CHAPTER 42:01
COMPANIES

ARRANGEMENT OF SECTIONS

   SECTION

PART I
Preliminary

   1.   Short title

   2.   Interpretation

   3.   Public notice

   4.   Meaning of "solvency test"

   5.   Stated capital

   6.   Meaning of "holding company" and "subsidiary"

   7.   Definition of "control"

   8.   Certain matters to be disregarded

   9.   Act binds the State

   10.   The Registrar

   11.   Registers

   12.   Registration of documents

   13.   Inspection and evidence of registers

   14.   Registrar's powers of inspection

   15.   Appeals from Registrar's decisions

   16.   Enforcement of duty on companies to make return to Registrar

   17.   Lost documents

   18.   Extension of time

PART II
Incorporation - Essential Requirements

   19.   Essential requirements and types of company

   20.   Right to apply for registration

   21.   Application for registration

   22.   Registration

   22A.   Delegation of powers by the Registrar

   23.   Certificate of incorporation

   24.   Separate legal personality

PART III
Capacity, Powers and Validity of Actions

   25.   Capacity and powers

   26.   Validity of actions

   27.   Dealings between company and other persons

   28.   No constructive notice

PART IV
Company Names

   29.   Name to be reserved

   30.   Name of company if liability of shareholders limited and if a private company

   31.   Power to dispense with "limited"

   32.   Application for reservation of name

   33.   Name of company

   34.   Change of name

   35.   Direction to change name

   36.   Use of company name

PART V
Company Constitution

   37.   No requirement for company to have constitution

   38.   Effect of Act on company having constitution

   39.   Effect of Act on company not having constitution

   40.   Form of constitution

   41.   Contents of constitution

   42.   Effect of constitution

   43.   Adoption, alteration and revocation of constitution

   44.   New form of constitution

PART VI
Shares

   45.   Legal nature and rights and powers attaching to shares

   46.   Types of shares

   47.   No par value shares

   48.   Transferability of shares

   49.   Issue of shares on registration and amalgamation

   50.   Issue of other shares

   51.   Alteration in number of shares

   52.   Pre-emptive rights to new issues

   53.   Consideration for issue of shares

   54.   Shares not paid for in cash

   55.   Calls on shares

   56.   Consent to issue of shares

   57.   Time of issue of shares

   58.   Board may authorise distributions to shareholders

   59.   Reduction of stated capital

   60.   Dividends

   61.   Shares in lieu of dividends

   62.   Shareholder discounts

   63.   Recovery of distributions

   64.   Reduction of shareholders liability and distribution

   65.   Company may acquire or redeem its own shares

   66.   Purchase of own shares

   67.   Liability of directors and shareholders where solvency test not satisfied

   68.   Cancellation of shares repurchased

   69.   Company may hold its own shares

   70.   Reissue of shares company holds in itself

   71.   Enforceability of contract to repurchase shares

   72.   Meaning of "redeemable"

   73.   Redemption at option of company

   74.   Redemption at option of shareholder

   75.   Redemption on fixed date

   76.   Restrictions on giving financial assistance

   77.   Transactions not prohibited by section 76

   78.   Subsidiary may not hold shares in holding company

   79.   Statement of rights to be given to shareholders

PART VII
Title Transfers, Share Register and Certificates

   80.   Lien on shares

   81.   Transfer of shares

   82.   Transfer of shares by operation of law

   83.   Company to maintain share register

   84.   Place of share register

   85.   Share register as evidence of legal title

   86.   Secretary's duty to supervise share register

   87.   Power of court to rectify share register

   88.   Trusts not to be entered on register

   89.   Share Certificate

PART VIII
Shareholders and their Rights and Obligations

   90.   Meaning of "shareholder"

   91.   Liability of shareholders

   92.   Liability for calls and forfeiture of shares

   93.   Shareholders not required to acquire shares by alteration to constitution

   94.   Exercise of powers reserved to shareholders

   95.   Exercise of powers by ordinary resolution

   96.   Powers exercised by special resolution

   97.   Management review by shareholders

   98.   Shareholder may require company to purchase shares

   99.   Notice requiring purchase

   100.   Purchase by company

   101.   Purchase of shares by third party

   102.   Court may grant exemption

   103.   Court may grant exemption if company insolvent

   104.   Variation of class rights

   105.   Annual meeting of shareholders

   106.   Special meetings of shareholders

   107.   Resolution in lieu of meeting

   108.   Court may call meeting of shareholders

   109.   Proceedings at meetings

   110.   Shareholders entitled to receive distributions, attend meetings and exercise rights

PART IX
Debentures and Registration of Charges

   111.   Creation and issue of debentures

   112.   Security for debentures

   113.   Bonds to be registered in deed registry; copies of documents to be annexed to bonds and deeds of pledge

   114.   Debenture may be registered

   115.   Trustee for debenture holders

   116.   Issue of debentures at different dates and ranking of preference

   117.   Rights of debenture holders

   118.   Power to re-issue redeemed debenture in certain cases

   119.   Debenture to be described as secured or unsecured

   120.   Form of debentures or debenture certificates

   121.   Register of pledges, cessions and bonds and Register of debenture holders

   122.   Special powers of court

   123.   Perpetual debentures

   124.   Debentures to bearer

   125.   Filing of particulars of charges

PART X
Directors and Secretaries - their Powers and Duties

   126.   Meaning of "director" and "board"

   127.   Management of company

   128.   Major transactions

   129.   Delegation of powers

   130.   Duty of directors to act in good faith and in best interest of company

   131.   Exercise of powers in relation to employees

   132.   Use of information and advice

   133.   Approval of the company

   134.   Meaning of "interested"

   135.   Disclosure of interest

   136.   Avoidance of transactions

   137.   Effect on third parties

   138.   Application of sections 135 and 136 in certain cases

   139.   Interested director may vote

   140.   Use of company information

   141.   Meaning of "relevant interest"

   142.   Relevant interests to be disregarded in certain cases

   143.   Disclosure of share dealing by directors

   144.   Restrictions on share dealing by directors

   145.   Number of directors

   146.   Qualifications of directors

   147.   Director's consent required

   148.   Appointment of first and subsequent directors

   149.   Court may appoint directors

   150.   Appointment of directors to be voted on individually

   151.   Removal of directors

   152.   Director ceasing to hold office

   153.   Resignation of last remaining director

   154.   Validity of director's acts

   155.   Notice of change of directors and secretary

   156.   Proceedings of board

   157.   Remuneration, loans and other benefits

   158.   Standard of care and civil liability of officers

   159.   Indemnity and insurance

   160.   Duty of directors on insolvency

   161.   Secretary

   162.   Qualifications of Company Secretary

   163.   Duties of Company Secretary

PART XI
Enforcement

   164.   Interpretation

   165.   Interdict

   166.   Derivative actions

   167.   Costs of derivative action to be met by company

   168.   Powers of court where leave granted

   169.   Compromise, settlement, or withdrawal of derivative action

   170.   Actions by shareholders against directors

   171.   Actions by shareholders against company

   172.   Actions by shareholder to require company to act

   173.   Representative actions

   174.   Prejudiced shareholders

   175.   Alteration to constitution

   176.   Ratification of certain actions of directors

PART XII
Administration of Companies

   177.   Method of contracting

   178.   Attorneys

   179.   Pre-incorporation contracts may be ratified

   180.   Warranties implied in pre-incorporation contracts

   181.   Failure to ratify

   182.   Registered office

   183.   Description of registered office

   184.   Change of registered office

   185.   Requirement to change registered office

   186.   Company records

   187.   Form of records

   188.   Inspection of records by directors

PART XIII
Accounting Records, Audit and Disclosure by Companies

   189.   Accounting records to be kept

   190.   Place accounting records to be kept

   191.   Appointment of auditors

   192.   Auditors' fees and expenses

   193.   Appointment of partnership as auditor

   194.   Qualifications of auditors

   195.   Automatic reappointment

   196.   Appointment of first auditor

   197.   Replacement of auditor

   198.   Auditor not seeking reappointment

   199.   Auditor to avoid conflict of interest

   200.   Auditor's report

   201.   Access to information

   202.   Auditor's attendance at shareholders' meeting

   203.   Company to provide auditors report to trustee for debenture holders

   204.   Duties of auditor on becoming aware of irregularity

   205.   Obligation to prepare financial statements

   206.   Contents and form of financial statements

   207.   Obligation to prepare group financial statements

   208.   Contents and form of group financial statement

   209.   Registration of financial statement

   210.   Meaning of "balance sheet date"

   211.   Meaning of "financial statements and group financial statements"

   212.   Obligation to prepare annual report

   213.   Sending of annual report to shareholders

   214.   Sending of financial statements to shareholders who elect not to receive annual report

   215.   Contents of annual report

   216.   Failure to disclose

   217.   Annual return

   218.   Public inspection of company records

   219.   Inspection of company records by shareholders

   220.   Manner of inspection

   221.   Copies of documents

PART XIV
Amalgamations

   222.   Amalgamations

   223.   Amalgamation proposal

   224.   Approval of amalgamation proposal

   225.   Short form amalgamation

   226.   Registration of amalgamation proposal

   227.   Certificate of amalgamation

   228.   Effect of certificate of amalgamation

   229.   Registers

   230.   Powers of court in other cases

PART XV
Compromises with Creditors

   231.   Interpretation

   232.   Compromise proposal

   233.   Notice of proposed compromise

   234.   Approval and effect of compromise

   235.   Variation of compromise

   236.   Powers of court

   237.   Effect of compromise in liquidation of company

   238.   Costs of compromise

PART XVI
Approval of Arrangements, Amalgamations and Compromises by Court

   239.   Interpretation

   240.   Approval of arrangements, amalgamation and compromises

   241.   Court may make additional orders

   242.   Court may approve amalgamation or compromise

   243.   Application of section 237

PART XVII
Companies Limited by Guarantee

   244.   Provisions which apply to a company limited by guarantee

PART XVIII
Private Companies

   245.   Limitations and privileges of a private company

   246.   Private companies need not keep interests register

   247.   Unanimous agreement by shareholders

PART XIX
Close Companies

   248.   Formation of close company

   249.   Qualification for membership of and nature of business of a close company

   250.   Contributions by members

   251.   Postal address and registered office

   252.   Deregistration

   253.   Nature of member's interest

   254.   Representation of members

   255.   Acquisition of member's interest by new member

   256.   Disposal of interest of insolvent member

   257.   Disposal of interest of deceased member

   258.   Maintenance of aggregate of members' interest

   259.   Payment by close company for members' interest acquired

   260.   Financial assistance by close company in respect of acquisition of members' interest

   261.   Registration of changes

   262.   Management

   263.   Meetings

   264.   Fiduciary position of members

   265.   Payments by close company to members

   266.   Prohibition of loans and furnishing of security to members and others by close company

   267.   Liability of members for negligence

   268.   Rules applying to internal relations in the absence of contrary agreement

   269.   Disqualification of persons regarding management of close company

   270.   Accounting records

   271.   Financial year of close company

   272.   Annual financial statements

   273.   Appointment of accounting officers

   274.   Qualifications of accounting officers

   275.   Right of access and remuneration of accounting officers

   276.   Duties of accounting officers

PART XX
Alteration in Nature of Companies

   277.   Conversion of company limited by shares to company limited by guarantee

   278.   Conversion of private company into close company

   279.   Conversion of close company into a private company

   280.   Conversion of public and private companies

PART XXI
Investigations

   281.   Qualifications of Inspectors

   282.   Declared companies and their inspection

   283.   Investigation of other companies

   284.   Inspector's Reports

   285.   Investigation at company's request and investigation of related corporation

   286.   Investigation of financial or other control of corporation

   287.   Procedure and powers of inspector

   288.   Costs of investigations

   289.   Report of inspector admissible in evidence

   290.   Suspension of proceedings in relation to declared company

   291.   Power to require information as to person interested in shares or debentures

   292.   Power to impose restrictions on shares or debentures

   293.   Inspectors appointed in other countries

   294.   Saving for attorneys and bankers

PART XXII
Public Offering of Securities and Prospectus

   295.   Definitions

   296.   Restrictions as to offers to the public

   297.   Offers not being offers to the public

   298.   Offer or subscription to public without a prospectus prohibited

   299.   Approval by stock exchange a requirement for letters of allocation

   300.   Offer for sale to the public without prospectus prohibited

   301.   Rights offers

   302.   Application form for shares to be attached to prospectus

   303.   Matters to be stated in prospectus

   304.   Consent of person named as director or expert

   305.   Contracts and translations thereof to be attached to prospectus

   306.   Where the issue is underwritten

   307.   Signing, date and date of issue, of prospectus

   308.   Registration of prospectus

   309.   Time limit for issue of prospectus

   310.   Advertising as to prospectus

   311.   Waiver of requirements of the Part void

   312.   Variation of contract mentioned in prospectus

   313.   Liability for untrue statement in prospectus

   314.   Liability of experts and others

   315.   Offences in respect of untrue statements in prospectus

   316.   No diminution of liability under any other law or the common law

   317.   Time limit as to allotment or acceptance

   318.   No allotment unless minimum subscription received

   319.   No allotment or acceptance if application form not attached to prospectus

   320.   Voidable allotment where sections 317, 318, or 319 contravened

   321.   Minimum interval before allotment or acceptance

   322.   Conditional allotment if prospectus states shares to be listed by stock exchange

   323.   Compulsory acquisition of minority in affected transaction

   324.   Prohibition of insider trading

   325.   Fraudulent inducement to invest

   326.   False statements and transactions

   327.   Misleading documents

   328.   Stock market manipulation

   329.   Disclosure of beneficial interest in securities

PART XXIII
Removal from the Register

   330.   Removal from the register

   331.   Grounds for removal from register

   332.   Notice of intention to remove where company has ceased to carry on business

   333.   Notice of intention to remove in other cases

   334.   Objection to removal from register

   335.   Duties of Registrar if objection received

   336.   Powers of court

   337.   Property of company removed from the register

   338.   Disclaimer of property by the State

   339.   Liability of directors, shareholders and others to continue

   340.   Liquidation of company removed from register of companies

   341.   Registrar may restore company to register of companies

   342.   Court may restore company to register of companies

   343.   Restoration to register

PART XXIV
External Companies

   344.   Application of this Part and meaning of "carrying on business"

   345.   Registration of external companies

   346.   Registered office and authorised agents

   347.   Return of alteration

   348.   Registrar's certificate and validity of transactions

   349.   Financial Statements

   350.   Publication of name by company

   351.   Service of notices

   352.   Cessation of business in Botswana

   353.   Exemption in respect of transfer duty

   354.   Power of external company to hold land in Botswana

PART XXV
Transfer of Registration and Registration of Statutory Corporations as Companies

