rights—

(i) under all circumstances;

(ii) by reason of the occurrence of an event that has occurred and is continuing, or a currently exercisable option or right to purchase such shares or such convertible securities;

(b) a partner of that person acting on behalf of the partnership of which they are partners;

(c) a trust or estate, in which that person has a substantial beneficial interest or in respect of which he serves as a trustee, legal representative or in a similar capacity;

(d) a spouse or child of that person; or

(e) a relative of that person or of his spouse if that relative has the same residence as that person;

“auditor” includes a partnership of auditors;

“beneficial interest” means an interest arising out of the

beneficial ownership of shares or debentures;

“beneficial ownership” includes ownership through a trustee, legal representative, agent or other intermediary;

“body corporate” includes a company or other body corporate wherever or however incorporated, other than a corporation sole;

“Bye-laws” means the Bye-laws of a company made under section 66;

“commencement date” means the 15th April, 1997;

“Commission” means the Securities and Exchange Commission established under section 3(1) of the Securities Industry Act;

“company” means a body corporate that is incorporated or continued under this Act;

“company limited by guarantee” means a company with or without a share capital whose articles set out the provisions required by section 9(2A);

“control”, in relation to a body corporate, means the power of a person to secure by means of—

(a) the holding of shares or the possession of voting power in relation to that body corporate; or

(b) any other power conferred by the articles of incorporation or other document regulating the body corporate, that the business and affairs of the body corporate are conducted in accordance with the wishes of that person;

“Court” means the High Court;

“corporate instruments” includes any statute, letters patent, memorandum of association, articles of association, certificate of incorporation, certificate of continuance, Bye-laws, Regulations or other instrument by which a body corporate is incorporated or continued or that governs or regulates the affairs of a body corporate;

“debenture” includes debenture stock and any bond or other instrument evidencing any indebtedness or guarantee of a company in respect of indebtedness whether secured or not, but shall not include a cheque, promissory note or bill of exchange or endorsement thereon, a letter of credit issued by a bank nor an instrument evidencing a deposit account issued by a financial institution or a credit union within the meaning of the Co-operative Societies Act or an insurance company;

“director”, in relation to a body corporate, means a person occupying therein the position of a director by whatever title he is called;

“external company” means any incorporated body of persons that is formed under the laws of a country other than Trinidad and Tobago;

“firm” means an unincorporated body of two or more individuals, or one or more individuals and one or more corporations, or two or more corporations, who have entered into partnership with one another with a view to carrying on business for profit;

“former Act” means the Companies Ordinance, repealed by this Act;

“former-Act company” means a company incorporated or registered under the former Act or any Act replaced by that Act;

“incorporator” means, in relation to a company, a person who signs the articles of incorporation of the company;

“legal representative”, in relation to a company, shareholder, debenture holder or other person, means a person who stands in place of and represents the company, shareholder, debenture holder or person, and without limiting the generality of the foregoing, includes, as the circumstances require, a trustee, executor, administrator, assignee, or receiver of the company, shareholder, debenture holder or person;

“liability” includes, in relation to a company, any debt of the company that arises under—

(a) section 53;

(b) section 235(2); or

“member”, in relation to a non-profit company or a company limited by guarantee, means a member of the company in accordance with the provisions of this Act and the articles and Bye-laws of the company;

“Minister” means the Minister to whom responsibility for the Registrar General’s Department is assigned;

“non-profit company” means a company without share capital;

“officer”, in relation to a body corporate means—

(a) the chairman, deputy chairman, president or vice-president of the board of directors;

(b) the managing director, general manager, comptroller, secretary or treasurer; or

(c) any other person who performs for the body corporate functions similar to those normally performed by the holder of any office specified in paragraph (a) or (b) and who is duly appointed to perform such functions;

“ordinary resolution” means a resolution passed by a majority of the votes cast by the shareholders who voted in respect of that resolution;

“prescribed” means prescribed by rules made under section 464 or Regulations made under section 507;

“public company” means a company any of whose issued shares or debentures are or were part of a distribution to the public within the meaning of section 6 but does not include a former-Act company which was not a public company under the former Act at the commencement date;

“record” includes any register, book or other record that is required to be kept by a body corporate;

“redeemable share” means a share issued by a company—

(a) that the company can purchase or redeem upon demand of the company; or

(b) that the company is required by its articles to purchase or redeem at a specified time or upon the demand of a shareholder;

“Registrar” refers to the Registrar of Companies under this Act;

“Registrar of Companies” refers to the Registrar General or any officer acting in that capacity, and in this regard section 3(1) of the Registrar General Act applies and includes any person duly authorized by the Registrar;

“relative”, in relation to a person, means—

(a) a parent, grandparent, brother, sister or spouse;

(b) a son-in-law or daughter-in-law; or

“security interest” means any interest in or charge upon any property of a company, by way of mortgage, assignment, bond, lien, pledge or other means, that is created or taken to secure the payment of a debt or the performance of any other obligation of the company;

“seal” includes a rubber stamp;

“send” includes deliver;

“series”, in relation to shares, means a division of a class of shares;

“share” includes stock;

“shareholder”, in relation to a company, means a person described in section 107(1);

“special resolution” means a resolution proposed at a meeting of the company of which not less than twenty-one days’ notice specifying the intention to propose the resolution as a special resolution has been duly given and which is—

(a) passed by a majority of not less than seventy-five per cent of the votes cast by the shareholders who voted in respect of the resolution; or

(b) reduced to writing as a special resolution and signed by all the shareholders entitled to vote on the resolution;

“stated capital account” means an account maintained pursuant to section 37;

“statutory declaration” means a declaration made under the Statutory Declarations Act;

“stock exchange” means any market where shares, bonds and other securities are traded;

“unanimous shareholder agreement” means an agreement described in section 137;

“unlimited liability company” means a company not having any limit on the liability of its members.

CORPORATE RELATIONSHIPS

5. (1) For the purposes of this Act—

(a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other, or both are subsidiaries of the same body corporate, or each of them is controlled by the same person; and

(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are affiliated with each other.

(2) For the purposes of this Act—

(a) a body corporate is the holding body corporate of another if that other body corporate is its subsidiary; and

(b) a body corporate is a subsidiary of another body corporate if it is controlled by that other body corporate.

PUBLIC DISTRIBUTION OF CORPORATE SECURITIES

Distribution to the public. [5 of 1997].

6. (1) For the purposes of this Act—

(a) a share or debenture of a body corporate is part of a distribution to the public, when, in respect of the share or debenture—

(i) there has been, under the laws of Trinidad and Tobago or any other jurisdiction, a filing of a prospectus, statement in lieu of prospectus, registration statement, stock exchange takeover bid circular or similar instrument; or

(ii) the share or debenture is listed for trading on any stock exchange wherever situated; and

(b) a share or debenture of a body corporate is deemed to be part of a distribution to the public where the share or debenture has been issued and a filing referred to in paragraph (a)(i) would be required if the share or debenture were being issued currently.

(2) For the purposes of this Act, the shares or debentures of a company that are issued upon a conversion of other shares or debentures of a company, or in exchange for other shares or debentures, are deemed to be part of a distribution to the public if any of those other shares or debentures were part of a distribution to the public.

(3) On the application of a company, the Commission may determine that shares or debentures of the company are not or were not part of a distribution to the public if the Commission is satisfied that such determination would not prejudice any shareholder or debenture holder of the company.

7. (Repealed by Act No. 5 of 1997).

PART III - FORMATION AND OPERATION OF COMPANIES DIVISION 1—INCORPORATION OF COMPANIES

Incorporation. [5 of 1997 2 of 2013].

8. (1) Subject to subsection (2), one or more persons may incorporate a company, with or without limited liability, by signing and delivering articles of incorporation to the Registrar and otherwise complying with the requirements of this Division and the name of every incorporator shall be entered in the company’s register of members as soon as may be after the company’s registration.

(2) No individual who—

(a) is less than eighteen years of age;

(b) is mentally ill, within the meaning of the Mental Health Act; or

(c) is an undischarged bankrupt, having been adjudged or otherwise declared bankrupt under any law in force in Trinidad and Tobago or elsewhere, shall form or join in the formation of a company under this Act.

(3) (Repealed by Act No. 2 of 2013).

Formalities. [5 of 1997 2 of 2013]

9. (1) Articles of incorporation shall follow the prescribed form and set out, in respect of the proposed company—

(a) its proposed name;

(b) whether the liability of its members is limited or unlimited and if the liability of its members is limited whether it is limited by shares or by guarantee or by both shares and guarantee;

(ba) whether it is a public company;

(i) if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares; and

(ii) if a class of shares can be issued in series, the authority, if any, given to the directors to fix the number of shares in, or to determine the designation of, and the rights, privileges, restrictions and conditions attaching to, the shares of each series;

(d) if the transfer or ownership of shares of the company is to be restricted, a statement to that effect and a statement as to the nature of such restrictions;

(da) whether the pre-emptive rights under section 38 with respect to the issue of shares are to be varied and, if so, a statement as to the nature of such variations; ' (db) whether the power of the directors to make, amend or repeal the Bye-laws under section 66 is restricted and, if so, a statement as to the nature of such restrictions;

(e) the number of directors, or , subject to section 73(a), the minimum and maximum number of directors;

(ea) the number of intended employees;

(eb) the main area of business activity;

(f) any restrictions on the business that the company may carry on;

(g) whether it is a non-profit company.

(2) Articles of incorporation may set out the maximum number of shares that the company is authorised to issue.

(2A) The articles of a company limited by guarantee shall also set out—

(a) that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges, and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount; and

(b) the number of members with which it is proposed to be registered.

(2B) The articles shall include a statement by an Attorney-at-law engaged in the formation of the company or by a person named in the articles or in the documents accompanying the articles as a director or secretary of the company that no signatory to the articles is an individual who is so described in section 8(2) and that there is compliance with all the requirements precedent to the formation of the company under the Act.

(3) The articles may provide for anything permitted by this Act or any other law to be provided for by the Bye-laws of the company.

Required votes.

10. (1) Subject to subsection (2), if the articles or any unanimous shareholder agreement require a greater number of votes of directors or shareholders than that required by this Act to effect any action, the provisions of the articles or of the unanimous shareholder agreement shall prevail.

(2) The articles shall not require a greater number of votes of shareholders to remove a director than the number specified in section 75.

11. An incorporator shall deliver or cause to be delivered to the Registrar with the articles of incorporation the documents required by sections 71(1), 176(1) and 481.

CERTIFICATE OF INCORPORATION

12. Upon receipt of articles of incorporation which comply with the provisions of this Act, the Registrar shall issue a certificate of incorporation in accordance with section 481 and the certificate is conclusive proof of the incorporation of the company named in the certificate.

Effective Date

13. A company comes into existence on the date shown on its certificate of incorporation.

CORPORATE NAME

14. (1) Subject to subsection (2) and section 17—

(a) the word “Limited” or the abbreviation “Ltd.” shall be the last word of the name of every limited liability company; and

(b) the word “unlimited” or the abbreviation “Unltd.” shall be the last word of the name of every unlimited liability company, and a company may use and may be legally designated by either the full or the abbreviated form.

(2) Subsection (1) does not apply to a non-profit company.

Reserved name. [5 of 1997].

15. Subject to section 17, a company shall not be incorporated with or have a name—

(a) that is prohibited or refused under section 493; or

(b) that is reserved for another company or intended company under section 492.

Name change.

16. Where, through inadvertence or otherwise, a company—

(a) comes into existence with a name that contravenes section 15; or

(b) is, upon an application to change its name, granted a name that contravenes section 15, the Registrar may direct the company to change its name in accordance with section 214.

Continued name

17. A company that is continued under this Act is entitled to be continued with the name it lawfully had before that continuance.

Name revocation. [5 of 1997].

18. Where a company has been directed under section 16 to change its name and has not, within sixty days from the service of the direction to that effect, changed its name to a name that complies with this Act, the Registrar may revoke the name of the company and assign to it a name and, until changed in accordance with section 214, the name of the company is thereafter the name so assigned.

Assigned name. [5 of 1997].

19. (1) When a company has had its name revoked and a name assigned to it under section 18, the Registrar shall issue a certificate of amendment showing the new name of the company and shall forthwith give notice of the change in the Gazette and a daily newspaper.

(2) Upon the issue of a certificate of amendment under subsection (1), the articles of the company to which the certificate refers are amended accordingly on the date shown in the certificate.

(3) The Registrar may recover the cost of giving notice in a daily newspaper under subsection (1) from the company in respect of which the notice is given.

PRE-INCORPORATION AGREEMENTS

20. (1) Except as provided in this section, a person who enters into a written contract in the name of or on behalf of a company before it comes into existence is personally bound by the contract and is entitled to the benefits of the contract.

(2) Within a reasonable time after a company comes into existence, it may, by any action or conduct signifying the intention to be bound thereby, adopt a written contract made, in its name or on its behalf, before it came into existence.

(3) When a company adopts a contract under subsection (2)—

(a) the company is bound by the contract and is entitled to the benefits thereof as if the company had been in existence at the date of the contract and had been a party to it; and

(b) a person, who purported to act in the name of the company or on its behalf, ceases, except as provided in subsection (4), to be bound by or entitled to the benefits of the contract.

(4) Except as provided in subsection (5), whether or not a written contract made before the coming into existence of the company is adopted by the company, a party to the contract may apply to the Court for an order fixing obligations under the contract as joint or joint and several, or apportioning liability between or among the company and a person who purported to act in the name of the company or on its behalf and the Court may, upon the application, make any order it thinks fit.

(5) If expressly so provided in the written contract, a person who purported to act for or on behalf of a company before it came into existence is not in any event bound by the contract or entitled to the benefits of the contract.

DIVISION 2—CORPORATE CAPACITY AND POWERS

Capacity and powers. [5 of 1997].

21. (1) A company has the capacity, and, subject to this Act and any other law, the rights, powers and privileges of an individual including, without prejudice to the foregoing, the power to hold lands in any part of Trinidad and Tobago or elsewhere.

(2) A non-profit company may not, without the licence of the President, hold more than two acres of land but the President may by licence empower any such company to hold lands in such quantity, and subject to such conditions, as the President thinks fit.

(3) A company has the capacity to carry on its business, conduct its affairs and exercise its powers in Trinidad and Tobago to the extent that the laws of Trinidad and Tobago permit and in any jurisdiction outside Trinidad and Tobago to the extent that the laws of that jurisdiction permit.

(4) It is not necessary for a bye-law to be passed to confer any particular power on a company or its directors.

(5) This section does not authorize any company to carry on any business or activity in breach of—

(a) any written law prohibiting or restricting the carrying on of the business or activity; or

(b) any provision requiring any permission or licence for the carrying on of the business or activity.

Powers reduced.

22. A company shall not carry on any business or exercise any power that it is restricted by its articles from carrying on or exercising, nor shall a company exercise any of its powers in a manner contrary to its articles.

Validity of acts.

23. For the avoidance of doubt, it is declared that no act of a company, including any transfer of property to or by a company, is invalid by reason only that the act or transfer is contrary to its articles.

Notice not presumed. [5 of 1997].

24. (1) Subject to subsection (2), no person is affected by, or presumed to have notice or knowledge of, the contents of a document concerning a company by reason only that the document has been filed with the Registrar or is available for inspection at any office of the company.

(2) Subsection (1) shall not apply to a charge, the particulars of which are required to be registered under Part IV.\

No disclaimer allowed. [5 of 1997].

25. A company or a guarantor of an obligation of the company may not assert against a person dealing with the company or with any person who has acquired rights from the company—

(a) that any of the articles or Bye-laws of the company or any unanimous shareholder agreement has not been complied with;

(b) that the persons named in the most recent notice sent to the Registrar under section 71 or 79 are not the directors of the company;

(c) that the place named in the most recent notice sent to the Registrar under section 176 is not the registered office of the company;

(d) that a person held out by a company as a director, an officer or an agent of the company has not been duly appointed or had no authority to exercise the powers and perform the duties that are customary in the business of the company or usual for such a director, officer or agent;

(e) that a document issued by any director, officer or agent of the company with actual or usual authority to issue the document is not valid or not genuine; or

(f) that the financial assistance referred to in section 56 or the sale, lease or exchange of property referred to in section 138 was not authorized, except where that person has, or ought to have by virtue of his position with or relationship to the company, knowledge to the contrary.

Contracts of a company. [5 of 1997].

26. (1) A contract made according to this section—

(a) is in form effective in law and binds the company and the other party to the contract; and

(b) may be varied or discharged in the like manner that it is authorized by this section to be made.

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

(a) a contract which if made between private persons would be by law required to be in writing and if made according to the law of Trinidad and Tobago to be under seal may be made on behalf of the company in writing under the company’s common seal;

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

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

Bills and notes.

27. A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by a person acting under its authority.

Power of attorney. [5 of 1997]. Ch. 19:06.

28. (1) Subject to the provisions of the Registration of Deeds Act, a company may, by writing under seal, empower any person, either generally or in respect of any specified matter, as its attorney to execute deeds on its behalf in any place within or outside Trinidad and Tobago.

(2) A Deed signed by a person empowered as provided in subsection (1) binds the company and has the same effect as if it were under the company’s seal.

Company seals. [5 of 1997].

29. (1) A company may have a common seal with its name signified thereon in legible characters; but, except when required by any written law to use its common seal, the company may, for the purpose of sealing any document, use its common seal or any other form of seal.

(2) If authorized by its Bye-laws, a company may have for use in any country other than Trinidad and Tobago or for use in any district or place not situated in Trinidad and Tobago an official seal, which shall be a facsimile of the common seal of the company with the addition on its face of the name of every country, district or place where it is to be used.

(3) Every document to which an official seal of the company is duly affixed binds the company as if it had been sealed with the common seal of the company.

(4) A company may, by an instrument in writing under its common seal, authorize any person appointed for that purpose to affix the company’s official seal to any document to which the company is party in the country, district or place where its official seal can be used.

(5) Any person dealing with an agent appointed pursuant to subsection (4) may, in reliance on the instrument conferring the authority, assume that the authority of the agent continues during the period, if any, mentioned in the instrument, or, if no period is so mentioned, until that person has actual notice of the revocation or determination of the authority.

(6) A person who affixes an official seal of a company to a document shall, by writing under his hand, certify on the document the date on which, and the place at which, the official seal is affixed.

DIVISION 3—SHARE CAPITAL

Nature of shares.

30. (1) Shares in a company are personal estate and are not of the nature of real estate; and a share is transferable in the manner provided by this Act.

(2) Shares in a company are to be without nominal or par value.

(3) When a former-Act company is continued under this Act, a share with nominal or par value issued by the company before it was so continued is, for the purposes of subsection (2), deemed to be a share without nominal or par value.

(4) Subject to subsection (5), each share in a company shall be distinguished by an appropriate designation.

(5) If at any time all the issued shares in a company, or all the issued shares in a company of a particular class, rank equally for all purposes, none of those shares need thereafter have a distinguishing designation so long as it ranks equally for all purposes with all shares for the time being issued, or, as the case may be, all the shares for the time being issued of the particular class.

If only one class.

31. When a company has only one class of shares, the rights of the holders are equal in all respects, and include—

(a) the right to vote at any meeting of shareholders;

(b) the right to receive any dividend declared by the company;

Share classes.

32. The articles of a company may provide for more than one class of shares; and, if they so provide—

(a) the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out in the articles; and

(b) the rights set out in section 31 shall be attached to at least one class of shares, but all of those rights need not be attached to the same class of shares.

Share issue.

33. (1) Subject to the articles, the Bye-laws, any unanimous shareholder agreement and section 38, shares may be issued at such times, to such persons and for such consideration as the directors may determine.

(2) No company may issue bearer shares or bearer share certificates.

Consideration.

34. (1) A share shall not be issued until it is fully paid—

(a) in money; or

(b) in property or past service that is the fair equivalent of the money that the company would have received if the share had been issued for money.

(2) In determining whether property or past service is the fair equivalent of a money consideration, reasonable charges and expenses of organisation and reorganization, and payments for property and past services reasonably expected to benefit the company shall be taken into account.

(3) For the purposes of this section, “property” does not include a promissory note or a promise to pay.

Stated capital accounts. [5 of 1997].

35. (1) A company shall maintain a separate account to be known as a “stated capital account” for each class and series of shares that it issues.

(2) A company shall add to the appropriate stated capital account the full amount of the consideration that it receives for any shares that it issues.

(3) A company shall not reduce or permit to be reduced its stated capital or any stated capital account except in the manner provided by this Act.

(4) A company shall not, in respect of a share that it issues, add to a stated capital account an amount greater than the amount of the consideration that it receives for the share.

(5) When a company proposes to add an amount to a stated capital account that it maintains in respect of a class or series of shares, that addition to the stated capital account shall be approved by special resolution if—

(a) the amount to be added was not received by the company as consideration for the issue of shares; and

(b) the company has issued any outstanding shares of more than one class or series.

(6) Notwithstanding section 34 and subsection (2)—

(a) when, in exchange for property, a company issues shares—

(i) to a body corporate that was an affiliate of the company immediately before the exchange; or

(ii) to a person who controlled the company immediately before the exchange, the company, subject to subsection (4), may add to the stated capital accounts that are maintained for the shares of the classes or series issued, the amount agreed, by the company and the body corporate or person, to be the consideration for the shares so exchanged;

(b) when a company issues shares in exchange for shares of a body corporate that was an affiliate of the company immediately before the exchange, the company may, subject to subsection (4), add to the stated capital accounts that are maintained for the shares of the classes or series issued an amount that is not less than the amount set out, in respect of the acquired shares of the body corporate, in the stated capital or equivalent accounts of the body corporate immediately before the exchange; or

(c) when a company issues shares in exchange for shares of a body corporate that becomes, because of the exchange, an affiliate of the company, the company may, subject to subsection (4), add to the stated capital accounts that are maintained for the shares of the classes or series issued an amount that is not less than the amount set out, in respect of the acquired shares of the body corporate, in the stated capital or equivalent accounts of the body corporate immediately before the exchange.

(7) When a former-Act company is continued under this Act—

(a) then, notwithstanding subsection (2), it is not required to add to a stated capital account any consideration received by it before it was so continued, unless the share in respect of which the consideration is received is issued after the company is continued under this Act;

(b) an amount unpaid in respect of a share issued by the former-Act company before it was so continued and paid after it was so continued shall be added to the stated capital account that is maintained for the shares of that class or series; and

(i) section 43(2);

(ii) section 48;

(iii) section 54;

(iv) section 56(2)(b); and

(v) section 225(2)(a), is deemed to include the amount that would have been included in stated capital if the company had been incorporated under this Act.

(8) When a former-Act company is continued under this Act, it may add to a stated capital account any consideration received by it for a share it issued.

(9) A company at any time may, subject to subsection (5), add to a stated capital account any amount it credited to a retained earnings or other surplus capital account.

Open-ended mutual company.

36. Section 35 and any other provision of this Act relating to stated capital do not apply to a company—

(a) that is a public company;

(b) that carries on only the business of investing the consideration it receives for the shares it issues; and

Series shares

37. (1) The articles of a company may authorize the issue of any class of shares in one or more series, and may authorize the directors to fix the number of shares in and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to the limitations set out in the articles.

(2) If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

(3) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section may confer upon the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

(4) Before the issue of shares of a series authorized under this section, the directors shall deliver to the Registrar articles of amendment in the prescribed form to designate a series of shares.

(5) Upon receipt from a company of articles of amendment designating a series of shares, the Registrar shall issue to the company a certificate of amendment in accordance with section 481.

(6) The articles of a company are amended accordingly on the date shown in the certificate of amendment issued under subsection (5).

Pre-emptive rights. [5 of 1997].

