Companies Act, 2004

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Companies Act, 2004

Act 28 of 2004

  • Published in Government Gazette no. 3362 on 30 December 2004

  • Assented to on 19 December 2004
  • Commences on 1 November 2010 unless otherwise noted

  1. [Amended by Companies Amendment Act, 2007 (Act 9 of 2007) on 1 November 2010]

  2. [Amended by Business and Intellectual Property Authority Act, 2016 (Act 8 of 2016) on 16 January 2017]

ACTTo provide for the incorporation, management and liquidation of companies; and to provide for incidental matters.BE IT ENACTED by the Parliament of the Republic of Namibia, as follows:-[Act 8 of 2016 substitutes “Board” for “Minister” throughout the Act, except in sections 13, 15, 98(7), (16) and (29), 147(6), 336(1) and 452. It also substitutes “Registration Office” for “Companies Registration Office” throughout the Act.]

Chapter 1
INTERPRETATION AND APPLICATION OF ACT


1. Definitions

(1)In this Act, unless the context otherwise indicates -accounting records”, in relation to a company, includes accounts, deeds, writings and other documents;annual duty” means the annual duty referred to in section 182;annual return” means the annual return referred to in section 181;articles”, in relation to a company, means the articles of association of that company for the time being in force, and includes any provision, in so far as it applies in respect of that company, set out in Table A or Table B in Schedule 1;auditor” means a person who is, under section 23 of the Public Accountants’ and Auditors’ Act, 1951 (Act No. 51 of 1951), registered as an accountant and auditor and who has been appointed as an auditor under this Act;BIPA” means the Business and Intellectual Property Authority established by section 3 of BIPA Act;BIPA Act” means the Business and Intellectual Property Authority Act, 2016 (Act No. 8 of 2016);Board” means the Board of BIPA constituted under section 8 of BIPA Act;[definitions of “BIPA”, “BIPA Act” and “Board” inserted by Act 8 of 2016]books or papers” and “books and papers” include accounts, deeds, writings and other documents;certified” means certified in the manner prescribed by the Board to be a true copy or a correct translation;close corporation” means a corporation as defined in section 1 of the Close Corporations Act, 1988, (Act No. 26 of 1988);[The comma before the bracketed text is superfluous.]Companies Act, 1926,” means the Companies Act, 1926 (Act No. 46 of 1926), referred to in section 442 of the repealed Act”;[The closing quotation mark at the end of this definition is superfluous.]company” means a company incorporated under Chapter 4 of this Act and includes any body which, immediately before the commencement of this Act, was a company in terms of the repealed Act;Court”, in relation to any company or other body corporate, means the High Court and, in relation to any offence under this Act, includes a magistrate’s court having jurisdiction in respect of that offence;debenture” includes debenture stock, debenture bonds and any other securities of a company, whether constituting a charge on the assets of the company or not;director” includes any person occupying the position of director or alternate director of a company, by whatever name that person may be designated;equity share capital” and “equity shares”, in relation to a company, means its issued share capital and shares, excluding any part which, neither with regard to dividends nor with regard to capital, carries any right to participate beyond a specified amount in a distribution;existing company” means any body which, before the commencement of this Act, was a company in terms of the repealed Act;external company” means a company or other association of persons, incorporated outside Namibia, which has a place of business in Namibia, or which was an external company in terms of the repealed Act;foreign country” means any state, country or territory other than Namibia;holding company” means a holding company as defined in subsection (4);judicial manager” means the final judicial manager referred to in section 438;liquidator”, in relation to a company, means the person appointed under Chapter 14 as liquidator of that company, and includes any co-liquidator and any provisional liquidator so appointed;manager”, in relation to a company, means any person who is a principal executive officer of the company for the time being, by whatever name designated and whether or not that person is a director;Master” means the Master of the High Court;memorandum”, in relation to a company, means the memorandum of association of that company for the time being in force, and in relation to an external company, means the charter, statutes, memorandum of association and articles, or other instrument constituting or defining the constitution of the company;Minister”, in relation to any matter to be dealt with in the office of the Master in connection with the winding-up or judicial management of companies, means the Minister responsible for Justice and, in relation to any other matter, means the Minister responsible for Trade and Industry;[Act 8 of 2016 makes a global