MENU

Section 924 of The Companies Act No. 17 of 2015: Explanatory statement setting out effect of arrangement or compromise to be circulated or made available to company's creditors and members of company

    

(1) When the Court has ordered a meeting to be convened under section 923,the company concerned shall ensure that—
(a) each notice convening the meeting that is sent to a creditor or member includes or is accompanied by a statement that complies with subsection (2); and
(b) each notice convening the meeting that is given by advertisement either—
(i) includes such a statement; or
(ii) states where and how creditors or members entitled to attend the meeting may obtain copies of such a statement.
(2) A statement complies with this subsection only if—
(a) it explains the effect of the proposed compromise or arrangement; and (b) in particular, it specifies—
(i) any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise); and
(ii) the effect on those interests of the compromise or arrangement, in so far as it is different from the effect on similar interests of other persons.
(3) If the compromise or arrangement affects the rights of debenture holders of the company, the company shall include in the statement the same explanation in respect of the trustees of any deed for securing the issue of the debentures as is required to be given in respect of the company's directors.
(4) If a notice given by advertisement states that copies of an explanatory statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member is entitled, on making application in the manner indicated by the notice, to be provided by the company with a copy of the statement free of charge.
(5) If a company fails to comply with a requirement of this section, 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.
(6) In proceedings for an offence under subsection (5), it is a defence for theperson charged with the offence to establish on a balance of probabilities that the failure was due to the refusal of a director or trustee for debenture holders to supply the necessary particulars of the interests of the director or trustee.
(7) For the purpose of this section, the following persons are taken to be officersof the company:
(a) a liquidator or administrator of the company;
(b) a trustee of a deed for securing the issue of debentures of the company.

« Previous:   Section 923 - Court may order meeting of company’s creditors or members to be held          Next: »   Section 925 - Duty of directors and trustees to provide information

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

Enhance Your Research with Bookmarks and Annotations

Here's how you can use these features:

  • To bookmark this page, click the "Bookmark this Page" button below the document title.
  • To add an annotation, highlight text in the document and select "Add Annotation" from the toolbar that appears.
  • These features are great for organizing your research and keeping track of key information.
  • You can view and manage your bookmarks and annotations on your Bookmarks and Annotations page.

Cited By:

More Sections