38. (1) Except the articles otherwise provide, no shares of a class of shares may be issued unless the shares have first been offered to the shareholders of the company holding shares of that class; and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others.

(2) Notwithstanding subsection (1) and anything contained in the articles, the shareholders of the company have no pre-emptive right in respect of shares to be issued by the company pursuant to the exercise of conversion privileges, options or rights previously granted by the company.

(3) Subject to subsections (4) to (9), an offer required by subsection (1) shall be in writing and shall be made to a holder of shares either personally or by sending it by post (that is to say, prepaying and posting a letter containing the offer) to him or to his registered address or, if he has no registered address in Trinidad and Tobago, to the address in Trinidad and Tobago supplied by him to the company for the giving of notice to him, and if sent by post, the offer is deemed to be made at the time at which the letter would be delivered in the ordinary course of post.

(4) Where shares are held by two or more persons jointly, the offer may be made to the joint holder first named in the register of members in respect of the shares.

(5) In the case of the holder’s death or bankruptcy, the offer may be made—

(a) by sending it by post in a prepaid letter addressed to the persons claiming to be entitled to the shares in consequence of the death or bankruptcy by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address in Trinidad and Tobago supplied for the purpose by those so claiming; or

(b) until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death or bankruptcy had not occurred.

(6) If the holder—

(a) has no registered address in Trinidad and Tobago and has not given to the company an address in Trinidad and Tobago for the service of notices on him; or

(b) is the holder of a share warrant, the offer may be made by causing a notice specifying where a copy of the offer can be obtained or inspected, to be published in a daily newspaper circulating in Trinidad and Tobago.

(7) The offer shall state a period of not less than twenty one days during which it may be accepted and the offer shall not be withdrawn before the end of that period.

(8) A requirement or authority contained in the articles of a company, if it is inconsistent with any of the provisions of subsections (3) to (7), has effect as a provision excluding subsection (3).

(9) Subsections (3) to (8) are without prejudice to any written law by virtue of which a company is prohibited, whether generally or in specified circumstances, from offering or allotting shares to any person.

Conversion privileges. [5 of 1997].

39. (1) A company may grant conversion privileges, options or rights to acquire shares or debentures of the company, but shall set out the conditions thereof in any certificates or other instruments issued in respect thereof.

(2) Conversion privileges, options and rights to acquire shares or debentures of a company may be made transferable or non-transferable, and options and rights to acquire shares or debentures may be made separable or inseparable from any debentures or shares to which they are attached.

Reserve shares.

40. Where a company—

(a) has granted privileges to convert any debentures or shares issued by the company into shares or into shares of another class or series of shares; or

(b) has issued or granted options or rights to acquire shares, if the articles of the company limit the number of authorized shares, the company shall reserve and continue to reserve sufficient authorized shares to meet the exercise of those conversion privileges, options and rights.

Own shares. [5 of 1997].

41. (1) Subject to subsection (2), and except as provided in sections 42 to 45, a company—

(a) shall not hold shares in itself or in its holding body corporate; and

(b) shall not permit any of its subsidiary bodies corporate to acquire shares of the company.

(2) A company shall cause a subsidiary body corporate of the company that holds shares of the company, except as may be permitted under sections 42 to 45, to sell or otherwise dispose of those shares within five years from the date, as the case requires—

(a) that the body corporate became a subsidiary of the company; or

(b) that the company was continued under this Act.

Exceptions.

42. (1) A company may in the capacity of a legal representative hold shares in itself or in its holding body corporate unless it, or the holding body corporate, or a subsidiary of either of them has a beneficial interest in the shares.

(2) A company may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money.

Acquisition of own shares.

43. (1) Subject to subsection (2) and to its articles, a company may purchase or otherwise acquire shares issued by it.

(2) A company shall not make any payment to purchase or otherwise acquire shares issued by it, if there are reasonable grounds for believing that—

(a) the company is unable, or would, after that payment, be unable to pay its liabilities as they become due; or

(b) the realisable value of the company’s assets would, after that payment, be less than the aggregate of its liabilities and stated capital of all classes.

Other acquisition. [5 of 1997].

44. (1) Notwithstanding section 43(2), but subject to subsection (3) and to its articles, a company may purchase or otherwise acquire its own issued shares—

(a) to settle or compromise a debt or claim asserted by or against the company;

(b) to eliminate fractional shares; or

(c) to fulfill the terms of a non-assignable agreement under which the company has an option or is obligated to purchase shares owned by a director, an officer or an employee of the company.

(2) Notwithstanding section 43(2), a company may purchase or otherwise acquire its own issued shares—

(a) to satisfy the claim of a shareholder who dissents under section 227; or

(b) to comply with an order under section 242.

(3) A company shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that—

(a) the company is unable, or would, after the payment, be unable to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would, after the payment, be less than the aggregate of—

(i) its liabilities; and

(ii) the amount that would be required to pay the holders of shares who have a right to be paid, on a redemption or in a winding up, rateably with or before the holders of shares to be purchased or redeemed.

Redeemable shares.

45. (1) Notwithstanding section 43(2) or section 44(3), but subject to subsection (2) of this section and to its articles, a company may, at prices not exceeding the redemption price thereof stated in its articles or calculated according to a formula stated in its articles, purchase or redeem any redeemable shares issued by it.

(2) A company shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that—

(a) the company is unable or would, after that payment, be unable to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would, after that payment, be less than the aggregate of—

(i) its liabilities; and

(ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a winding up, rateably with or before the holders of the shares to be purchased or redeemed.

Donated shares.

46. Subject to section 50, a company may accept from any shareholder a share of the company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of any amount unpaid on any such share except in accordance with section 48.

Voting thereon. [5 of 1997].

47. A company holding shares in itself or in its holding body corporate shall not vote those shares or permit those shares to be voted unless the company—

(a) holds the shares in the capacity of a legal representative; and

(b) has complied with section 148.

Stated capital reduction. [5 of 1997].

48. (1) Subject to subsection (3), a company may by special resolution reduce its stated capital for any purpose including, without limiting the generality of the foregoing, for the purpose of—

(a) extinguishing or reducing a liability in respect of an amount unpaid on any share;

(b) distributing to the holder of an issued share of any class or series of shares an amount not exceeding the stated capital of the class or series; or

(2) A special resolution under this section shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

(3) A company shall not reduce its stated capital for any purpose other than the purpose mentioned in subsection (1)(c) if there are reasonable grounds for believing that—

(a) the company is unable, or would, after that reduction, be unable, to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities.

(4) A company that reduces its stated capital under this section shall, not later than thirty days after the date of the passing of the resolution, serve notice of the resolution on all persons who on the date of the passing of the resolution were creditors of the company.

(5) A creditor may apply to the Court for an order compelling a shareholder or other recipient—

(a) to pay to the company an amount equal to any liability of the shareholder that was extinguished or reduced contrary to this section; or

(b) to pay or deliver to the company any money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.

(6) An action to enforce a liability imposed by this section may not be commenced after two years from the date of the act complained of.

(7) This section does not affect any liability that arises under section 88 or 89.

Stated capital adjustment. [5 of 1997].

49. (1) Upon a purchase, redemption or other acquisition by a company under section 43, 44, 45, 59 or 230 or section 242(3)(f) of shares or fractions thereof issued by it, the company shall deduct, from the stated capital account maintained for the class or series of shares purchased, redeemed or otherwise acquired, an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions thereof purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2) A company shall deduct the amount of a payment made by the company to a shareholder under section 242(3)(g) from the stated capital account maintained for the class or series of shares in respect of which the payment was made.

(3) A company shall adjust its stated capital accounts in accordance with any special resolution referred to in section 48(2).

(4) Upon a conversion of issued shares of a class into shares of another class, or upon a change under section 214, 237 or 242 of issued shares of a company into shares of another class or series, the company shall—

(a) deduct, from the stated capital account maintained for the class or series of shares changed or converted, an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series changed or converted, divided by the number of issued shares of that class or series immediately before the change or conversion; and

(b) add the result obtained under paragraph (a), and any additional consideration received by the company pursuant to the change, to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been changed or converted.

(5) For the purposes of subsection (4), when a company issues two classes of shares and there is attached to each of the classes a right to convert a share of the one class into a share of the other class, then, if a share of one class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued shares of both classes immediately before the conversion.

Cancellation of shares.

50. Shares or fractions of shares issued by a company and purchased, redeemed or otherwise acquired by the company shall be cancelled, or, if the articles of the company limit the number of authorized shares, the shares or fractions may be restored to the status of authorized, but unissued, shares.

Presumption re own shares.

51. For the purposes of sections 49 and 50, a company holding shares in itself as permitted by section 42 is deemed not to have purchased, redeemed or otherwise acquired those shares.

Changing share class. [5 of 1997].

52. (1) Shares issued by a company and converted or changed under section 214, 237 or 242 into shares of another class or series become issued shares of the class or series of shares into which the shares have been converted or changed.

(2) Where its articles limit the number of authorized shares of a class or series of shares of a company and issued shares of that class or series have become, pursuant to subsection (1), issued shares of another class or series, the number of unissued shares of the first-mentioned class or series shall, unless the articles otherwise provide, be increased by the number of shares that, pursuant to subsection (1), became shares of another class or series.

Redemption and cancellation of debentures. [5 of 1997].

52A. (1) Debentures issued, pledged, hypothecated or deposited by a company are not redeemed by reason only that the indebtedness evidenced by the debentures or in respect of which the debentures are issued, pledged, hypothecated or deposited is repaid.

(2) Debentures issued by a company and purchased, redeemed or otherwise acquired by it may be cancelled or, subject to any applicable trust deed or other agreement, may be reissued, pledged or hypothecated to secure any obligation of the company then existing or thereafter incurred, and any such acquisition and reissue, pledge or hypothecation is not a cancellation of the debentures.

Effect of purchase contract.

53. (1) A contract with a company providing for the purchase of shares of the company is specifically enforceable against the company except to the extent that the company cannot perform the contract without thereby being in breach of section 43 or 44.

(2) In any action brought on a contract referred to in subsection (1), the company has the burden of proving that performance of the contract is prevented by section 43 or 44.

(3) Until the company has fully performed a contract referred to in subsection (1), the other party retains the status of a claimant who is entitled—

(a) to be paid as soon as the company is lawfully able to do so; or

(b) to be ranked in a winding up subordinate to the rights of creditors but in priority to the shareholders.

Sale of shares on commission. [5 of 1997].

53A. The directors of a company may authorize the company to pay a reasonable commission to any person in consideration of his purchasing or agreeing to purchase shares of the company from the company or from any other person or procuring or agreeing to procure purchasers for any such shares.

Prohibited dividend.

54. A company shall not declare or pay a dividend if there are reasonable grounds for believing that—

(a) the company is unable, or would, after the payment, be unable, to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

Payment of dividend. [5 of 1997].

55. (1) Subject to section 54 and subsection (2), a company may pay a dividend in money, in property, or by issuing fully paid shares of the company.

(2) A company shall not pay a dividend in money or in property out of unrealized profits.

(3) If shares of a company are issued in payment of a dividend, the value of the dividend stated as an amount in money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

Illicit loans by company.

56. (1) When circumstances prejudicial to the company exist, the company or any company with which it is affiliated shall not, directly or indirectly, give financial assistance by means of a loan, guarantee or otherwise—

(a) to a shareholder, director, officer or employee of the company or affiliated company, or to an associate of any such person for any purpose; or

(b) to any person for the purpose of, or in connection with, a purchase of a share issued or to be issued by the company or a company with which it is affiliated.

(2) Circumstances prejudicial to the company exist in respect of financial assistance mentioned in subsection (1) when there are reasonable grounds for believing that—

(a) the company is unable or would, after giving the financial assistance, be unable to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, would, after giving the financial assistance, be less than the aggregate of the company’s liabilities and stated capital of all classes.

Enforcement of illicit loans.

57. A contract made by a company contrary to section 56 may be enforced by the company or by a lender for value in good faith without notice of the contravention.

Immunity of shareholders.

58. The shareholders of a company other than of an unlimited liability company are not, as shareholders, liable for any liability, act or default of the company except under section 48(5) or section 137(2).

Lien on shares. [5 of 1997].

59. (1) Subject to this Act, the articles of a company may provide that the company has a lien on a share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the company and, in the case of a former Act company, such debt may include an amount unpaid in respect of a share issued by the company prior to its continuance under this Act and the articles may provide also for an existing right of forfeiture in respect of any such partly paid share.

(2) A company may enforce a lien or right of forfeiture referred to in subsection (1) in accordance with its articles or Bye-laws.

DIVISION 4—MANAGEMENT OF COMPANIES

Duty of directors to manage company

60. Subject to the articles and any unanimous shareholder agreement, the directors of a company shall—

(a) exercise the powers of the company directly or indirectly through the employees and agents of the company; and

(b) direct the management of the business and affairs of the company.

Secretary.

61. (1) Every company shall have a secretary and may have one or more assistant secretaries, who, or each of whom—

(a) shall be appointed by the directors, or if provision is made in the Bye-laws of a company for the appointment, in accordance with that provision; and

(b) may be an individual, a body corporate or a firm.

(2) If a company carries on business for more than one month without complying with subsection (1), the company and every officer of the company who is in default is guilty of an offence.

Acts of secretary, etc.

62. (1) Anything required or authorized to be done by or in relation to the secretary, may, if the office is vacant, or if for any other reason the secretary is unable to act, be done by or in relation to any assistant secretary or, if the assistant secretary or secretaries are unable to act, by or in relation to any officer of the company authorized generally or specially in that behalf by the director or directors of the company.

(2) A provision requiring or authorizing a thing to be done by or in relation to a director and the secretary is not satisfied by its being done by or in relation to the same person acting both as director and as, or in the place of, the secretary.

Secretary of public company.

63. (1) The directors of a public company shall take all reasonable steps to ensure that each secretary and assistant secretary of the company is a person who appears to the directors to have the requisite knowledge and experience to discharge the functions of a secretary of a public company.

(2) For the purpose of this section, a person—

(a) who, on the commencement date, held the office of secretary, assistant secretary or deputy secretary of a public company;

(b) who, for at least three years of the five years immediately preceding his appointment as secretary, held the office of secretary of a public company;

(c) who is a member in good standing of the Institute of Chartered Accountants of Trinidad and Tobago, the Association of Chartered Secretaries and Administrators of Trinidad and Tobago or the Chartered Institute of Public Finance and Accountancy;

(d) who is an Attorney-at-law; or

(e) who, by virtue of his holding or having held any other position or having been a member of any other body, appears to be capable of discharging the functions of a secretary of a public company, may be assumed by a director of a public company to have the requisite knowledge and experience to discharge the functions of a secretary or assistant secretary of a public company, if the director does not know otherwise.

Number of directors. [5 of 1997].

64. (1) A company shall have at least two directors but a public company shall have no fewer than three directors, at least two of whom are not officers or employees of the company or any of its affiliates.

(2) Only an individual or a body corporate may be a director of a company.

Restricted powers.

65. The articles of a company may, in whole or in part, restrict the powers of the directors to manage the business and affairs of the company.

Bye-law powers.

66. (1) Except the articles, Bye-laws or any unanimous shareholder agreement otherwise provide, the directors of a company may by resolution make, amend or repeal any Bye-laws for the regulation of the business or affairs of the company.

(2) The directors of a company shall submit a Bye-law, or any amendment or repeal of a Bye-law made under subsection (1), to the shareholders of the company at the next meeting of shareholders after the making, amendment or repeal of the Bye-law; and the shareholders may, by ordinary resolution, confirm, amend or reject the Bye-law, amendment or repeal.

(3) A Bye-law, or any amendment or repeal of a Bye law, is effective from the date of the resolution of the directors making, amending or repealing the Bye-law until—

(a) the Bye-law, amendment or repeal is confirmed, amended or rejected by the shareholders pursuant to subsection (2); or

(b) the Bye-law, amendment or repeal ceases to be effective pursuant to subsection (4), and, if the Bye-law, amendment or repeal is confirmed or amended by the shareholders, it continues in effect in the form in which it was confirmed or amended.

(4) When a Bye-law, or an amendment or repeal of a Bye-law, is not submitted to the shareholders as required by subsection (2), or is rejected by the shareholders, the Bye-law, amendment or repeal ceases to be effective; and no subsequent resolution of the directors to make, amend or repeal a Bye-law having substantially the same purpose or effect is effective until the resolution is confirmed, with or without amendment, by the shareholders.

(5) A shareholder who is entitled to vote at an annual meeting of shareholders may, in accordance with sections 116 to 124, propose the making, amendment or repeal of a Bye-law.

Organisational meeting. [5 of 1997].

67. (1) After the issue of a certificate of incorporation of a company, a meeting of the directors of the company shall be held at which the directors may—

(a) make Bye-laws;

(b) adopt forms of share certificates and corporate records;

(d) appoint officers;

(e) unless a special meeting is called to pass a resolution pursuant to section 164, appoint an auditor to hold office until the first annual meeting of shareholders;

(f) make banking arrangements; and

(g) transact any other business.

(2) In the case of a public company, an incorporator or a director may call a meeting of directors referred to in subsection (1) by giving by post not less than seven clear days’ notice of the meeting to each director and stating in the notice the time and place of the meeting.

(3) Subsection (1) does not apply to a company to which a certificate of amalgamation has been issued under section 226.

Disqualified directors.

68. (1) An individual who is prohibited by section 8(2) from forming or joining in the formation of a company shall not be a director of any company.

(2) When an individual is disqualified under section 69 from being a director of a company, that individual shall not, during that period of disqualification, be a director of any company.

Court disqualified directors.

69. (1) When, on the application of the Registrar, the Court is satisfied that an individual is unfit to be concerned in the management of a public company, the Court may order that that individual shall not, without the prior leave of the Court, be a director of the company, or be in any way, directly or indirectly, concerned with the management of the company for such period—

(a) beginning—

(i) with the date of the order; or

(ii) if the individual is undergoing, or is to undergo, a term of imprisonment and the Court so directs, with the date on which he completes that term of imprisonment or is otherwise released from prison; and

(b) not exceeding five years, as may be specified in the order.

(2) In determining whether or not to make an order under subsection (1), the Court shall have regard to all the circumstances that it considers relevant, including any previous convictions of the individual in Trinidad and Tobago or elsewhere for an offence involving fraud or dishonesty or in connection with the promotion, formation or management of any body corporate.

(3) Before making an application under this section in relation to any individual, the Registrar shall give that individual not less than ten days’ notice of the Registrar’s intention to make the application.

(4) On the hearing of an application made by the Registrar under this section or an application for leave under this section, the Registrar and any individual concerned with the application may appear and call attention to any matters that are relevant, and may give evidence, call witnesses and be represented by an Attorney-at-law.

No qualification required.

70. Except the articles of a company otherwise provide, a director of the company need not hold shares issued by the company.

Notice of directors.

71. (1) At the time of delivering articles of incorporation of a company to the Registrar, the incorporators shall deliver, in the prescribed form, a notice of the names of the directors of the company; and the Registrar shall file the notice.

(2) Each director named in the notice referred to in subsection (1) holds office as a director of the company from the issue of the certificate of incorporation of the company until the first meeting of the shareholders of the company.

(3) Subject to section 73(b), the shareholders of a company shall, by ordinary resolution at the first meeting of the company and at each following annual meeting at which an election of directors is required, elect directors to hold office for a term expiring not later than the close of the third annual meeting of the shareholders of the company following the election.

(4) Directors of a company who are elected at a meeting of shareholders need not hold office for the same term.

(5) A director who is not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following his election.

(6) Notwithstanding subsections (2), (3) and (5), if directors are not elected at a meeting of shareholders, the incumbent directors continue in office until their successors are elected.

(7) If a meeting of shareholders fails, by reason of the disqualification, incapacity or death of any candidates, to elect the number or the minimum number of directors required by the articles of the company, the directors elected at that meeting may exercise all the powers of the directors as if the number of directors so elected constituted a quorum.

(8) The articles of a company or an unanimous shareholder agreement may, for terms expiring not later than the close of the third annual meeting of the shareholders following the election, provide for the election or appointment of directors by the creditors or employees of the company or by any classes of these creditors or employees.

Alternative directors. [5 of 1997].

72. (1) A meeting of the shareholders of a company may, by ordinary resolution, elect a person to act as a director in the alternative to a director of the company, or may authorise the directors to appoint such alternative directors as are necessary for the proper discharge of the affairs of the company.

(2) An alternate director shall have all the rights and powers of the director for whom he is elected or appointed in the alternative, except that he shall not be entitled to attend and vote at any meeting of the directors otherwise than in the absence of that other director.

(3) Notwithstanding subsections (1) and (2), the Bye laws of a company, other than a public company, may, in relation to alternate directors, make provisions in addition to or in substitution for the provisions of subsection (1) or (2).

Cumulative voting. [5 of 1997].

73. Where the articles of a company provide for cumulative voting, the following rules shall apply:

(a) the articles shall require a fixed number, and not a minimum and maximum number of directors;

(b) each shareholder who is entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by him, multiplied by the number of directors to be elected, and he may cast all his votes in favor of one candidate, or distribute them among the candidates in any manner;

(c) a separate vote of shareholders shall be taken with respect to each candidate nominated for director unless a resolution is passed unanimously permitting two or more persons to be elected by a single resolution;

(d) if a shareholder votes for more than one candidate without specifying the distribution of his votes among the candidates, he is deemed to distribute his votes equally among the candidates for whom he votes;

(e) if the number of candidates nominated for director exceeds the number of positions to be filled, the candidates who receive the least number of votes shall be eliminated until the number of candidates remaining equals the number of positions to be filled;

(f) each director ceases to hold office at the close of the first annual meeting of shareholders following his election;

(g) a director may not be removed from office if the votes cast against his removal would be sufficient to elect him and those votes could be voted cumulatively at the election at which the same total number of votes were cast and the number of directors required by the articles were then being elected; and

(h) the number of directors required by the articles may not be decreased if the votes cast against the motion to decrease would be sufficient to elect a director and those votes could be voted cumulatively at an election at which the same total number of votes were cast and the number of directors required by the articles were then being elected.

Termination of office.

74. (1) A director of a company ceases to hold office when—

(a) he dies or resigns;

(b) he is removed in accordance with section 75; or

(2) The resignation of a director of a company becomes effective at the time his written resignation is served on the company or at the time specified in the resignation, whichever is later.

Removal of directors.

75. (1) Subject to section 73(g), the shareholders of a company may—

(a) by ordinary resolution at a special meeting, remove any director from office; or

(b) where a director was elected for a term exceeding one year and is not up for re-election at an annual meeting, remove such director by ordinary resolution at that meeting.

(2) Where the holders of any class or series of shares of a company have an exclusive right to elect one or more directors, a director so elected may only be removed by an ordinary resolution at a meeting of the shareholders of that class or series of shares.

(3) Subject to section 73(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders at which the director is removed, or, if the vacancy is not so filled, it may be filled pursuant to section 77. 75. (1) Subject to section 73(g), the shareholders of a company may—

(a) by ordinary resolution at a special meeting, remove any director from office; or

(b) where a director was elected for a term exceeding one year and is not up for re-election at an annual meeting, remove such director by ordinary resolution at that meeting.

76. (1) A director of a company is entitled to receive notice of, and to attend and be heard at, every meeting of shareholders.

(2) A director—

(a) who resigns;

(b) who receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing him from office; or

(c) who receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of his resignation or removal, or because his term of office has expired or is about to expire, may submit to the company a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution.

(3) The company shall forthwith send a copy of the statement referred to in subsection (2) to the Registrar and to every shareholder entitled to receive notice of any meeting referred to in subsection (1), unless the statement is included in or attached to a management proxy circular required by section 144.

