Source: http://goalgoole.com/companies-limited-by-shares/
Timestamp: 2018-03-24 04:32:28
Document Index: 227762984

Matched Legal Cases: ['Art. 311', 'Art. 312', 'Art. 315', 'Art. 316', 'Art. 319', 'Art. 320', 'Art. 322', 'Art. 321', 'Art. 315', 'Art. 323', 'Art. 219', 'Art. 324', 'Art. 825', 'Art. 327', 'Art. 329', 'Art. 330', 'Art.332', 'Art. 333', 'Art. 334', 'Art. 336', 'Art. 337', 'Art. 338', 'Art. 339', 'Art. 340', 'Art. 731', 'Art. 341', 'Art. 342', 'Art. 343', 'Art. 344', 'Art. 345', 'Art. 346', 'Art. 349', 'Art. 350', 'Art. 351', 'Art. 352', 'Art. 354', 'Art. 357', 'Art. 358', 'Art. 359', 'Art. 331', 'Art. 360', 'Art. 361', 'Art. 364', 'Art. 365', 'Art. 366', 'Art. 367', 'Art. 370', 'Art. 371', 'Art. 373', 'Art. 376', 'Art. 377', 'Art. 378', 'Art. 438', 'Art. 664', 'Art. 381', 'Art. 382', 'Art. 433', 'Art. 386', 'Art. 383', 'Art. 388', 'Art. 390', 'Art. 391', 'Art. 392', 'Art. 393', 'Art. 397', 'Art. 328', 'Art. 399', 'Art. 400', 'Art. 404', 'Art. 406', 'Art. 407', 'Art. 408', 'Art. 410', 'Art. 412', 'Art. 415', 'Art. 419', 'Art. 375', 'Art. 420', 'Art. 463', 'Art. 425', 'Art. 431', 'Art. 433', 'Art. 436', 'Art. 437', 'Art. 438', 'Art. 439', 'Art. 438', 'Art. 440', 'Art. 441', 'Art. 438', 'Art. 442', 'Art. 439', 'Art. 440', 'Art. 436', 'Art. 443', 'Art. 444', 'Art. 447', 'Art. 449', 'Art. 451', 'Art. 452', 'Art. 453', 'Art. 454', 'Art. 455', 'Art. 456', 'Art. 458', 'Art. 459', 'Art. 464', 'Art. 425', 'Art. 465', 'Art. 466', 'Art. 474', 'Art. 471', 'Art. 470', 'Art. 474', 'Art. 475', 'Art. 478', 'Art. 312', 'Art. 479', 'Art. 482', 'Art. 484', 'Art. 306', 'Art. 306', 'Art. 485', 'Art. 491', 'Art. 485', 'Art. 494', 'Art. 485', 'Art. 497', 'Art. 498', 'Art. 499', 'Art. 500', 'Art. 501', 'Art. 503', 'Art. 504', 'Art. 505', 'Art. 507', 'Art. 509']

Companies Limited By Shares | GOALGOOLE | Because you need Information for your goals !
1. The founders may, for a period not exceeding three years, reserve personally to themselves in the memorandum of association and in addition to their rights as shareholders, a share which shall not exceed one fifth of the net profits in the balance sheet.
3. The benefits provided by this Article are personal to the founders but no founder shares may be issued.
Art. 311. – Members reduced in number below the legal minimum.
1. No company shall remain in business for more than six months after the number of members is reduced to less than five. Every member aware of such reduction shall be personally liable for the debts contracted thereafter.
Chapter 2. Formation of the company
Art. 312. – General requirements in respect of formation.
1. The articles of association which govern the operation of the company shall be drawn up by the founders in accordance with the law.
3. Articles of association shall be deemed to form part of the memorandum of association and shall be attached thereto.
Art. 315. – Valuation of contributions in kind.
1. A member who makes a contribution in kind shall file a report made and sworn by experts appointed by the Ministry of Commerce and Industry.
5. The provisions of sub-art. (3) and (4) shall apply notwithstanding approval having been given to the report under sub-art. (1) by a general meeting of the subscribers.
Art. 316. – Formation as between founders.
1. An offer to subscribers shall be made by a prospectus signed by all the founders and shall contain:
2. Copies of the prospectus and of the expert report shall be made available to all persons who may wish to subscribe.
Art. 319. – Application for shares.
1. Applications for shares shall be made on the form provided and deposited in the place of application.
2. The applicant for shares shall declare that he has read the prospectus and the expert report, if any. He shall state on the form his name and address, the number of shares applied for and the date of application.
Art. 320. – Meeting of subscribers.
