INTERIM REVISED STATUTES OF ANGUILLA 2000
COMPANIES ACT
Division 3

Share Capital

Nature of shares

28.      (1) Shares in a company are personal estate, and a share is transferable in the manner provided by this Act.

(2)  Shares in a company are to be without nominal or par value.

(3)  Subject to subsection (4), each share in a company shall be distinguished by an appropriate designation.

(4)  If at any time all the issued shares in a company, or all the issued shares in a company of a particular class, rank equally for all purposes, none of those shares need thereafter have a distinguishing designation so long as they rank equally for all purposes with all shares for the time being issued, or all the shares for the time being issued of the particular class, as the case may be.

(5)  No company may issue bearer shares or bearer share certificates.

When only one class of shares

29.      When a company has only one class of shares, each share confers on the holder rights equal in all respects to the rights conferred on the holder of each other share, including—

(a)  the right to vote at any meeting of shareholders;

(b)  the right to an equal share in dividends declared by the company; and

(c)  the right to an equal share in any distribution of the surplus assets of the company.

Share classes

30.      The articles of a company may provide for more than one class of shares and, if they do so—

(a)  the rights, privileges, restrictions and conditions attaching to the shares of each class shall be set out in the articles; and

(b)  the rights set out in section 29 shall be attached to at least one class of shares, but all of those rights need not be attached to the same class of shares.

Share issue

31.      Subject to the articles, the by-laws, any unanimous shareholder agreement, and section 36, shares may be issued at the times, and to the persons, and for the consideration, that the directors determine.

Consideration

32.      (1) A share shall not be issued until it is fully paid—

(a)  in money; or

(b)  in property or past service that is the fair equivalent of the money that the company would have received if the share had been issued for money.

(2)  In determining whether property or past service is the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organisation and reorganisation, and payments for property and past services reasonably expected to benefit the company.

(3)  For the purposes of this section, “property” does not include a promissory note or a promise to pay.

Stated capital accounts

33.      (1) A company shall maintain a separate stated capital account expressed in any of the established currencies for each class and series of shares that it issues.

(2)  A company shall add to the appropriate stated capital account the full amount of the consideration that it receives for any shares that it issues.

(3)  A company shall not reduce its stated capital or any stated capital account except in the manner provided by this Act.

(4)  A company shall not, in respect of a share that it issues, add to a stated capital account an amount greater than the amount of the consideration that it receives for the share.

(5)  When a company proposes to add an amount to a stated capital account that it maintains in respect of a class or series of shares, that addition to the stated capital account shall be approved by special resolution if—

(a)  the amount to be added was not received by the company as consideration for the issue of shares; and

(b)  the company has issued any outstanding shares of more than one class or series.

(6)  Notwithstanding section 32 and subsection (2)—

(a) when, in exchange for property, a company issues shares—

(i) to a body corporate that was an affiliate of the company immediately before the exchange, or

(ii) to a person who controlled the company immediately before the exchange,

the company, subject to subsection (4), may add to the stated capital accounts that are maintained for the shares of the classes or series issued, the amount agreed, by the company and the body corporate or person, to be the consideration for the shares so exchanged;

(b)  when a company issues shares in exchange for shares of a body corporate that was an affiliate of the company immediately before the exchange, the company may, subject to subsection (4), add to the stated capital accounts that are maintained for the shares of the classes or series issued an amount that is not less than the amount set out, in respect of the acquired shares of the body corporate, in the stated capital or equivalent accounts of the body corporate immediately before the exchange; or

(c)  when a company issues shares in exchange for shares of a body corporate that becomes, because of the exchange, an affiliate of the company, the company may, subject to subsection (4), add to the stated capital accounts that are maintained for the classes or series issued an amount that is not less than the amount set out, in respect of the acquired shares of the body corporate, in the stated capital or equivalent accounts of the body corporate immediately before the exchange.

Open-ended mutual company

34.      Section 33 and any other provision of this Act relating to stated capital do not apply to a company—

(a)  that is a public company;

(b)  that carries on only the business of investing the consideration it receives for the shares it issues; and

(c)  all or substantially all of whose issued shares are redeemable upon the demand of shareholders.

Series shares

35.      (1) The articles of a company may authorise —

(a)  the issue of any class of shares in one or more series; and

(b)  the directors to fix the number of shares in and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to the limitations set out in the articles.

