Part VII: Capital of the
Chapter 1: Securities and Transactions Therein
Article A: Freedom to Diversify
285. A company may have shares, debentures or other
securities, each of which may have different rights attached.
Freedom to diversify
Article B: Registered Share Capital
286. The general meeting may increase the
registered share capital of a company in classes of shares, as it may determine.
Increasing registered share capital
287. The general meeting may cancel unalloted
registered share capital, provided that the company is under no obligation,
including a conditional obligation, to allot such shares.
Cancellation of registered share capital
Article C: Issue of Securities
288. The board of directors may issue shares and
other securities, convertible into or realizable as shares, up to the limit of
the company’s registered share capital; for this purpose, convertible securities
or securities realizable as shares shall be considered to have been converted or
realized on the date of issue.
Authority to issue shares and convertible
289. (a) The board of directors may resolve to
issue a series of debentures within the scope of its power to borrow on behalf
of the company, and within the bounds of such power.
(b) The provisions of
subsection (a) shall not negate the power of the general manager, or a person
authorized by him for such purpose, from borrowing on behalf of the company,
from issuing single debentures, promissory notes or bills of exchange, within
the bounds of his power to do so.
Power to issue debentures
290. (a) In a private company, the issued capital
of which contains one class of shares, shares shall be offered to each
shareholder in accordance with the proportion of each shareholder’s holding of
the issued share capital; the board of directors may offer another person the
shares that a shareholder refused to purchase or did not accept a tender offer
before the final date fixed for such in the offer, unless otherwise prescribed
in the articles of association.
(b) A company
incorporated prior to the commencement of this Law which in its articles of
association has contracted out of article (4) of the Second Schedule to the
Companies Ordinance, as it was worded immediately prior to the commencement of
this Law, shall be considered to have contracted out of subsection (a) in its
articles of association.
Entitlement to participate in future allotments
291. A company shall not allot a share the
consideration for which, in whole or in part, is not paid up in cash, unless the
consideration for the share is specified in a written document.
Allotment other than in return for cash
292. A private company must, within fourteen days
of an allotment of shares, provide the Registrar with the following documents:
(1) a report, in the form
prescribed by the Minister, specifying the details of the allotment;
(2) in allotments to
which the provisions of section 291 apply – a copy of the document as referred
to in that section.