substitution of “Board” for “Minister”. This substitution has not been applied to this definition, where it would produce a nonsensical result.]officer”, in relation to a company, includes any managing director, manager or secretary but excludes a secretary which is a body corporate;official language” means the official language of Namibia referred to in Article 3 of the Namibian Constitution;place of business” means any place where the company transacts or holds itself out as transacting business and includes a share transfer or share registration office;prescribed” means prescribed by regulation made under this Act;prospectus” means any prospectus, notice, circular, advertisement or other invitation offering any shares of a company to the public;provisional judicial manager” means a provisional judicial manager appointed by the Master under section 435;Registrar” means the Registrar of business and industrial property as defined in section 1 of BIPA Act;[definition of “Registrar” substituted by Act 8 of 2016]Registration Office” means the Registration Office as defined in section 1 of BIPA Act;[definition of “Registration Office” inserted by Act 8 of 2016]regulations” means the regulations made under this Act;SAC” means the Standing Advisory Committee established by section 16;secretary” includes any official of a company by whatever name designated, including a body corporate, performing the duties normally performed by a secretary of a company;share”, in relation to a company, means a share in the share capital of that company and includes stock, and in relation to an offer of shares for subscription or sale, includes a share and a debenture of a company, whether a company within the meaning of this Act or not, and any rights or interests, by whatever name called, in a company or in or to that share or debenture;share warrant” means the warrant referred to in section 107(1);special resolution”, in relation to a company, means a resolution passed at a general meeting of that company in the manner provided for by section 207;staff member” means a staff member as defined in section 1(1) of the Public Service Act, 1995 (Act No. 13 of 1995);subsidiary company” or “subsidiary” means a subsidiary company as defined in subsection (3);the repealed Act” means the Companies Act, 1973 (Act No. 61 of 1973);this Act” includes the regulations;wholly owned subsidiary” means a wholly owned subsidiary as defined in subsection (5); andwinding-up order” means any order of court whereby a company is wound up and includes any order of court whereby a company is placed under provisional winding-up for so long as that order is in force.
(2)A person is not deemed to be, within the meaning of this Act, a person in accordance with whose directions or instructions the directors of a company are accustomed to act by reason only that the directors of the company act on advice given by him or her in a professional capacity.
(3)For the purposes of this Act, a company is deemed to be a subsidiary of another company if -(a)that other company is a member of it and -(i)holds a majority of the voting rights in it; or(ii)has the right to appoint or remove directors holding a majority of the voting rights at meetings of the board; or(iii)has the sole control of a majority of the voting rights in it, whether pursuant to an agreement with other members or otherwise; or(b)it is a subsidiary of any company which is a subsidiary of that other company; or(c)subsidiaries of that other company or that other company and its subsidiaries together hold the rights referred to in paragraph (a).
(4)In determining whether a company holds the majority of the voting rights as contemplated in subsection (3)(a)(i) -(a)voting rights which are exercisable only in certain circumstances must be taken into account only -(i)when those circumstances have arisen, and for so long as they continue; or(ii)when those circumstances are under the control of the person holding the voting rights;(b)voting rights held by a person in a fiduciary capacity must be treated as not held by him or her but by the beneficiary of those voting rights;(c)voting rights held by a person as nominee for another person must be treated as not held by him or her but by that other person, and voting rights are deemed to be held by a nominee for another person if they are exercisable only on the instructions or with the consent or concurrence of that other person.
(5)A body corporate or other undertaking which would have been a subsidiary of a company had the body corporate or other undertaking been a company is deemed to be a subsidiary of that company.
(6)For the purposes of this Act, a company is deemed to be a holding company of another company if that other company is its subsidiary.
(7)For the purposes of this Act, a subsidiary is deemed to be a wholly owned subsidiary of another company if it has no members except that other company and a wholly owned subsidiary of that other company and its or their nominees.
(8)Where in this Act, reference is made to days within which anything is to be done, Saturdays, Sundays and public holidays must be excluded in calculating the days.

