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Division 3A - Reduction of share capital

...Division 3A - Reduction of share capital...

78K Liability of members on reduced shares

... Liability of members on reduced shares Where a company's share capital is reduced under any provision of this Division, a member of the company (past or present) is not liable in respect of the issue price of any share to any call or contribution greater in amount than the difference (if any) between — the issue price of the share; and the aggregate of the amount paid up on the share (if any) and the amount reduced on the share. ...

383 No civil proceedings to be brought in respect of bearer shares or share warrants

... No civil proceedings to be brought in respect of bearer shares or share warrants Any allotment, issue, sale, transfer, assignment or other disposition in Singapore of any bearer share or share warrant by a foreign company registered under this Division is void. 15/2017 No civil proceedings may be brought or maintained in any court for or in respect of any bearer share or share warrant allotted, issued, sold, transferred, assigned or disposed by a foreign company registered under this Division. 15/2017 ...

67 Use of share capital to pay expenses incurred in issue of new shares

... Use of share capital to pay expenses incurred in issue of new shares A company may use its share capital to pay any expenses (including brokerage or commission) incurred directly in the issue of new shares. 36/2014 A payment made under subsection (1) is not to be taken as reducing the amount of share capital of the company. 36/2014 ...

68 Issue of shares for no consideration

... Issue of shares for no consideration A company having a share capital may issue shares for which no consideration is payable to the issuing company. 36/2014 ...

71 Power of company to alter its share capital

... Power of company to alter its share capital Subject to subsections (1B) and (1C), a company, if so authorised by its constitution, may in general meeting alter its share capital in any one or more of the following ways: Deleted by Act 21 of 2005 consolidate and divide all or any of its share capital; convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares; subdivide its shares or any of them, so however that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share is the same as it was in the case of the share from which the reduced share is derived; cancel the number of shares which at the date of the passing of the resolution in that behalf have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the number of the shares so cancelled. 36/2014 A public company which alters its share capital may lodge with the Registrar a notice of the alteration in the prescribed form. 36/2014 A private company may alter its share capital by lodging a notice of alteration in the prescribed form with the Registrar. 36/2014 An alteration of share capital of a private company on or after does not take effect until the electronic register of members of the company is updated by the Registrar under section 196A(5). 36/2014 Cancellations A cancellation of shares under this section is not deemed to be a reduction of share capital within the meaning of this Act. As to share capital of unlimited company on re-registration An unlimited company having a share capital may by any resolution passed for the purposes of section 30(1) — increase the amount of its share capital by increasing the issue price of each of its shares, but subject to the condition that no part of the increased capital is capable of being called up except in the event and for the purposes of the company being wound up; and in addition or alternatively, provide that a specified portion of its uncalled share capital is not capable of being...

78A Preliminary

... Preliminary A company may reduce its share capital under the provisions of this Division in any way and, in particular, do all or any of the following: extinguish or reduce the liability on any of its shares in respect of share capital not paid up; cancel any paid-up share capital which is lost or unrepresented by available assets; return to shareholders any paid-up share capital which is more than it needs. A company may not reduce its share capital in any way except by a procedure provided for it by the provisions of this Division. A company's constitution may exclude or restrict any power to reduce share capital conferred on the company by this Division. 36/2014 In this Division — reduction information , in relation to a proposed reduction of share capital by a special resolution of a company, means the following information: the amount of the company's share capital that is thereby reduced; the number of shares that are thereby cancelled; resolution date , in relation to a resolution, means the date when the resolution is passed. 36/2014 This Division does not apply to an unlimited company, and does not preclude such a company from reducing in any way its share capital. This Division does not apply to any redemption of preference shares issued by a company under section 70(1) which results in a reduction in the company's share capital. 36/2014 This Division does not apply to the purchase or acquisition or proposed purchase or acquisition by a company of its own shares in accordance with sections 76B to 76G. ...