(2)  If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

(3)  No rights, privileges, restrictions or conditions attached to a series of shares authorised under this section may confer upon the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

(4)  Before the issue of shares of a series authorised under this section, the directors shall file with the Registrar articles of amendment in the prescribed form to designate a series of shares.

(5)  If he is satisfied that the relevant requirements of this Act have been complied with, the Registrar shall, upon receipt from a company of articles of amendment designating a series of shares, issue a certificate of amendment to the company.

(6)  The articles of a company are amended on the date shown in the certificate of amendment issued under subsection (5).

(7)  A director who authorises, permits or acquiesces in the issue of shares of a series under this section before the filing with the Registrar of articles of amendment commits an offence.

Pre-emptive rights

36.      (1) If the articles so provide, no shares of a class of shares may be issued unless the shares have first been offered to the shareholders of the company holding shares of that class.

(2)  Shareholders holding shares of the class to be issued have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class at the price and on the terms that those shares are to be offered to others.

(3)  Notwithstanding that the articles of a company provide the pre-emptive right referred to in subsections (1) and (2), the shareholders of the company have no pre-emptive right in respect of shares to be issued by the company—

(a)  for consideration other than money; and

(b)  pursuant to the exercise of conversion privileges, options or rights previously granted by the company.

Conversion privileges

37.      (1) A company may grant conversion privileges, options or rights to acquire shares of the company, but shall set out those privileges, options or rights in any certificates or other instruments issued in respect of the certificates.

(2) Conversion privileges, options and rights to acquire shares of a company may be made transferable or non-transferable, and options and rights to acquire shares may be made separable or inseparable from any debentures or shares to which they are attached.

Reserve shares

38.      Where a company—

(a)  has granted privileges to convert any debentures or shares issued by the company into shares or into shares of another class or series of shares; or

(b)  has issued or granted options or rights to acquire shares;

if the articles of the company limit the number of authorised shares, the company shall reserve and continue to reserve sufficient authorised shares to meet the exercise of those conversion privileges, options and rights.

Company holding own shares

39.      (1) Subject to subsection (2), and except as provided in sections 40 to 42, a company shall not hold shares in itself or in its holding body corporate.

(2)  A company shall cause a subsidiary body corporate of the company that holds shares of the company to sell or otherwise dispose of those shares within 5 years from the date—

(a)  that the body corporate became a subsidiary of the company; or

(b)  that the company was continued under this Act; as the case may be.

(3)  A company may in the capacity of a legal representative hold shares in itself or in its holding body corporate unless it, or the holding body corporate, or a subsidiary of either of them, has a beneficial interest in the shares.

(4)  A company may hold shares in itself or in its holding body corporate by way of security for the purposes of a transaction entered into by it in the ordinary course of a business that includes the lending of money.

Acquisition of own shares

40.      (1) Subject to subsection (2) and to its articles, a company may purchase or otherwise acquire shares issued by it.

(2)  A company shall not make any payment to purchase or otherwise acquire shares issued by it if there are reasonable grounds for believing that—

(a)  the company is unable, or would, after that payment, be unable to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets would, after that payment, be less than the aggregate of its liabilities and stated capital of all classes.

(3)  A company that contravenes subsection (2) commits an offence.

Other acquisition of own shares

41.      (1) Notwithstanding section 46(2), but subject to subsection (3) and to its articles, a company may purchase or otherwise acquire its own issued shares—

(a)  to settle or compromise a debt or claim asserted by or against the company;

(b)  to eliminate fractional shares; or

(c) to fulfil the terms of a non-assignable agreement under which the company has an option or is obligated to purchase shares owned by a director, an officer or an employee of the company.

(2)  Notwithstanding section 40(2), a company may purchase or otherwise acquire its own shares or own issued shares to satisfy the claim of a shareholder who dissents under section 161.

(3)  A company shall not make any payment to purchase or acquire under subsection (1) shares issued by it if there are reasonable grounds for believing that—

(a)  the company is unable, or would, after the payment, be unable to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets would, after that payment, be less than the aggregate of its liabilities and the amount required for payment on a redemption or in a winding up of all shares the holders of which have the right to be paid before the holders of the shares to be purchased or acquired.

(4)  A company that contravenes subsection (3) commits an offence.

