PART
- III
SHARES, SHARE CAPITAL AND SHAREHOLDERS
Authorised and
Issued Capital
15. i. The capital
mentioned in the Articles of Incorporation shall be the authorised
capital of the company within which the company shall be entitled
to issue shares.
ii. The authorised
share capital may be varied with the approval of shareholders
and the Department.
Paid up Capital
16. i. Subject to
other provisions of this Act. all shares issued by a company shall
be paid up within ninety days of allotment or within
such extended time as the Board may permit.
ii. If the amount
due of shares is not paid up within
the time specified in subsection (i) above, the
Board may decide to charge interest at a rate
not exceeding the maximum Bank Overdraft rate
applicable to the company and the share together with
the money paid on application shall be liable to forfeiture.
Amount Payable
on Application
17. Not less
than 25% of the amounts payable on shares shall be paid along
with the application.
Issue of
Further Shares
18.
i. Subject to
section 15, the Board may increase the
issued capital of the company by issuing further shares
to the shareholders and/or to the public with the
approval of the shareholders and the Department.
ii. Shares may be
issued at par, at premium, or at discount.
iii. A company
may at any time issue to the ordinary shareholders
bonus shares pro-rata by capitalisation of its
free reserves and undistributed
profits or utilisation of shares premium
with the approval
of the shareholders and the Department.
iv. Any further
shares issued by a company shall rank pari passu with the existing
shares already issued in all respects. However,
the entitlement
to dividend on the new shares shall be from such date
as the company may decide.
Offer of
shares to the Public
19.
i. Offer of
shares to the public shall be made by issuing
a prospectus
containing particulars prescribed under subsection v) below and the
prospectus shall incorporate such changes as the Department
may require before it is issued to the public.
ii. The prospectus
shall be printed, dated and signed by the Chairman and Managing
Director and it shall be registered with the Department for
a period of not less than seven days before the offer of shares is
made and every copy of prospectus shall state that the prospectus
has been so registered.
iii. The offer
shall be made by publishing the prospectus
in a national
newspaper.
iv. A copy of
the prospectus shall be given alongwith the application form for shares.
v. The
prospectus shall, inter alia,
contain the following particulars;
a. name of the
company;
b. main objects
of the company and present business of the company;
c. particulars
of authorised, issued and paid up capital and of any borrowings,
including by the issue of debentures, with
a period to maturity exceeding twelve moths;
d. particulars
of shares issued or to be issued for consideration
other than cash.
e. names
and addresses of the Directors, including
the Managing Director,
auditors and bankers of the company;
f. shares held
by the Directors;
g. purpose of
making the offer;
h. amount of
premium or discount on shares;
i. underwriting
commission payable on the shares under issue which shall
not exceed 2% of the amount of capital underwritten
and names and addresses of persons to whom such commission is payable.
j. brokerage
not exceeding one per cent of the value of shares to be procured by
the brokers and names and addresses of such brokers;
k. report
of the auditors on the turnover, profits and dividends of the
company for the past five financial years or such
lesser period for which the company has been in
existence, and on the financial stability or solvency
having regard to the proposed share issue;
l. interest
of the Directors and their family members in any contract or arrangement
with the company; and
m. other particulars,
if any, prescribed by the Department.
vi. the Chairman and
Managing Director signing the prospectus shall be personally responsible
for any false statement or misstatement in the prospectus made
deliberately or with knowledge thereof and shall be personally
liable to pay compensation to any person who suffers
any
loss or damage arising
from his subscription or purchase of shares offered through
the prospectus provided that any such Chairman
or Managing
Director shall not be liable if he withdraws his consent for
issue of prospectus before the date of publication
in a national
newspaper and gives a public
notice in a national newspaper of that fact.
