Section 368 of The Companies Act No. 17 of 2015: Restrictions on public company allocating shares for non-cash consideration
(1) A public company shall not allot shares as fully or partly paid up (as to their nominal value or any premium on them) otherwise than in cash unless—
(a) the consideration for the allotment has been independently valued in accordance with the provisions of this Division;
(b) the valuer's report has been made to the company during the six months immediately preceding the allotment of the shares; and (c) a copy of the report has been sent to the proposed allottee.
(2) For the purpose of subsection (1), the application of an amount standing to the credit of—
(a) any of a company's reserve accounts; or
(b) its profit and loss account, in paying up (to any extent) shares allotted to members of the company; or premiums on shares so allotted, does not count as consideration for the allotment, and that subsection does not apply in that case.
(3) If a company allots shares in contravention of subsection (1) and either—
(a) the allottee has not received the valuer's report required to be sent to the allottee; or
(b) there has been some other contravention of the requirements of this section or section 371 that the allottee knew or ought to have known amounted to a contravention, the allottee is liable to pay the company an amount equal to the aggregate of the nominal value of the shares and the whole of any premium (or, if the case so requires, so much of that aggregate as is treated as paid up by the consideration), with interest at the appropriate rate.
(4) This section has effect subject to sections 369 and 370.
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- Section 369 - Exception to valuation requirement: arrangement with another company
(1) Section 368 does not apply to the allotment of shares by a company in connection with an arrangement for the allotment of shares in the company on terms that the whole or part of the consideration...
- Section 370 - Exception to valuation requirement: merger
(1) Section 368 does not apply to the allotment of shares by a company in connection with a proposed merger with another company.
(2) For the purpose of subsection (1), a proposed merger exists when...
- Section 371 - Non-cash consideration for shares: requirements as to valuation and report
(1) Part XLI applies to the valuation and report required by section 368.
(2) The valuer shall specify in the report—
(a) the nominal value of the shares to be wholly or partly paid for by the...
- Section 372 - Copy of report to be lodged with Registrar
(1) A company to which a report is made under section 368 as to the value of any consideration for which, or partly for which, it proposes to allot shares shall lodge a copy of the report to the...
- Section 373 - Public company: agreement for transfer of non-cash asset in initial period
(1) A public company formed as such shall not enter into an agreement—(a) with a person who is a subscriber to the company's memorandum;
(b) for the transfer by the person to the company or another,...
- Section 374 - Agreement for transfer of non-cash asset: requirement of independent valuation
(1) The following conditions are conditions that are required to be complied with for the purpose of section 373—
(a) that the consideration to be received by the company, and any consideration other...
- Section 375 - Agreement for transfer of non-cash asset: requirements as to valuation and report
(1) Part XLI applies to the valuation and report required by section 374.
(2) In the report, the valuer shall specify—
(a) the consideration to be received by the company, describing the relevant...
- Section 376 - Agreement for transfer of non-cash asset: requirement of approval by members
(1) The following conditions are further conditions that are required to be complied with for the purpose of section 374—
(a) that the terms of the agreement have been approved by an ordinary...
- Section 377 - Copy of resolution to be lodged with Registrar
(1) Within fourteen days after a company passes a resolution with respect tothe transfer of a non-cash asset, the company shall lodge with the Registrar for registration a copy of the resolution,...
- Section 378 - Modification of provisions in relation to company whose conversion into a public company has been registered
Sections 373 to 377 apply with the following modifications in relation to a company whose conversion into a public company has been registered by the Registrar—
(a) the reference in section 373(1)(a)...
- Section 379 - Agreement for transfer of non-cash inset; effect of contravention
(1) If a public company enters into an agreement in contravention of section373 and either—
(a) the other party to the agreement has not received the valuer's report required to be sent to that...
- Section 380 - Liability of subsequent holders of shares
(1) If a person becomes a holder of shares in respect of which—
(a) section 368 has been contravened; and
(b) because of that contravention another person is liable to pay an amount under the...
