International Business Companies Act, 2016

Act 15 of 2016

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Citation: Act 15 of 2016
Date: 20 December 2021
Language: English
Type: Act

International Business Companies Act, 2016

Act 15 of 2016

Published on 10 August 2016
Assented to on 4 August 2016
Commenced on 1 December 2016 by International Business Companies Act, 2016 (Commencement) (No. 2) Notice, 2016
[This is the version of this document as it was at 20 December 2021 to 31 August 2024.]

[Amended by International Business Companies (Amendment) Act, 2018 (Act 12 of 2018) on 30 November 2018]
[Amended by International Business Companies (Amendment) Act, 2018 (Act 15 of 2018) on 1 January 2019]
[Amended by International Business Companies (Amendment of Second Schedule) Regulations, 2020 (Statutory Instrument 23 of 2020) on 1 April 2020]
[Amended by International Business Companies (Amendment) Act, 2020 (Act 8 of 2020) on 31 August 2020]
[Amended by International Business Companies (Amendment) Act, 2020 (Act 10 of 2020) on 31 August 2020]
[Amended by International Business Companies (Amendment) Act, 2021 (Act 32 of 2021) on 6 August 2021]
[Amended by International Business Companies Act and Other Related Laws (Amendment) Act, 2021 (Act 63 of 2021) on 20 December 2021]

Part I – Preliminary

1. Short title and commencement

This Act may be cited as the International Business Companies Act 2016 and shall come into operation of such date as the Minister may, by notice in the Gazette appoint.

2. Interpretation

In this Act, unless the context otherwise requires—“acceptable translator” means person who is—(a)in respect of a language other than English or French, for the purposes of this Act capable of translating that language into English or French, as applicable; and(b)acceptable to the Registrar as a translator in accordance with such requirements as may be specified in written guidelines issued by the Registrar;“accounting records”, in relation to a company, means documents in respect of—(a)the company’s assets and liabilities;(b)the receipts and expenditure of the company; and(c)the sales, purchases and other transactions to which the company is a party;“Act commencement date” means the date on which this Act comes into force;“Appeals Board” means the Appeals Board established under the Financial Services Authority (Appeals Board) Regulations 2014;“approved form” means a form approved by the Registrar or the Authority in accordance with section 353;“articles” means the original, amended or restated articles of association of a company;“assessable income” means the assessable income as defined in section 2 of the Business Tax Act (Cap 20);“associated company” means as defined in section 3(2);“authorised capital”, in relation to a company, means—(a)in the case of a par value company, the maximum amount of share capital that the company is authorised by its memorandum to issue;(b)in the case of a no par value company, the maximum number, if any, of no par value shares that the company is authorised by its memorandum to issue;“Authority” means the Financial Services Authority as established by the Financial Services Authority Act;“Authority’s Website” means the Authority’s principal public access internet website for the time being maintained by or on behalf of the Authority;“bearer share” means a share represented by a certificate which—(a)does not record the owner’s name; and(b)states to the effect that the bearer of the certificate is the owner of the share;“board”, in relation to a company, means—(a)the board of directors, committee of management or other governing authority of the company; or(b)if the company has only one director, that director;“body corporate” includes a company, a corporation registered under the Companies Act and a body corporate incorporated outside Seychelles, but does not include an unincorporated association or an unincorporated partnership;“business day” means any day other than a Saturday, Sunday or public holiday in Seychelles;“cell” means a cell of a protected cell company;“class of members”, in respect of a protected cell company, includes—(a)the members of a cell of the company; and(b)any class of members of a cell of the company;“company” means—(a)an international business company; or(b)a former Act company;“company limited by shares” means a company—(a)whose memorandum limits the liability of all its members to the amount (if any) unpaid on the shares respectively held by its members; and(b)which is—(i)incorporated with a share capital comprising par value shares; or(ii)authorised to issue no par value shares;“company limited by guarantee” means a company whose memorandum limits the liability of all its members to a fixed amount which each member thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up;“company limited by shares and guarantee” means a company—(a)whose memorandum limits the liability of one or more of its members to a fixed amount which each member thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up;(b)whose memorandum limits the liability of one or more its members to the amount (if any) unpaid on the shares respectively held by its members; and(c)which is—(i)incorporated with a share capital comprising par value shares; or(ii)authorised to issue no par value shares;“Court” means the Supreme Court of Seychelles;“director”, in relation to a company, a foreign company and any other body corporate, includes a person occupying or acting in the position of director by whatever name called;“dissolved”, in relation to a company, means dissolved under this Act or any other written law of Seychelles;“distribution” means as defined in section 68;“dividend” means as defined in section 69;“document” means a document in any form and includes—(a)any writing on any material;(b)a book, graph, drawing or other pictorial representation or image;(c)information recorded or stored by any electronic or other technological means and capable with or without the aid of any equipment of being reproduced;“electronic form” with reference to information means any information generated, sent, received or stored in any computer storage media such as magnetic, optical, computer memory or other similar devices;“electronic record” means data, record or data generated, image or sound stored, received or sent in an electronic form and includes any electronic code or device necessary to decrypt or interpret the electronic record;“executive”, in relation to a company, means a person employed in an executive or managerial capacity;“foreign company” means a body corporate that is incorporated or registered under the laws of a jurisdiction outside Seychelles;“former Act” means the International Business Companies Act 1994 repealed by section 381;“former Act company” means a company which was incorporated or continued under the former Act;“guarantee member”, in relation to a company, means a person—(a)being a member whose liability in his capacity as such a member is limited by the company’s memorandum to the amount which he thereby undertakes, by way of guarantee and not by reason of holding any share, to contribute to the assets of the company if it is wound up; and(b)whose name is entered in the register of members as a guarantee member;“international business company” means as defined in section 5(1);“incapacitated adult” means a person, other than a minor, who under the written law of Seychelles does not have legal capacity;“limited company” means—(a)a company limited by shares;(b)a company limited by guarantee; or(c)a company limited by shares and guarantee;“limited life company” means a limited life company as defined in section 8(1);“member”, in relation to a company, means a person whose name is entered in the company’s register of members as—(a)a shareholder; or(b)a guarantee member;“memorandum” means the original, amended or restated memorandum of association of a company;“Minister” means the Minister responsible for Finance;“minor” means an individual under the age of eighteen;“non-cellular company” means an international business company which is not a protected cell company;“no par value company” means a company which is—(a)authorised to issue no par value shares; and(b)not authorised to issue par value shares,whether or not it also has guarantee members;“no par value share” means a registered share which is not expressed as having nominal value;“officer”, in relation to a company, means a director, executive, secretary or liquidator;“Official Seal” means the official seal of the Registrar as provided for in section 345;“ordinary company” means a company registered under the Companies Act and includes a relevant company as defined in the Companies (Special Licences) Act (Cap 253);“ordinary resolution” means an ordinary resolution of members as defined in section 110;“parent”, in relation to a company, foreign company or other body corporate, means as defined in section 3(1)(b);“par value company” means a company which is—(a)registered with share capital comprising par value shares; and(b)not authorised to issue no par value shares,whether or not it also has guarantee members;“par value share” means a registered share which is expressed as having nominal value;“personal representative” means the executor or administrator for the time being of a deceased person;“private trust company” means a company—(a)whose memorandum states that it is a private trust company; and(b)which shall not carry on any business other than providing of the connected trust services as defined in the International Corporate Service Providers Act;“protected cell company” means an international business company to which section 7 applies;“records” means documents and other records however stored;“registered agent” means, in relation to a company, the person who is the company’s registered agent in accordance with section 164;“registered share” means a share in a company which is issued to a named person, whose name is entered in the company’s register of members as the holder of that share;“Register of Registered Charges” means the Register of Registered Charges maintained by the Registrar in accordance with sections 181(3) and 346(1)(b);“Register” means the Register of International Business Companies maintained by the Registrar in accordance with section 346(1)(a);“Registrar” means the Chief Executive Officer of the Authority appointed under section 9 of the Financial Services Authority Act;“resident person” means—(a)an individual who resides in Seychelles or who is present in Seychelles for a period of, or periods amounting in aggregate to, one hundred eighty-three days or more in any twelve-month period that commences or ends during a calendar year;(b)a company registered under this Act;(c)a body corporate registered under the Companies Act;(d)a foreign company managed and controlled in Seychelles;(e)a partnership in which one of the partners is a resident in Seychelles, including a limited partnership registered under the Limited Partnerships Act;(f)a foundation registered under the Foundations Act; or(g)a trust registered under the International Trusts Act;“resolution of directors” means as defined in section 155;“secured creditor” means as defined in section 327(c);“securities” means as defined in section 2(1) of the Securities Act, including shares and debt obligations of every kind and options, warrants and other rights to acquire shares or debt obligations;“share” means a par value share or a no par value share in a body corporate or a cell, in respect of which liability is limited to the amount (if any) unpaid on it;“share capital”, in relation to a company, means—(a)in the case of a par value company, the sum of the aggregate par value of all the issued and outstanding par value shares of a company and shares with par value held by the company as treasury shares;(b)in the case of a no par value company, the aggregate of the amounts designated by the directors as share capital of all issued and outstanding no par value shares of the company and no par value shares held by the company as treasury shares,and the amounts as may be from time to time transferred from surplus to share capital by a resolution of the directors;“shareholder”, in relation to a company, means a person whose name is entered in the register of members as the holder of one or more shares, or fractional shares, in the company;“solvency test” means a solvent test as specified in section 67;“special resolution” means a special resolution of members as specified in section 112;“subsidiary”, in relation to a company, foreign company or other body corporate, means as defined in section 3(1)(c);“surplus”, in relation to a company, means the excess, if any, at the time of the determination, of total assets of the company over the sum of its total liabilities, as shown in the books of account plus its share capital;“treasury share” means a share of a company that was previously issued but was repurchased, redeemed or otherwise acquired by the company and not cancelled.

3. Associated companies

(1)For the purposes of this section—

(a)“group”, in relation to a company (referred to in this paragraph as the “first company”), means the first company and any other company that is—

(i)a parent of the first company;

(ii)a subsidiary of the first company;

(iii)a subsidiary of a parent of the first company; or

(iv)a parent of a subsidiary of the first company;

(b)“parent”, in relation to a company (referred to in this paragraph as the “first company”), means another company that, whether acting alone or under an agreement with one or more other persons,—

(i)holds, whether legally or beneficially, a majority of the issued shares of the first company;

(ii)has the power, directly or indirectly, to exercise, or control the exercise of, a majority of the voting rights in the first company;

(iii)has the right to appoint or remove the majority of the directors of the first company;

(iv)has the right to exercise a dominant influence over the management and control of the first company pursuant to a provision in the constitutional documents of the first company; or

(v)is a parent of a parent of the first company; and

(c)“subsidiary”, in relation to a company (referred to in this paragraph as the “first company”), means a company of which the first company is a parent.

(2)For the purposes of this Act, a company is associated with another company if it is in the same group as the other company and references to an “associated company” shall be construed accordingly.

(3)For the purposes of subsections (1) and (2), “company” includes a foreign company and any other body corporate.

4. Application of this Act

This Act shall apply to—

(a)an international business company; and

(b)a former Act company.

Part II – Company incorporation

I – Types of international business companies

5. Definition of international business companies

(1)An “international business company” means a company incorporated or continued, or converted into a company, under this Act.

(2)A company shall not—

(a)carry on banking business as defined in the Financial Institutions Act (Cap 79) in or outside Seychelles;

(b)carry on insurance business as defined in the Insurance Act (Cap 98) in Seychelles or, unless it is licensed or otherwise legally able to do so under the laws of the country in which it carries on such business, outside Seychelles;

(c)carry on business providing international corporate services, international trustee services or foundation services as defined in the International Corporate Service Providers Act except—

(i)to the extent permitted under the International Corporate Service Providers Act; and

(ii)in the case of carrying on such business outside Seychelles, if the company is licensed or otherwise legally able to do so under the laws of each country outside Seychelles in which it carries on such business;

(d)carry on securities business as defined in the Securities Act (Cap 208) in Seychelles or, unless it is licensed or otherwise legally able to do so under the laws of the country in which it carries on such business, outside Seychelles;

(e)carry on business as a mutual fund as defined in the Mutual Fund and Hedge Fund Act (Cap 285) unless it is licensed or otherwise legally able to do so under the Mutual Fund and Hedge Fund Act or under the laws of a recognised jurisdiction as defined in the Mutual Fund and Hedge Fund Act; or

(f)carry on gambling business as defined in the Seychelles Gambling Act, 2014 (Act 29 of 2014), including interactive gambling business, in or outside Seychelles unless it is licensed or otherwise legally able to do so under the laws of the country in which it carries on such business.

6. Companies which may be incorporated or continued

(1)An international business company shall be incorporated or continued, or converted into a company, under this Act as—

(a)a company limited by shares;

(b)a company limited by guarantee; or

(c)a company limited by shares and guarantee.

(2)Subject to the provisions of this Act, an international business company may be—

(a)a protected cell company; or

(b)limited life company.

7. Protected cell companies

A company is a protected cell company if—

(a)it has been incorporated or continued under this Act in accordance with Part XIII including having obtained the Authority’s written consent under section 221 which has not been revoked; and

(b)its memorandum provides that it is a protected cell company.

