Singapore Companies Act - Chapter 50 - Shares, Debentures and Charges

Singapore Companies Act

Singapore Companies Act Singapore Companies Act Singapore Companies Act

PART IV

SHARES, DEBENTURES AND CHARGES

Division 1 — Prospectuses

Requirement to issue form of application for shares or debentures with a prospectus

43.  [Repealed by S 236/2002]

As to invitations to the public to lend money to or to deposit money with a corporation

44.  [Repealed by S 236/2002]

Contents of prospectuses

45.  [Repealed by S 236/2002]

Profile statement

45A.  [Repealed by S 236/2002]

Exemption from requirements as to form or content of prospectus or profile statement

46.  [Repealed by S 236/2002]

Abridged prospectus for renounceable rights issues

47.  [Repealed by S 236/2002]

Restrictions on advertisements, etc.

48.  [Repealed by S 236/2002]

As to retention of over-subscriptions in debenture issues

49.  [Repealed by S 236/2002]

Registration of prospectus

50.  [Repealed by S 236/2002]

Lodging supplementary document or replacement document

50A.  [Repealed by S 236/2002]

Exemption for certain governmental and international corporations as regards the signing of a copy of prospectus by all directors

51.  [Repealed by S 236/2002]

Document containing offer of shares for sale deemed prospectus

52.  [Repealed by S 236/2002]

Allotment of shares and debentures where prospectus indicates application to list on stock exchange

53.  [Repealed by S 236/2002]

Expert’s consent to issue of prospectus containing statement by him

54.  [Repealed by S 236/2002]

Civil liability for false or misleading statements and omissions

55.  [Repealed by S 236/2002]

Persons liable to inform person making offer or invitation about certain deficiencies

55A.  [Repealed by S 236/2002]

Defences

55B.  [Repealed by S 236/2002]

Criminal liability for false or misleading statements and omissions

56.  [Repealed by S 236/2002]

Division 2 — Restrictions on allotment and commencement of business

Prohibition of allotment unless minimum subscription received

57.  [Repealed by S 236/2002]

Application and moneys to be held by the company in trust in a separate bank account until allotment

58.  [Repealed by S 236/2002]

Restriction on allotment in certain cases

59. —(1)  A public company having a share capital which does not issue a prospectus on or with reference to its formation shall not allot any of its shares or debentures unless, at least 3 days before the first allotment of either shares or debentures, there has been lodged with the Registrar a statement in lieu of prospectus which complies with the requirements of this Act.

(2)  If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months.

(3)  Every director of a company who knowingly contravenes or permits or authorises the contravention of subsection (1) shall —

(a) be guilty of an offence; and

(b) be liable in addition to the penalty or punishment for the offence to compensate the company and allottee respectively for any loss, damages or costs which the company or allottee has sustained or incurred thereby.

(4)  No proceedings for the recovery of any compensation referred to in subsection (3)(b) shall be commenced after the expiration of 2 years from the date of the allotment

[UK, 1948, s. 48; Aust., 1961, s. 50]

Requirements as to statements in lieu of prospectus

60.

—(1)  To comply with the requirements of this Act, a statement in lieu of prospectus lodged by or on behalf of a company —

(a) shall be signed by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing;

(b) shall, subject to Part III of the Sixth Schedule, be in the form of and state the matters specified in Part I of that Schedule and set out the reports specified in Part II of that Schedule; and

(c) shall, where the persons making any report specified in Part II of that Schedule have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 5 of Part III of that Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefor.

(2)  The Registrar shall not accept for registration any statement in lieu of prospectus unless it appears to him to comply with the requirements of this Act.

(3)  Where in any statement in lieu of prospectus there is any untrue statement or wilful non-disclosure, any director who signed the statement in lieu of prospectus shall, unless he proves either that the untrue statement or non-disclosure was immaterial or that he had reasonable ground to believe and did up to the time of the delivery for registration of the statement in lieu of prospectus believe that the untrue statement was true or the non-disclosure immaterial, be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both

[UK, 1948, s. 48; Aust., 1961, s. 51]

Restrictions on commencement of business in certain circumstances

61.

—(1)  Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing power —

(a) if any money is or may become liable to be repaid to applicants for any shares or debentures offered for public subscription by reason of any failure to apply for or obtain permission for listing for quotation on any securities exchange; or

(b) unless —

(i) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription;

(ii) every director has paid to the company on each of the shares taken or contracted to be taken by him, and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription; and

(iii) there has been lodged with the Registrar a declaration in the prescribed form by —

(A) the secretary or one of the directors of the company; or

(B) a prescribed person authorised by the company, verifying that sub-paragraphs (i) and (ii) have been complied with.

(2)  Where a public company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing power unless —

(a) there has been lodged with the Registrar a statement in lieu of prospectus which complies with the provisions of this Act;

(b) every director of the company has paid to the company on each of the shares taken or contracted to be taken by him, and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash; and

(c) there has been lodged with the Registrar a declaration in the prescribed form by —

(i) the secretary or one of the directors of the company; or

(ii) a prescribed person authorised by the company, verifying that paragraph (b) has been complied with.

(3)  The Registrar shall, on the lodgment of the declaration under subsection (1)(b)(iii) or (2)(c), as the case may be, issue a notice in the prescribed form that the company is entitled to commence business and to exercise its borrowing powers; and that notice shall be conclusive evidence of the matters stated in it.

(4)  Any contract made by a company before the date on which it is entitled to commence business shall be provisional only and shall not be binding on the company until that date, and on that date it shall become binding.

(5)  Where shares and debentures are offered simultaneously by a company for subscription, nothing in this section shall prevent the receipt by the company of any money payable on application for the debentures.

(6)  If any company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000 and to a default penalty of $250.

(7)  Upon the application of a company which has received a notice under subsection (3) and payment of the prescribed fee, the Registrar shall issue to the company a certificate, under his hand and seal, confirming that the company is entitled to commence business and to exercise its borrowing powers, and that certificate shall be conclusive evidence of the matters stated in it

[UK, 1948, s. 109; Aust., 1961, s. 52]

Restriction on varying contracts referred to in prospectus, etc.

62.  A company shall not before the statutory meeting vary the terms of a contract referred to in the prospectus or statement in lieu of prospectus, unless the variation is made subject to the approval of the statutory meeting

[UK, 1948, s. 42; Aust., 1961, s. 53]

Division 3 — Shares

No par value shares

62A.

—(1)  Shares of a company have no par or nominal value.

(2)  Subsection (1) shall apply to all shares, whether issued before, on or after 30th January 2006

[Aust., 2001, s. 254C]

Transitional provisions for section 62A

62B.

—(1)  For the purpose of the operation of this Act on or after 30th January 2006 in relation to a share issued before that date—

(a) the amount paid on the share shall be the sum of all amounts paid to the company at any time for the share (but not including any premium); and

(b) the amount unpaid on the share shall be the difference between the price of issue of the share (but not including any premium) and the amount paid on the share.

(2)  On 30th January 2006, any amount standing to the credit of a company’s share premium account and any amount standing to the credit of a company’s capital redemption reserve shall become part of the company’s share capital.

(3)  Notwithstanding subsection (2), a company may use the amount standing to the credit of its share premium account immediately before 30th January 2006 to—

(a) provide for the premium payable on redemption of debentures or redeemable preference shares issued before that date;

(b) write off —

(i) the preliminary expenses of the company incurred before that date; or

(ii) expenses incurred, or commissions or brokerages paid or discounts allowed, on or before that date, for or on any duty, fee or tax payable on or in connection with any issue of shares of the company;

(c) pay up, pursuant to an agreement made before that date, shares which were unissued before that date and which are to be issued on or after that date to members of the company as fully paid bonus shares;

(d) pay up in whole or in part the balance unpaid on shares issued before that date to members of the company; or

(e) pay dividends declared before that date, if such dividends are satisfied by the issue of shares to members of the company.

(4)  Notwithstanding subsection (2), if the company carries on insurance business in Singapore immediately before 30th January 2006, it may also apply the amount standing to the credit of its share premium account immediately before that date by appropriation or transfer to any fund established and maintained pursuant to the Insurance Act (Cap. 142).

(5)  Notwithstanding subsection (1), the liability of a shareholder for calls in respect of money unpaid on shares issued before 30th January 2006 (whether on account of the par value of the shares or by way of premium) shall not be affected by the shares ceasing to have a par value.

(6)  For the purpose of interpreting and applying, on or after 30th January 2006, a contract (including the memorandum and articles of the company) entered into before that date or a trust deed or other document executed before that date—

(a) a reference to the par or nominal value of a share shall be a reference to —

(i) if the share is issued before that date, the par or nominal value of the share immediately before that date;

(ii) if the share is issued on or after that date but shares of the same class were on issue immediately before that date, the par or nominal value that the share would have had if it had been issued then; or

(iii) if the share is issued on or after that date and shares of the same class were not on issue immediately before that date, the par or nominal value determined by the directors, and a reference to share premium shall be taken to be a reference to any residual share capital in relation to the share;

(b) a reference to a right to a return of capital on a share shall be taken to be a reference to a right to a return of capital of a value equal to the amount paid in respect of the share’s par or nominal value; and

(c) a reference to the aggregate par or nominal value of the company’s issued share capital shall be taken to be a reference to that aggregate as it existed immediately before that date as —

(i) increased to take account of the par or nominal value as defined in paragraph (a) of any shares issued on or after that date; and

(ii) reduced to take account of the par or nominal value as defined in paragraph (a) of any shares cancelled on or after that date.

(7)  A company may —

(a) at any time before —

(i) the date it is required under section 197(4) to lodge its first annual return after 30th January 2006; or

(ii) the expiry of 6 months from 30th January 2006, whichever is the earlier; or

(b) within such longer period as the Registrar may, if he thinks fit in the circumstances of the case, allow, file with the Registrar a notice in the prescribed form of its share capital.

(8)  Unless a company has filed a notice of its share capital under subsection (7), the Registrar may for the purposes of the records maintained by the Authority adopt, as the share capital of the company, the aggregate nominal value of the shares issued by the company as that value appears in the Authority’s records immediately before 30th January 2006

[Aust., Corporations, ss. 1444, 1449; Companies, s. 69 (2) (modified)]

Return as to allotments

63.

—(1)  Where a company makes any allotment of its shares, other than a deemed allotment, the company shall within 14 days thereafter lodge with the Registrar a return of the allotments stating —

(a) the number of the shares comprised in the allotment;

(b) the amount (if any) paid or deemed to be paid on the allotment of each share;

(ba) the amount (if any) unpaid on each share referred to in paragraph (b);

(c) where the capital of the company is divided into shares of different classes the class of shares to which each share comprised in the allotment belongs; and

(d) the full name, identification, nationality (if such identification or nationality, as the case may be, is required by the Registrar) and address of, and the number and class of shares held by —

(i) each of its members; or

(ii) if it has more than 50 members as a result of the allotment, each of the 50 members who, following the allotment, hold the most number of shares in the company (excluding treasury shares)

[12/2002; 21/2005]

(1A)  A return of allotments referred to in subsection (1) by a company the shares of which are listed on a stock exchange in Singapore need not state the particulars referred to in subsection (1)(d).

(2)  In subsection (1), “identification” means in the case of a person issued with an identity card, the number of his identity card and, in the case of a person not issued with an identity card, particulars of his passport or such other similar evidence of identification as is available.

(3)  [Deleted by Act 12 of 2002]

(4)  Where shares are allotted as fully or partly paid up otherwise than in cash and the allotment is made pursuant to a contract in writing, the company shall lodge with the return the contract evidencing the entitlement of the allottee or a copy of any such contract certified as prescribed.

(5)  If a certified copy of a contract is lodged, the original contract duly stamped shall if the Registrar so requests be produced at the same time to the Registrar.

(6)  Where shares are allotted as fully or partly paid up otherwise than in cash and the allotment is made —

(a) pursuant to a contract not reduced to writing;

(b) pursuant to a provision in the memorandum or articles; or

(c) in satisfaction of a dividend declared in favour of, but not payable in cash to, the shareholders, or in pursuance of the application of moneys held by the company in an account or reserve in paying up unissued shares to which the shareholders have become entitled, the company shall lodge with the return a statement containing such particulars as are prescribed but, where the shares are allotted pursuant to a scheme of arrangement approved by the Court under section 210, the company may lodge a copy of the order of the Court in lieu of the statement in the prescribed form.

(7)  In this section, “deemed allotment” means an issue of shares without formal allotment to subscribers to the memorandum.

(8)  If default is made in complying with this section, every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $4,000 and to a default penalty of $250

[UK, 1948, s. 52; Aust., 1961, s. 54]

As to voting rights of equity shares in certain companies

64.

—(1)  Notwithstanding any provision in this Act or in the memorandum or articles of a company to which this section applies, but subject to sections 76J and 180(1), each equity share issued by such a company after 29th December 1967 shall confer the right at a poll at any general meeting of the company to one vote, and to one vote only, in respect of each equity share unless it is a management share issued by a newspaper company under section 10 of the Newspaper and Printing Presses Act (Cap. 206)

[15/84; 22/93; 21/2005]

(2)  Where any company to which this section applies has, prior to 29th December 1967, or, while it was a company to which this section did not apply, issued any equity share which does not comply with subsection (1), the company shall not issue any invitation to subscribe for or to purchase any shares or debentures of such company until the voting rights attached to each share of that company have been duly varied so as to comply with subsection (1).

(3)  For the purposes of this section, any alteration of the rights of issued preference shares so that they become equity shares shall be deemed to be an issue of equity shares.

(4)  The Minister may, by order published in the Gazette, declare that subsection (1) shall apply to all or any equity shares or any class of equity shares which have been issued before 29th December 1967 by a company to which this section applies and which is specified in the declaration and thereupon that subsection shall apply to such equity shares so issued by such company from such date as is specified in the declaration being a date not less than one year after the making of the declaration.

(5)  This section shall apply to a public company having a share capital.

(6)  Any person who makes any invitation to the public in breach of subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years.

Differences in calls and payments, etc.

65.

—(1)  A company if so authorised by its articles may —

(a) make arrangements on the issue of shares for varying the amounts and times of payment of calls as between shareholders;

(b) accept from any member the whole or a part of the amount remaining unpaid on any shares although no part of that amount has been called up; and

(c) pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

[UK, 1948, s. 59; Aust., 1961, ss. 55, 56]

Reserve liability

(2)  A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up, but no such resolution shall prejudice the rights of any person acquired before the passing of the resolution

[Aust., 1961, s. 56]

Share warrants

66.

—(1)  A company shall not issue any share warrant stating that the bearer of the warrant is entitled to the shares therein specified and which enables the shares to be transferred by delivery of the warrant.

(2)  The bearer of a share warrant issued before 29th December 1967 shall be entitled, on surrendering it for cancellation, to have his name entered in the register of members.

(3)  The company shall be responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant issued before 29th December 1967 in respect of the shares therein specified without the warrant being surrendered and cancelled

[Aust., 1961, s. 57]

Power to pay certain commissions, and prohibition of payment of all other commissions, discounts, etc.

67.  [Repealed by Act 21 of 2005]

Power to issue shares at a discount

68.  [Repealed by Act 21 of 2005]

Issue of shares at premium

69.  [Repealed by Act 21 of 2005]

Relief from section 69

69A.  [Repealed by Act 21 of 2005]

Merger relief

69B.  [Repealed by Act 21 of 2005]

Relief from section 69 in respect of group reconstruction

69C.  [Repealed by Act 21 of 2005]

Retrospective relief from section 69 in certain circumstances

69D.  [Repealed by Act 21 of 2005]

Provisions supplementary to sections 69B and 69C

69E.  [Repealed by Act 21 of 2005]

Power to make provision extending or restricting relief from section 69

69F.  [Repealed by Act 21 of 2005]

Redeemable preference shares

70.

—(1)  Subject to this section, a company having a share capital may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be, liable to be redeemed and the redemption shall be effected only on such terms and in such manner as is provided by the articles.

(2)  The redemption shall not be taken as reducing the amount of share capital of the company.

(3)  The shares shall not be redeemed unless they are fully paid up.

(4)  The shares shall not be redeemed out of the capital of the company unless —

(a) all the directors have made a solvency statement in relation to such redemption; and

(b) the company has lodged a copy of the statement with the Registrar.

(5)  [Deleted by Act 21 of 2005]

(6)  [Deleted by Act 21 of 2005]

(7)  [Deleted by Act 21 of 2005]

(8)  If a company redeems any redeemable preference shares it shall within 14 days after so doing give notice thereof to the Registrar specifying the shares redeemed

[UK, 1948, s. 58; Aust., 1961, s. 61]

Power of company to alter its share capital

71.

—(1)  A company, if so authorised by its articles, may in general meeting alter its share capital in any one or more of the following ways:

(a) [Deleted by Act 21 of 2005]

(b) consolidate and divide all or any of its share capital;

(c) convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares;

(d) subdivide its shares or any of them, so however that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;

(e) cancel the number of shares which at the date of the passing of the resolution in that behalf have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the number of the shares so cancelled.

(1A)  The company may lodge with the Registrar notice of any alteration referred to in subsection (1)(b), (c), (d) or (e) in the prescribed form.

Cancellations

(2)  A cancellation of shares under this section shall not be deemed to be a reduction of share capital within the meaning of this Act.