2. General application of Act

This Act applies to every company incorporated under this Act, every external company and, save as is otherwise provided in this Act, to every existing company.

3. Application of Act restricted

This Act does not apply to -(a)any company the formation, registration and management of which is governed by any law relating to building societies, friendly societies, including pension funds, within the meaning of the Pension Funds Act, 1956 (Act No. 24 of 1956), trade unions and employers’ organisations, or co-operative societies or companies, save in so far as may be otherwise provided in that law;(b)any company or external company or society which is subject to any law relating to banks or insurance companies or societies in so far as that law is inconsistent with this Act.

Chapter 2
ADMINISTRATION OF ACT


Part 1 – Registration Office and Registrar


4. Registration Office and register

(1)For the purposes of this Act, the companies are registered at the Registration Office.[subsection (1) substituted by Act 8 of 2016]
(2)Notwithstanding subsection (1), the Board may by notice in the Gazette, declare any other place to be a Registration Office for the purposes of this Act.
(3)The Registrar must, in the Registration Office, keep a register of companies in which must be recorded the registration of any company and any other matter for which provision is made in this Act.
(4)The register of companies kept by the Registrar under the repealed Act is deemed to be and to form part of the register of companies to be kept in the Registration Office.

5. Seal of the Registration Office

[The heading of section 5 in the ARRANGEMENT OF SECTIONS is “Seal of Registration Office”.]There is a seal of the Registration Office and the impression of that seal must be judicially noticed in evidence.

6. Appointment of Registrar, Deputy Registrar and delegation of power

(1)...[subsection (1) deleted by Act 8 of 2016]
(2)...[subsection (2) deleted by Act 8 of 2016]
(3)...[subsection (3) deleted by Act 8 of 2016]
(4)The Registrar may in writing delegate any of the powers and entrust any of the duties assigned to him or her by this Act, to any staff member, except for the powers and duties entrusted or assigned to him or her by section 10 and, in so far as they relate to giving notice in the Gazette, sections 30(3), 33(6), 49(5), 50(3)(b)(iii), 74(2) and (3), 98, 149(2) and 425(2).

7. Exemption from liability

(1)No act or omission by the Registrar or any staff member or other person in the employment of the State, having duties to perform under this Act, subjects the State, or the Registrar, or that staff member or person to any liability for any loss or damage sustained by any person in consequence of that act or omission unless that act or omission was done in bad faith or was due to a lack of reasonable care or diligence.
(2)An auditor, a liquidator, a judicial manager or a provisional judicial manager is not liable in respect of any opinion expressed or certificate given or report or statement made or statement, account or document certified by him or her in good faith in the ordinary course of his or her duties under this Act, unless it is proved that that opinion was expressed or that certificate was given or that report or statement was made or that statement, account or document was certified maliciously or negligently.

8. Inspection and copies of documents in Registration Office

(1)Subject to subsection (4), any person may, on payment of the prescribed fee -(a)inspect the documents lodged under this Act with the Registrar;(b)obtain a certificate from the Registrar as to the contents or part of the contents of any document kept by him or her under this Act in respect of any company and which is open to inspection; or(c)obtain a copy of or extract from that document.
(2)If the Registrar is satisfied -(a)that an inspection, certificate, copy or extract is required on behalf of any foreign government; and(b)that no fees are payable in the foreign country concerned in respect of that inspection, certificate, copy or extract required on behalf of the Government of Namibia;no fee referred to in subsection (1) is payable.
(3)If the Registrar is satisfied that any inspection, certificate, copy or extract is required for purposes of research by or under the control of an institution for higher education, the Registrar may permit that inspection, or furnish that certificate or copy or an extract, without payment of those fees.
(4)No person may inspect a document referred to in subsection (1) or obtain a certificate as to the contents or part of the contents or obtain a copy of the document or an extract from the document, if the Registrar is satisfied that that document contains particular information or a particular fact concerning the affairs or business of a company, or of any of its subsidiaries, which information or fact the company has been prohibited under section 14(1) from disclosing or from stating on or in any document, or which information or fact the company has been exempted under that section from any obligation so to disclose or state.
(5)Subsection (4) does not apply to those portions of that document which do not contain or refer to or give any indication of the particular information or particular fact which the company has been prohibited or exempted from disclosing or stating.