8. Limited life companies

A company is a limited life company if its memorandum includes a provision that the company shall be wound up and dissolved upon—

(a)the expiration of a fixed period of time; or

(b)the bankruptcy, death, expulsion, insanity, resignation or retirement of any member of the company; or

(c)the happening of some other event which is not the expiration of a fixed period of time.

II – Incorporation of companies

9. Application to incorporate a company

(1)Subject to subsection (2), an application may be made to the Registrar for the incorporation of a company under this Act by filing with the Registrar—

(a)a memorandum and articles which comply with the requirements of this Act, signed by or on behalf of each subscriber in accordance with sections 13 and 20;

(b)an incorporation application in the approved form in accordance with Part I of the First Schedule, signed by or on behalf of the proposed registered agent of the company;

(c)if the company is to be incorporated as a protected cell company, the written consent of the Authority given under section 221;

(d)the applicable incorporation fee as specified in Part I of the Second Schedule; and

(e)such other documents as may be prescribed.

(2)An application for the incorporation of a company shall only be filed by its proposed registered agent.

(3)For the purposes of this section, the “proposed registered agent” means the person named in the memorandum as the first registered agent of the company.

10. Incorporation of a company

(1)If the Registrar is satisfied that the requirements of this Act in respect of incorporation of a company have been complied with, the Registrar shall upon receipt of the documents filed under section 9(1),—

(a)register the documents;

(b)allot a unique registration number to the company; and

(c)issue a certificate of incorporation to the company in the approved form.

(2)The certificate of incorporation shall be signed by the Registrar and sealed with the Official Seal.

11. Effect of incorporation

(1)A certificate of incorporation issued under this Act is conclusive evidence of the following matters—

(a)that the company is incorporated under this Act; and

(b)that the requirements of this Act have been complied with in respect of the incorporation of the company.

(2)Upon incorporation of a company under this Act—

(a)the company is a legal entity in its own right separate from its members and continues in existence until it is dissolved;

(b)the memorandum and articles are binding as between—

(i)the company and each member of the company; and

(ii)each member of the company.

(3)The company, the board, each director and each member of a company has the rights, powers, duties and obligations set out in this Act except to the extent that they are negated or modified, as permitted by this Act, by the memorandum or the articles.

(4)The memorandum and articles of a company have no effect to the extent that they contravene or are inconsistent with this Act.

12. Annual fee

(1)Each company which is on the Register shall pay to the Registrar on or before the date of each anniversary of its incorporation, continuation or conversion under this Act, the annual fee set out in Part I of the Second Schedule.

(2)Payment under subsection (1) shall be made by the company through its registered agent.

(3)Where the annual fee referred to in subsection (1) is not paid by the date set out in that subsection, the company shall be liable to a penalty fee equal to ten percent of the annual fee if the payment is made within 90 days of the date when it becomes due.

(4)Where the annual fee referred to in subsection (1) is not paid by the date set out in that subsection, the company shall be liable to a penalty fee equal to fifty percent of the annual fee if the payment is made after 90 days of the date when it becomes due.

13. Memorandum of association

(1)The memorandum of a company shall—

(a)state the full name and address of each subscriber; and

(b)be printed and signed by or on behalf of each subscriber in the presence of at least one witness who shall attest the signature and insert his own name and address.

(2)For the purposes of subsection (1) the sole subscriber who signs the memorandum of a company may be its proposed registered agent, who shall not be required to become a member of the company upon its incorporation.

(3)Subject to subsection (2), each subscriber to the memorandum shall become a member of the company.

14. Content of the memorandum of association

The memorandum of a company shall state—

(a)the name of the company;

(b)the address in Seychelles of the company’s registered office as at the date of the memorandum;

(c)whether the company is—

(i)a company limited by shares;

(ii)a guarantee company; or

(iii)a company limited by shares and guarantee;

(d)the name and address of the company’s registered agent as at the date of the memorandum;

(e)[Repealed.]

(f)otherwise as may be required by this Act.

15. Memorandum of company with shares

In the case of a company limited by shares or otherwise authorised to issue shares, the memorandum shall state—

(a)if it is a par value company, the authorised capital with which the company is to be registered and the number of shares of a fixed nominal value in each class comprising the authorised capital;

(b)if it is a no par value company, the authorised capital with which the company is to be registered and the limit (if any) on the number of shares of each class which the company is to be authorised to issue;

(c)that the liability of a member arising from the member’s holding of any share is limited to the amount (if any) unpaid on it; and

(d)the classes of shares that the company is authorised to issue and, if the company is authorised to issue two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares.

16. Memorandum of company with guarantee members

(1)Where a company is to be registered with a memorandum which provides for guarantee members, the memorandum shall state that each guarantee member is liable to contribute to the assets of the company, if it should be wound up while he is a member or within 12 months after he ceases to be a member, such fixed amount as may be required for the purposes specified in subsection (2) but does not exceed a maximum amount to be specified in the memorandum in relation to that member.

(2)The purposes to which subsection (1) refers are—

(a)payment of the debts and liabilities of the company contracted before he ceases to be a member;

(b)payment of the costs, charges and expenses of winding up; and

(c)adjustment of the rights of the contributories among themselves.

(3)In the case of a company limited by shares and guarantee, the memorandum or articles may—

(a)require a guarantee member also to be a shareholder; or

(b)prohibit a guarantee member from also being a shareholder.

(4)If the memorandum or articles of a company limited by shares and guarantee do not make provision under subsection (3), a guarantee member may also be a shareholder.

(5)A company limited by shares shall not amend its memorandum under Sub-Part III of this Part to change its status into a company limited by guarantee or company limited by shares and guarantee unless—

(a)there is no unpaid liability on any of its issued shares; and

(b)the company’s proposed amended memorandum and change of status, including any proposed cancellation of shares, has been approved by unanimous resolution of members or, if permitted by its memorandum, by ordinary resolution.

17. Memorandum may specify objects

(1)The memorandum may specify objects of the company and may provide that the activities of the company shall be restricted to the attainment or furtherance of the specified objects.

(2)If—

(a)no objects of the company are specified in the memorandum;

(b)objects are specified but the activities of the company are not restricted to the attainment or furtherance of those objects; or

(c)the memorandum contains a statement, either alone or with other objects, that the object of the company is to engage in any act or activity that is not prohibited under any law for the time being in force in Seychelles,

the company’s objects shall be deemed to include, and the company shall have full power and the authority to carry out or to engage in, any act or activity that is not prohibited under any law for the time being in force in Seychelles, subject to any limitations in the memorandum.

18. Memorandum or articles of limited life company

Where a company is to be wound up and dissolved upon—

(a)the expiration of a period of time; or

(b)the happening of some other event,

that period or event shall be specified in the memorandum or articles of the company.

19. Language of memorandum

(1)Subject to subsection (2), the memorandum of a company shall be in English or French or in any other official language of any country.

(2)Where the language of the memorandum of a company is a language other than English or French, the memorandum shall be accompanied by a translation of it, in the English or French language, certified as true and accurate by the company’s proposed registered agent.

(3)The registered agent shall not give a certificate under subsection (2), unless the translation has been obtained from or confirmed by an acceptable translator.

20. Articles of association

(1)A company’s articles shall set out regulations for the company.

(2)The articles of a company shall be printed and signed by or on behalf of each subscriber in the presence of at least one witness who shall attest the signature and insert his own name and address.

(3)For the purposes of subsection (2) the sole subscriber who signs the articles of a company may be its proposed registered agent, who shall not be required to become a member of the company upon its incorporation.

(4)Subject to subsection (3), each subscriber to the articles shall become a member of the company.

21. Language of articles

(1)Subject to subsection (2), the articles of a company shall be in English or French or in any other official language of any country.

(2)Where the language of the articles of a company is a language other than English or French, the articles shall be accompanied by a translation of it, in the English or French language, certified as true and accurate by the company’s proposed registered agent.

(3)The registered agent shall not give a certificate under subsection (2), unless the translation has been obtained from or confirmed by an acceptable translator.

III – Amendment and restatement of memorandum or articles

22. Amendment of memorandum or articles

(1)Subject to this section and section 23, the memorandum or articles of a company may be amended by—

(a)an ordinary resolution; or

(b)a resolution of directors.

(2)The memorandum or articles of a company may not be amended—

(a)by a resolution of directors alone, if this Act requires that the proposed amendment be approved by resolution of members; or

(b)by a resolution of directors or members alone, if this Act requires that the proposed amendment also be approved by the Court.

(3)Subject to subsection (4), the memorandum of a company may include one or more of the following provisions—

(a)that specified provisions of the memorandum or articles may not be amended;

(b)that the memorandum or articles, or specified provisions of the memorandum or articles, may be amended only if certain specified conditions are met;

(c)that all or any provisions of the memorandum or articles may only be amended by a resolution of members;

(d)that a resolution passed by a specified majority of members representing in excess fifty per cent of the votes of those members entitled to vote, is required to amend the memorandum or articles or specified provisions of the memorandum or articles.

(4)Subsections (3)(a) and (b) do not apply to any provision in the memorandum of a company that restricts the objects of that company.

(5)Notwithstanding any provision in a company’s memorandum or articles to the contrary, the directors of the company shall not have the power to amend the memorandum or articles—

(a)to restrict the rights or powers of the members to amend the memorandum or articles;

(b)to change the percentage of members required to pass a resolution to amend the memorandum or articles; or

(c)in circumstances where the memorandum or articles cannot be amended by the members,

and any resolution of the directors of a company is void and of no effect to the extent that it contravenes this subsection.

23. Registration of amendments to memorandum or articles

(1)Where a resolution is passed to amend the memorandum or articles of a company, the company shall file for registration a certified copy or extract of the amendment resolution in accordance with subsection (2).

(2)In respect of the certified copy or extract of the resolution referred to in subsection (1), an extract of the resolution shall be certified as a true copy and signed by the registered agent of the company.

(3)An amendment to the memorandum or articles only has effect from the date that the certified copy or extract resolution referred to in subsection (1) is registered by the Registrar.

24. Restated memorandum or articles

(1)A company may at any time file with the Registrar a restated memorandum or articles.

(2)A restated memorandum or articles filed under subsection (1) shall incorporate only such amendments that have been registered under section 23.

(3)Where a company files a restated memorandum or articles under subsection (1), the restated memorandum or articles has effect as the memorandum or articles of the company with effect from the date that it is registered by the Registrar.

(4)The Registrar is not required to verify that a restated memorandum or articles filed under this section incorporates all the amendments, or only those amendments, that have been registered under section 23.

(5)It is not obligatory that a restated memorandum or articles filed under subsection (1) be signed by the original subscriber.

Part III – Company names

25. Requirements as to names

(1)Subject to subsection (2), the name of a company shall end with—

(a)the word “Limited”, “Corporation”, “Limited Liability Company”, “Company” or “Incorporated”; or

(b)the abbreviation “Ltd”, “Corp”, “LLC”, “Co” or “Inc”.

(2)The name of a protected cell company shall end with the words “Protected Cell Company” or with the abbreviation “PCC”.

(2A)The name of a private trust company shall end with the words “Private Trust Company” or with the abbreviation “PTC”.

(3)A company may use, and be legally designated by, either the full or the abbreviated form of any word or words required as part of its name under this section.

(4)Where the abbreviation “Ltd”, “Corp”, “Inc”, “LLC”, “PTC” or “PCC” is used as part of a company’s name, a full-stop may be inserted at the end of the abbreviation.

(5)A protected cell company shall assign a distinctive name to each of its cells that—

(a)distinguishes the cell from any other cell of the company; and

(b)ends with the words “Protected Cell” or with the abbreviation “PC”.

(6)Subject to subsection (7) and notwithstanding subsection (1), a former Act company may retain any name, including any suffix denoting limited liability, which was permissible under the former Act.

(7)If a former Act company changes its name on or after the Act commencement date, it shall comply with subsection (1).

26. Restrictions on company names

A company shall not be registered, whether on incorporation, continuation, conversion, merger or consolidation, under a name that—

(a)is identical to the name under which another company is registered under this Act or the Companies Act (Cap 40);

(b)is so similar to the name under which another company is registered under this Act that the use of the name would, in the opinion of the Registrar, be likely to confuse or mislead;

(c)includes a prohibited word, phrase or abbreviation referred to in Part I of the Third Schedule;

(d)includes a restricted word, phrase or abbreviation referred to in Part II of the Third Schedule, unless the prior written consent to the use of the word, phrase or abbreviation has been given by the Registrar and any other regulatory body whose consent thereto is required under Seychelles law; or

(e)in the opinion of the Registrar—

(i)suggests or is calculated to suggest the patronage or any connection with the Government of Seychelles or the government of any other country; or

(ii)is in any way offensive, misleading, objectionable or contrary to public policy or to the public interest.

27. Rights and interests in names

(1)Nothing in this Part requires the Registrar, when determining whether to incorporate, continue or convert a company under a name, to register a change of name or to direct a change of name, to—

(a)make a determination of any person’s interest in a name, or the rights of any person concerning a name or the use of a name, whether the interest or rights are alleged to arise under Seychelles law or any law in a jurisdiction other than Seychelles; or

(b)to take account of any trademark, or equivalent right, whether registered in Seychelles or in a jurisdiction other than Seychelles.

(2)Subsection (1) does not prevent the Registrar taking into account any matter specified in that subsection when determining whether, in his opinion, the registration of a company name is, or would be, objectionable or contrary to public policy or to the public interest.