195 Limitation of liability of trustee, etc., registered as holder of shares

... Limitation of liability of trustee, etc., registered as holder of shares Any trustee, executor or administrator of the estate of any deceased person who was registered in a register as the holder of a share in any company may become registered as the holder of that share as trustee, executor or administrator of that estate and is in respect of that share subject to the same liabilities and no more as he or she would have been subject to if the share had remained registered in the name of the deceased person. 15/2017 Any trustee, executor or administrator of the estate of any deceased person who was beneficially entitled to a share in any company being a share registered in a register may with the consent of the company and of the registered holder of that share become registered as the holder of the share as trustee, executor or administrator of that estate and is in respect of the share subject to the same liabilities and no more as he or she would have been subject to if the share had been registered in the name of the deceased person. 15/2017 Shares in a company registered in a register and held by a trustee in respect of a particular trust must at the request of the trustee be marked in the register in such a way as to identify them as being held in respect of the trust. 15/2017 Subject to this section, no notice of any trust expressed, implied or constructive may be entered in a register or be receivable by the Registrar and no liabilities are affected by anything done pursuant to subsection (1), (2) or (3) or pursuant to the law of any other place which corresponds to this section and the company concerned is not affected by notice of any trust by anything so done. 15/2017 ...

7 Interests in shares

... held by the manager of the collective investment scheme concerned, does not constitute an interest in a share. Where a body corporate has, or is by the provisions of this section deemed to have, an interest in a share and...
... the body corporate, that person is deemed to have an interest in that share. Where a body corporate has, or is by the provisions of this section (apart from this subsection) deemed to have, an interest in a share and...
... the voting power in the body corporate, that person is deemed to have an interest in that share. 36/2014 For the purposes of subsection (4A), a person is an associate of another person if the firstmentioned...
... the share mentioned in subsection (4A); or a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of that other person in relation to the share mentioned in subsection (4A). 36/2014 Where a person — has entered into a contract to purchase a share; has a right, otherwise than by reason of having an interest under a trust, to have a share transferred to the person or to the person's order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; has the right to acquire a share, or an interest in a share, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or is entitled (otherwise than by reason of the person having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members) to exercise or control the exercise of a right attached to a share, not being a share of which the person is the registered holder, that person is deemed to have an interest in that share. For the purposes of Division 4 of Part 4 and sections 163 to 165 and 244, a book-entry security is to be treated as if it were an interest in a share. 36/2014 A person is not to be deemed not to have an interest in a share by reason only that the person has the interest in the share jointly with another person. It is immaterial, for the purposes of determining...

62B Transitional provisions for section 62A

... Transitional provisions for section 62A For the purpose of the operation of this Act on or after in relation to a share issued before that date — the amount paid on the share is the sum of all amounts paid to the company at any time for the share (but not including any premium); and the amount unpaid on the share is the difference between the price of issue of the share (but not including any premium) and the amount paid on the share. On , any amount standing to the credit of a company's share premium account and any amount standing to the credit of a company's capital redemption reserve becomes part of the company's share capital. Despite subsection (2), a company may use the amount standing to the credit of its share premium account immediately before to — provide for the premium payable on redemption of debentures or redeemable preference shares issued before that date...
... dividends are satisfied by the issue of shares to members of the company. Despite subsection (2), if the company carries on insurance business in Singapore immediately before , it may also apply the amount standing to the credit of its share...
...) entered into before that date or a trust deed or other document executed before that date — a reference to the par or nominal value of a share is a reference to — if the share is issued before that date — the par or nominal value of the share immediately before that date; if the share is issued on or after that date but shares of the same class were on issue immediately before that date — the par or nominal value that the share would have had if it had been issued then; or if the share is issued on or after that date and shares of the same class were not on issue immediately before that date — the par or nominal value determined by the directors, and a reference to share premium is a reference to any residual share capital in relation to the share; a reference to a right to a return of capital on a share is a reference to a right to a return of capital of a value equal to the amount paid in respect of the share's par or nominal value; and a reference to the aggregate par or nominal value of the company's issued share capital is a reference to that aggregate as it existed immediately before that date as — increased to take account of the par or nominal value as defined in paragraph...