   355.   Registration and continuation of foreign company and statutory corporation

   356.   Foreign company shall be authorised to register

   357.   Foreign companies that cannot be registered

   358.   Registration

   359.   Effect of registration

   360.   Companies may transfer incorporation

   361.   Company to give public notice

   362.   Companies that cannot transfer incorporation

   363.   Removal from register

PART XXVI
Winding Up and Judicial Management

   364.   Modes of winding up

   365.   Jurisdiction of Master

   366.   Liability as contributories of present and past members

   367.   Nature of liability of contributory

   368.   When a company deemed unable to pay its debts

   369.   Circumstances in which company may be wound up by court

   370.   Petition for winding up a company

   371.   Powers of court on hearing petitions

   372.   Court may stay or restrain proceedings against company

   373.   Commencement of winding up by court

   374.   Court may adopt proceedings of voluntary winding up

   375.   Effect of winding up order

   376.   Action stayed and avoidance of certain attachments, executions, dispositions etc.

   377.   Transmission of winding up order to certain officers

   378.   Statement of company's affairs to Master

   379.   Report by Master

   380.   Application of sections

   381.   Custody of property and appointment of liquidator

   382.   Meetings of creditors and contributories

   383.   Proof of claims

   384.   Powers of liquidator

   385.   Exercise of liquidator's powers

   386.   Control by Master over liquidator

   387.   Bank account

   388.   Release of liquidator

   389.   Remuneration of liquidator

   390.   Court may stay or set aside winding up

   391.   Settlement of lists of contributories

   392.   Requiring delivery of property

   393.   Ordering payment of debt by contributory

   394.   Making call and ordering payment

   395.   Ordering payment into bank

   396.   Order on contributory conclusive evidence

   397.   Court to adjust rights of contributories

   398.   Inspection of books by creditors and contributories

   399.   Dissolution of company

   400.   Summoning persons suspected of having property of company

   401.   Ordering public examination of promoters, directors, etc.

   402.   Arrest of absconding contributory

   403.   Powers to be cumulative

   404.   Appeal from any order

   405.   Circumstances in which company may be wound up voluntarily

   406.   Notice of resolution for voluntary winding up

   407.   Commencement of voluntary winding up

   408.   Effect of voluntary winding up on business and status of company

   409.   Provision and effect of security

   410.   Application of sections

   411.   Appointment, powers and remuneration of liquidator

   412.   Power to fill vacancy in office of liquidator

   413.   Liquidator may accept shares, etc as consideration for sale of property of company

   414.   Application of sections 415 to 417

   415.   Meeting of creditors and appointment of liquidator

   416.   Powers of liquidator

   417.   Application of section 413

   418.   Application of sections 419 to 428

   419.   Consequences of voluntary winding up

   420.   Avoidance of transfer after commencement of winding up

   421.   Notice by liquidator of his appointment

   422.   Proof of claims

   423.   Arrangement when binding on company and creditors

   424.   Meetings of creditors and contributories

   425.   Power to apply to court

   426.   Duty of liquidator to call meetings of company and creditors

   427.   Notice to Registrar of confirmation of final account

   428.   Saving of rights of creditors and contributories

   429.   Application of sections 430 to 441

   430.   Summoning directors and others to attend meeting of creditors

   431.   Examination of directors and others at meeting of creditors

   432.   Application of certain provisions of the law on insolvency

   433.   Refusal to supply essential services prohibited

   434.   Voidable and undue preferences

   435.   Procedure for setting aside voidable transactions and charges

   436.   Other orders

   437.   Additional provisions relating to setting aside transactions and charges

   438.   Transactions at undervalue

   439.   Transactions for inadequate or excessive consideration with directors and certain other persons

   440.   Court may set aside certain securities and charges

   441.   Liability if proper accounting records not kept

   442.   Application of sections 443 to 469

   443.   Persons disqualified for appointment as liquidator

   444.   Power of court to declare person disqualified from being liquidator or to remove a liquidator

   445.   Liquidator to give security, and to choose a domicilium within Botswana

   446.   Co-liquidator

   447.   Title and acts of liquidators

   448.   General meetings to hear liquidator's report

   449.   Books to be kept by liquidator and inspection thereof

   450.   Liquidator to lodge with Master accounts in winding up

   451.   Application to court to compel liquidator to lodge accounts

   452.   Inspection of accounts

   453.   Objections to account by interested parties

   454.   Confirmation of account

   455.   Distribution of estate

   456.   Liquidator to lodge receipts for dividends or pay dividends to Guardian's Fund

   457.   Leave of absence or resignation of liquidator

   458.   Voting at meetings of creditors and contributories

   459.   Books of company to be evidence

   460.   Application of assets and costs of winding up

   461.   Payment of money deposited with Master and disposal of books and papers

   462.   Insolvency (Assetless Companies) Fund

   463.   Meetings to ascertain wishes of creditors and contributories

   464.   Power of court to declare dissolution of company void

   465.   Review by court

   466.   Special commissioners for taking evidence

   467.   Orders to be sent to Master and Registrar

   468.   Pooling of assets of related companies

   469.   Guidelines for orders

   470.   Application of certain provisions in winding up to judicial management

   471.   Placing company under judicial management

   472.   Judicial management order

   473.   Position of company's auditor in judicial management

   474.   Duties of judicial manager

   475.   Voidable and undue preferences in case of judicial management

   476.   Application of assets during judicial management

   477.   Cancellation of judicial management order

   478.   Power of court to assess damages against delinquent promoters, directors etc.

   479.   Penalty for failure by directors and others to attend meetings

   480.   Offences consequent upon a winding-up or judicial management

   481.   Responsibility of directors and other persons for fraudulent conduct of business

   482.   Prosecution of delinquent directors and others

PART XXVII
Winding Up of Unregistered Associations

   483.   Unregistered association defined

   484.   Winding up of unregistered association

   485.   Contributories

   486.   Power of court to stay or restrain proceedings

   487.   Directions as to property in certain cases

   488.   Provisions of this Part cumulative

PART XXVIII
Dormant Companies

   489.   Meaning of dormant company

   490.   A company may be recorded in the Register as a dormant company

   491.   Exemptions available to dormant companies

PART XXIX
Offences and Penalties

   492.   Penalty for failure to comply with Act

   493.   Penalties in cases of failure by board or company to comply with Act

   494.   Additional powers of enforcement

   495.   Defences

   496.   False statement

   497.   Fraudulent use or destruction of property

   498.   Falsification of records

   499.   Carrying on business fraudulently

   500.   Persons prohibited from managing companies

   501.   Court may disqualify directors

   502.   Liability for contravening sections 500 and 501

   503.   Improper use of "Limited"

   504.   Failure to keep accounts

   505.   Other offences

   506.   Reports of offences and production and inspection of books

   507.   Inducement to be appointed liquidator

PART XXX
Miscellaneous

   508.   Service of documents on companies in legal proceedings

   509.   Service of other documents on companies

   510.   Service of documents on external companies in legal proceedings

   511.   Service of other documents on external companies

   512.   Service of documents on shareholders and creditors

   513.   Additional provisions relating to service

   514.   Directors' certificates

   515.   Prohibition of large partnerships

   516.   Exemption for liability of acts or omissions of Government officers

   517.   Power to grant relief

   518.   Irregularities in proceedings

   519.   Translations of instruments

   520.   Costs in actions by limited companies

   521.   Arbitration

   522.   Fees

   523.   Rules of procedure

   524.   Amendment of Schedules

   525.   Fees paid to company

   525A.   Deregistration of a company

   526.   Repeal of Cap. 42:01

   527.   Transitional provisions

   528.   Regulations

      First Schedule - Constitution of a Private Company Limited by Shares

      Second Schedule - Proceedings at Meetings of Shareholders

      Third Schedule - Sections of this Act that Confer Powers on Directors that cannot be Delegetated

      Fourth Schedule - Proceedings of the Board of a Company

      Fifth Schedule - Provisions relating to trustee for Debenture Holders and Trust Deed

      Sixth Schedule

      Seventh Schedule - Calls on Shares and Forfeiture of Shares

      Eighth Schedule - Provisions of Act not applying to a Private Company acting under Unanimous Agreement

      Ninth Schedule - Provisions of the Act which do not apply to Close Companies

      Tenth Schedule - Matters to be stated in Prospectus in addition to those required in the Act

Proc. 71, 1959,
G.N. 43, 1959,
Law 8, 1961,
Law 30, 1962,
HMC Order 1, 1963,
G.N. 51, 1964,
Act 8, 1966,
L.N. 84, 1966,
Act 7, 1968,
Act 28, 1968,
S.I. 53, 1969,
Act 63, 1970,
Act 29, 1971,
Act 9, 1972,
Act 5, 1974,
Act 18, 1974,
S.I. 13, 1974,
S.I. 19, 1975,
Act 12, 1976,
S.I. 36, 1976,
Act 22, 1978,
Act 36, 1980,
Act 34, 1982,
S.I. 142, 1984,
Act 7, 1995,
S.I. 57, 1996,
Act 14, 2005,
S.I. 85, 2006,
Act 32, 2003,
S.I. 25, 2007,
Act 11, 2008,
Act 26, 2008,
Act 6, 2011,
Act 22, 2014,
S.I. 122, 2014.

An Act to update and consolidate the law relating to Companies.

[Date of commencement: 3rd July, 2007]

PART I
Preliminary (ss 1-18)

1.   Short title

   This Act may be cited as the Companies Act.

2.   Interpretation

   (1) In this Act, unless the context otherwise requires -

   "accounting records" means the accounting records referred to in section 189;

   "accounting period" means, in relation to a company or another body corporate, the period in respect of which the financial statements of the company or other body corporate are made up, whether that period is a year or not;

   "annual meeting" means the meeting of a company required to be held by section 105;

   "annual report" means the report required to be made by section 212;

   "annual return" means the return required to be made by section 217 and includes any document attached to or intended to be read with the return;

   "arrangement" includes a re-organization of the share capital of a company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both these methods;

   "articles" -

   (a)   means the articles of association of an existing company; and

   (b)   includes, so far as they apply to the company, the provisions contained in Table A or Table C of the First Schedule to the repealed Act;

   "balance sheet date" has the meaning assigned to it in section 210;

   "Board" and "board of directors" have the meanings assigned to them in section 126;

   "banking company" means a bank licensed under the Banking Act;

   "benefits" in relation to a director -

   (a)   includes a fee, percentage or other payment, and the money value of any consideration, allowance or perquisite, given directly or indirectly, to him in relation to the management or direction of the affairs of the company or of a related company, whether as a director or otherwise; but

   (b)   does not include an amount given in payment or reimbursement of out-of-pocket expenses incurred for the benefit of the company;

   "book" includes any account, deed, writing or document, and any other record of information however compiled, recorded or stored;

   "borrowing company" means a company that is or will be under a liability to repay any money received or to be received by it in response to an invitation to the public to subscribe for or purchase debentures;

   "branch register" means -

   (a)   in relation to a company, a branch register of members referred to in section 84; and

   (b)   in relation to an external company, a branch register of shareholders required to be kept under Part XXIV;

   "carrying on business" for the purposes of Part XXIV has the meaning given in section 344;

   "certified" means -

   (a)   in relation to a copy or extract of a document, certified in the prescribed manner to be a true copy or extract of the document; and

   (b)   in relation to a translation of a document, certified in the prescribed manner to be a correct translation of the document into the English language;

   "charge" means -

   (a)   a mortgage or a mortgage bond;

   (b)   a deed of hypothecation;

   (c)   a notarial bond;

   (d)   a deposit of a share or debenture certificate made by way of charge;

   (e)   a pledge of shares or debentures;

   (f)   a pledge or cession over motor vehicles or plant and equipment;

   (g)   a cession of book debts;

   (h)   a charge on a ship or aircraft; and

   (i)   an agreement to give a charge;

   "class" in relation to a class of shares for the purposes of section 104 means a class of shares having attached to them the same rights, privileges, limitations and conditions;

   "close company" means a company which is registered as a close company in accordance with Part XIX;

   "company" means a company formed and registered under Part II or registered under Part XXIV or an existing company;

   "company limited by guarantee" means a company formed on the principle of having the liability of its members limited by the constitution to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up;

   "company limited by shares" means a company formed on the principle of having the liability of its shareholders limited, by the constitution, to any amount unpaid on the shares respectively held by the shareholders;

   "constitution" means a document referred to in section 40;

   "contributory" means a person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are deemed to be contributories, includes any person alleged to be a contributory under section 366;

   "corporation"-

   (a)   means a body corporate, including an external company or a foreign company or a partnership formed or existing in Botswana or elsewhere, but

   (b)   does not include-

      (i)   a statutory corporation,

      (ii)   a corporation sole,

      (iii)   a registered co-operative society,

      (iv)   a trade union, or

      (v)   a registered association;

   "court" means the High Court of Botswana and in relation to any offence against this Act, includes a Magistrate's Court having jurisdiction in respect of that offence;

   "creditors' voluntary winding up" has the meaning assigned to it by section 409(3);

   "date of incorporation" means the date of registration of a company;

   "debenture" means -

   (a)   a written acknowledgment of indebtedness issued by a company in respect of a loan made or to be made to it or to any other person or money deposited or to be deposited with the company or any other person or the existing indebtedness of the company or any other person whether constituting a charge on any of the assets of the company or not;

   (b)   includes -

      (i)   debenture stock,

      (ii)   convertible debenture,

      (iii)   a bond or an obligation,

      (iv)   loan stock,

      (v)   an unsecured note, or

      (vi)   any other instrument executed, authenticated, issued or created in consideration of such a loan or existing indebtedness; and

   (c)   does not include -

      (i)   a bill of exchange,

      (ii)   a promissory note,

      (iii)   a letter of credit,

      (iv)   an acknowledgment of indebtedness issued in the ordinary course of business for goods or services supplied,

      (v)   a policy of insurance, or

      (vi)   a deposit certificate, pass book or other similar document issued in connection with a deposit or current account at a banking company;

   "debenture trust deed" -

   (a)   means a deed executed by a company and a trustee for debenture holders in relation to the issue of debentures; and

   (b)   includes a supplemental document, resolution or scheme of arrangement modifying the terms of the deed and a deed substituted therefor;

   "debenture stock" means -

   (a)   a debenture by which a company or a trustee for debenture holders' acknowledges that the holder of the stock is entitled to participate in the debt owing by the company under a debenture trust deed; and

   (b)   includes loan stock;

   "declared company" has the meaning assigned to it in section 282;

   "director" has the meaning set out in section 126;

   "distribution" in relation to a distribution by a company to a shareholder, means-

   (a)   the direct or indirect transfer of money or property, other than the company's own shares, to or for the benefit of the shareholder; or

   (b)   the incurring of a debt to or for the benefit of the shareholder, in relation to shares held by that shareholder, and whether by means of a purchase of property, the redemption or other acquisition of shares, a distribution of indebtedness, or by some other means, but shall not include a distribution of assets to shareholders upon a winding up;

   "dividend" has the meaning set out in section 60;

   "document" means a document in any form, and includes-

   (a)   any writing on any material;

   (b)   information recorded or stored by means of a tape-recorder, computer, or other device, and material subsequently derived from information so recorded or stored;

   (c)   a book, graph, or drawing;

   (d)   a photograph, film, negative, tape, or other device in which one or more visual images are embodied so as to be capable (with or without the aid of equipment) of being reproduced;

   "dormant company" means a company recorded by the Registrar as being a dormant company under Part XXVIII;

   "entitled person", in relation to a company, means-

   (a)   a shareholder; and

   (b)   a person upon whom the constitution confers any of the rights and powers of a shareholder;

   "employee" means a person who has entered into a contract of employment for the hire of his labour;

   "executive director" means a director who is involved in the day to day management of the company;

   "executor" means a person who is appointed by the Master of the High Court to administer the estate of a deceased person;

   "exempt private company" has the meaning assigned to it in subsection (3) of this section;

   "existing company" means a body corporate registered or deemed to be registered under Part II of this Act or under the repealed Act;

   "expert" means a person holding himself out to be such whose professional or technical training gives authority to a statement made by him;

   "external company" means a body corporate, other than a corporation sole, which is registered or incorporated outside Botswana and that is required to be registered under Part XXIV;

   "external country" means any state, dominion, country, colony or territory other than Botswana;

   "external register" means the register of bodies corporate that are incorporated outside Botswana kept pursuant to Part XXIV;

   "financial statements" has the meaning assigned to it in section 211(1);

   "financial year" means, in relation to any body corporate, the period in respect of which any profit and loss account of the body corporate laid before it in general meeting is made up, whether that period is a year or not;

   "firm" means the association formed by persons who enter into a partnership not registered under this Act or the repealed Act;

   "foreign company" means a body of persons formed outside Botswana which-

   (a)   is a body corporate in its place of incorporation; or

   (b)   under the law of its place of formation may sue and be sued, or hold property in the name of an officer of the body duly appointed for that purpose;

   "functional currency" with reference to a company means the currency of the country in which the company operates;

   "group financial statements" has the meaning set out in section 211(3);

   "group of companies" or "group" has the meaning set out in section 207;

   "holding company" has the meaning assigned to it section 6(2);

   "inspector" means a qualified person in terms of section 281 who is appointed to carry out an investigation under Part XXI;

   "insurance company" means a company registered as an insurer under the Insurance Industry Act;

   "interested", in relation to a director, has the meaning set out in section 134;

   "interests register" means the register kept under sections 135 and 186 (1)(c);

   "International Financial Reporting Standards"-

   (a)   means the International Financial Reporting Standards issued by the International Accounting Standards Board; and

   (b)   includes-

      (i)   the interpretations of the International Reporting Standards issued by the International Financial Reporting Interpretation Committee;

      (ii)   International Accounting Standards still in force according to the International Accounting Standards Board; and

      (iii)   any other entity to which the responsibility for setting accounting standards has been assigned by the International Accounting Standards Board;

   "International Standards on Auditing" means the International Standards on Auditing issued by the International Federation of Accountants;

   "investment company with variable capital" means an investment company with variable capital which is licensed under the Collective Investment Undertakings Act;

   "Judicial Manager" means a person appointed in terms of section 472;

   "legal practitioner" means a person who is enrolled as a legal practitioner under the Legal Practitioners Act;

   "limited company" means a company limited by shares or by guarantee;

   "liquidator" means the person appointed under Part XXVI as liquidator of a company and includes any co-liquidators or provisional liquidators so appointed and also includes the Master acting as the liquidator;

   "listed company" means a company the shares or a class of shares of which have been admitted to quotation on the official list of a stock exchange;

   "major transaction" has the meaning assigned to it in section 128(2);

   "manager" means the principal executive of a company, whether or not that person is a director;

   "Master" means the Master of the High Court of Botswana or any person acting in that capacity;

   "member" means, in the case of a company limited by shares, a shareholder within the meaning of section 90 and in the case of a close company means a person who is designated as a member in the application for registration as a close company or who becomes a member on being admitted as a member, and in the case of a company limited by guarantee, means a person whose name is entered in or who is entitled to have his name entered in the register of members;

   "members voluntary winding up" has the meaning assigned to it by section 409(2);

   "memorandum" means the memorandum of association of an existing company;

   "nominee" means a person who, in exercising a right in relation to a share, debenture or other property, is entitled to exercise that right only in accordance with instructions given by some other person either directly or through the agency of one or more persons, and a person is the nominee of another person where he is entitled to exercise such a right only in accordance with instructions given by that other person;

   "non-executive director" means a director who has no involvement in the day to day management of the company;

   "offer" includes an invitation to make an offer;

   "officer", in relation to a company means a director, a secretary or manager;

   "one person company" means a private company in which the only shareholder is also the sole director of the company, and for the avoidance of doubt, a company of which the only shareholder is a corporation controlled by the person who is the sole director of the company is not a one person company;

   "ordinary resolution" has the meaning assigned to it in section 95(2);

   "parent company" means a company that has one or more subsidiaries;

   "partnership" means any partnership not registered as a company under this Act or the repealed Act;

   "person concerned" in relation to a company, includes -

   (a)   a person who is or has been employed by a corporation as a director, banker, auditor, attorney-at-law, notary or otherwise;

   (b)   a person who, or in relation to whom there are reasonable grounds for suspecting that he-

      (i)   has in his possession any property of the corporation,

      (ii)   is indebted to the corporation, or

      (iii)   is able to give information concerning the promotion, formation, management, dealing, affairs or property of the corporation;

   "pre-emptive rights" means the rights conferred on shareholders under section 52;

   "private company" is a company which is incorporated as a private company or is registered as a private company having the characteristics referred to in Part XVIII;

   "records" means the documents required to be kept by a company under section 186(1);

   "redeemable" has the meaning assigned to it in section 72;

   "register" or "register of companies" means the register required to be kept under section 11(1)(a);

   "register of external companies" means the register required to be kept under section 11(1)(b);

   "registered" means registered under this Act or the repealed Act;

   "registered co-operative society" has the meaning assigned to it in the Co-operative Societies Act;