9. Manner of payment of fees to Registration Office

(1)The payment of all fees, additional fees, annual duty or other moneys payable to the Registrar as laid down by this Act must be effected in the prescribed manner.
(2)No document, form, return or notice in respect of which any fee or payment is determined under this Act, is complete unless proof of payment of the prescribed fee, additional fees, annual duty or other moneys has been delivered to the Registrar.
(3)Any fees, additional fees, annual duty and any other moneys payable under this Act to the Registrar are for the account of BIPA and any outstanding fees or other money due and payable are debt due to BIPA and are recoverable by BIPA in any competent court.[subsection (3) substituted by Act 8 of 2016]

10. Annual report by Registrar

The Registrar must, in every calendar year, submit to the Board a report containing information concerning the registration of companies of each type, their authorised capitals or numbers of shares, increases in and reductions of capital, prospectuses, windings-up, judicial managements, deregistrations and dissolutions of companies, additional fees collected, prosecutions and convictions under this Act and other matters which the Board may direct.

Part 2 – Powers of Court and Procedure


11. Security for costs in legal proceedings by companies and bodies corporate

Where a company or other body corporate is the plaintiff or applicant in any legal proceedings, the Court may at any stage, if it appears by credible testimony that there is reason to believe that the company or body corporate or, if it is being wound up, the liquidator of the company, will be unable to pay the costs of the defendant or respondent if the defence of the latter is successful, require sufficient security to be given for those costs and may stay all proceedings until the security is given.

12. Copies of Court orders to be transmitted to Registrar and Master

Where any Court makes any order under this Act in relation to any company, the Registrar of the Court must, without delay, send a copy of the order to the Registrar and if that order relates to the winding-up or judicial management of any company, also a copy to the Master.

Part 3 – Regulations and Notices


13. Regulations

(1)The Minister may, after consultation with the Minister responsible for Justice where appropriate, make regulations -(a)providing for the conduct and administration of the Registration Office and prescribing the practice and procedure to be observed in that office;(b)prescribing the practice and procedure to be observed in the office of the Master in connection with the winding-up and judicial management of companies;(c)providing for the reproduction of any records in the Registration Office or the office of the Master by microfilm, microcard, miniature photographic process or any other process deemed suitable by the Minister;(d)providing for the use for official purposes and the admissibility in evidence in any proceedings, whether in a court of law or otherwise, of any reproduction contemplated in paragraph (c);(e)providing for the keeping and preservation of any records, or any reproduction contemplated in paragraph (c), in the Registration Office or the office of the Master, the removal from those offices and preservation in any other place of those records or reproductions and prescribing the circumstances under which those records or reproductions may be destroyed;(f)prescribing how records required under this Act to be kept by a company may be kept, and prescribing the circumstances under which those records may be destroyed;(g)prescribing the procedure to be followed with respect to any matter in connection with the winding-up and judicial management of companies;(h)prescribing the form and the contents of any return, notice or form provided for by this Act;(i)prescribing when an additional copy or copies of documents to be lodged under the Act are to be lodged and whether the additional copy or copies are to be in the form of a copy or copies certified in the manner prescribed or are to be in duplicate original form;(j)prescribing the matters in respect of which fees are payable and the tariff of those fees;(k)prescribing the rate of the annual duty payable by companies and the additional fees payable for late payment of annual duty or payment of an amount less than the prescribed annual duty;(l)providing for a table of fees, subject to taxation by the Master, which are payable to a liquidator as remuneration;(m)prescribing a tariff of remuneration payable to any person performing on behalf of a liquidator any act relating to the winding-up of a company, and prohibiting the charging or recovery of remuneration at a higher tariff than the tariff so prescribed;(n)as to any matter required or permitted by this Act to be prescribed by regulation; and(o)generally, as to any matter which the Minister considers necessary or expedient to prescribe in order that the purposes of this Act may be achieved.
(2)Any regulations made under subsection (1) may prescribe penalties for any contravention thereof or failure to comply therewith not exceeding a fine of N$2 000 or imprisonment for a period not exceeding six months or both that fine and imprisonment.

