INTERNATIONAL BUSINESS COMPANIES ACT, 1994
PART III

CAPITAL AND DIVIDENDS

19. Subject to any limitations in the Memorandum or Articles, each share in a company incorporated under this Act shall be issued for money or other valuable consideration.

20.(1)    Subject to any limitations in the Memorandum or Articles, shares in a company incorporated under this Act may be issued for such amount as may be determined from time to time by the directors, except that in the case of shares with par value the amount shall not be less than the par value; and, in the absence of fraud, the decision of the directors as to the value of the consideration received by the company in respect of the issue is conclusive, unless a question of law is involved.

(2) Subject to any limitations in the Memorandum or Articles, treasury shares and unissued shares may be disposed of by a company incorporated under this Act on such terms and conditions as the directors may determine.

21. Subject to any limitations in its Memorandum or Articles, a company incorporated under this Act may issue fractions of a share and unless and to the extent otherwise provided in the Memorandum or Articles, a fractional share has the corresponding fractional liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a share of the same class or series of shares.

22.  (1) Where a company incorporated under this Act issues a share with par value, the consideration in respect of the share constitutes capital to the extent of the par value and the excess constitutes surplus.

(2)    Subject to any limitations in the Memorandum or Articles, where a company incorporated under this Act issues a share without par value, the consideration in respect of the share constitutes capital to the extent designated by the directors and the excess constitutes surplus, except that the directors shall designate as capital an amount of the consideration that shall be at least equal to the amount that the share is entitled to as a preference, if any, in the assets of the company upon liquidation of the company.

(3) Upon the disposition by a company incorporated under this Act of a treasury share, the consideration in respect of the share shall be added to surplus.

23. (1)    A share issued as a dividend by a company incorporated under this Act shall be treated for all purposes as having been issued for money equal to the surplus that has been transferred to capital upon the issue of the share.

(2) In the case of a dividend of authorised but unissued shares with par value, an amount equal to the aggregate par value of the shares shall be transferred from surplus to capital at the time of the distribution.

(3) In the case of a dividend of authorised but unissued shares without par value, the amount designated by the directors shall be transferred from surplus to capital at the time of the distribution, except that the directors shall designate as capital an amount that is at least equal to the amount that the shares are entitled to as preference, if any, in the assets of the company upon liquidation of the company.

(4) A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having proportionately small par value does not constitute a dividend of shares.

24. (1) Subject to any limitations in its Memorandum or Articles, a company incorporated under this Act may, by a resolution of directors, amend its Memorandum to increase or reduce its authorised capital, and in connection therewith, the company may -

(a)    increase or reduce the number of shares which the company may issue;

(b)    increase or reduce the par value of any of its shares; or

(c)    effect any combination under paragraphs (a) and (b).

(2)    Where a company reduces its authorised capital under subsection (1), then, for purposes of computing capital of the company, any capital that immediately before the reduction was represented by shares but  immediately following the reduction is no longer represented by shares shall be deemed to be surplus transferred from capital to surplus.

(3) A company incorporated under this Act shall, in writing, inform the Registrar of any increase or decrease of its authorised capital  within 30 days after the resolution.

(4) A company  that contravenes subsection (3) shall be liable to a penalty of $25 for each day  or part thereof during which  the contravention  continues.

(5) A director who  knowingly   permits the contravention of subsection (3) shall be liable to a penalty of $25 for each day or part thereof during which the contravention continues.

25. (1)    A company incorporated under this Act may amend its Memorandum -

(a)    to divide the shares, including issued shares, of a class or series into a larger number of shares of the same class or series; or

(b)    to combine the shares, including issued shares of a class or series into  a smaller number of shares of the same class or series.

(2)    Where shares are divided or combined under subsection (1), the aggregate par value of the new shares shall be equal to the aggregate par value of the original shares.

26.    Shares of a company incorporated under this Act are movable property and are not of the nature of immovable property.

27. (1)    A company incorporated under this Act shall state in its Articles whether or not certificates in respect of its shares shall be issued.

(2) Where a company incorporated under this Act issues certificates in respect of its shares, the certificates shall be  evidenced by the signature of a director or officer of the company; and the Articles may provide for the signatures to be facsimiles.

(3) A certificate issued in accordance with subsection (2) specifying a share held by a member of the company shall be prima facie evidence of the title of the member to the share specified therein.

