chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 20 : Articles of association
1) A company shall frame the articles of association in order to attain the objectives set forth in its memorandum of association and carry out its activities in a well –managed manner.
2) The articles of association shall state the following matters:
a) Procedures for convening the general meeting of the company and notice to be given for such meeting,
b) Proceedings of general meeting,
c) Number of directors, provision of alternate director, if any, and tenure of directors,
d) Provisions relating to the minutes of decisions of the general meeting and the board of directors, and duplicate copies and inspection thereof,
e) If a person has to subscribe shares to become a director of a company, minimum number of shares,
f) In the case of a public company, qualifications and number of independent director,
g) Where any professional persons, other than shareholders, are to be appointed as directors, provisions relating to the number, tenure, qualifications and procedures of appointment of such persons,
h) Powers and duties of the board of directors and the managing director,
i) Authority of directors and delegation of authority,
j) Quorum for a meeting of the board of directors, notice of meeting and proceedings of meeting,
k) Lien on shares,
l) Different classes of shares and the rights, powers and restrictions attached to such shares,
m) Provisions relating to calls on shares and forfeiture of shares,
n) Provisions relating to the transfer of shares,
o) Matters on alteration in share capital,
p) Matters on buying back of shares by the company, if the company is to buy back its shares,
q) Appointment of a company secretary,
r) Provisions relating to remuneration, allowances and facilities of directors,
s) Use of the company’s seal in its transactions, if it is to be so used,
t) Accounts, books of accounts and audit of the company,
u) Provisions on powers to raise loans or debentures,
v) Amalgamation of the company,
w) Such matters, if any, as required by the prevailing law to be mentioned in the articles of association of a company carrying on any specific business,
x) Such other necessary matters as required to be mentioned in the articles of association.
3) If any provision contained in the articles of association of the company, inclusive of a provision on the saving of its directors or officers, is inconsistent with this Act and the memorandum of association, such provision shall be void to the extent of such inconsistency.
4) The format of articles of association shall be as prescribed.
Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 22 : Memorandum of association and articles of association to be published
1) A public company shall publish its memorandum of association and articles of association within three months after getting license to commence its business.
2) If any amendment is made to the memorandum of association and articles of association of a public company, the amended memorandum of association and articles of association shall be published within three months after such amendment.
3) A public company shall so keep the memorandum of association and articles of association published pursuant to Sub- section (1) or (2) at its registered office that such memorandum and articles can be made available as and when so demanded by the concerned.
Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 23 : Prospectus to be published
1) A public company shall publish its prospectus prior to issuing its securities publicly.
2) Prior to the publication of prospectus under Sub-section(1), the prospectus signed by all directors of the company has to be submitted, along with a written application made to the Securities Board for approval, under the prevailing laws on securities.
3) Unless and until the Securities Board approves and gives permission for the public issue under Sub-section (2) and a copy of such prospectus is registered with the office, no company or no person, on behalf of such company, shall publish, or cause to be published , the prospectus of such company.
4) If it appears that the prospectus submitted pursuant to Subsection( 2) omits any important matter or contains any unnecessary matter the Securities Board shall cause such prospectus to be amended or altered as required and grant approval to publish it in accordance with law.
5) If the prospectus submitted pursuant too Sub-section (2) is approved by the Securities Board, the concerned company shall give to the Office information thereof, in writing, accompanied by a copy of the approval letter of the Securities Board; and on receipt of that information, the Office shall register the prospectus pursuant to this Section.
Provided, however, that if it appears that any matter contained in this Act has not been complied with, the Office may refuse to register it.
6) If any person demands for a copy of the prospectus registered pursuant to Sub-section (5) , the Office shall provide such copy by collecting the prescribed fees.
7) In publishing the prospectus pursuant to Sub-section(1), the company shall also mention that the prospectus has been approved by the Securities Board and registered with the Office, and the date thereof.
8) The covering page of each prospectus shall also mention that such prospectus has been registered pursuant to this Section and that the Securities Board or the Office shall not be liable to bear any kind of responsibility in respect of the matters mentioned therein.
9) Prior to the approval by the Securities Board of the prospectus of any company, the concerned company shall make a declaration before the Securities Board that the provisions of this Act have been complied with; and the Securities Board may, if it deems necessary, seek opinion of the Office on that matter.
10) Other procedures to be fulfilled in publishing the prospectus and the matters to be set out in the prospectus shall be as mentioned in the prevailing law on securities.
Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 24 : Liability for matters contained in prospectus
1) It shall be the duty and obligation of the concerned company to abide by the matters contained in the prospectus published under Section (23).
2) The directors who have signed the prospectus as referred to in Sub-section (1) shall be liable for the matters mentioned in that prospectus .
3) If any published prospectus contains false statements made maliciously or deliberately and any person sustains any loss or damage by reason of his/her subscription of securities on the faith of that prospectus, the directors who have signed that prospectus shall be personally liable to pay compensation for the actual loss or damage so sustained .
Provided, however, that a promoter who resigns before the decision made by the company to publish the prospectus or whom on becoming aware of any false statement in the prospectus, publishes a notice of that matter to the information of the general public prior to the sale or allotment of securities or who proves that he/she did not know that the prospectus contained any false statement shall not be liable to bear such compensation.

Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 25 : Duplicate copies to be issued
1) If any shareholder or any other person concerned demands for a duplicate copy of the memorandum of association, prospectus, annual accounts and audit or directors report or any document submitted by the company to the Office the concerned company shall provide a duplicate copy of such document by collecting the fees prescribed in the articles of association.
Provided, however, that any person whoever may demand for such document in the case of a public company.
2) If the concerned company does not provide duplicates of such documents pursuant to Sub-section (1), the Office shall provide duplicates of such documents from its records by collecting the prescribed fees.

Companies Act 2063

Chapter 3  Memorandum of Association, Articles of Association and prospectus

Section 26 : Seal of company and its use
1) A company which intends to use a seal in its transactions shall make the seal in its name in clear legible letters.
2) The company using the seal as referred to in Sub-section (1), shall use it in any reports and records to be submitted on its behalf and business letters to be used in its name, statements of accounts, bills, invoices, requisition order forms, notices and official publications, negotiable instruments, bills of exchange, promissory notes, and official documents signed or issued on its behalf.
3) If any person fails to indicate the name of the company while signing, on behalf of the company, the documents mentioned in Subsection (2) , such person shall be personably liable for the same.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 27 : Face value of shares and application
1) The face value of shares of a private company shall be as specified in its articles of association.
2) The face value of shares of a public company shall be fifty rupees per share or shall be equivalent to such amount exceeding fifty rupees as is divisible by the figure ten as provided in the memorandum of association and articles of association.
3) In inviting an application by a public company for the subscription of its shares, no amount exceeding fifty per cent of the face value of each share shall be demanded with the application.
Provided, however, that in raising capital by a company which has been in operation since at least three years ago by publishing its audited fiscal statements for its last three years, at the time of publication of its prospectus, this provision shall not be applicable.
4) A person who intends to subscribe the shares of a public company has to make an application in the format as prescribed.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 28 : Allotment of shares
1) Where a public company invites the general public to apply for the subscription of its shares it shall allot the shares and give the shareholders a notice in the format as prescribed, within a maximum period of three months after the date of closure of share issue.
Provided, however, that in cases where at least fifty percent of the total shares issued publicly cannot be sold failing a guarantee/underwriting agreement on the subscription of at least fifty percent of the publicly issued shares, no shares shall be allotted.
2) If the company makes an application, explaining the reasons for failure to allot shares within the time-limit set forth in Sub-section(1), owing to the circumstance mentioned in the proviso to that Sub-section within seven days after the expiration of that time-limit, the Office may extend the time limit for up to three months for the allotment of shares. If the shares cannot be allotted even within such extended time limit, the company may allot such shares through negotiations or any other methods.
3) If the allotment of shares cannot be made even within the time –limit as referred to in Sub-section (1) or (2) , the amount received for the subscription of shares as well as an interest thereon, as prescribed, from the day of expiration of such time-limit to the day of refund of such amount shall be refunded.
4) If the funds are insufficient to refund the amount required to be refunded pursuant to Sub-section (3), the shortfall amount shall be borne by the promoters personally.
5) Where the allotment of shares pursuant to Sub-section (1)or (2) is made discriminatorily or with intent to cause any loss or damage to any investor may file a petition, setting out the reasons for the same, in the court on that matter.
6) If a petition is filed pursuant to Sub-section 5), where any investor has sustained any loss or damage by reason of the deliberate violation of this Section by any officer of the company or permission given by such officer to any one to commit such violation, the court may issue an order for realisation from such officer personally of compensation for such loss or damage as well as reasonable expenses incurred in the legal action.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 29 : Power to issue shares at premium
