۲.۲ 89-108 part 6

8/20/2019 ۲.۲ 89-108 Part 6

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O w n S h a r e s

Part 6 - Share Capital and Debentures

Part 6 - Share Capital and DebenturesPart 6 - Share Capital and Debentures

Nature, Numbering and Certifcate o SharesNature, Numbering and Certifcate o Shares

1 !he shares or other interest o an" member in a compan" shall be

mo#able propert", transerable

in the manner pro#ided b" the articles o the compan"

$ % certifcate under the common seal o the compan" speci"ing an" shares held b"an" member shall be prima acia e#idence o the title o the member to the shares

therein specifed

& 'ach share in a compan" shall ha#e a distincti#e number

( a compan" limited b" share ma" ha#e di)erent *inds o share capital and classes

therein as pro#ided b" its memorandum and articles+

Provided that di)erent rights and pri#ileges in relation to the di)erent classes o

shares ma" onl" be conerred in such manner as ma" be prescribed

No company shall issue partl" paid shares+Provided that where a compan" has partl" paid shares on the commencement o this

Ordinance, it

i. shall not issue an" urther share capital until all the shares pre#iousl" issued ha#e

become ull" paid up

ii. shall pa" di#idend onl" in proportion to the amount paid up on each share

%lteration%lteration

/$ Power o compan" limited b" shares to alter its share capital

1. a company limited by shares, i so authorised b" its articles, ma" alter the conditions

o its memorandum in a general meeting so as to -

a.0NC'%S' its share capital b" such amount as it thin*s e2pedient3

b.CONSO40D%!' %ND D050D' the whole or an" part o its share capital into shares

o larger amount than its e2isting shares3

c.S7-D050D' its shares, or an" o them, into shares o smaller amount than is

f2ed b" the memorandum3 or

d.C%NC'4 shares which, at the date o the passing o the resolution in thatbehal, ha#e not been ta*en or agreed to be ta*en b" an" person, and

diminish the amount o its share capital b" the amount o the shares so

cancelled+

Provided that in the e#ent o issuance, consolidation or sub-di#ision o shares, the

rights attaching to the new shares shall be strictl" proportional to the rights

attaching to the pre#ious shares to consolidated or sub-di#ided+

!he compan" shall fle with the registrar notice o the e2ercise o an" power conerred

to in sub-section (1) within 1 da"s rom the e2ercise thereo

a cancellation o shares in pursuance o sub-section (1)

shall not be deemed to be a reduction o share capital within the meaning o this

Ordinance

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&-%. Notwithstanding anything contained in this Ordinance or any other law for the time being in force or

the memorandum and articles,

where the authorised capital o a compan" is ull" subscribed, or the unsubscribed

capital is insu8cient,

the same shall be deemed to ha#e been increased to the e2tent necessar" or issue

o shares to a scheduled ban* or fnancial institution

in pursuance o an" obligation o the compan" to issue shares to such ban* or

institution

/( Notice o 0NC'%S'S o share capital or o members

1. 9here a compan" ha#ing a share capital has

a. resol#ed to increase its shares capital be"ond the authorised capital, or

b. such capital is increased under sub-section &-%. of section 92 and

c. Provided that where deault is made b" a compan" in fling a notice o

increase in the authorised capital under sub-section (3-A) of section 92,

the scheduled ban* or the fnancial institution to whom shares ha#e been

issued ma" fle notice o such increase with the registrar and

such notice shall be deemed to ha#e been fled b" the compan" itsel and

the scheduled ban* or fnancial institution shall be entitled to reco#er rom

the compan" the amount o an" ee properl" paid b" it to the registrar in

respect o such increase

d. where a compan" not ha#ing a share capital has resol#ed to

increase the number o its members be"ond the number pre#iousl" registered,

it shall fle with the registrar, within 1 da"s ater the passing o the resolution, a

notice o the increase o capital or members, as the case ma" be, and the

registrar shall record the increase+

$. !he notice to be gi#en under sub-section (1) shall include particulars o the shares to

be a)ected and the conditions sub:ect to which the new shares are to be issued

&. 0 a compan" ma*es deault in compl"ing the re;uirements o sub-section (1), it shall

be liable to a fne which ma" e2tend to 1<< rupees or e#er" da" during which the

deault continues, and e#er" o8cer o the compan" who *nowingl" and wilull"

authorises or permits the deault shall be liable to the li*e penalt"

(. No resolution reerred in sub-section (1) shall ta*e e)ect unless the notice re;uired

b" that sub-section to be fled with the registrar is dul" sent to him

/& Notice to registrar o CONSO40D%!0ON o share capital, etc

1 9here a compan" ha#ing a share capital has consolidated and di#ided its share

capital into shares o larger amount3 than its e2isting shares,

it shall, within 1 da"s o the consolidation and di#ision, fle notice with the registrar

o the same, speci"ing the shares consolidated and di#ided

$ 0 a compan" ma*es deault in compl"ing with the re;uirements o sub-

section (5) of section 92 or sub-section (1) of this section, it shall be liable to a fne which ma"

e2tent to 1<< rupees or e#er" da" during which the deault continues, and e#er"

o8cer o the compan" who *nowingl", and wilull" authorises or permits the

deault shall be liable to the li*e penalt"