14. Prohibition of disclosure of, and exemption from obligation to disclose, certain information

(1)The Board may -(a)by notice in writing prohibit any company from disclosing, or from stating on or in any document of the company;(b)on the written application of a company to the Registrar, exempt it, subject to any conditions or restrictions which the Board may impose, from the obligation to disclose, or to state on or in any of its documents,particular information or a particular fact concerning the affairs or business of the company, or that of any of its subsidiaries, which the company would otherwise be required under this Act to disclose or to state on or in any document.
(2)Notwithstanding subsection (1) any company must, if the Registrar in a particular case in writing requires the company to do so, submit to the Registrar information which the company would otherwise have been required to submit to the Registrar in terms of this Act.
(3)The Board must, when considering whether to impose a prohibition or grant an exemption under subsection (1), have regard to the right of the members of the company and of other persons to be informed of the state of affairs and the business and of the profit or loss of the company or of the company and its subsidiaries.
(4)Any company which contravenes a prohibition imposed under subsection (1)(a) and any director or officer of a company who contravenes that prohibition, commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(5)For the purposes of this section a company includes an external company.

15. Notices amending or adding to Schedules

(1)The Minister may by notice in the Gazette amend or add to the Schedules to this Act.
(2)Any notice referred to in subsection (1) may prescribe different provisions in respect of different types of companies.
(3)A notice referred to in subsection (1) amending or adding to -(a)Table A or B contained in Schedule 1 does not apply in relation to any company in respect of which the Table in question applied immediately before the date on which the notice took effect;(b)\Schedule 4 does not apply in respect of any financial year of any company which ended before that date.

Part 4 – Standing Advisory Committee


16. ***

[section 16 deleted by Act 8 of 2016]

17. ***

[section 17 deleted by Act 8 of 2016]

18. ***

[section 18 deleted by Act 8 of 2016]

19. ***

[section 19 deleted by Act 8 of 2016]

Chapter 3
TYPES AND FORMS OF COMPANIES, CONVERSIONS AND LIMITATIONS ON PARTNERSHIPS AND ASSOCIATIONS


Part 1 – Types of Companies


20. Companies having share capital and companies not having share capital

(1)Two types of companies may be formed and incorporated under this Act, namely -(a)a company having a share capital; or(b)a company not having a share capital and having the liability of its members limited by the memorandum (in this Act called “a company limited by guarantee”).
(2)A company having a share capital may be either a public company or a private company having shares of par value or shares of no par value.
(3)All companies limited by guarantee, including existing companies, are deemed to be public companies for the purposes of this Act.

21. Non-profit associations

(1)Any association -(a)formed or to be formed for any lawful purpose;(b)having as its object the promotion of religion, arts, sciences, education, charity, recreation, or any other cultural or social activity or communal or group interests;(c)which intends to apply its profits, if any, or other income in promoting its object;(d)which prohibits the payment of any dividend to its members; and(e)which complies with the requirements of this section in respect to its formation and registration,may be incorporated as a company limited by guarantee.
(2)The memorandum of an association referred to in subsection (1) must comply with the requirements of this Act and must, in addition, contain the following provisions -(a)the income and property of the association however derived must be applied solely towards the promotion of its object, and no portion must be paid or transferred, directly or indirectly, by way of dividend, bonus, or otherwise, to the members of the association or to its holding company or subsidiary, but nothing contained in the memorandum prevents the payment in good faith of reasonable remuneration to any officer or employee of the association or to any member in return for any services actually rendered to the association;(b)on its winding-up, deregistration or dissolution the assets of the association remaining after the satisfaction of all its liabilities must be given or transferred to some other association or institution or associations or institutions having objects similar to its object, to be determined by the members of the association at or before the time of its dissolution or, failing that determination, by the Court.
(3)Sections 55(1)(c) and 182 do not apply to an association referred to in subsection (1).
(4)Existing associations incorporated under section 21 of the repealed Act are deemed to have been formed and incorporated under this section.