(3)The registration of a company under this Act with a company name does not give the company any interest in, or rights over, the name that it would not have, apart from this Part.

28. Language of company names

Subject to sections 25, 26 and 31 of this Act and to the requirements set out in the Fourth Schedule—

(a)the name of a company may be expressed in any language; and

(b)where the name of a company is in the English or French language, it may have an additional foreign character name.

29. Reservation of names

(1)Subject to this section, the Registrar may upon a request made by a person licensed to provide international corporate services under the International Corporate Service Providers Act (Cap 275), reserve for 30 days a name for future adoption by a company under this Act.

(2)The Registrar may refuse to reserve a name if he is not satisfied that the name complies with this Part in respect of the company or proposed company.

(3)On the expiry of the 30 day period referred to in subsection (1), the Registrar may, on payment of the fee specified in Part II of the Second Schedule, for each 30 day period thereafter, continue reserving the name for future adoption by a company under this Act, provided that the request to continue reserving the name is made by the same person within 7 days after the expiry of the 30 day period referred to in subsection (1) or each other 30 days period thereafter.

30. Change of name

(1)Subject to its memorandum and articles, a company may apply to the Registrar to change its name or its foreign character name by way of an amendment to its memorandum and articles in accordance with sections 22 and 23.

(2)Where a company proposes to change its name or its foreign character name, section 26 shall apply to the name by which the company proposes to change its name.

(3)Where a company applies to change its name or its foreign character name, the Registrar shall, on compliance by the company with sections 22 and 23, and if it is satisfied that the proposed new name or new foreign character name of the company complies with section 26—

(a)enter the new name in the Register in the place of the former name; and

(b)issue a certificate of change of name to the company.

(4)A change of the name of a company under this section or section 31—

(a)takes effect from the date of the certificate of change of name issued by the Registrar; and

(b)does not affect any rights or obligations of the company or render defective any legal proceedings by or against it, and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

31. Power to require change of name

(1)If a company has been incorporated, continued or converted into a company under this Act with, or has changed its name to, a name which, in the opinion of the Registrar, does not comply with sections 25 or 26 the Registrar may—

(a)within 2 years of that time direct the company by written notice to make an application to change its name or its foreign character name on or before a date specified in the notice, which shall be not less than 30 days after the date of the notice; or

(b)apply to the Court for, and the Court may grant, an order changing the company’s name or its foreign character name, or requiring the company to change such name, to a name acceptable to the Registrar on such terms as the Court thinks fit.

(2)If a company that has received a notice under subsection (1)(a) fails to file an application to change its name to a name acceptable to the Registrar on or before the date specified in the notice, the Registrar may revoke the name of the company and assign it a new name acceptable to the Registrar.

(3)Where the Registrar assigns a new name to a company under subsection (2) or pursuant to an order made by the Court under subsection (1)(b), it shall—

(a)enter the new name in the Register in the place of the former name;

(b)issue a certificate of change of name to the company; and

(c)publish the change of name in the Gazette.

(4)A company that fails to comply with a direction given under this section within the period of time specified by the Registrar under subsection (1)(a) commits an offence and is liable on conviction to a fine not exceeding US$10,000.

32. Reuse of company names

The Registrar may permit the reuse of company names as provided for in the Fifth Schedule.

Part IV – Company capacity and powers

33. Capacity and powers

(1)Subject to this Act, any other written law and its memorandum and articles, a company has, irrespective of corporate benefit—

(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and

(b)for the purposes of paragraph (a), full rights, powers and privileges.

(2)Without limiting the generality of subsection (1), subject to its memorandum and articles, subsection (3) and section 48 (Bearer shares prohibited), the powers of a company include the power to do any of the following—

(a)issue and cancel shares and hold treasury shares;

(b)grant options over unissued shares in the company and treasury shares;

(c)issue securities that are convertible into shares;

(d)give financial assistance to any person in connection with the acquisition of its own shares;

(e)issue debt obligations of every kind and grant options, warrants and rights to acquire debt obligations;

(f)guarantee a liability or obligation of any person and secure any obligations by mortgage, pledge or other charge, of any of its assets for that purpose; and

(g)protect the assets of the company for the benefit of the company, its creditors and its members and, at the discretion of the directors, for any person having a direct or indirect interest in the company.

(3)Paragraphs (a), (b), (c) and (d) of subsection (2) shall not apply to company limited by guarantee.

(4)For the purposes of subsection (2)(g), the directors may cause the company to transfer any of its assets in trust to one or more trustees, each of which may be an individual, company, association, partnership, foundation or similar entity and, with respect to the transfer, the directors may provide that the company, its creditors, its members or any person having a direct or indirect interest in the company, or any of them, may be the beneficiaries of the trust.

(5)The rights or interests of any existing or subsequent creditor of the company in any assets of the company are not affected by any transfer under subsection (4), and those rights or interests may be pleaded against any transferee in any such transfer.

34. Validity of acts of company

(1)Subject to subsection (2), no act of a company and no transfer of an asset by or to a company is invalid by reason only of the fact that the company did not have the capacity, right or power to perform the act or to transfer or receive the asset.

(2)The lack or alleged lack of capacity, right or power of a company to perform an act or to transfer or receive an asset may be asserted—

(a)in proceedings by a member or a director against the company to prohibit the performance of any act, or the disposition of property by or to the company; and

(b)in proceedings by the company, whether acting directly or through a liquidator or other legal representative or through members of the company in a representative capacity, against the incumbent or former directors or other officers of the company for loss or damage through their unauthorised act.

(3)This section applies to companies incorporated before, on or after the Act commencement date, but this section does not affect the capacity of a former Act company in relation to anything done by it before this section came into force.

35. Personal liability

(1)Subject to subsection (2) and except in so far as he may be liable for his own conduct or acts, no director, agent or liquidator of a company is liable for any debt, obligation or default of the company, unless—

(a)it is proved that he acted fraudulently or otherwise in bad faith; or

(b)specifically provided in this Act or in any other written law of Seychelles.

(2)If at any time there is no member of a company, any person doing business in the name of or on behalf of the company is personally liable for the payment of all debts of the company contracted during such time and the person may be sued in respect thereof without joinder in the proceedings of any other person.

36. Dealings between a company and other persons

(1)A company or a guarantor of an obligation of a company may not assert against a person dealing with the company or with a person who has acquired assets, rights or interests from the company that—

(a)this Act or the memorandum or articles of the company has not been complied with;

(b)a person named as a director in the company’s register of directors—

(i)is not a director of the company;

(ii)has not been duly appointed as a director of the company; or

(iii)does not have authority to exercise a power which a director of a company carrying on business of the kind carried on by the company customarily has authority to exercise;

(c)a person held out by the company as a director, employee or agent of the company—

(i)has not been duly appointed; or

(ii)does not have authority to exercise a power which a director, employee or agent of a company carrying on business of the kind carried on by the company customarily has authority to exercise;

(d)a person held out by the company as a director, employee or agent of the company with authority to exercise a power which a director, employee or agent of a company carrying on business of the kind carried on by the company does not customarily have authority to exercise, does not have authority to exercise that power; or

(e)a document issued on behalf of a company by a director, employee or agent of the company with actual or usual authority to issue the document is not valid or not genuine,

unless the person has, or ought to have, by virtue of his relationship to the company, knowledge of the matters referred to in any of paragraphs (a) to (e).

(2)Subsection (1) applies even though a person of the kind referred to in paragraphs (b) to (e) of that subsection acts fraudulently or forges a document that appears to have been signed on behalf of the company, unless the person dealing with the company or with a person who has acquired assets, rights or interests from the company has actual knowledge of the fraud or forgery.

37. Contracts generally

(1)A contract may be entered into by a company as follows—

(a)a contract that, if made between individuals, would by law be required to be in writing and made by deed or under seal, is validly entered into by a company as a deed or an instrument under seal if it is either—

(i)sealed with the common seal of the company and witnessed by a director of the company or such other person who is authorised by the memorandum and articles to witness the application of the company’s seal; or

(ii)expressed to be, or is executed on behalf of the company and expressed to be executed as, or otherwise makes clear on its face that it is intended to be, a deed and it is signed by any person acting under the express or implied authority of the company;

(b)a contract that, if made between individuals, would be required by law to be in writing and signed by the parties thereto, may be entered into by or on behalf of the company in writing and signed by any person acting under the express or implied authority of the company; and

(c)a contract that, if made between individuals, would be valid although entered into orally and not reduced to writing, may be entered into orally by or on behalf of the company by any person acting under the express or implied authority of the company.

(2)Any contract made according to this section may be varied or discharged in the same manner as it is authorised by this section to be made.

(3)A contract entered into in accordance with this section is valid and is binding on the company and its successors and all other parties to the contract, their heirs, executors or administrators.

38. Pre-incorporation contracts

(1)A person who enters into a contract in the name of or on behalf of a company before the company is incorporated, is personally bound by, liable under and entitled to the benefits of the contract, except where—

(a)the contract specifically provides otherwise; or

(b)subject to any provisions of the contract to the contrary, the company ratifies the contract under subsection (2).

(2)A company may, by any action or conduct signifying its intention to be bound by a contract entered into in its name or on its behalf before it was incorporated, ratify the contract after the company’s incorporation.

(3)When a company ratifies a contract under subsection (2)—

(a)the company is bound by, liable under and entitled to the benefits of the contract as if the company had been incorporated at the date of the contract and had been a party to it; and

(b)subject to any provisions of the contract to the contrary, the person who acted in the name of or on behalf of the company ceases to be personally bound by, liable under or entitled to the benefits of the contract.

39. Power of attorney

(1)Subject to its memorandum and articles, a company may by an instrument in writing appoint a person as its attorney either generally or in relation to a specific matter.

(2)An act of an attorney appointed under subsection (1) in accordance with the instrument under which he was appointed binds the company.

(3)An instrument appointing an attorney under subsection (1) may either be—

(a)executed as a deed; or

(b)signed by a person acting under the express or implied authority of the company.

40. Company seal

(1)A company may have a common seal.

(2)A company which has a common seal shall have its name in legible characters on that seal.

(3)A company which has a common seal may have duplicate common seals.

41. Authentication or attestation

(1)A document requiring authentication or attestation by a company may be signed by—

(a)a director of the company;

(b)a secretary of the company;

(c)an agent of the company authorised to act generally on its behalf; or

(d)an agent of the company specifically authorised to authenticate or attest documents on its behalf.

(2)An authentication or attestation under subsection (1) need not be under its common seal.

Part V – Shares

I – General

42. Nature of shares

A share in a company is movable property.

43. Share rights

(1)Subject to subsections (2) and (3), a share in a company confers on the holder—

(a)the right to one vote at a meeting of the members of the company or on any resolution of the members of the company;

(b)the right to an equal share in any dividend paid in accordance with this Act; and

(c)the right to an equal share in the distribution of the surplus assets of the company.

(2)Where expressly authorised by its memorandum in accordance with section 15 but subject to section 48 (Bearer shares prohibited), a company—

(a)may issue more than one class of shares; and

(b)may issue shares subject to terms that negate, modify or add to the rights specified in subsection (1).

(3)Without limiting the generality of subsection (2)(b) but subject to section 48 (Bearer shares prohibited), shares in a company may—

(a)subject to the provisions of this Act, be redeemable;

(b)confer no rights, or preferential rights, to distributions;

(c)confer special, limited or conditional rights, including voting rights;

(d)confer no voting rights;

(e)participate only in certain assets of the company;

(f)where issued in, or converted to, one class or series, be convertible to another class or series, in the manner specified in the memorandum or articles.

44. Distinguishing numbers

The shares in a company having a share capital divided into shares shall each be distinguished by an appropriate number except that if at any time all the issued shares in the company or all the issued shares in the company of a particular class are fully paid up and carry the same rights in all respects, none of those shares need to have a distinguishing number.

45. Series of shares

Subject to its memorandum and articles, a company may issue a class of shares in one or more series.

46. Par value and no par value shares

(1)Subject to the memorandum and articles of a company and subsection (2), a share may be issued as a par value share or a no par value share.

(2)A company shall not have a share capital consisting of shares which include par value shares and no par value shares.

(3)Subject to the memorandum and articles of a company, a par value share may be issued in any currency.

47. Fractional shares

(1)Subject to its memorandum and articles, a company may issue fractional shares.

(2)Unless and to the extent otherwise provided in a company’s articles, a fractional share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to par value, premium, contribution, calls or otherwise howsoever), limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class of shares; and in this Act the expression “share” includes a fraction of a share and no issue or purported issue of a fraction of a share shall be invalid by reason only of the fact that it was issued or purportedly issued prior to the Act commencement date.

(3)The par value of a par value share may be expressed in an amount which is a fraction or a percentage of the smallest denomination of the currency in which it is issued.

48. Bearer shares prohibited

A company shall not, and has no power to,—

(a)issue a bearer share;

(b)convert a registered share into a bearer share;

(c)exchange a registered share for a bearer share; or

(d)convert any other securities into, or exchange any other securities for, bearer shares.

II – Issue of shares

49. Issue of shares

Subject to this Act and to its memorandum and articles, shares in a company may be issued, and options to acquire shares in a company granted, at such times, to such persons, for such consideration and on such terms as the directors may determine.