1. When the time for milking applications has expired, the founders shall call a meeting of the subscribers.
2. The provisions relating to the calling and decisions of an extraordinary general meeting shall apply to meetings of subscribers, without prejudice to the provisions of Art. 322.
Art. 321. – Purpose of the meeting.
1. Resolutions meetings shall be drawn up and signed by the founders and all documents submitted to the meeting shall be annexed thereto.
5. The provisions of Art. 315 (4) shall apply where the meeting reduces the number of shares allocated to contributors in kind.
Art. 323. – Deposit of the memorandum of association and registration in the commercial register.
1. The provisions of Art. 219-224 of the Code shall apply regardless of the manner in which the company was formed.
3. The notice to be published and the application for registration shall contain the particulars specified in An. 313 (1) – (7) and (10) – (12).
Art. 324. – Effect of publicity.
1. Where publication and registration have been made, the company shall have a legal existence and personality notwithstanding that all the legal requirements relating to the formation of the company have not been complied with.
Chapter 3. Shares and the rights and duties of shareholders
Art. 825. – Form of shares.
1. Shares may not be issued at a price lower than their par value.
2. Shares may be issued at a price greater than their par value where such issue is provided by the memorandum or articles of association or decided by an extraordinary general meeting. The difference between the par value and the price at which shares are issued shall be known as a premium.
Art. 327. – Shares issued before registration of the company in the commercial register.
1. Shares are indivisible.
4. Joint owners of a share shall be jointly and severally liable in respect of any liabilities as shareholder.
Art. 329. – Pledge or usufruct.
1. Where a share is pledged or subject to a usufruct, the right to vote at meetings shall, unless otherwise agreed, he exercised by the pledgee or usufructuary.
4. A usufructuary shall he liable for calls on shares but may claim for repayment when the usufruct expires.
Art. 330. – Indications on shares.
1. Every share company shall keep at its head office a register of shareholders.
5. The Ministry of Commerce and Industry may, on the request of any interested party or partner or of the company itself, order the rectification of the register, where an error has occurred.
Art.332. – Purchase by the company of its own shares.
1. A company may acquire its own shares where:
4. The provisions of this Article shall apply where a company receives its own shares in pledge.
Art. 333. – Restriction on free transfer of shares.
1. Provisions may be made in the articles of association or by resolution of an extraordinary meeting restricting the free transfer of shares.
4. Where the pre-emptive right is reserved to the company, the price shall be paid from reserve funds.
Art. 334. – Company shall not grant advances nor make loans on its shares.
1. The memorandum of association or an amendment thereto by a general meeting may provide for the setting- up of several classes of shares with different rights.
3. No change in the rights conferred to a class of share may be made unless a meeting of the class of shareholders has agreed under the same conditions as the general meeting having recommended the change.
Art. 336. – Preference shares.
1. A share company may create preference shares either in the memorandum of association or by resolution of an extraordinary general meeting. Such shares enjoy a preference over other shares, such as a preferred right of subscription in the event of future issues, or rights of priority over profits, or assets or both.
4. The number of shares having restricted voting right under sub-art. (3) may not exceed half the amount of capital.
Art. 337. – Dividend shores.
1. A company may repay, from profits or reserve funds, without reducing the capital, to shareholders the par value of their shares.
2. Shareholders whose shares are thus redeemed shall receive dividend shares (actions de jouissance). These shares do not confer any right to that part of the dividend representing the statutory interest, nor to repayment of contributions upon the dissolution of the company. They retain however a right of vote, unless otherwise provided in the memorandum of association, a right to that part of the dividend exceeding the statutory interest and a right to distribution of a share of the surplus in the winding-up.
Art. 338. – Paying up of cash shares.
1. Shares subscribed in cash shall be paid up upon subscription as to one fourth of their par value or a greater amount if so provided in the memorandum of association and, where appropriate, as to the whole of the premium. They may only be registered shares until they are fully paid.
3. Where shares have been issued by existing companies before the coming into force of this Code, the period of five years shall run from the date of coming into force.
Art. 339. – Paying up of shares by way of contribution.
1. Shares representing contributions in kind shall normally be fully paid at the time of formation of the company and not later than the day of registration of the company.
2. They may not be separated from the counterfoil and be negotiated before two years from registration.
Art. 340. – Assignment of shares.
1. Bearer shares are assigned by delivery, without any other requirement.
3. The provisions of Art. 731 of this Code shall apply to bearer shares which are lost or stolen.
Art. 341. – Conveyance of registered shares.