   "registered office" has the meaning assigned to it in section 182;

   "Registrar" means the Registrar of Companies appointed in accordance with section 10;

   "related company" has the meaning assigned to it in section 6(7);

   "related corporation" has the meaning assigned to it in section 6(7);

   "relative", in relation to any person, means-

   (a)   any parent, spouse, child, brother or sister of that person;

   (b)   any parent, child, brother or sister of a spouse of that person; or

   (c)   a nominee or trustee for any of those persons;

   "relevant interest" has the meaning assigned to it in section 141;

   "repealed Act" means the Companies Act repealed under section 526;

   "resolution in lieu of meeting" means a resolution signed by all members or shareholders in accordance with section 107;

   "secure electronic" signature means an electronic signature that results from the use of an electronic documents system;

   "secured creditor", in relation to a company, means a person entitled to a charge on or over property owned by that company;

   "securities" has the meaning assigned to it in the Botswana Stock Exchange Act;

   "share" means a share in the share capital of a company;

   "shareholder" has the meaning assigned to it in section 90;

   "share register" means the share register required to be kept under section 83;

   "signed" means subscribed by a person under his hand with his signature, and includes that person's secure electronic signature;

   "solvency test" has the meaning assigned to it in section 4;

   "special meeting" means a meeting called in accordance with section 106;

   "special resolution" means a resolution approved by a majority of 75 per cent or, if a higher majority is required by the constitution, that higher majority, of the votes of those shareholders entitled to vote and voting on a question;

   "spouse", in relation to a person, means a person to whom that person is married;

   "stated capital" has the meaning assigned to it in section 5;

   "statutory corporation" means a body corporate established under an Act of Parliament;

   "subsidiary" has the meaning assigned to it in section 6;

   "Stock Exchange" means a stock exchange established under the Botswana Stock Exchange Act or any other stock exchange outside Botswana which is regulated by the laws of the jurisdiction in which it is situated and is recognized by the Minister for the purposes of this Act;

   "stock market" means such primary and secondary or other stock market as may be established under the Botswana Stock Exchange Act or may be established by any other Stock Exchange recognized by the Minister for the purposes of this Act;

   "surplus assets" means the assets of a company remaining after the payment of creditors' claims and available for distribution in accordance with section 455 prior to its removal from the register of companies;

   "trade union" has the same meaning as in the Trade Unions and Employers Organizations Act;

   "trustee for debenture holders" means a person designated as such in a debenture trust deed;

   "unable to pay its debts", in relation to a company, has the meaning assigned to it in section 368 and, in relation to an unregistered association, has the meaning assigned to it by section 484(4)(b);

   "unanimous resolution" means a resolution which has the assent of every shareholder entitled to vote on the matter which is the subject of the resolution and either-

   (a)   given by voting at a meeting to which notice to propose the resolution has been duly given and of which the minutes of the meeting duly record that the resolution was carried unanimously; or

   (b)   where the resolution is signed by every shareholder or his agent duly appointed in writing signed by him, and such resolution may consist of one or more documents in similar form (including letters, telegrams, cables, facsimiles, telex messages, electronic mail or similar forms of communication) in each case signed by the shareholder concerned or his agent on his behalf duly authorised in writing signed by him;

   "unregistered association" has the meaning assigned to it in section 483;

   "virtually wholly owned subsidiary" has the meaning given by section 6(6);

   "wholly owned subsidiary" has the meaning assigned to it in section 6(5);

   "winding-up resolution" means a resolution passed for the winding up of a company;

   "winding up order" means any order whereby a company is placed under liquidation or provisional liquidation when such order for provisional liquidation has not been set aside;

   "working day" means a day of the week other than Saturday, Sunday or a public holiday;

   "writing" includes-

   (a)   the recording of words in a permanent or legible form; and

   (b)   the display of words by any form of electronic or other means of communication in a manner that enables the words to be readily stored in a permanent form and with or without the aid of any equipment to be retrieved and read;

   "year" means a calendar year.

   (2) A reference in this Act to an address means-

   (a)   in relation to an individual, the full address of the place where that person usually lives;

   (b)   in relation to a company its registered office;

   (c)   in relation to any other body corporate, its registered office or, if it does not have a registered office, its principal place of business.

   (3) A company shall be an "exempt private company" where it is a private company which, in respect of its last preceding financial year, satisfied all of the following criteria-

   (a)   the total assets of the company are less than such amounts as may be prescribed in Regulations made under this Act;

   (b)   the annual turnover of the company is less than such amounts as may be prescribed in Regulations made under this Act; and

   (c)   none of the shareholders in such company is a company.

   (4) A private company which is not an exempt private company is a non-exempt private company.

   (5) In determining the "total assets" of the company for the purposes of subsection (3), regard shall be had to the total assets of the company as shown in the most recent financial statements of the company prepared on the basis of generally accepted accounting principles.

   (6) In the application of subsections (3), (4) and (5) to any period which is a financial year of a company but not in fact a year, the maximum figure for turnover in subsection (3)(ii) shall be proportionately adjusted.

   (7) A private company which is incorporated after the commencement of this Act shall qualify as an exempt private company in respect of its first financial year if it satisfies all the relevant qualifying criteria in respect of that year.

3.   Public notice

   Where, pursuant to this Act, public notice is required to be given of any matter affecting a company, that notice shall be given by publishing notice of the matter-

   (a)   in at least one issue of the Government Gazette; and

   (b)   in at least one issue of a newspaper with wide circulation in Botswana.

4.   Meaning of "solvency test"

   (1) For the purposes of this Act, a company satisfies the solvency test if-

   (a)   the company is able to pay its debts as they become due in the normal course of business; and

   (b)   the value of the company's assets is greater than the sum of-

      (i)   the value of its liabilities, and

      (ii)   the company's stated capital.

   (2) In determining for the purposes of this Act (other than sections 224 and 225 which relate to amalgamations) whether the value of a company's assets is greater than the value of its liabilities, the Board may take into account-

   (a)   in the case of a public company or a non-exempt private company, the most recent financial statements of the company prepared in accordance with International Accounting Standards;

   (b)   in the case of an exempt private company, the most recent financial statements prepared on the basis of generally accepted accounting principles that are applicable to private or close companies; and

   (c)   a valuation of assets or estimates of liabilities that are reasonable in the circumstances.

   (3) Without limiting sections 224 and 225, in determining, for the purposes of those sections whether the value of the amalgamated company's assets will be greater than the sum of the value of its liabilities and its stated capital, the directors of each amalgamating company-

   (a)   shall have regard to-

      (i)   financial statements that are prepared in accordance with International Accounting Standards or generally accepted accounting principles that are prepared as if the amalgamation had become effective, and

      (ii)   all other circumstances that the directors know or ought to know would affect, or may affect, the value of the amalgamated company's assets and the value of its liabilities;

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

5.   Stated capital

   (1) Subject to section 59, stated capital in relation to a company means the total of all amounts received by the company or due and payable to the company-

   (a)   in respect of the issue of the shares; and

   (b)   in respect of calls on the shares.

   (2) Where a share is issued for consideration other than cash, the Board shall, in accordance with section 53, determine the cash value of that consideration for the purposes of subsection (1).

   (3) Where a share has attached to it an obligation other than an obligation to pay calls, and that obligation is performed by the shareholder-

   (a)   the Board shall determine the cash value, if any, of that performance; and

   (b)   the cash value of that performance shall be deemed to be a call which has been paid on the share for the purposes of subsection (1).

   (4) A company shall not reduce its stated capital except in the manner provided by this Act.

6.   Meaning of "holding company" and "subsidiary"

   (1) In this section and in sections 7 and 8, the expression "company" includes a corporation.

   (2) For the purposes of this Act, a company is a subsidiary of another company if -

   (a)   that other company -

      (i)   controls the composition of the Board of the company,

      (ii)   is in a position to exercise, or control the exercise of, more than one-half the maximum number of votes that can be exercised at a meeting of the company,

      (iii)   holds more than one-half of the issued shares of the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital, or

      (iv)   is entitled to receive more than one-half of every dividend paid on shares issued by the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital; or

   (b)   the company is a subsidiary of a company that is a subsidiary of another company.

   (3) For the purposes of this Act, a company is another company's holding company if that other company is its subsidiary.

   (4) For the purposes of this Act -

   (a)   a company is the "ultimate holding company" of another company if -

      (i)   the other company is a subsidiary of the first mentioned company, and

      (ii)   the first mentioned company is not itself a subsidiary of any company;

   (b)   "the ultimate holding company in Botswana", in relation to a company incorporated in Botswana, means a holding company which is not a subsidiary of a company incorporated in Botswana.

   (5) A company shall be deemed to be the wholly owned subsidiary of another corporation if the members of the company do not include any person apart from-

   (a)   that other corporation;

   (b)   a nominee of that other corporation;

   (c)   a subsidiary of that other corporation being a subsidiary the members of which do not include any person apart from that other corporation or a nominee of that other corporation; or

   (d)   a nominee of such a subsidiary.

   (6) A company shall be deemed to be the virtually wholly owned subsidiary of another corporation (known as "the parent") if the parent owns 90 per cent or more of the voting power in that company.

   (7) Where a body corporate is -

   (a)   a holding company of another body corporate;

   (b)   a subsidiary of another body corporate; or

   (c)   a subsidiary of a holding company of another body corporate, the first mentioned body and the other body are related to each other and are "related corporations", and "related company" has a corresponding meaning where the body in question is a company.

   (8) For the purposes of subsection (7), a company within the meaning of section 2 of the repealed Act is related to another company if, were it a company within the meaning of subsection (1), it would be related to that other company.

7.   Definition of "control"

   For the purposes of section 6, without limiting the circumstances in which the composition of a company's Board is to be taken to be controlled by another company, the composition of the Board is to be taken to be so controlled if the other company, by exercising a power exercisable (whether with or without the consent or concurrence of any other person) by it, can appoint or remove all the directors of the company, or such number of directors as together hold a majority of the voting rights at meetings of the Board of the company, and for this purpose, the other company is to be taken as having power to make such an appointment if-

   (a)   a person cannot be appointed as a director of the company without the exercise by the other company of such a power in the person's favour; or

   (b)   a person's appointment as a director of the company follows necessarily from the person being a director or other officer of the other company.

8.   Certain matters to be disregarded

   In determining whether a company is a subsidiary of another company-

   (a)   shares held or a power exercisable by that other company only as a trustee are not to be treated as held or exercisable by it;

   (b)   subject to paragraphs (c) and (d) of this section, shares held or a power exercisable-

      (i)   by a person as a nominee for that other company, except where that other company is concerned only as a trustee, or

      (ii)   by, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is concerned only as a trustee-are to be treated as held or exercisable by that other company;

   (c)   shares held or a power exercisable by a person under the provisions of debentures of the company or of a debenture trust deed shall be disregarded; and

   (d)   shares held or a power exercisable by, or by a nominee for, that other company or its subsidiary (not being held or exercisable in the manner described in paragraph (c) of this section) are not to be treated as held or exercisable by that other company if-

      (i)   the ordinary business of that other company or its subsidiary, as the case may be, includes the lending of money, and

      (ii)   the shares are held or the power is exercisable by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

9.   Act binds the State

   This Act binds the State.

10.   The Registrar

   (1) There shall be a Registrar of Companies who shall be a public officer, and who shall, subject to the control of the Minister, be responsible for the administration of this Act and who shall perform such functions and exercise such powers as may be conferred on him by this Act or any other enactment.

   (2) The Registrar shall be appointed in accordance with the provisions of the Public Service Act.

   (3) There shall also be a Deputy Registrar of Companies who shall be a public officer and who shall likewise be appointed in accordance with the provisions of the Public Service Act, and who shall have the power to do any act or thing which may be lawfully done under this Act or any other enactment by the Registrar.

   (4) The seal of the office of the Registrar shall be such device as may be determined by the Minister and shall be kept by the Registrar to be affixed on all documents, including duplicates, pertaining to the registration of a company under this Act.

   (5) Without derogating from the generality of the provisions of subsection (1), the Registrar shall-

   (a)   take charge of, and be responsible for the safe custody of, all documents lodged with the Registrar under this Act;

   (b)   examine and register all returns and other documents lodged with the Registrar; and

   (c)   exercise any other powers conferred on the Registrar by this or any other Act or which the Minister may by Regulations prescribe.

11.   Registers

   (1) The Registrar shall ensure the maintenance of a register of -

   (a)   companies registered or deemed to be registered under this Act;

   (b)   external companies registered or deemed to be registered under Part XXIV; and

   (c)   dormant companies, returns for which have not be made for a period of five years.

   (2) The register of companies and the register of external companies may be kept in such manner as the Registrar considers appropriate including, either wholly or partly, by means of a device or facility-

   (a)   that records or stores information electronically or by other means; and

   (b)   that permits the information so recorded or stored to be readily inspected or reproduced in usable form.

   (3) The Minister may make regulations for the purposes of this section-

   (a)   authorising the destruction of any documents which have been recorded or stored electronically or by other means;

   (b)   providing that any document stored and reproduced electronically or by other means by the Registrar shall for all purposes be treated as if it were the original document, notwithstanding any law to the contrary;

   (c)   otherwise giving full effect to, and ensuring the efficient operation of, any device or facility of the kind referred to in subsection (2).

12.   Registration of documents

   (1) On receipt of a document for registration under this Act, the Registrar shall-

   (a)   subject to subsection (2), register the document in the register of companies or the register of external companies, as the case may be; and

   (b)   give written advice of the registration to the person from whom the document was received.

   (2) If a document received by the Registrar for registration under this Act-

   (a)   is not in the prescribed form, if any;

   (b)   does not comply with this Act or regulations made under this Act;

   (c)   is not printed or typewritten;

   (d)   where the register of companies or the register of external companies is kept wholly or partly by means of a device or facility referred to in section 11(2), the document is not received by the Registrar in a form that enables particulars to be entered directly by electronic or other means in the device or facility;

   (e)   has not been properly completed;

   (f)   contains matter contrary to law;

   (g)   contains any error, alteration or erasure; or

   (h)   contains material that is not clearly legible, the Registrar may refuse to register the document.

   (3) Where the Registrar refuses to register the document under subsection (2) he shall request either-

   (a)   that the document be appropriately amended or completed and submitted for registration again; or

   (b)   that a fresh document be submitted in its place.

   (4) For the purposes of this Act, a document is registered when-

   (a)   the document itself is constituted part of the register of companies or the register of external companies; or

   (b)   particulars of the document are entered in any device or facility referred to in section 11(2).

   (5) Neither registration nor refusal of registration of a document, by the Registrar, affects or creates a presumption as to, the validity or invalidity of the document or the correctness or otherwise of the information contained in it.

13.   Inspection and evidence of registers

   (1) A person may, on payment of the prescribed fee, inspect-

   (a)   any document that constitutes part of the register of companies or the register of external companies;

   (b)   particulars of any registered document that have been entered on any device or facility referred to in section 11(2); or

   (c)   any registered document particulars of which have been entered in any such device or facility,

during the hours when the office of the Registrar is open to the public for the transaction of business on a working day.

   (2) A person may, on payment of the prescribed fee require the Registrar to give or certify-

   (a)   a certificate of incorporation of a company;

   (b)   a copy of, or extract from, a document that constitutes part of the register of companies or the register of external companies;

   (c)   particulars of any registered document that have been entered in any device or facility referred to in section 11(2); or

   (d)   a copy of, or extract from, a registered document particulars of which have been entered in any such device or facility.

   (3) Nothing in subsections (1) and (2) shall apply to-

   (a)   any report by an inspector appointed under Part XXI, unless the Registrar directs otherwise;

   (b)   a report filed by a liquidator or judicial manager of a company unless the person applying to inspect the document or requiring a copy or extract of it is a shareholder or creditor of that company;

   (4) A process to compel the production of-

   (a)   a registered document kept by the Registrar; or

   (b)   evidence of the entry of particulars of a registered document in any device or facility referred to in section 11(2), shall not issue from the court without the leave of the court and, a statement shall be attached stating that it is issued with the leave of the court.

   (5) A copy of, or extract from, a registered document-

   (a)   that constitutes part of the register of companies or the register of external companies; or

   (b)   particulars of which have been entered in any device or facility referred to in section 11(2),

certified to be a true copy or extract by the Registrar is admissible in evidence in legal proceedings to the same extent as the original document.

   (6) An extract certified by the Registrar as containing particulars of a registered document that have been entered in any device or facility referred to in section 11(2) is, in the absence of proof to the contrary, conclusive evidence of the entry of those particulars.

14.   Registrar's powers of inspection

   (1) For the purpose of ascertaining whether a company or an officer is complying with this Act or any subsidiary enactment made under this Act, the Registrar may, on giving 72 hours written notice to the company, call for the production of or inspect any book required to be kept by the company.

   (2) A person shall not obstruct or hinder the Registrar or a person authorised by the Registrar while exercising a power conferred by subsection (1).

   (3) Any person who fails to comply with subsection (1) shall be guilty of an offence and liable to the penalty set out in section 492(2).

   (4) In this section "Company" includes an external company.

15.   Appeals from Registrar's decisions

   (1) A person who is aggrieved by an act or decision of the Registrar under this Act may appeal to the court within 15 working days after the date of notification of the act or decision, or within such further time as the court may allow.

   (2) On hearing the appeal, the court may approve the Registrar's act or decision or may give such directions or make such determination in the matter as the court considers appropriate.

16.   Enforcement of duty on companies to make return to Registrar

   (1) Where a person makes default in complying with a requirement of this Act relating to the filing of a document or the giving of a notice and still fails to make good the default within 14 days from the service on the person of a notice requiring it to be done, the court may, on the application of the Registrar or the Master or, if the person making default is a company on the application of a member or creditor, make an order directing the person, or if the person making default is a corporation, the corporation or any officer, to make good the default within such time as may be specified in the order.