50. Consideration for shares

(1)Subject to subsections (2) and (3), a share may be issued for consideration in any form, including money, a promissory note, or other written obligation to contribute money or property, immovable property, movable property (including goodwill and knowhow), services rendered or a contract for future services.

(2)Subject to section 55, the consideration for a par value share shall not be less than the par value of the share.

(3)Subject to any provision to the contrary in its memorandum or articles, a company may—

(a)issue bonus shares, partly paid shares and nil paid shares; and

(b)accept payment of consideration for a share in such installment amounts and at such times after issue of the share as the company may approve.

(4)If a share is issued in contravention of subsection (2), the person to whom the share is issued is liable to pay to the company an amount equal to the difference between the issue price and the par value.

(5)Where a par value company issues a par value share, the consideration in respect of the share constitutes share capital to the extent of the par value and the excess constitutes surplus.

(6)Subject to any limitations in its memorandum or articles, where a no par value company issues a no par value share, the consideration in respect of the share constitutes share capital to the extent designated by the directors and the excess constitutes surplus, except that the directors shall designate as share capital an amount of the consideration that shall be at least equal to the amount that the share is entitled to as a preference, if any, in the assets of the company upon its liquidation.

51. Provision for different amounts to be paid on shares

A company, if so authorised by its articles, may—

(a)make arrangements on the issuance of shares for a difference between the shareholders in the amounts and times of payments of calls or installments payable on their shares;

(b)accept from a shareholder the whole or a part of the amount remaining unpaid on shares held by him, although no part of that amount has been called up or become payable; and

(c)pay distributions in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.

52. Shares issued for consideration other than money

(1)Before issuing shares for a consideration other than money (whether in whole or in part), the directors shall pass a resolution stating—

(a)the amount to be credited for the issue of the shares;

(b)their determination of the reasonable present cash value of the non-money consideration for the issue; and

(c)that, in their opinion, the present cash value of the non-money consideration and money consideration (if any) for the issue is not less than the amount to be credited for the issue of the shares.

(2)Subsection (1) shall not apply to the issue of any bonus shares.

53. Time of issue

A share is deemed to be issued when the name of the shareholder is entered in the issuing company’s register of members.

54. Consent to issue certain shares

The issue by a company of a share that—

(a)increases a liability of a person to the company; or

(b)imposes a new liability on a person to the company,

is void if that person, or an authorised agent of that person, does not agree in writing to becoming the holder of the share.

55. Power to issue shares at a discount

A company may issue shares at a discount.

56. Power of company to pay commissions

(1)A company has the power, and shall be deemed always to have had the power, to pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares in the company, if the payment of the commission is authorised by the company’s articles.

(2)A vendor to, or promoter of, or other person who receives payment in money or shares from a company has, and is deemed always to have had, power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been lawful under subsection (1).

57. Pre-emptive rights

(1)Subsections (2) to (4) apply to a company where the memorandum or articles of the company expressly provide that this section shall apply to the company, but not otherwise.

(2)Before issuing shares that rank or would rank as to voting or distribution rights, or both, equally with or prior to shares already issued by the company, the directors shall offer the shares to existing shareholders in such a manner that, if the offer was accepted by those shareholders, the existing voting or distribution rights, or both, of those shareholders would be maintained.

(3)Shares offered to existing shareholders under subsection (2) shall be offered at such price and on such terms as the shares are to be offered to other persons.

(4)An offer made under subsection (2) must remain open for acceptance for a period of not less than 21 days.

(5)Nothing in this section prevents the memorandum or articles of a company from modifying the provisions of this section or from making different provisions with respect to pre-emptive rights.

58. Share certificates

(1)A company shall state in its articles the circumstances, if any, in which share certificates shall be issued.

(2)If a company issues share certificates, the certificates—

(a)shall, subject to the company’s memorandum and articles, be signed by—

(i)at least one director of the company; or

(ii)such other person who maybe authorised by resolution of directors to sign share certificates; or

(b)shall be under the common seal of the company, with or without the signature of any director of the company,

and the articles may provide for the signatures or common seal to be facsimiles.

III – Transfer of shares

59. Transferability of shares

Subject to any limitations or restrictions on the transfer of shares in the memorandum or articles, a share in a company is transferable.

60. Transfer of deceased member’s share by personal representative

A transfer of the share of a deceased member of a company made by the deceased member’s personal representative, although the personal representative is not a member of the company, is as valid as if the personal representative had been a member at the time of the execution of the instrument of transfer.

61. Transfer by operation of law

Shares in a company may pass by operation of law, notwithstanding anything to the contrary in the memorandum or articles of the company.

62. Transfer of registered shares

(1)Subject to subsections (2) and (3) and to section 66, registered shares in a company shall be transferred by a written instrument of transfer—

(a)signed by the transferor;

(b)signed by the transferee; and

(c)containing the name and address of the transferee.

(2)If expressly permitted by a company’s memorandum or articles but subject to subsection (3), registered shares in the company shall be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, provided that a written instrument of transfer to which this subsection applies shall not be invalidated if it is signed by both the transferee and the transferor.

(3)The instrument of transfer shall be signed by the transferee (as well as the transferor) if—

(a)the share is not fully paid up; or

(b)registration as a holder of the share otherwise imposes a liability to the company on the transferee.

(4)The instrument of transfer of a registered share shall be sent to the company for registration.

(5)Subject to its memorandum or articles and section 63, the company shall, on receipt of an instrument of transfer, enter the name of the transferee of the share in the register of members unless the directors resolve to refuse or delay the registration of the transfer for reasons that shall be specified in the resolution.

63. Refusal to register transfer

(1)The directors shall not pass a resolution refusing or delaying the registration of a transfer unless this Act or the memorandum or articles permit them to do so.

(2)Where the directors pass a resolution under subsection (1), the company shall, as soon as practicable, send the transferor and the transferee written notice of the refusal or delay.

(3)Subject to the memorandum or articles of a company, the directors may refuse or delay the registration of a transfer of shares if the transferor has failed to pay an amount due in respect of those shares.

(4)Notwithstanding anything in its memorandum or articles but subject to section 66, a company shall not register a transfer of shares in the company unless a written instrument of transfer as referred to in section 62(1) has been delivered to it.

64. Loss of instrument of transfer

If the directors of a company are satisfied that an instrument of transfer of registered shares has been signed but that the instrument has been lost or destroyed, they may resolve—

(a)to accept such evidence of the transfer of the shares as they consider appropriate; and

(b)that the transferee’s name should be entered in the register of members, notwithstanding the absence of the instrument of transfer.

65. Time of transfer of share

Subject to the provisions of this Sub-Part, the transfer of a share is effective when the name of the transferee is entered in the register of members.

66. Transfer of securities through clearing agencies and securities facilities

(1)In this section—

(a)“approved rules” mean the rules and procedures of a clearing agency, recognised overseas clearing agency, securities facility or a recognised overseas securities facility, as the case may be, relating to the transfer of ownership of securities, which rules and procedures have been approved in writing by the Authority under the Securities Act or by a recognized overseas regulatory authority;

(b)“clearing agency” means a licensed clearing agency under the Securities Act;

(c)“recognised overseas clearing agency” means a company licensed by a recognized overseas regulatory authority whose licensed business includes the provision of services for the clearing or settlement or both in respect of transactions in securities;

(d)“recognised overseas regulatory authority” means as defined in the Securities Act;

(e)“recognised overseas securities facility” means a company licensed by a recognized overseas regulatory authority whose licensed business includes the provision of securities registry services or securities depository services including a central securities depository for the settlement of securities transactions;

(f)“recognized overseas securities exchange” means as defined in the Securities Act;

(g)“securities facility” means a licensed Securities Facility under the Securities Act; and

(h)“Seychelles Securities Exchange” means a licensed securities exchange under the Securities Act.

(2)Subject to subsection (3), securities issued by a company listed on a Seychelles Securities Exchange or on a recognized overseas securities exchange may be—

(a)issued in electronic form;

(b)converted from physical form to electronic form or vice versa;

(c)transferred by electronic means.

(3)Notwithstanding any other provision of this Act or other written law, the method of transferring the ownership of securities deposited in or cleared through a clearing agency, recognised overseas clearing agency, securities facility or recognised overseas securities facility shall be a transfer made in accordance with the approved rules.

(4)Subsection (3) is without prejudice of the right of any person to apply to the Court for a declaration or other order in respect of the ownership or transfer of securities.

IV – Distributions

67. Meaning of “solvency test”

(1)For the purposes of this Act, a company satisfies the solvency test if—

(a)the company is able to pay its debts as they become due; and

(b)the value of the company’s assets is greater than the value of its liabilities.

(2)In determining whether the value of a company’s assets is greater than the value of its liabilities, the directors—

(a)shall have regard to—

(i)the most recent accounts of the company; and

(ii)all other circumstances that the directors know or ought to know affect, or may affect, the value of the company’s assets and the value of the company’s liabilities; and

(b)may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(3)This section applies to cells and cores of protected cell companies as if references to companies were references to cells or cores, as the case may be, of protected cell companies.

68. Meaning of “distribution”

(1)In this Act but subject to the provisions of this Part, “distribution”, in relation to a distribution by a company to a member, means—

(a)the direct or indirect transfer of an asset, other than the company’s own shares, to or for the benefit of the member; or

(b)the incurring of a debt to or for the benefit of a member,

in relation to shares held by a shareholder, or to the entitlements to distributions of a member who is not a shareholder, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes a dividend.

(2)“Distribution” does not include—

(a)a distribution by way of a distribution of assets to members of the company on its winding up;

(b)a distribution of assets to members of a cell of a protected cell company during and for the purposes of a receivership order; or

(c)a distribution of assets to members of a cell of a protected cell company during and for the purposes of the termination of the cell.

69. Meaning of “dividend”

(1)In this Act, “dividend” means every distribution of a company’s assets to its members, except distributions by way of—

(a)an issue of shares as fully or partly paid bonus shares;

(b)a redemption or purchase of any of the company’s own shares or financial assistance for a purchase of the company’s own shares;

(c)a reduction of share capital.

(2)For the avoidance of doubt, a dividend may be in the form of money or any other property.

70. Distributions

(1)Subject to this Sub-Part and to any other requirement imposed by the memorandum or articles of the company, the directors of a company (other than a protected cell company) may, by resolution, authorise a distribution by the company to members at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that the company will, immediately after the distribution, satisfy the solvency test.

(2)A resolution of directors passed under subsection (1) shall contain a statement that, in the opinion of the directors, the company will, immediately after the distribution, satisfy the solvency test.

71. Cellular and non-cellular distributions by protected cell company

(1)Subject to section 72 and to any other requirement imposed by the memorandum or articles of the company, the directors of a protected cell company may authorise a distribution in respect of a cell (“cellular distribution”) at any time if they are satisfied, on reasonable grounds, that the protected cell company will, immediately after the distribution, satisfy the solvency test as it applies by virtue of subsection (2).

(2)In determining whether a protected cell company satisfies the solvency test under subsection (1) for the purpose of making a cellular distribution in respect of a cell, no account is to be taken of—

(a)the assets and liabilities, attributable to any other cell of the company; or

(b)non-cellular assets and liabilities of the company.

(3)Subject to section 72 and to any other requirement imposed by the memorandum or articles of the company, the directors of a protected cell company may authorise a distribution in respect of its non-cellular assets and liabilities (a “non-cellular distribution”) at any time if they are satisfied, on reasonable grounds, that the protected cell company will, immediately after the distribution, satisfy the solvency test as it applies by virtue of subsection (4).

(4)In determining whether a protected cell company satisfies the solvency test under subsection (3) for the purposes of making a non-cellular distribution, no account need be taken of the assets and liabilities of any cell of the protected cell company, except in the respect of any liability arising pursuant to Sub-Part IV of Part XIII by which the protected cell company’s non-cellular assets may be utilised to meet any liability attributable to any cell of a protected cell company.

72. Recovery of distributions made when company did not satisfy solvency test

(1)Where a distribution has been made to a member by a company and the company did not, immediately after the distribution, satisfy the solvency test, then the distribution (or the value thereof) may be recovered by the company from the member but only if—

(a)the member received the distribution or the benefit of the distribution (as the case maybe) other than in good faith and without knowledge of the company’s failure to satisfy the solvency test;

(b)the member’s position has not been altered by the member relying on the validity of the distribution; and

(c)it would not be unfair to require repayment in full or at all.

(2)Where a distribution has been made to a member or members by a company and the company did not, immediately after the distribution, satisfy the solvency test, then, a director who failed to take reasonable steps to ensure that the distribution was made in accordance with section 70, or, in the case of a protected cell company, section 71, shall be personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.

(3)If, in an action brought against a director or member under this section, the Court is satisfied that the company could, by making a distribution of a lesser amount, have satisfied the solvency test, the Court may—

(a)permit the member to retain; or

(b)relieve the director from liability in respect of,

an amount equal to the value of any distribution that could properly have been made.

V – Redemption and purchase of own shares

73. Company may redeem or purchase its own shares

(1)Subject to sections 70 and 71, a company may redeem, purchase or otherwise acquire its own shares in accordance with—

(a)sections 74, 75 and 76; or

(b)such other provisions for the redemption, purchase or other acquisition of its own shares as may be specified in its memorandum or articles or in a written agreement between the company and the or each affected shareholder.