1. Ownership of registered shares shall be established by the relevant entry in the register kept at the head office.
2. No transfer is complete until recorded in this register.
Art. 342. – Liability to meet calls.
1. Holders, previous assignees and subscribers shall be jointly and severally liable for calls on shares.
7. A member who fails to make payments on shares when they become due shall lose his voting rights.
Art. 343. – Temporary warrants.
1. Temporary bearer warrants shall only be issued in respect of bearer shares which are fully paid. Temporary warrants shall be of no effect where they are issued before bearer shares are fully paid.
3. Temporary warrants in respect of registered shares shall be registered. The provisions relating to registered shares shall apply to the transfer of such warrants.
Art. 344. – Joint holdings.
1. Where ten per cent or more of the capital of one company is held by a second company, the first company may not hold shares in the second company.
4. The companies shall furnish to the Ministry of Commerce and Industry a sworn statement that they have complied with either sub-art. (2) or sub-art. (3) of this Article.
Art. 345. – Rights arising out of shares.
1. Every share shall confer a right to participation in the annual net profits and to a share in the net proceeds on a winding-up.
6. Similar rights may be reserved to holders of preference shares by an express provision in the memorandum or articles of association.
Art. 346. – Liability of founders and directors.
1. The board shall elect a chairman from among its members where no chairman has been elected by a meeting of subscribers or shareholders.
5. The board may appoint a secretary.
Art. 349. – Qualification shares.
1. The directors shall deposit as security with the company such number of their registered shares in the company as is fixed in the memorandum of association.
2. These shares shall not be handed back until the owners have ceased to be directors and have fully discharged their liabilities, if any to the company.
Art. 350. – Appointment of directors.
1. The first directors may be appointed under the memorandum or articles of association. This appointment shall be submitted to a meeting of subscribers for confirmation. If such confirmation is not given, the meeting shall appoint other directors.
5. Where more than, two directors are to be elected, such elections may not take place simultaneously.
Art. 351. – Replacement of directors.
1. Where, during a financial year, one or more of the directors have left the board, the surviving directors may appoint other; persons to complete the period for which the directors who have left the board were appointed.
5. During the period prior to the calling of the general meeting under sub-art. (4), the auditors may carry on the management of the company.
Art. 352. – Rights of a minority.
1. Directors may receive a fixed annual remuneration, the amount of which shall be determined by a general meeting and charged against general expenses.
7. The Ministry of Commerce and Industry, taking into account the special benefits which have been provided to directors having the status of founders and having regard to the position of the company and to the salaries and benefits of its employees, may, on the position of share holders representing not less than 10% of the capital, order the reduction of the remuneration of the directors where it considers it excessive.
Art. 354. – Removal.
1. Any dealings made directly or indirectly between a company and a director shall receive the prior approval of the board of directors and notice shall be given to the auditors.
6. The provisions of this Article shall not apply to normal agreements between the company and its clients.
Art. 357. – Directors may not contract loons with the company.
1. Directors of a company other than bodies corporate may not borrow money from the company, obtain an overdraft in current account or have any obligation guaranteed in respect of business transacted with third parties.
2. The provisions of sub-art. (1) shall not apply in respect of day to day business of a company which carries on banking business.
Art. 358. – Decisions Of the board of directors.
1. No decision may be taken by the board of directors unless a majority of directors is present. Decisions shall be taken by an absolute majority. Voting may be by proxy.
4. Copies of decisions shall be signed by the chairman and a secretary.
Art. 359.- Register of directors.
1. Every company shall keep at its head office a register of its directors and managers with, particulars as to their civil status, profession, and any directorship held in other companies and, where the director is a company, the name of the company and the address of its head office.
3. The register shall be open to inspection in accord1lnce with Art. 331 (3).
Art. 360. – Register of shares and debentures held by the directors.
1. Every company shall keep at its head office a register showing the number and value of shares or debentures held by each director:
4. The register of directors shall be available at the annual general meeting for inspection by any member attending the meeting.
Art. 361. – Statements to be provided concerning remuneration of directors.
1. The directors shall have such powers as are given to them by law, the memorandum or articles of association and resolutions passed at meetings of shareholders.
3. Persons authorised to act as agents for the company may exercise in its name their powers as agents. Any restriction on their powers shall not affect third parties acting in good faith.
Art. 364. – Liability of directors to the company.
1. Directors shall be responsible for exercising the duties imposed on them by law, the memorandum or articles of association and resolutions of meetings, with the care due from an agent.
6. A director shall not be liable where he is not at fau1t and has caused a minute dissenting from the action which has been taken by the board to be entered forthwith in the directors’ minute book and sent to the auditors.