(4) No company or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (3).

Filling vacancy. [5 of 1997].

77. (1) Subject to subsections (3) and (4), a quorum of directors of a company may fill a vacancy among the directors of the company, except a vacancy resulting from an increase in the number or minimum number of directors, or from a failure to elect the number or minimum number of directors required by the articles of the company.

(2) If there is no quorum of directors, or if there has been a failure to elect the number or minimum number of directors required by the articles, the directors then in office shall forthwith call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting, or if there are no directors then in office, the meeting may be called by any shareholder.

(3) Where the holders of any class or series of shares of a company have an exclusive right to elect one or more directors and a vacancy occurs among those directors—

(a) then, subject to subsection (4), the remaining directors elected by that class or series may fill the vacancy except a vacancy resulting from an increase in the number or minimum number of directors for that class or series, or from a failure to elect the number or minimum number of directors for that class or series; or

(b) if there are no such remaining directors, any holder of shares of that class or series may call a meeting of the holders thereof for the purpose of filling the vacancy.

(4) The articles of a company may provide that a vacancy among the directors be filled only—

(a) by a vote of the shareholders;

(b) by a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors, if the vacancy occurs among the directors elected by that class or series; or

(5) Subject to section 75, a director appointed or elected to fill a vacancy holds office for the unexpired term of his predecessor.

Numbers changed. [5 of 1997].

78. (1) The shareholders of a company may amend the articles of the company to increase or, subject to section 73(h), to decrease the number of directors, or the minimum or maximum number of directors.

(2) A decrease under subsection (1) shall not affect the term of an incumbent director.

(3) Where the shareholders adopt an amendment to the articles of a company to increase the number or minimum number of directors, the shareholders may, at the meeting at which they adopt the amendment, elect the additional number of directors authorized by the amendment, and for that purpose, notwithstanding sections 218(2) and 481(2), on the issue of a certificate of amendment the articles are deemed to be amended as of the date the shareholders adopt the amendment to the articles.

Notice of change. [5 of 1997].

79. (1) Within thirty days after a change is made among its directors, a company shall deliver to the Registrar a notice in the prescribed form setting out the change, and the Registrar shall file the notice.

(2) Any interested person, or the Registrar, may apply to the Court for an order to require a company to comply with subsection (1); and the Court may so order and make any further order it thinks fit.

Directors’ meetings.

80. (1) Unless the articles or Bye-laws of a company otherwise provide, the directors of a company may meet at any place, and upon such notice as the Bye-laws require.

(2) Subject to the articles or Bye-laws, a majority of the number of directors or minimum number of directors required by the articles constitutes a quorum at any meeting of directors; and notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

81. (1) A notice of a meeting of the directors of a company shall specify any matter referred to in section 84(2) that is to be dealt with at the meeting; but, unless the Bye-laws of the company otherwise provide, the notice need not specify the purpose of or the business to be transacted at the meeting.

(2) A director may, in any manner, waive a notice of a meeting of directors; and attendance of a director at a meeting of directors is a waiver of notice of the meeting by the director except when he attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Adjourned meeting.

82. Notice of an adjourned meeting of directors need not be given if the time and place of the adjourned meeting is announced at the original meeting.

Telephone participation.

83. (1) Subject to the Bye-laws of a company, a director may, if all the directors of the company consent, participate in a meeting of directors of the company or of a committee of the directors by means of such telephone or other communication facilities as permit all persons participating in the meeting to hear each other.

(2) A director who participates in a meeting of directors by such means as are described in subsection (1), is, for the purposes of this Act, present at the meeting.

(3) For the purposes of this section, the laws of Trinidad and Tobago shall apply to any meeting of directors of a company incorporated in Trinidad and Tobago and the meeting is deemed to take place in Trinidad and Tobago.

Delegation of powers.

84. (1) Directors of a company may appoint from their number a managing director or a committee of directors and delegate to the managing director or committee any of the powers of the directors.

(2) Notwithstanding subsection (1), no managing director and no committee of directors of a company may—

(a) submit to the shareholders any question or matter requiring the approval of the shareholders;

(b) fill a vacancy among the directors or in the office of auditor;

(d) declare dividends;

(e) purchase, redeem or otherwise acquire shares issued by the company;

(f) approve a management proxy circular referred to in Division 6;

(g) approve any financial statements referred to in section 151; or

(h) adopt, amend or repeal Bye-laws.

Validity of acts.

85. An act of a director or officer is valid notwithstanding any irregularity in his election or appointment, or any defect in his qualification.

Resolution in writing

86. (1) When a resolution in writing is signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors—

(a) the resolution is deemed to be as valid as if it had been passed at a meeting of directors or a committee of directors; and

(b) the resolution is deemed to satisfy all the requirements of this Act relating to meetings of directors or committees of directors.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or committee of directors.

LIABILITIES OF DIRECTORS

Liability for share issue. [5 of 1997].

87. Directors of a company who vote for or consent to a resolution authorizing the issue of a share under section 34 for a consideration other than money are jointly and severally liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share had been issued for money on the date of the resolution.

Liability for other acts.

88. Directors of a company who vote for, or consent to, a resolution authorizing—

(a) a purchase, redemption or other acquisition of shares contrary to section 43, 44 or 45;

(b) a payment of a dividend contrary to section 54 or 55;

(d) a payment of an indemnity contrary to any of the provisions of sections 227 to 236 or section 242, are jointly and severally liable to restore to the company any amounts so distributed or paid and not otherwise recovered by the company.

Contribution for judgment.

89. A director who has satisfied a judgment founded on a liability under section 87 or 88 is entitled to contribution from the other directors who voted for or consented to the unlawful act upon which the judgment was founded.

Recovery by action.

90. (1) A director who is liable under section 88 may apply to the Court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 43, 44, 45, 54, 55 or 56.

(2) In connection with an application under subsection (1), the Court may, if it is satisfied that it is equitable to do so—

(a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to any of the provisions of section 43, 44, 45, 54, 55, 56, 101 to 105, 227 to 236 or 242;

(b) order a company to return or issue shares to a person from whom the company has purchased, redeemed or otherwise acquired shares; or

Defense to liability.

91. A director of a company is not liable under section 87 if he did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the company would have received if the share had been issued for money.

Time-limit on liability

92. An action to enforce a liability imposed under section 87 or 88 may not be commenced after two years from the date of the resolution authorizing the action complained of.

CONTRACTUAL INTEREST

Interest in contracts. [5 of 1997].

93. (1) A director or officer of a company—

(a) who is a party to a material contract or proposed material contract with the company; or

(b) who is a director or an officer of any body, or has a material interest in any body, that is a party to a material contract or proposed material contract with the company, shall disclose in writing to the company or request to have entered in the minutes of meetings of directors the nature and extent of his interest.

(2) The disclosure required by subsection (1) shall be made, in the case of a director of a company—

(a) at the meeting at which a proposed contract is first considered;

(b) if the director was not then interested in a proposed contract, at the first meeting after he becomes so interested;

(d) if a person who is interested in a contract later becomes a director of the company, at the first meeting after he becomes a director.

(3) The disclosure required by subsection (1) shall be made, in the case of an officer of a company who is not a director—

(a) forthwith after he becomes aware that the contract or proposed contract is to be considered, or has been considered, at a meeting of directors of the company;

(b) if the officer becomes interested after a contract is made, forthwith after he becomes so interested; or

(c) if a person who is interested in a contract later becomes an officer of the company, forthwith after he becomes an officer.

(4) If a material contract or a proposed material contract is one that, in the ordinary course of the company’s business, would not require approval by the directors or shareholders of the company, a director or officer of the company shall disclose in writing to the company, or request to have entered in the minutes of meetings of directors, the nature and extent of his interest forthwith after the director or officer becomes aware of the contract or proposed contract.

(5) A director of a company who is referred to in subsection (1) shall not be present at, form part of a quorum or vote on any resolution to approve a contract in which he has an interest, unless the contract—

(a) is an arrangement by way of security for money loaned to, or obligations undertaken by him, for the benefit of the company or an affiliate of the company;

(b) is a contract that relates primarily to his remuneration as a director, officer, employee or agent of the company or an affiliate of the company;

(d) is a contract with an affiliate of the company.

(6) Any contract referred to in subsection (1) together with all circumstances relevant thereto shall be reported to the shareholders not later than on the distribution of the next financial statements.

Interest declaration.

94. For the purposes of section 93, a general notice to the directors of a company by a director or an officer of the company declaring that he is a director or officer of, or has a material interest in, another body, and is to be regarded as interested in any contract with that body is a sufficient declaration of interest in relation to any such contract.

Avoidance of nullity.

95. A material contract between a company and one or more of its directors or officers, or between a company and another body of which a director or officer of the company is a director or officer, or in which he has a material interest, is neither void nor voidable—

(a) by reason only of that relationship; or

(b) by reason only that a director with an interest in the contract is present at, or is counted to determine the presence of a quorum at, a meeting of directors or a committee of directors that authorized the contract, if the director or officer disclosed his interest in accordance with section 93(2), (3) or (4) or section 94, as the case may be, and the contract was approved by the directors or the shareholders and was reasonable and fair to the company at the time it was approved.

Setting aside contract.

96. When a director or officer of a company fails to disclose, in accordance with section 93 or 94, his interest in a material contract made by the company, the Court may, upon the application of the company or a shareholder of the company, set aside the contract on such terms as the Court thinks fit

OFFICERS OF A COMPANY

Designation of offices, etc.

97. Subject to this Act and to the articles or Bye-laws of a company or any unanimous shareholder agreement—

(a) the directors of the company may designate the offices of the company, appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the company, except powers to do anything referred to in section 84(2);

(b) a director may be appointed to any office of the company; and

BORROWING POWERS OF DIRECTORS

98. (1) Unless the articles or Bye-laws of, or any unanimous shareholder agreement relating to, the company otherwise provide, the directors of the company may, without authorization of the shareholders—

(a) borrow money upon the credit of the company;

(b) issue, reissue, sell or pledge debentures of the company;

(c) subject to section 56, give a guarantee on behalf of the company to secure performance of an obligation of any person; and

(d) mortgage, charge, pledge, or otherwise create to secure any obligation of the company or any other person a security interest in all or any property of the company that is owned or subsequently acquired by the company.

(2) Notwithstanding section 84(2) and section 97(a), unless the articles or Bye-laws of, or any unanimous shareholder agreement relating to, a company otherwise provide, the directors of the company may by resolution delegate the powers mentioned in subsection (1) to a director, a committee of directors or any officer of the company.

**DUTY OF DIRECTORS AND OFFICERS **

Duty of care.

99. (1) Every director and officer of a company shall in exercising his powers and discharging his duties—

(a) act honestly and in good faith with a view to the best interests of the company; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) In determining what are the best interests of a company, a director shall have regard to the interests of the company’s employees in general as well as to the interests of its shareholders.

(3) The duty imposed by subsection (2) on the directors of a company is owed by them to the company alone; and the duty is enforceable in the same way as any other fiduciary duty owed to a company by its directors.

(4) No information about the business or affairs of a company shall be disclosed by a director or officer of the company except—

(a) for the purposes of the exercise or performance of his functions as a director or officer;

(b) for the purposes of any legal proceedings;

(d) when authorized by the company.

(5) Every director and officer of a company shall comply with this Act and the Regulations, and with the articles and Bye-laws of the company, and any unanimous shareholder agreement relating to the company.

(6) Subject to section 137(2), no provision in a contract, the articles of a company, its Bye-laws or any resolution, relieves a director or officer of the company from the duty to act in accordance with this Act or the Regulations, or relieves him from liability for a breach of this Act or the Regulations.

Dissenting to resolution. [5 of 1997].

100. (1) A director who is present at a meeting of the directors or of a committee of directors is deemed to have consented to any resolution passed or action taken at that meeting, unless—

(a) he requests that his dissent be or his dissent is entered in the minutes of the meeting;

(b) he sends his written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) he sends his dissent by registered post or delivers it to the registered office of the company immediately after the meeting is adjourned.

(2) A director who votes for a resolution may not dissent under subsection (1).

(3) A director who was not present at a meeting at which a resolution was passed or action taken is presumed to have consented thereto unless, within twenty-one days after he becomes aware of the resolution, he—

(a) causes his dissent to be placed with the minutes of the meeting; or

(b) sends his dissent by registered post or delivers it to the registered office of the company, provided that, where a director fails to comply with paragraph (a) or (b) within the specified time, he may apply to the Court for relief, and the Court, if satisfied that failure to comply was accidental or due to inadvertence or that it is just and equitable to grant relief, may make an order extending the time for complying with paragraph (a) or (b) for such period as the Court may think proper.

(4) A director is not liable under section 87, 88 or 99 if he relies in good faith upon—

(a) financial statements of the company represented to him by an officer of the company; or

(b) a report of an Attorney-at-law, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by him.

INDEMNITIES

Indemnifying directors, etc. [5 of 1997].

101. (1) Except in respect of an action by or on behalf of a company or body corporate to obtain a judgment in its favor, a company may indemnify—

(a) a director or officer of the company;

(b) a former director or officer of the company; or

(c) a person who acts or acted at the company’s request as a director or officer of a body corporate of which the company is or was a shareholder or creditor, or his personal representatives, against all costs, charges and expenses (including an amount paid to settle an action or satisfy a judgment) reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being, or having been, a director or officer of that company or body corporate.

(2) Subsection (1) does not apply unless the director or officer to be so indemnified—

(a) acted honestly and in good faith with a view to the best interests of the company; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful.

For derivative action. [5 of 1997].

102. A company may with the approval of the Court indemnify a person referred to in section 101 in respect of an action—

(a) by or on behalf of the company or body corporate to obtain a judgment in its favor; and

(b) to which he is made a party by reason of being or having been a director or an officer of the company or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with the action, if he fulfills the conditions set out in section 101(2).

Right to indemnity.

103. Notwithstanding anything in section 101 or 102, a person described in section 101 is entitled to indemnity from the company in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being, or having been, a director or officer of the company or body corporate, if the person seeking indemnity—

(a) was substantially successful on the merits in his defense of the action or proceeding;

(b) fulfills the conditions set out in section 101(2); and

Insurance of directors, etc. [5 of 1997].

104. A company may purchase and maintain insurance for the benefit of any person referred to in section 101 against any liability incurred by him—

(a) in his capacity as a director or officer of the company, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the company; or

(b) in his capacity as a director or officer of another body corporate where he acts or acted in that capacity at the company’s request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the company.

Court approval of indemnity. [5 of 1997].

105. (1) A company or person referred to in section 101 may apply to the Court for an order approving an indemnity under section 102 or 103; and the Court may so order and make any further order it thinks fit.

(2) An applicant under subsection (1) shall give the Registrar notice of the application; and the Registrar may appear and be heard in person or by an Attorney-at-law.

(3) Upon an application under subsection (1), the Court may order notice to be given to any interested person; and that person may appear and be heard in person or by an Attorney-at-law.

REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES

Remuneration

106. Subject to its articles or Bye-laws or any unanimous shareholder agreement, the directors of a company may fix the remuneration of the officers and employees of the company and the shareholders in general meeting may fix the fees payable to the directors.

DIVISION 5—SHAREHOLDERS OF COMPANIES

MEETINGS OF SHAREHOLDERS

107. (1) The following persons are shareholders in a company:

(a) a person who is a member of the company under section 349(3);

(b) the personal representative of a deceased shareholder and the trustee in bankruptcy of a bankrupt shareholder;

(c) a person in whose favor a transfer of shares has been executed and delivered but whose name has not been entered in the register of members of the company or, if two or more such transfers have been executed and delivered, the person in whose favor the most recent transfer has been made, provided that in the case of a company other than a public company in respect of the persons mentioned in paragraphs (b) and (c), this section shall take effect subject to the provisions of its articles or Bye-laws.

(2) In this Act, any reference to holders of shares is a reference to persons who are shareholders in respect of the shares and any reference to holding shares shall be construed accordingly.

(3) For the purposes of this Act, shares shall be considered as having been issued if any person is a shareholder in respect of them.

(4) Meetings of shareholders of a company shall be held at the place within Trinidad and Tobago provided in the Bye laws, or, in the absence of any such provision, at the place within Trinidad and Tobago that the directors determine.

(5) Notwithstanding subsection (4), a meeting of shareholders of a company may be held outside of Trinidad and Tobago if all the shareholders entitled to vote at the meeting so agree.

(6) A shareholder who attends a meeting of shareholders held outside Trinidad and Tobago agrees to its being so held unless he attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

Meeting outside Trinidad and Tobago. [5 of 1997].

108. (1) Notwithstanding section 107, if the articles of a company so provide, meetings of shareholders of a company may be held outside Trinidad and Tobago.

(2) If the Bye-laws so provide and the requisite notice for the holding of the meeting is given, a shareholder may participate in a meeting of shareholders by means of such telephone or other communication facilities as permit all persons participating in the meeting to hear each other.

(3) A person who participates in a meeting of shareholders by such means as are described in subsection (2), is, for the purposes of this Act, present at the meeting.

(4) For the purposes of this section, the laws of Trinidad and Tobago shall apply to any meeting of shareholders of a company incorporated in Trinidad and Tobago and the meeting is deemed to take place in Trinidad and Tobago.

Calling meetings.

109. The directors of a company—

(a) shall call an annual meeting of shareholders not later than eighteen months after the company comes into existence, and subsequently not later than fifteen months after holding the last preceding annual meeting; and

(b) may at any time call a special meeting of shareholders.

Record date of shareholders. [5 of 1997].

110. (1) For the purpose of—

(a) determining the shareholders of the company who are—

(i) entitled to receive payment of a dividend; or

(ii) entitled to participate in a winding-up distribution; or

(b) determining the shareholders of the company for any other purpose except the right to receive notice of, or to vote at, a meeting, the directors may fix in advance a date as the record date for the determination of shareholders; but that record date shall not precede by more than thirty days the particular action to be taken.

(2) For the purpose of determining shareholders who are entitled to receive notice of a meeting of shareholders of the company, the directors of the company may fix in advance a date as the record date for the determination of shareholders; but the record date shall not precede by more than sixty days or by less than fourteen days the date on which the meeting is to be held.

Statutory date. [5 of 1997].

111. If no record date is fixed—

(a) the record date for determining the shareholders who are entitled to receive a notice of a meeting of the shareholders is—

(i) the close of business on the date immediately preceding the day on which the notice is given; or

(ii) if no notice is given, the day on which the meeting is held; and

(b) the record date for the determination of shareholders for any purpose other than the purpose specified in paragraph (a) is the close of business on the day on which the directors pass the resolution relating to that purpose.

Notice of record date.

112. If a record date is fixed under section 110, notice thereof shall, in the case of a public company, be given—

(a) to the Commission; and

(b) by advertisement in a daily newspaper published in Trinidad and Tobago, not less than seven days before the date so fixed.

Notice of meeting. [5 of 1997].

113. (1) Subject to the giving of at least twenty-one days’ notice of a special resolution, notice of the time and place of a meeting of shareholders shall be sent not less than ten days nor more than fifty days before the meeting—

(a) to each shareholder entitled to vote at the meeting;

(b) to each director; and

(2) A notice of a meeting of shareholders of a company is not required to be sent to shareholders of the company who were not registered on the records of the company or its transfer agent on the record date determined under section 110 or 111, as the case may be, but failure to receive notice does not deprive a shareholder of the right to vote at the meeting.

(3) If a meeting of shareholders is adjourned for less than thirty days, it is not necessary, unless the Bye-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the meeting that is adjourned.

(4) If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty days or more, notice of the adjourned meeting shall be given as for an original meeting; but, unless the meeting is adjourned by one or more adjournments for an aggregate of more than ninety days, section 143(1) does not apply.

Special business.

114. (1) All business transacted at a special meeting of shareholders, and all business transacted at an annual meeting of shareholders, is special business, except—

(a) the consideration of the financial statements;

(b) the directors’ report, if any;

(d) the sanction of dividends;

(e) the election of directors; and

(f) the reappointment of the incumbent auditor.

(2) Notice of a meeting of shareholders at which special business is to be transacted shall state—

(a) the nature of that business in sufficient detail to permit the shareholder to form a reasoned judgment thereon; and

(b) the text of any special resolution to be submitted to the meeting.

Waiver of notice and telephone participation. [5 of 1997].

115. (1) A shareholder and any other person who is entitled to attend a meeting of shareholders may in any manner waive notice of the meeting, and the attendance of any person at a meeting of shareholders is a waiver of notice of the meeting by that person unless he attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

(2) Subject to the Bye-laws of a company, a shareholder may, if all the shareholders of the company or, in the case of a class of shareholders, all the shareholders of that class consent, participate in a meeting of shareholders by means of such telephone or other communication facilities as permit all persons participating in the meeting to hear each other.

(3) A shareholder who participates in a meeting of shareholders by such means as are described in subsection (2) is, for the purposes of this Act, present at the meeting.

“Proposals” of shareholders.

116. A shareholder of a company who is entitled to vote at an annual meeting of the shareholders may—

(a) submit to the company notice of any matter that he proposes to raise at the meeting (in this Division referred to as a “proposal”); and

(b) discuss at the meeting any matter in respect of which he would have been entitled to submit a proposal.

Inclusion in proxy circular. [5 of 1997].

117. (1) A company that solicits proxies shall set the proposal out in the management proxy circular required by section 144 or attach the proposal to that circular.

(2) If so requested by a shareholder who submits a proposal to a company, the company shall include in the management proxy circular, or attach to it, a statement by the shareholder of not more than two hundred words in support of the proposal, and the name and address of the shareholder.

Nomination in proposal.

118. A proposal may include nominations for the election of directors if the proposal is signed by one or more holders of shares who represent in the aggregate not less than—

(a) five per cent of the shares of the company; or

(b) five per cent of the shares of a class of shares of the company, entitled to vote at a meeting to which the proposal is to be presented; but this section does not preclude nominations made at a meeting of shareholders of a company that is not required to solicit proxies under section 143.

Non-compliance with proxy solicitation. [5 of 1997].

119. A company is not required to comply with section 117 if—

(a) the proposal is not submitted to the company at least sixty days before the anniversary date of the previous annual meeting of shareholders of the company;

(b) it clearly appears that the proposal is submitted by the shareholder primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the company or its directors, officers, shareholders or debenture holders or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes;

(c) the company, at the shareholder’s request, included a proposal in a management proxy circular relating to a meeting of shareholders held within two years preceding the receipt of that request and the shareholder failed to present the proposal, in person or by proxy, at the meeting;

(d) substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident’s proxy circular relating to a meeting of shareholders held within two years preceding the receipt of the shareholder’s request and the proposal was defeated;

(e) the rights conferred by that subsection are being abused to secure publicity; or

(f) where the matter in the best judgment of the directors is inimical to the commercial interest of the company.

Publishing immunity.

120. No company, or person acting on its behalf, incurs any liability by reason only of circulating a proposal or statement in compliance with this Act.

Refusal notice. [5 of 1997]

121. When a company refuses to include a proposal or a statement referred to in section 117(2) in a management proxy circular, the company shall, within ten days after receiving the proposal or statement, notify the shareholder submitting the proposal or statement of its intention to omit the proposal or statement from the management proxy circular; and the company shall notify him in writing of the reasons for its refusal.

Restraining meeting.

122. Upon application to the Court by a shareholder of a company who is claiming to be aggrieved by the company’s refusal under section 121 to include a proposal in a management proxy circular, the Court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Right to omit proposal.

123. A company or any person claiming to be aggrieved by a proposal submitted to the company may apply to the Court for an order permitting the company to omit the proposal from its management proxy circular and the Court may, if it is satisfied that section 119 applies, make such order as it thinks fit.