64 Rights and powers attaching shares

... Rights and powers attaching shares Subject to subsections (2) and (3), sections 21 and 76J, and any written law to the contrary, a share in a company confers on the holder of the share the right to one vote on a poll at a meeting of the company on any resolution. 36/2014 A company's constitution may provide that a member is not entitled to vote unless all calls or other sums personally payable by the member in respect of shares in the company have been paid. 36/2014 Subject to subsection (4) and section 64A, a right specified in subsection (1) may be negated, altered, or added to by the constitution of the company. 36/2014 Despite subsection (3), the right of a holder of a specified share of a company to at least one vote on a poll at a meeting of the company on the following resolutions may not be negated or altered: a resolution to wind up the company voluntarily under section 160 of the Insolvency, Restructuring and Dissolution Act 2018; or a resolution to vary any right attached to a specified share and conferred on the holder. 36/2014; 40/2018 In subsection (4), specified share means a share in the company, by whatever name called which, but for that subsection, does not entitle the holder thereof to the right to vote at a general meeting of the company. 36/2014 This section does not operate so as to limit or derogate from the rights of any person under section 74. 36/2014 ...

66 Share warrants

... Share warrants A company must not issue any share warrant stating that the bearer of the warrant is entitled to the shares therein specified and which enables the shares to be transferred by delivery of the warrant. The bearer of a share warrant issued before is, in the 2-year period after , entitled to surrender it for cancellation and to have the bearer's name entered in the register of members. 36/2014 The company is responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant issued before in respect of the shares therein specified without the warrant being surrendered and cancelled. 36/2014 A company must cancel any share warrant which is issued by a company before that is unaccounted for by the expiry of the 2-year period mentioned in subsection (2), and the company is not responsible for any loss incurred by any person by reason of such cancellation. 36/2014 ...

63C Notice of increase in total amount paid up on shares

... Notice of increase in total amount paid up on shares Where a private company issues any partly paid or unpaid share of any class and the company subsequently receives all or any part of the unpaid amount with respect to the share, the company must lodge with the Registrar a notice in the prescribed form with respect to the total amount of such payments and the increase in the total amount paid up on the relevant class of shares within 14 days after the payment. 36/2014 ...

78G Reduction by special resolution subject to Court approval

... Reduction by special resolution subject to Court approval A company limited by shares may, as an alternative to reducing its share capital under section 78B or 78C, reduce it in any way by a special resolution approved by an order of the Court under section 78I, but the resolution and the reduction of the share capital do not take effect until — that order has been made; the company has complied with section 78I(3) (lodgment of information with Registrar); and the Registrar has recorded the information lodged with him or her under section 78I(3) in the appropriate register. Deleted by Act 36 of 2014 ...

74A Conversion of shares

... Conversion of shares Subject to this section and sections 64A and 75, a company the share capital of which is divided into different classes of shares may make provision in its constitution to authorise the conversion of one class of shares into another class of shares. 36/2014 A public company may convert one class of shares ( A ) into another class of shares ( B ) by special resolution only if the constitution of the public company — permits B to be issued; and sets out the rights attached to B . 36/2014 A private company may convert shares from one class to another by lodging a notice of conversion in the prescribed form with the Registrar. 36/2014 A conversion of shares by a private company on or after does not take effect until the electronic register of members of the company is updated by the Registrar under section 196A(5). 36/2014 Section 74 applies where a conversion of shares undertaken by a company involves a variation or an abrogation of the rights attached to any class of shares in the company. 36/2014 Despite anything in this section, a share that is not a redeemable preference share when issued cannot afterwards be converted into a redeemable preference share. 36/2014 ...