Art. 365. – Proceedings to enforce directors liability,
1. No proceedings shall be instituted against the directors without a resolution of a general meeting to this effect. Such a resolution may be moved and adopted although not on the agenda.
4. Where a resolution under sub-art. (2) is adopted but the company fails to institute proceedings within three months, the shareholders who voted for the resolution may jointly institute proceedings.
Art. 366. – Liability to creditors.
1. Directors shall be liable to the company’s creditors where they fail to preserve intact the company’s assets.
4. Creditors may not apply to set aside a resolution to compromise except on the grounds available to them under civil law.
Art. 367. – Proceedings instituted by shareholders and third parties.
1. Auditors shall be elected by the meeting of subscribers and thereafter by the annual general meeting.
3. When signing as auditor, an auditor shall add the name of the company whose accounts he is auditing.
Art. 370. – Persons not competent.
1. The following persons may not be elected as auditors:
3. Reports submitted by an auditor and adopted by the annual general meeting shall not, save in the case of fraud, be invalid merely by reason of the fact that the provisions of this Article have not been observed.
Art. 371. – Revocation of the appointment of an auditor.
1. The remuneration of auditors shall be fixed by the general meeting on their appointment.
2. Where the general meeting fails to agree on the remuneration of the auditors, the Ministry of Commerce and Industry may on the application of any interested party fix the remuneration.
Art. 373. – Professional secrecy.
1. The auditors shall submit to the annual general meeting a written report on the manner in which they have carried out their duties and their comments on the report of the board of directors.
4. The general meeting shall not consider the balance sheet in the absence of a report under sub-art. (l).
Art. 376. – Auditors to inform directors of irregularities.
1. Where the auditors find irregularities or breaches of legal or statutory requirements, they shall inform the directors and, where grave irregularities or breaches have occurred, they shall inform the general meeting.
2. The auditors shall inform the public prosecutor of any matters which would appear to disclose the commission of an offence.
Art. 377. – Calling of general meetings.
1. The auditors shall call a general meeting where the directors fail to do so under the law or in accordance with the memorandum or articles of association.
6. Expenses incurred under this Article shall be borne by the company.
Art. 378. – Powers.
1. The auditors may at any time make on the spot such audits and checks as they think necessary and may call for any information, agreements, books, accounts, minute books and such other documents as may be required for the proper execution of their duties.
1. Auditors shall be civilly liable to the company and third parties for any fault in the exercise of their duties which occasioned loss.
2. An auditor who knowingly gives or confirms an untrue report concerning the position of a company or fails to inform the public prosecutor of an offence which he knows to have been committed shall be punished under Art. 438 or Art. 664 of the Penal Code, as the case may be.
Art. 381. – Investigation into the position of a company on the request of shareholders.
1. Shareholders representing at least one tenth of the shares issued may ask the Ministry of Commerce and Industry to appoint one or more qualified inspectors to make an investigation and report on the company’s state of affairs.
2. The petition shall contain such evidence as the Ministry deems necessary and the petitioners may be required to guarantee up to a maximum of 500 Ethiopian dollars the expenses of the investigation.
Art. 382. – Investigation compulsory.
1. The directors and authorised agents of any company under investigation shall produce to the inspectors all hooks and documents required by them and furnish all information necessary for the investigation.
2. Any director or authorised agent who obstructs the inspectors in the course of the investigation shall be reported to the Ministry of Commerce and Industry which may cause proceedings to be instituted under Art. 433 of the Penal Code.
Art. 386. – Inspectors’ Report.
1. Where the Ministry of Commerce and Industry has good reason to believe that registered shareholders are only nominees of the persons who exercise effective control of a company, the Ministry may appoint inspectors to ascertain the real owners of the shares under Art. 383.
1. Notwithstanding the provisions of Art. 388, no shareholder may be deprived without his consent of the rights inherent in membership.
2. Rights inherent in membership are rights which, under the law or the memorandum or articles of association, do not depend upon decisions of the general meeting or board of directors or which are connected with the right to take part in meetings, such as the right to be a member, to vote, to challenge a decision of the company or to receive dividends and a share in a winding-up.
Art. 390. – Classes of meetings
1. Shareholders’ meetings may be general or special.
3. Special meetings comprise only shareholders of a specific class.
Art. 391. – Calling meetings.
1. General meetings are called by the directors, the auditors, the liquidators or, where appropriate, by an officer of the court.
2. The court of the place where the head-office is situate may appoint an officer of the court to call a meeting and to draw up the agenda for consideration where shareholders representing one tenth of the share capital show that such an appointment is necessary.