Registrar’s notice.

124. An applicant under section 122 or 123 shall give the Registrar notice of the application, and the Registrar may appear and be heard in person or by an Attorney-at-law.

SHAREHOLDER LISTS

List of shareholders. [5 of 1997].

125. (1) A public company or a company with twenty-five or more shareholders shall—

(a) not later than ten days after the record date is fixed under section 110(2), if a record date is so fixed; or

(b) if no record date is fixed—

(i) at the close of business on the date immediately preceding the day on which the notice is given; or

(ii) if no notice is given, as of the day on which the meeting is held, prepare a list of its shareholders, who are entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of shares held by each shareholder.

(1A) For the purposes of subsection (1), two or more joint shareholders shall be counted as one shareholder.

(2) When a company fixes a record date under section 110(2), a person named in the list prepared under subsection (1)(a) is, subject to subsection (3), entitled at the meeting to which the list relates, to vote the shares shown opposite his name.

(3) Where a person has transferred the ownership of any of his shares in a company after the record date fixed by the company, if the transferee of those shares—

(a) produces properly endorsed share certificates to the company or otherwise establishes to the company that he owns the shares; and

(b) demands, not later than ten days before the meeting of the shareholders of the company, that his name be included in the list of shareholders before the meeting, the transferee may vote such shares at the meeting, unless the transfer is one that a company is for any reason entitled to refuse to register pursuant to the provisions of its articles or Bye-laws;

(4) When a company does not fix a record date under section 110(2), a person named in a list of shareholders prepared under subsection (1)(b) may, at the meeting to which the list relates, vote the shares shown opposite his name.

Examination of list.

126. A shareholder of a company may examine the list of its shareholders—

(a) during usual business hours at the registered office of the company or at the place where its register of shareholders is maintained; and

(b) at the meeting of shareholders for which the list was prepared.

QUORUM

Quorum at meetings. [5 of 1997].

127. (1) Unless the Bye-laws otherwise provide, a quorum of shareholders is present at a meeting of shareholders if the holders of a majority of the shares entitled to vote at the meeting are present in person or represented by proxy.

(2) If a quorum is present at the opening of a meeting of shareholders, the shareholders present may, unless the Bye-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

(3) Unless the Bye-laws otherwise provide, if a quorum is not present within thirty minutes of the time appointed for a meeting of shareholders, the meeting stands adjourned to the same day two weeks thereafter, at the same time and place; and, if at the adjourned meeting, a quorum is not present within thirty minutes of the appointed time, the shareholders present constitute a quorum.

(4) When a company has only one shareholder, or has only one shareholder of any class or series of shares, that shareholder present in person or by proxy constitutes a meeting.

VOTING SHARES

Right to vote shares.

128. Unless the articles of the company otherwise provide, on a show of hands a shareholder or proxy holder has one vote; and upon a ballot a shareholder or proxy holder has one vote for every share held.

Representative of other body

129. (1) When a body corporate is a shareholder of a company, the company shall recognize any individual authorized by a resolution of the directors or governing body of the body corporate to represent it at meetings of shareholders of the company.

(2) An individual who is authorized as described in subsection (1) may exercise, on behalf of the body corporate that he represents, all the powers it could exercise if it were an individual shareholder.

Joint shareholders.

130. Unless the Bye-laws otherwise provide, if two or more persons hold shares jointly, one of those holders present at a meeting of shareholders may, in the absence of the other, vote the shares; but if two or more of those persons who are present, in person or by proxy, vote, they shall vote as one on the shares jointly held by them.

Voting method at meetings.

131. (1) Unless the Bye-laws otherwise provide, voting at a meeting of shareholders shall be by a show of hands, except when a ballot is demanded by a shareholder or proxy holder entitled to vote at the meeting.

(2) A shareholder or proxy holder may demand a ballot either before or immediately after any vote by show of hands.

Resolution in writing.

132. (1) Except where a written statement is submitted by a director under section 76 or an auditor under section 171—

(a) a resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders; and

(b) a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders, and signed by all the shareholders entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the meetings of shareholders but failure so to keep such copy does not render void any action taken by the company.

COMPULSORY MEETING

Requisitioned shareholders meeting. [5 of 1997].

133. (1) The holders of not less than five per cent of the issued shares of a company that carry the right to vote at a meeting sought to be held by them may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.

(2) The requisition referred to in subsection (1), which may consist of several documents of like form, each signed by one or more shareholders of the company, shall state the business to be transacted at the meeting and shall be sent to each director and to the registered office of the company.

(3) Upon receiving a requisition referred to in subsection (1), the directors shall call a meeting of shareholders to transact the business stated in the requisition, unless—

(a) a record date has been fixed under section 110(2) and notice thereof has been given under section 112;

(b) the directors have called a meeting of shareholders and have given notice thereof under section 113; or

(4) If, after receiving a requisition referred to in subsection (1), the directors do not call a meeting of shareholders within twenty-one days after receiving the requisition, any shareholder who signed the requisition may call the meeting.

(5) A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to the Bye-laws, this Division and Division 6 of this Part.

(6) Unless the shareholders otherwise resolve at a meeting called under subsection (4), the company shall reimburse the shareholders who requisitioned the meeting the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

134. (1) Upon the application to the Court by a director of a company or a shareholder of the company who is entitled to vote at a meeting of the shareholders, or by the Registrar, the Court may—

(a) when for any reason it is impracticable—

(i) to call a meeting of shareholders in the manner in which meetings of shareholders can be called; or

(ii) to conduct the meeting in the manner prescribed by the Bye-laws and this Act; or

(b) when the directors fail to call a meeting of the shareholders in contravention of section 133; or

(c) for any other reason thought fit by the Court, order a meeting of shareholders to be called, held and conducted in such manner as the Court may direct.

(2) Without restricting the generality of subsection (1), the Court may order that the quorum required by the Bye-laws or this Act be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

(3) A meeting of the shareholders of a company called, held and conducted pursuant to this section is for all purposes a meeting of shareholders of the company duly called, held and conducted.

CONTROVERTED AFFAIRS

135. (1) A company or a shareholder or director thereof may apply to the Court to determine any controversy with respect to an election or appointment of a director or auditor of the company.

(2) Upon an application made under this section, the Court may make any order it thinks fit including—

(a) an order restraining a director or auditor whose election or appointment is challenged from acting, pending determination of the dispute;

(b) an order declaring the result of the disputed election or appointment;

(c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the company until a new election is held, or appointment made; and

(d) an order determining the voting rights of shareholders and of persons claiming to own shares.

SHAREHOLDER AGREEMENTS

Pooling agreement.

136. (1) A written agreement between two or more shareholders of a company may provide that in exercising voting rights the shares held by them will be voted as provided in the agreement.

(2) An aggrieved party to an agreement referred to in subsection (1) may not bring any action or make any claim against a company on the grounds that shares were not voted in accordance with that agreement.

Unanimous shareholder agreement.

137. (1) An otherwise lawful written agreement among all the shareholders of a company, or among all the shareholders and a person who is not a shareholder, that restricts, in whole or in part, the powers of the directors of the company to manage the business and affairs of the company is valid.

(2) A shareholder who is a party to any unanimous shareholder agreement has all the rights, powers and duties, and incurs all the liabilities of a director of the company to which the agreement relates, to the extent that the agreement restricts the powers of the directors to manage the business and affairs of the company; and the directors are thereby relieved of their duties and liabilities to the same extent.

(3) If a person who is the beneficial owner of all the issued shares of a company makes a written declaration that restricts in whole or in part the powers of the directors to manage the business and affairs of the company, the declaration constitutes a unanimous shareholder agreement.

(4) Where any unanimous shareholder agreement is executed or terminated, written notice of that fact, together with the date of the execution or termination thereof, shall be filed with the Registrar within fifteen days after the execution or termination, and in default thereof, the Registrar shall be entitled to collect from the company a penalty of one hundred dollars for every month, or part thereof, after the fifteen days that the company fails to file the notice.

SHAREHOLDER APPROVAL

Extraordinary transaction. [5 of 1997].

138. (1) A sale, lease or exchange of all, or substantially all, the property of a company other than in the ordinary course of business of the company requires the approval of the shareholders in accordance with this section.

(2) A notice of a meeting of shareholders complying with section 113 shall be sent in accordance with that section to each shareholder and shall—

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange; and

(b) state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 227, but failure to make the statement referred to in paragraph (b) does not invalidate a sale, lease or exchange referred to in subsection (1).

(3) At the meeting referred to in subsection (2) the shareholders may authoriZe the sale, lease or exchange of the property, and may fix or authorize the directors to fix any of the terms and conditions of the sale, lease or exchange.

(4) Each share of the company carries the right to vote in respect of a sale, lease or exchange referred to in subsection (1), whether or not it otherwise carries the right to vote.

(5) The shareholders of a class or series of shares of the company are entitled to vote separately as a class or series in respect of a sale, lease or exchange referred to in subsection (1) only if the class or series is affected by the sale, lease or exchange in a manner different from the shares of another class or series.

(6) A sale, lease or exchange referred to in subsection (1) is adopted when the shareholders of each class or series of shares who are entitled to vote thereon have, by special resolution, approved of the sale, lease or exchange.

(7) Notwithstanding any authorization given by the shareholders under subsection (1), the directors of a company may, subject to the rights of third parties, abandon the sale, lease or exchange without any further approval of the shareholders.

(8) Where a sale, lease or exchange is abandoned under subsection (7), the directors shall notify the shareholders of the abandonment and the reasons therefor within thirty days of the decision to abandon it.

DIVISION 6 — PROXIES

Definitions.

139. (1) In this Part—

“broker” means a person registered as a broker under Part IV of the Securities Industry Act;

“form of proxy” means a written or printed form that, upon completion and signature by or on behalf of a shareholder, becomes a proxy;

“proxy” means a completed and signed form of proxy by means of which a shareholder appoints a proxy holder to attend and act on his behalf at a meeting of shareholders;

“solicit” or “solicitation” includes, subject to subsection (2)—

(a) a request for a proxy, whether or not accompanied with or included in a form of proxy;

(b) a request to execute or not to execute a form of proxy or to revoke a proxy;

(c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy; and

(d) the sending of a form of proxy to a shareholder under section 143;

“solicitation by or on behalf of the management of a company” means a solicitation by any person pursuant to a resolution or instructions of, or with the acquiescence of, the directors or a committee of directors of the company concerned.

(2) the term “solicit” or “solicitation” does not include—

(a) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder;

(b) the performance of administrative acts or professional services on behalf of a person soliciting a proxy;

(d) a solicitation by a person in respect of shares of which he is the beneficial owner.

PROXY HOLDERS

Proxy appointment.

140. (1) A shareholder who is entitled to vote at a meeting of shareholders may by means of a proxy appoint a proxy holder, or one or more alternate proxy holders, none of whom need be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.

(2) A proxy shall be executed in writing by the shareholder or his attorney authorized in writing.

(3) A proxy is valid only at the meeting in respect of which it is given or any adjournment of that meeting.

Revocation of proxy.

141. A shareholder of a company may revoke a proxy—

(a) by depositing an instrument in writing executed by him or by his attorney authorized in writing—

(i) at the registered office of the company at any time, up to and including the last business day preceding the day of the meeting, or any adjournment of that meeting, at which the proxy is to be used; or

(ii) with the chairman of the meeting on the day of the meeting or any adjournment of that meeting; or

(b) in any other manner permitted by law.

Deposit of proxy.

142. (1) The directors of a company may specify in a notice calling a meeting of the shareholders of the company a time not exceeding forty-eight hours preceding the meeting or an adjournment of the meeting before which time proxies to be used at the meeting shall be deposited with the company or its agent.

(2) In the calculation of time for the purposes of subsection (1), Saturdays, Sundays and public holidays are to be excluded.

Mandatory solicitation of proxy. [5 of 1997].

143. (1) Subject to subsection (2), the management of a company shall, concurrently with the giving of notice of a meeting of shareholders, send a form of proxy in the prescribed form to each shareholder who is entitled to receive notice of the meeting.

(2) Where a company, other than a public company, has fewer than twenty-five shareholders, two or more joint shareholders being counted as one, the management of the company need not send a form of proxy under subsection (1).

Prohibited solicitation.

144. A person shall not solicit proxies unless there is sent to the auditor of the company, to each shareholder whose proxy is solicited and to the company if the solicitation is not by or on behalf of the management of the company—

(a) a management proxy circular in the prescribed form, either as an appendix to, or as a separate document accompanying the notice of the meeting, when the solicitation is by or on behalf of the management of the company; or

(b) a dissident’s proxy solicitation, in the prescribed form stating the purpose of the solicitation, when the solicitation is not by or on behalf of the management of the company.

Documents for Commission.

145. A person required to send a management proxy circular or dissident’s proxy circular shall concurrently send a copy thereof to the Commission, together with a copy of the notice of the meeting, form of proxy and any other documents for use in connection with the meeting.

Exemption by Commission.

146. Upon the application of an interested person, the Commission may, on such terms as it thinks fit, exempt that person from any of the requirements of section 143 or 144, and the exemption may be given retroactive effect by the Commission.

Proxy attending meeting.

147. (1) A person who solicits a proxy and is appointed proxy holder shall—

(a) attend in person, or cause an alternate proxy holder to attend, the meeting in respect of which the proxy is given; and

(b) comply with the directions of the shareholder who appointed him.

(2) A proxy holder or an alternate proxy holder has the same rights as the shareholder who appointed him—

(a) to speak at the meeting of shareholders in respect of any matter;

(b) to vote by way of ballot at the meeting; and

(c) except when a proxy holder or an alternate proxy holder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of any show of hands.

SHARE REGISTRANTS

Duty of broker.

148. (1) Shares of a company that are registered in the name of a broker or his nominee and not beneficially owned by the broker may not be voted unless the broker forthwith after the receipt thereof sends to the beneficial owner—

(a) a copy of the notice of the meeting, financial statements, management proxy circular, dissident’s proxy circular and any other documents sent to shareholders by or on behalf of any person for use in connection with the meeting, other than the form of proxy; and

(b) except where the broker has received written voting instructions from the beneficial owner, a written request for voting instructions.

(2) A broker may not vote or appoint a proxy holder to vote shares registered in his name or in the name of his nominee that he does not beneficially own unless he receives voting instructions from the beneficial owner of the shares.

(3) A person by or on behalf of whom a solicitation is made shall, at the request of a broker, forthwith furnish to the broker at that person’s expense the necessary number of copies of the documents referred to in subsection (1)(a).

(4) A broker shall vote or appoint a proxy holder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

(5) If requested by a beneficial owner of shares of a company, the broker of those shares shall appoint the beneficial owner or a nominee of the beneficial owner as proxy holder for those shares.

(6) The failure of a broker to comply with this section does not render void any meeting of shareholders or any action taken at the meeting.

Governing prohibition.

149. Nothing in section 148 gives a broker the right to vote shares that he is otherwise prohibited from voting.

REMEDIAL POWERS

Restraining order. [5 of 1997].

150. (1) If a form of proxy, management proxy circular or dissident’s proxy circular—

(a) contains an untrue statement of a material fact; or

(b) omits to state a material fact required therein or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made, an interested person may apply to the Commission.

(2) On an application under this section, the Commission may make any order it thinks fit, including any or all of the following orders:

(a) an order restraining the solicitation or the holding of the meeting or restraining any person from implementing or acting upon any resolution passed at the meeting to which the form of proxy, management proxy circular or dissident’s proxy circular relates;

(b) an order requiring correction of any form of proxy or proxy circular and a further solicitation; or

(3) An applicant under this section shall give the Registrar notice of the application and the Registrar may appear and be heard in person or by an Attorney-at-law.

DIVISION 7 — FINANCIAL DISCLOSURE COMPARATIVE FINANCIAL STATEMENTS

Annual financial returns. [5 of 1997].

151. (1) Subject to this section and to section 152, the directors of a company shall place before the shareholders at every annual meeting of the shareholders of the company—

(a) comparative financial statements, as prescribed, relating separately to—

(i) the period that began on the date the company came into existence and ended not more than twelve months after that date, or, if the company has completed a financial year, the period that began immediately after the end of the last period for which financial statements were prepared and ended not more than twelve months after the beginning of that period; and

(ii) the immediately preceding financial year;

(b) the report of the auditor, if any; and

(c) any further information respecting the financial position of the company and the results of its operations required by the articles of the company, its Bye-laws, or any unanimous shareholder agreement and any information required to be reported under section 93(6).

(2) The financial statements required by subsection (1)(a)(ii) may be omitted if the reason for the omission is set out in the financial statements, or in a note thereto, to be placed before the shareholders at an annual meeting.

(3) The Registrar may in any particular case adjust the period relating to which financial statements are to be placed before the shareholders at any annual meeting.

152. (Repealed by Act No. 5 of 1997).

Consolidated financial returns.

153. (1) A company shall keep at its registered office a copy of the financial statements of each of its subsidiary bodies corporate the accounts of which are consolidated in the financial statements of the company.

(2) A shareholder of a company who holds not less than five per cent of the equity of the company, or his agent or legal representative, may, upon request therefor, examine the statements referred to in subsection (1) during the usual business hours of the company, and may make extracts from those statements free of charge.

(3) A company may, within fifteen days of a request to examine statements under subsection (2), apply to the Court for an order barring the right of any person to examine those statements and the Court may, if it is satisfied that the examination would be detrimental to the company or a subsidiary body corporate, bar that right and make any further order the Court thinks fit.

(4) A company shall give the Registrar and the person asking to examine statements under subsection (2) notice of any application under subsection (3); and the Registrar and that person may appear and be heard in person or by an Attorney-at-law.

(5) Where a company applies for an order under subsection (3), the company shall, within seven days, send to the Registrar a copy of the order made by the Court.

Approval of directors.

154. (1) The directors of a company shall approve the financial statements referred to in section 151, and the approval shall be evidenced by the signature of one or more directors.

(2) A company shall not issue, publish or circulate copies of the financial statements referred to in section 151 unless the financial statements are—

(a) approved and signed in accordance with subsection (1); and

(b) accompanied by a report of the auditor of the company, if any. 154. (1) The directors of a company shall approve the financial statements referred to in section 151, and the approval shall be evidenced by the signature of one or more directors.

(2) A company shall not issue, publish or circulate copies of the financial statements referred to in section 151 unless the financial statements are—

(a) approved and signed in accordance with subsection (1); and

(b) accompanied by a report of the auditor of the company, if any.

Copies of documents to be sent to shareholders.

155. (1) Not less than twenty-one days before each annual meeting of the shareholders of a company before the signing of a resolution under section 132(1)(b) in lieu of its annual meeting, the company shall send a copy of the documents referred to in section 151 to each shareholder, except a shareholder who has informed the company in writing that he does not want a copy of those documents.

(2) Notwithstanding subsection (1), a public company whose shares, or any class of whose shares, are listed need not, in such cases as may be prescribed and provided any prescribed conditions are complied with, send copies of the documents referred to in section 151 to shareholders of the company, but may instead send them a summary financial statement.

(3) The summary financial statement shall be derived from the company’s annual accounts and the directors’ report and shall be in the prescribed form and contain the prescribed information.

(4) Every summary financial statement shall—

(a) state that it is only a summary of information in the company’s annual accounts and the directors’ report;

(b) contain a statement of the company’s auditors of their opinion as to whether the summary financial statement is consistent with those accounts and that report and complies with the requirements of this section and the regulations;

(c) state whether the auditors’ report on the annual accounts was unqualified or qualified, and if it was qualified set out the report in full together with any further material needed to understand the qualification;

(d) state whether the auditors’ report on the annual accounts contained a statement as to—

(i) the inadequacy of the accounting records or returns;

(ii) the accounts not agreeing with the records or returns; or

(iii) the failure to obtain necessary information or explanations.

(5) In subsection (2), “listed” means admitted to the official list of the Trinidad and Tobago Stock Exchange.

Registrar’s copies. [5 of 1997].

156. (1) A public company shall deliver a copy of the documents referred to in section 151 to the Registrar not less than twenty-one days before each annual meeting of the shareholders or forthwith after the signing of a resolution under section 132(1)(b) in lieu of the annual meeting, and in any event not later than fifteen months after the last date when the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed.

(2) (Repealed by Act No. 5 of 1997).**

(3) If a company referred to in subsection (1)—

(a) sends interim financial statements or related documents to its shareholders; or

(b) is required to file interim financial statements or related documents with, or to send them to, a public authority or a recognized stock exchange, the company shall forthwith send copies thereof to the Registrar.

(4) A subsidiary company is not required to comply with this section if—

(a) the financial statements of its holding company are in consolidated or combined form and include the accounts of the subsidiary; and

(b) the consolidated or combined financial statements of the holding company are included in the documents sent to the Registrar by the holding company in compliance with this section.

(5) The Registrar is entitled to collect, from a company that fails to comply with subsection (1), a penalty of one hundred dollars for every day, or part thereof, that the company thereafter fails to deliver to the Registrar a copy of the documents referred to in subsection (1).

AUDIT COMMITTEE

157. (1) Subject to subsection (2), a public company shall, and any other company may, have an audit committee composed of not less than three directors of the company, a majority of whom are not officers or employees of the company or any of its affiliates.

(2) A public company may apply to the Commission for an order authorizing the company to dispense with an audit committee, and the Commission may, if it is satisfied that the shareholders will not be prejudiced by such an order, permit the company to dispense with an audit committee on such reasonable conditions as it thinks fit.

(3) An audit committee shall review the financial statements of the company before such financial statements are approved under section 154 and report its findings to the Board of Directors.

(4) The auditor of a company is entitled to receive notice of every meeting of the audit committee and, at the expense of the company, to attend and be heard thereat; and, if so requested by a member of the audit committee, shall attend every meeting of the committee held during the term of office of the auditor.

(5) The auditor of a company or a member of the audit committee may call a meeting of the committee.

AUDITOR

Eligibility for appointment. [5 of 1997].

158. (1) A person is eligible for appointment as auditor of a company only if he—

(a) is a practizing member of a recognized supervisory body; and

(b) is eligible for the appointment under the rules of that body.

(2) An individual or a firm may be appointed as auditor of a company, but a company or other body corporate shall not be so appointed, unless there is in force in relation to that company or body corporate a policy of insurance which covers liability in respect of professional negligence on terms and to an amount satisfactory to the Commission.

(3) In this section, “recognized supervisory body” means the Institute of Chartered Accountants of Trinidad and Tobago and such other body as the President may, by Order, designate.

Ministerial authorization of appointment. [5 of 1997].

159. (1) The Minister may, after consultation with the Institute of Chartered Accountants of Trinidad and Tobago, authorize, by instrument in writing, any person to be appointed as an auditor of companies, if that person is in the opinion of the Minister suitably qualified for such an appointment by reason of his knowledge and experience, provided that such appointment shall not be for a period exceeding one year at a time.

(2) A person who was in practice in Trinidad and Tobago as an auditor on the commencement of this Act shall apply for an authorization to be appointed as an auditor of companies under subsection (1) not later than twelve months after the commencement of this Act.

160. (Repealed by Act No. 5 of 1997).

Ineligibility on ground of lack of independence. [5 of 1997].

161. (1) Subject to subsection (5), a person or a partnership is disqualified from being an auditor of a company if he or any of the partners, as the case may be, is not independent of the company, any of its affiliates, or the directors or officers of any such company or its affiliates.