As to share capital of unlimited company on re-registration

(3)  An unlimited company having a share capital may by any resolution passed for the purposes of section 30(1) —

(a) increase the amount of its share capital by increasing the issue price of each of its shares, but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being wound up; and

(b) in addition or alternatively, provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.

Notice of increase of share capital

(4)  [Deleted by Act 21 of 2005]

(5)  [Deleted by Act 21 of 2005]

[UK, 1948, ss. 61, 64; Aust., 1961, s. 62]

Validation of shares improperly issued

72.  Where a company has purported to issue or allot shares and the creation, issue or allotment of those shares was invalid by reason of any provision of this or any other written law or of the memorandum or articles of the company or otherwise or the terms of issue or allotment were inconsistent with or unauthorised by any such provision the Court may, upon application made by the company or by a holder or mortgagee of any of those shares or by a creditor of the company and upon being satisfied that in all the circumstances it is just and equitable to do so, make an order validating the issue or allotment of those shares or confirming the terms of issue or allotment thereof or both and upon a copy of the order being lodged with the Registrar those shares shall be deemed to have been validly issued or allotted upon the terms of the issue or allotment thereof

[Aust., 1961, s. 63]

Special resolution for reduction of share capital

73.  [Repealed by Act 21 of 2005]

Rights of holders of classes of shares

74.

—(1)  If, in the case of a company the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorising the variation or abrogation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of that provision, the rights attached to any such class of shares are at any time varied or abrogated, the holders of not less in the aggregate than 5% of the issued shares of that class may apply to the Court to have the variation or abrogation cancelled, and, if any such application is made, the variation or abrogation shall not have effect until confirmed by the Court

[10/74]

(1A)  For the purposes of subsection (1), any of the company’s issued share capital held as treasury shares shall be disregarded.

(2)  An application shall not be invalid by reason of the applicants or any of them having consented to or voted in favour of the resolution for the variation or abrogation if the Court is satisfied that any material fact was not disclosed by the company to those applicants before they so consented or voted.

(3)  The application shall be made within one month after the date on which the consent was given or the resolution was passed or such further time as the Court allows, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they appoint in writing for the purpose.

(4)  On the application the Court, after hearing the applicant and any other persons who apply to the Court to be heard and appear to the Court to be interested, may, if satisfied having regard to all the circumstances of the case that the variation or abrogation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation or abrogation, as the case may be, and shall, if not so satisfied, confirm it and the decision of the Court shall be final.

(5)  The company shall, within 14 days after the making of an order by the Court on any such application, lodge a copy of the order with the Registrar and if default is made in complying with this provision the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty

[15/84; 12/2002]

(6)  The issue by a company of preference shares ranking pari passu with existing preference shares issued by the company shall be deemed to be a variation of the rights attached to those existing preference shares unless the issue of the first-mentioned shares was authorised by the terms of issue of the existing preference shares or by the articles of the company in force at the time the existing preference shares were issued.

(7)  For the purposes of this section, the alteration of any provision in the memorandum or articles of a company which affects or relates to the manner in which the rights attaching to the shares of any class may be varied or abrogated shall be deemed to be a variation or abrogation of the rights attached to the shares of that class.

(8)  This section shall not operate so as to limit or derogate from the rights of any person to obtain relief under section 216

[UK, 1948, s. 72; UK, 2003, Sch., para. 9; Aust., 1961, s. 65]

Rights of holders of preference shares to be set out in memorandum or articles

75.

—(1)  No company shall allot any preference shares or convert any issued shares into preference shares unless there are set out in its memorandum or articles the rights of the holders of those shares with respect to repayment of capital, participation in surplus assets and profits, cumulative or non-cumulative dividends, voting and priority of payment of capital and dividend in relation to other shares or other classes of preference shares.

(2)  If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000

[Aust., 1961, s. 66]

Company financing dealings in its shares, etc.

76.

—(1)  Except as otherwise expressly provided by this Act, a company shall not —

(a) whether directly or indirectly, give any financial assistance for the purpose of, or in connection with —

(i) the acquisition by any person, whether before or at the same time as the giving of financial assistance, of —

(A) shares or units of shares in the company; or

(B) shares or units of shares in a holding company of the company; or

(ii) the proposed acquisition by any person of —

(A) shares or units of shares in the company; or

(B) shares or units of shares in a holding company of the company;

(b) whether directly or indirectly, in any way —

(i) acquire shares or units of shares in the company; or

(ii) purport to acquire shares or units of shares in a holding company of the company; or

(c) whether directly or indirectly, in any way, lend money on the security of —

(i) shares or units of shares in the company; or

(ii) shares or units of shares in a holding company of the company.

(2)  A reference in this section to the giving of financial assistance includes a reference to the giving of financial assistance by means of the making of a loan, the giving of a guarantee, the provision of security, the release of an obligation or the release of a debt or otherwise.

(3)  For the purposes of this section, a company shall be taken to have given financial assistance for the purpose of an acquisition or proposed acquisition referred to in subsection (1)(a) (referred to in this subsection as the relevant purpose) if —

(a) the company gave the financial assistance for purposes that included the relevant purpose; and

(b) the relevant purpose was a substantial purpose of the giving of the financial assistance.

(4)  For the purposes of this section, a company shall be taken to have given financial assistance in connection with an acquisition or proposed acquisition referred to in subsection (1)(a) if, when the financial assistance was given to a person, the company was aware that the financial assistance would financially assist —

(a) the acquisition by a person of shares or units of shares in the company; or

(b) where shares in the company had already been acquired — the payment by a person of any unpaid amount of the subscription payable for the shares, or the payment of any calls on the shares

(5)  If a company contravenes subsection (1), the company shall not be guilty of an offence, notwithstanding section 407, but each officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both.

(6)  Where a person is convicted of an offence under subsection (5) and the Court by which he is convicted is satisfied that the company or another person has suffered loss or damage as a result of the contravention that constituted the offence, that Court may, in addition to imposing a penalty under that subsection, order the convicted person to pay compensation to the company or other person, as the case may be, of such amount as the Court specifies, and any such order may be enforced as if it were a judgment of the Court.

(7)  The power of a Court under section 391 to relieve a person to whom that section applies, wholly or partly and on such terms as the Court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (6) from the liability to have such an order made against him.

(8)  Nothing in subsection (1) prohibits —

(a) the payment of a dividend by a company in good faith and in the ordinary course of commercial dealing;

(b) a payment made by a company pursuant to a reduction of capital in accordance with Division 3A of this Part;

(c) the discharge by a company of a liability of the company that was incurred in good faith as a result of a transaction entered into on ordinary commercial terms;

(d) anything done in pursuance of an order of Court made under section 210;

(e) anything done under an arrangement made in pursuance of section 306;

(f) anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue of section 309;

(g) where a corporation is a borrowing corporation by reason that it is or will be under a liability to repay moneys received or to be received by it —

(i) the giving, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of a guarantee in relation to the repayment of those moneys, whether or not the guarantee is secured by any charge over the property of that company; or

(ii) the provision, in good faith and in the ordinary course of commercial dealing, by a company that is a subsidiary of the borrowing corporation, of security in relation to the repayment of those moneys;

(ga) the giving by a company in good faith and in the ordinary course of commercial dealing of any representation, warranty or indemnity in relation to an offer to the public of, or an invitation to the public to subscribe for or purchase, shares or units of shares in that company;

(h) the purchase by a company of shares in the company pursuant to an order of a Court;

(i) the creation or acquisition, in good faith and in the ordinary course of commercial dealing, by a company of a lien on shares in the company (other than fully-paid shares) for any amount payable to the company in respect of the shares; or

(j) the entering into, in good faith and in the ordinary course of commercial dealing, of an agreement by a company with a subscriber for shares in the company permitting the subscriber to make payments for the shares by instalments, but nothing in this subsection —

(i) shall be construed as implying that a particular act of a company would, but for this subsection, be prohibited by subsection (1); or

(ii) shall be construed as limiting the operation of any rule of law permitting the giving of financial assistance by a company, the acquisition of shares or units of shares by a company or the lending of money by a company on the security of shares or units of shares

(9)  Nothing in subsection (1) prohibits —

(a) the making of a loan, or the giving of a guarantee or the provision of security in connection with one or more loans made by one or more other persons, by a company in the ordinary course of its business where the activities of that company are regulated by any written law relating to banking, finance companies or insurance or are subject to supervision by the Monetary Authority of Singapore and where —

(i) the lending of money, or the giving of guarantees or the provision of security in connection with loans made by other persons, is done in the course of such activities; and

(ii) the loan that is made by the company, or, where the guarantee is given or the security is provided in respect of a loan, that loan is made on ordinary commercial terms as to the rate of interest, the terms of repayment of principal and payment of interest, the security to be provided and otherwise;

(b) the giving by a company of financial assistance for the purpose of, or in connection with, the acquisition or proposed acquisition of shares or units of shares in the company or in a holding company of the company to be held by or for the benefit of employees of the company or of a corporation that is related to the company, including any director holding a salaried employment or office in the company or in the corporation; or

(c) the purchase or acquisition or proposed purchase or acquisition by a company of its own shares in accordance with sections 76B to 76G

[13/87; 38/98; 21/2005]

(9A)  Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company of the company if —

(a) the amount of the financial assistance, together with any other financial assistance given by the company under this subsection repayment of which remains outstanding, would not exceed 10% of the aggregate of —

(i) the total paid-up capital of the company; and

(ii) the reserves of the company, as disclosed in the most recent financial statements of the company that comply with section 201;

(b) the company receives fair value in connection with the financial assistance;

(c) the board of directors of the company passes a resolution that —

(i) the company should give the assistance;

(ii) giving the assistance is in the best interests of the company; and

(iii) the terms and conditions under which the assistance is given are fair and reasonable to the company;

(d) the resolution sets out in full the grounds for the directors’ conclusions;

(e) all the directors of the company make a solvency statement in relation to the giving of the financial assistance;

(f) within 10 business days of providing the financial assistance, the company sends to each member a notice containing particulars of —

(i) the class and number of shares or units of shares in respect of which the financial assistance was or is to be given;

(ii) the consideration paid or payable for those shares or units of shares;

(iii) the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of those shares or units of shares, the identity of the beneficial owner; and

(iv) the nature and, if quantifiable, the amount of the financial assistance; and

(g) not later than the business day next following the day when the notice referred to in paragraph (f) is sent to members of the company, the company lodges with the Registrar a copy of that notice and a copy of the solvency statement referred to in paragraph (e).

(9B)  Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company of the company if —

(a) the board of directors of the company passes a resolution that —

(i) the company should give the assistance;

(ii) giving the assistance is in the best interests of the company; and

(iii) the terms and conditions under which the assistance is given are fair and reasonable to the company;

(b) the resolution sets out in full the grounds for the directors’ conclusions;

(c) all the directors of the company make a solvency statement in relation to the giving of the financial assistance;

(d) not later than the business day next following the day when the resolution referred to in paragraph (a) is passed, the company sends to each member having the right to vote on the resolution referred to in paragraph (e) a notice containing particulars of —

(i) the directors’ resolution referred to in paragraph (a);

(ii) the class and number of shares or units of shares in respect of which the financial assistance is to be given;

(iii) the consideration payable for those shares or units of shares;

(iv) the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of those shares or units of shares, the identity of the beneficial owner;

(v) the nature and, if quantifiable, the amount of the financial assistance; and

(vi) such further information and explanation as may be necessary to enable a reasonable member to understand the nature and implications for the company and its members of the proposed transaction;

(e) a resolution is passed —

(i) by all the members of the company present and voting either in person or by proxy at the relevant meeting; or

(ii) if the resolution is proposed to be passed by written means under section 184A, by all the members of the company, to give that assistance;

(f) not later than the business day next following the day when the resolution referred to in paragraph (e) is passed, the company lodges with the Registrar a copy of that resolution and a copy of the solvency statement referred to in paragraph (c); and

(g) the financial assistance is given not more than 12 months after the resolution referred to in paragraph (e) is passed.

(9C)  A company shall not give financial assistance under subsection (9A) or (9B) if, before the assistance is given —

(a) any of the directors who voted in favour of the resolution under subsection (9A)(c) or (9B)(a), respectively —

(i) ceases to be satisfied that the giving of the assistance is in the best interests of the company; or

(ii) ceases to be satisfied that the terms and conditions under which the assistance is proposed are fair and reasonable to the company; or

(b) any of the directors no longer has reasonable grounds for any of the opinions expressed in the solvency statement.

(9D)  A director of a company is not relieved of any duty to the company under section 157 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company or in a holding company of the company, by —

(a) the passing of a resolution by the board of directors of the company under subsection (9A) for the giving of the financial assistance; or

(b) the passing of a resolution by the board of directors of the company, and the passing of a resolution by the members of the company, under subsection (9B) for the giving of the financial assistance.

(10)  Nothing in subsection (1) prohibits the giving by a company of financial assistance for the purpose of, or in connection with, an acquisition or proposed acquisition by a person of shares or units of shares in the company or in a holding company of the company if —

(a) the company, by special resolution, resolves to give financial assistance for the purpose of or in connection with, that acquisition;

(b) where —

(i) the company is a subsidiary of a listed corporation; or

(ii) the company is not a subsidiary of a listed corporation but is a subsidiary whose ultimate holding company is incorporated in Singapore, the listed corporation or the ultimate holding company, as the case may be, has, by special resolution, approved the giving of the financial assistance;

(c) the notice specifying the intention to propose the resolution referred to in paragraph (a) as a special resolution sets out —

(i) particulars of the financial assistance proposed to be given and the reasons for the proposal to give that assistance; and

(ii) the effect that the giving of the financial assistance would have on the financial position of the company and, where the company is included in a group of corporations consisting of a holding company and a subsidiary or subsidiaries, the effect that the giving of the financial assistance would have on the financial position of the group of corporations, and is accompanied by a copy of a statement made in accordance with a resolution of the directors, setting out the names of any directors who voted against the resolution and the reasons why they so voted, and signed by not less than 2 directors, stating whether, in the opinion of the directors who voted in favour of the resolution, after taking into account the financial position of the company (including future liabilities and contingent liabilities of the company), the giving of the financial assistance would be likely to prejudice materially the interests of the creditors or members of the company or any class of those creditors or members;

(d) the notice specifying the intention to propose the resolution referred to in paragraph (b) as a special resolution is accompanied by a copy of the notice, and a copy of the statement, referred to in paragraph (c);

(e) not later than the day next following the day when the notice referred to in paragraph (c) is despatched to members of the company there is lodged with the Registrar a copy of that notice and a copy of the statement that accompanied that notice;

(f) the notice referred to in paragraph (c) and a copy of the statement referred to in that paragraph are sent to —

(i) all members of the company;

(ii) all trustees for debenture holders of the company; and

(iii) if there are no trustees for, or for a particular class of, debenture holders of the company — all debenture holders, or all debenture holders of that class, as the case may be, of the company whose names are, at the time when the notice is despatched, known to the company;

(g) the notice referred to in paragraph (d) and the accompanying documents are sent to —

(i) all members of the listed corporation or of the ultimate holding company;

(ii) all trustees for debenture holders of the listed corporation or of the ultimate holding company; and

(iii) if there are no trustees for, or for a particular class of, debenture holders of the listed corporation or of the ultimate holding company — all debenture holders or debenture holders of that class, as the case may be, of the listed corporation or of the ultimate holding company whose names are, at the time when the notice is despatched, known to the listed corporation or the ultimate holding company;

(h) within 21 days after the date on which the resolution referred to in paragraph (a) is passed or, in a case to which paragraph (b) applies, the date on which the resolution referred to in that paragraph is passed, whichever is the later, a notice —

(i) setting out the terms of the resolution referred to in paragraph (a); and

(ii) stating that any of the persons referred to in subsection (12) may, within the period referred to in that subsection, make an application to the Court opposing the giving of the financial assistance, is published in a daily newspaper circulating generally in Singapore;

(i) no application opposing the giving of the financial assistance is made within the period referred to in subsection (12) or, if such an application or applications has or have been made, the application or each of the applications has been withdrawn or the Court has approved the giving of the financial assistance; and

(j) the financial assistance is given in accordance with the terms of the resolution referred to in paragraph (a) and not earlier than —

(i) in a case to which sub-paragraph (ii) does not apply — the expiration of the period referred to in subsection (12); or

(ii) if an application or applications has or have been made to the Court within that period —

(A) where the application or each of the applications has been withdrawn — the withdrawal of the application or of the last of the applications to be withdrawn; or

(B) in any other case — the decision of the Court on the application or applications.

(10A)  If the resolution referred to in subsection (10)(a) or (b) is proposed to be passed by written means under section 184A, subsection (10)(f) or (g), as the case may be, shall be complied with at or before the time —

(a) agreement to the resolution is sought in accordance with section 184C; or

(b) documents referred to in section 183(3A) in respect of the resolution are served on or made accessible to members of the company in accordance with section 183(3A), as the case may be.

[13/87; 8/2003]

(11)  Where, on application to the Court by a company, the Court is satisfied that the provisions of subsection (10) have been substantially complied with in relation to a proposed giving by the company of financial assistance of a kind mentioned in that subsection, the Court may, by order, declare that the provisions of that subsection have been complied with in relation to the proposed giving by the company of financial assistance.