(1) A public company which may make public issue of securities in accordance with the prevailing law relating to securities may issue shares of premium value in accordance with the conditions and conditions specified in the prevailing law relating to securities. However, private companies or other public companies that have not made arrangements for the public disposal of securities in accordance with the prevailing law on securities can issue shares of premium value with the approval of the General Assembly in cases where the assets exceed the liabilities.
(2) In the event of the sale of shares at the premium price pursuant to sub-section (1), an amount equal to the value calculated out of the amount received therefrom shall be credited to the premium account.
(3) The amount in the account pursuant to sub-section (2) may be used by the company for the following purposes: –
(a) to allocate and issue fully paid up bonus shares to the shareholders out of the unissued share capital,
(b) to arrange the amount in respect of the premium to be paid on the return of any preference shares to be returned,
(c) to deduct the initial expenses of the company,
(d) to pay or recover the amount of commission or discount paid or incurred in connection with the issue of shares of the company.
(4) When seeking the approval of the Office to issue shares of premium value in accordance with sub-section (1), the three-year audited financial statement shall be provided to the Office.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 30 : Shares with different rights and rights of such shareholders
1) The company may, by making provisions to that effect in its memorandum of association and articles of association, issue various classes of shares with different rights attached thereto.
2) Except as otherwise provided in the articles of association of a accompany, approval of the shareholders of any particular class shall be required to make any alteration in the rights of those shareholders of that class.
Provided, however, that no alteration may be made in the rights of the shareholders of any particular class in a manner to adversely affect the rights of the shareholders of any other class.
3) If the shareholders representing at least ten percent share of any particular class who are not satisfied with a decision to make alteration in the rights attached to the shares of that class pursuant to Sub- section (2) file a petition in the court to have the decision to make such alteration void, the decision made to make alteration in the rights of the shareholders of such class shall not be enforced unless and until otherwise decided or ordered by the court.
4) A petition shall be made pursuant to Sub-section (3) within thirty days after the decision made to make alteration in the rights attached to the shares of any particular class; and any decision as referred to in Sub-section(2) shall not be enforced pending the expiration of that time limit.
5) If it appears that alteration in the rights conferred to the shareholders of the class concerned is prejudicial to the rights of the petitioner shareholders, the court may quash the decision made on the alteration in the rights of the shareholders of that class.
6) The board of directors shall submit a proposed resolution on the alteration in the rights of the shareholders of any particular class pursuant to Sub-section (2) to the general meeting of the shareholders of the concerned class; and such resolution has to be adopted as a special resolution by the general meeting.
7) Notwithstanding anything contained elsewhere in this Section, in privatising a company fully or partly owned by the Government of Nepal, as a shareholder, in accordance with the prevailing law on privatisation, the Government of Nepal may have special voting right in making decision on the following matters, as provided in the articles of association, so long as the investment to the Government of Nepal is retained in such company:
a) In making decision on a resolution to relinquish the title to an undertaking pursuant to Clause (a) of Subsection (1) of Section 105,
b) In making decision on voluntary liquidation of the company,
c) In making decision to amalgamate the company into another company.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 31 : Return of shares to be filed with office
1) A company shall file with the Office a return of allotments stating the number of shares issued and allotted, total amount of the shares, the names and addresses of the allotters, and the amount paid or due and payable on each share, within thirty days after the allotment of shares.
2) If any shares have been allotted as fully or partly paid up otherwise than in cash, the company shall file with the Office a deed constituting the title of the allotter to the shares together with any contract of sale or a contract for services or other consideration in respect of which that allotment was made, and a return stating the number and nominal amount of shares so allotted and the extent to which they are to be treated as paid- up.