73 Redenomination of shares

... Redenomination of shares A company having a share capital may by ordinary resolution convert its share capital or any class of shares from one currency to another currency. 36/2014 A resolution under this section may authorise a company having a share capital to redenominate its share capital — on more than one occasion; and at a specified time or under specified circumstances. 36/2014 The redenomination must be made at a spot rate of exchange specified in the resolution. 36/2014 The rate mentioned in subsection (3) must be either — a rate prevailing on a day specified in the resolution; or a rate determined by taking the average of rates prevailing on each consecutive day of a period specified in the resolution. 36/2014 The day or period specified for the purposes of subsection (4) must be within the period of 28 days ending on the day before the resolution is passed. 36/2014 A resolution under this section may specify conditions which must be met before the redenomination takes effect. 36/2014 Redenomination in accordance with a resolution under this section takes effect — on the day on which the resolution is passed; or on such later day as may be determined in accordance with the resolution. 36/2014 A resolution under this section lapses if the redenomination for which it provides has not taken effect at the end of the period of 28 days beginning on the date on which it is passed. 36/2014 A company's constitution may exclude or restrict the exercise of a power conferred by this section. 36/2014 In this section and sections 73A and 73B, redenomination means the conversion of share capital or any class of shares from one currency to another. 36/2014 ...

78C Reduction of share capital by public company

... Reduction of share capital by public company A public company may reduce its share capital in any way by a special resolution if the company — Deleted by Act 36 of 2014 meets the solvency requirements; and meets such publicity requirements as may be prescribed by the Minister, but the resolution and the reduction of the share capital take effect only as provided by section 78E. Despite subsection (1), the company need not meet the solvency requirements if the reduction of share capital does not involve any of the following: a reduction or distribution of cash or other assets by the company; a release of any liability owed to the company. 36/2014 The company meets the solvency requirements if — all the directors of the company make a solvency statement in relation to the reduction of share capital; the statement is made — in time for subsection (4)( a ) to be complied with; but not before the beginning of the period of 30 days ending with the resolution date; and a copy of the solvency statement is lodged with the Registrar, together with the copy of the resolution required to be lodged with the Registrar under section 186, within 15 days beginning with the resolution date. 36/2014 Unless subsection (2) applies, the company must — throughout the meeting at which the resolution is to be passed — make the solvency statement or a copy of it available for inspection by the members at the meeting; and throughout the 6 weeks beginning with the resolution date — make the solvency statement or a copy of it available at the company's registered office for inspection free of charge by any creditor of the company. The resolution does not become invalid by virtue only of a contravention of subsection (4), but every officer of the company who is in default shall be guilty of an offence. Any requirement under subsection (3)( c ) or (4)( b ) ceases if the resolution is revoked. ...

78H Creditor protection

... Creditor protection This section applies if a company makes an application under section 78G(1) and the proposed reduction of share capital involves either — a reduction of liability in respect of unpaid share capital; or the payment to a shareholder of any paid-up share capital, and also applies if the Court so directs in any other case where a company makes an application under that section. Upon the application to the Court, the Court is to settle a list of qualifying creditors. If the proposed reduction of share capital involves either — a reduction of liability in respect of unpaid share capital; or the payment to a shareholder of any paid-up share capital, the Court may, if having regard to any special circumstances of the case it thinks it appropriate to do so, direct that any class or classes of creditors are not qualifying creditors. For the purpose of settling the list of qualifying creditors, the Court — must ascertain, as far as possible without requiring an application from any creditor, the names of qualifying creditors and the nature and amount of their debts or claims; and may publish notices fixing a day or days within which creditors not included in the list are to claim to be so included or are to be excluded from the list. Any officer of the company who — intentionally conceals the name of a qualifying creditor; intentionally misrepresents the nature or amount of the debt or claim of any creditor; or aids, abets or is privy to any such concealment or misrepresentation, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years. In this section and section 78I but subject to subsection (3), qualifying creditor means a creditor of the company who, at a date fixed by the Court, is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company. ...