(12)  Where a special resolution referred to in subsection (10)(a) is passed by a company, an application to the Court opposing the giving of the financial assistance to which the special resolution relates may be made, within the period of 21 days after the publication of the notice referred to in subsection (10)(h) —

(a) by a member of the company;

(b) by a trustee for debenture holders of the company;

(c) by a debenture holder of the company;

(d) by a creditor of the company;

(e) if subsection (10)(b) applies by —

(i) a member of the listed corporation or ultimate holding company that passed a special resolution referred to in that subsection;

(ii) a trustee for debenture holders of that listed corporation or ultimate holding company;

(iii) a debenture holder of that listed corporation or ultimate holding company; or

(iv) a creditor of that listed corporation or ultimate holding company; or

(f) by the Registrar.

(13)  Where an application or applications opposing the giving of financial assistance by a company in accordance with a special resolution passed by the company is or are made to the Court under subsection (12), the Court —

(a) shall, in determining what order or orders to make in relation to the application or applications, have regard to the rights and interests of the members of the company or of any class of them as well as to the rights and interests of the creditors of the company or of any class of them; and

(b) shall not make an order approving the giving of the financial assistance unless the Court is satisfied that —

(i) the company has disclosed to the members of the company all material matters relating to the proposed financial assistance; and

(ii) the proposed financial assistance would not, after taking into account the financial position of the company (including any future or contingent liabilities), be likely to prejudice materially the interests of the creditors or members of the company or of any class of those creditors or members, and may do all or any of the following:

(A) if it thinks fit, make an order for the purchase by the company of the interests of dissentient members of the company and for the reduction accordingly of the capital of the company;

(B) if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court for the purchase (otherwise than by the company or by a subsidiary of the company) of the interests of dissentient members;

(C)

give such ancillary or consequential directions and make such ancillary or consequential orders as it thinks expedient;

(D)

make an order disapproving the giving of the financial assistance or, subject to paragraph (b), an order approving the giving of the financial assistance.

(14)  Where the Court makes an order under this section in relation to the giving of financial assistance by a company, the company shall, within 14 days after the order is made, lodge with the Registrar a copy of the order.

(15)  The passing of a special resolution by a company for the giving of financial assistance by the company for the purpose of, or in connection with, an acquisition or proposed acquisition of shares or units of shares in the company, and the approval by the Court of the giving of the financial assistance, do not relieve a director of the company of any duty to the company under section 157 or otherwise, and whether of a fiduciary nature or not, in connection with the giving of the financial assistance.

(16)  A reference in this section to an acquisition or proposed acquisition of shares or units of shares is a reference to any acquisition or proposed acquisition whether by way of purchase, subscription or otherwise.

(17)  This section does not apply in relation to the doing of any act or thing pursuant to a contract entered into before 15th May 1987 if the doing of that act or thing would have been lawful if this Act had not been enacted

[UK, 1948, s. 54; Aust., 1961, s. 67; NZ, 1993, ss. 76-80; Companies, s. 76 (15) (modified)]

Consequences of company financing dealings in its shares, etc.

76A.

—(1)  The following contracts or transactions made or entered into in contravention of section 76 shall be void:

(a) a contract or transaction by which a company acquires or purports to acquire its own shares or units of its own shares, or shares or units of shares in its holding company; and

(b) a contract or transaction by which a company lends money on the security of its own shares or units of its own shares, or on the security of shares or units of shares in its holding company.

(2)  Subject to subsection (1), a contract or transaction made or entered into in contravention of section 76, or a contract or transaction related to such contract or transaction, shall be voidable at the option of the company. The company may, subject to the following provisions of this section, avoid any contract or transaction to which this subsection applies by giving notice in writing to the other party or parties to the contract or transaction.

(3)  The Court may, on the application of a member of a company, a holder of debentures of a company, a trustee for the holders of debentures of a company or a director of a company, by order, authorise the member, holder of debentures, trustee or director to give a notice or notices under subsection (2) in the name of the company.

(4)  Where —

(a) a company makes or performs a contract, or engages in a transaction;

(b) the contract is made or performed, or the transaction is engaged in, in contravention of section 76 or the contract or transaction is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section; and

(c) the Court is satisfied, on the application of the company or of any other person, that the company or that other person has suffered, or is likely to suffer, loss or damage as a result of —

(i) the making or performance of the contract or the engaging in of the transaction;

(ii) the making or performance of a related contract or the engaging in of a related transaction;

(iii) the contract or transaction being void by reason of subsection (1) or avoided under subsection (2); or

(iv) a related contract or transaction being void by reason of subsection (1) or avoided under subsection (2), the Court may make such order or orders as it thinks just and equitable (including, without limiting the generality of the foregoing, all or any of the orders mentioned in subsection (5)) against any party to the contract or transaction or to the related contract or transaction, or against the company or against any person who aided, abetted, counselled or procured, or was, by act or omission, in any way, directly or indirectly, knowingly concerned in or party to the contravention.

(5)  The orders that may be made under subsection (4) include —

(a) an order directing a person to refund money or return property to the company or to another person;

(b) an order directing a person to pay to the company or to another person a specified amount of the loss or damage suffered by the company or other person; and

(c) an order directing a person to indemnify the company or another person against any loss or damage that the company or other person may suffer as a result of the contract or transaction or as a result of the contract or transaction being or having become void.

(6)  If a certificate signed by not less than 2 directors, or by a director and a secretary, of a company stating that the requirements of section 76(9A), (9B) or (10) (as the case may be), inclusive, have been complied with in relation to the proposed giving by the company of financial assistance for the purposes of an acquisition or proposed acquisition by a person of shares or units in the company or in a holding company of the company is given to a person —

(a) the person to whom the certificate is given is not under any liability to have an order made against him under subsection (4) by reason of any contract made or performed, or any transaction engaged in, by him in reliance on the certificate; and

(b) any such contract or transaction is not invalid, and is not voidable under subsection (2), by reason that the contract is made or performed, or the transaction is engaged in, in contravention of section 76 or is related to a contract that was made or performed, or to a transaction that was engaged in, in contravention of that section

(7)  Subsection (6) does not apply in relation to a person to whom a certificate is given under that subsection in relation to a contract or transaction if the Court, on application by the company concerned or any other person who has suffered, or is likely to suffer, loss or damage as a result of the making or performance of the contract or the engaging in of the transaction, or the making or performance of a related contract or the engaging in of a related transaction, by order, declares that it is satisfied that the person to whom the certificate was given became aware before the contract was made or the transaction was engaged in that the requirements of section 76(9A), (9B) or (10) (as the case may be) had not been complied with in relation to the financial assistance to which the certificate related

(8)  For the purposes of subsection (7), a person shall, in the absence of proof to the contrary, be deemed to have been aware at a particular time of any matter of which an employee or agent of the person having duties or acting on behalf of the person in relation to the relevant contract or transaction was aware at the time.

(9)  In any proceeding, a document purporting to be a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be such a certificate and to have been duly given.

(10)  A person who has possession of a certificate given under subsection (6) shall, in the absence of proof to the contrary, be deemed to be the person to whom the certificate was given.

(11)  If a person signs a certificate stating that the requirements of section 76(9A), (9B) or (10) (as the case may be) have been complied with in relation to the proposed giving by a company of financial assistance and any of those requirements had not been complied with in respect of the proposed giving of that assistance at the time when the certificate was signed by that person, the person shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both

(12)  It is a defence to a prosecution for an offence under subsection (11) if the defendant proves that at the time when he signed the certificate he believed on reasonable grounds that all the requirements of section 76(9A), (9B) or (10) (as the case may be) had been complied with in respect of the proposed giving of financial assistance to which the certificate relates

(13)  The power of a Court under section 391 to relieve a person to whom that section applies, wholly or partly and on such terms as the Court thinks fit, from a liability referred to in that section extends to relieving a person against whom an order may be made under subsection (4) from the liability to have such an order made against him.

(14)  If a company makes a contract or engages in a transaction under which it gives financial assistance as mentioned in section 76(1)(a) or lends money as mentioned in section 76(1)(c), any contract or transaction made or engaged in as a result of or by means of, or in relation to, that financial assistance or money shall be deemed for the purposes of this section to be related to the first-mentioned contract or transaction.

(15)  Any rights or liabilities of a person under this section (including rights or liabilities under an order made by the Court under this section) are in addition to and not in derogation of any rights or liabilities of that person apart from this section but, where there would be any inconsistency between the rights and liabilities of a person under this section or under an order made by the Court under this section and the rights and liabilities of that person apart from this section, the provisions of this section or of the order made by the Court shall prevail.

Company may acquire its own shares

76B.

—(1)  Notwithstanding section 76, a company may, in accordance with this section and sections 76C to 76G, purchase or otherwise acquire shares issued by it if it is expressly permitted to do so by its articles

[38/98; 36/2000]

(2)  This section and sections 76C to 76G shall apply to ordinary shares, stocks and preference shares

[36/2000]

(3)  The total number of ordinary shares and stocks in any class that may be purchased or acquired by a company during the relevant period shall not exceed 10% (or such other percentage as the Minister may by notification prescribe) of the total number of ordinary shares and stocks of the company in that class ascertained —

(a) as at the date of the last annual general meeting of the company held before any resolution passed pursuant to section 76C, 76D, 76DA or 76E; or

(b) as at the date of such resolution, whichever is the higher, unless —

(i) the company has, at any time during the relevant period, reduced its share capital by a special resolution under section 78B or 78C; or

(ii) the Court has, at any time during the relevant period, made an order under section 78I confirming the reduction of share capital of the company.

(3A)  Where a company has reduced its share capital by a special resolution under section 78B or 78C, or the Court has made an order under section 78I, the total number of ordinary shares and stocks of the company in any class shall, notwithstanding subsection (3)(a) and (b), be taken to be the total number of ordinary shares and stocks of the company in that class as altered by the special resolution of the company or the order of the Court, as the case may be.

(3B)  The total number of preference shares in any class which are not redeemable under section 70 that may be purchased or acquired by a company during the relevant period shall not exceed 10% (or such other percentage as the Minister may by notification prescribe) of the total number of non-redeemable preference shares of the company in that class ascertained —

(a) as at the date of the last annual general meeting of the company held before any resolution passed pursuant to section 76C, 76D, 76DA or 76E; or

(b) as at the date of such resolution, whichever is the higher, unless —

(i) the company has, at any time during the relevant period, reduced its share capital by a special resolution under section 78B or 78C; or

(ii) the Court has, at any time during the relevant period, made an order under section 78I confirming the reduction of share capital of the company.

(3C)  Where a company has reduced its share capital by a special resolution under section 78B or 78C, or the Court has made an order under section 78I, the total number of non-redeemable preference shares of the company in any class shall, notwithstanding subsection (3B)(a) and (b), be taken to be the total number of non-redeemable preference shares of the company in that class as altered by the special resolution of the company or the order of the Court, as the case may be.

(3D)  There shall be no limit on the number of redeemable preference shares that may be purchased or acquired by a company during the relevant period

[36/2000]

(3E)  For the purposes of this section, any of the company’s ordinary shares held as treasury shares shall be disregarded.

(4)  In subsection (3), “relevant period” means the period commencing from the date the last annual general meeting of the company was held or if no such meeting was held the date it was required by law to be held before the resolution in question is passed, and expiring on the date the next annual general meeting is or is required by law to be held, whichever is the earlier, after the date the resolution in question is passed.

(5)  Ordinary shares that are purchased or acquired by a company pursuant to section 76C, 76D, 76DA or 76E shall, unless held in treasury in accordance with section 76H, be deemed to be cancelled immediately on purchase or acquisition.

(5A)  Preference shares that are purchased or acquired by a company pursuant to section 76C, 76D, 76DA or 76E shall be deemed to be cancelled immediately on purchase or acquisition.

(6)  On the cancellation of a share under subsection (5) or (5A), the rights and privileges attached to that share expire

[38/98; 21/2005]

(7)  For the purposes of this section, shares are deemed to be purchased or acquired on the date on which the company would, apart from subsection (5), become entitled to exercise the rights attached to the shares.

(8)  Within 30 days of the passing of a resolution referred to in section 76C, 76D, 76DA or 76E, the directors of the company shall lodge with the Registrar a copy of the resolution

[38/98; 8/2003]

(9)  Within 30 days of the purchase or acquisition of the shares, the directors of the company shall lodge with the Registrar the notice of the purchase or acquisition in the prescribed form with the following particulars:

(a) the date of the purchase or acquisition;

(b) the number of shares purchased or acquired;

(c) the number of shares cancelled;

(d) the number of shares held as treasury shares;

(e) the company’s issued share capital before the purchase or acquisition;

(f) the company’s issued share capital after the purchase or acquisition;

(g) the amount of consideration paid by the company for the purchase or acquisition of the shares;

(h) whether the shares were purchased or acquired out of the profits or the capital of the company; and

(i) such other particulars as may be required in the prescribed form

[38/98; 8/2003; 21/2005]

(10)  Nothing in this section or in sections 76C to 76G shall be construed so as to limit or affect an order of the Court made under any section that requires a company to purchase or acquire its own shares

[UK, 1985, s. 162; Aust., Co. Law Rev. Act, 1998, Sch. 1 (ss. 257A, 257B, 257H); Aust., 2001, s. 254Y; NZ, 1993, ss. 58, 59, 66]

Authority for off-market acquisition on equal access scheme

76C.

—(1)  A company, whether or not it is listed on a securities exchange, may make a purchase or acquisition of its own shares otherwise than on a securities exchange (referred to in this section as an off-market purchase) if the purchase or acquisition is made in accordance with an equal access scheme authorised in advance by the company in general meeting

[38/98; 42/2001]

(2)  The notice specifying the intention to propose the resolution to authorise an off-market purchase referred to in subsection (1) must —

(a) specify the maximum number of shares or the maximum percentage of ordinary issued share capital authorised to be purchased or acquired;

(b) determine the maximum price which may be paid for the shares;

(c) specify a date on which the authority is to expire, being a date that must not be later than the date on which the next annual general meeting of the company is or is required by law to be held, whichever is the earlier; and

(d) specify the sources of funds to be used for the purchase or acquisition including the amount of financing and its impact on the company’s financial position.

(3)  The resolution authorising an off-market purchase referred to in subsection (2) must state the particulars referred to in subsection (2)(a), (b) and (c).

(4)  The authority for an off-market purchase referred to in subsection (2) may, from time to time, be varied or revoked by the company in general meeting.

(5)  A resolution to confer or vary the authority for an off-market purchase under this section may determine the maximum price for purchase or acquisition by —

(a) specifying a particular sum; or

(b) providing a basis or formula for calculating the amount of the price in question without reference to any person’s discretion or opinion.

(6)  For the purposes of this section and sections 76D and 76DA, an “equal access scheme” means a scheme which satisfies all the following conditions:

(a) the offers under the scheme are to be made to every person who holds shares to purchase or acquire the same percentage of their shares;

(b) all of those persons have a reasonable opportunity to accept the offers made to them; and

(c) the terms of all the offers are the same except that there shall be disregarded —

(i) differences in consideration attributable to the fact that the offers relate to shares with different accrued dividend entitlements;

(ii) differences in consideration attributable to the fact that the offers relate to shares with different amounts remaining unpaid; and

(iii) differences in the offers introduced solely to ensure that each member is left with a whole number of shares

[Aust., Co. Law Rev. Act, 1998, Sch. 1 (s. 257B)]

[38/98; 8/2003]

Authority for selective off-market acquisition

76D.

—(1)  A company may make a purchase or acquisition of its own shares otherwise than on a securities exchange and not in accordance with an equal access scheme (referred to in this section as a selective off-market purchase) if —

(a) the purchase or acquisition is made in accordance with an agreement authorised in advance under subsection (2); and

(b) the company is not listed on a securities exchange

[38/98; 42/2001]

(2)  The terms of the agreement for a selective off-market purchase must be authorised by a special resolution of the company, with no votes being cast by any person whose shares are proposed to be purchased or acquired or by his associated persons, and subsections (3) to (13) shall apply with respect to that authority and to resolutions conferring it.

(3)  The notice specifying the intention to propose a special resolution to authorise an agreement for a selective off-market purchase must —

(a) specify a date on which the authority is to expire, being a date that must not be later than the date on which the next annual general meeting of the company is or is required by law to be held, whichever is the earlier; and

(b) specify the sources of funds to be used for the purchase or acquisition including the amount of financing and its impact on the company’s financial position.

(4)  The special resolution authorising a selective off-market purchase referred to in subsection (2) must state the expiry date referred to in subsection (3)(a).

(4A)  If the special resolution referred to in subsection (2) is proposed to be passed by written means under section 184A —

(a) a person whose shares are proposed to be purchased or acquired or any of his associated persons shall not be regarded as a member having the right to vote on the resolution at a general meeting of the company for the purposes of section 184A;

(b) subsection (7) does not apply; but all documents referred to in this section shall be given to all members having the right to vote on the resolution at a general meeting for the purposes of section 184A at or before the time —

(i) agreement to the resolution is sought in accordance with section 184C; or

(ii) documents referred to in section 183(3A) in respect of the resolution are served on or made accessible to them in accordance with section 183(3A), as the case may be.

(5)  The authority referred to in subsection (2) may, from time to time, be varied or revoked by a special resolution with no votes being cast by any person whose shares are proposed to be purchased or acquired or by his associated persons.

