Companies Act · 2021 Revised Edition · Part · Share Capital and Debentures Prospectus
57. Power of company to pay interest out of capital in certain cases
Official textFrom Attorney General's Chambers, unchanged
Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a lengthened period, the company may pay interest on so much of that share capital as is for the time being paid-up for the period and subject to the conditions and restrictions in this section mentioned, and may charge the sum so paid by way of interest to capital as part of the cost of construction of the work or building, or the provision of plant:
share
"share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;
Provided that -
no such payment shall be made unless it is authorised by the articles or by special resolution;
no such payment, whether authorised by the articles or by special resolution, shall be made without the previous sanction of the Court;
before sanctioning any such payment the Court may, at the expense of the company, appoint a person to inquire and report to them as to the circumstances of the case, and may before making the appointment, require the company to give security for the payment of the costs of the inquiry;
the payment shall be made only for such period as may be determined by the Court, and that period shall in no case extend beyond the close of the half year next after the half year during which the works or buildings have been actually completed or the plant provided;
the rate of interest shall in no case exceed 4 per cent per annum or such other rate as may for the time being be prescribed by the Court;
fl the payment of the interest shall not operate as a reduction of the amount paid-up on the shares in respect of which it is paid;
Companies
CAP. 39 71
the accounts of the company shall show the share capital on which, and the rate at which, interest has been paid out of capital during the period to which the accounts relate.
If default is made in complying with proviso (g) to subsection (I), the company and every officer of the company who is in default is guilty of an offence and liable on conviction to a fine of $5,000.
REDUCTION OF SHARE CAPITAL
Terms defined in s 2
accounts
Defined · s 2"accounts" means profit and loss accounts, or income and expenditure accounts, and balance sheets referred to in section 122 and includes notes (other than auditors' reports or directors' reports) attached or intended to be read with any of those profit and loss accounts, income and expenditure accounts or balance sheets;
articles
Defined · s 2"articles" means the articles of association of a company, as originally framed or as altered by special resolution, including, so far as they apply to the company, the regulations contained in Table A in Schedule 1;
charge
Defined · s 2"charge" includes a mortgage and any agreement to give or execute a charge or mortgage whether upon demand or otherwise;
officer
Defined · s 2"officer", in relation to a corporation, includes - (a) any director or secretary of the corporation or a person employed in an executive capacity by the corporation; @) a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and (c) any liquidator of a company appointed in a voluntary winding up, but does not include - (i) any receiver who is not also a manager; (ii) any receiver and manager appointed by the Court; (iii) any liquidator appointed by the Court or by the creditors; and (iv) an Executive Manager appointed by the Minister under section 230(1) of the Insolvency Order, 2016 (S 112016);
share
Defined · s 2"share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;
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Restrictions on Sale of Shares and Offers of Shares for Sale
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