22. Meaning of “private company” and cessation of its privileges

(1)In this Act the expression “private company” means a company having a share capital and which by its articles -(a)restricts the right to transfer its shares;(b)limits the number of its members, other than persons who are in the employment of the company and of persons who having been formerly in the employment of the company were, while in that employment, and have continued after the termination of that employment to be, members of the company, to 50; and(c)prohibits any offer to the public for the subscription of any shares or debentures of the company.
(2)Where two or more persons hold one or more shares of a company jointly they must, for the purposes of this section, be treated as a single member.
(3)A private company must not alter its articles in such manner that they no longer include all of the provisions referred to in subsection (1) unless it is at the same time converted into a public company.
(4)If a private company fails to comply with its articles referred to in subsection (1), it immediately becomes subject to sections 306(5), 310 and 311(1) as if it were a public company, but, the Court, on being satisfied that the failure to comply with the articles was unintentional or due to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any other person interested and on appropriate terms and conditions, order that the company be relieved of those obligations which apply to a public company.

23. Incorporation of certain branches of foreign companies and non-profit associations

(1)Notwithstanding anything to the contrary contained in this Act, a branch, established in Namibia, of a company or other association of persons, incorporated outside Namibia, or an association of persons which is not incorporated and has its head office in a foreign country may be incorporated under section 21 if -(a)the object in Namibia of that branch corresponds with the object of the company or association concerned;(b)that branch complies with the requirements of section 21; and(c)the whole of the business and all the property, rights and obligations in Namibia of the company or association concerned will, on incorporation under section 25, be transferred in due form to vest in and be binding on the company so incorporated.
(2)Notwithstanding anything to the contrary in any law -(a)no transfer or stamp duty is payable in respect of the transfer of property contemplated in subsection (1)(c); and(b)any licence, exemption, permit, certificate or authority held in terms of any law by the company or association concerned in respect of its business or property in Namibia will, with effect from the date of incorporation of the branch concerned as a company because of subsection (1), for the purposes of that law be deemed to be held by the company so incorporated in respect of that business or property.
(3)This Act in so far as it relates to external companies does not apply in the case of an external company a branch of which has been incorporated as a company by virtue of subsection (1).

Part 2 – Conversion of Companies


24. Conversion of public company, having share capital into private company, and vice versa

(1)With the sanction of a special resolution and on compliance with the requirements of sections 22 and 28 and with the other requirements of this Act in respect of private companies, a public company having a share capital may convert itself into a private company having a share capital.
(2)With the sanction of a special resolution and on compliance with the other requirements of this Act in respect of public companies, a private company having a share capital may convert itself into a public company having a share capital.

25. Conversion of company into incorporated non-profit association or company limited by guarantee

With the sanction of a special resolution and on compliance with the requirements of section 28 and the other requirements of this Act in respect of non-profit associations and companies limited by guarantee, any company may convert itself into a non-profit association under section 21 or into a company limited by guarantee, except that a company having a share capital may only so convert itself if its share capital is cancelled.

26. Conversion of company limited by guarantee into company having share capital

With the sanction of a special resolution and on compliance with the requirements of section 28 and the other requirements of this Act in respect of companies having a share capital, a company limited by guarantee, excluding a non-profit association under section 21, but including an existing company limited by guarantee having a share capital, may convert itself into a company having a share capital.

27. Conversion of unlimited company

(1)An unlimited company referred to in section 25(1) of the repealed Act, which still exists at the commencement of this section and which has not been converted as contemplated in section 25(1) of that Act, may with the sanction of a special resolution and on compliance with section 28 and the other requirements of this Act, convert itself into any type or form of company provided for by this Act, but, that conversion does not affect the liability of its members in respect of any debts, liabilities or obligations incurred or contracts entered into by, with or on behalf of the company before the conversion.
(2)Until the conversion referred to in subsection (1) takes place -(a)section 25(2) of the repealed Act continues to apply to that unlimited company as if that section has not been repealed; and(b)the obligation imposed in terms of section 25(3) of that Act, in the case of an unlimited company which is a private company, continues to bind that company as from the date of commencement of this section.