(6)  For the purposes of subsections (2) and (5) —

(a) a member or his associated persons who holds any of the shares to which the resolution relates is regarded as exercising the voting rights carried by those shares not only if he votes in respect of them on a poll on the question whether the resolution shall be passed, but also if he votes on the resolution otherwise than on a poll;

(b) notwithstanding anything in the company’s articles, any member of the company may demand a poll on that question; and

(c) a vote and a demand for a poll by a person as proxy for a member or any of his associated persons are the same respectively as a vote and a demand by the member.

(7)  The special resolution referred to in subsection (2) is not effective for the purposes of this section unless (if the proposed agreement is in writing) a copy of the agreement or (if not) a written memorandum of its terms is available for inspection by members of the company both —

(a) at the company’s registered office for not less than 15 days ending with the date of the meeting at which the resolution is passed; and

(b) at the meeting itself.

(8)  A memorandum of terms so made available must include the names of any members holding shares to which the agreement relates and where a member holds such shares as nominee for another person, the name of that other person; and a copy of the agreement so made available must have annexed to it a written memorandum specifying any such names which do not appear in the agreement itself.

(9)  A company may agree to a variation of an existing agreement so approved, but only if the variation is authorised, before it is agreed to, by a special resolution of the company, with no votes being cast by any person whose shares are proposed to be purchased or acquired or by his associated persons.

(10)  Subsections (3) to (7) shall apply to the authority for a proposed variation as they apply to the authority for a proposed agreement except that a copy of the original agreement or (as the case may require) a memorandum of its terms, together with any variations previously made, must also be available for inspection in accordance with subsection (7).

(11)  The rights of a company under an agreement for a selective off-market purchase approved under this section shall not be capable of being assigned except by order of the Court made pursuant to any provision of this Act or any other written law.

(12)  An agreement by a company to release its rights under an agreement for a selective off-market purchase approved under this section is void unless the terms of the release agreement are approved in advance before the agreement is entered into by a special resolution of the company with no votes being cast by any person whose shares are proposed to be purchased or acquired or by his associated persons; and subsections (3) to (7) shall apply to the approval for a proposed release agreement as they apply to authority for the proposed variation of an existing agreement.

(13)  A resolution to confer or vary authority for a selective off-market purchase under this section may determine the maximum price for purchase or acquisition by —

(a) specifying a particular sum; or

(b) providing a basis or formula for calculating the amount of the price in question without reference to any person’s discretion or opinion.

(14)  For the purposes of this section, “associated person” in relation to a person means —

(a) the person’s spouse, child or step-child; or

(b) a person who would, by virtue of section 7(5), be treated as an associate of the first-mentioned person.

[UK, 1985, s. 164; Aust., Co. Law Rev. Act 1998, Sch. 1 (s. 257D)]

Contingent purchase contract

76DA.

—(1)  A company may, whether or not it is listed on a securities exchange, make a purchase or acquisition of its own shares under a contingent purchase contract if the proposed contingent purchase contract is authorised in advance by a special resolution of the company.

(2)  Subject to subsection (3), the authority under subsection (1) may, from time to time, be varied or revoked by a special resolution of the company.

(3)  The notice specifying the intention to propose a special resolution to authorise a contingent purchase contract must specify a date on which the authority is to expire and that date must not be later than the date on which the next annual general meeting of the company is or is required by law to be held, whichever is the earlier.

(4)  The special resolution referred to in subsection (1) is invalid for the purposes of this section unless a copy of the proposed contingent purchase contract is available for inspection by members of the company —

(a) at the company’s registered office for not less than 15 days ending with the date of the meeting at which the resolution is passed; and

(b) at the meeting itself.

(5)  A company may agree to a variation of an existing contingent purchase contract so approved if, and only if, the variation is authorised, before it is agreed to, by a special resolution of the company.

(6)  Subsections (2), (3) and (4) shall apply to the authority for a proposed variation as they apply to the authority for a proposed contingent purchase contract, except that a copy of the original contract, together with any variations previously made, must also be available for inspection in accordance with subsection (4).

(7)  The company may only make an offer to enter into a contingent purchase contract in accordance with all of the following conditions:

(a) the offer must be made to every person who holds shares of the same class in the company;

(b) the number of shares that a company is obliged or entitled to purchase or acquire under the contract from any person, in relation to the total number of shares of the same class held by that person, must be of the same proportion for every person who holds shares of that class to whom the offer is made; and

(c) the terms of all offers in respect of each class of shares must be the same.

(8)  For the avoidance of doubt, the company may purchase or acquire shares under a contingent purchase contract from any person whether or not the offer to enter into the contract was originally made to him.

(9)  In this section, “contingent purchase contract” means a contract entered into by a company and relating to any of its shares —

(a) which does not amount to a contract to purchase or acquire those shares; but

(b) under which the company may (subject to any condition) become entitled or obliged to purchase or acquire those shares.

[UK, 1985, s. 165]

Authority for market acquisition

76E.

—(1)  A company shall not make a purchase or acquisition of its own shares on a securities exchange (referred to in this section as a market purchase) unless the purchase or acquisition has been authorised in advance by the company in general meeting

[38/98; 42/2001]

(2)  The notice specifying the intention to propose the resolution to authorise a market purchase must —

(a) specify the maximum number of shares or the maximum percentage of ordinary issued share capital authorised to be purchased or acquired;

(b) determine the maximum price which may be paid for the shares;

(c) specify a date on which the authority is to expire, being a date that must not be later than the date on which the next annual general meeting of the company is or is required by law to be held, whichever is the earlier; and

(d) specify the sources of funds to be used for the purchase or acquisition including the amount of financing and its impact on the company’s financial position.

(3)  The authority for a market purchase may be unconditional or subject to conditions and must state the particulars referred to in subsection (2)(a), (b) and (c).

(4)  The authority for a market purchase may, from time to time, be varied or revoked by the company in general meeting but the variation must comply with subsections (2) and (3).

(5)  A resolution to confer or vary authority for a market purchase under this section may determine the maximum price for purchase or acquisition by —

(a) specifying a particular sum; or

(b) providing a basis or formula for calculating the amount of the price in question without reference to any person’s discretion or opinion.

[UK, 1985, s. 166]

Payments to be made only if company is solvent

76F.

—(1)  A payment made by a company in consideration of —

(a) acquiring any right with respect to the purchase or acquisition of its own shares in accordance with section 76C, 76D, 76DA or 76E;

(b) the variation of an agreement approved under section 76D or 76DA; or

(c) the release of any of the company’s obligations with respect to the purchase or acquisition of any of its own shares under an agreement approved under section 76D or 76DA, may be made out of the company’s capital or profits so long as the company is solvent.

(2)  If the requirements in subsection (1) are not satisfied in relation to an agreement —

(a) in a case within subsection (1)(a), no purchase or acquisition by the company of its own shares in pursuance of that agreement is lawful;

(b) in a case within subsection (1)(b), no such purchase or acquisition following the variation is lawful; and

(c) in a case within subsection (1)(c), the purported release is void.

(3)  Every director or manager of a company who approves or authorises, the purchase or acquisition of the company’s own shares or the release of obligations, knowing that the company is not solvent shall, without prejudice to any other liability, be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years.

(4)  For the purposes of this section, a company is solvent if —

(a) the company is able to pay its debts in full at the time of the payment referred to in subsection (1) and will be able to pay its debts as they fall due in the normal course of business during the period of 12 months immediately following the date of the payment; and

(b) the value of the company’s assets is not less than the value of its liabilities (including contingent liabilities) and will not after the proposed purchase, acquisition or release, become less than the value of its liabilities (including contingent liabilities).

(5)  In determining, for the purposes of subsection (4), whether the value of a company’s assets is less than the value of its liabilities (including contingent liabilities), the directors or managers of a company —

(a) must have regard to —

(i) the most recent financial statements of the company that comply with section 201(1A), (3) and (3A), as the case may be; and

(ii) all other circumstances that the directors or managers know or ought to know affect, or may affect, the value of the company’s assets and the value of the company’s liabilities (including contingent liabilities); and

(b) may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(6)  In determining, for the purposes of subsection (5), the value of a contingent liability, the directors or managers of a company may take into account —

(a) the likelihood of the contingency occurring; and

(b) any claim the company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

[Companies, s. 76F (modified)]

Reduction of capital or profits or both on cancellation of repurchased shares

76G.  Where under section 76C, 76D, 76DA or 76E, shares of a company are purchased or acquired, and cancelled under section 76B(5), the company shall —

(a) reduce the amount of its share capital where the shares were purchased or acquired out of the capital of the company;

(b) reduce the amount of its profits where the shares were purchased or acquired out of the profits of the company; or

(c) reduce the amount of its share capital and profits proportionately where the shares were purchased or acquired out of both the capital and the profits of the company, by the total amount of the purchase price paid by the company for the shares cancelled.

Treasury shares

76H.

—(1)  Where ordinary shares or stocks are purchased or otherwise acquired by a company in accordance with sections 76B to 76G, the company may —

(a) hold the shares or stocks (or any of them); or

(b) deal with any of them, at any time, in accordance with section 76K.

(2)  Where ordinary shares or stocks are held under subsection (1)(a) then, for the purposes of section 190 (Register and index of members), the company shall be entered in the register as the member holding those shares or stocks

[UK, 1985, s. 162A; UK, Treasury Shares, reg. 3]

Treasury shares: maximum holdings

76I.

—(1)  Where a company has shares of only one class, the aggregate number of shares held as treasury shares shall not at any time exceed 10% of the total number of shares of the company at that time.

(2)  Where the share capital of a company is divided into shares of different classes, the aggregate number of the shares of any class held as treasury shares shall not at any time exceed 10% of the total number of the shares in that class at that time.

(3)  Where subsection (1) or (2) is contravened by a company, the company shall dispose of or cancel the excess shares in accordance with section 76K before the end of the period of 6 months beginning with the day on which that contravention occurs, or such further period as the Registrar may allow.

(4)  In subsection (3), “the excess shares” means such number of the shares, held by the company as treasury shares at the time in question, as resulted in the limit being exceeded

[UK, 1985, s. 162B; UK, Treasury Shares, reg. 3]

Treasury shares: voting and other rights

76J.

—(1)  This section shall apply to shares which are held by a company as treasury shares.

(2)  The company shall not exercise any right in respect of the treasury shares and any purported exercise of such a right is void.

(3)  The rights to which subsection (2) applies include any right to attend or vote at meetings (including meetings under section 210) and for the purposes of this Act, the company shall be treated as having no right to vote and the treasury shares shall be treated as having no voting rights.

(4)  No dividend may be paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made, to the company in respect of the treasury shares.

(5)  Nothing in this section is to be taken as preventing —

(a) an allotment of shares as fully paid bonus shares in respect of the treasury shares; or

(b) the subdivision or consolidation of any treasury share into treasury shares of a smaller amount, if the total value of the treasury shares after the subdivision or consolidation is the same as the total value of the treasury share before the subdivision or consolidation, as the case may be.

(6)  Any shares allotted as fully paid bonus shares in respect of the treasury shares shall be treated for the purposes of this Act as if they were purchased by the company at the time they were allotted, in circumstances in which section 76H applied

[UK, 1985, s. 162C; UK, Treasury Shares, reg. 3]

Treasury shares: disposal and cancellation

76K.

—(1)  Where shares are held as treasury shares, a company may at any time —

(a) sell the shares (or any of them) for cash;

(b) transfer the shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;

(c) transfer the shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person;

(d) cancel the shares (or any of them); or

(e) sell, transfer or otherwise use the treasury shares for such other purposes as the Minister may by order prescribe.

(2)  In subsection (1)(a), “cash”, in relation to a sale of shares by a company, means —

(a) cash (including foreign currency) received by the company;

(b) a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid;

(c) a release of a liability of the company for a liquidated sum; or

(d) an undertaking to pay cash to the company on or before a date not more than 90 days after the date on which the company agrees to sell the shares.

(3)  But if the company receives a notice under section 215 (Power to acquire shares of shareholders dissenting from scheme or contract approved by 90% majority) that a person desires to acquire any of the shares, the company shall not, under subsection (1), sell or transfer the shares to which the notice relates except to that person.

(4)  The directors may take such steps as are requisite to enable the company to cancel its shares under subsection (1) without complying with section 78B (Reduction of share capital by private company), 78C (Reduction of share capital by public company) or 78I (Court order approving reduction).

(5)  Within 30 days of the cancellation or disposal of treasury shares in accordance with subsection (1), the directors of the company shall lodge with the Registrar the notice of the cancellation or disposal of treasury shares in the prescribed form with such particulars as may be required in the form, together with payment of the prescribed fee

[UK, 1985, s. 162D; UK, Treasury Shares, reg. 3]

Options over unissued shares

77.

—(1)  An option granted after 29th December 1967 by a public company which enables any person to take up unissued shares of the company after a period of 5 years has elapsed from the date on which the option was granted shall be void.

(1A)  An option granted on or after 18th November 1998 by a public company which enables any employee of that company or its related corporation (including any director holding a salaried office or employment in that company or corporation) to take up unissued shares of the company after a period of 10 years has elapsed from the date on which the option was granted shall be void and subsection (1) shall not apply to such an option.

(2)  Subsection (1) or (1A) shall not apply in any case where the holders of debentures have an option to take up shares of the company by way of redemption of the debentures

[Aust., 1961, s. 68]

Power of company to pay interest out of capital in certain cases

78.  Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a long period, the company may pay interest on so much of such share capital (except treasury shares) as is for the time being paid up and charge the interest so paid to capital as part of the cost of the construction or provision but —

(a) no such payment shall be made unless it is authorised, by the articles or by special resolution, and is approved by the Court;

(b) before approving any such payment, the Court may at the expense of the company appoint a person to inquire and report as to the circumstances of the case, and may require the company to give security for the payment of the costs of the inquiry;

(c) the payment shall be made only for such period as is determined by the Court, but in no case extending beyond a period of 12 months after the works or buildings have been actually completed or the plant provided;

(d) the rate of interest shall in no case exceed 5% per annum or such other rate as is for the time being prescribed; and

(e) the payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid.

[UK, 1948, s. 65; Aust., 1961, s. 69]

Division 3A — Reduction of share capital

Preliminary

78A.

—(1)  A company may reduce its share capital under the provisions of this Division in any way and, in particular, do all or any of the following:

(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;

(b) cancel any paid-up share capital which is lost or unrepresented by available assets;

(c) return to shareholders any paid-up share capital which is more than it needs.

(2)  A company may not reduce its share capital in any way except by a procedure provided for it by the provisions of this Division.

(3)  A company’s memorandum or articles may exclude or restrict any power to reduce share capital conferred on the company by this Division.

(4)  In this Division —

“Comptroller” means the Comptroller of Income Tax appointed under section 3(1) of the Income Tax Act (Cap. 134);

“reduction information”, in relation to a proposed reduction of share capital by a special resolution of a company, means the following information:

(a) the amount of the company’s share capital that is thereby reduced; and

(b) the number of shares that are thereby cancelled;

“resolution date”, in relation to a resolution, means the date when the resolution is passed.

(5)  This Division shall not apply to an unlimited company, and shall not preclude such a company from reducing in any way its share capital.

(6)  This Division shall not apply to the purchase or acquisition or proposed purchase or acquisition by a company of its own shares in accordance with sections 76B to 76G

[UK, 1985, s. 50]

Reduction of share capital by private company

78B.

—(1)  A private company limited by shares may reduce its share capital in any way by a special resolution if the company —

(a) sends to the Comptroller a notice —

(i) stating that the resolution has been passed; and

(ii) containing the text of the resolution and the resolution date, within 8 days beginning with the resolution date;

(b) meets the solvency requirements; and

(c) meets such publicity requirements as may be prescribed by the Minister, but the resolution and the reduction of the share capital shall take effect only as provided by section 78E.

(2)  Notwithstanding subsection (1), the company need not meet the solvency requirements if the reduction of share capital is solely by way of cancellation of any paid-up share capital which is lost or unrepresented by available assets.

(3)  For the purposes of subsection (1), the company meets the solvency requirements if —

(a) all the directors of the company make a solvency statement in relation to the reduction of capital; and

(b) the statement is made —

(i) in time for subsection (4)(a) to be complied with; but

(ii) not before the beginning of the period of 15 days ending with the resolution date.

(4)  Unless subsection (2) applies, the company —

(a) shall —

(i) if the resolution for reducing share capital is a special resolution to be passed by written means under section 184A, ensure that every copy of the resolution served under section 183(3A) or 184C(1) (as the case may be) is accompanied by a copy of the solvency statement; or

(ii) if the resolution is a special resolution to be passed in a general meeting, throughout that meeting make the solvency statement or a copy of it available for inspection by the members at that meeting; and

(b) shall, throughout the 6 weeks beginning with the resolution date, make the solvency statement or a copy of it available at the company’s registered office for inspection free of charge by any creditor of the company.

(5)  The resolution does not become invalid by virtue only of a contravention of subsection (4), but every officer of the company who is in default shall be guilty of an offence.

(6)  Any requirement under subsection (4)(b) ceases if the resolution is revoked

[UK, 1985, s. 51]

Reduction of share capital by public company

78C.

—(1)  A public company may reduce its share capital in any way by a special resolution if the company —

(a) sends to the Comptroller a notice —

(i) stating that the resolution has been passed; and

(ii) containing the text of the resolution and the resolution date, within 8 days beginning with the resolution date;

(b) meets the solvency requirements; and

(c) meets such publicity requirements as may be prescribed by the Minister, but the resolution and the reduction of the share capital shall take effect only as provided by section 78E.