(2) For the purposes of this section—

(a) independence is a question of fact; and

(b) a person is deemed not to be independent if he or his business partner—

(i) is a business partner, a director, an officer or an employee of the company, of any of its affiliates, or of any director, officer or employee of any such company or its affiliates;

(ii) beneficially owns or controls directly or indirectly a material interest in the shares or debentures of the company or any of its affiliates; or

(iii) has been a receiver, receiver-manager, liquidator or trustee in bankruptcy of the company or any of its affiliates within two years of his proposed appointment as auditor of the company.

(3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of his disqualification.

(4) An interested person may apply to the Court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

(5) An interested person may apply to the Court for an order exempting an auditor from disqualification under this section and the Court may, if it is satisfied that an exemption would not unfairly prejudice the shareholders, make an exemption order on such terms as it thinks fit, which order may have retrospective effect.

Effect of ineligibility. [5 of 1997].

162. (1) No person shall act as auditor of a company if he is disqualified from holding the office.

(2) If during his term of office an auditor of a company becomes disqualified from holding the office, he shall thereupon vacate office and shall forthwith give notice in writing to the company concerned that he has vacated it by reason of ineligibility.

(3) A person who acts as auditor of a company in contravention of subsection (1) or fails to give notice of vacating his office as required by subsection (2) is guilty of an offence.

Appointment of auditor.

163. (1) Subject to section 164, the shareholders of a company shall, by ordinary resolution, at the first annual meeting of shareholders and at each succeeding annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

(2) An auditor appointed under section 67(1)(e) is eligible for appointment under subsection (1).

(3) Notwithstanding subsection (1), if an auditor is not appointed at a meeting of shareholders, the incumbent auditor continues in office until his successor is appointed.

(4) The remuneration of an auditor may be fixed by ordinary resolution of the shareholders, or if not so fixed, it may be fixed by the directors.

Dispensing with auditor.

164. (1) The shareholders of a company, other than a company mentioned in section 156(1), may resolve not to appoint an auditor.

(2) A resolution under subsection (1) is valid only until the next succeeding annual meeting of shareholders.

(3) A resolution under subsection (1) is not valid unless it is consented to by all the shareholders, including shareholders not otherwise entitled to vote.

Cessation of office.

165. (1) An auditor of a company ceases to hold office when—

(a) he dies or resigns; or

(b) he is removed pursuant to section 166.

(2) A resignation of an auditor becomes effective at the time a written resignation is sent to the company, or at the time specified in the resignation, whichever is the later date.

Removal of auditor.

166. (1) The shareholders of a company may, by ordinary resolution at a special meeting, remove an auditor other than an auditor appointed by the Court under section 168.

(2) A vacancy created by the removal of an auditor may be filled at any meeting at which the auditor is removed, or, if the vacancy is not so filled, it may be filled under section 167.

Filling auditor vacancy.

167. (1) Subject to subsection (3), the directors shall forthwith fill a vacancy in the office of auditor.

(2) If there is not a quorum of directors, the directors then in office shall, within twenty-one days after a vacancy in the office of auditor occurs, call a special meeting of shareholders to fill the vacancy; and if they fail to call a meeting, or if there are no directors, the meeting may be called by any shareholder.

(3) The Bye-laws of a company may provide that a vacancy in the office of auditor be filled only by vote of the shareholders.

(4) An auditor appointed to fill a vacancy holds office for the unexpired term of his predecessor.

Court-appointed auditor.

168. (1) If a company does not have an auditor, the Court may, upon the application of—

(a) a shareholder;

(b) the Commission, in the case of a public company; or

(c) the Registrar, in the case of any other company, appoint and fix the remuneration of an auditor, and the auditor holds office until an auditor is appointed by the shareholders.

(2) Subsection (1) does not apply if the shareholders have resolved under section 164 not to appoint an auditor.

Auditor’s right to notice.

169. The auditor of a company is entitled to receive a notice of every meeting of the shareholders of the company, and, at the expense of the company, to attend and be heard at the meeting on matters relating to his duties as auditor.

Required attendance. [5 of 1997].

170. (1) If a shareholder of a company, whether or not he is entitled to vote at the meeting, or a director of a company gives written notice to the auditor of the company or a former auditor who was engaged in the auditing of the financial statements to be considered at such meeting not less than ten days before a meeting of the shareholders of the company, to attend the meeting, the auditor or former auditor, as the case may be, shall attend the meeting at the expense of the company and answer questions relating to his duties as auditor or former auditor of the company.

(2) A shareholder or director who sends a notice referred to in subsection (1) shall, concurrently, send a copy of the notice to the company.

(3) An auditor or former auditor of a company who fails without reasonable cause to comply with subsection (1) is guilty of an offence.

Right to comment. [5 of 1997].

171. (1) An auditor who—

(a) resigns;

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing him from office;

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because his term of office has expired or is about to expire; or

(d) receives a notice or otherwise learns of a meeting of shareholders at which a resolution referred to in section 164 is to be proposed, may submit to the company a written statement giving the reasons for his resignation or the reasons why he opposes any proposed action or resolution.

(2) When it receives a statement referred to in subsection (1), the company shall forthwith send a copy of the statement to every shareholder entitled to receive notice of any meeting referred to in section 169 and to the Registrar, unless the statement is included in, or attached to, a management proxy circular required by section 144.

(3) No person shall accept an appointment or consent to be appointed as auditor of a company if he is replacing an auditor who has resigned, been removed or whose term of office has expired or is about to expire until he has requested and received from that auditor a written statement of the circumstances and the reason why, in that auditor’s opinion, he is to be replaced.

(4) Notwithstanding subsection (3), a person otherwise qualified may accept an appointment or consent to be appointed as auditor of a company if, within fifteen days after making the request referred to in that subsection, he does not receive a reply.

(5) Unless subsection (4) applies, an appointment as auditor of a company of a person who has not complied with subsection (3) is void.

Examination by auditor.

172. (1) An auditor of a company shall make the examination that is in his opinion necessary to enable him to report in the prescribed manner on the financial statements required by this Act to be placed before the shareholders, except such financial statements or parts thereof that relate to the immediately preceding financial year referred to in section 151(1)(a)(ii).

(2) Notwithstanding section 173, an auditor of a company may reasonably rely upon the report of an auditor of a body corporate or an unincorporated business the accounts of which are included in whole or in part in the financial statements of the company.

(3) For the purpose of subsection (2), reasonableness is a question of fact.

(4) Subsection (2) applies whether or not the financial statements of the holding company reported upon by the auditor are in consolidated form.

Right to inspect.

173. (1) Upon the demand of an auditor of a company, the present or former directors, officers, employees or agents of the company shall furnish to the auditor—

(a) such information and explanations; and

(b) such access to records, documents, books, accounts and vouchers of the company or any of its subsidiaries, as are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 172 and that the directors, officers, employees or agents are reasonably able to furnish.

(2) Upon the demand of an auditor of a company, the directors of the company shall—

(a) obtain from the present or former directors, officers, employees or agents of any subsidiary of the company the information and explanations that the directors, officers, employees and agents are reasonably able to furnish, and that are, in the opinion of the auditor, necessary to enable him to make the examination and report required under section 172; and

(b) furnish the information and explanations so obtained to the auditor.

Detected error.

174. (1) A director or an officer of a company shall forthwith notify the audit committee and the auditor of any error or misstatement of which he becomes aware in a financial statement that the auditor or a former auditor of the company has reported upon.

(2) When the auditor or a former auditor of a company is notified or becomes aware of an error or misstatement in a financial statement upon which he has reported to the company and, in his opinion, the error or misstatement is material, he shall inform each director of the company accordingly.

(3) When under subsection (2) the auditor or a former auditor of a company informs the directors of an error or misstatement in a financial statement of the company, the directors shall—

(a) prepare and issue revised financial statements; or

(b) otherwise inform the shareholders of the error or misstatement, and, if the company is one that is required to comply with section 156, inform the Registrar and, in the case of a public company the Commission, of the error or misstatement in the same manner as the directors inform the shareholders of the error or misstatement.

DIVISION 8 — CORPORATE RECORDS

REGISTERED OFFICE OF COMPANY

Registered office.

175. (1) A company shall at all times have a registered office in Trinidad and Tobago.

(2) The directors of the company may change the address of the registered office.

Notice of address.

176. (1) At the time of delivering articles of incorporation, the incorporators shall deliver to the Registrar, in the prescribed form, notice of the address of the registered office of the company and the Registrar shall file the notice.

(2) A company shall, within fifteen days of any change of the address of its registered office, deliver to the Registrar a notice in the prescribed form of the change, which the Registrar shall file.

COMPANY REGISTERS AND RECORDS

Records of company.

177. (1) A company shall prepare and maintain at its registered office records containing—

(a) the articles and the Bye-laws, and all amendments thereto, and a copy of any unanimous shareholder agreement and amendments thereto;

(b) minutes of meetings and resolutions of shareholders; and

(2) A company shall prepare and maintain a register of members showing—

(a) the name and the latest known address of each person who is a member;

(b) a statement of the shares held by each member; and

(c) the date on which each person was entered on the register as a member, and the date on which any person ceased to be a member.

(3) A company shall prepare and maintain a register of its directors and secretaries and a register of directors’ holdings in accordance with sections 178 to 180.

(4) A company that issues debentures shall prepare and maintain a register of debenture holders showing—

(a) the name and the latest known address of each debenture holder;

(b) the principal of the debentures held by each holder; the amount or the highest amount of any premium payable on redemption of the debentures;

(d) the date on which the name of each person was entered on the register as a debenture holder; and

(e) the date on which each person ceased to be a debenture holder.

(5) A company that grants conversion privileges, options, or rights to acquire shares of the company shall maintain a register showing the name and latest known address of each person to whom the privileges, options or rights have been granted, and such other particulars in respect thereof as are prescribed.

(6) A company may appoint an agent to prepare and maintain the registers required by this section to be prepared and maintained by the company, and the registers shall be kept at the registered office of the company or at some other place in Trinidad and Tobago designated by the directors of the company.

REGISTER OF DIRECTORS AND SECRETARIES

Register of directors and secretaries. [5 of 1997]

178. (1) The register of directors and secretaries kept by a company pursuant to section 177(3) shall contain with respect to each director—

(a) a statement of his present forename and surname, any former forename or surname, his usual residential address and his business occupation, if any;

(b) particulars of other directorships held by him; and

(2) The register kept by a particular company need not contain, pursuant to subsection (1)(b), particulars of directorships held by a director in any company of which the particular company is a wholly owned subsidiary.

(3) The register shall contain with respect to the secretary and each assistant secretary—

(a) in the case of an individual, a statement of his present forename and surname, any former forename or surname, and his usual residential address;

(b) in the case of a corporation, a statement of its corporate name and registered or principal office; and

(4) A company shall lodge with the Registrar—

(a) within one month after a person ceases to be a director, except in the case of a person becoming a director pursuant to section 71, a return in the prescribed form notifying the Registrar of the change and containing, with respect to each person who is then a director of the company, the particulars required to be specified in the register in relation to him;

(b) within one month after a person becomes the secretary or an assistant secretary, a return in the prescribed form notifying the Registrar of that fact and containing, with respect to the person, the particulars required to be specified in the register in relation to such a person; and

(c) within one month after a person ceases to be the secretary or an assistant secretary, a return in the prescribed form notifying the Registrar of that fact.

(5) A director in respect of whom an entry is required to be made in the register shall notify the company in writing within fourteen days after the matter occasioning the requirement of the entry occurs or arises, and shall include in the notification the particulars which the company is required to enter in the register in respect of that matter.

(6) A director is guilty of an offence—

(a) if he fails to comply with subsection (5); or

(b) if he gives false, misleading or incomplete information to any company with a view to it making an entry in its register.

Register of directors’ holdings.

179. (1) A public company shall keep a register showing the required particulars with respect to any interest in shares in, or debentures of, the company or of any affiliate or associate of the company, which is vested in a director, and notice of every entry therein, and any change thereof, shall be given to the Commission forthwith.

(2) For the purposes of this section, an interest in shares or debentures is vested in a director if—

(a) the shares or debentures are registered in the director’s name, or the names of the director and other persons jointly, or in the name of a nominee for him, or for him and them;

(b) the director has a derivative interest in the shares or debentures, or a right or power to acquire a derivative interest in them;

(c) the director has a right to subscribe for the shares or debentures, or another person has a right to subscribe for them and the director has a right to acquire them after they have been allotted;

(d) the shares or debentures are the subject of a voting arrangement in favor of a director, that is to say, an arrangement (whether legally enforceable or not) by which the director may require the holder of the shares or debentures to vote, or not to vote, or to vote in a particular manner, at any general meeting of the company or at any meeting of a class of shareholders or debenture holders, or by which the debenture may require the holder of the shares or debentures to appoint the director or any other person to be his proxy with power to vote in respect of the shares or debentures at any such meeting.

(3) For the purposes of subsection (1), the required particulars with respect to an interest in shares or debentures vested in a director are—

(a) the number and classes of the shares and the number, classes and the amount of the principal and premiums payable to the holder of the debentures;

(b) the nature of the interest and its duration (if it is limited in duration);

(c) the date of the acquisition of the interest and the consideration (if any) given by the director or any other person for the acquisition; and

(d) the date of the disposal of the interest by the director or the date of its cessation (whichever first occurs) and the consideration (if any) received by him or any other person for such disposal or cessation.

(4) A director in respect of whom any entry is required to be made in the register shall notify the company in writing within seven days after the matter occasioning the requirement of the entry occurs or arises, and shall include in the notification the particulars which the company is required to enter in the register in respect of that matter.

(5) This section extends to interest in shares and debentures vested in a director at the time when he becomes a director, and subsection (4) applies in that case with the substitution of a period of seven days after the director becomes a director for the period of seven days after the matter occasioning the requirement of an entry occurs or arises.

(6) The register shall be so made up that entries in it against the several names recorded in the register appear in chronological order.

(7) The entries which are required by this section to be made in the register shall not be removed from the register, notwithstanding the fact that the person in respect of whom they are required to be made ceases to be a director, but it shall not be necessary to make an entry in the register in respect of a matter which occurs or arises after he ceases to be a director.

(8) This section does not apply to an interest of a director which is created by the articles of incorporation of a company if the interest is one which is conferred on all the shareholders of the company or on all the shareholders of the class concerned, on the same terms and conditions, as on the director, that is to say, strictly in proportion to the shares, or shares of that class, held by them respectively.

(9) A company, its secretary and every director who is in default, are guilty of an offence—

(a) if the company fails to make an entry required by this section to be made in the register within three days after written notification of the matter required to be registered is given to it or any of its directors (other than a person in respect of whom an entry is required to be made) acquires knowledge of the matter in relation to which an entry is required to be made (whichever is the earlier);

(b) if the company makes a false, misleading or incomplete entry in relation to a matter which is required to be entered in the register; or

(c) if the company fails to give the Commission notice of an entry, or change thereof, within fourteen days of the date on which the making of such entry or change was due.

(10) A director of a company is guilty of an offence if he fails to give a written notice of any matter in compliance with subsection (4) or (5), within the time thereby limited, to every company which is required to make an entry in relation to the matter in the register, or if he gives false, misleading or incomplete information to any such company with a view to it making an entry in its register.

Extension of section to associates of directors. [5 of 1997].

180. (1) For the purposes of section 179—

(a) an interest of an associate of a director of a company (not being himself a director thereof) in shares or debentures shall be treated as being the director’s interest; and

(b) a contract, assignment or right of subscription entered into, exercised or made by, or grant made to, an associate of a director of a company (not being himself a director thereof) shall be treated as having been entered into, exercised or made by, or as the case may be, as having been made to, the director.

(2) A director of a company shall be under obligation to notify the company in writing of the occurrence, while he is director, of either of the following events, namely:

(a) the grant by the company to an associate of his of a right to subscribe for shares in, or debentures of, the company; and

(b) the exercise by an associate of his of such a right as aforesaid granted by the company, stating, in the case of the grant of a right, the like information as is required by section 179 to be stated by the director on the grant to him by another company of a right to subscribe for shares in, or debentures of, that other company and, in the case of the exercise of a right, the like information as is required by that section to be stated by the director on the exercise of a right granted to him by another company to subscribe for shares in, or debentures of, that other company; and an obligation imposed by this subsection on a director shall be fulfilled by him before the expiration of the period of seven days beginning with the day next following that on which the occurrence of the event that gives rise to it comes to his knowledge.

(3) A person is guilty of an offence if he fails to give a written notice of any matter in compliance with subsection (2), within the time thereby limited, to the company concerned, or if he gives false, misleading or incomplete information to the company.

REGISTER OF SUBSTANTIAL SHAREHOLDERS

Substantial shareholder. [5 of 1997].

181. (1) Sections 182 to 185 apply only to public companies.

(2) For the purposes of sections 182 to 185—

(a) a person has a substantial shareholding in a company if he holds, by himself or by his nominee, shares in the company entitling him to cast on his own behalf at least ten per cent of the total votes entitled to be cast at any general meeting of the company;

(b) a person who has a substantial shareholding in a company is a substantial shareholder of the company.

Substantial shareholder to give notice to company

182. (1) A person who is a substantial shareholder in a company shall give notice in writing to the company stating his name and address and giving full particulars of the shares held by him or his nominee (naming the nominee) by virtue of which he is a substantial shareholder.

(2) A person required to give notice under subsection (1) shall do so within fourteen days after that person becomes aware that he is a substantial shareholder.

(3) The notice shall be so given notwithstanding that the person has ceased to be a substantial shareholder before the expiration of the period referred to in subsection (2).

Person ceasing to be a substantial shareholder to notify the company

183. (1) A person who ceases to be a substantial shareholder in a company shall give notice in writing to the company stating his name and the date on which he ceased to be a substantial shareholder and giving full particulars of the circumstances by reason of which he ceased to be a substantial shareholder.

(2) A person required to give notice under subsection (1) shall do so within fourteen days after he becomes aware that he has ceased to be a substantial shareholder.

Company to keep register of substantial shareholders. [5 of 1997].

184. (1) A company shall keep a register in which it shall enter—

(a) in alphabetical order the names of persons from whom it has received a notice under section 182; and

(b) against each name so entered, the information given in the notice and, where it receives a notice under section 187, the information given in that notice, and notice of every entry therein, and every change thereof, shall be given to the Commission forthwith.

(2) The Registrar may at any time in writing require the company to furnish him with a copy of the register or any part of the register, and the company shall furnish the copy within fourteen days after the day on which the requirement is received by the company.

(3) If default is made in complying with this section, the company and every officer of the company that is in default are guilty of an offence.

(4) A company is not, by reason of anything done under sections 182 to 184—

(a) to be taken for any purpose to have notice of, or

(b) put upon inquiry as to, a right of a person to or in relation to a share in the company.

185. A person who fails to comply with section 182 or 183 is guilty of an offence.

RECORDS OF TRUSTS

Trust notices. [5 of 1997].

186. (1) Except as provided in this section, notice of a trust, express, implied or constructive, shall not be—

(a) entered by a company in any of the registers maintained by it pursuant to section 177; or

(b) received by the Registrar.

(2) No liabilities are affected by anything done in pursuance of subsection (3), (4) or (5); and the company concerned is not affected with notice of any trust by reason of anything so done.

(3) Subject to the provisions of the articles or the Bye laws, a personal representative of the estate of a deceased individual who was registered in a register of a company as a member or debenture holder may become registered as the holder of that share or debenture as personal representative of that estate.

(4) Subject to the provisions of the articles or the Bye laws, a personal representative of the estate of a deceased individual who was the beneficial owner of a share or debenture of the company that is registered in a register of the company may, with the consent of the company and of the registered member or debenture holder, become the registered member or debenture holder as the personal representative of the estate.

(5) When a personal representative of an estate of a deceased individual is registered pursuant to subsection (3) as a holder of a share or debenture of a company, the personal representative is, in respect of that share or debenture, subject to the same liabilities, and no more, that he would be subject to had the share or debenture remained registered in the name of the deceased individual.

ACCOUNTS, MINUTES AND OTHER RECORDS

Other records. [5 of 1997].

187. (1) In addition to the records described in section 177, a company shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committees of the directors.

(2) Subject to subsection (3), the records required under subsection (1) shall be kept at the registered office of the company or at some other place in Trinidad and Tobago designated by the directors; and those records shall at all reasonable times be available for inspection by the directors.

(3) Accounting records of a company may be kept at a place outside Trinidad and Tobago provided that accounting records that are adequate to enable the directors to ascertain the financial position of the company with reasonable accuracy on a quarterly basis shall be kept by the company at the registered office of the company or at some other place in Trinidad and Tobago designated by the directors.

(4) For the purposes of section 177(1)(b) and of this section, when a former-Act company is continued under this Act, “records” includes similar registers and other records required by law to be maintained by the company before it was continued under this Act.

FORM OF RECORDS

Records form.

188. All records required by this Act to be prepared and maintained—

(a) may be in a bound or loose-leaf form or in a photographic film form; or

(b) may be entered or recorded—

(i) by any system of mechanical or electronic data processing; or

(ii) by any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

CARE OF RECORDS

Duty of care for records.

189. A company and its agents shall take reasonable precautions—

(a) to prevent loss or destruction of;

(b) to prevent falsification of entries in; and

(c) to facilitate detection and correction of inaccuracies in, the records required by this Act to be prepared and maintained in respect of the company.

ACCESS TO RECORDS

Access to records.

190. (1) The directors and shareholders of a company, and their agents and legal representatives, may, during the usual business hours of the company, examine the records of the company referred to in section 177 and may take extracts therefrom free of charge.

(2) A shareholder of a company is, upon request and without charge, entitled to one copy of the articles and Bye-laws of the company and any unanimous shareholder agreement, and to one copy of any amendments to any of those documents.

(3) The Commission, its agents and legal representatives, may, during the usual business hours of a public company, examine the records of that company referred to in sections 177, 179 and 184 and may take extracts therefrom free of charge.

SHAREHOLDERS’ LISTS

Basic list of shareholders.

191. (1) Upon payment of a reasonable fee and sending to a public company or its transfer agent the affidavit referred to in subsection (4), any person may upon application require the company or its transfer agent to furnish him, within fifteen days from the receipt of the affidavit, a list of members of the company, in this section referred to as the “basic list”, made up to a date not more than thirty days before the date of receipt of the affidavit, which shall set out—

(a) the names of the members of the company;

(b) the number of shares held by each member; and

(2) When a person requiring a basic list from a public company states in the affidavit referred to in subsection (4) that he requires supplemental lists from the company, he may, upon payment of a reasonable fee, require the company or its transfer agent to furnish him with supplemental lists of the members, which shall set out any changes from the basic list—

(a) in the names or addresses of the members; and

(b) in the number of shares held by each member, for each business day following the date to which the basic list is made up.

(3) When a supplemental list has been required from a public company under subsection (2) by any person, the company, or its transfer agent, shall furnish that person with a supplemental list—

(a) on the date the basic list is furnished, if the information relates to changes that took place before that date; and

(b) on the business day following the day to which the supplemental list relates if the information relates to changes that take place on or after the date the basic list is furnished.

(4) The affidavit required under subsection (1) shall state—

(a) the name and address of the applicant;

(b) the name and address for service of the body corporate, if the applicant is a body corporate; and

(c) that the basic list and any supplemental list obtained pursuant to subsection (2) will not be used except as permitted under section 193.

(5) If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.

192. A person requiring under section 191 that a company supply a basic list or a supplemental list may also require the company to include in any such list the name and address of any known holder of an option or right to acquire shares of the company.

Restricted use of lists.

193. A list of members obtained under section 191 from a company shall not be used by any person except in connection with—

(a) an effort to influence the voting of shareholders of the company;

(b) an offer to acquire shares in the company;

Annual returns. [5 of 1997].