   (2) Any order under subsection (1) may provide that all costs of, and incidental to, the application and the order thereon shall be borne by the company or by any officers of the company responsible for the default.

   (3) Nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a company or its officers in respect of any such default.

17.   Lost documents

   (1) Where a constitution or any other document relating to a company required to be filed has been lost or destroyed, the company may apply to the Registrar for leave to file a copy of the document.

   (2) On receipt of an application under subsection (1), the Registrar may direct that a notice in that behalf shall be given to such person and in such manner as the Registrar considers appropriate.

   (3) The Registrar may, on being satisfied-

   (a)   that the original document has been lost or destroyed,

   (b)   of the date of the filing of the original document, and

   (c)   that the copy of the document produced to him is a correct copy, certify on that copy that the Registrar is so satisfied and direct that the copy be filed in the same manner as the original document.

   (4) The copy shall, on being filed, from such date as is mentioned in the certificate as the date of the filing of the original, have the same force and effect as the original.

18.   Extension of time

   Where a person is required by this Act to do any act within a specified time, he may be granted an extension of time within which the act is required to be done by the-

   (a)   Registrar, for a period not exceeding 60 days; and

   (b)   court, upon expiry of the 60 days extension under paragraph (a), in accordance with section 518(4) on good cause being shown.

PART II
Incorporation - Essential Requirements (ss 19-24)

19.   Essential requirements and types of company

   (1) A company shall have-

   (a)   a name;

   (b)   one or more shares in the case of a company limited by shares;

   (c)   one or more members in the case of a close company or a company limited by guarantee;

   (d)   one or more directors in the case of a private company and two or more directors in the case of a public company; and

   (e)   a secretary in the case of all companies other than a close company and an accounting officer in the case of a close company.

   (2) A company shall be-

   (a)   a company limited by shares;

   (b)   a close company; or

   (c)   a company limited by guarantee.

   (3) Every company limited by shares or by guarantee shall be either a private company or a public company.

   (4) Every company limited by shares or by guarantee shall be a public company unless it is stated in its application for incorporation or its constitution that it is a private company.

20.   Right to apply for registration

   Any person may, either alone or together with another person, apply for the registration of a company under this Act.

21.   Application for registration

   (1) An application for the registration of a company under this Act shall be made to the Registrar, and shall be-

   (a)   in the prescribed form;

   (b)   signed by each applicant;

   (c)   accompanied, in the case of a company other than a close company, by a document in the prescribed form signed by every person named as a director or secretary, containing his consent to be a director or secretary and a certificate that he is not disqualified from being appointed or holding office as a director or secretary of a company and providing the identity number of the director; and

   (d)   accompanied by-

      (i)   in the case of a company having a share capital, a document in the prescribed form signed by every person named as a shareholder, or by an agent of that person authorised in writing, containing that person's consent to being a shareholder and to taking the class and number of shares specified in the document and stating the consideration to be provided by that shareholder for the issue of those shares,

      (ii)   in the case of a close company, a document in the prescribed form signed by every person named as a member, containing that person's consent to being a member and stating the particulars required by section 248(4),

      (iii)   in the case of a company limited by guarantee, a document signed by each person named as a member, or by an agent of that person authorised in writing, containing that person's consent to be a member and stating a named amount up to which the member undertakes to contribute to the assets of the company, in the event of its being wound up while that person is a member, or within one year after ceasing to be a member, for payment of the debts and liabilities of the company contracted before that person ceases to be a member, and of the costs, charges and expenses of the winding up, and for the adjustments of the rights among themselves of the other members who are similarly required to contribute, or

      (iv)   if the document has been signed by an agent, the instrument authorising the agent to sign it; and

   (e)   accompanied by a notice given under section 32(3) reserving a name for the proposed company; and

   (f)   accompanied by a document certified by at least one applicant as the company's constitution, if the proposed company is to have a constitution apart from the Act.

   (2) Without limiting the provisions of subsection (1), the application shall state-

   (a)   the full name and address of each applicant;

   (b)   the full name and residential address of every director and of the secretary of the proposed company;

   (c)   the full name and residential address of every shareholder or member of the proposed company, and in the case of a company limited by shares, the number of shares to be issued to every shareholder and the amount to be paid or other consideration to be provided by that shareholder for the issue of those same shares;

   (d)   whether the company is a private company;

   (e)   whether a company is a close company;

   (f)   the registered office of the proposed company; and

   (g)   the physical address of the principal place of business or other activity of the proposed company.

   (3) The application shall also be accompanied by a declaration made by a person engaged in the formation of the company, who shall be one of the persons referred to in subsection (4), stating that the application complies with the provisions of this Act.

   (4) The person who may make the declaration of compliance referred to in subsection (3) and section 50(4)(c) shall be-

   (a)   a legal practitioner;

   (b)   a member of the Botswana Institute of Accountants;

   (c)   a member of the Southern African Institute of Chartered Secretaries and Administrators; or

   (d)   such other class of person as the Minister may prescribe.

   (5) The person who may make the declaration of compliance referred to in subsection (3) shall be-

   (a)   a director of the proposed company;

   (b)   a member of-

      (i)   a company limited by shares,

      (ii)   a close company, or

      (iii)   a company limited by guarantee; or

   (c)   such other class of person as the Minister may prescribe.

22.   Registration

   (1) On receipt of a properly completed application for registration of a company, the Registrar shall-

   (a)   enter the particulars of the company in the register;

   (b)   assign a unique number to the company as its company number; and

   (c)   issue a certificate of incorporation in the prescribed form.

   (2) Notwithstanding the provisions of subsection (1), the Registrar may refuse to register a company if, in his opinion, it is in the public interest to do so.

22A.   Delegation of powers by the Registrar

   Registrar may, in writing, delegate to any officer at or above the level of Principal Commercial Officer in the office of the Registrar of Companies, the power to sign and issue certificates of incorporation.

23.   Certificate of incorporation

   A certificate of incorporation of a company issued under section 22 is conclusive evidence that-

   (a)   all the requirements of this Act as to registration have been complied with; and

   (b)   on and from the date of incorporation stated in the certificate, the company is incorporated under this Act.

24.   Separate legal personality

   A company incorporated under this Act shall be a body corporate with the name by which it is registered from time to time and shall continue in existence until it is removed from the register of companies.

PART III
Capacity, Powers, and Validity of Actions (ss 25-28)

25.   Capacity and powers

   (1) Subject to this Act, any other enactment, and the general law, a company has, both within and outside Botswana-

   (a)   full capacity to carry on or undertake any business or activity, do any act which it may by law do, or enter into any transaction; and

   (b)   for the purposes of paragraph (a), full rights, powers and privileges.

   (2) The constitution of a company may contain a provision relating to the capacity, rights, powers, or privileges of the company if the provision restricts the capacity of the company or those rights, powers and privileges.

26.   Validity of actions

   (1) If the constitution of a company sets out the objects of a company, there is deemed to be a restriction in the constitution on carrying on any business or activity that is not within those objects, unless the constitution expressly provides otherwise.

   (2) If the constitution of a company provides for any restriction on the business or activities in which the company may engage-

   (a)   the capacity and powers of the company shall not be affected by that restriction; and

   (b)   no act of the company and no contract or other obligation entered into by the company and no transfer of property to or by the company is invalid by reason only that it was done in contravention of that restriction.

   (3) Subsection (2) does not limit-

   (a)   section 165, relating to interdicts to restrain conduct by a company that would contravene its constitution;

   (b)   section 166 relating to derivative actions by directors and shareholders;

   (c)   section 170 relating to actions by shareholders of a company against the directors; or

   (d)   section 172 relating to actions by shareholders to require the directors of a company to take action under the constitution or this Act.

27.   Dealings between company and other persons

   (1) A company or a guarantor of an obligation of a company may not assert against a person dealing with the company or with a person who has acquired property, rights, or interests from the company that-

   (a)   this Act (in so far as it provides for matters of company meetings and internal procedure) or the constitution of the company has not been complied with; or

   (b)   a person named as a director or secretary of the company in the most recent notice received by the Registrar under section 155-

      (i)   is not a director or secretary of a company,

      (ii)   has not been duly appointed, or

      (iii)   does not have authority to exercise a power which a director or secretary of a company carrying on business of the kind carried on by the company customarily has authority to exercise;

   (c)   a person held out by the company as a director, secretary, employee, or agent of the company-

      (i)   has not been duly appointed, or

      (ii)   does not have authority to exercise a power which a director, secretary, employee, or agent of a company carrying on business of the kind carried on by the company customarily has authority to exercise;

   (d)   a person held out by the company as a director, secretary, employee, or agent of the company with authority to exercise a power which a director, secretary, employee, or agent of a company carrying on business of the kind carried on by the company does not customarily have authority to exercise, does not have authority to exercise that power; or

   (e)   a document issued on behalf of a company by a director, secretary, employee, or agent of the company with actual or usual authority to issue the document is not valid or not genuine, unless the person has, or ought to have, by virtue of his position with or relationship to the company, knowledge of the matters referred to in any of paragraphs (a), (b), (c), (d), or (e), as the case may be, of this subsection and in that case subsection (3) applies.

   (2) Subsection (1) of this section applies even though a person of the kind referred to in paragraphs (b) to (e) of that subsection acts fraudulently or forges a document that appears to have been signed on behalf of the company, unless the person dealing with the company or with a person who has acquired property, rights, or interests from the company has actual knowledge of the fraud or forgery.

   (3) Where the person dealing with the company has, by virtue of his position with or relationship with the company, knowledge of any of the matters referred to in paragraphs (a), (b), (c), (d), or (e) of subsection (1), the company shall not be precluded from asserting against that person that the state of the particular matter of which that person has knowledge in fact accords with the knowledge of that person.

   (4) A person is a person who is "dealing with the company" for the purposes of this section if that person is a party to any transaction or other act to which the company is a party.

28.   No constructive notice

   No person shall be deemed to have notice or knowledge of the contents of the constitution of, or any other document relating to, a company by reason only of the fact that the constitution or document has been registered by the Registrar; or it is available for inspection at an office of the company.

PART IV
Company Names (ss 29-36)

29.   Name to be reserved

   The Registrar shall not register a company under a name or register a change of the name of a company unless the name has been reserved.

30.   Name of company if liability of shareholders limited and if a private company

   (1) Unless a licence has been granted under section 31, the registered name of a company other than a close company, shall end with the word "Limited" .

   (2) If the company is a private company, the word "Proprietary" shall be added before the word "Limited" .

   (3) If the company is a close company the designation CC in capital letters shall be added to the name of the close company.

31.   Power to dispense with "Limited"

   (1) Where it is proved to the satisfaction of the Minister that an association about to be formed as a company is to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Minister may direct that the association be registered as a company, without the addition of the word "Limited" to its name, and the association may be registered accordingly.

   (2) A direction under this section may be granted on such conditions (including the maximum area of land the company may hold) as the Minister considers appropriate, and those conditions shall be binding on the association, and shall, if the Minister so directs, be inserted in the constitution.

   (3) The association shall, on registration, enjoy all the privileges of limited companies, and be subject to all their obligations, except those of using the word "Limited" as any part of its name, and of publishing its name, and of sending lists of members and directors and managers to the Registrar.

   (4) A direction under this section may at any time be revoked by the Minister, and upon revocation the Registrar shall enter the word "Limited" at the end of the name of the association in the register, and the association shall cease to enjoy the exemptions and privileges granted by this section.

   (5) No direction under this section may be revoked unless the Minister has given to the association notice in writing of his intention and has afforded the association an opportunity of being heard in opposition to the revocation.

   (6) Where, as a result of a direction given under subsection (1), the constitution includes a provision that the constitution shall not be altered except with the consent of the Minister, the company may not, by special resolution alter any provision of the constitution.

   (7) Where a direction under this section is revoked, the constitution may be altered by special resolution so as to remove any provision in, or to the effect that, the constitution may be altered only with the consent of the Minister.

   (8) A private company which has been the subject of a direction under this section need not include the word "Proprietary" in its name.

32.   Application for reservation of name

   (1) The Registrar shall, on written application by the applicant, reserve a name pending registration of a company or a change of name of an existing company; and such reservation shall be for a period of 30 days or such longer period not exceeding 60 days as the Registrar may, for special reasons, allow.

   (2) An application for the reservation of the name of a company shall be made to the Registrar in the prescribed form.

   (3) The Registrar may not reserve a name and no company may be registered by a name-

   (a)   the use of which would contravene the Banking Act or any other enactment;

   (b)   that is identical or almost identical to, the name of a registered company or a registered external company or a statutory corporation, or to a name registered under the Registration of Business Names Act, unless the registered company, the registered external company or the business is in liquidation or insolvency and signifies its consent to the registration in such manner as the Registrar may require;

   (c)   that is identical or almost identical to a name that the Registrar has already reserved under this Act or the repealed Act and that is still available for registration; or

   (d)   that, in the opinion of the Registrar, is calculated to mislead the public or cause offence to a person or any class of persons or is suggestive of blasphemy or indecency.

   (4) The Registrar shall, within 10 working days of the date the application was received, advise the applicant by notice in writing-

   (a)   whether or not he has reserved the name; and

   (b)   If the name has been reserved, that unless the reservation is sooner revoked by the Registrar, the name is available for registration of a company with that name or on a change of name, for the period of time stated in the notice.

33.   Name of company

   Except with the Minister's written consent, no company, including an external company, shall be registered under a name which includes-

   (a)   the word "Authority", "Commonwealth", "co-operative", "Government", "National", "President", "Presidential", "Regional" or "State",

   (b)   the combined words "United Nations"; or

   (c)   any other word which, in the Registrar's opinion suggests, or is likely to suggest, that it enjoys the patronage of the Government or of a statutory corporation, or of the Government of any other State or of a department of any such Government or of the General Assembly of the United Nations.

34.   Change of name

   (1) An application to change the name of a company shall -

   (a)   be in the prescribed form;

   (b)   be accompanied by a notice reserving the name; and

   (c)   subject to the constitution of the company, be made by a director of the company, with the approval of a special resolution of the company.

   (2) Subject to its constitution, an application to change the name of a company is not an amendment of the constitution of the company for the purposes of this Act.

   (3) The Registrar shall not enter a change of name in the register until 14 days after he has publicised, by notice in the Gazette, the application made to him for the change of name of the company.

   (4) At the expiry of the 14 days after publication of the Gazette under subsection (3), the Registrar shall -

   (a)   enter the new name of the company in the register of companies; and

   (b)   issue a certificate of incorporation for the company recording the change of name of the company.

   (5) A change of name of a company -

   (a)   takes effect from the date of the certificate issued under subsection (4); and

   (b)   does not affect the rights or obligations of the company, or legal proceedings by or against the company, and legal proceedings that might have been continued or commenced against the company under its former name may be continued or commenced against it under its new name.

35.   Direction to change name

   (1) If the Registrar believes on reasonable grounds that the name under which a company is registered should not have been reserved, he may serve written notice on the company to change its name by a date specified in the notice, being a date not less than 20 working days after the date on which the notice is served.

   (2) If the company does not change its name within the period specified in the notice, the Registrar may enter, on the register of companies, a new name for the company selected by the Registrar, being a name under which the company may be registered under this Part.

   (3) If the Registrar registers a new name under subsection (2)-

   (a)   he shall issue a certificate of incorporation for the company recording the new name of the company, and section 34(4) of this Act shall apply in relation to the registration of the new name as if the name of the company had been changed under that section;

   (b)   he shall, within 14 days of the date of entry of the new name in the register, publicise the new name of the company by notice in the Gazette; and

   (c)   the company shall pay to the Registrar the costs of the advertisement published under paragraph (b).

36.   Use of Company name

   (1) A company shall ensure that its name is clearly stated in-

   (a)   every written communication sent by, or on behalf of, itself; and

   (b)   every document issued or signed by, or on behalf of, itself that evidences or creates a legal obligation of the company.

   (2) Where-

   (a)   a document that evidences or creates a legal obligation of a company is issued or signed by or on behalf of the company; and

   (b)   the name of the company is incorrectly stated in the document, every person who issued or signed the document is liable to the same extent as the company if the company fails to discharge the obligation.

   (3) Liability under subsection (2) shall not be applicable where-

   (a)   the person who issued or signed the document proves that the person in whose favour the obligation was incurred was aware at the time the document was issued or signed that the obligation was incurred by the company; or

   (b)   the court is satisfied that it would not be just and equitable for the person who issued or signed the document to be so liable.

   (4) For the purposes of subsections (1), (2) and (3) and of section 177, relating to the manner in which a company may enter into contracts and other obligations, a company may use a generally recognised abbreviation of a word or words in its name if it is not misleading to do so and in particular may use the abbreviation "Ltd" and "Pty" for the words "Limited" and "Proprietary".

   (5) If, within the period of 12 months immediately preceding the giving by a company of any public notice, the name of the company was changed, the company shall ensure that the notice states-

   (a)   that the name of the company was changed in that period; and

   (b)   the former name or names of the company.

   (6) If a company fails to comply with subsection (1) or subsection (4)-

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalty set out in section 493(1).

PART V
Company Constitution (ss 37-44)

37.   No requirement for company to have constitution

   Except where required by any other Act, a company including a close company may, but does not need to, have a constitution.

38.   Effect of Act on company having constitution

   (1) If a company other than a close company has a constitution, the company, the Board, each director, and each shareholder of the company shall have the rights, powers, duties, and obligations set out in this Act except to the extent that they are negated or modified, in accordance with this Act, by the constitution of the company.

   (2) If a close company has a constitution, the members of the close company shall have the rights, powers, duties and obligations set out in Part XIX except to the extent that they are negated or modified, in accordance with that Part, by the constitution of the company.

39.   Effect of Act on company not having constitution

   If a public company does not have a constitution, the company, the Board, each director, and each shareholder of the company have the rights, powers, duties, and obligations set out in this Act.