Application
and Allotment
20.
i. Every person
intending to become a shareholder (other than a subscriber to
the Articles) shall submit an application in writing in the form
prescribed by the company enclosing therewith the
amount payable
on application within such time as may be
specified by the company.
ii. The Board
may allot shares to the applicant upon receipt of the
application together with the money payable thereupon provided that
no allotment may be made to a non-Bhutanese person, including
a Foreign Company, without the approval of the Government.
iii. All moneys received
in respect of applications shall be kept in a separate bank
account till the allotment of shares is made and refund shall be
made to the applicants who have not been allotted
or have been
allotted lesser number of shares than applied for as the case may
be.
iv. Shares may be
allotted for consideration other than cash only with the approval
of the shareholders.
v. Particulars of
shares allotted with the names of shareholders shall be filed with
the Department within thirty days of allotment.
Nature of
Shares and Voting Rights
21. i. Shares
in a company shall be movable property and transferable in accordance
with the provisions of this Act or rules, if any, made thereunder
and the Articles.
ii. Shares shall
be distinguished by appropriate numbers serially
given and shall be evidenced by one or more Share Certificates.
iii. Each Ordinary
Share fully paid up shall entitle the holder to one vote.
iv. Each Ordinary
Share shall be of uniform amount.
v. The voting
rights pertaining to the holders of Preference Shares
shall be specified in the Articles.
Certificate
of Shares
22. i. A certificate
under the seal of the company specifying any
share held by
any shareholder shall be prima-facie evidence of
the title of the shareholder to such share.
ii. A certificate
shall be in the form specified in Schedule - III.
iii. A certificate
may be renewed or a duplicate of a certificate may be issued
by a company upon the application of a shareholder if such certificate.
a. is proved
to have been lost or destroyed; or
b. having
been defaced, or mutilated or torn is surrendered to the
company on such
terms and upon such indemnity or guarantee
as the Board
may think fit.
Transfer
of Shares
23.
i. Shares may
be transferred by duly executing an instrument of transfer in
the form specified in Schedule - IV in favour
of the transferee
and having the transfer registered in the
books of the company
upon production of the instrument of transfer together
with the
relevant Share Certificate.
ii. All transfers
in favour of non-Bhutanese persons including
a Foreign
Company shall be done only upon obtaining written approval of
the Government.
iii. Upon receipt
of a duly executed instrument of transfer and the relevant
Share Certificate, the company shall,
subject to the provisions
of subsection (ii), proceed to register the transfer within thirty
days from the date of receipt.
iv. Particulars
of all transfers approved or refused
shall be forthwith
recorded in a Register of Transfers in the form prescribed
in Schedule - V.
v. A company
may in the interest of the company and if permitted by
the Articles
have the power to refuse transfer of shares for reasons to be
recorded in writing.
vi. Where a
company refuses to register a transfer
or fails to register
a transfer within the prescribed time, any aggrieved
party may
make an application to the Department for suitable directions
to the company and the Department shall dispose of the applications
after hearing the parties.
Nominee
24. For each
share allotted only one nominee may be nominated by the shareholder
which fact shall be recorded on the Share Certificate and in
the Register of Shareholders.
Transmission
of Shares
25. i. In the
case of death of a shareholder, the company
shall transmit
the shares to the name of the nominee.
ii. In the case
of lunacy or insolvency of a shareholder the company shall, upon production
of an order from the Court, transmit the shares held in the
name of the shareholder to the name
of the person mentioned
in the order who shall be the nominee or if the nominee is a minor
the legal guardian of such a nominee.
Register
of Shareholders
26. i. a. A
company shall maintain a Register of Shareholders in the form specified
in Schedule - VI
b. An index shareholders shall also be maintained
by the company
in alphabetical order.
ii. Particulars
of all issues of shares, transfers and transmission shall
be entered in the Register of
Shareholders and where a shareholder
is a non-Bhutanese person the Register of
Shareholders shall specify the fact.
iii. The Register
of Shareholders may be closed for periods
not exceeding
in the aggregate thirty days in any year by
publishing a notice
in a national newspaper not less than seven
days before the closure
in each case.
Annual List
of Shareholders
27. Each year
the company shall deliver to the Department a list of
shareholders as on the date of the Annual General Meeting held in
that year within thirty days from the date of
conclusion of the said meeting
and the list shall contain the name and
address of each shareholder
alongwith the number of shares held by him.
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