Art. 392. – Mode of calling.
1. Notices calling meetings shall be issued in accordance with the articles of association and shall be published in the Official Commercial Gazette and in one newspaper authorised to publish legal notices and circulating in the area where the head office is situate.
4. The calling of meetings made necessary in the absence of a quorum is prescribed in the provisions relating to each class of meeting.
Art. 393. – Ordinary meetings called by reason of lack of quorum.
1. Notices of meetings shall give the company’s name, the nature, capital and head office of the company and the place where and time, within which hearer shares (if any) are to be deposited.
2. Notices of subsequent meetings made necessary by lack of quorum shall give the dates of the abortive meetings.
Art. 397. – Agenda.
1. A shareholder may nominate one proxy only. Where a shareholder has appointed a proxy, he may not vote in person.
2. The representation of joint holders of shares, of reversioners and of pledgees is provided for in Art. 328 and 329.
Art. 399. – Requirements in respect of conduct of business.
1. A meeting is not legally constituted for taking decisions where there is not a quorum and a majority.
3. The memorandum and the articles of association may not vary the provisions of this Code relating to majority and quorum.
Art. 400. – Shares redeemed by the company carry no voting rights.
1. An attendance sheet shall be kept for each meeting. It shall show the names and address of shareholders present or represented by proxy and the number of shares and votes held by each shareholder.
2. The attendance sheet shall be initialled by the shareholders or their proxies, and shall be certified as correct by the bureau of the meeting.
Art. 404. – Chairman.
1. The two members of the meeting who hold or represent the greater number of shares shall be appointed tellers, where they are willing to accept such appointment.
2. The bureau shall appoint a secretary who, unless otherwise provided, need not be a shareholder.
Art. 406. – Right to inspect documents.
1. Every shareholder may at all times, lilt the head office, inspect and take copies of:
3. The rights under this Article are enjoyed by joint holders of shares, reversioners and usufructuaries, and pledgees.
Art. 407. – Voting rights attached to shares.
1. The voting rights attached to ordinary or dividend shares shall be in proportion to the amount of capital represented.
2. Every share carries at least one vote.
Art. 408. – Limitation of votes.
1. Where the interests of a member, acting on his own beha1f or on behalf of a third party, conflict with the interests of the company, such member may not exercise his right to vote.
4. Shares which are deprived of voting rights under this Article shall he taken into account in calculating the quorum.
Art. 410. – Provisions restricting the free exercise of voting rights invalid.
1. Discussions at meetings shall be reduced to minutes entered in a minute book and signed by a majority of the members of the bureau. Such entry shall be certified as correct by the chairman of the board of directors of the company or by two directors.
i. the texts of resolutions adopted.
Art. 412. – Minute where there is no quorum.
1. Where shareholders representing one third of the capital represented at a meeting consider that they have insufficient information upon the matters to be discussed, they may require the meeting to be adjourned for a period not exceeding three days.
2. This right may be exercised once in respect of one matter.
Art. 415. – Informal meeting of all shareholders.
1. Shareholders or proxies representing all the shares may by agreement hold a general meeting without further formality.
1. Resolutions adopted by a meeting in accordance with the law, the memorandum or articles of association shall bind all members, including those who were not present or dissented.
6. Nothing in this Article shall affect rights of third parties acquired in good faith while the resolution was effective.
PARAGRAPH 2. – ORDINARY MEETINGS
1. Within four months from the end of each financial year, an ordinary annual general meeting shall be called by the directors.
3. Where necessary, other ordinary general meetings may be held.
Art. 419. – Business conducted at the meeting.
1. The balance sheet, the profit and loss account and the directors’ and auditors’ reports shall be read out at the ordinary general meeting. After discussion it shall approve or reject the accounts for the past financial year. It shall decide, where necessary, on the allocation and distribution of profits and on all questions arising out of the accounts for the past financial year.
2. The meeting may appoint or remove directors and auditors, decide the amount of their remuneration, amend where necessary the accounts after considering the report required under Art. 375, approve the issue of debentures as well as the guarantees attached thereto and decide all matters other than those reserved, to extraordinary general meetings.
Art. 420. – Taking part in meetings.
1. Notwithstanding any provision to the contrary, any shareholder has the right to take part in ordinary meetings without regard to the number of shares held.
1. When first called, general meetings shall be composed of that number of shareholders which represents either in person or by proxy at least one-quarter of the voting shares.
3. Decisions are taken by a simple majority, abstentions and blank ballots (if any) being disregarded.
PARAGRAPH 3. – EXTRAORDINARY MEETINGS
1. Not less than a two-thirds majority is required for a resolution to be adopted in an extraordinary meeting, abstentions and blank ballots being disregarded.