Companies Act 2063

Chapter 4  Shares And Debentures

Section 32 : Dealing in securities
1) While issuing its securities to the general public, a public company shall deal in the securities only through a securities dealer recognised to do securities transactions including all acts such as the sale, allotment and recovery of amounts of such securities.
2) A public company shall file with the Office a copy of an agreement made by it on the dealing of securities through any body, within seven days after the date of making of such agreement.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 33 : Share certificate
1) A share certificate in the prescribed format shall be issued to every shareholder in respect of each share subscribed by him/her within two months after the allotment of shares; the share certificate shall bear the signature of any two out of a director or chief executive of the company or the company secretary, in the case of a public company, and the signature of the person as mentioned in the articles of association or consensus agreement, in the case of a private company, and also bear the seal of the company, if any.
2) While issuing a share certificate with respect to any shares held jointly by two or more persons, the share certificate may be issued to any one of them by mentioning their names in the certificate.
Provided that the names of all shareholders are mentioned in the shareholder register.
3) If a share certificate is lost or destroyed because of a divine act or otherwise, the shareholder shall give information thereof to the registered office of the company immediately when he/she knows that the share certificate has been so lost or destroyed because of the divine act or otherwise.
4) If any application is made pursuant to sub-section (3), the company shall, if the matter contained in the application seems to be reasonable after inquiring into all necessary matters relating thereto, issue another share certificate to the applicant by collecting the duplicate fees for a duplicate copy as prescribed in the articles of association, and this matter shall also be recorded in the shareholder register.
5) Notwithstanding anything contained elsewhere in this Section, if a listed company has caused a register to be maintained, pursuant to sub-section (6) of Section 46, by the securities registrar authorised to provide securities deposit service under the prevailing law, provision may be made to issue to the shareholder a securities deposit passbook or any other certificate certifying him/her to be a shareholder, instead of a share certificate.
6) A certificate issued by a company, signed by its competent officer and under the seal of the company, if any, to be used by it, specifying the number of shares or debentures held by any shareholder or debenture-holder shall be prima facie evidence of his/her title to such shares or debentures.
7) If any company allots any shares or debentures or transfers such shares or debentures to a representative of a body licensed under the prevailing law to carry on securities dealings, the provision of sub-section (1) shall not apply to such shares or debentures.
Companies Act 2063

Chapter 4  Shares And Debentures

Section 34 : Raising loans or issuing debentures
1) If a public company deems necessary to raise loans or issue debentures, it may, specifying the reason therefore, a work plan to be executed from proceeds and budget necessary for that propose raise loans or issue debentures with or without pledging or mortgaging its immovable assets.Provided, however, that no debentures may be issued unless and until an approval to commence its business is obtained and its issued capital is fully paid up.
2) Notwithstanding anything contained in the prevailing law, any company may, subject to sub- section(1) , raise additional loans or issue additional debentures against the security already furnished by that company with the already furnished by that company with the previous creditors as a security from such creditors, within the limit of such security, by clearly indicating the previous creditors as well as amount of loan (amount) already obtained.
3) Notwithstanding anything contained in the prevailing law, the matters relating to the terms, repayment period and interest of a loan borrowed or lent by a company shall be governed by a deed or contract concluded between the creditor and the borrower.
4) If a company is to raise loans or issue debentures pursuant to Sub- section (1) or (2) , the company shall give its information, along with the reasons for the same, to the office.

Companies Act 2063

Chapter 4  Shares And Debentures

Section 35 : Procedures for issuing debentures
1) A public company shall, in issuing debentures pursuant to this Act, issue debentures after making provision of a debenture trustee. Such debenture trustee has to be a debenture trustee licensed by the Securities Board.
2) The matters relating to the creditor and the borrower, in issuing debentures with a debenture trustee, shall be as mentioned in an agreement to be concluded between such trustee and the company.
3) If the memorandum of association or the articles of association shall provide that debentures can be converted into shares or such term has been specified prior to the issuance of debentures, an debentures may be converted into shares, subject to the share capital related provisions of this Act.
4) If any debentures are to be converted into shares pursuant to Sub-section (3), this matter has to be clearly mentioned in the prospectus.
5) Notwithstanding anything contained in the prevailing law, the court may, if it thinks necessary, issue an order of specific performance to get performed a contract concluded between a public company and a person in respect of the subscription of the debentures issued by that company.