194. (1) A company shall, not later than thirty days after each anniversary date of its continuance, incorporation or amalgamation under this Act, deliver to the Registrar a return in the prescribed form containing the prescribed information made up to such anniversary date and accompanied by the prescribed fees.

(2) A director or officer of the company shall certify the contents of every return made under this section.

(3) If default is made in complying with this section, the company and every director and officer who is in default, are guilty of an offence.

DIVISION 9—TRANSFER OF SHARES AND DEBENTURES

Transfer of shares. [5 of 1997].

195. (1) The shares or debentures of a company may be transferred by a written instrument of transfer signed by the transferor and naming the transferee.

(2) Where an instrument of transfer is prescribed in the Bye-laws of a company, that instrument shall be used to transfer the shares or debentures of the company.

(3) Subject to subsection (2) and to any written law, no particular form of words is necessary to transfer shares or debentures, if words are used that show with reasonable certainty that the person signing the transfer intends to vest the title to the shares or debentures in the transferee.

(4) A company, and, in the case of debentures, the trustee of the trust deed securing the same, is not bound or entitled to treat the transferee of shares or debentures as the owner of them until the transfer to him has been registered or until the Court orders the registration of the transfer to him; and until the transfer is presented to the company for registration, the company is not to be treated as having notice of the transferee’s interest there under or of the fact that the transfer has been made.

(5) This section applies notwithstanding anything contained in the articles or Bye-laws of a company, and notwithstanding anything contained in any trust deed or debentures or any contract or instrument.

Restrictions on transfer. [5 of 1997].

196. (1) Where the right to transfer a share is restricted or subject to a unanimous shareholder agreement, a notice to that effect shall be given on the share certificate issued in respect of that share.

(2) A transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

(3) No restriction or condition in a trust deed covering a debenture of a company, or in the debenture, limits the right of any person to transfer the debenture held by him.

(4) Subject to any rights of pre-emption or other restrictions on the transfer of shares set out in the articles or noted on the share certificate, a transfer of the shares or debentures of a shareholder or debenture holder of a company made by—

(a) his legal representative;

(b) a trustee in bankruptcy;

(d) a receiver or other person appointed by the Court to administer the estate of a person of unsound mind;

(e) the guardian of a minor; or

(f) a person appointed by the Court to execute the transfer, is, although the person executing the transfer is not himself registered with the company as the holder of the shares or debentures, as the case may be, as valid as if he had been so registered at the time of the execution of the instrument of transfer.

(5) This section applies in respect of a company notwithstanding anything contained in the articles or Bye-laws of the company, and notwithstanding anything contained in any trust deed or debentures, or any contract or instrument relating to the shares or debentures of the company.

Duty to issue. [5 of 1997].

197. (1) A public company shall issue a certification of the transfer of a share or debenture on the presentation to the company of a transfer that is signed by the holder of the share or debenture and accompanied by delivery to the company of the share certificate or debenture.

(2) A certification consists of a statement signed on behalf of the company and written or endorsed on the transfer to the effect that the share certificate or debenture, as the case may be, has been delivered to, or lodged with, the company.

(3) The certification by a company of any transfer of a share or debenture of the company is a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the share or debenture in the transferor named in the transfer; but is not a representation that the transferor has any title to the share or debenture.

(4) Where any person acts on the faith of a false certification by a company made fraudulently or negligently, the company is liable to compensate him for any loss he incurs in consequence of his so acting.

(5) A company that has issued a certification of a transfer of a share or debenture of the company is liable to compensate any person for loss that he incurs in consequence of the company subsequently releasing, otherwise than on surrender of the certification of the transfer of the share or debenture, possession of the share certificate or debenture in respect of which the certification was issued.

(6) For the purposes of this section—

(a) the certification of a transfer is deemed to be made by a company if—

(i) the person issuing the certification is a person authorized to issue certifications of transfers on the company’s behalf; and

(ii) the certification is signed by a person authorized to issue certifications of transfers on the company’s behalf, or by any other officer or employee, either of the company or of a body corporate so authorized; and

(b) a certification is deemed to be signed by a person if it purports to be authenticated by his signature or initials, whether handwritten or not, unless the signature or initials were placed on the certification neither by that person nor any person, authorized to use the signature or initials for the purpose of issuing certifications of transfers on the company’s behalf.

Transfer certificate.

198. (1) A company shall, within five weeks after the allotment of any of its shares or debentures, and within two months after the date on which a transfer of any of its shares or debentures is presented to the company for registration, complete and have ready for delivery to the allottee or transferee a proper certificate or debenture for any share or debenture allotted or transferred to him.

(2) When a company on which a notice is served requiring the company to make good any default in complying with subsection (1) fails to make good the default within seven days after the service of the notice, the Court may, on the application of the person entitled to have a certificate or debenture delivered to him, make an order directing the company and any officer of the company to make good the default within such time as may be specified in the order; and the order may provide that all costs incidental to the application be borne by the company and any officer of the company responsible for the default.

(3) For the purposes of this section, “transfer” means a transfer in proper form duly signed by the transferor and otherwise valid, and does not include a transfer that the company is for any reason entitled to refuse to register and does not register.

Registration. [5 of 1997].

199. (1) Notwithstanding anything in the articles or Bye-laws of a company or in any debenture, trust deed or other contract or instrument, the company shall not register a transfer of any share or debenture of the company unless a transfer in proper form and duly signed by the transferor, and accompanied by the relevant share certificates, has been delivered to the company; but nothing in this section affects any duty of the company to register as a member or debenture holder of the company any person to whom the ownership of any share or debenture of the company has been transmitted by operation of law.

(2) On the application of the transferor of any share or debenture of a company, the company shall enter in its register of members or debenture holders, as the case requires, the name of the transferee in the same manner and subject to the same conditions as if the application for the entry had been made by the transferee.

(3) Subject to subsection (4) but otherwise notwithstanding anything in the articles or Bye-laws of a company or in any debenture, trust deed or other contract or instrument, a company shall register the trustee in bankruptcy or the personal representative of a shareholder or debenture holder as a member in respect of the shares, or as holder of the debentures of the bankrupt or, as the case may be, the deceased person, in its register of members or debenture holders, as the case may be, within seven days after he produces to the company satisfactory evidence of his title and requests it to register him as a member or debenture holder.

(4) The duties of a company under this section are subject to any rights of pre-emption or other restrictions on transfer of shares contained in the articles or noted on the share certificate.

Effect of certificate.

200. (1) A certificate issued by a company and signed on its behalf stating that any shares or debentures of the company are held by any person is prima facie proof of the title of that person to the shares or debentures.

(2) The registration of a person as a member or debenture holder of a company, or the issue of a share certificate or debenture, constitutes a representation by the company that the person so registered, or the person named in the share certificate or debenture as entitled to the shares or debentures mentioned therein, is entitled to the shares or debentures mentioned in the register or in the share certificate or debenture; and the company may not deny the truth of that representation as against a person who believes it to be true and acquires or contracts to acquire the shares or debentures or any interest therein in good faith and for money or money’s worth.

(3) It is no defence for a company to show for the purposes of subsection (2) that a registration or the issue of a share certificate or other document was procured by fraud or by the presentation to it of a forged document.

(4) Subsections (2) and (3) do not apply in respect of certificates issued by a former-Act company before the commencement date.

DIVISION 10—TAKEOVER BIDS

Definitions.

201. In this Division—

“dissenting offeree”, if a takeover bid is made for all the shares of a class of shares—

(a) means a shareholder of that class of share who does not accept the takeover bid; and

(b) includes a subsequent holder of that share who acquires it from the person mentioned in paragraph (a);

“offer” includes an invitation to make an offer;

“offeree” means a person to whom a takeover bid is made;

“offeree company” means a company whose shares are the object of a takeover bid;

“offeror” means a person who makes a takeover bid otherwise than as an agent, and includes two or more persons who, directly or indirectly—

(a) make takeover bids jointly or in concert; or

(b) intend to exercise, jointly or in concert, voting rights attached to shares for which a takeover bid is made;

“share” means a share with or without voting rights, and includes—

(a) a debenture currently convertible into such a share; or

(b) currently exercisable options and rights to acquire a share or such a convertible debenture;

“takeover bid” means an offer made by an offeror to shareholders of an offeree company to acquire all the shares of any class of issued shares of the offeree company, and includes every offer by an issuer to repurchase its own shares.

Offeror rights.

202. If, within one hundred and twenty days after the date of a takeover bid, the bid is accepted by the holders of not less than ninety per cent of the shares of any class of shares to which the takeover bid relates, other than shares held at the date of the takeover bid by or on behalf of the offeror or an affiliate or associate of the offeror, the offeror may, upon complying with this Division, acquire the shares held by the dissenting offerees.

Notice to dissenting shareholders. [5 of 1997].

203. An offeror may acquire shares held by a dissenting offeree by sending, by registered post, within sixty days after the date of termination of the takeover bid, and in any event within one hundred and eighty days after the date of the takeover bid an offeror’s notice to each dissenting offeree and to the Commission stating—

(a) that offerees who are holding ninety per cent or more of the shares to which the bid relates accepted the takeover bid;

(b) that the offeror is bound to take up and pay for or has taken up and paid for the shares of the offerees who accepted the takeover bid;

(i) to transfer his shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the takeover bid; or

(ii) to demand payment of the fair value of his shares in accordance with sections 209 to 212 by notifying the offeror within twenty days after the dissenting offeree receives the offeror’s notice;

(d) that a dissenting offeree who does not notify the offeror in accordance with paragraph (c)(ii) is presumed to have elected to transfer his shares to the offeror on the same terms as the offeror acquired the shares from the offerees who accepted the takeover bids; and

(e) that a dissenting offeree shall send the share certificates for his shares to which the takeover bid relates to the offeree company within twenty days after he receives the offeror’s notice.

Adverse claims.

204. Concurrently with sending the offeror’s notice under section 203, the offeror shall send to the offeree company a notice of adverse claim with respect to each share held by a dissenting offeree.

Delivery of certificates.

205. A dissenting offeree to whom an offeror’s notice is sent under section 203 shall, within twenty days after he receives that notice, send the share certificate for the class of shares to which the takeover bid relates to the offeree company.

Payment for shares.

206. Within twenty days after the offeror sends an offeror’s notice under section 203, the offeror shall pay or transfer to the offeree company the amount of money or other consideration that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected, under section 203(c)(i), to accept the takeover bid.

Money in trust.

207. The offeree company holds in trust for the dissenting shareholders the money or other consideration it receives under section 206; and the offeree company shall deposit the money in a separate account in a bank and shall place the other consideration in the custody of a bank.

Duty of offeree company. [5 of 1997].

208. Within thirty days after the offeror sends an offeror’s notice under section 203, the offeree company shall—

(a) issue the offeror a share certificate in respect of the shares that were held by dissenting offerees;

(b) give to each dissenting offeree who—

(i) under section 203(c)(i), elects to accept the takeover bid; and

(ii) sends his share certificates as required under section 205, the money or other consideration to which he is entitled, disregarding fractional shares, which may be paid for in money; and

(c) send to each dissenting shareholder who has not sent his share certificates as required under section 205 a notice stating that—

(i) his shares have been cancelled;

(ii) the offeree company or some designated person holds in trust for him the money or other consideration to which he is entitled as payment for or in exchange for his shares; and

(iii) the offeree company will, subject to sections 209 to 211, send that money or other consideration to him forthwith after receiving the relevant share certificates for his shares.

Application to Commission.

209. (1) If a dissenting offeree has, under section 203(c)(ii), elected to demand payment of the fair value of his shares, the offeror may, within twenty days after it has paid the money or transferred the other consideration under section 206, apply to the Commission to fix the fair value of the shares of that dissenting offeree.

(2) If an offeror fails to apply to the Commission under subsection (1), a dissenting offeree may, within a further period of twenty days, apply to the Commission to fix the fair value of the shares of the dissenting shareholder.

(3) If no application is made to the Commission under subsection (2) within the time provided therefor in that subsection, a dissenting offeree thereby elects to transfer his shares to the offeror on the same terms as the offeror acquired the shares from the offerees who accepted the takeover bid.

Joined parties

210. Upon an application under section 209—

(a) all dissenting offerees referred to in section 203(c)(ii) whose shares have not been acquired by the offeror are to be joined as parties and are bound by the decision of the Commission; and

(b) the offeror shall notify each affected dissenting offeree of the date, place and consequences of the application and of the offeree’s right to appear and be heard in person or by Attorney-at-law.

Powers and order of Commission.

211. (1) Upon an application to the Commission under section 209, the Commission may determine whether any other person is a dissenting offeree who should be joined as a party; and the Commission shall then fix a fair value for the shares of all dissenting offerees.

(2) The Commission may appoint one or more appraisers to assist the Commission to fix a fair value for the shares of a dissenting offeree.

(3) The final order of the Commission shall be made in favor of each dissenting offeree against the offeror and be for the amount of the offeree’s shares as fixed by the Commission.

Additional orders. [5 of 1997].

212. In connection with proceedings under this Division, the Commission may make any order it thinks fit, and, in particular, it may—

(a) fix the amount of money or other consideration that is required to be held in trust under section 207;

(b) order that the money or other consideration be held in trust by a person other than the offeree company;

(c) allow to each dissenting offeree, from the date he sends or delivers his share certificates under section 205 until the date of payment, a reasonable rate of interest on the amount payable to him;

(d) order that any money payable to a shareholder who cannot be found be paid into Court and section 457(2) applies in respect of that payment;

(e) order that any party who has unreasonably caused or delayed the proceedings or otherwise increased the costs thereof to pay the whole or part of the reasonable costs of the Commission or of the other parties to the proceedings

Takeover regulations. [5 of 1997].

213. (1) Subject to this Division, the Minister may make Regulations governing takeovers in respect of companies other than public companies.

(2) Without prejudice to the generality of subsection (1), regulations made thereunder may include—

(a) the exemption of certain offers from this Division;

(b) the level of acquisition of voting rights by a person or persons acting in concert at which an offer to all shareholders of the relevant shares shall become mandatory and the conditions applying to such offers;

(c) the requirements of the offeror or the offeree company in respect of information to be disclosed to shareholders of the offeree company and of the offeror, if a company;

(d) the requirements as regards equitable treatment of shareholders of the same class or cash alternatives in offers or both;

(e) the timing of offer procedures and circulation of documentation;

(f) conditions observable in the dealing of shares by the offeror or by persons in concert during the offer period and the reporting to the Commission of dealings in the shares of the offeree company during the takeover period;

(g) the minimum period within which an unsuccessful offer may not be renewed;

(h) the requirements to protect minority interests.

DIVISION 11 — FUNDAMENTAL COMPANY CHANGES ALTERING ARTICLES

Fundamental amendment to articles. [5 of 1997].

214. (1) Subject to sections 216 and 217, the articles of a company may, by special resolution, be amended—

(a) to change its name;

(b) to add, change or remove any restriction upon the business that the company can carry on;

(c) to change any maximum number of shares that the company is authorized to issue and in the case of a company limited by guarantee to increase the number of members;

(d) to create new classes of shares;

(e) to change the designation of all or any of its shares, and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued;

(f) to change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series, or into the same or a different number of shares of other classes or series;

(g) to divide a class of shares, whether issued or unissued, into a series of shares and fix the number of shares in each series, and the rights, privileges, restrictions and conditions attached thereto;

(h) to authorize the directors to divide any class of unissued shares into series of shares and fix the number of shares in each series, and the rights, privileges, restrictions and conditions attached thereto;

(i) to authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;

(j) to revoke, diminish or enlarge any authority conferred under paragraph (h) or (i);

(k) to increase or decrease the number of directors or the minimum or maximum number of directors, subject to sections 73 and 78;

(l) to add, change or remove restrictions on the transfer of shares;

(m) to change the liability of its shareholders from unlimited liability to limited liability, subject to subsection (3); or

(n) to add, change or remove any other provision that is permitted by this Act to be set out in the articles but not, in the case of a company limited by guarantee, the provisions referred to in paragraph (a) of section 9(2A).

(2) A provision in the articles of a company that restricts in whole or in part the powers of the directors to manage the business and affairs of the company may not be amended except with the consent of all the shareholders.

(3) A change in the liability of the shareholders of a company from unlimited liability to limited liability shall not affect the rights or liabilities of the company in respect of any debt or obligation incurred, or any contract entered into by, or on behalf of, the company before the change, and those rights or liabilities may be enforced as if no such change had taken place.

Proposal to amend articles.

215. (1) Subject to subsection (2), a director or a shareholder of a company who is entitled to vote at an annual meeting of shareholders may, in accordance with section 116, make a proposal to amend the articles of the company.

(2) Notice of a meeting of shareholders at which a proposal to amend the articles is to be considered shall set out the proposed amendment, and, where applicable, shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 227; but failure to make that statement does not invalidate an amendment.215. (1) Subject to subsection (2), a director or a shareholder of a company who is entitled to vote at an annual meeting of shareholders may, in accordance with section 116, make a proposal to amend the articles of the company.

216. (1) The holders of shares of a class, or, subject to subsection (2), of a series, are, unless the articles otherwise provide in the case of an amendment described in paragraph (a) or (b), entitled to vote separately, as a class or series, upon a proposal to amend the articles—

(a) to increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class;

(b) to effect an exchange, reclassification or cancellation of all or part of the shares of that class;

(c) to add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, in particular—

(i) to remove or change prejudicially rights to accrued dividends or to cumulative dividends;

(ii) to add, remove or change redemption rights prejudicially;

(iii) to reduce or remove a dividend preference or a winding up preference; or

(iv) to add, remove or change prejudicially conversion privileges, options, voting transfer or pre-emptive rights, or rights to acquire shares or debentures of a company, or sinking fund provisions;

(d) to increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class;

(e) to create a new class of shares equal or superior to the shares of that class;

(f) to make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class;

(g) to effect an exchange or to create a right of exchange of all or part of the shares of another class into the shares of that class; or

(h) to constrain the issue or transfer of the shares of that class, or extend or remove the constraint.

(2) The holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) only if the series is affected by an amendment in a manner different from other shares of the same class.

(3) Subsection (1) applies whether or not shares of a class or series otherwise carry the right to vote.

(4) A proposed amendment to the articles referred to in subsection (1) is adopted when the holders of the shares of each class or series entitled to vote separately thereon as a class or series have approved the amendment by a special resolution.

Delivery of articles. [5 of 1997].

217. (1) After an amendment has been adopted under section 214, or 216, articles of amendment in the prescribed form shall be delivered to the Registrar.

(2) If an amendment effects or requires a reduction of stated capital, section 48(3) and (4) shall apply.

Certificate of amendment.

218. (1) Upon receipt of articles of amendment from a company, the Registrar shall issue to the company a certificate of amendment in accordance with section 481.

(2) An amendment to the articles of a company becomes effective on the date shown in the certificate issued by the Registrar in respect of that company; and the articles of the company are amended accordingly.

(3) No amendment to the articles affects—

(a) an existing cause of action or claim or liability to prosecution in favour of or against the company or its directors or officers; or

(b) any civil, criminal or administrative action or proceeding to which a company or any of its directors or officers is a party.

219. (1) The directors of a company may at any time, and shall, when so directed by the Registrar, restate the articles of incorporation of the company as amended.

**(2) **Re-stated articles of incorporation in the prescribed form shall be delivered to the Registrar.

(3) Upon receipt of re-stated articles of incorporation, the Registrar shall issue a re-stated certificate of incorporation in accordance with section 481.

AMALGAMATION

220. Two or more companies, including holding and subsidiary companies, may amalgamate and continue as one company.

Agreement for amalgamation.

221. (1) Each company proposing to amalgamate shall enter into an agreement setting out the terms and means of effecting the amalgamation, and in particular, setting out—

(a) the provisions that are required to be included in articles of incorporation under section 9;

(b) the name and residential address of each proposed director of the amalgamated company;

(c) the manner in which the shares of each amalgamating company are to be converted into shares or debentures of the amalgamated company;

(d) if any shares of an amalgamating company are not to be converted into shares or debentures of the amalgamated company, the amount of money or shares or debentures of any body corporate that the holders of those shares are to receive instead of shares or debentures of the amalgamated company;

(e) the manner of payment of money instead of the issue of fractional shares of the amalgamated company or of any other body corporate the shares or debentures of which are to be received in the amalgamation;

(f) whether the Bye-laws of the amalgamated company are to be those of one of the amalgamating companies, and, if not, a copy of the proposed Bye-laws; and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated company.

(2) If shares of one of the amalgamating companies are held by or on behalf of another of the amalgamating companies, the amalgamation agreement shall provide for the cancellation of those shares when the amalgamation becomes effective, without any repayment of capital in respect thereof; and no provision may be made in the agreement for the conversion of those shares into shares of the amalgamated company.

Approval by shareholders.

222. (1) The directors of each amalgamating company shall submit the amalgamation agreement for approval to a meeting of the shareholders of the amalgamating company of which they are directors, and, subject to subsection (4), to the holders of each class or series of shares of that amalgamating company.

(2) A notice of a meeting of shareholders complying with section 113 shall be sent in accordance with that section to each shareholder of each amalgamating company; and the notice—

(a) shall include or be accompanied with a copy or summary of the amalgamation agreement; and

(b) shall state that a dissenting shareholder is entitled to be paid the fair value of his shares in accordance with section 227, but failure to make the statement referred to in paragraph (b) does not invalidate an amalgamation.

(3) Each share of an amalgamating company carries the right to vote in respect of an amalgamation, whether or not the share otherwise carries the right to vote.

(4) The holders of shares of a class or series of shares of an amalgamating company are entitled to vote separately as a class or series in respect of an amalgamation when the amalgamation agreement contains a provision that, if contained in a proposed amendment to the articles, would entitle those holders to vote as a class or series under section 216.

(5) An amalgamation agreement is adopted when the shareholders of each amalgamating company have approved of the amalgamation by special resolution of each class or series of the shareholders entitled to vote on the amalgamation.

(6) An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation the agreement can be terminated by the directors of an amalgamating company, notwithstanding approval of the agreement by the shareholders of all or any of the amalgamating companies.

Vertical short-form amalgamation.

223. A holding company and one or more of its wholly-owned subsidiary companies may amalgamate and continue as one company without complying with sections 221 and 222, if—

(a) the amalgamation is approved by a resolution of the directors of each amalgamating company; and

(b) the resolutions provide that—

(i) the shares of each amalgamating subsidiary company will be cancelled without any repayment of capital in respect of the cancellation;

(ii) the articles of amalgamation will be the same as the articles of incorporation of the amalgamating holding company; and

(iii) no shares or debentures will be issued by the amalgamated company in connection with the amalgamation.

Horizontal short-form amalgamation.

224. Two or more wholly-owned subsidiary companies of the same holding body corporate may amalgamate and continue as one company without complying with sections 221 and 222 if—

(a) the amalgamation is approved by a resolution of the directors of each amalgamating company; and

(b) the resolution provide that—

(i) the shares of all but one of the amalgamating subsidiary companies will be cancelled without any repayment of capital in respect of the cancellation;

(ii) the articles of amalgamation will be the same as the articles of incorporation of the amalgamating subsidiary company whose shares are not cancelled; and

(iii) the stated capital of the companies whose shares are cancelled will be added to the stated capital of the amalgamating subsidiary company whose shares are not cancelled.

Articles of amalgamation.

225. (1) Subject to section 222(6), after amalgamation has been adopted under section 222 or approved under section 223 or 224, articles of amalgamation in the prescribed form shall be sent to the Registrar together with the documents required by sections 71 and 176.