(2)Where a company may redeem, purchase or otherwise acquire its own shares otherwise than in accordance with sections 74, 75 and 76, it may not redeem, purchase or otherwise acquire the shares without the consent of the member whose shares are to be redeemed, purchased or otherwise acquired, unless the company is permitted by the memorandum or articles to purchase, redeem or otherwise acquire the shares without that consent.

(3)Unless the shares are held as treasury shares in accordance with section 78, any shares acquired by a company are deemed to be cancelled immediately on redemption, purchase or other acquisition.

(4)A company shall not redeem its shares if, as a result of the redemption, the company would have no members.

(5)A company shall not redeem a share unless it is fully paid up, and if it is expressly authorised by its memorandum or articles to the contrary, in which case any redemption amount shall be paid on a pro rata basis proportionate to the amount paid up in respect of the share.

(6)Where sections 74, 75 and 76 are negated or modified by provisions for the redemption, purchase or other acquisition of a company’s own shares specified in a written agreement between the company and a shareholder (in this subsection referred to as a “Redemption Agreement”) and there is any inconsistency between the Redemption Agreement and the company’s memorandum and articles in relation to the redemption, purchase or other acquisition of a company’s own shares, such inconsistency shall be resolved as follows—

(a)if the Redemption Agreement includes a term to the effect that the Redemption Agreement shall prevail to the extent of any inconsistency with the company’s memorandum and articles, the Redemption Agreement shall prevail; and

(b)if the Redemption Agreement does not includes a term to the effect that the Redemption Agreement shall prevail to the extent of any inconsistency with the company’s memorandum and articles, the company’s memorandum and articles shall prevail.

74. Process for redemption or purchase of own shares

(1)The directors of a company may make an offer to redeem, purchase or otherwise acquire shares issued by the company, if the offer is—

(a)an offer to all shareholders to redeem, purchase or otherwise acquire shares issued by the company that—

(i)would, if accepted, leave the relative voting and distribution rights of the shareholders unaffected; and

(ii)affords each shareholder a reasonable opportunity to accept the offer; or

(b)an offer to one or more shareholders to redeem, purchase or otherwise acquire shares—

(i)to which all shareholders have consented in writing; or

(ii)that is permitted by the memorandum or articles and is made in accordance with section 75.

(2)Where an offer is made in accordance with subsection (1)(a)—

(a)the offer may also permit the company to redeem, purchase or otherwise acquire additional shares from a shareholder to the extent that another shareholder does not accept the offer or accepts the offer only in part; and

(b)if the number of additional shares exceeds the number of shares that the company is entitled to redeem, purchase or otherwise acquire, the number of additional shares shall be reduced pro rata.

(3)This section does not apply to a company to the extent that it is negated, modified or inconsistent with provisions for the redemption, purchase or other acquisition of its own shares specified in—

(a)the company’s memorandum or articles; or

(b)a written agreement between the company and the shareholder.

75. Offer to one or more shareholders under section 74 (1)(b)(ii)

(1)The directors of a company shall not make an offer to one or more shareholders under section 74(1)(b)(ii) unless they have passed a resolution stating that, in their opinion—

(a)the redemption, purchase or other acquisition is to the benefit of the remaining shareholders; and

(b)the terms of the offer and the consideration offered for the shares are fair and reasonable to the company and to the remaining shareholders.

(2)A resolution passed under subsection (1) shall set out the reasons for the directors’ opinion.

(3)The directors shall not make an offer to one or more shareholders under section 74(1)(b)(ii) if, after the passing of a resolution under subsection (1) and before the making of the offer, they cease to hold the opinions specified in subsection (1).

(4)A shareholder may apply to the Court for an order restraining the proposed purchase, redemption or other acquisition of shares under section 74(1)(b)(ii) on the grounds that—

(a)the redemption, purchase or other acquisition is not in the best interests of the remaining shareholders; or

(b)the terms of the offer and the consideration offered for the shares are not fair and reasonable to the company or the remaining shareholders.

(5)This section does not apply to a company to the extent that it is negated, modified or inconsistent with provisions for the redemption, purchase or other acquisition of its own shares specified in—

(a)the company’s memorandum or articles; or

(b)a written agreement between the company and the shareholder.

76. Shares redeemed at the option of a shareholder

(1)If a share is redeemable at the option of the shareholder and the shareholder gives the company proper notice of his intention to redeem the share—

(a)the company shall redeem the share on the date specified in the notice, or if no date is specified, on the date of the receipt of the notice;

(b)unless the share is held as a treasury share under section 78, on redemption the share is deemed to be cancelled; and

(c)from the date of redemption, the former shareholder ranks as an unsecured creditor of the company for the sum payable on redemption.

(2)If a share is redeemable on a specified date—

(a)the company shall redeem the share on that date;

(b)unless the share is held as a treasury share under section 78, on redemption the share is deemed to be cancelled; and

(c)from the date of redemption, the former shareholder ranks as an unsecured creditor of the company for the sum payable on redemption.

(3)Where a company redeems a share under subsections (1) or (2), sections 74 and 75 do not apply.

(4)This section does not apply to a company to the extent that it is negated, modified or inconsistent with provisions for the redemption of its shares specified in—

(a)the company’s memorandum or articles; or

(b)a written agreement between the company and the shareholder.

77. Redemptions or purchases deemed not to be a distribution

The redemption, purchase or other acquisition by a company of one or more of its own shares is deemed not to be a distribution where—

(a)the company redeems the share or shares under and in accordance with section 76;

(b)the company otherwise redeems the share or shares pursuant to a right of a shareholder to have his shares redeemed or to have his shares exchanged for money or other property of the company; or

(c)the company redeems, purchases or otherwise acquires the share or shares by virtue of the provisions of section 207 (Redemption of minority shares) or section 210 (Rights of dissenters).

78. Treasury shares

(1)A company may hold shares that have been redeemed, purchased or otherwise acquired under section 73 as treasury shares if—

(a)the memorandum or articles of the company do not prohibit it from holding treasury shares;

(b)the directors resolve that shares to be redeemed, purchased or otherwise acquired shall be held as treasury shares; and

(c)the number of shares purchased, redeemed or otherwise acquired, when aggregated with shares of the same class already held by the company as treasury shares, does not exceed fifty per cent of the shares of that class previously issued by the company, excluding shares that have been cancelled.

(2)All the rights and obligations attaching to a treasury share are suspended and shall not be exercised by or against the company while it holds the share as a treasury share.

79. Transfer of treasury shares

Treasury shares may be transferred by the company and the provisions of this Act and the memorandum and articles that apply to the issue of shares apply to the transfer of treasury shares.

VI – Alteration of capital

80. Alteration of capital of par value companies

(1)Subject to subsections (2), (3) and (4), section 83 and to its memorandum and articles, a par value company may—

(a)amend its memorandum in accordance with Sub-Part III of Part II to alter its authorised capital;

(b)increase its share capital by creating new shares of such amount as it thinks fit;

(c)combine all or any of its shares (whether issued or not) into a smaller number of shares with a larger par value amount than its existing shares;

(d)divide all or any of its shares into a larger number of shares with a smaller par value amount than its existing shares; and

(e)change the currency denomination of its share capital or any class of its share capital.

(2)A division or combination of par value shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, of shares in the same class or series.

(3)Where par value shares are divided or combined under this section, the aggregate par value of the new shares must be equal to the aggregate par value of the original shares.

(4)If any alteration to the company’s authorised capital or to the composition thereof is involved, paragraphs (b) to (e) of subsection (1) shall be subject to paragraph (a) of subsection (1).

81. Alteration of capital of no par value companies

(1)Subject to subsections (2) and (3), section 83 and to its memorandum and articles, a no par value company may—

(a)amend its memorandum in accordance with Sub-Part III of Part II to alter its authorised capital, including to increase or reduce the number of shares that it is authorised to issue;

(b)combine all or any of its shares (whether issued or not) into a smaller number of shares; and

(c)divide all or any of its shares (whether issued or not) into a larger number of shares.

(2)A division or combination of no par value shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, of shares in the same class or series.

(3)If any alteration to the company’s authorised capital or to the composition thereof is involved, paragraphs (b) and (c) of subsection (1) shall be subject to paragraph (a) of subsection (1)

82. Forfeiture of shares

(1)Subject to contrary provision in its memorandum or articles, a company may—

(a)in accordance with this section cause any of its shares which have been issued otherwise than as fully paid to be forfeited for failure to pay any sum due and payable on them; or

(b)accept the surrender of such shares instead of causing them to be so forfeited.

(2)Notwithstanding any provision to the contrary in the memorandum or articles of a company or the terms of issue of any shares in such company, a share may only be forfeited if a written notice of forfeiture has been served on the member who defaults in making payment in respect of the share.

(3)The written notice of forfeiture referred to in subsection (2) shall specify a date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that, in the event of non-payment at or before the time specified in the notice the shares, or any of them, in respect of which payment is not made will be liable to be forfeited.

(4)Where a written notice of forfeiture has been issued under this section and the requirements of the notice have not been complied with, the directors may, at any time before tender of payment, forfeit and cancel the shares to which the notice relates.

(5)The company is under no obligation to refund any moneys to the member whose shares have been cancelled pursuant to subsection (4) and that member shall be discharged from any further obligation to the company.

83. Reduction of share capital

(1)Subject to this Sub-Part and to any contrary provisions in its memorandum or articles, a company having a share capital may by special resolution reduce its share capital in any way.

(2)In particular, and without prejudice to the generality of subsection (1), the company may—

(a)extinguish or reduce the liability on any of its shares in respect of share capital not paid up;

(b)with or without extinguishing or reducing liability on any of its shares—

(i)cancel any paid-up share capital which is lost or unrepresented by available assets; or

(ii)pay off any paid-up share capital which is in excess of the needs of the company; and

(c)if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.

(3)Subject to a company’s memorandum and articles, a reduction of share capital of a company shall not be subject to confirmation by the Court if the directors of the company pass a resolution approving the reduction if they are satisfied, on reasonable grounds, that the company will, immediately after the reduction, satisfy the solvency test.

(4)A resolution of directors passed under subsection (3) shall contain a statement that, in the opinion of the directors, the company will, immediately after the reduction in issued capital, satisfy the solvency test.

(5)Any director who makes a statement under subsection (4) that the company satisfies the solvency without having reasonable grounds for that statement commits an offence and is liable on conviction to a fine not exceeding US$25,000.

(6)The provisions of this section shall not apply in relation to a mutual fund (as defined in the Mutual Fund and Hedge Fund Act) or to any other company which redeems any of its shares under and in accordance with section 76 (Shares redeemed at the option of a shareholder).

84. Application to Court for order of confirmation

(1)Subject to subsection (2), where a company has passed a special resolution for reducing its issued share capital, it may apply to the Court for an order confirming the reduction.

(2)Where a company has passed a special resolution for reducing its issued share capital, it shall apply to the Court for an order confirming the reduction if—

(a)a resolution of directors has not been passed under section 83(3); or

(b)the company’s memorandum or articles specifies that a reduction of share capital of the company shall be subject to confirmation by the Court.

(3)If the proposed reduction of share capital involves either—

(a)a diminution of liability in respect of any amount unpaid on a share; or

(b)the payment to a shareholder of any paid up capital,

and in any other case if the Court so directs, subsections (4), (5), and (6) have effect, but subject throughout to subsection (7).

(4)Every creditor of the company who at the date fixed by the Court is entitled to a debt or claim which if that date were the commencement of the winding up of the company, would be admissible in proof against the company is entitled to object to the reduction of share capital.

(5)The Court shall settle a list of creditors entitled to object, and for that purpose—

(a)shall ascertain, as far as possible, without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims; and

(b)may direct the publication of notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction of capital.

(6)If a creditor entered on the list referred to in subsection (5) whose debt or claim is not discharged or has not determined does not consent to the reduction, the Court may dispense with the consent of that creditor, on the company securing payment of the creditor’s debt or claim by appropriating (as the Court may direct) the following amount—

(a)if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;

(b)if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the Court after an enquiry and adjudication.

(7)If a proposed reduction of share capital involves either the diminution of a liability in respect of unpaid capital or the payment to a shareholder of paid up capital, the Court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that subsections (4) to (6) shall not apply as regards any class or any classes of creditors.

85. Court order confirming reduction

(1)The Court, if satisfied with respect to every creditor of the company who under section 84 is entitled to object to the reduction of share capital that either—

(a)the creditor’s consent to the reduction has been obtained; or

(b)the creditor’s debt or claim has been discharged or has determined, or has been secured,

may make an order confirming the reduction of share capital on such terms and conditions as it thinks fit.

(2)Where the Court so orders, it may also make an order requiring the company to publish, as the Court directs, the reasons for reduction of capital or such other information in regard to it as the Court thinks fit with a view to giving proper information to the public and, if the Court thinks fit, the causes which led to the reduction.

86. Registration of order and minute of reduction

(1)Where the Court confirms the reduction of a company’s share capital, the company shall deliver to the Registrar—

(a)the order of the Court confirming the reduction; and

(b)a minute, approved by the Court, showing in respect of the company the information specified in subsection (2).

(2)The information to which subsection (1) refers is—

(a)the aggregate amount of the reduced share capital, as confirmed by the Court;

(b)the number of shares into which the share capital is to be divided, and, in the case of a par value company, the amount of each share;

(c)in the case of a par value company the amount (if any), at the date of the registration of the order and minute under subsection (3), which will remain paid up on each share which has been issued; and

(d)in the case of a no par value company, the amount (if any) remaining unpaid on issued shares.