128 Registration of transfer at request of transferor by private companies

... Registration of transfer at request of transferor by private companies Subject to section 129, on the request in writing of the transferor of — any share in a private company — the company must lodge with the Registrar a notice of transfer of shares in the prescribed form; or any debenture or other interest in a private company — the company must enter in such register as the company considers appropriate, the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee. 36/2014 The transfer of any share in a private company on or after does not take effect until the electronic register of members of the company is updated by the Registrar under section 196A(5). 36/2014 On the request in writing of the transferor of a share or debenture, the private company must by written notice require the person having the possession, custody or control of the share certificate or debenture and the instrument of transfer thereof or either of them to deliver or produce it or them to the office of the company within a stated period, being not less than 7 and not more than 28 days after the date of the notice, to have the share certificate or debenture cancelled or rectified, and the transfer registered (in the case of a transfer of debenture) or otherwise dealt with. 36/2014 If any person refuses or neglects to comply with a notice given under subsection (3), the transferor may apply to a judge to issue a summons for that person to appear before the Court and show cause why the documents mentioned in the notice should not be delivered or produced as required by the notice. 36/2014 Upon appearance of a person so summoned the Court may examine the person upon oath and receive other evidence, or if the person does not appear after being duly served with such summons, the Court may receive evidence in the person's absence and in either case the Court may order the person to deliver such documents to the company upon such terms or conditions as to the Court seem fit, and the costs of the summons and proceedings thereon are in the discretion of the Court. 36/2014 Lists of share certificates or debentures called in under this section and not delivered or produced must be exhibited in the office of the company and must be advertised in such newspapers and at such times as the...

180 As to member’s rights at meetings

... As to member's rights at meetings A member has, despite any provision in the constitution of the company, a right to attend any general meeting of the company and to speak on any resolution before the meeting. 36/2014 In the case of a company limited by shares, the holder of a share may vote on a resolution before a general meeting of the company if, in accordance with the provisions of section 64, the share confers on the holder a right to vote on that resolution. 36/2014 In the case of a company other than a company limited by shares, a member may vote on a resolution before a general meeting of the company if the right to vote on that resolution is conferred on the member under the constitution of the company. 36/2014 Despite subsection (2), a preference share issued after but before carries, in addition to any other right conferred by this Act, the right in a poll at any general meeting to at least one vote in respect of each such share held during such period as the preferential dividend or any part thereof remains in arrears and unpaid, such period starting from a date not more than 12 months, or such lesser period as the constitution may provide, after the due date of the dividend. 36/2014 For the purposes of subsection (4) — preference share means a share, by whatever name called, which does not entitle the holder thereof — to the right to vote at a general meeting (except in the circumstances specified in subsection (4)); or to any right to participate beyond a specified amount in any distribution whether by way of dividend, or on redemption, in a winding up, or otherwise; and a dividend is deemed to be due on the date appointed in the constitution for the payment of the dividend for any year or other period or, if no such date is appointed, upon the day immediately following the expiration of the year or other period and whether or not such dividend has been earned or declared. 36/2014 ...

Division 3A — Reduction of share capital

Preliminary

78A.—(1) A company may reduce its share capital under the provisions of this Division in any way and, in particular, do all or any of the following:

(a)	extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b)	cancel any paid‑up share capital which is lost or unrepresented by available assets;
(c)	return to shareholders any paid‑up share capital which is more than it needs.

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

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

[36/2014]

(4) In this Division —

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

(a)	the amount of the company’s share capital that is thereby reduced;
(b)	the number of shares that are thereby cancelled;

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

[36/2014]

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

(5A) This Division does not apply to any redemption of preference shares issued by a company under section 70(1) which results in a reduction in the company’s share capital.

[36/2014]

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

Reduction of share capital by private company

78B.—(1) A private company limited by shares may reduce its share capital in any way by a special resolution if the company —

(a)	[Deleted by Act 36 of 2014]
(b)	meets the solvency requirements; and
(c)	meets such publicity requirements as may be prescribed by the Minister,

but the resolution and the reduction of the share capital take effect only as provided by section 78E.