4. Nothing in this Article shall affect the provisions of Art. 463.
PARAGRAPH 4. – SPECIAL MEETINGS
1. Special meetings shall he composed:
2. The majority in special meetings shall he as provided in Art. 425 (1).
Chapter 5. Debentures
1. Debentures issued by a company may not exceed the amount of paid up capital shown in the last adopted balance sheet. This amount may be exceeded:
3. The provisions of sub-art. (I) shall not apply to real estate loan or agricultural mortgage companies.
Art. 431. – Reduction of capital where there are debentures.
1. Bonds may be issued at a price greater than their par value.
2. Bonds may not be issued at a price lower than their par value except in accordance with special laws.
Art. 433. – Contents of debenture certificates.
1. Holders of debentures of a given issue may combine as a legal personality to protect their common interests as provided hereinafter.
2. Notwithstanding any provision to the contrary, debenture holders who have combined under sub-art. (1) may at any time meet in general meeting.
Art. 436. – Calling of debenture holders’ meetings.
1. A meeting of debenture holders may be called by the company or by the representative of the debenture holders, if any.
7. The calling and holding of general meetings of debenture holders shall be at the expense of the debtor company.
Art. 437. – Business of debentures holders’ meetings.
1. Resolutions adopted by debenture holders’ meetings bind all debenture holders, whether absent, dissenting or incapable.
2. Meetings may adopt resolutions to protect the interests of debenture holders, to enforce the loan agreement and to provide for all necessary expenses in connection therewith.
Art. 438. – Decisions on proposals by the company.
1. The meeting may also consider proposals of the debtor company relating to:
4. The meeting may not increase the liability of the debenture holders by imposing additional payments or agree to the conversion of debentures into shares, except by an unanimous vote, nor provide for differential treatment amongst the debenture holders.
Art. 439. – Conditions for the validity of decisions Quorum.
1. A meeting may take decisions where its members represent not less than one-third of the debentures which may be represented.
4. For matters to be decided under Art. 438, where a quorum of one shall is not attained at the second meeting, a furhter meeting shall be called in the same manner and within the same period of time. Such meeting may make decisions where one-quarter of the debenture are present or represented.
Art. 440. – Majority.
1. Resolutions shall be adopted by simple majority.
3. The voting rights of debentures shall be in proportion to the share of the loan which they represent respectively, each debenture giving the right to not less than one vote.
Art. 441. – Confirmation of certain decisions.
1. A resolution adopted under Art. 438 shall be submitted to the court for confirmation within fifteen days from the meeting by the company, the representative of the debenture holders or by a debenture holder. In default of submission, the resolution shall be of no effect.
2. Debenture holders who dissented or were absent may oppose the confirmation of the resolution.
Art. 442. – Agent of debenture holders.
1. Debenture holders may be represented by one or more agents who shall be nominated or removed by a general meeting of debenture holders having the quorum specified in Art. 439 (1) and (3) and a majority as specified in Art. 440 (1).
4. The provisions of Art. 436 (4) shall apply to the appointment of an agent of the debenture holders.
Art. 443. – Powers of agents.
1. Unless otherwise provided by the general meeting of debenture holders, agents of the debenture holders may do all things necessary in the interest of the debenture holders, and in particular accept and preserve securities guaranteeing the loan.
4. They shall be present at the drawing of debentures for redemption.
Art. 444. – Duties in the event of the bankruptcy of the debtor company.
1. Where the debtor company is adjudged bankrupt or enters into a scheme of arrangement, the agent of the debenture holders, if any, shall prove for all debenture holders thereof. He shall receive on their behalf all notices of meetings.
1. At the end of each financial year, the directors shall prepare a detailed inventory and valuation of assets and liabilities.
3. The report shall give detailed information on the profit and loss account, an exact statement of the total amount of remuneration of the directors and auditors, and proposals for the distribution of dividends, if any.
Art. 447. – Submission of accounts and report to the auditors.
1. The balance sheet and profit and loss account shall be prepared each year in the same form as in preceding years and the methods of valuation shall remain the same, unless the general meeting adopts variations in the mode of presentation of the accounts or the methods of valuation on the reasoned advice of the auditors.
2. The profit and loss account shall show under separate heads losses or profits arising out of the company’s various activities.
Art. 449. – Annexures.
1. Provisions for amortisation shall be made each year so that the item to be amortised be written off at the end of its period of use. Where, during the period of amortisation, the rate proves insufficient, such rate shall be increased so that the amortisation corresponds to the depreciation.
