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Section 541 of The Companies Act No. 17 of 2015: Offence to attempt to evade restrictions

    

(1) This section applies if shares are subject to restrictions imposed by an order under section 537.
(2) A person who—
(a) exercises or purports to exercise a right—
(i) to dispose of shares that to the person's knowledge, are for the time being subject to restrictions; or
(ii) to dispose of a right to be issued with any such shares;
(b) votes in respect of any such shares (whether as holder or proxy), or appoints a proxy to vote in respect of them;
(c) being the holder of any such shares, fails to notify that they are subject to those restrictions a person whom the person does not know to be aware of that fact but does know to be entitled (apart from the restrictions) to vote in respect of those shares (whether as holder or as proxy); or
(d) being the holder of any such shares, or being entitled to a right to be issued with other shares in right of them, or to receive any payment on them (otherwise than in a liquidation), enters into an agreement that is void under section 540(2) or (3).
(3) If shares of a company are issued in contravention of the restrictions, 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 thousand shillings.
(4) This section is subject—
(a) to any directions given under section 537(2), 542 or 543; 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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