[36/2014]

(2) Despite subsection (1), the company need not meet the solvency requirements if the reduction of share capital does not involve any of the following:

(a)	a reduction or distribution of cash or other assets by the company;
(b)	a release of any liability owed to the company. [36/2014]

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

(a)

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

(b)

the statement is made —

(i)	in time for subsection (4)(a) to be complied with; but
(ii)	not before the beginning of the period of 20 days ending with the resolution date. [21/2005; 36/2014]

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

(a)

must —

(i)	if the resolution for reducing share capital is a special resolution to be passed by written means under section 184A — ensure that every copy of the resolution served under section 183(3A) or 184C(1) (as the case may be) is accompanied by a copy of the solvency statement; or
(ii)	if the resolution is a special resolution to be passed in a general meeting — throughout that meeting make the solvency statement or a copy of it available for inspection by the members at that meeting; and

(b)

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

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

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

Reduction of share capital by public company

78C.—(1) A public company may reduce its share capital in any way by a special resolution if the company —

(a)	[Deleted by Act 36 of 2014]
(b)	meets the solvency requirements; and
(c)	meets such publicity requirements as may be prescribed by the Minister,

but the resolution and the reduction of the share capital take effect only as provided by section 78E.

(2) Despite subsection (1), the company need not meet the solvency requirements if the reduction of share capital does not involve any of the following:

(a)	a reduction or distribution of cash or other assets by the company;
(b)	a release of any liability owed to the company. [36/2014]

(3) The company meets the solvency requirements if —

(a)

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

(b)

the statement is made —

(i)	in time for subsection (4)(a) to be complied with; but
(ii)	not before the beginning of the period of 30 days ending with the resolution date; and

(c)

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

[36/2014]

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

(a)	throughout the meeting at which the resolution is to be passed — make the solvency statement or a copy of it available for inspection by the members at the meeting; and
(b)	throughout the 6 weeks beginning with the resolution date — make the solvency statement or a copy of it available at the company’s registered office for inspection free of charge by any creditor of the company.

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

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

Creditor’s right to object to company’s reduction

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

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

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

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

(a)	the creditor must as soon as possible serve the application on the company; and
(b)	the company must as soon as possible give to the Registrar notice of the application.

Position at end of period for creditor objections

78E.—(1) Where —

(a)	a private company passes a special resolution for reducing its share capital and meets the requirements under section 78B(1)(c) and the solvency requirements under section 78B(3) (if applicable); and
(b)	no application for cancellation of the resolution has been made under section 78D(2) during the 6 weeks beginning with the resolution date,

for the reduction of share capital to take effect, the company must lodge with the Registrar —

(c)

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

(d)

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

(i)	a copy of the solvency statement under section 78B(3) (if applicable);
(ii)	a statement made by the directors confirming that the requirements under section 78B(1)(c) and the solvency requirements under section 78B(3) (if applicable) have been complied with, and that no application for cancellation of the resolution has been made;
(iii)	a notice containing the reduction information. [36/2014]

(2) Where —

(a)	a public company passes a special resolution for reducing its share capital and meets the requirements under section 78C(1)(c) and the solvency requirements (if applicable) under section 78C(3); and
(b)	no application for cancellation of the resolution has been made under section 78D(2) during the 6 weeks beginning with the resolution date,

for the reduction of share capital to take effect, the company must lodge with the Registrar the following documents after the end of 6 weeks, and before the end of 8 weeks, beginning with the resolution date:

(c)	a statement made by the directors confirming that the requirements under section 78C(1)(c) and the solvency requirements under section 78C(3) (if applicable) have been complied with, and that no application for cancellation of the resolution has been made;
(d)	a notice containing the reduction information. [36/2014]

(3) Where —

(a)	a private company passes a special resolution for reducing its share capital and meets the requirements under section 78B(1)(c) and the solvency requirements under section 78B(3) (if applicable); but
(b)	during the 6 weeks beginning with the resolution date, one or more applications for cancellation of the resolution are made under section 78D(2),

for the reduction of share capital to take effect, the following conditions must be satisfied:

(c)

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

(d)