40.   Form of constitution

   The constitution of a company, if it has one, is-

   (a)   in the case of a company registered under Part II, a document certified by the applicant for registration of the company as the company's constitution;

   (b)   in the case of a private company other than a close company registered under Part II, if no constitution is registered under paragraph (a), the constitution in the First Schedule;

   (c)   in the case of a company registered under the repealed Act, the memorandum and articles of association as originally registered or as altered in accordance with the repealed Act, including so far as they apply to the company the regulations contained in Table A, Table B, Table C or Table D in the First Schedule to the repealed Act:

         Provided that any statement of objects in the memorandum shall, from the commencement of this Act, have the effect stated in section 25;

   (d)   a document that is adopted by the company as its constitution under section 43;

   (e)   a document described in section 44 of this Act; or

   (f)   a document described in any of the preceding paragraphs of this section as altered by the company under section 43 or varied by the court under section 175.

41.   Contents of constitution

   Subject to section 25(2), the constitution of a company may contain-

   (a)   matters contemplated by this Act for inclusion in the constitution of a company; and

   (b)   such other matters as the company wishes to include in its constitution.

42.   Effect of constitution

   (1) The constitution of a company has no effect to the extent that it contravenes, or is inconsistent with, this Act.

   (2) Subject to this Act, the constitution of a company is binding as between-

   (a)   the company and each shareholder; and

   (b)   shareholders, in accordance with its terms.

43.   Adoption, alteration and revocation of constitution

   (1) The shareholders of a company that does not have a constitution may, by special resolution, adopt a constitution for the company.

   (2) Subject to subsection (3), and without limiting section 104 (which relates to variation of shareholders' rights) and section 174 (which relates to the right of a shareholder to apply to the court for relief in cases of prejudice), but subject to section 31(6) (which relates to a direction made by the Minister under section 31) and to section 64 (which relates to the reduction of shareholders' liability), the shareholders of a company may, by special resolution, alter or revoke the constitution of the company.

   (3) An existing company which has, as its constitution pursuant to section 40(c), a memorandum of association and articles of association, shall not alter any of the provisions in its existing memorandum of association or articles of association unless it replaces its memorandum of association and its articles of association by a single document into which it consolidates its constitution.

   (4) Within 10 working days of the adoption of a constitution by a company, or the alteration or revocation of the constitution of a company, as the case may be, the Board shall ensure that a notice in the prescribed form of the adoption of the constitution or of the alteration or revocation of the constitution is delivered to the Registrar for registration.

   (5) If the Board of a company fails to comply with subsection (4) of this section, every director of the company commits an offence and is liable, on conviction, to the penalty set out in section 493 (1).

   (6) A company to which subsection (3) would otherwise apply may apply to the Registrar for dispensation from the requirement in subsection (3) that the memorandum and articles of association be replaced at that time by a constitution into which it consolidates its existing memorandum and articles, and where the Registrar considers that the requirement may impose undue hardship on the company, the Registrar may grant a dispensation to the company from the application of subsection (3) on such conditions as the Registrar considers appropriate. The conditions imposed by the Registrar may include a condition that the company register such a constitution within such period of time as the Registrar may stipulate.

   (7) Notwithstanding the provisions of section 522 and the Eleventh Schedule, the Registrar shall not, during a period of three years from the commencement of this Act, require the payment of any fee which would otherwise be payable on the presentation by a company, registered under the repealed Act, for registration of a constitution which replaces its memorandum and articles.

44.   New form of constitution

   (1) A company may, from time to time, deliver, to the Registrar, a single document that incorporates the provisions of a document referred to in any of the paragraphs of section 40, together with all amendments to it.

   (2) The Registrar may, if he considers that by reason of the number of amendments to a company's constitution it would be desirable for the constitution to be contained in a single document, by notice in writing, require a company to deliver to him a single document that incorporates the provisions of a document referred to in any of the paragraphs of section 40 together with the amendments to it.

   (3) Within 20 working days of receipt by a company of a notice under subsection (2), the Board shall ensure that the document required by that subsection is received by the Registrar for registration.

   (4) The Board shall ensure that a document delivered to the Registrar under this section is accompanied by a certificate signed by a person authorised by the Board that the document complies with subsection (1) or subsection (2), as the case may be, of this section.

   (5) As soon as the Registrar receives a document certified in accordance with subsection (4), he shall register the document.

   (6) If the Board of a company fails to comply with subsection (3) or subsection (4), every director of the company shall be guilty of an offence and liable to the penalty set out in section 493(1).

PART VI
Shares (ss 45-79)

45.   Legal nature and rights and powers attaching to shares

   (1) A share in a company is movable property and is transferable in accordance with section 48.

   (2) Subject to subsection (3), a share in a company confers on the holder-

   (a)   the right to one vote on a poll at a meeting of the company on any resolution;

   (b)   the right to an equal share in dividends authorised by the Board;

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

   (3) Subject to section 60, the rights specified in subsection (2) may be negated, altered, or added to by the constitution of the company or in accordance with the terms on which the share is issued under section or section 50, as the case may be.

46.   Types of shares

   (1) Subject to the constitution of the company, different classes of shares may be issued in a company.

   (2) Without limiting subsection (1), shares in a company may-

   (a)   be redeemable within the meaning of section 72;

   (b)   confer preferential or limited rights to distributions of capital or income;

   (c)   confer special, limited, or conditional voting rights; or

   (d)   not confer voting rights.

47.   No par value shares

   (1) All shares created or issued after the commencement of this Act shall be shares of no par value.

   (2) All shares issued prior to the commencement of this Act shall be deemed to be converted into shares of no par value but such conversion shall not affect the rights and liabilities attached to such shares and in particular, but without prejudice to the generality of this provision, such conversion shall not affect-

   (a)   any unpaid liability on such shares; or

   (b)   the rights of the holders thereof in respect of dividends, voting or repayment on winding up or a reduction of capital.

   (3) Subsection (2) shall apply notwithstanding any statement in a share certificate relating to the shares that describes the shares by reference to a par value.

   (4) On the commencement of this Act, the stated capital of a company which has issued shares prior to the commencement of this Act shall be the whole of the company's called up issued share capital and its share premium account.

   (5) Notwithstanding the provisions of subsection (1), the Registrar may, in exceptional circumstances where he is satisfied that a company registered under this Act is a wholly owned subsidiary of a company registered outside Botswana and that for the purposes of the company's reporting obligations outside Botswana it is necessary for the company to be formed with shares carrying a par value, the Registrar may grant a dispensation from the provisions of subsection (1) and permit the issue of a class or classes of par value shares, on such terms and conditions as he may consider appropriate:

   Provided that all the ordinary shares or all the preference shares shall consist of either one or the other, and any premiums received on any issue of shares shall be transferred into an account called a share premium account to which, together with the company's nominal issued share capital, the provisions of section 59 relating to reduction of capital shall apply.

   (6) Shares of par value issued under subsection (5) may, with the approval of the Registrar where the functional currency of the company is a foreign currency, be designated in that foreign currency, but shall otherwise be designated in the currency of Botswana.

48.   Transferability of shares

   (1) Subject to any limitation or restriction on the transfer of shares in the constitution, a share in a company is transferable.

   (2) A share is transferred by entry in the share register in accordance with section 81.

   (3) Subject to section 82, the executor of a deceased shareholder may transfer a share even though the executor is not a shareholder at the time of transfer.

   (3A) Where shares in a company are transferred in accordance with this section, a copy of the share register in which such transfer is entered shall, within 30 days, be lodged with the Registrar.

49.   Issue of shares on registration and amalgamation

   (1) Upon the registration of the company under section 22, the company shall issue, to any person or persons named in the application for registration as a shareholder or shareholders, the number of shares specified in the application as being the number of shares to be issued to that person or those persons.

   (2) Upon the issue of a certificate of amalgamation under section 227, the amalgamated company shall issue to any person entitled to a share or shares under the amalgamation proposal, the share or shares to which that person is entitled.

50.   Issue of other shares

   (1) Subject to this Act and the constitution of the company, the Board of a company may issue shares at any time, to any person, and in any number it considers appropriate.

   (2) If the shares confer rights other than those set out in section 45(2), or impose any obligation on the holder, the Board shall, subject to-

   (a)   the prior approval of an ordinary resolution of shareholders (unless the constitution otherwise provides); and

   (b)   the requirements of section 104 (dealing with a variation of class rights), approve terms of issue which set out the rights and obligations attached to the shares.

   (3) The terms of issue approved by the Board under subsection (2)-

   (a)   shall be consistent with the constitution of the company, and to the extent that they are not so consistent are invalid and of no effect; and

   (b)   are deemed to form part of the constitution and may be amended in accordance with section 43 subject to the requirements of section 104, providing for the variation of class rights.

   (4) Within 10 working days of the issue of shares under this section, the company shall-

   (a)   give notice to the Registrar in the prescribed form of-

      (i)   the number of shares issued, and

      (ii)   the amount of the consideration for which the shares have been issued, or its value as determined by the Board under section 53 and 54; and

      (iii)   the amount of the company's stated capital following the issue of the shares;

   (b)   deliver to the Registrar a copy of any terms of issue approved under subsection (2); and

   (c)   deliver to the Registrar together with the notice under paragraph (a) and the copy of any terms of issue under paragraph (b), a declaration made by any of the persons referred to in section 21(3) that the provisions of the Act in relation to the issue of shares have been complied with.

   (5) If a company fails to comply with subsection (4)-

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every officer of the company who is in default shall be guilty of an offence and liable to the penalty set out in section 493(1).

51.   Alteration in number of shares

   (1) A company may by ordinary resolution -

   (a)   subdivide its shares into shares of a smaller amount if the proportion between the amount paid, and the amount, if any, unpaid on each reduced share remains the same as it was in the case of the share from which the reduced share is derived; or

   (b)   consolidate and divide all of its shares into shares of a larger amount than its existing shares.

   (2) Where shares are consolidated, the amount paid and any unpaid liability thereon, any fixed sum by way of dividend or repayment to which such shares are entitled, shall also be consolidated.

   (3) Where a company has altered its share capital in a manner specified in subsection (1), it shall, within 10 working days, file a notice to that effect with the Registrar.

   (4) A notice under subsection (3) shall include particulars with respect to the classes of shares affected.

52.   Pre-emptive rights to new issues

   (1) Subject to the constitution, where a company issues shares which rank equally with or prior to existing shares as to voting or distribution rights, those shares shall be offered to the holders of existing shares in a manner which would, if the offer were accepted, maintain the relative voting and distribution rights of those shareholders.

   (2) An offer under subsection (1) shall remain open for acceptance for a reasonable time.

53.   Consideration for issue of shares

   (1) Before it issues any shares the Board shall-

   (a)   determine the amount of the consideration for which the shares shall be issued; and

   (b)   resolve that in its opinion the consideration is fair and reasonable to the company and to all existing shareholders.

   (2) The consideration for which a share is issued may take any form and may be cash, promissory notes, contracts for future services, real or personal property, or other securities of the company and may be issued in part for cash and in part by way of some other form of consideration.

54.   Shares not paid for in cash

   (1) Shares shall be deemed not to have been paid for in cash except to the extent that the company has actually received cash in payment of the shares at the time of or subsequently to the agreement to issue the shares.

   (2) Before shares are credited as fully or partly paid up other than for cash, the Board shall-

   (a)   determine the reasonable present cash value of the consideration; and

   (b)   resolve that, in its opinion, the present cash value of the consideration is-

      (i)   fair and reasonable to the company and to all existing shareholders, and

      (ii)   not less than the amount to be credited in respect of the shares.

   (3) The directors who vote in favour of a resolution under subsection (2) shall sign a certificate-

   (a)   describing the consideration in sufficient detail to identify it; and

   (b)   stating -

      (i)   the present cash value of the consideration and the basis for assessing it,

      (ii)   that the present cash value of the consideration is fair and reasonable to the company and to all existing shareholders; and

      (iii)   that the present cash value of the consideration is not less than the amount to be credited in respect of the shares.

   (4) The Board shall deliver a copy of a certificate that complies with subsection (3) to the Registrar for registration within 10 working days after it is given, and where the shares are issued to an officer or employee of the company or to any relative of such persons or to a corporation which is a related party of such persons, the certificate shall be entered in the Interests Register.

   (5) For the purposes of this section, shares that are or are to be credited as paid up, whether wholly or partly, as part of an arrangement that involves the transfer of property or the provision of services and an exchange of cash or cheques or other negotiable instruments, whether simultaneously or not, shall be treated as paid up other than in cash to the value of the property or services.

   (6) A director who fails to comply with subsection (3) of this section shall be guilty of an offence and liable to the penalty set out in section 492 (1).

   (7) Nothing in this section applies to the issue of shares in a company on-

   (a)   the conversion of any convertible securities; or

   (b)   the exercise of any option to acquire shares in the company.

   (8) If the Board of a company fails to comply with subsection (4), every officer of the company shall be guilty of an offence and liable to the penalty set out in section 492(1).

55.   Calls on shares

   (1) Where a call is made on a share or any other obligation attached to a share is performed by the shareholder, the company shall, within 10 working days of the call being made, give notice to the Registrar in the prescribed form of-

   (a)   the amount of the call or its value as determined by the Board under section 5(3); and

   (b)   the amount of the stated capital of the company following the making of the call.

   (2) If a company fails to comply with subsection (1)-

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company who is in default shall be guilty of an offence and liable to the penalty set out in section 493(1).

56.   Consent to issue of shares

   The issue by a company of a share that-

   (a)   increases the liability of a person to the company; or

   (b)   imposes a new liability on a person to the company, is void if that person or an agent of that person authorised in writing does not consent in writing to becoming the holder of the share before it is issued.

57.   Time of issue of shares

   A share is issued when the name of the holder is entered on the share register.

58.   Board may authorise distributions to shareholders

   (1) Before a distribution is made by a company to any shareholder, that distribution-

   (a)   shall be authorised by the Board under subsection (2); and

   (b)   shall, unless the constitution provides otherwise, be approved by the shareholders by ordinary resolution.

   (2) The Board of a company may authorise a distribution at such time and of such amount as it considers appropriate, if it is satisfied that the company will, immediately after the distribution is made, satisfy the solvency test.

   (3) The directors who vote in favour of a distribution shall sign a certificate stating that, in their opinion, the company will, immediately after the distribution, satisfy the solvency test.

   (4) If after a distribution is authorised and before it is made, the Board ceases to be satisfied that the company will, immediately after the distribution is made, satisfy the solvency test, any distribution made by the company is deemed not to have been authorised.

   (5) In applying the solvency test for the purpose of this section and section 63, "debts" includes fixed preferential returns on shares ranking ahead of those in respect of which a distribution is made, except where that fixed preferential return is expressed in the constitution as being subject to the power of the Board to authorise distributions.

   (6) A director who fails to comply with subsection (3) of this section shall be guilty of an offence and liable to the penalty set out in section 493(2).

59.   Reduction of stated capital

   (1) Subject to subsection (3), a company may by special resolution reduce its stated capital to such amount as it considers appropriate.

   (2) Public notice of a proposed reduction of a company's stated capital shall be given not less than 30 days before the resolution to reduce stated capital is passed.

   (3) Where a company has agreed in writing with a creditor of the company that it will not reduce its stated capital below a specified amount without the prior consent of the creditor, or unless specified conditions are satisfied at the time of the reduction, a resolution to reduce stated capital passed in breach of any such agreement is invalid and of no effect.

   (4) A company shall not take any action to extinguish or reduce a liability in respect of an amount unpaid on a share or to reduce its stated capital for any purpose other than the purpose of declaring that its stated capital is reduced by an amount that is not represented by the value of its assets if there are reasonable grounds for believing that -

   (a)   the company is, or after the taking of such action, would be unable to pay its debts as they become due; or

   (b)   after the taking of such action the value of the company's assets would be less than the value of its liabilities.

   (5) Where a share is redeemed at the option of the shareholder under section 74 or on a fixed date under section 75, or the company purchases a share under section 100 and the Board is satisfied that as a consequence of the redemption or purchase, the company would but for this subsection fail to satisfy the solvency test, the Board shall resolve that the stated capital of the company shall be reduced by the amount by which the company would so fail to satisfy the solvency test and the resolution of the Board shall have effect notwithstanding subsections (1) to (3).

   (6) A company which has reduced its stated capital shall, within 10 working days of the reduction, give notice of the reduction to the Registrar, specifying the amount of the reduction and the reduced amount of its stated capital.

   (7) If a company fails to comply with subsection (2) or subsection (6) -

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(2); and

   (b)   every officer of the company who is in default shall be guilty of an offence and liable to the penalty set out in section 493(2).

60.   Dividends

   (1) A dividend is a distribution other than a distribution to which sections 66 and 76 apply.

   (2) The Board shall not authorise a dividend-

   (a)   in respect of some but not all the shares in a class; or

   (b)   of a greater amount in respect of some shares in a class than other shares in that class except where-

      (i)   the amount of the dividend is reduced in proportion to any liability attached to the shares under the constitution, or

      (ii)   a shareholder has agreed in writing to receive no dividend, or a lesser dividend than would otherwise be payable.

61.   Shares in lieu of dividends

   Subject to the constitution of the company, the Board may issue shares to any shareholders who have agreed to accept the issue of shares, wholly or partly, in lieu of a proposed dividend or proposed future dividends if -

   (a)   the right to receive shares, wholly or partly, in lieu of the proposed dividend or proposed future dividends has been offered to all shareholders of the same class on the same terms;

   (b)   in the event that all shareholders elect to receive the shares in lieu of the proposed dividend, the relative voting or distribution rights in relation to the shares would be maintained;

   (c)   the shareholders to whom the right is offered are afforded a reasonable opportunity of accepting it;

   (d)   the shares issued to each shareholder are issued on the same terms and subject to the same rights as the shares issued to all shareholders in that class who agree to receive the shares; and

   (e)   the provisions of section 50 are complied with by the Board.

