Chapter 2: Formation, Administration and Dissolution of Companies
Part D: Capitalisation of profit companies
s47: Capitalisation shares
- (1) Except to the extent that a company's Memorandum of Incorporation provides otherwise:
- (a) the board of that company, by resolution, may approve the issuing of any authorised shares of the company, as capitalisation shares, on a pro rata basis to the shareholders of one or more classes of shares;
- (b) shares of one class may be issued as a capitalisation share in respect of shares of another class; and
- (c) subject to subsection (2), when resolving to award a capitalisation share, the board may at the same time resolve to permit any shareholder entitled to receive such an award to elect instead to receive a cash payment, at a value determined by the board.
- (2) The board of a company may not resolve to offer a cash payment in lieu of awarding a capitalisation share, as contemplated in subsection (1)(c), unless the board:
- (a) has considered the solvency and liquidity test, as required by section 46, on the assumption that every such shareholder would elect to receive cash; and
- (b) is satisfied that the company would satisfy the solvency and liquidity test immediately upon the completion of the distribution.
No related regulations.
No related note.
No related forms.