(3)The Registrar shall register the order and minute, and thereupon the resolution for reducing the share capital as confirmed by the order shall take effect.

(4)The Registrar shall certify the registration of the order and minute and such certificate—

(a)shall be signed by the Registrar and sealed with the Registrar’s seal;

(b)is conclusive evidence that all the requirements of this Act with respect to the reduction of share capital have been complied with, and the company’s share capital is as stated in the minute.

(5)The minute when registered is deemed to be substituted for the corresponding part of the company’s memorandum.

87. Liability of members on reduced shares

(1)In the case of a reduction of share capital, a member of the company, past or present, shall not be liable in respect of any share to any call or contribution exceeding in amount the difference, if any, between the amount of the share as fixed by the minute and the amount paid or the reduced amount, if any, which is to be deemed to have been paid on the shares.

(2)If any creditor entitled in respect of any debt or claim to object to the reduction of issued share capital is, by reason of his ignorance of the proceedings for reduction or of their nature and effect with respect to his debt or claim, not entered on the list of creditors, and after the reduction the company is unable to pay the amount of his debt or claim, then—

(a)every person who was a member of the company at the date of the registration of the order for reduction and minute shall be liable to contribute for the payment of that debt or claim an amount not exceeding the amount which he would have been liable to contribute if the company had commenced to be wound up on the day before the said date; and

(b)if the company is wound up, the Court, on the application of any such creditor and proof of his ignorance as aforesaid, may if it thinks fit, settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories in a winding up.

(3)Nothing in this section shall affect the rights of the contributories among themselves.

88. Penalty for concealing name of creditor, etc

If an officer of the company in respect of an application to the Court under this Sub-Part—

(a)wilfully conceals the name of a creditor entitled to object to the reduction of share capital;

(b)wilfully misrepresents the nature or amount of the debt or claim of a creditor; or

(c)aids, abets or is privy to any such concealment or misrepresentation,

the officer is guilty of an offence and is liable on conviction to a fine not exceeding US$25,000.

VII – Security over shares

89. Interpretation

In this Sub-Part, “pledge” means any form of security interest, including, without limitation—

(a)a pledge;

(b)a charge; or

(c)a hypothecation,

over one or more shares in a company, other than an interest arising by operation of law, and “pledged”, “pledgee” and “pledgor” shall be construed accordingly.

90. Right to pledge shares

Subject to—

(a)the provisions of a company’s memorandum or articles; and

(b)any other prior written agreement made by the shareholder,

a shareholder may pledge a share held by him in a company.

91. Form of pledge of shares

(1)A pledge of shares of a company shall be in writing signed by, or with the authority of, the shareholder whose name is entered in the company’s register of members as the holder of the share to which the pledge relates.

(2)A pledge of shares of a company need not be in any specific form but it shall clearly indicate—

(a)the intention to create a pledge; and

(b)the amount secured by the pledge or how that amount is to be calculated.

92. Pledge of shares governed by Seychelles law

(1)Subject to this section, where the governing law of a pledge of shares in a company is the law of Seychelles, in the case of a default by the pledgor under the terms of the pledge, the pledge is entitled to the following remedies—

(a)subject to any limitations or provisions to the contrary in the instrument creating the pledge, the right to sell the shares;

(b)subject to any limitations or provisions to the contrary in the instrument creating the pledge, the right to—

(i)vote on the shares;

(ii)receive distributions in respect of the shares; and

(iii)exercise other rights and powers of the pledgor in respect of the shares,

until such time as the pledge is discharged; and

(c)the right to appoint a receiver who, subject to any limitations or provisions to the contrary in the instrument creating the pledge, may—

(i)vote on the shares;

(ii)receive distributions in respect of the shares; and

(iii)exercise other rights and powers of the pledgor in respect of the shares,

until such time as the pledge is discharged.

(2)Subject to subsection (3), the remedies referred to in subsection (1) are not exercisable until—

(a)a default has occurred and has continued for a period of not less than thirty days, or such shorter period as may be specified in the instrument creating the pledge; and

(b)the default has not been rectified within fourteen days or such shorter period as may be specified in the instrument creating the pledge from service of the notice specifying the default and requiring rectification thereof.

(3)Where the governing law of a pledge of shares in a company is the law of Seychelles, if the instrument creating the pledge so provides, the remedies referred to in subsection (1) are exercisable immediately on a default occurring.

(4)Subject to any limitations or provisions to the contrary in the instrument creating the pledge, the remedies referred to in subsection (1) are exercisable without an order of the Court.

93. Exercising power of sale under a Seychelles law pledge of shares

(1)Notwithstanding any provision to the contrary in the instrument creating a pledge of shares governed by Seychelles law, in the event that a pledgee is exercising his right of sale pursuant to section 92(1)(a), the sale shall be at—

(a)open market value at the time of sale; or

(b)the best price reasonably obtainable if there is no open market value at the time of sale.

(2)Subject to any provision to the contrary in the instrument creating a pledge of shares governed by Seychelles law, a sale pursuant to subsection (1) may be conducted in any manner, including by private sale or public auction.

94. Pledge of shares governed by foreign law

Where the governing law of a pledge of shares in a company is not the law of Seychelles—

(a)the pledge shall be in compliance with the requirements of its governing law in order for the pledge to be valid and binding on the company; and

(b)the remedies available to a pledgee shall be governed by the governing law and the instrument creating the pledge, except that the rights between the pledgor or pledgee as a member of the company and the company shall continue to be governed by the memorandum and articles of the company and this Act.

95. Application of enforcement monies

Subject to any provision to the contrary in the instrument creating a pledge of shares of a company, all amounts that accrue from the enforcement of the pledge shall be applied in the following manner—

(a)firstly, in meeting the costs incurred in enforcing the pledge;

(b)secondly, in discharging the sums secured by the pledge; and

(c)thirdly, in paying any balance due to the pledgor.

96. Annotating and filing of register of members

(1)At the written request of a shareholder who has created a pledge over shares in a company, the company shall enter or cause to be entered in its register of members—

(a)a statement that the shares are pledged;

(b)the name and address of the pledgee; and

(c)the date on which the statement and name are entered in the register of members.

(2)A copy of the register of members of a company, annotated in accordance with subsection (1), may be filed by the company with the Registrar in accordance with section 349.

VIII – Conversion of par value shares into no par value shares and vice versa

97. Conversion of shares in par value companies

(1)A par value company may convert its shares into no par value shares by altering its memorandum in accordance with this section.

(2)The power conferred by subsection (1)—

(a)may only be exercised by converting all of the company’s shares into no par value shares;

(b)may only be exercised by a special resolution of the company and, if there is more than one class of issued shares, with the approval of a special resolution passed at a separate meeting of the holders of each class of shares; and

(c)may be exercised whether or not the issued shares of the company are fully paid.

(3)The special resolution of the company—

(a)shall specify the number of no par value shares into which each class of issued shares is to be divided;

(b)may specify any number of additional no par value shares which the company may issue; and

(c)shall make such other alterations to the memorandum and articles as may be requisite in the circumstances.

(4)Upon converting its shares under this section, the company—

(a)shall transfer, from the share capital account for each class of shares to the stated capital account for that class, the total amount that has been paid up on the shares of that class; and

(b)shall transfer any amount standing to the credit of a share premium account or capital redemption reserve to the stated capital account for the class of share which would have fallen to be issued if that amount had been applied in paying up unissued shares issued to members as fully paid bonus shares.

(5)On the conversion of a company’s shares under this section, any amount which is unpaid on any share immediately before the conversion remains payable when called or due.

98. Conversion of shares in no par value companies

(1)A no par value company may convert its shares into par value shares by altering its memorandum in accordance with this section.

(2)The power conferred by subsection (1)—

(a)may only be exercised by converting all of the company’s shares into par value shares;

(c)may be exercised whether or not the issued shares of the company are fully paid.

(3)For the purpose of a conversion of shares under this section, each share of a class shall be converted into a share which—

(a)confers upon the holder, as nearly as possible, the same rights as were conferred by it before the conversion; and

(b)has a nominal value specified in the special resolution of the company, being a value not exceeding the amount standing to the credit of the stated capital account for that class divided by the number of shares of that class in issue.

(4)The special resolution of the company shall make such alterations to the memorandum and articles as may be requisite in the circumstances.

(5)Upon converting its shares under this section, the company—

(a)shall, to the extent that the amount standing to the credit of the stated capital account for each class of shares equals the total nominal amount of the shares of the class into which those shares are converted, transfer the amount to the share capital account; and

(b)shall, to the extent (if any) that the amount exceeds that total nominal amount, transfer it to the share premium account for that class.

(6)On the conversion of a company’s shares under this section, any amount which is unpaid on any share immediately before the conversion remains payable when called or due.

Part VI – Membership

I – Members

99. Minimum number of members

(1)Subject to subsection (2), a company shall at all times have one or more members.

(2)Subsection (1) does not apply during the period from the incorporation of the company to the appointment of its first directors.

100. Requirement for company limited by shares and guarantee

In the case of a company limited by shares and guarantee, at least one of the members of the company shall be a guarantee member.

101. Minors and incapacitated adults

(1)Subject to subsection (2) and unless prohibited under a company’s memorandum or articles, a minor or an incapacitated adult may be a member of a company.

(2)Where a company’s memorandum or articles does not prohibit a minor or incapacitated adult from being a member of a company, no shares shall be issued to a minor or incapacitated adult unless one or more persons (for the purposes of this section called a “representative”) are legally entitled to, and are willing to, represent the interests of the minor or incapacitated adult in respect of exercising any voting or other rights attached to the shares for and on behalf of the minor or incapacitated adult.

(3)Nothing in this section shall prevent shares in a company from being held by a person in a trustee or guardian capacity as a member for and on behalf of a minor or incapacitated adult.

(4)A representative, and a trustee or guardian under subsection (3), shall—

(a)not be a minor or an incapacitated adult; and

(b)act in the best interests of the minor or incapacitated adult.

102. Liability of members

(1)A member of a limited company has no liability, as a member, for the liabilities of the company.

(2)The liability of a shareholder to the company, as shareholder, is limited to—

(a)any amount unpaid on a share held by the shareholder;

(b)any liability expressly provided for in the memorandum or articles of the company; and

(c)any liability to repay a distribution under section 72(1).

(3)The liability of a guarantee member to the company, as guarantee member, is limited to—

(a)the amount that the guarantee member is liable to contribute as specified in the memorandum in accordance with section 16(1); and

(b)any other liability expressly provided for in the memorandum or articles of the company; and

(c)any liability to repay a distribution under section 72(1).

103. Service on members

Any notice, information or written statement required under this Act to be given by a company to members shall be served—

(a)in the manner specified in the memorandum or articles, as the case may be; or

(b)in the absence of a provision in the memorandum or articles, by personal service or by mail addressed to each member at the address shown in the register of members or, where the member consents, by and in accordance with such electronic means as may be permitted by sections 364 and 365.

II – Register of members

104. Register of members

(1)Subject to section 106, every company shall keep at its registered office in Seychelles a register to be known as a register of members, and enter in it the following information as appropriate for the company—

(a)the name and address of each person who holds any shares in the company;

(b)the number of each class and series of shares held by each shareholder;

(c)the name and address of each person who is a guarantee member of the company;

(d)the date on which the name of each member was entered in the register of members; and

(e)the date on which any person ceased to be a member.

(2)A company shall ensure that the information required by subsection (1) to be kept in its register of members is accurate and up-to-date.

(3)The register of members may be in such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the company must be able to produce legible evidence of its contents.

(4)An entry relating to a former member of the company may be removed from the register after seven years from the date on which the member ceased to be a member.

(5)A company that contravenes subsection (1) or (2) shall be liable to a penalty fee not exceeding US$10,000.

(6)A director who knowingly permits a contravention under subsection (1) or (2) shall be liable to a penalty fee not exceeding US$10,000.

105. Nature of register

(1)The register of members is prima facie evidence of any matters which are by this Act directed or permitted to be inserted in it.

(2)Without prejudice to the generality of subsection (1), the entry of the name of a person in the register of members as a holder of a share in a company is prima facie evidence that legal title in the share vests in that person.

(3)Subject to its memorandum or articles, a company shall treat the holder of a share, as appearing in the company’s register of members, as the only person entitled to—

(a)exercise any voting rights attaching to the share;

(b)receive notices;

(c)receive a distribution in respect of the share; and

(d)exercise other rights and powers attaching to the share.

106. Register of members of listed companies

(1)A listed company (as defined in the Securities Act) may apply in writing to the Registrar for approval to keep its register of members at a location in Seychelles at a place other than its registered office.

(2)The Registrar may in its absolute discretion approve or decline an application by a listed company under subsection (1) or impose such conditions as it may think fit in relation to approving any such application.

(3)Where a listed company keeps its register of members at an approved location pursuant to subsection (1), it shall—

(a)not, without the Registrar’s prior written approval, change the location of where it keeps its register of members;

(b)within 14 days of an approval given by the Registrar under subsection (1), notify in writing its registered agent of the address of the location at which its register of members is kept;

(c)within 14 days of any change in the location at which its register of members is kept, notify in writing its registered agent of the changed location; and

(d)subject to subsection (4), keep a copy of its register of members at its registered office and, where there is any change in the register, provide the registered agent with an updated copy of the register within 14 days.

