Section 419 of The Companies Act No. 17 of 2015: Reduction of capital of private company supported by solvency statement
(1) A resolution for reducing share capital of a private company limited byshares is supported by a solvency statement if—
(a) the directors of the company make a statement of the solvency of the company in accordance with section 420 not more than fourteen days before the date on which the resolution is passed; and
(b) the resolution and solvency statement are registered in accordance with section 421.
(2) If the resolution is proposed as a written resolution, the directors of thecompany shall send or submit a copy of the solvency statement to each eligible member at or before the time at which the proposed resolution is sent or submitted to the member.
(3) If the resolution is proposed at a general meeting, the directors of thecompany shall make a copy of the solvency statement available for inspection by members of the company throughout that meeting.
(4) The validity of a resolution is not affected by a failure to comply with subsection (2) or (3).
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- Section 420 - What is a solvency statement?
(1) A solvency statement is a statement that each of the directors—
(a) has formed the opinion, as regards the company's situation at the date of the statement, that no ground exists on which the...
- Section 421 - Registration of resolution and supporting documents
(1) Within fourteen days after the resolution for reducing share capital is passed the company shall lodge with the Registrar for registration a statement of capital that complies with subsection...
- Section 422 - General power to make further provision by regulations
The regulations may make further provision for the implementation of this Part.
- Section 423 - Interpretation: Part XVI
(1) In this Part—
"distributable profits", in relation to the giving of any financial assistance—
(a) means those profits out of which the company could lawfully make a distribution equal in value...
- Section 424 - General rule against limited company acquiring its own shares
(1) A limited company shall not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with this Part.
(2) Subsection (1) does not prevent a limited company from...
- Section 425 - Treatment of shares held by nominee
(1) This section applies to shares in a limited company that—
(a) are taken by a subscriber to the memorandum as nominee of the company;
(b) are issued to a nominee of the company; or
(c) are...
- Section 426 - Liability of others if nominee fails to make payment in respect of shares
(1) This section applies to shares in a limited company that—
(a) are taken by a subscriber to the memorandum as a nominee of the company;
(b) are issued to a nominee of the company; or
(c) are...
- Section 427 - Duty to cancel shares in public company held by or for the company
(1) This section applies to a public company if—
(a) shares of the company are forfeited, or are surrendered to the company instead of forfeiture, as provided by the company's articles for a failure...
- Section 428 - Notice of cancellation of shares
(1) Within one month after cancelling shares in order to comply with section427, a company shall lodge with the Registrar for registration a notice giving details to the cancelled shares.
(2) The...
- Section 429 - Conversion of public company into private company in consequence of cancellation of shares
(1) If a public company is obliged to convert itself into a private company in orderto comply with section 427, the directors may resolve that the company should be so converted.
(2) Such a...
- Section 430 - Issue of certificate of incorporation on registration of conversion of public company into private company
(1) The Registrar shall register the conversion of a company into a private limited company if satisfied that the application for registration complies with the requirements of section 429.
(2) If...
- Section 431 - Effect of failure to apply for registration of company's conversion into private company
(1) If a public company that is required by section 427 to apply to the Registrarfor the registration of the conversion of the company into a private company fails to do so before the deadline...
- Section 432 - Offence to fail to cancel shares or apply for registration of company's conversion into private company
(1) If a company that is required to do so by section 427—
(a) fails to cancel specified shares; or
(b) fails to make an application for the registration of the conversion of the company into a...
- Section 433 - Application of sections 437 to 442 to private company that applies for registration of conversion into public company
(1) This section applies to a private company that is registered as a public company—
after shares in the company have been forfeited in accordance with the company's articles or have been...
- Section 434 - Transfer to reserve on acquisition of shares by public company ornominee
(1) If—
(a) a public company, or a nominee of a public company, acquires shares in the company; and
(b) those shares are shown in a balance sheet of the company as an asset,
the company shall...
- Section 435 - Public companies: general rule against lien or charges on own shares
(1) A lien or other charge of a public company on its own shares(whether taken expressly or otherwise) is void, except as permitted by this section.(
2) In the case of any description of company, a...
- Section 436 - Interests to be disregarded in determining whether company has beneficial interest
In determining for the purposes of this Part whether a company has a beneficial interest in shares, the interests referred to in sections 437, 438 and 439 are to be disregarded.
- Section 437 - Residual interest under pension scheme or employees’ share scheme
(1) When the shares are held in trust for the purposes of a pension scheme or an employees’ share scheme, any residual interest of the company that has not vested in possession is to be...
- Section 438 - Employer’s charges and other rights of recovery
(1) If the relevant shares are held on trust for the purposes of a pension scheme, the following are to be disregarded—
(a) a charge or lien on, or set-off against, any benefit or other right or...
- Section 439 - Rights as executor, administrator or trustee
(1) If the company is an executor, administrator or trustee, rights that thecompany has in that capacity are to be disregarded.
(2) Those rights include—
(a) a right of the company to recover its...
- Section 440 - Meaning of “financial assistance” for purposes of this Part
(1) In this Division, “financial assistance” means—(a) financial assistance given in the form of a gift; (b) financial assistance given—
(i) in the form of a guarantee, security or indemnity other...
- Section 442 - Assistance for acquisition of shares in public company
(1) If a person is acquiring or proposing to acquire shares in a public company, neither the company nor any other company that is a subsidiary of the company may give financial assistance (directly...
- Section 443 - Assistance by public company for acquisition of shares in its private holding company
(1) If a person is acquiring or proposing to acquire shares in a private company, a public company that is a subsidiary of that company shall not give financial assistance (directly or indirectly) for...