3. The costs of capital issues and increases shall be amortised not later than on the expiry of the fifth financial year following that during which such issue or increase was made.
Art. 451. – Accounts of holding companies.
1. Where a company is a holding company, the accounts of its subsidiaries shall be submitted to the annual general meeting at the same time and in the same manner as its own accounts.
4. The provision of sub-art. (2) shall not apply if the Ministry of Commerce and Industry approves, where the directors of the holding company are of opinion that the drawing up of such balance sheet could prejudice the company or its subsidiaries, or that the company and its subsidiaries carry out business of such a differing nature that they may not reasonably be deemed to form a single enterprise.
Art. 452. – Profits.
1. The net profits comprise the net receipts for the financial year after deduction of general costs and other charges, and of amortisation and allowances.
3. The general meeting shall specify the reserve funds from which profit for distribution may be taken.
Art. 453. – Reserve funds.
1. Transfers to reserve funds shall be made from the net profits shown in the profit and loss account.
3. Unless otherwise provided in the articles of association reserve funds shall not bear interest.
Art. 454. – Legal reserve fund.
1. Not less than one twentieth of the net profits shall be transferred each year to the legal reserve fund until it amounts to one-fifth of the capital.
2. Transfers shall be made to the legal reserve fund where it has fallen below the amount fixed in sub-art. (1).
Art. 455. – Reserve created by issue premiums.
1. Where an extraordinary general meeting has approved an increase in capital, the issue premiums may be transferred to a reserve fund.
2. Only former and new shareholders may share in the distribution of such reserve.
Art. 456. – Allocation and distribution of profits.
1. The articles of association may provide that a fixed or interim interest shall be paid to shareholders even where there are no profits.
3. Where the articles of association provide for a fixed or interim interest as defined in sub-art. (1) and (2), such interest shall not be paid unless the articles of association have been published.
Art. 458. – Payment of dividends. Rights of shareholders.
1. Dividends may only be paid to shareholders from net profit shown in the approved balance sheet.
5. A shareholder shall become a creditor of the company for the amount of the dividend from the date fixed for payment.
Art. 459. – Claiming back of dividends.
1. Shareholders who dissent from resolutions concerning any change in the objects or nature of the company or the transfer of the head office abroad may withdraw from the company and have their shares redeemed, at the average price on the stock exchange over the last six months. Where the shares are not quoted on the stock exchange, they shall be redeemed at a price proportionate to the company’s assets as shown in the balance sheet for the last financial year.
3. The provisions of this Article shall apply notwithstanding any provision to the contrary in the articles of association.
Art. 464. – Increse of capital Procedure.
1. The capital may be increased by the issue of new shares or by an increase in the par value of existing shares.
3. An increase of capital by increasing the par value of shares may only be effected under Art. 425 (2) where such increase is not paid up by capitalisation of reserves or other funds.
Art. 465. – Delegation of powers to directors.
1. An extraordinary general meeting may by resolution delegate to the directors all powers to effect the increase of capital approved by the meeting.
2. Any provision in the memorandum or articles of association delegating such powers in advance to the directors shall be of no effect.
Art. 466. – Period for effecting an increase of capital.
1. Shareholders shall have a preferred right of subscription of new cash shares, in proportion to the number of shares held.
3. This right may not be exercised in the event of conversion of debentures into shares. Shareholders shall renounce such right under the provisions of Art. 474, at the time of issue of debentures convertible into shares at the will of the holders.
Art. 471. – Rights of reduced subscription.
1. The general meeting which resolves an increase of capital may also resolve that the provisions of Art. 470, 471 and 472 shall not apply, in whole or in part, but after considering:
3. The quorum and majority required for such decision shall be calculated on the whole of the shares making up the share capital but to the exclusion of the shares held or represented by such allottees.
Art. 474. – Issue of convertible debentures.
1. The issue of convertible debentures is subject in the prior approval of ‘an extraordinary general meeting.
4. The auditors shall prepare a special report on the propoaa1s submitted to the meeting as regards, the manner of conversion.
Art. 475. – Documents conferring special preferred rights prohibited.
1. The date of opening of a subscription shall be notified to shareholders by a notice published in the Official Commercial Gazette and in a newspaper empowered to publish legal notices circulating at the place where the head office is situate, ten days before the subscription list opens. Such notice shall indicate to shareholders their preferred right, the dates of opening and closing of the subscription list and the issue price of the shares and the amount to be paid-up.
2. Where all the shares are registered shares, the shareholders may be notified by registered letter ten days before the subscription list opens.
Art. 478. – Subscription of new shares.