62.   Shareholder discounts

   (1) The Board may resolve that the company offer shareholders discounts in respect of some or all of the goods sold or services provided by the company.

   (2) The Board may approve a discount scheme under subsection (1) only if it has previously resolved that the proposed discounts are-

   (a)   fair and reasonable to the company and to all shareholders; and

   (b)   to be available to all shareholders or all shareholders of the same class on the same terms.

   (3) A discount scheme may not be approved or continued by the Board unless it is satisfied on reasonable grounds that the company satisfies the solvency test.

   (4) Subject to subsection (5), a discount accepted by a shareholder under a discount scheme approved under this section is not a distribution for the purposes of this Act.

   (5) Where-

   (a)   a discount is accepted by a shareholder under a scheme approved or continued by the Board; and

   (b)   at the time the scheme was approved or the discount was offered, the Board ceased to be satisfied on reasonable grounds that the company would satisfy the solvency test, the provisions of section 63 shall apply in relation to the discount with such modifications as may be necessary as if the discount were a distribution that is deemed not to have been authorised.

63.   Recovery of distributions

   (1) A distribution made to a shareholder at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by the company from the shareholder unless-

   (a)   the shareholder received the distribution in good faith and without knowledge of the company's failure to satisfy the solvency test;

   (b)   the shareholder has altered the shareholder's position in reliance on the validity of the distribution; and

   (c)   it would be unfair to require repayment in full or at all.

   (2) If, in relation to a distribution made to shareholders-

   (a)   the procedure set out in section 58 has not been followed; or

   (b)   reasonable grounds for believing that the company would satisfy the solvency test in accordance with section 58, section 74 or section 75, as the case may be, did not exist at the time the certificate was signed, a director who-

      (i)   failed to take reasonable steps to ensure the procedure was followed, or

      (ii)   signed the certificate, as the case may be, is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

   (3) If, by virtue of section 58(4) a distribution is deemed not to have been authorised, a director who-

   (a)   ceased after authorisation but before the making of the distribution to be satisfied on reasonable grounds for believing that the company would satisfy the solvency test immediately after the distribution is made; and

   (b)   failed to take reasonable steps to prevent the distribution being made, is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

   (4) If, by virtue of section 62(5), a distribution is deemed not to have been authorised, a director who failed to take reasonable steps to prevent the distribution being made is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

   (5) If, in an action brought against a director or shareholder under this section, the court is satisfied that the company could, by making a distribution of a lesser amount, have satisfied the solvency test, the court may -

   (a)   permit the shareholder to retain; or

   (b)   relieve the director from liability in respect of,

an amount equal to the value of any distribution that could properly have been made.

64.   Reduction of shareholders liability

   (1) If a company proposes to alter its constitution, or redeem shares under section 73 in a manner which would cancel or reduce the liability of a shareholder to the company in relation to a share held prior to that alteration, or redemption, the proposed cancellation or reduction of liability is to be treated -

   (a)   for the purposes of section 58 as if it were a distribution; and

   (b)   for the purposes of section 60(2) as if it were a dividend.

   (2) If a company has altered its constitution, or redeemed shares under section 73 in a manner which cancels or reduces the liability of a shareholder to the company in relation to a share held prior to that alteration, or redemption, that cancellation or reduction of liability is to be treated for the purposes of section 63 as a distribution of the amount by which that liability was reduced.

   (3) If the liability of a shareholder of an amalgamating company, to that company in relation to a share held before the amalgamation is -

   (a)   greater than the liability of that shareholder to the amalgamated company in relation to a share or shares into which that share is converted; or

   (b)   cancelled by the cancellation of that share in the amalgamation, the reduction of liability effected by the amalgamation is to be treated, for the purposes of section 63(1) and (3), as a distribution by the amalgamated company to that shareholder, whether or not that shareholder becomes a shareholder of the amalgamated company of the amount by which that liability was reduced.

   (4) Where a company acquires shares issued by it, the provisions of section 67 shall govern the way in which the distribution to shareholders is to be treated.

65.   Company may acquire or redeem its own shares

   (1) A company shall not purchase or otherwise acquire any of its own shares except -

   (a)   under section 66;

   (b)   under sections 98 to 103;

   (c)   with the approval of a unanimous resolution;

   (d)   if the company is a private company, with the unanimous agreement of all shareholders under section 247; or

   (e)   in accordance with an order made by the court under this Act.

   (2) A company shall not redeem a share which is a redeemable share except in accordance with sections 72 to 75.

   (3) Within seven days following the acquisition or redemption of shares by the company, the company shall give notice to the Registrar of the number and class of shares acquired or redeemed.

   (4) Where shares are acquired by a company pursuant to subsection (1) or redeemed pursuant to subsection (2), the stated capital of the class of shares so acquired or redeemed shall be decreased by an amount derived by multiplying the number of shares of that class so acquired with the amount arrived at so as to take into account the extent to which the company's stated capital is reduced by the company's acquisition or redemption of its own shares.

   (5) A company shall not make any payment in whatever form to acquire or redeem any share issued by the company where there are reasonable grounds for believing that the company is or would after the payment, be unable to satisfy the solvency test.

   (6) Shares in the capital of a company may not be acquired or redeemed if, as a result of such acquisition or redemption, there would no longer be any shares on issue other than convertible or redeemable shares.

   (7) If a company fails to comply with subsection (3) or (4) -

   (a)   the company shall be guilty of an offence and liable, in the case of subsection (3), to the penalty set out in section 492(1) and in the case of subsection (4) to the penalty set out in section 492(3); and

   (b)   every officer of the company who is in default shall be guilty of an offence and liable, in the case of subsection (3), to the penalty set out in section 493(1) and in the case of subsection (4) to the penalty set out in section 493(2).

66.   Purchase of own shares

   (1) A company may with the approval of the Board and of an ordinary resolution of shareholders purchase or otherwise acquire its own shares:

      Provided that the shares are fully paid up and its constitution does not forbid it from doing so.

   (2) The approval pursuant to subsection (1) may be a general approval or a specific approval for a particular acquisition.

   (3) If the approval under subsection (1) is a general approval, it shall be valid only until the next annual meeting or it may be revoked or varied by ordinary resolution by any general meeting of the company at any time prior to such annual meeting.

   (4) Subject to subsection (10), before a company enters into any arrangement to purchase its own shares, the Board shall resolve that it is not aware of any information that has not been disclosed to shareholders which is material to an assessment of the value of the shares, and as a result of which the terms on which the shares are being acquired or the consideration to be provided for the shares are unfair to shareholders whose shares are to be acquired.

   (5) Save as provided by subsections (10) and (11), a company that proposes to acquire shares that are issued by it shall -

   (a)   deliver or mail a copy of the written offer or circular to each shareholder on record as at the date of the offer in such manner as may be provided in the constitution of the company for sending any notice of meeting to shareholders, stating the number and class or kind of its issued shares which the company proposes to acquire, specifying the terms and reasons for the offer and providing the disclosure required by subsection (12); and

   (b)   file a copy of the offering circular with the Registrar within 15 days of the date that it is delivered or mailed to the shareholders of the company.

   (6) The provisions of sections 313 to 315 shall apply so far as they reasonably extend to all documents issued in terms of subsection (5).

   (7) Where in response to any offer to acquire shares, the shareholders propose to dispose of a greater number of shares than the company offered to acquire, the company shall acquire from all shareholders who offered to sell, pro rata as nearly as possible disregarding fractions:

   Provided that this section shall not apply to the acquisition of shares in terms of transactions effected on a stock exchange within Botswana or to acquisition of shares by an investment company with variable capital.

   (8) A company that acquires shares issued by it shall notify the Registrar within 30 days of the date of acquisition in the prescribed form of the date, number and class of shares that it has acquired.

   (9) A stock exchange within Botswana may, in addition to any requirements contained in this Act, determine further requirements with which a company whose shares are listed on such exchange shall comply prior to such company acquiring its own shares.

   (10) Subsections (4), (5) and (8) shall not apply to an investment company with variable capital which is licensed under the Collective Investment Undertakings Act.

   (11) Subsection (5) shall not apply to-

   (a)   an offer which is made to all shareholders to acquire a proportion of their shares which, would if accepted, leave unaffected relative voting and distribution rights, and affords a reasonable opportunity to shareholders to accept the offer;

   (b)   an offer to which all shareholders have consented in writing;

   (c)   an offer made pursuant to a unanimous shareholder agreement under section 247;

   (d)   an offer made pursuant to an approval by unanimous resolution; or

   (e)   where the purchase or acquisition is made on a stock exchange in accordance with the rules of the stock exchange.

   (12) The disclosure required for the purposes of subsection (5) is a document that sets out -

   (a)   the nature and terms of the offer, and if made to specified shareholders only, names of those shareholders;

   (b)   the nature and extent of any relevant interest of any director of the company in any shares the subject of the offer; and

   (c)   the text of the resolution required by subsection (4), together with such further information and explanation as may be necessary to enable a reasonable shareholder to understand the nature and implications for the company and its shareholders of the proposed acquisition.

67.   Liability of directors and shareholders where solvency test not satisfied

   (1) The directors of a company, who, contrary to the provisions of section 65(5), are party to allowing the company to acquire any share issued by it, shall be jointly and severally liable to restore to the company any amount so paid and not otherwise recovered by the company, subject to any relief granted by the court under section 517.

   (2) A director who is liable under subsection (1) may apply to the court for an order directing any shareholder or former shareholder to pay, to the company, any money that was paid to such shareholder contrary to section 65(5).

   (3) Where the acquisition by the company, of shares issued by it, is in contravention of the provisions of section 66(5), any creditor who was a creditor at the time of acquisition or any shareholder may apply to the court for an order and the company may, if it thinks it equitable to do so -

   (a)   order a shareholder or former shareholder to pay to the company any money or return any consideration that was paid or provided by the company to acquire the shares;

   (b)   order the company to issue an equivalent number of shares to the shareholder or former shareholder;

   (c)   make such order as it considers appropriate.

   (4) A proceeding to enforce a liability imposed by this section shall be brought within three years after the date of completion of the acquisition.

   (5) Nothing contained in this section shall limit or diminish any liability which any person may incur under this Act or any other law, or the common law.

   (6) For the purposes of this section "director of a company" includes a director of a holding company of such company.

68.   Cancellation of shares repurchased

   (1) Subject to sections 69 and 70, shares that are acquired by a company pursuant to section 66 or section 100 are deemed cancelled immediately on acquisition.

   (2) Shares are acquired for the purposes of subsection (1) on the date on which the company would, apart from this section, become entitled to exercise the rights attached to the shares.

   (3) On the cancellation of a share under this section, the rights and privileges attached to that share expire; but the share may be reissued in accordance with this Part.

69.   Company may hold its own shares

   (1) Shares acquired by a company pursuant to section 66 or section 98 shall not be deemed cancelled under section 68(1) if -

   (a)   the constitution of the company expressly permits the company to hold its own shares;

   (b)   the Board of the company resolves that the shares concerned shall not be cancelled on acquisition; and

   (c)   the number of shares acquired, when aggregated with shares of the same class held by the company pursuant to this section at the time of the acquisition, does not exceed five per cent of the shares of that class previously issued by the company, excluding shares previously deemed to be cancelled under section 68(1).

   (2) Shares acquired by a company pursuant to section 66 or section 98 that, pursuant to this section, are not deemed cancelled shall be held by the company in itself.

   (3) A share that a company holds in itself under subsection (2) may be cancelled by the Board of the company resolving that the share is cancelled; and the share shall be deemed to be cancelled on the making of such a resolution.

   (4) The rights and obligations attaching to a share that a company holds in itself pursuant to subsection (2) shall not be exercised by or against a company while it holds the share.

   (5) Without limiting subsection (4), while a company holds a share in itself pursuant to this section, the company shall not -

   (a)   exercise any voting rights attaching to the share; or

   (b)   make or receive any distribution authorised or payable in respect of the share.

70.   Reissue of shares company holds in itself

   (1) Subject to subsection (2), section 53 shall apply to the transfer of a share held by a company in itself as if the transfer were the issue of the share under section 50.

   (2) Subject to subsection (1), the transfer of a share by a company in itself shall not be subject to any provisions in this Act or the company's constitution relating to the issue of shares, except to the extent the company's constitution expressly applies those provisions.

   (3) A company shall not grant an option to acquire a share it holds in itself or enter into any obligations to transfer such a share where the company has received notice in writing of a takeover scheme or, in the case of a listed company where the stock exchange makes a public notification to the share-market that a takeover offer for more than 20 per cent of the company's shares is to be made.

71.   Enforceability of contract to repurchase shares

   (1) A contract with a company providing for the acquisition, by the company, of its shares is specifically enforceable against the company except to the extent that the company would, after performance of the contract fail to satisfy the solvency test.

   (2) The company has the burden of proving that performance of the contract would result in the company being unable to satisfy the solvency test.

   (3) Until the company has fully performed a contract referred to in subsection (1), the other party to the contract retains the status of a claimant entitled to be paid as soon as the company is lawfully able to do so or, prior to the removal of the company from the register of companies, to be ranked subordinate to the rights of creditors but in priority to the other shareholders.

72.   Meaning of "redeemable"

   For the purpose of this Act, unless the constitution of the company forbids the issue of redeemable shares, a share is redeemable -

   (a)   if the terms of the issue of the share, or where those terms of issue are contained in the constitution, the constitution makes provision for the redemption of the share -

      (i)   at the option of the company,

      (ii)   at the option of the holder of the share, or

      (iii)   on a date specified in the terms of the issue of the share or the constitution if the terms of issue are contained in the constitution; or

   (b)   for a consideration that is -

      (i)   specified,

      (ii)   to be calculated by reference to a formula, or

      (iii)   required to be fixed by a suitably qualified person who is not associated with or interested in the company.

73.   Redemption at option of company

   A redemption of a share at the option of the company is -

   (a)   an acquisition by the company of the share for the purposes of section 66(4) and (5); and

   (b)   a distribution for the purposes of section 57.

74.   Redemption at option of shareholder

   (1) Subject to this section, if a share is redeemable at the option of the holder of the share, and the holder gives proper notice to the company requiring the company to redeem the share-

   (a)   the company shall redeem the share on the date specified in the notice, or if no date is specified, on the date of receipt of the notice;

   (b)   the share is deemed to be cancelled on the date of redemption; and

   (c)   from the date of redemption the former shareholder ranks as an unsecured creditor of the company for the sum payable on redemption.

   (2) A redemption under this section -

   (a)   is not a distribution for the purposes of section 58 and 60; and

   (b)   is deemed to be a distribution for the purposes of subsections (1) and (5) of section 63 of this Act.

75.   Redemption on fixed date

   (1) Subject to this section, if a share is redeemable on a specified date -

   (a)   the company shall redeem the share on that date;

   (b)   the share is deemed to be cancelled on that date; and

   (c)   from that date the former shareholder ranks as an unsecured creditor of the company for the sum payable on redemption.

   (2) A redemption under this section -

   (a)   is not a distribution for the purposes of sections 58 and 60; and

   (b)   is deemed to be a distribution for the purposes of subsections (1) and (3) of section 63.

76.   Restrictions on giving financial assistance

   (1) A company shall not give financial assistance directly or indirectly to any person for the purpose of or in connection with the acquisition of its own shares, other than in accordance with this section.

   (2) A company may give financial assistance for the purpose of, or in connection with, the acquisition of its own shares if the Board has previously resolved that -

   (a)   giving the assistance is in the interests of the company;

   (b)   the terms and conditions on which the assistance is given are fair and reasonable to the company and to any shareholders not receiving that assistance; and

   (c)   immediately after giving the assistance, the company will satisfy the solvency test.

   (3) If the amount of any financial assistance approved under subsection (2) together with the amount of any other financial assistance given by the company which is still outstanding exceeds 10 per cent of the company's stated capital, the company shall not give the assistance unless it first obtains from its auditor or, if it does not have an auditor, from a person qualified to act as its auditor, a certificate that -

   (a)   the person has inquired into the state of affairs of the company; and

   (b)   the person is not aware of anything to indicate that the opinion of the Board as to the matters in paragraph (b) of subsection (2) is unreasonable in all the circumstances.

   (4) The amount of any financial assistance under this section is not a distribution for the purposes of section 58.

   (5) For the purposes of this section, the term "financial assistance" includes giving a loan or guarantee, or the provision of security.

77.   Transactions not prohibited by section 76

   Section 76 shall not apply to -

   (a)   a distribution to a shareholder approved under section 58;

   (b)   the issue of shares by the company;

   (c)   a repurchase or redemption of shares by the company;

   (d)   anything done under a compromise under Part XV or a compromise or arrangement approved under Part XVI;

   (e)   a situation where the ordinary business of a company includes the lending of money by the company in the ordinary course of business.

78.   Subsidiary may not hold shares in holding company

   (1) Subject to this section, a subsidiary shall not hold shares in its holding company, and, subject to subsection (6), a transfer of shares in a holding company to its subsidiary shall be void and of no effect.

   (2) Subject to subsection (6), an issue of shares by a holding company to its subsidiary shall be void and of no effect.

   (3) Where a company that holds shares in another company becomes a subsidiary of that other company -

   (a)   the company may, notwithstanding subsection (1), continue to hold those shares; but

   (b)   the exercise of any voting rights attaching to those shares shall be of no effect.

   (4) Nothing in this section prevents a subsidiary holding shares in its holding company in its capacity as a personal representative or a trustee unless the holding company or another subsidiary has a beneficial interest under the trust other than an interest that arises by way of security for the purposes of a transaction made in the ordinary course of the business of lending money.

   (5) This section applies to a nominee for a subsidiary in the same way as it applies to the subsidiary.