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Own SharesOwn Shares

/ Prohibition o purchase or grant o fnancial assistance b" a compan" or purchaseo its own or its holding compan"=s shares

1 No company shall ha#e power to bu" its own shares or the shares o its holding

compan"

$ No company limited by shares, other than a private company, not being a

subsidiary of a public company ,shall gi#e, whether directl" or indirectl", and

whether b" means o a loan, guarantee, the pro#ision o securit" or otherwise,

an" fnancial assistance

or the purpose o or in connection with purchase made or to be made3

b" an" person o an" shares in the compan" or, where the compan" is a subsidiar", in

its holding compan"

Provided that nothing in this sub-section shall pre#ent the compan" rom ad#ancing or

securing an ad#ance to an" o its salaried emplo"ees, including a chie e2ecuti#e

who, beore his appointment as such, was not a director o the compan", but

e2cluding all directors o the compan", or purchase o shares o the compan" or o

its subsidiar" or holding compan", i ma*ing or securing o such ad#ance is a part

o tile contract o ser#ice o such emplo"ee

& 0 a compan" acts in contra#ention o sub-section (1) or sub-section (2), the compan" and

e#er" o8cer o the compan" who is *nowingl" and wilull" in deault shall be liable

to a fne which ma" e2tend to 1<,<<< rupees i the deault relates to a listed

company and to $,<<< rupees i the deault relates to any other company .

( Nothing in this section shall pre#ent

a. a compan" rom redeeming an" shares or an" other redeemable securit"

issued in accordance with the pro#isions o this Ordinance3 and

b. a listed compan" rom purchasing its own shares in accordance with the

pro#isions o this Ordinance

/% Power o compan" to purchase its own shares

1 Notwithstanding anything contained in this Ordinance or any other law for the time being in force or

the memorandum and articles,

a listed company ma", sub:ect to the pro#isions o this section and the rules ramedb" the Commission in this behal, purchase its own shares

$ !he purchase shall be authori>ed b" a special resolution which shall indicate the

ma2imum number o shares to be purchased3 the ma2imum price at which the shares

ma" be purchased3 and the period within which the purchase is to be made

& !he notice o the meeting in which the special resolution authori>ing the purchase o

shares is proposed to be mo#ed, shall be accompanied b" an e2planator" statement

containing all material acts including the ollowing-

a. :ustifcation or the purchase

b. source o unding3

c. e)ect on the fnancial position o the compan"3 and

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1&0 a compan" ma*es deault in compliance with the pro#isions o this section, the

compan" shall be liable to a fne which ma" e2tend to 1 million rupees and an"

o8cer o the compan" who is *nowingl" and wilull" in deault shall also be

punishable with imprisonment or a term which ma" e2tend to 6 months, or with fne

which ma" e2tend to 1 million rupees, or with both

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5ariation o Shareholder=s ights5ariation o Shareholder=s ights

1<B 5ariation o shareholders= rights

1 !he #ariation o the rights o shareholders o an" class shall be e)ected onl" in the

manner laid down in section 2! (Alteration of articles)

$ Not less than 1< o the class o shareholders who are aggrie#ed b" the #ariation o

their rights under sub-section (1) ma", within &< da"s o the date o the resolution

#ar"ing their rights,appl" to the Court or an order cancelling the resolution+

Provided that the Court shall not pass such an order unless it is shown to its

satisaction that some acts which would ha#e had a bearing on the decision o the

shareholders were withheld b" the compan" in getting the aoresaid resolution

passed or, ha#ing regard to all the circumstances o the case, that the #ariation

would unairl" pre:udice the shareholders o the class represented b" the

applicant

& %n application under sub-section (2) ma" be made on behal o the shareholdersentitled to ma*e it b" such one or more or their number as the" ma" authorise in

writing in this behal

( !he decision o the Court on an" such application shall be fnal

!he compan" shall, within 1 da"s ater the ser#ice on the compan" o an" order

made on an" such application, orward a cop" o the order to the registrar and, i

deault is made in compl"ing with this pro#ision, the compan" and e#er" o8cer o

the compan" who is *nowingl" and wilull" in deault shall be liable to a fne which

ma" e2tend to $<< rupees or each da" during which the deault continues

6 !he e2pression ?#ariation@ includes abrogation, re#ocation or enhancement

A "ection 5 o the #imitation Act$ 19%!, shall appl" to an application made under sub-

section (2)

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۲.۲ 89-108 part 6

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