(2)  Notwithstanding subsection (1), the company need not meet the solvency requirements if the reduction of share capital is solely by way of cancellation of any paid-up share capital which is lost or unrepresented by available assets.

(3)  The company meets the solvency requirements if —

(a) all the directors of the company make a solvency statement in relation to the reduction of share capital;

(b) the statement is made —

(i) in time for subsection (4)(a) to be complied with; but

(ii) not before the beginning of the period of 22 days ending with the resolution date; and

(c) a copy of the solvency statement is lodged with the Registrar, together with the copy of the resolution required to be lodged with the Registrar under section 186, within 15 days beginning with the resolution date.

(4)  Unless subsection (2) applies, the company shall —

(a) throughout the meeting at which the resolution is to be passed, make the solvency statement or a copy of it available for inspection by the members at the meeting; and

(b) throughout the 6 weeks beginning with the resolution date, make the solvency statement or a copy of it available at the company’s registered office for inspection free of charge by any creditor of the company.

(5)  The resolution does not become invalid by virtue only of a contravention of subsection (4), but every officer of the company who is in default shall be guilty of an offence.

(6)  Any requirement under subsection (3)(c) or (4)(b) ceases if the resolution is revoked

[UK, 1985, ss. 52, 53, 88]

Creditor’s right to object to company’s reduction

78D.

—(1)  This section shall apply where a company has passed a special resolution for reducing share capital under section 78B or 78C.

(2)  Any creditor of the company to which this subsection applies may, at any time during the 6 weeks beginning with the resolution date, apply to the Court for the resolution to be cancelled.

(3)  Subsection (2) shall apply to a creditor of the company who, at the date of his application to the Court, is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company.

(4)  When an application is made under subsection (2) —

(a) the creditor shall as soon as possible serve the application on the company; and

(b) the company shall as soon as possible give to the Registrar notice of the application.

[UK, 1985, s. 54]

Position at end of period for creditor objections

78E.

—(1)  Where —

(a) a private company passes a special resolution for reducing its share capital and meets the requirements under section 78B(1)(a) and (c) and the solvency requirements under section 78B(3) (if applicable); and

(b) no application for cancellation of the resolution has been made under section 78D(2) during the 6 weeks beginning with the resolution date, for the reduction of share capital to take effect, the company must lodge with the Registrar —

(i) a copy of the resolution in accordance with section 186; and

(ii) the following documents after the end of 6 weeks, and before the end of 8 weeks, beginning with the resolution date:

(A) a copy of the solvency statement under section 78B(3) (if applicable);

(B) a statement made by the directors confirming that the requirements under section 78B(1)(a) and (c) and the solvency requirements under section 78B(3) (if applicable) have been complied with, and that no application for cancellation of the resolution has been made; and

(C)

a notice containing the reduction information.

(2)  Where —

(a) a public company passes a special resolution for reducing its share capital and meets the requirements under section 78C(1)(a) and (c) and the solvency requirements (if applicable) under section 78C(3); and

(b) no application for cancellation of the resolution has been made under section 78D(2) during the 6 weeks beginning with the resolution date, for the reduction of share capital to take effect, the company must lodge with the Registrar the following documents after the end of 6 weeks, and before the end of 8 weeks, beginning with the resolution date:

(i) a statement made by the directors confirming that the requirements under section 78C(1)(a) and (c) and the solvency requirements under section 78C(3) (if applicable) have been complied with, and that no application for cancellation of the resolution has been made; and

(ii) a notice containing the reduction information.

(3)  Where —

(a) a private company passes a special resolution for reducing its share capital and meets the requirements under section 78B(1)(a) and (c) and the solvency requirements under section 78B(3) (if applicable); but

(b) during the 6 weeks beginning with the resolution date, one or more applications for cancellation of the resolution are made under section 78D(2), for the reduction of share capital to take effect, the following conditions must be satisfied:

(i) the company has complied with section 78D(4)(b) (notification to Registrar) in relation to all such applications;

(ii) the proceedings in relation to each such application have been brought to an end —

(A) by the dismissal of the application under section 78F; or

(B) without determination (for example, because the application has been withdrawn); and

(iii) the company has, within 15 days beginning with the date on which the last such proceedings were brought to an end in accordance with paragraph (ii), lodged with the Registrar —

(A) a statement made by the directors confirming that the requirements under section 78B(1)(a) and (c), the solvency requirements under section 78B(3) (if applicable) and section 78D(4)(b) have been complied with, and that the proceedings in relation to each such application have been brought to an end by the dismissal of the application or without determination;

(B) in relation to each such application which has been dismissed by the Court, a copy of the order of the Court dismissing the application; and

(C)

a notice containing the reduction information.

(4)  Where —

(a) a public company passes a special resolution for reducing its share capital and meets the requirements under section 78C(1)(a) and (c) and the solvency requirements under section 78C(3) (if applicable); but

(b) during the 6 weeks beginning with the resolution date, one or more applications for cancellation of the resolution are made under section 78D(2), for the reduction of capital to take effect, the following conditions must be satisfied:

(i) the company has complied with section 78D(4)(b) (notification to Registrar) in relation to all such applications;

(ii) the proceedings in relation to each such application have been brought to an end —

(A) by the dismissal of the application under section 78F; or

(B) without determination (for example, because the application has been withdrawn); and

(iii) the company has, within 15 days beginning with the date on which the last such proceedings were brought to an end in accordance with paragraph (ii), lodged with the Registrar —

(A) a statement made by the directors confirming that the requirements under section 78C(1)(a) and (c), the solvency requirements under section 78C(3) (if applicable) and section 78D(4) have been complied with, and that the proceedings in relation to each such application have been brought to an end by the dismissal of the application or without determination;

(B) in relation to each such application which has been dismissed by the Court, a copy of the order of the Court dismissing the application; and

(C)

a notice containing the reduction information.

(5)  The resolution in a case referred to in subsection (1), (2), (3) or (4), and the reduction of the share capital, shall take effect when the Registrar has recorded the information lodged with him in the appropriate register

[UK, 1985, ss. 55, 57]

Power of Court where creditor objection made

78F.

—(1)  An application by a creditor under section 78D shall be determined by the Court in accordance with this section.

(2)  The Court shall make an order cancelling the resolution if, at the time the application is considered, the resolution has not been cancelled previously, any debt or claim on which the application was based is outstanding and the Court is satisfied that —

(a) the debt or claim has not been secured and the applicant does not have other adequate safeguards for it; and

(b) it is not the case that security or other safeguards are unnecessary in view of the assets that the company would have after the reduction.

(3)  Otherwise, the Court shall dismiss the application.

(4)  Where the Court makes an order under subsection (2), the company must send notice of the order to the Registrar within 15 days beginning with the date the order is made.

(5)  If a company contravenes subsection (4), every officer of the company who is in default shall be guilty of an offence.

(6)  For the purposes of this section, a debt is outstanding if it has not been discharged, and a claim is outstanding if it has not been terminated

[UK, 1985, ss. 56, 58]

Reduction by special resolution subject to Court approval

78G.

—(1)  A company limited by shares may, as an alternative to reducing its share capital under section 78B or 78C, reduce it in any way by a special resolution approved by an order of the Court under section 78I, but the resolution and the reduction of the share capital shall not take effect until —

(a) that order has been made;

(b) the company has complied with section 78I(3) (lodgment of information with Registrar); and

(c) the Registrar has recorded the information lodged with him under section 78I(3) in the appropriate register.

(2)  The company shall —

(a) within 8 days beginning with the resolution date; and

(b) in any case, before making an application to the Court under subsection (1), send to the Comptroller a notice stating that the resolution has been passed and containing the text of the resolution and the resolution date.

[UK, 1985, s. 59]

Creditor protection

78H.

—(1)  This section shall apply if a company makes an application under section 78G(1) and the proposed reduction of share capital involves either —

(a) a reduction of liability in respect of unpaid share capital; or

(b) the payment to a shareholder of any paid-up share capital, and also applies if the Court so directs in any other case where a company makes an application under that section.

(2)  Upon the application to the Court, the Court shall settle a list of qualifying creditors.

(3)  If the proposed reduction of share capital involves either —

(a) a reduction of liability in respect of unpaid share capital; or

(b) the payment to a shareholder of any paid-up share capital, the Court may, if having regard to any special circumstances of the case it thinks it appropriate to do so, direct that any class or classes of creditors shall not be qualifying creditors.

(4)  For the purpose of settling the list of qualifying creditors, the Court —

(a) shall ascertain, as far as possible without requiring an application from any creditor, the names of qualifying creditors and the nature and amount of their debts or claims; and

(b) may publish notices fixing a day or days within which creditors not included in the list are to claim to be so included or are to be excluded from the list.

(5)  Any officer of the company who —

(a) intentionally conceals the name of a qualifying creditor;

(b) intentionally misrepresents the nature or amount of the debt or claim of any creditor; or

(c) aids, abets or is privy to any such concealment or misrepresentation, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years.

(6)  In this section and section 78I but subject to subsection (3), “qualifying creditor” means a creditor of the company who, at a date fixed by the Court, is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company

[UK, 1985, s. 60]

Court order approving reduction

78I.

—(1)  On an application by a company under section 78G(1), the Court may, subject to subsection (2), make an order approving the reduction in share capital unconditionally or on such terms and conditions as it thinks fit.

(2)  If, at the time the Court considers the application, there is a qualifying creditor within the meaning of section 78H —

(a) who is included in the Court’s list of qualifying creditors under that section; and

(b) whose claim has not been terminated or whose debt has not been discharged, the Court must not make an order approving the reduction unless satisfied, as respects each qualifying creditor, that —

(i) he has consented to the reduction;

(ii) his debt or claim has been secured or he has other adequate safeguards for it; or

(iii) security or other safeguards are unnecessary in view of the assets the company would have after the reduction.

(3)  Where an order is made under this section approving a company’s reduction in share capital, the company shall (for the reduction to take effect) lodge with the Registrar —

(a) a copy of the order; and

(b) a notice containing the reduction information, within 90 days beginning with the date the order is made, or within such longer period as the Registrar may, on the application of the company and on receiving the prescribed fee, allow.

[UK, 1985, s. 61]

Offences for making groundless or false statements

78J.  A director making a statement under section 78E(1)(ii)(B), (2)(i), (3)(iii)(A) or (4)(iii)(A) shall be guilty of an offence if the statement —

(a) is false; and

(b) is not believed by him to be true.

[UK, 1985, s. 65]

Liability of members on reduced shares

78K.  Where a company’s share capital is reduced under any provision of this Division, a member of the company (past or present) is not liable in respect of the issue price of any share to any call or contribution greater in amount than the difference (if any) between —

(a) the issue price of the share; and

(b) the aggregate of the amount paid up on the share (if any) and the amount reduced on the share.

Division 4 — Substantial shareholdings

Application and interpretation of Division

79.

—(1)  This section shall have effect for the purposes of this Division but shall not prejudice the operation of any other provision of this Act.

(2)  A reference to a company is a reference —

(a) [Deleted by Act 2/2009 wef 19/11/2012]

(b) to a body corporate, being a body incorporated in Singapore, that is for the time being declared by the Minister, by notification in the Gazette, to be a company for the purposes of this Division; or

(c) to a body, not being a body corporate formed in Singapore, that is for the time being declared by the Minister, by notification in the Gazette, to be a company for the purposes of this Division

[62/70; 49/73; 42/2001]

(3)  In relation to a company the whole or a portion of the share capital of which consists of stock, an interest of a person in any such stock shall be deemed to be an interest in an issued share in the company having attached to it the same rights as are attached to that stock.

(4)  A reference in the definition of “voting share” in section 4(1) to a body corporate includes a reference to a body referred to in subsection (2)(c).

Persons obliged to comply with Division

80.

—(1)  The obligation to comply with this Division extends to all natural persons, whether resident in Singapore or not and whether citizens of Singapore or not, and to all bodies corporate, whether incorporated or carrying on business in Singapore or not.

(2)  This Division extends to acts done or omitted to be done outside Singapore.

(3)  The Minister may, by order published in the Gazette, exempt any person or any class of persons from all or any of the provisions of this Division, subject to such terms or conditions as may be prescribed.

Substantial shareholdings and substantial shareholders

81.

—(1)  For the purposes of this Division, a person has a substantial shareholding in a company if —

(a) he has an interest or interests in one or more voting shares in the company; and

(b) the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares in the company.

(2)  For the purposes of this Division, a person has a substantial shareholding in a company, being a company the share capital of which is divided into 2 or more classes of shares, if —

(a) he has an interest or interests in one or more voting shares included in one of those classes; and

(b) the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all the voting shares included in that class.

(3)  For the purposes of this Division, a person who has a substantial shareholding in a company is a substantial shareholder in that company.

(4)  In this section and section 83, “voting shares” exclude treasury shares.

(5)  [Deleted by Act 21 of 2005]

[Aust. 1961, s. 69C; Aust., 2001, s. 9]

Substantial shareholder to notify company of his interests

82.

—(1)  A person who is a substantial shareholder in a company shall give notice in writing to the company stating his name and address and full particulars (including unless the interest or interests cannot be related to a particular share or shares the name of the person who is registered as the holder) of the voting shares in the company in which he has an interest or interests and full particulars of each such interest and of the circumstances by reason of which he has that interest

[62/70; 49/73; 13/87]

(2)  The notice shall be given —

(a) if the person was a substantial shareholder on 1st October 1971 — within one month after that date; or

(b) if the person became a substantial shareholder after that date — within 2 business days after becoming a substantial shareholder

[8/2003; S249/71]

(3)  The notice shall be so given notwithstanding that the person has ceased to be a substantial shareholder before the expiration of whichever period referred to in subsection (2) is applicable

[Aust. 1961, s. 69D]

Substantial shareholder to notify company of change in interests

83.

—(1)  Where there is a change in the percentage level of the interest or interests of a substantial shareholder in a company in voting shares in the company, the substantial shareholder shall give notice in writing to the company stating the information specified in subsection (2) within 2 business days after he becomes aware of such a change.

(2)  The information referred to in subsection (1) shall be —

(a) the name and address of the substantial shareholder;

(b) the date of the change and the circumstances leading to that change; and

(c) such other particulars as may be prescribed.

(3)  In subsection (1), “percentage level”, in relation to a substantial shareholder, means the percentage figure ascertained by expressing the total votes attached to all the voting shares in which the substantial shareholder has an interest or interests immediately before or (as the case may be) immediately after the relevant time as a percentage of the total votes attached to —

(a) all the voting shares in the company; or

(b) where the share capital of the company is divided into 2 or more classes of shares, all the voting shares included in the class concerned, and, if it is not a whole number, rounding that figure down to the next whole number.

[8/2003; 21/2005]

[Aust. 1961, s. 69E; Aust., 2001, s. 671B; UK, 1985, s. 200; HK S(DI), s. 5]

Person who ceases to be substantial shareholder to notify company

84.

—(1)  A person who ceases to be a substantial shareholder in a company shall give notice in writing to the company stating his name and the date on which he ceased to be a substantial shareholder and full particulars of the circumstances by reason of which he ceased to be a substantial shareholder

[62/70; 10/74; 13/87]

(2)  The notice shall be given within 2 business days after the person ceased to be a substantial shareholder

[Aust. 1961, s. 69F]

References to operation of section 7

85.  The circumstances required to be stated in the notice under section 82, 83 or 84 include circumstances by reason of which, having regard to section 7 —

(a) a person has an interest in voting shares;

(b) a change has occurred in an interest in voting shares; or

(c) a person has ceased to be a substantial shareholder in a company, respectively.

[Aust. 1961, s. 69G]

Persons holding shares as trustees

86.

—(1)  A person who holds voting shares in a company, being voting shares in which a non-resident has an interest, shall give to the non-resident a notice in the prescribed form as to the requirements of this Division

[62/70; 49/73; 13/87]

(2)  The notice shall be given —

(a) if the first-mentioned person holds the shares on 1st October 1971 — within 14 days after that date; or

(b) if the first-mentioned person did not hold the shares on that date — within 2 days after becoming the holder of the shares

[S 249/71]

(3)  In this section, “non-resident” means a person who is not resident in Singapore or a body corporate that is not incorporated in Singapore.

(4)  Nothing in this section affects the operation of section 80.

Registrar may extend time for giving notice under this Division

87.  The Registrar may, on the application of a person who is required to give a notice under this Division, in his discretion, extend, or further extend, the time for giving the notice.

Company to keep register of substantial shareholders

88.

—(1)  A company shall keep a register in which it shall immediately enter —

(a) in alphabetical order the names of persons from whom it has received a notice under section 82; and

(b) against each name so entered, the information given in the notice and, where it receives a notice under section 83 or 84, the information given in that notice

[62/70; 49/73; 15/84]

(2)  The register shall be kept at the registered office of the company, or, if the company does not have a registered office, at the principal place of business of the company in Singapore and shall be open for inspection by a member of the company without charge and by any other person on payment for each inspection of a sum of $2 or such lesser sum as the company requires.

(3)  A person may request the company to furnish him with a copy of the register or any part of the register on payment in advance of a sum of $1 or such lesser sum as the company requires for every page or part thereof required to be copied and the company shall send the copy to that person, within 14 days or such longer period as the Registrar thinks fit, after the day on which the request is received by the company.