   (6) Notwithstanding the provisions of this section, a subsidiary company may, in accordance with sections 69 to 70 with any necessary adjustments, acquire shares in its holding company to a maximum of 10 per cent in the aggregate of the number of issued shares of the holding company:

      Provided that this subsection shall not apply to the acquisition of shares by a holding company in its subsidiary.

79.   Statement of rights to be given to shareholders

   (1) Every company shall issue to a shareholder, on request, a statement that sets out-

   (a)   the class of shares held by the shareholder, the total number of shares of that class issued by the company, and the number of shares of that class held by the shareholder;

   (b)   the rights, privileges, conditions, and limitations, including restrictions on transfer, attaching to the shares held by the shareholder; and

   (c)   the relationship of the shares held by the shareholder to other classes of shares.

   (2) The company is not obliged to provide a shareholder with a statement if-

   (a)   a statement has been provided within the previous six months;

   (b)   the shareholder has not acquired or disposed of shares since the previous statement was provided;

   (c)   the rights attached to shares of the company have not been altered since the previous statement was provided; and

   (d)   there are no special circumstances which would make it unreasonable for the company to refuse the request.

   (3) The statement is not evidence of title to the shares or of any of the matters set out in it.

   (4) The statement shall state in a prominent place that it is not evidence of title to the shares or of the matters set out in it.

   (5) If a company fails to comply with subsection (1)-

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalties set out in section 493(1).

PART VII
Title Transfers, Share Register and Certificates (ss 80-89)

80.   Lien on shares

   (1) Subject to subsection (2) a company shall, unless the constitution provides otherwise, be entitled to a lien, in priority to any other claim, over every partly paid issued share, and over any dividend payable on the share, for all money due by the holder of that share to the company by way of money called or payable at a fixed time in respect of the unpaid amount owing in respect of that share.

   (2) A company, other than a listed company, may, if expressly so provided in its constitution, be entitled to a lien, in priority to any other claim over all shares including fully paid up shares and over any dividend payable on those shares, for all money due by the holder of those shares to the company whether in relation to the shares or otherwise.

   (3) A company may, in such manner as the directors consider appropriate, sell any share over which the company has a lien:

      Provided that no sale shall be made unless -

   (a)   a sum in respect of which the lien exists is presently payable; and

   (b)   until the expiry of 14 days after a written notice, stating and demanding payment of such part of the amount in respect of which the privilege or lien exists as is presently payable, has been given to the registered holder for the time of the share, or the person entitled to the share by reason of the death or bankruptcy of the registered holder.

   (4) The directors may, to give effect to any sale under subsection (2), authorise a person to transfer the shares sold to the purchaser of the shares, who shall be registered as the holder of the share comprised in any such transfer, and shall not be bound to see to the application of the purchase money, nor shall the title of the purchaser to the share be affected by any irregularity or invalidity in the proceedings relating to the sale.

   (5) The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and any residue shall, subject to a like lien for sums not presently payable as existed upon the share before the sale, be paid to the person entitled to the share at the date of the sale.

   (6) The directors may, unless the constitution provides otherwise, decline to register the transfer of a share on which the company has a lien.

81.   Transfer of shares

   (1) Subject to the constitution of the company and any other written law, shares in a company may be transferred by the entry of the name of the transferee on the share register in accordance with this section.

   (2) For the purpose of transferring shares, a transfer form signed by the present holder of the shares or by his personal representative shall be given to -

   (a)   the company; or

   (b)   an agent of the company who maintains the share register under section 83(4).

   (3) The form of transfer shall be signed by the transferee if registration has the effect of imposing on the transferee as holder of the shares a liability to the company.

   (4) On receipt of a form of transfer in accordance with subsection (2) and (3), the company shall forthwith enter or cause to be entered the name of the transferee on the share register as holder of the shares, unless -

   (a)   the Act or the constitution expressly permits the Board to refuse or delay registration for the reasons stated;

   (b)   the Board resolves within one month of receipt of the transfer to refuse or delay the registration of the transfer, and the resolution sets out in full the reasons for doing so; and

   (c)   notice of the resolution, including those reasons, is sent to the transferor and to the transferee within five days of the resolution being passed by the Board.

   (5) Subject to the constitution of a company, the Board may refuse or delay the registration of a transfer of shares under subsection (4) where the holder of the shares has failed to pay to the company an amount due in respect of those shares, whether by way of consideration for the issue of the shares or in respect of sums payable by the holder of the shares in accordance with the constitution.

   (6) Subsections (2) to (5) shall not apply to securities traded on a stock market of a Stock Exchange under a scheme for the electronic transfer of shares approved and publicly notified by a Stock Exchange.

   (7) Where a company fails to comply with subsection (4) -

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 491(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalty set out in section 492(1).

82.   Transfer of shares by operation of law

   (1) Shares in a company may pass by operation of law notwithstanding the constitution of the company.

   (2) A transfer of the share or other interest of a deceased shareholder of a company made by his executor shall, although the executor is not himself a shareholder, be as valid as if he had been a member at the date of the transfer, subject to the Capital Transfer Act and any law relating to the administration of the estate of a deceased person.

83.   Company to maintain share register

   (1) A company having a share capital shall maintain a share register that records the shares issued by the company, and in the case of a public company the register shall state -

   (a)   whether, under the constitution of the company or the terms of issue of the shares, there are any restrictions or limitations on the transfer of shares; and

   (b)   where any document that contains the restrictions or limitations may be inspected.

   (2) The share register shall state, with respect to each class of shares -

   (a)   the names, alphabetically arranged, and the latest known address of each person who is, or has within the last seven years been, a shareholder;

   (b)   the number of shares of that class held by each shareholder within the last seven years; and

   (c)   the date of any -

      (i)   issue of shares to,

      (ii)   repurchase or redemption of shares from, or

      (iii)   transfer of shares by or to, each shareholder within the last seven years, and in relation to the transfer, the name of the person to or from whom the shares were transferred.

   (3) In the case of a company which does not have a share capital, including a close company, the register required to be kept by this section may be called a register of members and shall state -

   (a)   the names and addresses of the members;

   (b)   the date at which each person was entered in the register as a member; and

   (c)   the date at which any person ceased to be a member, and the references in this Act to a share register shall be read as referring to this register of members.

   (4) An agent may maintain the share register of the company provided that the agent is a person, firm or corporation which is qualified to be the secretary of a public company in accordance with section 162.

   (5) Every company having more than 50 shareholders shall, unless the share register is in such a form as to constitute in itself an index, keep an index of the names of the shareholders of the company and shall, within 10 days from the day on which any alteration is made in the share register, make any necessary alteration in the index.

   (6) The index shall enable the account of each shareholder in the register to be found.

   (7) If a company fails to comply with subsection (1), (2) or (4) -

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalty set out in section 493(1).

   (8) The register required to be kept by this section may be kept in electronic form provided that the information kept on the register is available to persons entitled to inspect the register.

84.   Place of share register

   (1) The share register may, if expressly permitted by the constitution, be divided into two or more registers kept in different places.

   (2) The principal register shall be kept in Botswana.

   (3) If a share register is divided into two or more registers kept in different places -

   (a)   notice of the place where each register is kept shall be delivered to the Registrar for registration within 10 working days after the share register is divided or any place where a register is kept is altered;

   (b)   a copy of every register shall be kept at the same place as the principal register, and

   (c)   if an entry is made in a register other than the principal register, a corresponding entry shall be made within 10 working days in the copy of that register kept with the principal register.

   (4) In this section "principal register", in relation to a company means -

   (a)   if the share register is not divided into two or more registers, the share register; or

   (b)   if the share register is divided into two or more registers, the register described as the principal register in the last notice sent to the Registrar and every other register shall be a "branch register".

   (5) If a company fails to comply with subsections (2) and (3) -

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalty set out in section 493(1).

85.   Share register as evidence of legal title

   (1) Subject to section 87, the entry of the name of a person in the share register as holder of a share is prima facie evidence that legal title to the share vests in that person.

   (2) A company may treat the registered holder of a share as the only person entitled to -

   (a)   exercise the right to vote attaching to the share;

   (b)   receive notices;

   (c)   receive a distribution in respect of the share; and

   (d)   exercise the other rights and powers attaching to the share.

86.   Secretary's duty to supervise share register

   (1) It is the duty of the secretary to take reasonable steps to ensure that the share register is properly kept and that share transfers are promptly entered on it in accordance with section 83.

   (2) A secretary who fails to comply with subsection (1) shall be guilty of an offence and liable to the penalty set out in section 492(1).

87.   Power of court to rectiy share register

   (1) If the name of person is wrongly entered in, or omitted from, the share register of a company, the person aggrieved, or a shareholder, may apply to the court for -

   (a)   rectification of the share register;

   (b)   compensation for loss sustained; or

   (c)   both rectification and compensation.

   (2) On an application under this section the court may order -

   (a)   rectification of the register;

   (b)   payment of compensation by the company or a director of the company for any loss sustained; or

   (c)   rectification and payment of compensation.

   (3) On an application under this section, the court may decide -

   (a)   a question relating to the entitlement of a person who is a party to the application to have his name entered in, or omitted from, the register; and

   (b)   a question necessary or expedient to be decided for rectification of the register.

88.   Trust not to be entered on register

   No notice of a trust, whether express, implied, or constructive, may be entered on the share register or be received by the Registrar.

89.   Share certificate

   (1) Subject to subsection (2), a public company shall, within 20 working days after the issue, or registration of a transfer, of shares in the company, as the case may be, send a share certificate to every holder of those shares stating -

   (a)   the name of the company;

   (b)   the class of shares held by that person; and

   (c)   the number of shares held by that person.

   (2) Nothing in subsection (1) applies in relation to shares which can be transferred under a system for electronic trading approved by a Stock Exchange in Botswana pursuant to a scheme which does not require a share certificate for the transfer of shares.

   (3) A shareholder in a company, not being a company to which subsection (1) or subsection (2) applies, may apply to the company for a certificate relating to some or all of the shareholder's shares in the company.

   (4) On receipt of an application for a share certificate under subsection (3), the company shall within 20 working days after receiving the application -

   (a)   if the application relates to some but not all of the shares, separate the shares shown in the register as owned by the applicant into separate parcels, one parcel being the shares to which the share certificate relates, and the other parcel being any remaining shares; and

   (b)   in all cases send to the shareholder a certificate stating -

      (i)   the name of the company,

      (ii)   the class of shares held by the shareholder, and

      (iii)   the number of shares held by the shareholder to which the certificate relates.

   (5) Notwithstanding section 81, where a share certificate has been issued, a transfer of the shares to which it relates shall not be registered by the company unless the form of transfer required by that section is accompanied by the share certificate relating to the share, or by evidence as to its loss or destruction and, if required, an indemnity in a form required by the Board.

   (6) Subject to subsection (1), where shares to which a share certificate relates are to be transferred, and the share certificate is sent to the company to enable the registration of the transfer, the share certificate shall be cancelled and no further share certificate issued except at the request of the transferee.

   (7) If a company fails to comply with subsection (1) or subsection (4) -

   (a)   the company shall be guilty of an offence and liable to the penalty set out in section 492(1); and

   (b)   every director of the company shall be guilty of an offence and liable to the penalty set out in section 493(1).

PART VIII
Shareholders and their Rights and Obligations (ss 90-110)

90.   Meaning of "shareholder"

   In this Act, the term "shareholder", in relation to a company, means -

   (a)   in the case of a company having a share capital -

      (i)   a person whose name is entered in the share register as the holder for the time being of one or more shares in the company,

      (ii)   until the person's name is entered in the share register, a person named as a shareholder in an application for the registration of a company at the time of registration of the company, or

      (iii)   until the person's name is entered in the share register, a person who is entitled to have that person's name entered in the share register under a registered amalgamation proposal as a shareholder in an amalgamated company;

   (b)   in the case of a close company or a company limited by guarantee -

      (i)   a person, or

      (ii)   until the person's name is entered in the register of members, a person named as a member in an application for the registration of the company at the time of registration of the company; and

   (c)   in the case of a company limited by guarantee, until the person's name is entered in the register of members, a person who is entitled to have that person's name entered in the share register under a registered amalgamation proposal as a member in an amalgamated company.

91.   Liability of shareholders

   (1) A shareholder is not liable for an obligation of the company by reason only of being a shareholder.

   (2) The liability of a shareholder or member to the company is limited to -

   (a)   in the case of a company limited by shares any amount unpaid on a share held by the shareholder;

   (b)   in the case of a company limited by guarantee any amount which the member has undertaken to contribute to the company in the event of its being wound up;

   (c)   in the case of a close company any amount which the member has contributed to the company or undertaken or agreed to contribute to the company under section 250;

   (d)   any liability expressly provided for in the constitution of the company;

   (e)   any liability under sections 130, 158 and 160;

   (f)   any liability to repay a distribution received by the shareholder or member to the extent that the distribution is recoverable under section 63; or

   (g)   any liability under section 92.

   (3) Nothing in this section affects the liability of a shareholder or member to a company under a contract, including a contract for the issue of shares, or for any delict, or breach of a fiduciary duty, or other actionable wrong committed by the shareholder.

92.   Liability for calls and forfeiture of shares

   (1) Where a share renders its holder liable to calls, or otherwise imposes a liability on its holder, that liability attaches to the holder of the share for the time being, and not to a prior holder of the share, whether or not the liability became enforceable before the share was registered in the name of the current holder.

   (2) Where -

   (a)   all or part of the consideration payable in respect of the issue of a share remains unsatisfied; and

   (b)   the person to whom the share was issued no longer holds that share, liability in respect of that unsatisfied consideration does not attach to subsequent holders of the share, but remains the liability of the person to whom the share was issued, or of any other person who assumed that liability at the time of issue.

   (3) The calls on shares, in respect of any amount unpaid on the shares by the shareholders, and the forfeiture of shares, where any person fails to pay on any call or any instalment of a call for which such person is liable at the time appointed for payment, shall be made in accordance with the provisions of the Seventh Schedule.

93.   Shareholders not required to acquire shares by alteration to constitution

   Notwithstanding anything in the constitution of the company, a shareholder is not bound by an alteration of the constitution of a company that -

   (a)   requires the shareholder to acquire or hold more shares in the company than the number held on the date the alteration is made; or

   (b)   increases the liability of the shareholder to the company, unless the shareholder agrees in writing to be bound by the alteration either before, on, or after it is made.

94.   Exercise of powers reserved to shareholders

   (1) Subject to section 247, powers reserved to the shareholders of a company by this Act may be exercised only -

   (a)   at a meeting of shareholders pursuant to section 105 or section 106; or

   (b)   by a resolution in lieu of a meeting pursuant to section 107.

   (2) Powers reserved to the shareholders of a company by the constitution of the company may be exercised -

   (a)   subject to the constitution, at a meeting of shareholders pursuant to section 105 or section 106;

   (b)   by a resolution in lieu of a meeting pursuant to section 107; or

   (c)   in the case of a private company or a close company by a unanimous agreement under section 247.

95.   Exercise of powers by ordinary resolution

   (1) Unless otherwise specified in this Act or the constitution of a company, a power reserved to shareholders may be exercised by an ordinary resolution.

   (2) An ordinary resolution is a resolution that is approved by a simple majority of the votes of those shareholders entitled to vote and voting on the question.

96.   Powers exercised by special resolution

   (1) Notwithstanding the constitution of a company, when shareholders exercise a power to -

   (a)   adopt a constitution or alter or revoke the company's constitution;

   (b)   approve a major transaction;

   (c)   approve an amalgamation of the company under section 224; or

   (d)   wind up the company, the power shall be exercised by special resolution.

   (2) A special resolution pursuant to paragraph (a), (b) or (c) of subsection (1) can be rescinded only by a special resolution.

   (3) A special resolution pursuant to paragraph (d) of subsection (1) cannot be rescinded in any circumstances.

   (4) At any meeting at which a special resolution is submitted, a declaration of the chairman that the resolution is carried, shall unless a poll is demanded, be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour or against the resolution.

97.   Management review by shareholders

   (1) Notwithstanding anything in this Act or the constitution of the company, the chairman of a meeting of shareholders of a company shall allow a reasonable opportunity for shareholders at the meeting to question, discuss, or comment on the management of the company.

   (2) Notwithstanding anything in this Act or the constitution of the company, a meeting of shareholders may pass a resolution under this section which makes recommendations to the Board on matters affecting the management of the company.

   (3) Unless carried as a special resolution or unless the constitution so provides, any recommendation under subsection (2) shall not be binding on the Board.

98.   Shareholder may require company to purchase shares

   Where -

   (a)   a shareholder is entitled to vote on the exercise of one or more of the powers set out in-

      (i)   section 96(1)(a), and the proposed alteration imposes or removes a restriction on the business or activities in which the company may engage, or

      (ii)   section 96(1)(b) or (c);

   (b)   the shareholders resolved, pursuant to section 96, to exercise the power;

   (c)   the shareholder cast all the votes attached to shares registered in the shareholder's name and having the same beneficial owner against the exercise of the power; or

   (d)   the resolution to exercise the power was passed under section 107, the shareholder did not sign the resolution, that shareholder is entitled to require the company to purchase those shares in accordance with section 99.

99.   Notice requiring purchase

   (1) A shareholder of a company who is entitled to require the company to purchase shares by virtue of section 98 may -

   (a)   within 10 working days of the passing of the resolution at a meeting of shareholders; or

   (b)   where the resolution was passed under section 107, before the expiration of 10 working days after the date on which notice of the passing of the resolution is given to the shareholder, give a written notice to the company requiring the company to purchase those shares.

   (2) Within 20 working days of receiving a notice under subsection (1), the Board shall -

   (a)   agree to the purchase of the shares by the company;

   (b)   arrange for some other person to agree to purchase the shares;

   (c)   apply to the court for an order under section 102 or section 103; or

   (d)   arrange, before taking the action concerned, for the resolution to be rescinded in accordance with section 96 or decide in the appropriate manner not to take the action concerned, as the case may be.

