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Section 540 of The Companies Act No. 17 of 2015: Consequences of order imposing restrictions

    

(1) The effect of an order under section 537 that shares are subject to restrictions is as follows—
(a) a transfer of the shares is void;
(b) no voting rights are exercisable in respect of the shares;
(c) no further shares may be issued in right of the shares or in accordance with an offer made to their holder;
(d) except in a liquidation, no payment may be made of sums due from the company on the shares, whether in respect of capital or otherwise.
(2) If shares are subject to the restriction in subsection (1)(a), an agreement to transfer the shares is void.
(3) Subsection (2) does not apply to an agreement to transfer the shares on the making of an order under section 543 made under subsection (3)(b) of that section.
(4) If shares are subject to the restriction in subsection (1)(c) or (d), an agreement to transfer any right to be issued with other shares in right of those shares, or to receive any payment on them (otherwise than in a liquidation), is void.
(5) Subsection (4) does not apply to an agreement to transfer any such right on the making of an order under section 543 made under subsection (3)(b) of that section.
(6) This section is subject—
(a) to any directions given under section 537(2) or 542(3); and
(b) in the case of an interim order made under section 537(3), to the terms of the order.

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Disclaimer: This document is not to be taken as legal advise.

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