Redeemable shares

42.      (1) Notwithstanding section 40(2) or 41(3), but subject to subsection (2) and to its articles, a company may, at prices not exceeding the redemption price thereof stated in its articles or calculated according to a formula stated in its articles, purchase or redeem any redeemable shares issued by it.

(2)  A company shall not make any payment to purchase or redeem any redeemable shares issued by it if there are reasonable grounds for believing that—

(a)  the company is unable or would, after that payment, be unable to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets would, after that payment, be less than the aggregate of—

(i) its liabilities, and

(ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a winding up, rateably with or before the holders of the shares to be purchased or redeemed.

(3)  A company that contravenes subsection (2) commits an offence.

Donated shares

43.      Subject to section 47, a company may accept from any shareholder a share of the company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of any amount unpaid on the share except in accordance with section 45.

Voting shares held in itself

44.      A company holding shares in itself or in its holding body corporate shall not vote or permit those shares to be voted unless the company—

(a)  holds the shares in the capacity of a legal representative; and

(b)  has complied with any provisions in regulations relating to proxies.

Stated capital reduction

45.      (1) Subject to subsection (3), a company may by special resolution reduce its stated capital by—

(a)  extinguishing or reducing a liability in respect of an amount unpaid on any share;

(b)  returning any amount in respect of consideration that the company received for an issued share, whether or not the company purchases, redeems or otherwise acquires any share or fraction thereof that it issued; and

(c)  declaring its stated capital to be reduced by an amount that is not represented by realisable assets.

(2)  A special resolution under this section shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

(3)  A company shall not reduce its stated capital under paragraph (1)(a) or (b) if there are reasonable grounds for believing that—

(a)  the company is unable, or would, after that reduction, be unable, to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets would thereby be less than the aggregate of its liabilities.

(4)  A company that reduces its stated capital under this section shall not later than 30 days after the date of the passing of the resolution, serve notice of the resolution on all persons who on the date of the passing of the resolution were creditors of the company.

(5)  A creditor may apply to the Court for an order compelling a shareholder or other recipient—

(a)  to pay to the company an amount equal to any liability of the shareholder that was extinguished or reduced contrary to this section; or

(b)  to pay or deliver to the company any money or property that was paid or distributed to the shareholder or other recipient as a consequence of a reduction of capital made contrary to this section.

(6)  An action to enforce a liability imposed by this section may not be commenced after 2 years from the date of the act complained of.

(7)  This section does not affect any liability that arises under section 85 or 86.

(8)  A company that contravenes subsection (3) commits an offence.

Stated capital adjustment

46.      (1) Upon a purchase, redemption or other acquisition by a company under section 40, 41, 42, 58 or 161, of shares or fractions of shares issued by it, the company must deduct from the stated capital account maintained for the class or series of shares purchased, redeemed or otherwise acquired, an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series or fractions of shares purchased, redeemed or otherwise acquired, divided by the number of issued shares of that class or series immediately before the purchase, redemption or other acquisition.

(2)  A company shall adjust its stated capital accounts in accordance with any special resolution referred to in section 45(2).

(3)  Upon a conversion of issued shares of a class into shares of another class, or upon a change under this Division of issued shares of a company into shares of another class or series, the company shall—

(a)  deduct from the stated capital account maintained for the class or series of shares changed or converted, an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series changed or converted, divided by the number of issued shares of that class or series immediately before the change or conversion; and

(b)  add the result obtained under paragraph (a), and any additional consideration received by the company pursuant to the change, to the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been changed or converted.

(4)  For the purposes of subsection (3), when a company issues two classes of shares and there is attached to each of the classes a right to convert a share of the one class into a share of the other class, then, if a share of one class is converted into a share of the other class, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of issued shares of both classes immediately before the conversion.

Cancellation of shares

47.      Shares or fractions of shares issued by a company and purchased, redeemed or otherwise acquired by the company shall be cancelled, or, if the articles of the company limit the number of authorised shares, the shares or fractions may be restored to the status of authorised, but unissued, shares.

Presumption regarding own shares

48.      For the purposes of sections 46 and 47, a company holding shares in itself as permitted by section 40 is deemed not to have purchased, redeemed or otherwise acquired those shares.

Changing share class

49.      (1) Shares issued by a company and converted or changed under this Division into shares of another class or series of shares become issued shares of the class or series of shares into which the shares have been converted or changed.