(2) There shall be attached to the articles of amalgamation a statutory declaration of a director or an officer of each amalgamating company that establishes to the satisfaction of the Registrar—

(a) that there are reasonable grounds for believing that—

(i) each amalgamating company is and the amalgamated company will be able to pay its liabilities as they become due; and

(ii) the realizable value of the amalgamated company’s assets will not be less than the aggregate of its liabilities and stated capital of all classes; and

(b) that there are reasonable grounds for believing that—

(i) no creditor will be prejudiced by the amalgamation; or

(ii) adequate notice has been given to all known creditors of the amalgamating companies, and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

(3) For the purposes of subsection (2), adequate notice is given to creditors by a company, if—

(a) a notice in writing is sent to each known creditor having a claim against the company that exceeds one thousand dollars;

(b) a notice is published once in a daily newspaper published in Trinidad and Tobago; and

(c) each notice states that the company intends to amalgamate with one or more specified companies in accordance with this Act, and that a creditor of the company can object to the amalgamation within thirty days from the date of the notice.

Certificate of amalgamation.

226. (1) Upon receipt of articles of amalgamation, the Registrar shall issue a certificate of amalgamation in accordance with section 481.

(2) On the date shown in a certificate of amalgamation, in respect of an amalgamated company—

(a) the amalgamation of the amalgamating companies and their continuance as one company becomes effective;

(b) the property of each amalgamating company becomes the property of the amalgamated company;

(d) any existing cause of action, claim or liability to prosecution is unaffected;

(e) a civil, criminal or administrative action or proceeding pending by or against an amalgamating company may be continued by or against the amalgamated company;

(f) a conviction against, or ruling, order or judgment in favor of, or against, an amalgamating company may be enforced by or against the amalgamated company; and

(g) the articles of amalgamation are the articles of incorporation of the amalgamated company, and, except for the purposes of section 67(1), the certificate of amalgamation is the certificate of incorporation of the amalgamated company.

DISSENTERS’ RIGHTS AND OBLIGATIONS

Dissent by shareholder. [5 of 1997].

227. (1) Subject to sections 237 and 242, a shareholder of any class of shares of a company may dissent if the company resolves—

(a) to amend its articles under section 214 to add, change or remove any provisions restricting or constraining the issue or transfer of shares of that class;

(b) to amend its articles under section 214 to add, change or remove any restriction upon the businesses that the company can carry on;

(d) to sell, lease or exchange all or substantially all its property under section 138.

(2) Subject to sections 237 and 242, a shareholder of any class of shares of a company may dissent if the company is subject to an order of the Court under section 238 permitting the shareholders to dissent.

(3) A shareholder of any class or series of shares who is entitled to vote under section 216 may dissent if the company resolves to amend its articles in a manner described in that section.

(4) In addition to any other right he has, but subject to section 236, a shareholder who complies with this section is entitled, when the action approved by the resolution from which he dissents or an order, made under section 238, becomes effective, to be paid by the company the fair value of the shares held by him in respect of which he dissents; and the fair value is to be determined as of the close of business on the day before the resolution was adopted or the order made, but in determining the fair value of the shares any change in value reasonably attributable to the anticipated adoption of the resolution or to the order made under section 238 shall be excluded.

(5) A dissenting shareholder may not claim under this section except only with respect to all the shares of a class or series—

(a) held by him on behalf of any one beneficial owner; and

(b) registered in the name of the dissenting shareholder.

(6) A dissenting shareholder shall send to the company, at or before any meeting of shareholders of the company at which a resolution referred to in subsection (1) or (3) is to be voted on, a written dissent from the resolution, unless the company did not give notice to the shareholder of the purpose of the meeting and of his right to dissent.

(7) When a shareholder of a company has dissented pursuant to subsection (6) to a resolution referred to in subsection (1) or (3), the company shall, within ten days after the shareholders of the company adopt the resolution, send to the shareholder notice that the resolution has been adopted; but the notice need not be sent to the shareholder if he has voted for the resolution or has withdrawn his dissent.

Demand for payment. [5 of 1997].

228. (1) A dissenting shareholder shall, within twenty days after he receives a notice under section 227(7), or, if he does not receive that notice, within twenty days after he learns that a resolution under that subsection has been adopted, send to the company a written notice containing—

(a) his name and address;

(b) the number and class or series of shares in respect of which he dissents; and

(2) A dissenting shareholder shall, within thirty days after sending a notice under subsection (1), send the certificates representing the shares in respect of which he dissents to the company or its transfer agent.

(3) A dissenting shareholder who fails to comply with subsection (2) has no right to make a claim under this section.

(4) A company or its transfer agent shall endorse on any share certificate received by it under subsection (2) a notice that the holder of the share is a dissenting shareholder under this section, and forthwith return the share certificate to the dissenting shareholder or, if the certificate was sent by a person holding the certificate as security, the company may return the certificate to such person.

Suspension of rights. [5 of 1997].

229. (1) After sending a notice under section 228, a dissenting shareholder ceases to have any rights as a shareholder, other than the right to be paid the fair value of his shares as determined under this section, unless—

(a) the dissenting shareholder withdraws his notice before the company makes an offer under section 230;

(b) the company fails to make an offer in accordance with section 230 and the dissenting shareholder withdraws his notice; or

(i) under section 222(6), terminate an amalgamation agreement; or

(ii) under section 138(7), abandon a sale, lease or exchange of property, in which case his rights as a shareholder are reinstated as of the date the notice mentioned in section 228 was sent.

(2) Where a shareholder’s rights are reinstated under subsection (1), the company shall cancel the endorsement entered on his share certificate under section 228(4).

Offer to pay for share.

230. (1) A company shall, not later than seven days after the day on which the action approved by the resolution is effective, or the day the company received the notice referred to in section 228, whichever is the later date, send to each dissenting shareholder who has sent such a notice—

(a) a written offer to pay for his shares in an amount considered by the directors of the company to be the fair value of those shares, which shall be accompanied with a statement showing how the fair value was determined; or

(b) if section 236 applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

(2) Every offer made under subsection (1) for shares of the same class or series shall be on the same terms.

(3) Subject to section 236, a company shall pay for the shares of a dissenting shareholder within ten days after an offer made under subsection (1) had been accepted; but the offer lapses if the company does not receive an acceptance of the offer within thirty days after it has been made.

Application to Court.

231. (1) If a company fails to make an offer under section 230(1), or if a dissenting shareholder fails to accept the offer made by the company, the company may, within fifty days after the action approved by the resolution is effective, apply to the Court to fix a fair value for the shares of any dissenting shareholders.

(2) If a company fails to apply to the Court in the circumstances described in subsection (1), a dissenting shareholder may, within a further period of twenty days, apply to the Court to fix a fair value for the shares of any dissenting shareholders.

Joined parties.

232. Upon an application to the Court under section 231—

(a) all dissenting shareholders whose shares have not been purchased by the company are to be joined as parties and are bound by the decision of the Court; and

(b) the company shall notify each affected dissenting shareholder of the date, place and consequences of the application and of his right to appear and be heard in person or by an Attorney-at-law.

Court powers.

233. (1) Upon an application to the Court under section 231, the Court may determine whether any other person is a dissenting shareholder who should be joined as a party; and the Court shall then fix a fair value for the shares of the dissenting shareholders.

(2) The Court may appoint one or more appraisers to assist the Court to fix a fair value for the shares of the dissenting shareholders.

(3) The final order of the Court shall be made against the company in favor of each dissenting shareholder of the company and for the amount of the shares of the dissenting shareholder as fixed by the Court.

Interest.

234. The Court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder, from the date the action approved by the resolution is effective until the date of payment by the company.

Recourse of dissenting shareholder. [5 of 1997].

235. (1) If section 236 applies, the company shall, within ten days after the making of an order under section 233(3), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

(2) If section 236 applies, a dissenting shareholder, by written notice delivered to the company within thirty days after receiving a notice under subsection (1)—

(a) may withdraw his notice of dissent, in which case the company is deemed to consent to the withdrawal and the shareholder is reinstated to his full rights as a shareholder; or

(b) may retain a status as a claimant against the company entitled to be paid as soon as the company is lawfully able to do so, or, in a winding up, to be ranked subordinate to the rights of creditors of the company, but in priority to the company’s shareholders.

Prohibition of payment.

236. A company shall not make a payment to a dissenting shareholder under section 230 if there are reasonable grounds for believing—

(a) the company is or would, after the payment, be unable to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities.

RE-ORGANISATION

237. (1) In this section, “re-organisation” means—

(a) a Court order made under section 242;

(b) a receiving order under the Bankruptcy Act; or

(c) a Court order that is made under any other written law and that affects the rights among the company, its shareholders and creditors.

(2) If a company is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any change that might lawfully be made by an amendment under section 214.

(3) If the Court makes an order referred to in subsection (1), the Court may also—

(a) authorize the issue of debentures of the company, whether or not convertible into shares of any class or series, or having attached any rights or options to acquire shares of any class or series, and fix the terms thereof; and

(b) appoint directors in place of, or in addition to, all or any of the directors then in office.

(4) After an order referred to in subsection (1) has been made, articles of re-organisation in the prescribed form shall be sent by the company to the Registrar, together with the documents required by sections 71 and 176, if applicable.

(5) Upon receipt of articles of re-organisation for a company, the Registrar shall issue a certificate of amendment in accordance with section 481.

(6) A re-organisation of a company becomes effective on the date shown in the certificate of amendment, and its articles of incorporation are amended accordingly.

(7) A shareholder of a company is not entitled to dissent under section 227 if an amendment to the articles of incorporation of the company is effected under this section.

ARRANGEMENTS

238. (1) In this section, “arrangements” includes—

(a) an amendment of the articles of a company;

(b) an amalgamation of two or more companies;

(d) a transfer of all or substantially all the property of a company to another body corporate in exchange for property, money or shares or debentures of the body corporate;

(e) an exchange of shares or debentures held by shareholders or debenture holders of a company for property, money or other shares or debentures of the company, or property, money or shares or debentures of another body corporate if it is not a takeover bid within the meaning of Division 10;

(f) a winding up and dissolution of a company; and

(g) any combination of the activities described in paragraphs (a) to (f).

(2) For the purposes of this section, a company is insolvent when—

(a) it is unable to pay its liabilities as they become due; or

(b) the realizable value of the assets of the company is less than the aggregate of its liabilities and stated capital of all classes.

(3) Where it is not practicable for a company that is solvent to effect a fundamental change in the nature of an arrangement under any other provision of this Act, the company may apply to the Court for an approval of an arrangement proposed by the company.

(4) In connection with an application under this section, the Court may make any interim or final order it thinks fit, including—

(a) an order determining the notice to be given to any interested person or dispensing with notice to any person other than the Registrar and, in the case of a public company, the Commission;

(b) an order requiring a company, in such manner as the Court directs, to call, hold and conduct a meeting of shareholders or debenture holders, or holders of options or rights to acquire shares in the company;

(d) an order approving an arrangement as proposed by the company or as amended in such manner as the Court may direct.

(5) An applicant under this section shall give the Registrar and, in the case of a public company the Commission, notice of the application; and the Registrar and the Commission may appear and be heard.

(6) After an order referred to in subsection (4)(d) has been made, articles of arrangement in the prescribed form shall be sent to the Registrar together with the documents required by sections 79 and 176, if applicable.

(7) Upon receipt of articles of arrangement, the Registrar shall issue a certificate of amendment in accordance with section 481.

(8) An arrangement becomes effective on the date shown in the certificate of amendment.

DIVISION 12 — CIVIL REMEDIES

Definitions.

239. In this Part—

“action” means an action under this Act;

“complainant” means—

(a) a shareholder or debenture holder, or a former holder of a share or debenture of a company or any of its affiliates;

(b) a director or an officer or former director or officer of a company or any of its affiliates;

(d) any other person who, in the discretion of the Court, is a proper person to make an application under this Part.

DERIVATIVE ACTIONS

240. (1) Subject to subsection (2), a complainant may, for the purpose of prosecuting, defending or discontinuing an action on behalf of a company, apply to the Court for leave to bring an action in the name and on behalf of the company or any of its subsidiaries, or intervene in an action to which any such company or any of its subsidiaries is a party.

(2) No action may be brought, and no intervention in an action may be made, under subsection (1), unless the Court is satisfied—

(a) that the complainant has given reasonable notice to the directors of the company or its subsidiary of his intention to apply to the Court under subsection (1) if the directors of the company or its subsidiary do not bring, diligently prosecute or defend, or discontinue, the action;

(b) that the complainant is acting in good faith; and

(c) that it appears to be in the interests of the company or its subsidiary that the action be brought, prosecuted, defended or discontinued.

241. In connection with an action brought or intervened in under section 240, the Court may at any time make any order it thinks fit, including—

(a) an order authorizing the complainant, the Registrar or any other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action;

(c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to former and present shareholders or debenture holders of the company or its subsidiary, instead of to the company or its subsidiary; or

(d) an order requiring the company or its subsidiary to pay reasonable legal fees incurred by the complainant in connection with the action.

RESTRAINING OPPRESSION

Oppression restrained. [5 of 1997].

242. (1) A complainant may apply to the Court for an order under this section.

(2) If, upon an application under subsection (1), the Court is satisfied that in respect of a company or any of its affiliates—

(a) any act or omission of the company or any of its affiliates effects a result;

(b) the business or affairs of the company or any of its affiliates are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the company or any of its affiliates are or have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, any shareholder or debenture holder, creditor, director or officer of the company, the Court may make an order to rectify the matters complained of.

(3) In connection with an application under this section, the Court may make any interim or final order it thinks fit, including—

(a) an order restraining the conduct complained of;

(b) an order appointing a receiver or receiver manager;

(c) an order to regulate a company’s affairs by amending its articles or Bye-laws, or creating or amending a unanimous shareholder agreement;

(d) an order directing an issue or exchange of shares or debentures;

(e) an order appointing directors in place of, or in addition to, all or any of the directors then in office;

(f) an order directing a company, subject to subsection (6), or any other person, to purchase shares or debentures of a holder thereof;

(g) an order directing a company, subject to subsection (6), or any other person, to pay to a shareholder or debenture holder any part of the moneys paid by him for his shares or debentures;

(h) an order varying or setting aside a transaction or contract to which a company is a party, and compensating the company or any other party to the transaction or contract;

(i) an order requiring a company, within a time specified by the Court, to produce to the Court or an interested person financial statements in the form required by section 151 or an accounting in such other form as the Court may determine;

(j) an order compensating an aggrieved person;

(k) an order directing rectification of the registers or other records of a company under section 245;

(l) an order winding up and dissolving the company;

(m) an order directing an investigation under Division 2 of Part VII to be made; or

(n) an order requiring the trial of any issue.

(4) If an order made under this section directs the amendment of the articles or Bye-laws of a company—

(a) the directors shall forthwith comply with section 237(4); and

(b) no other amendment to the articles or Bye-laws may be made without the consent of the Court, until the Court otherwise orders.

(5) A shareholder is not entitled under section 227 to dissent if an amendment to the articles is effected under this section.

(6) A company shall not make a payment to a shareholder under subsection (3)(f) or (g) if there are reasonable grounds for believing that—

(a) the company is unable or would, after the payment, be unable to pay its liabilities as they become due; or

(b) the realizable value of the company’s assets would thereby be less than the aggregate of its liabilities.

(7) An applicant under this section may apply in the alternative for an order under section 355.

Staying action. [5 of 1997].

243. (1) An application made or an action brought or intervened in under this Part may not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the company or its subsidiary has been or might be approved by the shareholders of the company or its subsidiary; but evidence of approval by the shareholders may be taken into account by the Court in making an order under section 241, 242 or 355.

(2) An application made or an action brought or intervened in under this Part may not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the Court given upon such terms as the Court thinks fit; and if the Court determines that the interests of any complainant could be substantially affected by the stay, discontinuance, settlement or dismissal, the Court may order any party to the application or action to give notice to the complainant.

Interim costs.

244. In an application made or an action brought or intervened in under this Part, the Court may at any time order the company or its subsidiary to pay to the complainant interim costs, including legal fees and disbursements; but the complainant may be held accountable for those interim costs upon the final disposition of the application or action.

Rectification of records.

245. (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the registers or other records of a company, the company, a shareholder or debenture holder of the company, or any aggrieved person, may apply to the Court for an order that the registers or records of the company be rectified.

(2) An applicant under this section shall give the Registrar notice of the application; and the Registrar is entitled to appear and be heard in person or by an Attorney-at-law.

(3) In connection with an application under this section, the Court may make any order it thinks fit, including—

(a) an order requiring the registers or other records of the company to be rectified;

(b) an order restraining the company from calling or holding a meeting of shareholders, or paying a dividend before that rectification;

(c) an order determining the right of a party to the proceedings to have his name entered or retained in, or deleted or omitted from, the registers or records of the company, whether the issue arises between two or more shareholders or debenture holders or alleged shareholders or alleged debenture holders, or between the company and any shareholders or debenture holders, or alleged shareholders or alleged debenture holders; and

(d) an order compensating a party who has incurred a loss.

OTHER REMEDIAL ACTIONS

Directions for Registrar.

246. The Registrar may apply to the Court for directions in respect of any matter concerning his duties under this Act; and on the application, the Court may give such directions and may make such further order as it thinks fit.

Refusal by Registrar.

247. (1) When the Registrar refuses to file any articles or other document required by this Act to be filed by him before the articles or other document become effective, the Registrar shall—

(a) within thirty days after the receipt thereof by him, or thirty days after he receives any approval required under any other Act, whichever is the later date; and

(b) after giving the person who sent the articles or document an opportunity to be heard, give written notice of the refusal to that person, together with the reasons for the refusal.

(2)* If the Registrar does not file or give written notice of his refusal to file any articles or document within the time limited therefor in subsection (1), then, for the purposes of section 248, the Registrar has refused to file the articles or document.

Appeal from Registrar.

248. A person who is aggrieved by the decision of the Registrar—

(a) to refuse to file in the form submitted to him any articles or other document required by this Act to be filed by him;

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under sections 15 to 18;

(d) to refuse under section 344(2) to permit a continued reference to shares having a nominal or par value, may apply to the Court for an order requiring the Registrar to change his decision; and upon the application, the Court may so order, and make any further order it thinks fit.

Restraining order, etc.

249. If a company or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a company does not comply with this Act, the regulations, articles, Bye-laws, or any unanimous shareholder agreement of the company, a complainant or creditor of the company may, in addition to any other right he has, apply to the Court for an order directing any such person to comply with, or restraining any such person from acting in breach of, any provisions of this Act, the regulations, articles, Bye-laws or unanimous shareholder agreement, as the case may be.

APPLICATION TO THE COURT

Summary application.

250. Subject to this Act, where it is provided that a person may apply to the Court, the application may be made in a summary manner by originating summons or otherwise as the rules of the Court provide.

PART IV - PROTECTION OF CREDITORS

DIVISION 1—REGISTRATION OF CHARGES

Registration with Registrar. [5 of 1997].

251. (1) Subject to this Division, where a charge to which this section applies is created by a company, the company shall, within thirty days after the creation of the charge, lodge with the Registrar a statement of the charge and

(a) any instrument by which the charge is created or evidenced or a duly executed duplicate original thereof; or

(b) a copy of the instrument certified by an Attorney-at-law, acting in the matter, as a true and complete copy of the instrument as executed, and if this provision is not complied with in relation to the charge, the charge is void as against the liquidator and any creditor of the company so far as any security interest it thereby purported to create is concerned.

(2) Nothing in subsection (1) affects any contract or obligation for repayment of the money secured by a charge that is void under that subsection; and the money received under the charge becomes immediately payable.

(3) This section applies to the following charges and any variation or postponement thereof:

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

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

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

(d) a charge on land, wherever situate, or any interest therein;

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

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

(g) a charge on a ship or any share in a ship;

(h) a charge on goodwill, on a patent or a licence under a patent, on a trademark or on a copyright or a licence under a copyright; and

(i) such other charges as the Minister may, by Order, specify.

Contents of charge statements. [5 of 1997].

252. (1) Subject to subsections (2) and (3), the statement referred to in section 251 shall contain the following particulars:

(a) the date of the creation of the charge;

(b) the nature of the charge;

(c) the amount secured by the charge, or the maximum sum deemed to be secured by the charge in accordance with section 256;

(d) short particulars of the property charged;

(e) the persons entitled to the charge;

(f) and in the case of a floating charge, the nature of any restriction on the power of the company to grant further charges ranking in priority to, or equally with, the charge thereby created.

(2) Where a company creates a series of debentures containing or giving by reference to any other instrument any charge to the benefit of which the debenture holders of that series are entitled equally, it is sufficient if there is lodged with the Registrar for registration, within thirty days after the execution of the instrument containing the charges, or, if there is no such instrument, after the execution of the first debenture of the series, a statement containing the following:

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

(b) the dates of the resolutions authorizing the issue of the series and the date of any covering instrument by which the security interest is created or defined;

(d) the particulars specified in subsection (1)(b), (d) and (f).

(3) The statement referred to in subsection (2) shall be accompanied by the instrument containing the charge or the duly executed duplicate original thereof or a copy of that instrument certified by the Attorney-at-law preparing the same as a true and complete copy of the instrument as executed; but if there is no such other instrument, the statement shall be accompanied by a copy of one of the debentures of the series and a statutory declaration by an officer of the company or an Attorney-at-law acting in the matter verifying the copy to be a true and complete copy.

253. (Repealed by Act No. 5 of 1997).

Later charges. [5 of 1997].

254. When a charge requiring registration under section 251 or 252—

(a) is created before the lapse of thirty days after the creation of a prior unregistered charge that comprises all or any part of the property comprised in the prior charge; and

(b) is given as security for the same debt that is secured by the prior charge or any part of that debt, then, to the extent to which the subsequent charge is a security for the same debt or part thereof and so far as respects the property comprised in the prior charge, the subsequent charge does not operate nor is it valid unless it was given in good faith for the purpose of correcting some material error in the prior charge or under other proper circumstances and not for the purpose of avoiding or evading the provisions of this Division.

Effect on written laws.

255. Sections 251 to 254 do not affect any other written law relating to the registration of charges.

Fluctuating charges. [5 of 1997].

256. (1) When a charge the particulars of which require registration under section 251 is expressed to secure all sums due or to become due or some other fluctuating amount, the particulars required under section 252(1)(c) shall state the maximum sum that is deemed to be secured by the charge, which shall be the maximum covered by the stamp duty paid thereon; and the charge is, subject to subsection (2), void, so far as any security interest is created by the charge, as respects any excess over the stated maximum.

(2) Where, in respect of a charge on the property of a company of a kind referred to in subsection (1)—

(a) any additional stamp duty is later paid on the charge; and

(b) at any time after that, but before the commencement of the winding up of the company, amended particulars of the charge stating the increased maximum sum deemed to be secured by the charge, together with the original instrument by which the charge was created or evidenced, are lodged with the Registrar for registration, then, as from the date on which it is lodged, the charge, if otherwise valid, is effective to the extent of the increased maximum sum, except as regards any person who, before the date on which the charge was so lodged, had acquired any proprietary rights in, or a fixed or floating charge on, the property that is subject to the charge.

Charge on acquisition of property. [5 of 1997].

257. (1) Where a company acquires any property that is subject to a charge of any kind that would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Division, the company shall within thirty days after the date on which the acquisition is completed, lodge with the Registrar for registration—

(a) a statement of the particulars required by section 252 and of the date of the acquisition of the property; and

(b) the instrument or duplicate instrument or a copy of the instrument certified by an Attorney-at-law as provided for in section 251(1)(b).

(2) Failure to comply with subsection (1) does not affect the validity of the charge concerned.

Duty to register

258. (1) Documents and particulars required to be lodged for registration may—

(a) in the case of a requirement under section 251, be lodged by the company concerned or by any person interested in the documents; and

(b) in the case of a requirement under section 257, be lodged by the company concerned.