   (3) The Board shall, within the 20 working days give written notice to the shareholder of the Board's decision under this subsection.

100.   Purchase by company

   (1) Where the Board agrees under section 99(2)(a) to the purchase of the shares by the company, it shall, on giving notice under that subsection or within five working days thereafter -

   (a)   nominate a fair and reasonable price for the shares to be acquired; and

   (b)   give notice of the price to the holder of those shares.

   (2) A shareholder who considers that the price nominated by the Board is not fair or reasonable, shall forthwith give notice of objection to the company.

   (3) If, within 10 working days of giving notice to a shareholder under subsection (1), no objection to the price has been received by the company, the company shall, on such date as the company and the shareholder agree or, in the absence of agreement, as soon as practicable, purchase all the shares at the nominated price.

   (4) If, within 10 working days of giving notice to a shareholder under subsection (1), an objection to the price has been received by the company, the company shall -

   (a)   refer the question of what is a fair and reasonable price to arbitration and nominate a suitably qualified and independent arbitrator;

   (b)   give notice to the shareholder of the reference to arbitration and the name and particulars of the arbitrator; and

   (c)   within five working days, pay a provisional price in respect of each share equal to the price nominated by the Board.

   (5) A reference to arbitration under this section is deemed to be a submission to arbitration.

   (6) The arbitrator shall expeditiously determine a fair and reasonable price for the shares on the day prior to the date on which the vote of the shareholders authorising the action was taken or the date on which written consent of the shareholders without a meeting was obtained excluding any appreciation or depreciation directly or indirectly induced by the action, and that price shall be binding on the company and the shareholder for all purposes.

   (7) In the case of shares which are listed on a Stock Exchange or traded on a stock market, the arbitrator shall determine the price for the shares as being the price at which such shares are traded on the Stock Exchange or stock market as at the close of business on the day prior to the date on which the vote of shareholders authorising the action was taken or the date on which written consent of shareholders without a meeting was obtained, excluding any appreciation or depreciation directly or indirectly induced by the action, and that value shall be binding on the company and the shareholder for all purposes.

   (8) The arbitrator may -

   (a)   award interest on any balance payable or excess to be repaid under subsection (7) of this section at such rate as he considers appropriate having regard to whether the provisional price paid or the reference to arbitration, as the case may be, was reasonable;

   (b)   provide for interest to be paid to or by the shareholder whose shares are to be purchased; and

   (c)   award costs to the shareholder where the arbitrator considers this to be just.

   (9) If -

   (a)   the company fails to refer a question to arbitration in accordance with subsection (4); or

   (b)   the arbitrator to whom the matter is referred by the company is not independent of the company, or is not suitably qualified to conduct the arbitration the shareholder who has given a notice of objection under subsection (2) may apply to the court to appoint an arbitrator, and the court may appoint such person as it considers appropriate to act as arbitrator for the purposes of this section.

   (10) A purchase of shares by a company under this section -

   (a)   is deemed not to be a distribution for the purposes of section 58;

   (b)   is deemed to be a distribution for the purposes of section 63(1) and (3).

101.   Purchase of shares by third party

   (1) Section 100 applies to the purchase of shares by a person with whom the company has entered into an arrangement for purchase in accordance with section 99(2)(b) subject to such modifications as may be necessary, and, in particular, as if references in that section to the Board and the company were references to that person.

   (2) Every holder of shares that are to be purchased in accordance with the arrangement is indemnified by the company in respect of loss suffered by reason of the failure by the person who has agreed to purchase the shares to purchase them at the price nominated or fixed by arbitration, as the case may be.

102.   Court may grant exemption

   (1) A company to which a notice has been given under section 99 may apply to the court for an order exempting it from the obligation to purchase the shares to which the notice relates on the grounds that -

   (a)   the purchase would be disproportionately damaging to the company; or

   (b)   the company cannot reasonably be required to finance the purchase; or

   (c)   it would not be just and equitable to require the company to purchase the shares.

   (2) On an application under this section, the court may make an order exempting the company from the obligation to purchase the shares, and may make any other order it considers appropriate, including an order -

   (a)   setting aside a resolution of the shareholders;

   (b)   directing the company to take, or refrain from taking, any action specified in the order;

   (c)   requiring the company to pay compensation to the shareholders affected; or

   (d)   that the company be put into liquidation.

   (3) The court shall not make an order under subsection (2) on either of the grounds set out in paragraph (a) or paragraph (b) of subsection (1) unless it is satisfied that the company has made reasonable efforts to arrange for another person to purchase the shares in accordance with section 99(2)(b).

103.   Court may grant exemption if company is insolvent

   (1) If -

   (a)   a notice is given to a company under section 99;

   (b)   the Board has resolved that the purchase by the company of the shares to which the notice relates would result in it failing to satisfy the solvency test; and

   (c)   the company has, having made reasonable efforts to do so, been unable to arrange for the shares to be purchased by another person in accordance with section 99(2)(b), the company shall apply to the court for an order exempting it from the obligation to purchase the shares.

   (2) The court may, on an application under subsection (1), if it is satisfied that the purchase of the shares would result in the company failing to satisfy the solvency test, and the company has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with section 99(2)(b), make -

   (a)   an order exempting the company from the obligation to purchase the shares;

   (b)   an order suspending the obligation to purchase the shares; or

   (c)   such other order as it considers appropriate, including any order referred to in section 102(2).

   (3) For the purposes of this section, the stated capital of a company shall not be taken into account in determining whether the company will, after the purchase, fail to satisfy the solvency test provided that if a company has entered into an agreement with a creditor pursuant to section 59(3) the stated capital shall be taken into account to the extent required by that agreement unless the creditor's prior consent is obtained.

104.   Variation of class rights

   (1) Where the share capital of a company is divided into different classes of shares, a company may not take action which varies the rights attached to a class of shares unless that variation is approved by a special resolution or with the consent in writing of the holders of 75 per cent of the shares of that class.

   (2) Where the variation of rights attached to a class of shares is approved under subsection (1) and the company becomes entitled to take the action concerned, the holder of a share of that class, who did not consent to or cast any votes in favour of the resolution for the variation, may apply to the court for an order under section 174, or may require the company to purchase those shares in accordance with sections 98 to 103.

   (3) The expression "variation" in this section includes abrogation and the expression "varied" shall be construed accordingly.

   (4) A resolution which would have the effect of diminishing the proportion of the total votes exercisable at a general meeting of the company by the holders of the existing shares of a class or of reducing the proportion of the dividends or distributions payable at any time to the holders of the existing shares of a class, shall be deemed to be a variation of the rights of the class.

   (5) The company shall within one month from the date of the consent or resolution referred to in subsection (1) file with the Registrar in the prescribed form the particulars of such consent or resolution, and if default is made in complying with this provision, the company, and every director and officer thereof who knowingly is a party to the default, shall be guilty of an offence and shall be liable on conviction to the penalty set out in section 492(1).

105.   Annual meeting of shareholders

   (1) Subject to subsection (2) the Board of a company shall call an annual meeting of shareholders to be held -

   (a)   once in each calendar year;

   (b)   not later than six months after the balance sheet date of the company; and

   (c)   not later than 15 months after the previous annual meeting.

   (2) A company need not hold its first annual meeting in the calendar year of its registration but shall hold that meeting within 18 months of its registration.

   (3) The company shall hold the meeting on the date on which it is called to be held.

   (4) The business to be transacted at an annual meeting shall, unless already dealt with by the company, include -

   (a)   the consideration and approval of the financial statements;

   (b)   the receiving of any auditor's report;

   (c)   the consideration of the annual report;

   (d)   the appointment of any directors whose appointment on an annual or rotational basis is required by the constitution of the company;

   (e)   the appointment of any auditor pursuant to section 195, where relevant; and

   (f)   an opportunity for shareholders to question, discuss or comment on the management of the company in accordance with section 97(1).

106.   Special meetings of shareholders

   (1) A special meeting of shareholders entitled to vote on an issue may be called at any time by -

   (a)   the Board; or

   (b)   a person who is authorised by the constitution to call the meeting.

   (2) A special meeting shall be called by the Board on the written request of shareholders holding shares carrying together not less than 10 per cent of the voting rights entitled to be exercised on the issue.

107.   Resolution in lieu of meeting

   (1) A company need not hold any particular meeting if all members entitled to attend that meeting agree thereto in writing and in that event a unanimous resolution shall be deemed to be a resolution passed at that meeting on the date on which the last signature to that resolution is affixed.

   (2) A special meeting shall be called by the Board on the written request of shareholders holding shares carrying together not less than 60 per cent of the voting rights entitled to be exercised on the issue.

   (3) A resolution may be signed under subsection (1) without any prior notice being given to shareholders.

108.   Court may call meeting of shareholders

   (1) If the court is satisfied that -

   (a)   it is impracticable to call or conduct a meeting of shareholders in the manner prescribed by this Act or the constitution; or

   (b)   it is in the interests of a company that a meeting of shareholders be held, the court may order a meeting of shareholders to be held or conducted in such manner as the court directs.

   (2) Application to the court may be made by a director, or a shareholder, or a creditor of the company.

   (3) The court may make the order on such terms as to the costs of conducting the meeting and as to security for those costs as the court considers appropriate, and the court may give such directions as it considers appropriate including the direction that the legal personal representative of any deceased member may exercise all or any of the powers that the deceased member could have exercised if he or she were present at the meeting.

109.   Proceedings at meetings

   (1) Subject to subsection (2) the provisions of the Second Schedule govern proceedings at meetings of shareholders of a company.

   (2) The constitution of the company may make provision for any of the matters that the Second Schedule states may be subject to the constitution of the company.

110.   Shareholders entitled to receive distributions, attend meetings and exercise rights

   (1) Shareholders may be entitled to -

   (a)   receive distributions;

   (b)   exercise pre-emptive rights to acquire shares in accordance with section 52; or

   (c)   exercise any other right or receive any other benefit under this Act or the constitution.

   (2) The shareholders entitled under subsection (1) are -

   (a)   if the Board fixes a date for the purpose, those shareholders whose names are registered in the share register on that date;

   (b)   if the Board does not fix a date for the purpose, those shareholders whose names are registered in the share register on the day on which the Board passes the resolution concerned.

   (3) A date shall not be fixed under subsection (2) that precedes by more than 20 working days the date on which the proposed action will be taken.

   (4) The shareholders who are entitled to receive notice of a meeting of shareholders are -

   (a)   if the Board fixes a date for the purpose, those shareholders whose names are registered in the share register on that date;

   (b)   if the Board does not fix a date for the purpose, those shareholders whose names are registered in the share register at the close of business on the day immediately preceding the day on which the notice is given.

   (5) A date shall not be fixed under subsection (3) that precedes by more than 30 working days or less than 10 working days the date on which the meeting is to be held.

PART IX
Debentures and Registration of Charges (ss 111-125)

111.   Creation and issue of debentures

   A company may create and issue secured or unsecured debentures.

112.   Security for debentures

   (1) The binding of movable property as security for any debenture or debentures may be effected by -

   (a)   a deed of pledge and the delivery of the movable property concerned to one or more debenture-holders or to a trustee for debenture-holders; or

   (b)   a notarial bond, collateral notarial bond or notarial surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders; or

   (c)   the pledging of incorporeal rights by means of cession of such rights, whether present or future, in due and proper form.

   (2) The binding as aforesaid of immovable property may be effected by a mortgage bond, collateral mortgage bond or surety bond executed in favour of one or more debenture-holders or of a trustee for debenture-holders.

   (3) A wholly owned subsidiary shall be deemed to have and always to have had the power to mortgage any of its property as collateral security for the issue of debentures by its holding company.

113.   Bonds to be registered in deed registry; copies of documents to be annexed to bonds and deeds of pledge

   (1) Any mortgage bond or notarial bond in pursuance of the provisions of section 112 and subsequent transactions relating thereto shall, subject to the laws governing the registration of mortgage bonds and notarial bonds, be registered in the Deeds Registry.

   (2) If any such bond is in favour of one or more debenture-holders, a certified copy of the debenture concerned shall be annexed to the said bond.

   (3) If any such bond is in favour of a trustee for debenture-holders, certified copies of the debenture concerned and of the trust deed by which the trustee is appointed and in which the trustee's rights and duties are defined, shall be annexed to the bond.

   (4) Certified copies of the debenture concerned and of any such trust deed, if any, shall be annexed to any deed of pledge where the debentures are secured by a pledge of movable property.

114.   Debenture may be registered

   If any debenture is executed before a notary public, it may, subject to the provisions of section 121(1), be registered in the Deeds Registry in like manner as if it were a notarial bond.

115.   Trustee for debenture holders

   (1) If a company issues or agrees to issue debentures of the same class to more than 10 persons, or to any one or more persons with a view to the debentures or any of them being offered for sale to more than 10 persons, the company shall before issuing any of the debentures -

   (a)   sign under its seal a debenture trust deed; and

   (b)   procure the signature to the deed by a person qualified to act as a trustee for debenture holders.

   (2) For the purposes of this section, debentures shall not be deemed to be of the same class if -

   (a)   they do not rank equally for repayment when any security created by the debenture is enforced or the company is wound up; or

   (b)   different rights attach to them in respect of -

      (i)   the rate of, or dates for, payment of interest,

      (ii)   the dates when, or the instalments by which, the principal of the debentures will be repaid, unless the difference is solely that the class of debentures will be repaid during a stated period of time and particular debentures will be selected by the company for repayment at different dates during that period by drawings, ballot or otherwise,

      (iii)   any right to subscribe for or convert the debentures into shares or other debentures of the company or any other company or corporation, or

      (iv)   the powers of the debenture holders to realise any security.

   (3) No debenture trust deed shall cover more than one class of debentures.

   (4) The Fifth Schedule to the Act shall apply to the following -

   (a)   the qualification, appointment and removal of a trustee for debenture holders;

   (b)   the naming of a successor to a trustee for debenture holders;

   (c)   the matters to be set out in the trust deed;

   (d)   the powers of the trustee for debenture holders;

   (e)   the right of the trustee for debenture holders to obtain information from the borrowing company;

   (f)   meetings of debenture holders;

   (g)   the duties of the trustee for debenture holders;

   (h)   repayment of loans or deposits where the purpose stated in a prospectus issued in relation to debentures, is not achieved; and

   (i)   release of the trustee for debenture holders.

116.   Issue of debentures at different dates and ranking of preference

   In any bond or deed of pledge executed in favour of a trustee for debenture-holders generally, provision may be made that the debentures thereby secured or to be secured may be issued from time to time and at different dates, as the company may determine, but all such debentures, whenever issued, shall rank in preference concurrently with one another as from the date on which the pledge was constituted or the bond was registered.

117.   Rights of debenture holders

   (1) Every holder of a debenture secured by a pledge or a bond executed in favour of a trustee for debenture-holders generally shall, unless it is otherwise provided by the deed of pledge, bond or trust deed and copy of the debenture annexed thereto, be entitled to enforce his rights under such debenture as soon as it has been issued to him in the same manner as if he were himself the pledgee or the holder of such bond.

   (2) No notice of the cession of any such debenture shall be necessary in order to confer upon any cessionary thereof the rights of the cedent.

118.   Power to reissue redeemed debenture in certain cases

   (1) Where a company has redeemed any debentures previously issued, not being debentures convertible into shares of the company, it shall, unless its constitution or the conditions of issue of such debentures expressly otherwise provide or the debentures have been redeemed in pursuance of any obligation on the part of the company to redeem them, (not being an obligation enforceable only by the person to whom the redeemed debentures were issued or his successors in title) have and be deemed at all times to have had power to keep the debentures alive for the purpose of re-issue, and, where a company has purported to exercise such a power, it shall have and be deemed at all times to have had power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place, and upon such a re-issue the person entitled to the debentures shall have and shall be deemed at all times to have had the same rights and priorities as if the debentures had not previously been issued.

   (2) Where with the object of keeping debentures alive for the purpose of re-issue, they have been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

   (3) Where a company had deposited any of its debentures to secure advances from time to time 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 whilst the debentures remained so deposited.

   (4) Nothing in this section shall prejudice any power reserved to a company by its debentures or the securities therefor, to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished.

119.   Debenture to be described as secured or unsecured

   No debenture, debenture certificate or prospectus relating to debentures shall be issued by a company unless the term "debenture" or such other term denoting a debenture used therein is qualified by the word "secured" or "unsecured", as the case may be.

120.   Form of debentures or debenture certificates

   (1) No debenture or debenture certificate shall be issued by a company unless the conditions of the debenture concerned are stated on the debenture or on the debenture certificate.

   (2) Any debenture or debenture certificate shall be signed by one director of the company and an officer of the company duly authorised thereto by the directors and shall, in the case where the debenture concerned is not a bearer debenture and in the case of a debenture certificate, specify the debentures, other than bearer debentures, of that company held by the person named therein.

   (3) Any signature referred to in subsection (2) may be affixed to a debenture or debenture certificate by autographic or mechanical means.

   (4) Any debenture or debenture certificate issued in terms of this section shall be prima facie evidence of the title thereto of the person named therein or, in the case of a bearer debenture, of the bearer thereof.

121.   Register of pledges, cessions and bonds and Register of debenture holders

   (1) Every company shall keep at its registered office a register of charges and enter therein all charges affecting property of the company, giving in each case a short description of the property charged and the names and addresses of the persons in whose favour any charge or to whom any pledge has been delivered.

   (2) Every company shall keep at its registered office a register of debenture-holders showing the number of debentures issued and outstanding and whether or not they are payable to bearer and specifying the names and addresses of the holders, other than bearers, thereof.

   (3) The provisions of section 83 relating to the share register shall apply mutatis mutandis to the registers required to be kept by this section.

122.   Special powers of court

   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.

123.   Perpetual debentures

   Notwithstanding any other law, a condition contained in a debenture or in an agency deed for securing

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