28.(1)    A company incorporated under this Act shall cause to be kept one or more registers to be known as Share Registers containing -

(a)    the names and addresses of the persons who hold registered shares in the company;

(b)    the number of each class and series of registered shares held by each person;

(c)    the date on which  the name of each person  was entered in the Share Register;

(d)    the date on which any person ceased to be a member;

(e)    in the case of shares issued to bearer, the total number of each class and series of shares issued to bearer;

(f)    with respect to each certificate for shares issued to bearer -

(i)    the identifying number of the certificate;

(ii)    the number of each class or series of shares issued to bearer specified therein, and

(iii)    the date of issue of the certificate;

but the company may delete from the Share Register information relating to shares issued to bearer that have been cancelled.

(2)    The Share Register may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company shall be able to produce legible evidence of its contents.

(3)    A copy of the Share Register, commencing from the date of the registration of the company, shall be kept at the office of the company referred to in section 38 or such other place as the Directors determine and the company shall  inform the Registrar of the address of the other place.

(4)    The Share Register shall be prima facie evidence of any matters directed or authorised by this Act to be contained therein.

(5)    A company that  contravenes this section shall be liable to a penalty of $25 for each day or part thereof during which the contravention continues.

(6)    A director who knowingly permits the contravention of this section shall be liable to a penalty of $25 for each day or part thereof during which the contravention continues.

29. (1)    If -

(a)    information that is required to be entered in the Share Register under section 28 is omitted therefrom or inaccurately entered therein; or

(b)    there is unreasonable delay in entering the information in the Share Register,

a member of the company, or any person who is aggrieved by the omission, inaccuracy or delay may apply to the court for an order that the Share Register be rectified, and the court may either grant or refuse the application, with or without costs to be paid by the applicant, or order the rectification of the Share Register and may direct the company to pay all costs of the application and any damages the applicant may have sustained.

(2)    The court may, in any proceedings under subsection (1) determine -

(a)    any question relating to the right of a person who is a party to the proceedings to have his name entered in or omitted from the Share Register, whether the question arises between -

(i)  two or more members or alleged members; or

(ii)  between members or alleged members and the company, and

(b)    generally any question that may be necessary or expedient to be determined for the rectification of the     Share Register.

30.(1)    Subject to any limitations in the Memorandum or Articles, registered shares of a company incorporated under this Act may be transferred by a written instrument of transfer signed by the transferor and containing, save in the case of bearer shares, the name and address of the transferee.

(2) In the absence of a written instrument of transfer mentioned in subsection (1), the directors may accept such evidence of a transfer of shares as they consider appropriate.

(3) A company shall not be required to treat a transferee of a registered share in the company as a member until the transferee's name has been entered in the Share Register.

(4) Subject to any limitations in its Memorandum or Articles, a company incorporated under this Act shall, on the application of the transferor or transferee of a registered share in the company, enter in its Share Register the name of the transferee of the share.

(5) A transfer of registered shares of a deceased, or bankrupt member of a company incorporated under this Act made by his personal representative, guardian or trustee, as the case may be, or a transfer of registered shares owned by a person as a result of a transfer from a member by operation of law, is of the same validity as if the personal representative, guardian, trustee or transferee had been the registered holder of the shares at the time of the execution of the instrument of transfer.

31.    A share issued to bearer shall be transferable by delivery of the certificate relating to the share.

32.(1)    Where a governmental authority, whether it is legally constituted or not, in any jurisdiction outside Seychelles -

(a)    by or in connection with a nationalisation,    expropriation, confiscation, coercion, force or duress, or similar action; or

(b)    by or in connection with the imposition of any confiscatory tax, assessment or other governmental charge,

takes or seizes any shares or other interest in a company incorporated under this Act, the company itself or a person holding shares or any other interest in a company, including an interest as a creditor, may apply to the court for an order that the company disregard the taking or seizure and continue to treat the person who would have held shares or any other interest in the company but for the taking or seizure of the shares or other interest as continuing to hold the shares or other interest.

(2)    Without affecting subsection  (1), where a person whose shares or other interest have been taken or seized as referred to in subsection (1) is other than a natural person, the person making the application under subsection (1) or the company itself, may apply to the court for an additional order for the company to treat the persons believed by the company to have held the direct or indirect beneficial interests in the shares or other interests in the company as the holder of those shares or other interest.