1. An application to subscribe is not effective unless accompanied by the amount to be paid on subscription.
2. Where increases of capital are effected by the issue of cash shares, the provisions of Art. 312 (3) and 319-324 shall apply.
Art. 479. – Declaration of subscription.
1. New cash shares which form the whole or part of an increase of capital may he used to pay of the current liquid debts of the company at the date the subscription list opens.
2. An account showing the settlement of the debt shall be drawn up by the directors and certified as correct by the auditors who shall prepare a report showing the value of the debt so settled.
Art. 482. – Capitalisation of reserves.
1. Only the articles of association or a resolution of an extraordinary general meeting may authorise amortisation of capital.
4. Reduction of capital shall not result from amortisation.
Art. 484. – Reduction of capital.
1. A reduction of capital shall be effected;
1. Where, by reason of losses, the capital is reduced below the minimum permitted in Art. 306 (1), the capital shall be increased to the minimum required in Art. 306 (1) within a period of one year from the date of publication in the official commercial gazette in accordance with the provisions of Art. 485.
3. Where the increase of capital required by sub-art. (1) is not effected or the company is not reorganised, the dissolution of the company may be ordered by the court upon the application of any interested person.
Art. 491. – Reduction of capital not motivated by losses.
1. Any creditor holding rights prior to the publication in the official commercial gazette under Art. 485 may, where the reduction of capital is in an amount exceeding 10%, object to the resolution within three months from such publication.
3. No reduction of capital may be effected until the period specified in sub-art. (1) has expired.
Art. 494. – Minute recording reduction.
1. Where a reduction of capital has been effected, a minute shall be prcpared by the directors within one month and not later than one year from the date of publication in the official commercial gazette as provided in Art. 485.
2. The minute shall be published in the same time and manner as decisions of general meetings amending the articles of association.
1. Where the appointment of liquidators is not provided for in the memorandum or articles of association, they shall be appointed by the general meeting which resolved dissolution.
4. Appointment of new liquidators shall be made as provided in sub-art. (1) and (2).
Art. 497. – Survival of the company during winding-up.
1. Until winding-up is completed, the company shall retain its legal personality and name, to which the words “in liquidation” shall be added.
2. During winding-up, the organs of the company shall restrict their activities to acts necessary to facilitate the winding-up and which are not acts within the scope of the liquidators.
Art. 498. – Bankruptcy and winding-up.
1. Where a company is declared bankrupt, the winding-up shall proceed under the provisions of Book V of this Code.
2. The directors’ powers shall be restricted to representing the company if necessary.
Art. 499. – Duties and liability of liquidators.
1. Unless otherwise provided by law or the articles of association, the liquidators shall have the same duties and liabilities as directors.
4. When, the assets appear to be insufficient cover the debts of the company, the liquidators shall call upon the members to pay according to their share holding such instalments as may be due on their shares.
Art. 500. – Powers of liquidators.
1. Subject to any limitations imposed by the articles of association by the meeting appointing them, liquidators shall have full powers.
2. They may not undertake new business, unless required for the execution of contracts still running or where the interests of the winding-up so require. They shall be personally, jointly and severally in respect of any business undertaken outside the limits provided in this Article.
Art. 501. – Prohibition from distributing assets among members before full payment of debts.
1. Creditors shall be paid on the basis of a balance sheet prepared by the liquidators as soon as they are appointed. .
3. Creditors appearing in the company’s books or who are otherwise known shall be notified by registered letter. Notice to other creditors shall be given by notice, published in three successive monthly issues of the official commercial gazette and in the form laid down in the articles of association.
Art. 503. – Protection of creditors.
1. Where known creditors have failed to file their claims the amounts owing to them shall he paid into court.
2. Sums shall be set aside to meet claims in respect of undertakings of the company which are not completed or disputed claims where the creditors have not been guaranteed or distribution of assets has not been postponed until such undertakings are completed.
Art. 504. – Final balance sheet.
1. After paying the company’s liabilities, the liquidators shall prepare a final balance sheet, showing what percentage of the surplus assets is available for distribution on each share.
5. Where no application has been made within three months, the final balance sheet shall be deemed to be approved.
Art. 505.- Suspension of distribution.
1. After action has been taken under Art. 507, creditors who have not been paid may claim against the shareholders in person to the extent of their shares in the surplus assets.
2. Creditors may claim against the liquidators, where they have not been paid owing to the liquidators’ negligence.
Art. 509. – Preservation of the books.
1. The books of a company which has been dissolved shall be deposited with the Ministry of Commerce and Industry where they shall be kept for ten years.