(2) A person not being the company concerned who lodges documents or particulars for registration pursuant to subsection (1)(a) may recover from the company concerned the amount of any fees properly payable on the registration if he meets the requirements of sections 251 to 254.

259. (1) The Registrar shall keep a register of all the charges lodged for registration under this Division and enter in the register with respect to those charges the following particulars:

(a) in any case to which section 252(2) applies, such particulars as are required to be contained in a statement lodged under that subsection;

(b) in any case to which section 257 applies, such particulars as are required to be contained in a statement lodged under section 257(1)(a); and

(c) in any other case, such particulars as are required by section 252 to be contained in a statement lodged under that section.

(2) The Registrar shall issue a certificate of every registration, stating, if applicable, the amount secured by the charge, or, in a case referred to in section 256, the maximum amount secured by the charge, and the certificate is conclusive proof that the requirements as to registration have been complied with.

Endorsement on debenture

260. (1) A company shall endorse on every debenture issued by it—

(a) a copy of the certificate of registration of any charge related to the debenture; or

(b) a statement that the registration of a charge related to the debenture has been effected and the date of the registration.

(2) Subsection (1) does not apply to a debenture issued by a company before the charge was created in relation to the debenture.

Satisfaction and payment.

261. (1) Where, with respect to any registered charge—

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

(b) the property or undertaking charged, or any part thereof, has been released from the charge, or has ceased to form part of the company’s property or undertaking, the company may lodge with the Registrar in the prescribed form a memorandum of satisfaction, in whole or in part, or a memorandum of the fact that the property or undertaking, or any part thereof, has been released from the charge or has ceased to form part of the company’s property or undertaking, as the case may be, and the Registrar shall enter particulars of that memorandum in the register.

(2) The memorandum shall be supported by evidence sufficient to satisfy the Registrar of the payment, satisfaction, release or cessation referred to in subsection (1).

Rectification of error.

262. On being satisfied that the omission to register a charge within the time required, or that the omission or misstatement of any particular with respect to any such charge or in a memorandum—

(a) was accidental or due to inadvertence or to some other sufficient cause;

(b) is not of a nature to affect adversely the position of creditors or shareholders; or

(c) that, on other grounds, it is just and equitable to grant relief, the Court may, on the application of the company or any person interested, and on such terms and conditions as seem to the Court to be just and expedient, order that the time for registration be extended or that the omission or misstatement be rectified.

Retention of copy.

263. (1) A company shall retain, at the registered office of the company, a copy of every instrument creating any charge that requires registration under this Division; but, in the case of a series of debentures, the retention of a copy of one debenture of the series is sufficient for the purposes of this subsection.

(2) A company shall record all charges specifically affecting property of the company, and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge and the names of the persons entitled thereto.

Inspection of copies.

264. The copies of instruments retained by the company pursuant to section 263 shall be kept open for the inspection of creditors and shareholders of the company, free of charge.

Registration of receiver.

265. (1) Where any person—

(a) obtains an order for the appointment of a receiver of any of the property of a company; or

(b) appoints a receiver of any of the property of a company; or

(c) enters into possession of any property of a company under any powers contained in any charge, he shall give, within ten days from the date of the order, appointment or entry into possession, notice thereof to the Registrar, who shall enter the fact in the register of the particulars of charges relating to the company.

(2) When—

(a) a person who has been appointed a receiver of the property of a company ceases to act as receiver; or

(b) a person who had entered possession of any property of a company goes out of possession of that property, he shall, within ten days of his having done so, give notice of his so doing in the prescribed form to the Registrar, who shall enter the notice in the register of the particulars of charges relating to the company.

External company.

266. This Division applies to charges created or required after the commencement of this Division, by an external company, on property in Trinidad and Tobago in like manner and with like consequences as if the external company were a company as defined in section 4 whether or not the external company is registered under this Act pursuant to Division 2 of Part V.

DIVISION 2—TRUST DEEDS AND DEBENTURES

Definitions.

267. In this Division—

“event of default” means an event specified in a trust deed on the occurrence of which—

(a) a security interest constituted by the trust deed becomes enforceable; or

(b) the principal, interest and other moneys payable there under become, or can be declared to be, payable before maturity, but the event is not an event of default until all conditions prescribed in the trust deed in connection with that event for the giving of notice or the lapse of time or otherwise have been satisfied;

“trustee” means any person appointed as trustee under the terms of a trust deed to which a company is a party, and includes any successor trustee;

“trust deed” means any deed, indenture or other instrument, including any supplement or amendment thereto, made by a company after its incorporation or continuance under this Act, under which the company issues debentures and in which a person is appointed as trustee for the holders of the debentures issued there under.

Application of Division.

268. This Division applies to a trust deed if the debentures issued or to be issued under the trust deed are part of a distribution to the public.

TRUSTEES

Conflict of interest. [5 of 1997].

269. (1) No person may be appointed as trustee if there is a conflict of interest between his role as trustee and his role in any other capacity.

(2) For the purposes of subsection (1), there is a conflict of interest where a person is an officer or employee, or a shareholder of the company issuing the debentures.

(3) Within ninety days after a trustee becomes aware that a material conflict of interest exists in his case, the trustee shall—

(a) eliminate the conflict of interest; or

(b) resign from office.

(4) A trust deed, any debentures issued there under and a security interest effected thereby are valid notwithstanding a material conflict of interest of the trustee.

(5) If the trustee is appointed contrary to subsection (1) or continues as a trustee contrary to subsection (3), any interested person may apply to the Court for an order that the trustee be replaced; and the Court may make an order on such terms as it thinks fit.

List of debenture holders.

270. (1) A holder of debentures issued under a trust deed may, upon payment to the trustee of a reasonable fee, require the trustee to furnish, within fifteen days after delivering to the trustee the statutory declaration referred to in subsection (4), a list setting out—

(a) the names and addresses of the registered holders of the outstanding debentures of the issuer;

(b) the principal amount of outstanding debentures owned by each such holder; and

(c) the aggregate principal amount of debentures outstanding, as shown in the records maintained by the trustee on the day that the statutory declaration is delivered to him.

(2) Upon the demand of a trustee, the issuer of debentures shall furnish the trustee with the information required to enable the trustee to comply with subsection (1).

(3) If the person requiring the trustee to furnish a list under subsection (1) is a body corporate, the statutory declaration required under that subsection shall be made by a director or officer of the body corporate.

(4) The statutory declaration required under subsection (1) shall state—

(a) the name and address of the person requiring the trustee to furnish the list, and, if the person is a body corporate, its address for service; and

(b) that the list will not be used except as permitted under subsection (5).

(5) A list obtained under this section shall not be used by any person except in connection with—

(a) an effort to influence the voting of the debenture holders;

(b) an offer to acquire debentures; or

Evidence of compliance.

271. (1) An issuer or a guarantor of debentures issued or to be issued under a trust deed shall, before doing any act that is described in paragraph (a), (b) or (c) of this subsection, furnish the trustee with evidence of compliance with the conditions in the trust deed relating to—

(a) the issue, certification and delivery of debentures under the trust deed;

(b) the release, or release and substitution, of property that is subject to a security interest constituted by the trust deed; or

(2) Upon the demand of a trustee, the issuer or guarantor of debentures issued or to be issued under a trust deed shall furnish the trustee with evidence of compliance with the trust deed by the issuer or guarantor in respect of any act to be done by the trustee at the request of the issuer or guarantor.

Contents of evidence.

272. Evidence of compliance as required by section 271 shall consist of—

(a) a statutory declaration or certificate made by a director or an officer of the issuer or guarantor stating that the conditions referred to in that section have been complied with;

(b) if the trust deed requires compliance with conditions that are subject to review by an Attorney-at-law, his opinion that those conditions have been complied with; and

(c) if the trust deed requires compliance with conditions that are subject to review by an auditor or accountant, an opinion or report of the auditor of the issuer or guarantor, or such other accountant as the trustee may select, that those conditions have been complied with.

Further evidence.

273. The evidence of compliance referred to in section 272 shall include a statement by the person giving the evidence—

(a) declaring that he has read and understands the conditions of the trust deed described in section 271;

(b) describing the nature and scope of the examination or investigation upon which he based the certificate, statement or opinion; and

(c) declaring that he has made such examination or investigation as he believes necessary to enable him to make the statements or give the opinion contained or expressed therein.

Evidence relating to conditions.

274. Upon the demand of a trustee, the issuer or guarantor of debentures issued under a trust deed shall furnish the trustee with evidence in such form as the trustee may require as to compliance with any condition of the trust deed relating to any action required or permitted to be taken by the issuer or guarantor under the trust deed.

Certificate of compliance.

275. At least once in every twelve-month period beginning on the date of the trust deed and at any other time upon the demand of a trustee, the issuer or guarantor of debentures issued under the trust deed shall furnish the trustee with a certificate that the issuer or guarantor has complied with all requirements contained in the trust deed that, if not complied with, would, with the giving of notice, lapse of time or otherwise, constitute an event of default, or, if there has been failure to so comply, giving particulars of that failure.

Notice of default.

276. Within thirty days after a trustee under a trust deed becomes aware of an event of default there under, the trustee shall give to the holder of any debentures issued under the trust deed notice of the event of default arising under the trust deed and continuing at the time the notice is given, unless the trustee reasonably believes that it is in the best interests of the debenture holders to withhold that notice and in writing so informs the issuer and guarantor.

Redemption of debenture.

277. (1) Debentures issued, pledged or deposited by a company are not redeemed by reason only that the amount in respect of which the debentures are issued, pledged or deposited is repaid.

(2) Debentures issued by a company and purchased, redeemed or otherwise acquired by it may be cancelled, or, subject to any applicable trust deed or other agreement, may be reissued, pledged or deposited to secure any obligation of the company then existing or thereafter incurred; and any such acquisition and reissue, pledge or deposit is not a cancellation of the debenture.

Duty of care.

278. A trustee under a trust deed in exercising his powers and discharging his duties shall—

(a) act honestly and in good faith with a view to the best interests of the holders of the debentures issued under the trust deed; and

(b) exercise the care, diligence and skill of a reasonably prudent trustee.

Reliance on statements.

279. Notwithstanding section 278, a trustee is not liable if he relies in good faith upon statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust deed.

No exculpation.

280. No term of a trust deed or of any agreement between a trustee and the holders of debentures issued there under, or between the trustee and the issuer or guarantor, operates to relieve a trustee from the duties imposed upon him by section 278.

Rights of trustees.

281. (1) The trustee under a trust deed holds all contracts, stipulations and undertakings given to him and all mortgages, charges and securities vested in him, in connection with the debentures covered by the trust deed, or some of those debentures, exclusively for the benefit of the debenture holders concerned, except in so far as the trust deed otherwise provides.

(2) A debenture holder may—

(a) sue the company that issued the debentures he holds for payment of any amount payable to him in respect of the debentures; or

(b) sue the trustee of the trust deed covering the debentures he holds for compensation for any breach of the duties that the trustee owes him, and in any such action it is not necessary for any debenture holders of the same class, or, if the action is brought against the company, the trustee under the covering trust deed, to be joined as a party.

(3) A provision in a debenture or trust deed is valid and binding on all the debenture holders of the class concerned to the extent that, by a resolution supported by the votes of the holders of at least three-quarters in value of the debentures of that class in respect of which votes are cast on the resolution, the provision enables a meeting of the debenture holders—

(a) to release any trustee from liability for any breach of his duties to the debenture holders that he has already committed or generally from liability for all such breaches, without necessarily specifying them, upon his ceasing to be a trustee;

(b) to consent to the alteration or abrogation of any of the rights, powers or remedies of the debenture holders and the trustee under the trust deed covering their debentures, except the powers and remedies under section 288; or

(c) to consent to the substitution of debentures of a different class issued by the company or any other company or body corporate for the debentures of the debenture holders; or

(d) to consent to the cancellation of the debentures in consideration of the issue to the debenture holders of shares as fully paid in the company or any other body corporate.

(4) This section applies notwithstanding anything contained in a debenture trust deed or other instrument.

TRUST DEEDS

Need for trust deed. [5 of 1997].

282. (1) A public company shall, before issuing any of its debentures to the public, execute a trust deed in respect of the debentures and procure the execution thereof by a trustee.

(2) No trust deed may cover more than one class of debentures whether or not the trust deed is required by this section to be executed.

(3) Where a trust deed is required by this section to be executed in respect of any debentures issued by a public company but a trust deed has not been executed, the Court may, on the application of a holder of any debenture issued by the company—

(a) order the company to execute a trust deed in respect of those debentures;

(b) direct that a person nominated by the Court be appointed a trustee of the trust deed; and

(c) give such consequential directions as the Court thinks fit regarding the contents of the trust deed and its execution by the trustee.

Kinds of debentures

283. (1) Debentures belong to different classes if different rights attach to them in respect of—

(a) the rate of interest or the dates for payment of interest;

(b) the dates when, or the instalments by which, the principal of the debentures will be repaid, unless the difference is solely that the class of debentures will be repaid during a stated period of time and particular debentures will be repaid at different dates during that period according to selections made by the company or by drawings, ballot or otherwise;

(c) any right to subscribe for or convert the debentures into other shares or other debentures of the company or any other body corporate; or

(d) the powers of the debenture holders to realize any security interest.

(2) Debentures belong to different classes if they do not rank equally for payment when—

(a) any security interest is realized; or

(b) the company is wound up, and if, in those circumstances, the security interest or the proceeds thereof, or any assets available to satisfy the debentures, is or are not to be applied in satisfying the debentures strictly in proportion to the amount of principal, premiums and arrears of interest to which the holders of them are respectively entitled.

Cover of trust deed.Cover of trust deed.

284. A debenture is covered by a trust deed if the debenture holder is entitled to participate in any money payable by the company under the trust deed; or is entitled by the trust deed to the benefit of any security interest, whether alone or together with other persons.

Exception. [5 of 1997].

285. Sections 281(3) and 282 to 284 do not apply to debentures issued before the commencement date, or to debentures forming part of a class of debentures some of which were issued before that date.

Contents of trust deed.

286. (1) Every trust deed, whether required by section 282 or not, shall state—

(a) the maximum sum that the company can raise by issuing debentures of each specific issue;

(b) the maximum discount that can be allowed on the issue or reissue of the debentures, and the maximum premium at which the debentures can be made redeemable;

(c) the nature of any assets over which a security interest is created by the trust deed in favor of the trustee for the benefit of the debenture holders equally, and, except where such an interest is a floating charge or a general floating charge, the identity of the assets subject to it;

(d) the nature of any assets over which a security interest has been, or will be, created in favor of any person other than the trustee for the benefit of the debenture holders equally, and, except where such an interest is a floating charge or a general floating charge, the identity of the assets subject to it;

(e) whether the company has created or will have to create any security interest for the benefit of some, but not all, of the holders of debentures issued under the trust deed;

(f) any prohibition or restriction on the power of the company to issue debentures or to create any security interest on any of its assets ranking in priority to, or equally with, the debentures issued under the trust deed;

(g) whether the company will have power to acquire debentures issued under the trust deed before the date for their redemption and to re-issue the debentures;

(h) the dates on which interest on the debentures issued under the trust deed will be paid, and the manner in which payment will be made;

(i) the dates on which the principal of the debentures issued under the trust deed will be repaid, and, unless the whole principal is to be repaid to all the debenture holders at the same time, the manner in which redemption will be effected, whether by the payment of equal instalments of principal in respect of each debenture or by the selection of debentures for redemption by the company, or by drawing, ballot or otherwise;

(j) in the case of convertible debentures, the dates and terms on which the debentures can be converted into shares and the amounts that will be credited as paid upon those shares, and the dates and terms on which the debenture holders can exercise any right to subscribe for shares in right of the debentures held by them;

(k) the circumstances in which the debenture holders will be entitled to realize any security interest vested in the trustee or any other person for their benefit, other than the circumstances in which they are entitled to do so by this Act;

(l) the power of the company and the trustee to call meetings of the debenture holders, and the rights of debenture holders to require the company or the trustee to call meetings of the debenture holders;

(m) whether the rights of debenture holders can be altered or abrogated, and, if so, the conditions that are to be fulfilled, and the procedures that are to be followed, to effect an alteration or an abrogation; and

(n) the amount or rate of remuneration to be paid to the trustee and the period for which it will be paid, and whether it will be paid in priority to the principal, interest and costs in respect of debentures issued under the trust deed.

(2) If debentures are issued without a covering trust deed being executed, the statements required by subsection (1) shall be included in each debenture or in a note forming part of the same document, or endorsed thereon; and in applying that subsection, references therein to the trust deed are to be construed as references to all or any of the debentures of the same class.

(3) Subsection (2) does not apply if—

(a) the debenture is the only debenture of the class to which it belongs that has been or that can be issued; and

(b) the rights of the debenture holder cannot be altered or abrogated without his consent.

(4) This section does not apply to a trust deed executed or to debentures issued before the commencement date.

Contents of debentures.

287. (1) Every debenture that is covered by a trust deed shall state either in the body of the debenture or in a note forming part of the same document or endorsed thereon—

(a) the matters required to be stated in a trust deed by section 286(1)(a), (b), (f), (h), (i), (j) (l) and (m);

(b) whether the trustee of the covering trust deed holds the security interest vested in him by the trust deed in trust for the debenture holders equally, or in trust for some only of the debenture holders, and, if so, which debenture holders; and

(c) whether the debenture is secured by general floating charge vested in the trustee of the covering trust deed or in the debenture holders.

(2) A debenture issued by a company shall state on its face in clearly legible print that it is unsecured if no security interest is vested in the holder of the debenture or in any other person for his benefit as security for payment of principal and interest.

(3) This section does not apply to debentures issued before the commencement date.

REALIZATION OF SECURITY

Equity realization.

288. (1) Debenture holders are entitled to realize any security interest vested in them or in any other person for their benefit, if—

(a) the company fails, within one month after it becomes due, to pay—

(i) any instalment of interest;

(ii) the whole or part of the principal; or

(iii) any premium, owing under the debentures or the trust deed covering the debentures;

(b) the company fails to fulfill any of the obligations imposed on it by the debentures or the trust deed;

(c) any circumstances occur that by the terms of the debentures or trust deed entitle the holders of the debentures to realize their security interest; or

(d) the company goes into liquidation.

(2) Debenture holders whose debentures are secured by a general floating charge vested in themselves or the trustee of the covering trust deed or any other person are additionally entitled to realize their security interest, if—

(a) any creditor of the company issues a process of execution against any of its assets or commences proceedings for winding up of the company by order of any Court of competent jurisdiction;

(b) the company ceases to pay its debts as they fall due;

(d) the company incurs, after the issue of debentures of the class concerned, losses or diminution in the value of its assets that in the aggregate amount to more than one-half of the total amount owing in respect of—

(i) debentures of the class held by the debenture holders who seek to enforce their security interest; and

(ii) debentures whose holders rank before them for payment of principal or interest; or

(e) any circumstances occur that entitle debenture holders who rank for payment of principal or interest in priority to the debentures secured by the general floating charge to realize their security interest.

(3) At any time after a class of debenture holders becomes entitled to realize their security interest, a receiver of any assets subject to such security interest or in favor of the class of debenture holders or the trustee of the covering trust deed or any other person may be appointed—

(a) by the trustee;

(b) by the holders of debentures in respect of which there is owing more than half of the total amount owing in respect of all the debentures of the same class; or

(4) A receiver appointed pursuant to subsection (3) has, subject to any order made by the Court, power—

(a) to take possession of the assets that are subject to the security interest and to sell those assets; and

(b) if the security interest extends to that property—

(i) to collect debts owed to the company;

(ii) to enforce claims vested in the company;

(iii) to compromise, settle and enter into arrangements in respect of claims by or against the company;

(iv) to carry on the company’s business with a view to selling it on the most favorable terms;

(v) to grant or accept leases of land and licences in respect of patents, designs, copyright, or trade, service or collective marks; and

(vi) to recover capital unpaid on the company’s issued shares.

(5) The remedies given by this section are in addition to, and not in substitution for, any other powers and remedies conferred on the trustee under the trust deed or on the debenture holders by the debentures or the trust deed.

(6) Any power or remedy that is expressed in any instrument to be exerzisable if the debenture holders become entitled to realize their security interest is exercizable on the occurrence of any of the events specified in subsection (1), or, in the case of a general floating charge, in subsections (1) and (2).

(7) A manager of the business or of any of the assets of a company shall not be appointed for the benefit of debenture holders unless a receiver has also been appointed and has not ceased to act.

(8) This section applies to debentures issued before as well as after the commencement date.

(9) No provision in any instrument is valid that purports to exclude or restrict the remedies given by this section.

DIVISION 3 — RECEIVERS AND RECEIVER-MANAGERS

Disqualified receivers.

289. (1) A person shall not be appointed a receiver or receiver-manager of any assets of a company, and shall not act as such a receiver or receiver-manager, if the person—

(a) is a body corporate;

(b) is an undischarged bankrupt; or

(c) is disqualified from being a trustee under a trust deed executed by the company, or would be so disqualified if a trust deed had been executed by the company.

(2) If a person who was appointed to be a receiver or receiver-manager becomes disqualified under subsection (1) or under any provision contained in a debenture or trust deed, another person may be appointed in his place by the persons who are entitled to make the appointment, or by the Court; but a receivership is not terminated or interrupted by the occurrence of the disqualification.

(3) This section applies to a person appointed to be a receiver or receiver-manager whether so appointed before or after the commencement date.

Functions of receivers.

290. A receiver of any property of a company may, subject to the rights of secured creditors, receive the income from the property, pay the liabilities connected with the property, and realize the security interest of those on behalf of whom he is appointed; but, except to the extent permitted by the Court, he may not carry on the business of the company.

Functions of receiver manager.

291. A receiver of a company may, if he is also appointed manager of the company, carry on any business of the company to protect the security interest of those on behalf of whom he is appointed.

Directors’ powers stopped.

292. When a receiver-manager of a company is appointed by the Court or under an instrument, the powers of the directors of the company that the receiver-manager is authorized to exercise may not be exercised by the directors until the receiver-manager is discharged.

Duty under Court’s directions.

293. A receiver or receiver-manager of a company appointed by the Court shall act in accordance with the directions of the Court.

Duty under instrument.

294. A receiver or receiver-manager of a company appointed under an instrument shall act in accordance with that instrument and any directions of the Court given under section 296.

Duty of care.

295. A receiver or receiver-manager of a company appointed under an instrument shall—

(a) act honestly and in good faith; and

(b) deal with any property of the company in his possession or control in a commercially reasonable manner.

Directions by Court.

296. Upon an application by a receiver or receiver-manager of a company, whether appointed by the Court or under an instrument, or upon an application by any interested person, the Court may make any order it thinks fit, including—

(a) an order appointing, replacing or discharging a receiver or receiver-manager and approving his accounts;

(b) an order determining the notice to be given by any person, or dispensing with notice to any person;

(c) an order declaring the rights of persons before the Court or otherwise, or directing any person to do, or abstain from doing, anything;

(d) an order fixing the remuneration of the receiver or receiver-manager;

(e) an order requiring the receiver or receiver manager, or a person by or on behalf of whom he is appointed—

(i) to make good any default in connection with the receiver’s or receiver-manager’s custody or management of the property or business of the company;

(ii) to relieve any such person from any default on such terms as the Court thinks fit; and

(iii) to confirm any act of the receiver or receiver-manager; and

(f) an order giving directions on any matter relating to the duties of the receiver or receiver-manager. 296. Upon an application by a receiver or receiver-manager of a company, whether appointed by the Court or under an instrument, or upon an application by any interested person, the Court may make any order it thinks fit, including—