(3)    The court may, upon application made to it under subsection (1) or (2) -

(a)    grant such relief as it considers equitable and proper; and

(b)    order that any shares of or other interests in the company vest in such person or authority as the court may appoint and for such purposes as the court may determine.

(1)    Subject to any limitations in its Memorandum or Articles, a company incorporated under this Act may purchase, redeem or otherwise acquire and hold its own shares but only out of surplus or in exchange for newly issued shares of equal value.

(2)    No purchase, redemption or other acquisition permitted under subsection (1) shall be made unless the directors determine that immediately after the purchase, redemption or other acquisition -

(a)    the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b)    the realizable value of the assets of the company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in the books of account, and its issued and outstanding share capital,

and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive unless a question of law is involved.

(3)    A determination by the directors under subsection (2) is not required where shares are purchased, redeemed or otherwise acquired -

(a)    pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for money or other property of the company;

(b)    in exchange for newly issued shares in the company;

(c)    by virtue of the provisions of section 79; and

(d)    pursuant to an order of the court.

(4)    Subject to any limitations in the Memorandum or Articles, shares that a company purchases, redeems or otherwise acquires may be cancelled or held as treasury shares unless the shares are purchased, redeemed or otherwise acquired out of capital pursuant to section 35, in which case they shall be cancelled; and upon the cancellation of a share, the amount included as capital of the company with respect to that share shall be deducted from the capital of the company.

34.    Where shares in a company incorporated under this Act -

(a)    are held by the company as treasury shares;  or

(b)    are held by another company of which the first company holds, directly or indirectly, shares having more than 50 percent of the votes in the election of directors of  the other company,

the shareholders of the first company are not entitled to vote or to have dividends paid thereon and shall not be treated as outstanding for any purpose under this Act except for the purpose of determining the capital of the first company.

35.(1)    Subject to any limitations in the Memorandum or Articles and subsections (3) and (4), the capital of a company incorporated under this Act may by resolution of directors, be -

(a)    increased by transferring an amount out of the surplus of the company to capital; or

(b)    reduced by -

(i)    returning to members any amount received by the company upon the issue of any of its shares, the amount being surplus to the company;

(ii)    cancelling any capital that is lost or not represented by assets having realizable value; or

(iii)    transferring capital to surplus for the purpose of purchasing, redeeming or otherwise acquiring shares that the directors have resolved to purchase, redeem or otherwise acquire.

(2)    Where a company reduces its capital under subsection (1), the company may -

(a)    return to members any amount received by the company upon the issue of its shares;

(b)    purchase, redeem or otherwise acquire its shares out of capital; or

(c)    cancel any capital that is lost or not represented by assets having a realizable value.

(3)    No reduction of capital shall be effected that reduces the capital of the company to an amount that is less than the sum of -

(a)    the aggregate of -

(i)    all outstanding shares with par value, and

(ii)    all shares with par value held by the company as treasury shares; and

(b)    the aggregates of the amounts designated as capital of -

(i)    all outstanding shares without par value; and

(ii)    all shares without par value held by the company as treasury shares that are entitled to a preference, if any, in the assets of the company upon liquidation of the company.

(4)    No reduction of capital shall be effected under subsection (1) unless the directors determine that immediately after the reduction-

(a)    the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b)    the realizable value of the assets of the company will not be less than its total liabilities, other than deferred taxes, as shown in the books of account, and its remaining issued and outstanding share capital,

and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive unless a question of law is involved.

36.(1)  Subject to any limitations in its Memorandum or Articles a company incorporated under this Act may, by a resolution of directors, declare and pay dividends in money, shares or other property.

(2)    Dividends shall only be declared and paid if the directors determine that immediately after the payment of the dividend

(a)    the company will be able to satisfy its liabilities as they become due in the ordinary course of its business; and

(b)    the realizable value of the assets of the company will not be less than the sum of its total liabilities, other than deferred taxes, as shown in the books of account, and its issued and outstanding share capital,

and, in the absence of fraud, the decision of the directors as to the realizable value of the assets of the company is conclusive unless a question of law is involved.

37.    Subject to any limitations in its Memorandum or Articles a company incorporated under this Act may, by a resolution of directors, include in the computation of surplus for any purpose under this Act the net unrealised appreciation of assets of the company, and, in the absence of fraud, the decision as to the value of the assets is conclusive, unless a question of law is involved.

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