- Section 381 - Power of Court to grant relief
(1) A person who—
(a) is liable to a company under a provision of this Division make a payment for shares in the company; or
(b) is liable to a company because of an undertaking given to it in; or...
- Section 382 - Offence to contravene section 368 or 373
If a company contravenes section 368 or 373, the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred...
- Section 383 - Enforceability of undertakings to do work etc
(1) An undertaking given by any person, in or in connection with payment forshares in a company, to do work or perform services or to do any other thing, if it is enforceable by the company apart from...
- Section 384 - What is the appropriate rate of interest for the purposes of this Division?
(1) For the purposes of this Division the “appropriate rate” of interest is—(a) five percent per year; or
(b) if some other rate is specified by order made under subsection (2), that other...
- Section 385 - Interpretation: Division 7
In this Division—
“arrangement” includes any agreement or scheme, and in particular includes an arrangement approved in accordance with—
(a) Part XXXIV; or
(b) any provision of laws relating to...
- Section 386 - Company’s share premium account and application of share premiums
(1) If a company issues shares at a premium (whether for cash or otherwise),the company shall—
(a) if it has not already done so, establish an account to be called the share premium account;...
- Section 387 - Relief from requirements as to share premiums: Group reconstruction relief
(1) This section applies if an issuing company that is a wholly-owned subsidiary of a holding company allots shares— (a) to the holding company; or
(b) to another wholly-owned subsidiary of the...
- Section 388 - Merger relief
(1) This section applies if an issuing company acquires at least a ninety percent equity holding in another company under an arrangement providing for the allotment of equity shares in the issuing...
- Section 389 - Merger relief: meaning of ninety percent equity holding
(1) This section applies for the purpose of determining whether a company has, for the purposes of section 388, acquired at least a ninety percent equity holding in another company under an...
- Section 390 - Power to make further provision by regulations for the purposes of this Division
The regulations may prescribe provisions for either or both of the following—
(a) for relieving companies from the requirements of section 386 in relation to premiums other than cash...
- Section 391 - Relief may be reflected in company’s balance sheet
If an amount that corresponds to the amount representing the premiums, or part of the premiums, on shares issued by a company that, as a result of relief (if any) under this Division, is not included...
- Section 392 - Classes of shares
(1) For the purposes of this Act, shares are of one class if the rights attachedto them are in all respects uniform.
(2) For purposes of subsection (1), the rights attached to shares are not to be...
- Section 393 - Variation of class rights: companies having a share capital
(1) This section is concerned with the variation of the rights attached to a class of shares in a company having a share capital.
(2) Rights attached to a class of a company’s shares may be varied...
- Section 394 - Variation of class rights: companies without a share capital
(1) This section is concerned with the variation of the rights of a class of members of a company that does not have a share capital.
(2) Rights of a class of members may be varied only—
(a) in...
- Section 395 - Section 393 and 394 not to affect powers of Court under certain provisions
Neither section 393 nor section 394 affects the powers of the Court under section 78, Part XXIX or XXXIV.
- Section 396 - Right to object to variation: companies having a share capital
(1) This section applies if the rights attached to any class of shares in a company are varied under section 393.
(2) The holders of not less in the aggregate than fifteen percent of the issued...
- Section 397 - Right to object to variation: companies having a share capital
(1) This section applies if the rights of any class of members of a company are varied under section 394.
(2) Members comprising not less than fifteen percent of the members of the relevant class...
- Section 398 - Copy of Court order to be lodged with Registrar
(1) Within fourteen days after the making of an order by the Court on anapplication under section 396 or 397, the company concerned shall lodge a copy of the order with the Registrar for...
- Section 399 - Notice of name or other designation of class of shares
(1) If a company assigns a name or other designation, or a new name or otherdesignation, to any class or description of its shares, it shall, within fourteen days after doing so, lodge with the...