- Section 444 - Offence to give prohibited assistance
(1) If a company contravenes section 442(1) or (3) or 443 (1) or (3), thecompany, and each officer of the company who is in default, commit an offence.
(2) A company that is found guilty of an...
- Section 445 - Certain transactions excepted unconditionally from sections 442 and 443
Sections 442 and 443 do not prohibit any of the following transactions— (a) a distribution of a company’s assets in the form of—(i) a dividend lawfully made; or
(ii) a distribution in the course of a...
- Section 446 - Certain transactions excepted from sections 442 and 443 conditionally
(1) This section applies to the following transactions—
(a) if the lending of money is part of the ordinary business of the company —the lending of money in the ordinary course of the company’s...
- Section 447 - Power of limited company to purchase own shares
(1) A limited company having a share capital may purchase its own shares
(including any redeemable shares), subject to— (a) the following provisions of this Division; and
(b) any restriction or...
- Section 448 - Purchase of company’s own shares
(1) A limited company may not purchase its own shares unless they are fullypaid.
(2) A limited company that purchases its own shares shall pay for them on purchase.
(3) A purchase in contravention...
- Section 449 - Financing of purchase of company's own shares
(1) A private limited company may purchase its own shares out of capital in accordance with Division 4.
(2) Subject to subsection (1)—
(a) a limited company may purchase its own shares only out...
- Section 450 - Approval for company to purchase own shares
(1) A limited company may purchase its own shares only—
(a) by an off-market purchase, under a contract approved in advance in accordance with section 451; or
(b) by a market purchase, approved in...
- Section 451 - Authorisation for off-market purchase
(1) A company may make an off–market purchase of its own shares under acontract but only if—
(a) the terms of the contract have been approved by a special resolution of the company before the...
- Section 452 - Resolution authorising off-market purchase: exercise of voting rights
(1) This section applies to a resolution to confer, vary, revoke or renew an approval for the purposes of section 451.
(2) If the resolution is proposed as a written resolution, a member who holds...
- Section 453 - Resolution approving off-market purchase: disclosure of details of contract
(1) This section applies to a resolution passed by a company to confer, vary, revoke or renew an approval to make a purchase under section 451.
(2) The company shall ensure that a copy of the...
- Section 454 - Variation of contract for off-market purchase
(1) A company may agree to a variation of a contract approved under section451 only if the variation is approved in advance in accordance with this section.
(2) The terms of the variation have effect...
- Section 455 - Resolution approving variation: exercise of voting rights
(1) This section applies to a resolution passed by a company to confer, vary, revoke or renew an approval to vary a contract under section 454.
(2) If the resolution is proposed as a written...
- Section 456 - Resolution approving variation: disclosure of details of variation
(1) This section applies to a resolution passed by a company under section 454.
(2) The company shall ensure that a copy of the proposed variation (if it is inwriting) or a written memorandum giving...
- Section 457 - Release of company’s rights under contract for off-market purchase
(1) An agreement by a company to release its rights under a contract approvedunder section 451 is void unless the terms of the release agreement are approved in advance in accordance with this...
- Section 458 - Approval for company to make market purchase
(1) A company may make a market purchase of its own shares only if the purchase has been approved by a resolution of the company.
(2) Such an approval—
(a) can be general or limited to the purchase...
- Section 459 - Copy of contract or memorandum to be available for inspection
(1) This section applies to a company that has entered into—
(a) a contract approved under section 451; or
(b) a contract for a purchase approved under section 458.
(2) The company shall keep...
- Section 460 - Enforcement of right to inspect copy or memorandum
(1) If a company fails to comply with a requirement of section 459, 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...
- Section 461 - Company’s right to purchase own shares not assignable
The rights of a company under a contract authorised under section 451 or 458 are not capable of being assigned.
- Section 462 - Payments apart from purchase price to be made out of distributable profits
(1) A payment made by a company in consideration of—
(a) acquiring any right with respect to the purchase of its own shares under a contingent purchase contract approved under section 451;
(b) the...
- Section 463 - How shares purchased are to be treated
If a limited company makes a purchase of its own shares in accordance with this Division, then—
(a) if section 458 applies, the shares are to be held and dealt with in accordance with Part XXI,...
- Section 464 - Return of purchase of own shares to be lodged with Registrar
(1) Within fourteen days after a company purchases shares under this Division, it shall lodge with the Registrar for registration a return that complies with subsections (2) to (4).
(2) The return...
- Section 465 - Notice to Registrar of cancellation of shares
(1) If, on the purchase by a company of any of its own shares in accordance with this Part—
(a) section 526 does not apply (so that the shares are treated as cancelled); or
(b) that section applies...
- Section 466 - Interpretation: Division 4
In this Division—
(a) a reference to payment out of capital is to any payment so made, whether or not it would, apart from this section, be treated as a payment out of capital; and
(b) "the...
- Section 467 - Power of private limited company to redeem or purchase own shares out of capital
A private limited company may in accordance with this Division, but subject to any restriction or prohibition in the company's articles, make a payment in respect of the redemption or purchase of its...
- Section 468 - The permissible capital payment
A payment that, in accordance with this Division, can be made by a company out of capital in respect of the redemption or purchase of its own shares is such amount as, after applying for that purpose—...
- Section 469 - What profits are available
(1) For the purposes of this Division, the available profits of the company, inrelation to the redemption or purchase of any of its shares, are the profits of the company that are available for...
- Section 470 - Determination of available profits
(1) The available profits of the company are determined as follows—
(a) first—
Determine the profits of the company by reference to the following items as stated in the relevant financial...