(4)  The Registrar may at any time in writing require the company to furnish him with a copy of the register or any part of the register and the company shall furnish the copy within 7 days after the day on which the requirement is received by the company.

(5)  If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and in the case of a continuing offence to a further fine of $500 for every day during which the offence continues after conviction.

(6)  A company is not, by reason of anything done under this Division —

(a) to be taken for any purpose to have notice of; or

(b) to be put upon inquiry as to, a right of a person to or in relation to a share in the company.

[Aust. 1961, s. 69K]

Offences against certain sections

89.  A person who fails to comply with section 82, 83, 84 or 86 shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and in the case of a continuing offence to a further fine of $500 for every day during which the offence continues after conviction

[Aust. 1961, s. 69L]

Defence to prosecutions

90.

—(1)  It is a defence to a prosecution for failing to comply with section 82, 83, 84 or 86 if the defendant proves that his failure was due to his not being aware of a fact or occurrence the existence of which was necessary to constitute the offence and that —

(a) he was not so aware on the date of the summons; or

(b) he became so aware less than 7 days before the date of the summons

(2)  For the purposes of subsection (1), a person shall conclusively be presumed to have been aware of a fact or occurrence at a particular time —

(a) of which he would, if he had acted with reasonable diligence in the conduct of his affairs, have been aware at that time; or

(b) of which an employee or agent of the person, being an employee or agent having duties or acting in relation to his master’s or principal’s interest or interests in a share or shares in the company concerned, was aware or would, if he had acted with reasonable diligence in the conduct of his master’s or principal’s affairs, have been aware at that time.

Powers of Court with respect to defaulting substantial shareholders

91.

—(1)  Where a person is a substantial shareholder, or at any time after 1st October 1971 has been a substantial shareholder in a company and has failed to comply with section 82, 83 or 84, the Court may, on the application of the Minister, whether or not that failure still continues, make one or more of the following orders:

(a) an order restraining the substantial shareholder from disposing of any interest in shares in the company in which he is or has been a substantial shareholder;

(b) an order restraining a person who is, or is entitled to be registered as, the holder of shares referred to in paragraph (a) from disposing of any interest in those shares;

(c) an order restraining the exercise of any voting or other rights attached to any share in the company in which the substantial shareholder has or has had an interest;

(d) an order directing the company not to make payment, or to defer making payment, of any sum due from the company in respect of any share in which the substantial shareholder has or has had an interest;

(e) an order directing the sale of all or any of the shares in the company in which the substantial shareholder has or has had an interest;

(f) an order directing the company not to register the transfer or transmission of specified shares;

(g) an order that any exercise of the voting or other rights attached to specified shares in the company in which the substantial shareholder has or has had an interest be disregarded;

(h) for the purposes of securing compliance with any other order made under this section, an order directing the company or any other person to do or refrain from doing a specified act

[62/70; S249/71]

(2)  Any order made under this section may include such ancillary or consequential provisions as the Court thinks just.

(3)  An order made under this section directing the sale of a share may provide that the sale shall be made within such time and subject to such conditions, if any, as the Court thinks fit, including, if the Court thinks fit, a condition that the sale shall not be made to a person who is, or, as a result of the sale, would become a substantial shareholder in the company.

(4)  The Court may direct that, where a share is not sold in accordance with an order of the Court under this section, the share shall vest in the Registrar.

(5)  The Court shall, before making an order under this section and in determining the terms of such an order, satisfy itself, so far as it can reasonably do so, that the order would not unfairly prejudice any person.

(6)  The Court shall not make an order under this section, other than an order restraining the exercise of voting rights, if it is satisfied —

(a) that the failure of the substantial shareholder to comply as mentioned in subsection (1) was due to his inadvertence or mistake or to his not being aware of a relevant fact or occurrence; and

(b) that in all the circumstances, the failure ought to be excused.

(7)  The Court may, before making an order under this section, direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both.

(8)  The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order.

(9)  Section 347 applies in relation to a share that vests in the Registrar under this section as it applies in relation to an estate or interest in property vested in the Official Receiver under the first-mentioned section.

(10)  Any person who contravenes or fails to comply with an order made under this section that is applicable to him shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine of $500 for every day during which the offence continues after conviction.

(11)  Subsection (10) does not affect the powers of the Court in relation to the punishment of contempt of the Court

[Aust. 1961, s. 69N]

Power of company to require disclosure of beneficial interest in its voting shares

92.  [Repealed by Act 2/2009 wef 19/11/2012]

Division 5 — Debentures

Register of debenture holders and copies of trust deed

93.

—(1)  Every company which issues debentures (not being debentures transferable by delivery) shall keep a register of holders of the debentures at the registered office of the company or at some other place in Singapore.

(2)  Every company shall within 7 days after the register is first kept at a place other than the registered office lodge with the Registrar notice of the place where the register is kept and shall, within 7 days after any change in the place at which the register is kept, lodge with the Registrar notice of the change.

(3)  The register shall except when duly closed be open to the inspection of the registered holder of any debentures and of any holder of shares in the company and shall contain particulars of the names and addresses of the debenture holders and the amount of debentures held by them.

(4)  For the purposes of this section, a register shall be deemed to be duly closed if closed in accordance with the provisions contained in the articles or in the debentures or debenture stock certificates, or in the trust deed or other document relating to or securing the debentures, during such periods (not exceeding in the aggregate 30 days in any calendar year) as is therein specified.

(5)  Every registered holder of debentures and every holder of shares in a company shall at his request be supplied by the company with a copy of the register of the holders of debentures of the company or any part thereof on payment of $1 for every page or part thereof required to be copied, but the copy need not include any particulars as to any debenture holder other than his name and address and the debentures held by him.

(6)  A copy of any trust deed relating to or securing any issue of debentures shall be forwarded by the company to a holder of those debentures at his request on payment of the sum of $3 or such less sum as is fixed by the company, or where the copy has to be specially made to meet the request on payment of $1 for every page or part thereof required to be copied.

(7)  If inspection is refused, or a copy is refused or not forwarded within a reasonable time (but not more than one month) after a request has been made pursuant to this section, the company and every officer of the company who is in default shall be guilty of an offence.

(8)  A company which issues debentures may cause to be kept in any place outside Singapore a branch register of debenture holders which shall be deemed to be part of the company’s register of debenture holders and Division 4 of Part V shall with such adaptations as are necessary apply to and in relation to the keeping of a branch register of debenture holders.

(9)  If a company fails to comply with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty

[UK, 1948, s. 87; Aust., 1961, s. 70]

Specific performance of contracts

94.  A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance

[UK, 1948, s. 92; Aust., 1961, s. 71]

Perpetual debentures

95.  A condition in any debenture or in any deed for securing any debentures whether the debenture or deed is issued or made before or after 29th December 1967 shall not be invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency however remote or on the expiration of a period however long, any rule of law or equity to the contrary notwithstanding

[UK, 1948, s. 89; Aust., 1961, s. 72]

Reissue of redeemed debentures

96.

—(1)  Where a company has redeemed any debentures whether before or after 29th December 1967—

(a) unless any provision to the contrary, whether express or implied, is contained in the articles or in any contract entered into by the company; or

(b) unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled, the company shall have and shall be deemed always to have had power to reissue the debentures, either by reissuing the same debentures or by issuing other debentures in their place but the reissue of a debenture or the issue of one debenture in place of another under this subsection, whether the reissue or issue was made before or after that date, shall not be regarded as the issue of a new debenture for the purpose of any provision limiting the amount or number of debentures that may be issued by the company.

(2)  After the reissue the person entitled to the debentures shall have and shall be deemed always to have had the same priorities as if the debentures had never been redeemed.

(3)  Where a company has either before or after 29th December 1967 deposited any of its debentures to secure advances on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit while the debentures remain so deposited

[UK, 1948, s. 90; Aust., 1961, s. 73]

Qualifications of trustee for debenture holders

97.  [Repealed by S 236/2002]

Retirement of trustees

98.  [Repealed by S 236/2002]

Contents of trust deed

99.  [Repealed by S 236/2002]

Power of Court in relation to certain irredeemable debentures

100.

—(1)  Notwithstanding anything in any debenture or trust deed, the security for any debentures which are irredeemable or redeemable only on the happening of a contingency shall, if the Court so orders, be enforceable, immediately or at such other time as the Court directs if on the application of the trustee for the holders of the debentures or (where there is no trustee) on the application of the holder of any of the debentures the Court is satisfied that —

(a) at the time of the issue of the debentures the assets of the corporation which constituted or were intended to constitute the security therefor were sufficient or likely to become sufficient to discharge the principal debt and any interest thereon;

(b) the security, if realised under the circumstances existing at the time of the application, would be likely to bring not more than 60% of the principal sum of moneys outstanding (regard being had to all prior charges and charges ranking pari passu if any); and

(c) the assets covered by the security, on a fair valuation on the basis of a going concern after allowing a reasonable amount for depreciation are worth less than the principal sum and the borrowing corporation is not making sufficient profit to pay the interest due on the principal sum or (where no definite rate of interest is payable) interest thereon at such rate as the Court considers would be a fair rate to expect from a similar investment.

(2)  Subsection (1) shall not affect any power to vary rights or accept any compromise or arrangement created by the terms of the debentures or the relevant trust deed or under a compromise or arrangement between the borrowing corporation and creditors.

(3)  Subsection (1) shall not apply in relation to any debenture that is offered to the public for subscription or purchase

[Aust., 1961, s. 74c]

Duties of trustees

101.  [Repealed by S 236/2002]

Powers of trustee to apply to Court for directions, etc.

102.  [Repealed by S 236/2002]

Obligations of borrowing corporation

103.  [Repealed by S 236/2002]

Obligation of guarantor corporation to furnish information

104.  [Repealed by S 236/2002]

Loans and deposits to be immediately repayable on certain events

105.  [Repealed by S 236/2002]

Liability of trustees for debenture holders

106.  [Repealed by S 236/2002]

Division 5A — Exemptions from Divisions 1 and 5 in relation to Prospectus Requirements

Interpretation

106A.  [Repealed by S 236/2002]

Offer made by or to certain persons or under certain circumstances

106B.  [Repealed by S 236/2002]

Offer made to certain institutions or persons

106C.  [Repealed by S 236/2002]

Offer to sophisticated investors

106D.  [Repealed by S 236/2002]

Circumstances in which a prospectus is not required on first sale of shares or debentures acquired pursuant to exemptions in section 106C or 106D

106E.  [Repealed by S 236/2002]

Stock exchange offer

106F.  [Repealed by S 236/2002]

Offer of international debentures

106G.  [Repealed by S 236/2002]

Offer of debentures made by the Government or international financial institutions

106H.  [Repealed by S 236/2002]

Reporting requirements

106I.  [Repealed by S 236/2002]

Revocation of exemption

106J.  [Repealed by S 236/2002]

Power to conduct investigations

106K.  [Repealed by S 236/2002]

Transactions under exempted offers subjects to Division II of Part XII of this Act and Part IX of Securities Industry Act

106L.  [Repealed by S 236/2002]

Division 6 — Interests other than shares, debentures, etc.

Interpretation of this Division

107.  [Repealed by S 236/2002]

Approved deeds

108.  [Repealed by S 236/2002]

Approval of deeds

109.  [Repealed by S 236/2002]

Approval of trustees

110.  [Repealed by S 236/2002]

Covenants to be included in deeds

111.  [Repealed by S 236/2002]

Interests to be issued by companies only

112.  [Repealed by S 236/2002]

Statement to be issued

113.  [Repealed by S 236/2002]

Restriction on issue, etc., of interest to public

113A.  [Repealed by S 236/2002]

No issue without approved deed

114.  [Repealed by S 236/2002]

Register of interest holders

115.  [Repealed by S 236/2002]

Returns, information, etc., relating to interests

116.  [Repealed by S 236/2002]

Penalty for contravention of Division, etc.

117.  [Repealed by S 236/2002]

Winding up of schemes, etc.

118.  [Repealed by S 236/2002]

Power to exempt from compliance with Division and non-application of Division in certain circumstances

119.  [Repealed by S 236/2002]

Non-application of Division to personal representatives, etc.

120.  [Repealed by S 236/2002]

Division 7 — Title and transfers

Nature of shares

121.  The shares or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles, and shall not be of the nature of immovable property

[UK, 1948, s. 73; Aust., 1961, s. 90]

Numbering of shares

122.

—(1)  Each share in a company shall be distinguished by an appropriate number.

(2)  Notwithstanding subsection (1) —

(a) if at any time all the issued shares in a company or all the issued shares therein of a particular class are fully paid up and rank equally for all purposes, none of those shares need thereafter have a distinguishing number so long as each of those shares remains fully paid up and ranks equally for all purposes with all shares of the same class for the time being issued and fully paid up; or

(b) if all the issued shares in a company are evidenced by certificates in accordance with section 123 and each certificate is distinguished by an appropriate number and that number is recorded in the register of members, none of those shares need have a distinguishing number.

[UK, 1948, s. 74; Aust., 1961, s. 91]

Certificate to be evidence of title

123.

—(1)  A certificate under the common or official seal of a company specifying any shares held by any member of the company shall be prima facie evidence of the title of the member to the shares.

(2)  Every share certificate shall be under the common seal of the company or, in the case of a share certificate relating to shares on a branch register, the official seal of the company and shall state as at the date of the issue of the certificate —

(a) the name of the company and the authority under which the company is constituted;

(b) the address of the registered office of the company in Singapore, or, where the certificate is issued by a branch office, the address of that branch office; and

(c) the class of the shares, the amount paid on the shares, the amount (if any) unpaid on the shares and the extent to which the shares are paid up.

(3)  Failure to comply with this section shall not affect the rights of any holder of shares.

(4)  If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence

[UK, 1948, s. 81; Aust., 1961, s. 92]

Company may have duplicate common seal

124.  A company may, if authorised by its articles, have a duplicate common seal which shall be a facsimile of the common seal of the company with the addition on its face of the words “Share Seal” and a certificate under such duplicate seal shall be deemed to be sealed with the common seal of the company for the purposes of this Act

[Aust., 1961, s. 93]

Loss or destruction of certificates

125.

—(1)  Subject to subsection (2), where a certificate or other document of title to shares or debentures is lost or destroyed, the company shall on payment of a fee not exceeding $2 issue a duplicate certificate or document in lieu thereof to the owner on his application accompanied by —

(a) a statutory declaration that the certificate or document has been lost or destroyed, and has not been pledged, sold or otherwise disposed of, and, if lost, that proper searches have been made; and

(b) an undertaking in writing that if it is found or received by the owner it will be returned to the company.

(2)  Where the value of the shares or debentures represented by the certificate or document is greater than $500 the directors of the company may, before accepting an application for the issue of a duplicate certificate or document, require the applicant —

(a) to cause an advertisement to be inserted in a newspaper circulating in a place specified by the directors stating that the certificate or document has been lost or destroyed and that the owner intends after the expiration of 14 days after the publication of the advertisement to apply to the company for a duplicate; or

(b) to furnish a bond for an amount equal to at least the current market value of the shares or debentures indemnifying the company against loss following on the production of the original certificate or document, or may require the applicant to do both of those things.

(3)  Any duplicate certificate issued on or after 30th January 2006 in respect of a share certificate issued before that date shall state, in place of the historical nominal value of the shares, the amount paid on the shares and the amount (if any) unpaid on the shares

[Aust., 1961, s. 94]

Instrument of transfer

126.

—(1)  Notwithstanding anything in its articles, a company shall not register a transfer of shares or debentures unless a proper instrument of transfer has been delivered to the company, but this subsection shall not prejudice any power to register as a shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.

Transfer by personal representatives

(2)  A transfer of the share, debenture or other interest of a deceased person made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer.

(3)  The production to a company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, of a deceased person having been granted to some person shall be accepted by the company, notwithstanding anything in its articles, as sufficient evidence of the grant.

(4)  In this section, “instrument of transfer” includes a written application for transmission of a share debenture or other interest to a personal representative

[UK, 1948, ss. 75, 76, 82; Aust., 1961, s. 95]

Registrations of transfer at request of transferor

127.

—(1)  On the request in writing of the transferor of any share, debenture or other interest in a company the company shall enter in the appropriate register the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.

(2)  On the request in writing of the transferor of a share or debenture the company shall by notice in writing require the person having the possession, custody or control of the share certificate or debenture and the instrument of transfer thereof or either of them to bring it or them into the office of the company within a stated period, being not less than 7 and not more than 28 days after the date of the notice, to have the share certificate or debenture cancelled or rectified and the transfer registered or otherwise dealt with.

(3)  If any person refuses or neglects to comply with a notice given under subsection (2), the transferor may apply to a judge to issue a summons for that person to appear before the Court and show cause why the documents mentioned in the notice should not be delivered up or produced as required by the notice.

(4)  Upon appearance of a person so summoned the Court may examine him upon oath and receive other evidence, or if he does not appear after being duly served with such summons, the Court may receive evidence in his absence and in either case the Court may order him to deliver up such documents to the company upon such terms or conditions as to the Court seems fit, and the costs of the summons and proceedings thereon shall be in the discretion of the Court.

(5)  Lists of share certificates or debentures called in under this section and not brought in shall be exhibited in the office of the company and shall be advertised in such newspapers and at such times as the company thinks fit

[UK, 1948, s. 77; Aust., 1961, s. 96]

Notice of refusal to register transfer

128.