- Section 400 - Notice of particulars of variation of rights attached to shares to be lodged with Registrar
(1) If the rights attached to shares of a company are varied, the company shall,within fourteen days after the date on which the variation is made, lodge with the Registrar for registration a notice...
- Section 401 - Notice of new class of members to be lodged with Registrar
(1) If a company not having a share capital creates a new class of members,the company shall, within fourteen days after the date on which the new class is created, lodge with the Registrar for...
- Section 402 - Notice of name or other designation of class of members to be lodged with Registrar
(1) If a company not having a share capital assigns a name or other designation, or a new name or other designation, to any class of its members, it shall, within fourteen days after doing so, lodge...
- Section 403 - Notice of particulars of variation of class rights
(1) If the rights of any class of members of a company not having a sharecapital are varied, the company shall, within fourteen days after the date on which the variation is made, lodge with the...
- Section 404 - Alteration of share capital of limited company
(1) A limited company having a share capital may alter its share capital only—(a) by increasing its share capital by allotting new shares; or (b) reducing its share capital in accordance with this...
- Section 405 - Sub-division or consolidation of shores
(1) A limited company having a share capital may—
(a) subdivide its shares, or any of them, into shares of a smaller nominal amount than its existing shares; or
(b) consolidate and divide all or any...
- Section 406 - Notice to Registrar of sub-division or consolidation
(1) Within one month after subdividing, consolidating or dividing its shares, a company shall lodge with the Registrar for registration a notice specifying the shares that are affected, and...
- Section 407 - Special resolution for reduction of share capital
(1) A limited company that has a share capital may reduce its share capital byspecial resolution.
(2) A special resolution under subsection (1) takes effect as provided by section411(3).
(3) A...
- Section 408 - Application to Court for confirming order
(1) As soon as practicable a company has passed a resolution for reducing itsshare capital, it shall apply to the Court for an order confirming the reduction.
(2) If the proposed reduction of capital...
- Section 409 - Creditors entitled to object to reduction
(1) When this section applies, each creditor of the company who, at the date fixed by the Court, is entitled to a debt or claim that, if that date were the commencement of the liquidation of the...
- Section 410 - Order confirming reduction and powers of Court on making such order
(1) The Court may make an order confirming the reduction of capital on such terms and conditions as it considers appropriate.
(2) The Court may not confirm the reduction unless it is satisfied, in...
- Section 411 - Registration of Court order and statement of capital
(1) On production of an order of the Court confirming the reduction of a company’s share capital and the lodgement of a copy of the order and of a statement of capital approved by the Court, the...
- Section 412 - Liability of members following reduction of capital
(1) If a company’s share capital is reduced, a member of the company (past orpresent) is not liable in respect of any share to any call or contribution exceeding the amount of difference (if any)...
- Section 413 - Liability to creditors omitted from list of creditors
(1) This section applies to a creditor who, in the case of a reduction of capital confirmed by the Court, was entitled to object to the reduction of share capital but who, as a result of being...
- Section 414 - Offence to conceal name of creditor, etc
An officer of a company who— (a) intentionally or recklessly—
(i) conceals the name of a creditor entitled to object to the reduction of capital; or
(ii) misrepresents the nature or amount of the...
- Section 415 - Shares no bar to damages against company
A person is not precluded from seeking or obtaining damages or other compensation from a company only because the person—
(a) is holding or has held shares in the company;
(b) has a right to apply...
- Section 416 - Public companies: duty of directors to convene a meeting on loss of capital
(1) If the net assets of a public company are half or less of its called-up Share capital, the directors shall convene a general meeting of the company to consider how to deal with the...
- Section 417 - Public company reducing capital below authorised minimum
(1) If the Court makes an order confirming a reduction of a public company’scapital that has the effect of bringing the nominal value of its allotted share capital below the authorised minimum, the...
- Section 418 - Expedited procedure for registration of conversion of company into a private company
(1) The Court may authorise a public company to be converted into a private company without its having passed the special resolution required by section 77.
(2) If the Court does so, it shall specify...