[Ch4201s245]245.   Limitations and privileges of a private company

            A private company -

     (a)     shall not have more than 25 shareholders provided that where two or more of its shareholders hold one or more shares jointly they shall be deemed to be one shareholder and provided further that, in computing the number of 25, no account shall be taken of persons who are in the employment of the company, and who, having been formerly in the employment of the company were while in that employment and have continued, after the determination of that employment, to be members of the company;

     (b)     shall not make any offer to the public to subscribe for its shares or debentures;

     (c)     may provide in its constitution that the right to transfer its shares is restricted;

     (d)     may dispense with the holding of shareholders meetings if resolutions which would otherwise require the holding of a meeting are passed by means of a resolution in lieu of meeting under section 107;

     (e)     unless its constitution otherwise requires may remove a director from office by special resolution under section 151(2);

     (f)      in the case of an exempt private company is pursuant to section 191 not required to appoint an auditor;

     (g)     in the case of an exempt private company is pursuant to section 206 not required to prepare and present its accounts in accordance with the International Financial Reporting Standards;

     (h)     in the case of an exempt private company is not required to appoint as secretary a person who is qualified under section 162(3);

     (i)      may dispense with the provision of an annual report by unanimous resolution under section 212;

     (j)      may by unanimous resolution under section 246 dispense with the keeping of an interests register; and

     (k)     may by unanimous agreement among the shareholders dispense with the observance of any of the matters referred to in section 247.

[Ch4201s246]246.   Private companies need not keep interests register

            (1) Subject to subsection (3), a private company may by unanimous resolution of its shareholders dispense with the need to keep an interests register and while such a resolution is in force no provision of this Act which requires any matter to be entered in the interests register shall apply to a private company.

            (2) A unanimous resolution under subsection (1) shall cease to have effect if any shareholder gives notice in writing to the company that the shareholder requires the company to keep an interests register.

            (3) This section shall not apply to close companies and section 264 shall apply to such companies.

[Ch4201s247]247.   Unanimous agreement by shareholders

            (1) Where all the shareholders of a private company and to the extent to which the matters referred to in this section apply to it, the members of a close company agree to or concur in any action which has been taken or is to be taken by the company-

     (a)     the taking of that action is deemed to be validly authorised by the company, notwithstanding any provision in the constitution of the company; and

     (b)     the provisions of this Act referred to in the Eighth Schedule shall not apply in relation to that action.

            (2) Without limiting the matters which may be agreed to or concurred in under subsection (1), that subsection shall apply where all the shareholders of a private company including, where relevant, a close company agree to or concur in-

     (a)     the issue of shares by the company;

     (b)     the making of a distribution by the company;

     (c)     the repurchase or redemption of shares in the company;

     (d)     the giving of financial assistance by a company for the purpose of, or in connection with, the purchase of shares in the company;

     (e)     the payment of remuneration to a director (or member in the case of a close company) or the making of a loan to a director (or member) or the conferral of any other benefit on a director (or member); or

     (f)      the making of a contract between an interested director (or member in the case of a close company) and the company.

            (3) Where-

     (a)     a distribution is made by a company under this section; and

     (b)     as a consequence of the making of the distribution, the company fails to satisfy the solvency test, the distribution is deemed not to have been validly made.

            (4) A distribution to a shareholder which is deemed not to have been validly made 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 his position in reliance on the validity of the distribution; and

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

            (5) If reasonable grounds did not exist for believing that the company would satisfy the solvency test after the making of a distribution which is deemed not to have been validly made, each shareholder who agreed to or concurred in the making of the distribution is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from the shareholders to whom the distribution was made.

            (6) If, in an action brought against a shareholder under subsection (4) or (5), 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 shareholder from liability in respect of,

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