(4)In lieu of complying with the requirement under subsection (3)(d), a company may, with the prior written approval of the Registrar on such conditions as the Registrar may think fit, give its registered agent electronic or other instant access to its register of members.

(5)In the event that a listed company issues or may issue both certificated and uncertificated shares, it may, with the prior written approval of the Registrar on such conditions as the Registrar may think fit, keep two sub-registers of members which shall together constitute the company’s register of members.

(6)A company that contravenes any requirement of this section shall be liable to a penalty fee not exceeding US$10,000.

(7)A director who knowingly permits a contravention under this section shall be liable to a penalty fee not exceeding US$10,000.

107. Inspection of register of members

(1)A director or member of a company, in person or by attorney, is entitled without charge to inspect the company’s register of members.

(2)A person’s right to inspection under subsection (1) is subject to such reasonable notice or other restrictions as the company may by its articles or by resolution of directors impose, but so that not less than 2 hours in each business day be allowed for inspection.

(3)A person with the right to inspection under subsection (1) is entitled to request a copy of the company’s register of members or an extract of it, in which event the company may charge a reasonable copying fee.

(4)If an inspection under subsection (1) is refused, or if a copy document requested under subsection (3) is not made available within 21 business days of the request—

(a)the company commits an offence and is liable on conviction to a fine not exceeding US$5,000; and

(b)the aggrieved person may apply to the Court for an order that he should be permitted to inspect the register or that a copy of the register or an extract of it be provided to him, within 90 days from the date of refusal.

(5)On an application under subsection (4), the Court may make such orders as it considers just.

108. Rectification of register of members

(1)If—

(a)information that is required to be entered in the register of members under section 104 is omitted from the register or inaccurately entered in the register; or

(b)there is unreasonable delay in entering the information in the register,

a member of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the Court for an order that the register be rectified.

(2)On an application under subsection (1), the Court may—

(a)either refuse the application, with or without costs to be paid by the applicant, or order the rectification of the register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained;

(b)determine any question relating to the right of a person who is a party to the proceedings to have his name entered in or omitted from the register of members, whether the question arises between—

(i)two or more members or alleged members; or

(ii)between one or more members or alleged members and the company; and

(c)otherwise determine any question that may be necessary or expedient to be determined for the rectification of the register of members.

III – Members meetings and resolutions

109. Resolutions

(1)Unless otherwise specified in this Act or in the memorandum or articles of a company, the exercise by the members of a company of a power which is given to them under this Act or the memorandum or articles shall be by a resolution—

(a)passed at a meeting of members held in accordance with this Sub-Part; or

(b)passed as a written resolution in accordance with section 122.

110. Ordinary resolutions

(1)Subject to section 111, an ordinary resolution of the members, or of a class of members, of a company means a resolution passed by a simple majority.

(2)A resolution passed at a meeting on a show of hands is passed by a simple majority if it is passed by in excess of half of the members who, being entitled to do so, vote in person or by proxy on the resolution.

(3)A resolution passed on a poll taken at a meeting is passed by a simple majority if it is passed by members representing in excess of half of the total votes of members who, being entitled to do so, vote in person or by proxy on the resolution.

(4)A written resolution is passed by a simple majority if it is passed in accordance with this Sub-Part by members representing in excess of half of the total votes of members entitled to vote on the resolution.

(5)For the purposes of subsections (2), (3) and (4)—

(a)votes of shareholders shall be counted according to the votes attached to the shares held by the shareholder voting; and

(b)unless the memorandum or articles otherwise provide, a guarantee member is entitled to one vote on any resolution on which he is entitled to vote.

(6)Anything that may be done by ordinary resolution may also be done by special resolution.

(7)Unless the context otherwise requires, a reference in this Act to a resolution of members shall mean an ordinary resolution.

111. Ordinary resolutions may be required to have a higher proportion of votes

Section 110 does not preclude a company’s memorandum or articles from providing that all or certain ordinary resolutions are to be passed by a higher majority of votes than a simple majority.

112. Special resolutions

(1)Subject to section 113, a special resolution of the members, or of a class of members, of a company means a resolution passed by not less than a two-thirds majority.

(2)A resolution passed at a meeting on a show of hands is passed by a two-thirds majority if it is passed by not less than two-thirds of the members who, being entitled to do so, vote in person or by proxy on the resolution.

(3)A resolution passed on a poll taken at a meeting is passed by a two-thirds majority if it is passed by members representing not less than two-thirds of the total votes of members who, being entitled to do so, vote in person or by proxy on the resolution.

(4)A written resolution is passed by a two-thirds majority if it is passed in accordance with this Sub-Part by members representing not less than two-thirds of the total votes of members entitled to vote on the resolution.

113. Special resolutions may be required to have a higher proportion of votes

Section 112 does not preclude a company’s memorandum or articles from providing that all or certain special resolutions are to be passed by a higher majority of votes than a twothirds majority.

114. Convening of members meetings

(1)Subject to a company’s memorandum and articles, a meeting of the members of the company may be held at such time and in such place, within or outside Seychelles, as the convener of the meeting considers appropriate.

(2)Subject to any limitations in a company’s memorandum and articles, any of the following persons may convene a meeting of the members of the company at any time—

(a)the directors of the company; or

(b)such person or persons as may be authorised by the memorandum or articles to call the meeting.

(3)Subject to a provision in the memorandum or articles for a lesser percentage, the directors of a company shall call a meeting of the members of the company if requested in writing to do so by members entitled to exercise at least twenty per cent of the voting rights in respect of the matter for which the meeting is requested.

(4)A written request under subsection (3) shall state the objects of the meeting, and shall be signed by or on behalf of the requesting members and given to the directors at the company’s registered office or principal place of business, and may consist of several documents in similar form each signed by or on behalf of one or more requesting members.

(5)Subject to a provision in the memorandum or articles changing any time period referred to in this subsection, if the directors do not, within 21 days from the date of the service of the written request under subsections (3) and (4), call a meeting to be held within 2 months of that date, the requesting members, or any of them representing more than one half of the total voting rights of all of them, may themselves call a meeting, but a meeting so called shall not be held after 3 months from that date.

(6)A meeting called under this section by requesting members shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by directors.

(7)Reasonable expenses incurred by the requesting members by reason of the failure of the directors to call a meeting shall be repaid to the requesting members by the company, and sums so repaid shall be retained by the company out of sums due or to become due from the company by way of fees or other remunerations in respect of their services to the directors who were in default.

115. Notice of meetings of members

(1)Subject to a requirement in the memorandum or articles to give longer notice, a person or persons convening a meeting of the members of a company shall give to those persons whose names, on the date the notice is given, appear as members in the register of members and are entitled to vote at the meeting—

(a)in the case of a meeting for the passing of a special resolution, not less than 21 days’ notice in writing; and

(b)in the case of a meeting other than as referred to in paragraph (a), not less than 7 days’ notice in writing.

(2)Notwithstanding subsection (1), and subject to the memorandum or articles, a meeting of members held in contravention of the requirement to give notice is valid if members holding a ninety per cent majority, or such other majority as may be specified in the memorandum or articles, of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a member at the meeting shall be deemed to constitute a waiver on his part.

(3)The inadvertent failure of the convener or conveners of a meeting of members to give notice of the meeting to a member, or the fact that a member has not received the notice, does not invalidate the meeting.

116. Quorum

The quorum for a meeting of the members of a company for the purposes of a resolution of members is that fixed by the memorandum or articles but, where no quorum is so fixed, a meeting of members is properly constituted for all purposes if at the commencement of the meeting there are present, in person or by proxy, members entitled to exercise at least fifty percent of the votes.

117. Attending meeting by telephone or other electronic means

Subject to the memorandum or articles of a company, a member of the company shall be deemed to be present at a meeting of members if—

(a)the member participates by telephone or other electronic means; and

(b)all members participating in the meeting are able to hear each other.

118. Representation of body corporate at meetings

(1)A body corporate, whether or not a company within the meaning of this Act, may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of a company, or of any class of members of a company, or of creditors of a company which it is entitled to attend.

(2)A person so authorised in accordance with subsection (1) is entitled to exercise the same powers on behalf of the body corporate which the person represents as that body corporate could exercise if it were an individual member or creditor of the company.

119. Jointly owned shares

Subject to a company’s memorandum and articles, the following apply where shares are jointly owned—

(a)if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;

(b)if only one of them is present in person or by proxy, he may vote on behalf of all of them; and

(c)if two or more are present in person or by proxy, they must vote as one.

120. Proxies

(1)A member of a company is entitled by written instrument to appoint another person as his proxy to represent the member at any meeting of the company at which the member is entitled to attend and vote.

(2)Where a proxy attends a meeting as referred to in subsection (1), the proxy may speak and vote on behalf of the member who appointed the proxy.

(3)This section applies to meetings of any class of members as it applies to general meetings.

121. Demand for poll

(1)A provision contained in a company’s memorandum or articles is void in so far as it would have the effect either—

(a)of excluding the right to demand a poll at a meeting of members, or at a meeting of any class of members, on a question other than the election of the chairman of the meeting or the adjournment of the meeting; or

(b)of making ineffective a demand for a poll on any such question which is made either—

(i)by not less than 5 members having the right to vote on the question; or

(ii)by a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote on the question.

(2)A written instrument appointing a proxy to vote at such a meeting is deemed also to confer authority to demand or join in demanding a poll; and for the purposes of subsection (1) a demand by a person as proxy for a member is the same as a demand by the member.

(3)On a poll taken at such a meeting, a member entitled to more than one vote need not, if the member votes, in person or by proxy, use all his votes or cast all the votes he uses in the same way.

122. Written consent resolutions of members

(1)Subject to the memorandum and articles of the company, an action that may be taken by members of a company at a meeting of members or any class of members may also be taken by a resolution of members consented to in writing or by telex, telegram, cable or other written electronic communication, without the need for any notice.

(2)A resolution under subsection (1) may consist of several documents, including written electronic communications, in like form each signed or otherwise assented to by or on behalf of one or more members.

(3)A resolution under this section shall be deemed to be passed when the consent instrument, or the last of several instruments, is last signed or otherwise assented to or on such later date as is specified in the resolution.

123. Court may order meeting

(1)The Court may order a meeting of members to be called, held and conducted in such manner as the Court orders if it is of the opinion that—

(a)it is for any reason impracticable to call or conduct a meeting of the members of a company in the manner specified in this Act or in the memorandum and articles of the company; or

(b)it is in the interests of the members of the company that a meeting of members is held.

(2)An application for an order under subsection (1) may be made by a member or director of the company.

(3)The Court may make an order under subsection (1) on such terms, including as to the costs of conducting the meeting and as to the provision of security for those costs, as it considers appropriate.

(4)Where such an order is made, the Court may give such ancillary or consequential directions as it thinks expedient; and these may include a direction that one member of the company present in person or by proxy be deemed to constitute a meeting.

124. Resolution passed at adjourned meeting

Where a resolution is passed at an adjourned meeting of the members or any class of members of a company, the resolution is for all purposes to be treated as having been passed on the date on which it was in fact passed, and is not to be deemed passed on any earlier date.

125. Keeping of minutes and resolutions of members

(1)A company shall keep—

(a)minutes of all meetings of its members;

(b)minutes of all meetings of any class of its members;

(c)copies of all written resolutions consented to by its members; and

(d)copies of all written resolutions consented to by any class of its members.

(2)The records referred to in subsection (1) (which in this Sub-Part shall be referred to as “minutes and resolutions”) shall be kept for at least seven years from the date of the meeting or written resolution, as applicable.

(3)A company that contravenes this section shall be liable to a penalty fee not exceeding US$5,000.

(4)A director who knowingly permits a contravention under this section shall be liable to a penalty fee not exceeding US$5,000.

126. Location of minutes and resolutions of members

(1)A company shall keep its minutes and resolutions at such place inside or outside of Seychelles as the directors shall determine.

(2)Where a company does not keep its minutes and resolutions at its registered office, it shall notify in writing its registered agent of the physical address of the place at which its minutes and resolutions are kept.

(3)Where there is a change in the place at which its minutes and resolutions are kept, a company shall, within 14 days of the change, notify in writing its registered agent of the physical address of the place at which its minutes and resolutions are kept.

(4)A company that contravenes subsections (1), (2) or (3) shall be liable to a penalty fee not exceeding US$5,000.

(5)A director who knowingly permits a contravention under subsections (1), (2) or (3) shall be liable to a penalty fee not exceeding US$5,000.

127. Inspection of minutes and resolutions of members

(1)A director of a company in person or by attorney is entitled to inspect the company’s minutes and resolutions without charge.

(2)A member of a company in person or by attorney is entitled to inspect without charge minutes and resolutions of those classes of members of which he is a member.

(3)A person’s right to inspection under subsections (1) or (2) is subject to such reasonable notice or other restrictions as the company may by its articles or by resolution of directors impose, but so that not less than 2 hours in each business day be allowed for inspection.

(4)A person with the right to inspection under subsections (1) or (2) is entitled to request a copy of any of the company’s minutes and resolutions which the person is entitled to inspect, in which event the company may charge a reasonable copying fee.