(2) Where its articles limit the number of authorised shares of a class or series of shares of a company and issued shares of that class or series have become, under subsection (1), issued shares of another class or series, the number of unissued shares of the first-mentioned class or series shall, unless the articles of amendment otherwise provide, be increased by the number of shares that, pursuant to subsection (1), became shares of another class or series.

Effect of purchase contract

50.      (1) A contract with a company providing for the purchase of shares of the company is specifically enforceable against the company except to the extent that the company cannot perform the contract without thereby being in breach of section 40 or 41.

(2)  In any action brought on a contract referred to in subsection (1), the company has the burden of proving that performance of the contract is prevented by section 40 or 41.

(3)  Until the company has fully performed a contract referred to in subsection (1), the other party retains the status of a claimant who is entitled—

(a)  to be paid as soon as the company is lawfully able to do so; or

(b)  to be ranked in a winding up subordinate to the rights of creditors but in priority to the shareholders.

Commission for share purchase

51.      The directors of a company acting honestly and in good faith with a view to the best interests of the company may authorise the company to pay a commission to any person in consideration of his purchasing or agreeing to purchase shares of the company from the company or from any other person, or procuring or agreeing to procure purchasers for the shares.

Prohibited dividend

52.      (1) A company shall not declare or pay a dividend if there are reasonable grounds for believing that—

(a)  the company is unable, or would, after the payment, be unable, to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

(2) A company that contravenes subsection (1) commits an offence.

Payment of dividend

53.      (1) Subject to subsection (2), a company may pay a dividend in money, in property, or by issuing fully paid shares of the company.

(2)  A company shall not pay a dividend in money or in property out of unrealised profits.

(3)  If shares of a company are issued in payment of a dividend, the value of the dividend stated as an amount in money shall be added to the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend.

(4)  A company that contravenes subsection (2) commits an offence.

Illicit financial assistance by company

54.      (1) When circumstances prejudicial to the company exist, the company or any company with which it is affiliated shall not, except as permitted by section 55, directly or indirectly, give financial assistance by means of a loan guarantee or otherwise—

(a)  to a shareholder, director, officer or employee of the company or affiliated company, or to an associate of any of those persons for any purpose; or

(b)  to any person for the purpose of, or in connection with, a purchase of a share issued or to be issued by the company or a company with which it is affiliated.

(2)  Circumstances prejudicial to the company exist in respect of financial assistance mentioned in subsection (1) when there are reasonable grounds for believing that—

(a)  the company is unable or would, after giving the financial assistance, be unable to pay its liabilities as they become due; or

(b)  the realisable value of the company’s assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, would, after giving the financial assistance, be less than the aggregate of the company’s liabilities and stated capital of all classes.

(3)  If financial assistance is given in contravention of subsection (1)—

(a)  the company and, if applicable, the affiliated company; and

(b)  every person in receipt of the financial assistance who is aware that it was given in contravention of subsection (1);

commits an offence.

Permitted financial assistance

55.      Notwithstanding section 54, a company may give financial assistance to any person by means of a loan, guarantee or otherwise—

(a)  in the ordinary course of business, if the lending of money is part of the ordinary business of the company;

(b)  on account of expenditures incurred or to be incurred on behalf of the company;

(c)  to a holding body corporate if the company is a wholly-owned subsidiary of the holding body corporate;

(d)  to a subsidiary body corporate of the company; or

(e)  to employees of the company or any of its affiliates—

(i) to enable or assist them to purchase or erect living accommodation for their own occupation,

(ii) in accordance with a plan for the purchase of shares of the company or any of its affiliates to be held by a trustee, or

(iii) to enable or assist them to improve their education or skills, or to meet reasonable medical expenses.

Enforcement of illicit contracts

56.      A contract made by a company contrary to section 54 may be enforced by the company or by a lender for value in good faith without notice of the contravention.

Immunity of shareholders

57.      The shareholders of a company are not, as shareholders, liable for any liability, act or default of the company except under section 45(5) or 124(2).

Lien on shares

58.      (1) Subject to this Act, the articles of a company may provide that the company has a lien on a share registered in the name of a shareholder or his legal representative for a debt of that shareholder to the company including an amount unpaid in respect of a share issued by a company on the date it was continued under this Act.

(2) A company may enforce a lien referred to in subsection (1) in accordance with its by-laws.

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