Companies - Private Companies (Ss 245-247)

Link to law: http://www.elaws.gov.bw/desplaylrpage1.php?id=1315

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[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.

(7) The references in subsections (4), (5) and (6) to a shareholder

shall in the case of a close company be read as referring to a member