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

(i)	by the dismissal of the application under section 78F; or
(ii)	without determination (for example, because the application has been withdrawn);

(e)

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

(i)	a statement made by the directors confirming that the requirements under section 78B(1)(c), the solvency requirements under section 78B(3) (if applicable) and section 78D(4)(b) have been complied with, and that the proceedings in relation to each such application have been brought to an end by the dismissal of the application or without determination;
(ii)	in relation to each such application which has been dismissed by the Court, a copy of the order of the Court dismissing the application; and
(iii)	a notice containing the reduction information. [36/2014]

(4) Where —

(a)	a public company passes a special resolution for reducing its share capital and meets the requirements under section 78C(1)(c) and the solvency requirements under section 78C(3) (if applicable); but
(b)	during the 6 weeks beginning with the resolution date, one or more applications for cancellation of the resolution are made under section 78D(2),

for the reduction of capital to take effect, the following conditions must be satisfied:

(c)

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

(d)

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

(i)	by the dismissal of the application under section 78F; or
(ii)	without determination (for example, because the application has been withdrawn);

(e)

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

(i)	a statement made by the directors confirming that the requirements under section 78C(1)(c), the solvency requirements under section 78C(3) (if applicable) and section 78D(4) have been complied with, and that the proceedings in relation to each such application have been brought to an end by the dismissal of the application or without determination;
(ii)	in relation to each such application which has been dismissed by the Court, a copy of the order of the Court dismissing the application; and
(iii)	a notice containing the reduction information. [36/2014]

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

Power of Court where creditor objection made

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

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

(a)	the debt or claim has not been secured and the applicant does not have other adequate safeguards for it; and
(b)	it is not the case that security or other safeguards are unnecessary in view of the assets that the company would have after the reduction.

(3) Otherwise, the Court is to dismiss the application.

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

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

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

Reduction by special resolution subject to Court approval

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

(a)	that order has been made;
(b)	the company has complied with section 78I(3) (lodgment of information with Registrar); and
(c)	the Registrar has recorded the information lodged with him or her under section 78I(3) in the appropriate register.

(2) [Deleted by Act 36 of 2014]

Creditor protection

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

(a)	a reduction of liability in respect of unpaid share capital; or
(b)	the payment to a shareholder of any paid‑up share capital,

and also applies if the Court so directs in any other case where a company makes an application under that section.

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

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

(a)	a reduction of liability in respect of unpaid share capital; or
(b)	the payment to a shareholder of any paid‑up share capital,

the Court may, if having regard to any special circumstances of the case it thinks it appropriate to do so, direct that any class or classes of creditors are not qualifying creditors.

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

(a)	must ascertain, as far as possible without requiring an application from any creditor, the names of qualifying creditors and the nature and amount of their debts or claims; and
(b)	may publish notices fixing a day or days within which creditors not included in the list are to claim to be so included or are to be excluded from the list.

(5) Any officer of the company who —

(a)	intentionally conceals the name of a qualifying creditor;
(b)	intentionally misrepresents the nature or amount of the debt or claim of any creditor; or
(c)	aids, abets or is privy to any such concealment or misrepresentation,

shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years.

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

Court order approving reduction

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

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

(a)	who is included in the Court’s list of qualifying creditors under that section; and
(b)	whose claim has not been terminated or whose debt has not been discharged,

the Court must not make an order approving the reduction unless satisfied, as respects each qualifying creditor, that —

(c)	the qualifying creditor has consented to the reduction;
(d)	the qualifying creditor’s debt or claim has been secured or the qualifying creditor has other adequate safeguards for it; or
(e)	security or other safeguards are unnecessary in view of the assets the company would have after the reduction.

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

(a)	a copy of the order; and
(b)	a notice containing the reduction information,

within 90 days beginning with the date the order is made, or within such longer period as the Registrar may, on the application of the company and on receiving the prescribed fee, allow.

Offences for making groundless or false statements

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

(a)	is false; and
(b)	is not believed by the director to be true.

Liability of members on reduced shares

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

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

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