(5)If an inspection under subsections (1) or (2) is refused, or if a copy document requested under subsection (4) is not made available within 21 business days of the request—

(a)the company commits an offence and is liable on conviction to a fine not exceeding US$5,000; and

(b)the aggrieved person may within 90 days from the date of refusal apply to the Court for an order that he should be permitted to inspect the relevant minutes and resolutions or that a copy of such minutes and resolutions be provided to him.

(6)On an application under subsection (5), the Court may make such order as it considers just.

Part VII – Directors

I – Management of Companies

128. Management of company

Subject to any modifications or limitations in the company’s memorandum or articles—

(a)the business and affairs of a company shall be managed by, or under the direction or supervision of, the directors of the company; and

(b)the directors of a company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the company.

129. Carrying out of company obligations by directors

Wherever in this Act an obligation or duty is placed on a company or a company is authorised to do any act then unless it is otherwise provided such obligation, duty or act shall be carried out or caused to be carried out by the directors of the company.

130. Minimum number of directors

(1)A company shall at all times have at least one director appointed in accordance with this Act, except where otherwise provided by another written law of Seychelles.

(2)Subsection (1) does not apply during the period between the incorporation of the company and the appointment of the first directors.

(3)Subject to subsection (1), the number of directors of a company may be fixed by, or in the manner provided in, the company’s articles.

131. Deemed directors

If at any time a company does not have a director, any person who manages, or who directs or supervises the management of the business and affairs of the company is deemed to be a director of the company for the purposes of this Act.

132. Committee of directors

(1)Subject to the memorandum and articles of the company and to subsection (2), the directors may—

(a)designate one or more committees of directors, each consisting of one or more directors; and

(b)delegate to the committee one or more of their powers, including the power to affix the common seal of the company.

(2)Notwithstanding anything in the memorandum or articles of the company, the directors shall not delegate to a committee of directors any power to—

(a)amend the memorandum or articles, including to change the registered agent or registered office of the company;

(b)designate committees of directors;

(c)delegate powers to a committee of directors;

(d)appoint or remove directors;

(e)appoint or remove an agent;

(f)approve a plan or merger, consolidation or arrangement;

(g)approve voluntary winding up of the company under Sub-Part II or Sub-Part III of Part XVII; or

(h)approve distribution by the company, including to make a determination under section 70(1) or 71(1) that the company will, immediately after a proposed distribution, satisfy the solvency test.

(3)Subsection (2)(b) and (c) shall not prevent a committee of directors, where authorised by the directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.

(4)The directors who delegate any power under subsection (1) shall be responsible for the exercise of the power by the committee as if the power had been exercised by the directors, unless the directors prove that the exercise of power by the committee was outside the scope of the delegated authority.

132A. Agents

(1)The directors may appoint any person, including a person who is a director, to be an agent of the company.

(2)Subject to the memorandum or articles of the company, an agent of the company has such powers and authority of the directors, including the power and authority to affix the common seal of the company, as are set forth in the articles or in the resolution of directors appointing the agent, except that no agent has any power or authority to—

(a)amend the memorandum or articles, including to change the company’s registered agent or registered office;

(b)designate committees of directors;

(c)delegate powers to a committee of directors;

(d)appoint or remove directors;

(e)appoint or remove an agent;

(f)approve a plan or merger, consolidation or arrangement;

(g)approve voluntary winding up of the company under Sub-Part II or Sub-Part III of Part XVII;

(h)approve distributions by the company, including to make a determination under section 70(1) or 71(1) that the company will, immediately after a proposed distribution, satisfy the solvency test;

(i)fix emoluments of directors; or

(j)authorise the company to continue as a company incorporated under the laws of a jurisdiction outside Seychelles.

(3)Where the directors appoint any person to be an agent of the company, they may authorise the agent to appoint one or more substitute or delegate to exercise some or all of the powers conferred on the agent by the company.

(4)The directors may remove an agent appointed under subsection (1) and may revoke or vary a power conferred on him or her under subsection (2).

II – Appointment, removal and resignation of directors

133. Eligibility of directors

(1)Subject to subsection (2), the company’s memorandum and articles and to the provisions of the International Corporate Service Providers Act (Cap 275), a director of a company shall be an individual or a body corporate.

(2)The following persons shall not be a director of a company—

(a)an individual who—

(i)is a minor;

(ii)is an incapacitated adult; or

(iii)is an undischarged bankrupt;

(b)a body corporate which is dissolved or has commenced winding up;

(c)a person who is disqualified, under this Act, any other written law or by an order of the Court, from being a director; or

(d)a person who, in respect of a particular company, is prohibited by the memorandum or articles from being a director of the company.

(3)A person who acts as a director of a company whilst prohibited from doing so under subsection (2) is nevertheless deemed to be a director of the company for the purposes of any provision of this Act that imposes a duty or obligation on a director.

134. Appointment of directors

(1)The subscriber or subscribers to the company’s memorandum or a majority of them shall, within nine months of the date of incorporation of the company, appoint the first director or directors of the company.

(2)Subsequent directors of a company may be appointed—

(a)unless the memorandum or articles provide otherwise, by the members by ordinary resolution; or

(b)where permitted by the memorandum or articles, by a resolution of the directors.

(3)A director is appointed for such term as may be specified in the resolution appointing him.

(4)Unless the memorandum or articles of a company provide otherwise, the directors of a company may appoint one or more directors to fill a vacancy on the board.

(5)For the purposes of subsection (4)—

(a)there is a vacancy on the board if a director dies or otherwise ceases to hold office as a director prior to the expiration of his term of office; and

(b)the directors may not appoint a director for a term exceeding the term that remained when the person who ceased to be a director left or otherwise ceased to hold office.

(6)A director holds office until his successor takes office or until his earlier death, resignation or removal.

(7)A person shall not be appointed as a director or alternate director of a company, or nominated as a reserve director, unless the person has consented in writing to be a director or alternate director or to be nominated as a reserve director.

(8)Subsection (7) shall not apply to a director, alternate director or reserve director appointed or nominated prior to the commencement of the International Business Companies (Amendment) Act, 2021.

135. Nomination of reserve directors

Where a company has only one member who is an individual and that member is also the sole director of the company, notwithstanding anything contained in the memorandum or articles, that sole member/director may, by instrument in writing, nominate a person who is not prohibited from being a director of the company as a reserve director of the company to act in the place of the sole director in the event of his death.

136. Cessation of nomination of reserve directors

(1)The nomination of a person as a reserve director of the company ceases to have effect if—

(a)before the death of the sole member/director who nominated him—

(i)the person resigns as reserve director; or

(ii)the sole member director revokes the nomination in writing; or

(b)the sole member/director who nominated him ceases to be the sole member/director of the company for any reason other than his death.

(2)Subject to subsection (1), on the death of the sole member/director who nominated him, a reserve director shall become a director of the company for all purposes under this Act including with respect to the obligations and liabilities of a director.

137. Removal of directors

(1)Subject to the memorandum or articles of a company, a director of the company may be removed from office by resolution of the members of the company.

(2)Subject to the memorandum and articles, a resolution under subsection (1) may only be passed—

(a)at a meeting of the members called for the purpose of removing the director or for purposes including the removal of the director; or

(b)by a written resolution passed by in excess of half of the votes of the members of the company entitled to vote.

(3)The notice of a meeting called under subsection (2)(a) shall state that the purpose of the meeting is, or the purposes of the meeting include, the removal of a director.

(4)Where permitted by the memorandum or articles of a company, a director of the company may be removed from office by a resolution of the directors.

(5)Subject to the memorandum and articles, subsections (2) and (3) apply to a resolution of directors passed under subsection (4) with the substitution, in subsection (3), of “directors” for “members”.

138. Resignation of directors

(1)A director of a company may resign his office by giving written notice of his resignation to the company and the resignation has effect from the date the notice is received by the company or from such later date as may be specified in the notice.

(2)A director of a company shall resign forthwith if he is, or becomes, prohibited to act as a director under section 133.

139. Appointment of alternate directors

(1)Subject to the memorandum and articles of a company and to the provisions of the International Corporate Service Providers Act (Cap 275), a director of the company may appoint as an alternate any other director or any other person who is not prohibited from appointment as a director under section 133 to—

(a)exercise the appointing director’s powers; and

(b)carry out the appointing director’s responsibilities,

in relation to the taking of decisions by the directors in the absence of the appointing director.

(2)The appointing director may, at any time, terminate the alternate’s appointment.

(3)The appointment of an alternate director and its termination shall be in writing and written notice of the appointment and termination shall be given by the appointing director to the company—

(a)within such period as may be specified in the memorandum or articles; or

(b)if no period is specified in the memorandum or articles, as soon as reasonably practicable.

(4)The termination of the appointment of an alternate director does not take effect until written notice of the termination has been given to the company.

(5)An alternate director—

(a)has no power to appoint an alternate, whether of the appointing director or of the alternate director; and

(b)does not act as an agent of or for the appointing director.

140. Rights and duties of alternate directors

(1)An alternate director has the same rights as the appointing director in relation to any directors’ meeting and any written resolution circulated for written consent.

(2)Any exercise by the alternate director of the appointing director’s powers in relation to the taking of decisions by the directors, is as effective as if the powers were exercised by the appointing director.

(3)An alternate director is liable for his own acts and omissions as an alternate director and Sub-Part III of this Part applies to a person appointed as an alternate director, when acting as such.

141. Emoluments of directors

Subject to the memorandum or articles of a company, the directors of the company may fix the emoluments of directors in respect of services to be rendered in any capacity to the company.

142. Continuing liability

A director who vacates office remains liable under any provisions of this Act and under any other written law of Seychelles that impose liabilities on a director in respect of his acts or omissions or decisions made whilst he was a director.

143. Validity of acts of director

The acts of a person acting as a director are valid notwithstanding that it is later discovered that—

(a)the person’s appointment as a director was defective;

(b)the person is prohibited from acting as a director under section 133;

(c)the person had ceased to hold office; or

(d)the person was not entitled to vote on the matter in question.

III – Duties of directors and conflicts

144. Duties of directors

Subject to this section and section 145, a director, in exercising his powers and performing his duties, shall—

(a)act in accordance with the company’s memorandum and articles;

(b)act honestly and in good faith and in what the director believes to be in the best interests of the company; and

(c)exercise the care, diligence and skill that a reasonably prudent person would exercise in the same circumstances.

145. Directors of subsidiaries, etc

(1)A director of a company that is a wholly-owned subsidiary may, when exercising powers or performing duties as a director, if expressly permitted to do so by the memorandum or articles of the company, act in a manner which he believes is in the best interests of that company’s parent even though it may not be in the best interests of the company.

(2)A director of a company that is a subsidiary, but not a wholly-owned subsidiary, may, when exercising powers or performing duties as a director, if expressly permitted to do so by the memorandum or articles of the company and with the prior agreement of the members, other than its parent, act in a manner which he believes is in the best interests of that company’s parent even though it may not be in the best interests of the company.

(3)A director of a company that is carrying out a joint venture between the members may, when exercising powers or performing duties as a director in connection with the carrying out of the joint venture, if expressly permitted to do so by the memorandum or articles of the company, act in a manner which he believes is in the best interests of a member or members, even though it may not be in the best interests of the company.

146. Avoidance of breach

(1)Subject to subsection (2) and wi

International Business Companies Act, 2016

Act 15 of 2016

Related documents

International Business Companies Act, 2016

Act 15 of 2016

Part I – Preliminary

1. Short title and commencement

2. Interpretation

3. Associated companies

4. Application of this Act

Part II – Company incorporation

I – Types of international business companies

5. Definition of international business companies

6. Companies which may be incorporated or continued

7. Protected cell companies

8. Limited life companies

II – Incorporation of companies

9. Application to incorporate a company

10. Incorporation of a company

11. Effect of incorporation

12. Annual fee

13. Memorandum of association

14. Content of the memorandum of association

15. Memorandum of company with shares

16. Memorandum of company with guarantee members

17. Memorandum may specify objects

18. Memorandum or articles of limited life company

19. Language of memorandum

20. Articles of association

21. Language of articles

III – Amendment and restatement of memorandum or articles

22. Amendment of memorandum or articles

23. Registration of amendments to memorandum or articles

24. Restated memorandum or articles

Part III – Company names

25. Requirements as to names

26. Restrictions on company names

27. Rights and interests in names

28. Language of company names

29. Reservation of names

30. Change of name

31. Power to require change of name

32. Reuse of company names

Part IV – Company capacity and powers

33. Capacity and powers

34. Validity of acts of company

35. Personal liability

36. Dealings between a company and other persons

37. Contracts generally

38. Pre-incorporation contracts

39. Power of attorney

40. Company seal

41. Authentication or attestation

Part V – Shares

I – General

42. Nature of shares

43. Share rights

44. Distinguishing numbers

45. Series of shares

46. Par value and no par value shares

47. Fractional shares

48. Bearer shares prohibited

II – Issue of shares

49. Issue of shares

50. Consideration for shares

51. Provision for different amounts to be paid on shares

52. Shares issued for consideration other than money

53. Time of issue

54. Consent to issue certain shares

55. Power to issue shares at a discount

56. Power of company to pay commissions

57. Pre-emptive rights

58. Share certificates

III – Transfer of shares

59. Transferability of shares

60. Transfer of deceased member’s share by personal representative

61. Transfer by operation of law

62. Transfer of registered shares

63. Refusal to register transfer

64. Loss of instrument of transfer