—(1)  If a company refuses to register a transfer of any shares, debentures or other interests in the company it shall, within one month after the date on which the transfer was lodged with it, send to the transferor and to the transferee notice of the refusal.

(2)  Where an application is made to a company for a person to be registered as a member in respect of shares which have been transferred or transmitted to him by act of parties or operation of law, the company shall not refuse registration by virtue of any discretion in that behalf conferred by the articles unless it has served on the applicant, within one month beginning with the day on which the application was made, a notice in writing stating the facts which are considered to justify refusal in the exercise of that discretion

[10/74]

(3)  If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty

[UK, 1948, s. 78; Aust., 1961, s. 97]

Notice of transfer of shares

128A.

—(1)  Where there has been a transfer of shares, a company may lodge with the Registrar notice of that transfer of shares in the prescribed form.

(2)  The notice must state —

(a) every other transfer of shares effected prior to the date of the notice, other than a transfer that has been previously notified to the Registrar; or

(b) if it has more than 50 members after the transfer, the prescribed information in relation to the shares held by each of the 50 members who hold the most number of shares in the company after the transfer.

Certification of transfers

129.

—(1)  The certification by a company of any instrument of transfer of shares, debentures or other interests in the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares, debentures or other interests in the transferor named in the instrument of transfer but not as a representation that the transferor has any title to the shares, debentures or other interests.

(2)  Where any person acts on the faith of a false certification by a company made negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.

(3)  Where any certification is expressed to be limited to 42 days or any longer period from the date of certification, the company and its officers shall not, in the absence of fraud, be liable in respect of the registration of any transfer of shares, debentures or other interests comprised in the certification after the expiration of the period so limited or any extension thereof given by the company if the instrument of transfer has not within that period been lodged with the company for registration.

(4)  For the purposes of this section —

(a) an instrument of transfer shall be deemed to be certificated if it bears the words “certificate lodged” or words to the like effect;

(b) the certification of an instrument of transfer shall be deemed to be made by a company if —

(i) the person issuing the instrument is a person apparently authorised to issue certificated instruments of transfer on the company’s behalf; and

(ii) the certification is signed by a person apparently authorised to certificate transfers on the company’s behalf or by any officer either of the company or of a corporation so apparently authorised; and

(c) a certification that purports to be authenticated by a person’s signature or initials (whether handwritten or not) shall be deemed to be signed by him unless it is shown that the signature or initials were not placed there by him and were not placed there by any other person apparently authorised to use the signature or initials for the purpose of certificating transfers on the company’s behalf.

[UK, 1948, s. 79; Aust., 1961, s. 98]

Duties of company with respect to issue of certificates and default in issue of certificates

130.

—(1)  Every company shall within 2 months after the allotment of any of its shares or debentures, and within one month after the date on which a transfer (other than such a transfer as the company is for any reason entitled to refuse to register and does not register) of any of its shares or debentures is lodged with the company, complete and have ready for delivery all the appropriate certificates and debentures in connection with the allotment or transfer.

(2)  If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty.

(3)  If any company on which a notice has been served requiring the company to make good any default in complying with this section fails to make good the default within 10 days after the service of the notice, the Court may, on the application of the person entitled to have the certificates or the debentures delivered to him, make an order directing the company and any officer of the company to make good the default within such time as is specified in the order, and the order may provide that all costs of and incidental to the application shall be borne by the company or by any officer of the company in default in such proportions as the Court thinks fit

[UK, 1948, s. 80; Aust., 1961, s. 99]

Division 7A — The Central Depository System — a book-entry or scripless system for the transfer of securities

Interpretation

130A.  In this Division, unless the contrary intention appears —

“account holder” means a person who has an account directly with the Depository and not through a depository agent;

“bare trustee” means a trustee who has no beneficial interest in the subject-matter of the trust;

“book-entry securities”, in relation to the Depository, means securities —

(a) the documents evidencing title to which are deposited by a depositor with the Depository and are registered in the name of the Depository or its nominee; and

(b) which are transferable by way of book-entry in the Depository Register and not by way of an instrument of transfer;

“Depository” means the Central Depository (Pte) Limited or any other corporation approved by the Minister as a depository company or corporation for the purposes of this Act, which operates the Central Depository System for the holding and transfer of book-entry securities;

“Depository Register” means a register maintained by the Depository in respect of book-entry securities;

“depositor” means an account holder or a depository agent but does not include a sub-account holder;

“depository agent” means a member company of the Securities Exchange, a trust company (licensed under the Trust Companies Act (Cap. 336)), a banking corporation or merchant bank (approved by the Monetary Authority of Singapore under the Monetary Authority of Singapore Act (Cap. 186)) or any other person or body approved by the Depository who or which —

(a) performs services as a depository agent for sub-account holders in accordance with the terms of a depository agent agreement entered into between the Depository and the depository agent;

(b) deposits book-entry securities with the Depository on behalf of the sub-account holders; and

(c) establishes an account in its name with the Depository;

“derivative instruments”, in relation to debentures, stocks and shares, includes warrants, transferable subscription rights, options to subscribe for stocks or shares, convertibles, depository receipts and such other instruments as the Minister may, by order, prescribe;

“documents evidencing title” means —

(a) in the case of stocks, shares, debentures or any derivative instruments related thereto of a company or debentures or any derivative instruments related thereto of the Government — the stock certificates, share certificates, debenture certificates or certificates representing the derivative instrument, as the case may be; and

(b) in the case of stocks, shares, debentures or any derivative instruments related thereto of a foreign company or debentures or any derivative instruments related thereto of a foreign government or of an international body, or any other securities — such documents or other evidence of title thereto, as the Depository may require;

“international body” means the Asian Development Bank, the International Bank for Reconstruction and Development, the International Monetary Fund, the European Bank for Reconstruction and Development and such other international bodies as the Minister may, by order, prescribe;

“instrument” includes a deed or any other instrument in writing;

“rules” means the rules made by the Depository in relation to the operation of the Central Depository System and includes the Central Depository Rules and Procedures made by the Depository pursuant to its Articles of Association (as the same may be amended from time to time) and any rule with regard to payment of fees to the Depository;

“securities” has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289), and includes derivative instruments;

“Securities Exchange” means the Singapore Exchange Securities Trading Limited;

“sub-account holder” means a holder of an account maintained with a depository agent

[22/93; 42/2001; 5/2004; 11/2005; 21/2005]

Application of this Division

130B.

—(1)  This Division shall apply only to —

(a) book-entry securities; and

(b) designated securities, as if a reference to “book-entry securities” includes a reference to designated securities.

(2)  The application of this Division to designated securities under subsection (1)(b) shall be subject to such modifications as the Minister may by order prescribe, and different modifications may be prescribed for different classes of designated securities.

(3)  In this section, “designated securities” means such securities as may be accepted or designated by the Depository or its nominee for deposit, custody, clearing or book-entry settlement.

Establishment of Central Depository System

130C.  There is hereby established a computerised Central Depository System whereby, in accordance with the rules of the Depository —

(a) documents evidencing title in respect of securities (with where applicable, in the case of shares or registered debentures, proper instruments of transfer duly executed) are deposited with the Depository and are registered in the name of the Depository or its nominee;

(b) accounts are maintained by the Depository in the names of the depositors so as to reflect the title of the depositors to the book-entry securities; and

(c) transfers of the book-entry securities are effected electronically, and not by any other means, by the Depository making an appropriate entry in the Depository Register of the book-entry securities that have been transferred

[22/93; 5/2004]

Depository or nominee deemed to be bare trustee

130CA.

—(1)  The Depository or its nominee shall be deemed to hold the book-entry securities deposited with it as a bare trustee for the collective benefit of depositors.

(2)  Subject to subsections (3) and (4), a depositor shall not have any right to specific book-entry securities deposited with the Depository or its nominee but shall be entitled to a pro rata share computed on the basis of the book-entry securities credited to one or more accounts in the name of the depositor.

(3)  A depository agent shall be deemed to hold book-entry securities deposited in its name with the Depository or its nominee, on behalf of any sub-account holder, as a bare trustee.

(4)  A sub-account holder shall not have any right to specific book-entry securities deposited with the Depository or its nominee but shall be entitled to a pro rata share computed on the basis of the book-entry securities credited to one or more accounts maintained by the sub-account holder with a depository agent.

Depository not a member of a company and depositors deemed to be members

130D.

—(1)  Notwithstanding anything in this Act or any other written law or rule of law or in any instrument or in the memorandum or articles of a corporation, where book-entry securities of the corporation are deposited with the Depository or its nominee —

(a) the Depository or its nominee (as the case may be) shall be deemed not to be a member of the corporation; and

(b) the persons named as the depositors in a Depository Register shall, for such period as the book-entry securities are entered against their names in the Depository Register, be deemed to be —

(i) members of the corporation in respect of the amount of book-entry securities (relating to the stocks or shares issued by the corporation) entered against their respective names in the Depository Register; or

(ii) holders of the amount of the book-entry securities (relating to the debentures or any derivative instrument) entered against their respective names in the Depository Register.

(1A)  Notwithstanding anything in this Act or any other written law or rule of law or in any instrument or in the memorandum or articles of a corporation, where book-entry securities relating to units in any collective investment scheme within the meaning of the Securities and Futures Act (Cap. 289) (whether or not constituted as a corporation) are deposited with the Depository or its nominee —

(a) the Depository or its nominee (as the case may be) shall be deemed not to be a holder of the book-entry securities; and

(b) the persons named as the depositors in a Depository Register shall, for such period as the book-entry securities are entered against their names in the Depository Register, be deemed to be holders of the amount of the book-entry securities entered against their respective names in the Depository Register.

(2)  Nothing in this Division shall be construed as affecting —

(a) the obligation of a company to keep —

(i) a register of its members under section 190 and allow inspection of the register under section 192; and

(ii) a register of holders of debentures issued by the company under section 93 and allow inspection of the register under that section, except that the company shall not be obliged to enter in such registers the names and particulars of persons who are deemed members or holders of debentures under subsection (1)(b);

(b) the right of a depositor to withdraw his documents evidencing title in respect of securities from the Depository at any time in accordance with the rules of the Depository and to register them in his or any other name; or

(c) the enjoyment of any right, power or privilege conferred by, or the imposition of any liability, duty or obligation under this Act, any rule of law or under any instrument or under the memorandum or articles of association of a corporation upon a depositor, as a member of a corporation or as a holder of debentures or any derivative instruments except to the extent provided for in this Division or prescribed by regulations made thereunder

[22/93; 5/2004]

(3)  Notwithstanding any provision in this Act, a depositor shall not be regarded as a member of a company entitled to attend any general meeting of the company and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the general meeting.

(4)  The payment by a corporation to the Depository of any dividend payable to a depositor shall, to the extent of the payment made, discharge the corporation from any liability in respect of that payment.

Depository to certify names of depositors to corporation upon request

130E.  The Depository shall certify the names of persons on the Depository Register to a corporation in accordance with the rules of the Depository upon a written request being made to it by the corporation

[22/93; 5/2004]

Maintenance of accounts

130F.  The Depository shall maintain accounts of book-entry securities on behalf of depositors in accordance with the rules of the Depository.

Transfers effected by Depository under book-entry clearing system

130G.

—(1)  Subject to this Division, a transfer of book-entry securities between depositors shall be effected, notwithstanding anything in this Act or any other written law or rule of law or in any instrument or in a corporation’s memorandum or articles of association to the contrary, by the depository making an appropriate entry in its Depository Register.

(2)  A transfer of securities by the Depository by way of book-entry to a depositor under this Division shall be valid and shall not be challenged in any Court on the ground that the transfer is not accompanied by a proper instrument of transfer or that otherwise the transfer is not made in writing.

(3)  This section shall apply to a transfer of book-entry securities whether effected before or after 12th November 1993.

Depository to be discharged from liability if acting on instructions

130H.

—(1)  Subject to the regulations, the Depository, if acting in good faith and without negligence, shall not be liable for conversion or for any breach of trust or duty where the Depository has, in respect of book-entries in accounts maintained by it, made entries regarding the book-entry securities, or transferred or delivered the book-entry securities, according to the instructions of a depositor notwithstanding that the depositor had no right to dispose of or take any other action in respect of the book-entry securities.

(2)  The Depository or a depository agent, if acting in good faith and without negligence, shall be fully discharged of its obligations to the account holder or sub-account holder by the transfer or delivery of book-entry securities upon the instructions of the account holder or sub-account holder, as the case may be.

(3)  The Depository, if acting in good faith and without negligence, shall be fully discharged of its obligations to a depository agent by the transfer or delivery of book-entry securities upon the instructions of the depository agent.

(4)  For the purposes of this section, the Depository or a depository agent is not to be treated as having been negligent by reason only of its failure to concern itself with whether or not the depositor or sub-account holder, as the case may be, has a right to dispose of or take any other action in respect of the book-entry securities or to issue the instructions.

Confirmation of transaction

130I.  The Depository shall, in accordance with the rules made by the Depository, issue to each account holder and to each sub-account holder through his depository agent, following upon any transaction affecting book-entry securities maintained for such account holder by the Depository and maintained for such sub-account holder by his depository agent under this Division, a confirmation note which shall specify the amount and description of the book-entry securities and any other relevant transaction information.

No rectification of Depository Register

130J.

—(1)  Notwithstanding anything in this Act or any written law or rule of law, no order shall be made by the Court for rectification of the Depository Register; subject to that where the Court is satisfied that —

(a) a depositor did not consent to a transfer of the book-entry securities; or

(b) a depositor should not have been registered in the Depository Register as having title to the book-entry securities, it may award damages to the first-mentioned depositor or to any person who would have been entitled to have been registered in the Depository Register as having title to the book-entry securities, as the case may be, on such terms as the Court thinks to be equitable or make such other order as the Court thinks fit including an order for the transfer of book-entry securities to such depositor or person.

(2)  Where provisions exist in the memorandum or articles of association of a corporation that entitle a corporation to refuse registration of a transfer of book-entry securities, it may in relation to any transfer to which it objects, notify the Depository in writing of its refusal before the transfer takes place and furnish the Depository with the facts upon which such refusal is considered to be justified.

(3)  Where the Depository has had prior notice of the corporation’s refusal under subsection (2) (but not otherwise), it shall refuse to effect the transfer and to enter the name of the transferee in the Depository Register and thereupon convey the facts upon which such refusal is considered to be justified to the transferee.

(4)  Section 128 shall not apply to any refusal to register a transfer under subsections (2) and (3).

Trustee, executor or administrator of deceased depositor named as depositor

130K.

—(1)  Any trustee, executor or administrator of the estate of a deceased depositor whose name was entered in the Depository Register as owner or as having an interest in book-entry securities may open an account with the Depository and have his name entered in the Depository Register so as to reflect the interest of the trustee, executor or administrator in the book-entry securities.

(2)  Subject to this section, no notice of any trust expressed, implied or constructive shall be entered on the Depository Register and no liabilities shall be affected by anything done in pursuance of subsection (1) or pursuant to the law of any other place which corresponds to this section and the Depository and the issuer of the book-entry securities shall not be affected with notice of any trust by anything so done.

Non-application of certain provisions in bankruptcy and company liquidation law

130L.  Where by virtue of the provisions of any written law in relation to bankruptcy or company liquidation it is provided that —

(a) any disposition of the property of a company after commencement of a winding up shall be void, unless the Court orders otherwise; or

(b) any disposition of the property of a person who is adjudged bankruptcy after the making of an application for a bankruptcy order and before vesting of the bankrupt’s estate in a trustee shall be void unless done with the consent or ratification of the Court, those provisions shall not apply to any disposition of book-entry securities; but where a Court is satisfied that a party to the disposition, being a party other than the Depository, had notice that an application has been made for the winding up or bankruptcy of the other party to the disposition, it may award damages against that party on such terms as it thinks equitable or make such other order as the Court thinks fit, including an order for the transfer of book-entry securities by that party but not an order for the rectification of the Depository Register.

[22/93; 42/2005]

Non-application of certain provisions in sections 21 and 76A

130M.  Sections 21 and 76A, insofar as those sections provide that a transfer or contract of sale of shares or debentures in contravention of either section shall be void, shall not apply to any disposition of book-entry securities; but a Court, on being satisfied that a disposition of book-entry securities would in the absence of this section be void may, on the application of the Registrar or any other person, order the transfer of the shares acquired in contravention of either of those sections.

Security interest

130N.

—(1)  Except as provided in this section or any other written law or any regulations made under section 130P, no security interest may be created in book-entry securities.

(2)  A security interest in book-entry securities to secure the payment of a debt or liability may be created in favour of any depositor in the following manner:

(a) by way of assignment, by an instrument of assignment in the prescribed form executed by the assignor; or

(b) by way of charge, by an instrument of charge in the prescribed form executed by the chargor:

Provided that no security interest in any book-entry securities subsequent to any assignment or charge thereof may be created by the assignor or the chargor, as the case may be, in favour of any other person and any such assignment or charge shall be void.

(3)  Upon receipt of the instrument of assignment, the Depository shall immediately, by way of an off-market transaction, transfer the book-entry securities to the assignee and thereafter notify the assignor and the assignee of the transfer in the prescribed manner.

(4)  Upon receipt of the instrument of charge, the Depository shall immediately register the instrument in a register of charges maintained by the Depository and thereafter notify the chargor and the chargee in the prescribed manner.

(5)  The register of charges shall not be open to inspection to any person other than the chargor or the chargee or their authorised representatives and except for the purpose of the performance of its duties or the exercise of its functions or when required to do by any court or under the provisions of any written law, the Depository shall not disclose to any unauthorised person any information contained in the register of charges.

(6)  An assignment or a charge made in accordance with the provisions of this section, but not otherwise, shall have effect upon the Depository transferring the book-entry securities or endorsing the charge in the register of charges except that the instrument of assignment or charge shall not have any effect if on the date of receipt of such instrument, the number of book-entry securities in the account of the assignor or chargor is less than the number of book-entry securities specified in such instrument.

(7)  The provisions of section 130D(1), (1A) and (2) shall apply to an assignment of book-entry securities made under this section

[22/93; 5/2004]

(8)  An assignee or a registered chargee of book-entry securities shall have the following powers:

(a) a power, when the loan or liability has become due and payable, to sell the book-entry securities or any part thereof and in the case of a chargee he shall have the power to sell the book-entry securities or any part thereof in the name of and for and on behalf of the chargor; and

(b) any other power which may be granted to him in writing by the assignor or chargor in relation to the book-entry securities provided that the Depository shall not be concerned with or affected by the exercise of any such power.

(9)  Nothing in subsection (8) shall be construed as imposing on the Depository a duty to ascertain whether the power of sale has become exercisable or has been lawfully exercised by the assignee or chargee.

(10)  No book-entry securities assigned by way of security or charged in accordance with the provisions of this section may be —

(a) transferred by way of an off-market transaction to the assignor save upon the production of a duly executed re-assignment in the prescribed form; or

(b) transferred by the chargor, by way of sale or otherwise, save upon the production of a duly executed discharge or charge in the prescribed form.

(11)  Upon the sale by the assignee or the chargee in exercise of his power of sale of any book-entry securities assigned or charged in accordance with the provisions of this section, the assignee or the chargee shall immediately notify the Depository of the sale and the particulars of the book-entry securities sold by him, and the Depository shall —

(a) in the case of the sale by the assignee, notify the assignor of the sale; and

(b) in the case of the sale by the chargee, effect a transfer of the book-entry securities to the buyer in accordance with section 130G and notify the chargor of the transfer.

The provisions of sections 130I, 130J, 130L and 130M shall apply, with the necessary modifications, to a transfer effected pursuant to this section.

(12)  Upon fulfilling his obligations under an assignment by way of security or a charge, the assignor or the chargor shall be entitled to obtain from the assignee or chargee a re-assignment or a discharge of charge, as the case may be, of the whole or part of the book-entry securities.

(13)  A re-assignment or discharge of charge shall be effected by the Depository by transferring the book-entry securities to the assignor or cancelling the endorsement of charge in the register of charges and in the account of the chargor, as the case may be.

(14)  Book-entry securities may be assigned by way of security by an assignee or charged in the prescribed form by a chargee to secure the payment of any debt or liability of the assignee or the chargee, as the case may be, in accordance with the provisions of this section provided that no book-entry security may be charged by a chargee subsequent to any sub-charge.

(15)  All acts, powers and rights which might previously have been done or exercised by the chargee thereunder in relation to the book-entry securities may thereafter be done or exercised by the sub-chargee, and, except with the consent of the sub-chargee, shall not be done or exercised by the chargee thereunder during the currency of the sub-charge.

(16)  Upon the sale by the sub-chargee in exercise of his power of sale of any book-entry securities in accordance with the provisions of this section, the provisions of subsection (11), in respect of a sale by a chargee, shall apply with the necessary modifications to the sale by the sub-chargee.

(17)  Nothing in subsection (14) shall affect the rights or liabilities of the original assignor or chargor of the book-entry securities under subsections (12) and (13) and he shall be entitled to a re-assignment or discharge of charge from the assignee or chargee free from all subsequent security interests created without his consent upon satisfying his indebtedness or liability to the assignee or the chargee.

(18)  The provisions of section 130H shall apply to relieve the Depository and its servants or agents of any liability in respect of any act done or omission made under this section as if references to “depositor” include references to “assignee”, “chargee” or “sub-chargee”, as the case may be.

(19)  Nothing in this section shall affect the validity and operation of floating charges on book-entry securities created under the common law before or after 12th November 1993, but that the Depository shall not be required to recognise, even when having notice thereof, any equitable interest in any book-entry securities under a floating charge except the power of the chargee, upon the crystallisation of the floating charge, to sell the book-entry securities in the name of the chargor in accordance with the provisions of this section.

(20)  Nothing in subsection (19) shall be construed as imposing on the Depository a duty to ascertain whether the power of sale pursuant to a floating charge has become exercisable or has been lawfully exercised.

(21)  A stockbroker shall have a lien over unpaid book-entry securities purchased for the account of a customer which shall be enforceable by sale in accordance with and subject to the provisions of this section as if the same had been charged to him under this section except that the stockbroker shall not be obliged to notify the Depository of the sale or the particulars of the book-entry securities sold by him

[22/93; S92/97]

(22)  Any security interest on book-entry securities created before 12th November 1993 and subsisting or in force on that date shall continue to have effect as if that Act had not been enacted.

(23)  In this section, “off-market transaction” means a transaction effected outside the Securities Exchange

[22/93; 42/2001]

Depository rules to be regarded as rules of a securities exchange that are subject to Securities and Futures Act

130O.

—(1)  Rules made by the Depository in relation to the operation of the Central Depository System, including any amendments made thereto from time to time, shall be regarded as having the same force and effect as if made by a securities exchange and shall likewise be subject to the provisions of the Securities and Futures Act (Cap. 289)

[22/93; 42/2001]

(2)  Without prejudice to the generality of subsection (1), section 23 (Business rules and listing rules of approved exchanges) and section 25 (Power of court to order observance of or enforce business rules or listing rules) of the Securities and Futures Act shall apply to rules made by the Depository under subsection (1) as they apply to rules made by a securities exchange

[22/93; 42/2001]

Regulations

130P.  The Minister may make regulations for all matters or things which by this Division are required or permitted to be prescribed or which are necessary or expedient to give effect to this Division and, in particular, regulations may be made for or with respect to —

(a) rights and obligations of persons in relation to securities dealt with under the Central Depository System;

(b) procedures for the deposit and custody of securities and the transfer of title to book-entry securities and the regulation of persons concerned in that operation;

(c) matters relating to security interest in book-entry securities;

(d) keeping of depositors’ accounts by the Depository and sub-accounts by the depository agents;

(e) keeping of the Depository Register and of records generally;

(f) safeguards for depositors including the maintenance of insurance and the establishment and maintenance of compensation funds by the Depository for the purpose of settling claims by depositors;

(g) matters relating to link-ups between the Depository and other securities depositories (by whatever name called) established and maintained outside Singapore;

(ga) any requirement for fees charged by the Depository to be approved by a regulatory authority, and regulations made under this paragraph may provide —

(i) that the regulatory authority may require the Depository to furnish it with such information or documents as the Authority considers necessary for such approval;

(ii) that a contravention of any specified provision in the regulations shall be an offence; and

(iii) for penalties not exceeding a fine of $150,000 for each offence and, in the case of a continuing offence, a further penalty not exceeding a fine of 10% of the maximum fine prescribed for that offence for every day or part thereof during which the offence continues after conviction;

(h) the modification or exclusion of any provision of any written law, rule of law, any instrument or articles of association;

(i) the application, with such modifications as may be required, of the provisions of any written law, instrument or articles of association; and

(j) such supplementary, incidental, saving or transitional provisions as may be necessary or expedient

[22/93; 21/2005]

Division 8 — Registration of charges

Registration of charges

131.

—(1)  Subject to this Division, where a charge to which this section applies is created by a company there shall be lodged with the Registrar for registration, within 30 days after the creation of the charge, a statement containing the prescribed particulars of the charge, and if this section is not complied with in relation to the charge the charge shall, so far as any security on the company’s property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company.

(1A)  In connection with the registration of a charge to which this section applies which is created by a company there shall be produced to the Registrar, upon the Registrar’s request and for the purposes of inspection, at no cost to the Registrar, the instrument (if any) by which the charge is created or evidenced or a certified true copy thereof.

(2)  Nothing in subsection (1) shall prejudice any contract or obligation for repayment of the money secured by a charge and when a charge becomes void under this section the money secured thereby shall immediately become payable.

(3)  The charges to which this section applies are —

(a) a charge to secure any issue of debentures;

(b) a charge on uncalled share capital of a company;

(c) a charge on shares of a subsidiary of a company which are owned by the company;

(d) a charge or an assignment created or evidenced by an instrument which if executed by an individual, would require registration as a bill of sale;

(e) a charge on land wherever situate or any interest therein;

(f) a charge on book debts of the company;

(g) a floating charge on the undertaking or property of a company;

(h) a charge on calls made but not paid;

(i) a charge on a ship or aircraft or any share in a ship or aircraft; and

(j) a charge on goodwill, on a patent or licence under a patent, on a trade mark, or on a copyright or a licence under a copyright.

(3A)  The reference to a charge on book debts in subsection (3)(f) shall not include a reference to a charge on a negotiable instrument or on debentures issued by the Government.

(3B)  A charge referred to in subsection (3) does not include a charge created at any time on or after the date of commencement of the International Interests in Aircraft Equipment Act 2009 to the extent that it is capable of being registered under that Act

[5/2009 wef 01/05/2009]

(3C)  In subsection (3B), “registered” has the same meaning as in section 2(1) of the International Interests in Aircraft Equipment Act 2009

[5/2009 wef 01/05/2009]

(4)  Where a charge created in Singapore affects property outside Singapore, the statement containing the prescribed particulars of the charge may be lodged for registration under and in accordance with subsection (1) notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the place in which the property is situate.

(5)  When a series of debentures containing or giving by reference to any other instrument any charge to the benefit of which the debenture holders of that series are entitled equally is created by a company, it shall be sufficient if there are lodged with the Registrar for registration within 30 days after the execution of the instrument containing the charge, or if there is no such instrument after the execution of the first debenture of the series, a statement containing the following particulars:

(a) the total amount secured by the whole series;

(b) the dates of the resolutions authorising the issue of the series and the date of the covering instrument, if any, by which the security is created or defined;

(c) a general description of the property charged; and

(d) the names of the trustee, if any, for the debenture holders.

(6)  For the purposes of subsection (5), where more than one issue is made of debentures in the series, there shall be lodged within 30 days after each issue particulars of the date and amount of each issue, but an omission to do so shall not affect the validity of the debentures issued.

(7)  Where any commission, allowance or discount has been paid or made either directly or indirectly by a company to any person in consideration of his (whether absolutely or conditionally) subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any debentures the particulars required to be lodged under this section shall include particulars as to the amount or rate per cent of the commission, allowance or discount so paid or made, but omission to do so shall not affect the validity of the debentures issued.

(8)  The deposit of any debentures as security for any debt of the company shall not for the purposes of subsection (7) be treated as the issue of the debentures at a discount.

(9)  No charge or assignment to which this section applies (except a charge or assignment relating to land) need be filed or registered under any other written law.

(10)  Where a charge requiring registration under this section is created before the lapse of 30 days after the creation of a prior unregistered charge, and comprises all or any part of the property comprised in the prior charge, and the subsequent charge is given as a security for the same debt as is secured by the prior charge, or any part of that debt, then to the extent to which the subsequent charge is a security for the same debt or part thereof, and so far as respects the property comprised in the prior charge, the subsequent charge shall not be operative or have any validity unless it is proved to the satisfaction of the Court that it was given in good faith for the purpose of correcting some material error in the prior charge or under other proper circumstances and not for the purposes of avoiding or evading the provisions of this Division

[UK, 1948, s. 95; Aust., 1961, s. 100]

Duty to register charges

132.

—(1)  Documents and particulars required to be lodged for registration in accordance with section 131 may be lodged for registration by the company concerned or by any person interested in the documents, but if default is made in complying with that section the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty.

(2)  Where registration is effected by some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him on the registration

[UK, 1948, s. 96; Aust., 1961, s. 101]

Duty of company to register charges existing on property acquired

133.

—(1)  Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Division or, where a foreign company becomes registered in Singapore and has prior to such registration created a charge which if it had been created by the company while it was registered in Singapore would have been required to be registered under this Division or, where a foreign company becomes registered in Singapore and has prior to such registration acquired property which is subject to a charge of any such kind as would if it had been created by the company after the acquisition and while it was registered in Singapore have been required to be registered under this Division, the company shall cause a statement of the prescribed particulars to be lodged with the Registrar for registration within 30 days after the date on which the acquisition is completed or the date of the registration of the company in Singapore, as the case may be.

(2)  If default is made in complying with this section, the company or the foreign company and every officer of the company or foreign company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and also to a default penalty

[UK, 1948, s. 97; Aust., 1961, s. 102]

Register of charges to be kept by Registrar

134.

—(1)  The Registrar shall keep a register of all the charges lodged for registration under this Division and shall enter in the register with respect to those charges the following particulars:

(a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are required to be contained in a statement furnished under section 131(5); and

(b) in the case of any other charge —

(i) if the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company the date of the acquisition of the property;

(ii) the amount secured by the charge;

(iii) a description sufficient to identify the property charged; and

(iv) the name of the person entitled to the charge.

(2)  The Registrar shall issue a notice to the company concerned of the registration of a charge and the notice shall be conclusive evidence that the requirements as to registration have been complied with.

(3)  Upon the application of the company and payment of the prescribed fee, the Registrar shall issue to the company a certificate, under his hand and seal, confirming the registration of the charge and the certificate shall be conclusive evidence that the requirements as to registration have been complied with

[UK, 1948, s. 98; Aust., 1961, s. 103]

Endorsement of certificate of registration on debentures

135.

—(1)  The company shall cause to be endorsed on every debenture forming one of a series of debentures, or certificate of debenture stock which is issued by the company and the payment of which is secured by a charge so registered —

(a) a copy of the notice of registration; or

(b) a statement that the registration has been effected and the date of registration.

(2)  Subsection (1) shall not apply to any debenture or certificate of debenture stock which has been issued by the company before the charge was registered.

(3)  Every person who knowingly and wilfully authorises or permits the delivery of any debenture or certificate of debenture stock which is not endorsed as required by this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000

[UK, 1948, s. 99; Aust., 1961, s. 104]

Entries of satisfaction and release of property from charge

136.

—(1)  Where, with respect to any registered charge —

(a) the debt for which the charge was given has been paid or satisfied in whole or in part; or

(b) the property or undertaking charged or any part thereof has been released from the charge or has ceased to form part of the company’s property or undertaking of the company concerned, the company may lodge with the Registrar in the prescribed form a statement of satisfaction in whole or in part, or of the fact that the property or undertaking or any part thereof has been released from the charge or has ceased to form part of the company’s property or undertaking, as the case may be, and the Registrar shall enter particulars of that statement in the register.

(2)  The statement shall be endorsed with a statement by the chargee of the payment, satisfaction, release or ceasing referred to in subsection (1), as the case may be, and the second-mentioned statement shall constitute sufficient evidence of that payment, satisfaction, release or ceasing

Extension of time and rectification of register of charges

137.  The Court, on being satisfied that the omission to register a charge (whether under this or any corresponding previous written law) within the time required or that the omission or mis-statement of any particular with respect to any such charge or in a statement of satisfaction was accidental or due to inadvertence or to some other sufficient cause or is not of a nature to prejudice the position of creditors or shareholders or that on other grounds it is just and equitable to grant relief, may on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient (including a term or condition that the extension or rectification is to be without prejudice to any liability already incurred by the company or any of its officers in respect of the default) order that the time for registration be extended or that the omission or mis-statement be rectified

[UK, 1948, s. 101; Aust., 1961, s. 106]

Company to keep copies of charging instruments and register of charges

138.

—(1)  Every company shall cause the instrument creating any charge requiring registration under this Division or a copy thereof to be kept at the registered office of the company but in the case of a series of debentures the keeping of a copy of one debenture of the series shall be sufficient for the purposes of this subsection.

(2)  Every company shall keep at the registered office of the company a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge and (except in the case of securities to bearer) the names of the persons entitled thereto.

(3)  The instruments or copies thereof and the register of charges kept in pursuance of this section shall be open to the inspection of any creditor or member of the company without fee, and the register of charges shall also be open to the inspection of any other person on payment of such fee not exceeding $2 for each inspection as is fixed by the company.

(3A)  Any person may, on application to a company and on payment of a fee, not exceeding $1 for every page or part thereof, be furnished with a copy of any instrument or debenture kept by the company in pursuance of this section within 3 days of his making the application.

(4)  If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $2,000 and also to a default penalty

Documents made out of Singapore

139.  Where under this Division an instrument, deed, statement or other document is required to be lodged with the Registrar within a specified time, the time so specified shall, by force of this section, in relation to an instrument, deed, statement or other document executed or made in a place out of Singapore, be extended by 7 days or such further periods as the Registrar may from time to time allow

Charges, etc., created before 29th December 1967

140.  Except as is otherwise expressly provided, this Division shall apply to any charge that on 29th December 1967 was registrable under any of the repealed written laws but which at that date was not registered under any of those laws

Application of Division

141.  A reference in this Division to a company shall be read as including a reference to a foreign company registered under Division 2 of Part XI, but nothing in this Division applies to a charge on property outside Singapore of such foreign company

Singapore Companies Act Singapore Companies ActSingapore Companies Act

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