28. Notice of intended conversion of company

(1)Any company intending to convert itself into another type or form of company must, not less than 15 days before the date of the meeting convened for the purpose of passing the required special resolution, give notice in the Gazette of that intention, specifying the particulars of the proposed conversion and the date and place of the meeting.
(2)Subsection (1) does not apply to any private company having a share capital intending to convert itself into a public company having a share capital.
(3)If any company intending to convert itself into another type or form of company is a public company having a share capital, it must, in addition, send the notice referred to in subsection (1) to every creditor of the company by registered post not less than 15 days before the date of the meeting.

29. Contents and form of articles on conversion

When the articles of any company are to be altered for the purpose of converting the company into another type or form of company under section 24, 26 or 27, sections 64(2) and 65 in so far as they relate to the contents and form of articles, do, with the necessary changes, apply to the articles of that company.

30. Registration of conversion

(1)The Registrar must, on the registration of the special resolution made under this Part and on payment of the prescribed fee and on being satisfied that the requirements of this Act have been complied with, register any conversion in the register of companies and must issue an amended certificate of incorporation, stating the date of the first registration of the company, its former name, the name as altered and the nature of the conversion.
(2)Any conversion referred to in subsection (1) takes effect as from the date of the issue of the amended certificate of incorporation as contemplated in subsection (1).
(3)The Registrar must give notice in the Gazette of the conversion of a company into another type or form of company.

31. Effect of conversion and alteration of other registers

(1)The conversion of a company into another type or form of company under this Act does not affect the corporate existence of the company as from the date of its first registration, nor any of its rights, debts, liabilities, obligations incurred or contracts entered into by, with, or on its behalf at any time nor render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against it before the conversion, may, notwithstanding the conversion, be continued or commenced against the company as converted.
(2)If as a result of the conversion of a company into another type or form of company, any alteration in its name pursuant to the requirements of this Act is necessary, the alteration must not be regarded as a change of name for the purposes of section 50(1).
(3)On the production by a company of an amended certificate of incorporation or a certified copy to any registrar or other officer charged with the maintenance of a register under any law, and on compliance with the requirements of that registrar or officer as to the form of application, if any, and the payment of any fee prescribed by that law, if any, that registrar or other officer must make in his or her register all those alterations which are necessary because of the conversion of the company into another type or form of company.

Part 3 – Conversion of Companies and Close Corporations


32. Conversion of company into close corporation

When a company is converted into a close corporation in terms of the Close Corporations Act, 1988 (Act No. 26 of 1988), the Registrar must, simultaneously with the registration of the founding statement of the close corporation by the Registrar of Close Corporations in terms of that Act, cancel the registration of the memorandum and articles of association of the company concerned.

33. Conversion of close corporation into company

(1)A close corporation may, with the written consent of all its members, be converted into a company, as long as every member of the close corporation becomes a member of that company.
(2)A close corporation to be converted into a company as contemplated in subsection (1) may, subject to this section, apply to be incorporated as a company under Chapter 4 of this Act.
(3)If an application referred to in subsection (2) complies with Chapter 4 and subsection (4) -(a)the Registrar must register the memorandum and articles in accordance with section 68; and(b)the Registrar must satisfy himself or herself that simultaneously with that registration, the registration of the founding statement of the close corporation concerned is cancelled in accordance with the Close Corporations Act, 1988 (Act No. 26 of 1988).
(4)An application referred to in subsection (2) must be accompanied by -(a)a statement of the paid-up share capital, if any, for an amount not greater than the excess of the fair value of the assets to be acquired by the company, over the liabilities to be assumed by the company because of the conversion, but, the company may treat any portion of that excess not reflected as paid-up share capital, as distributable reserves; and(b)a statement by the close corporation’s accounting officer, based on the performance of his or her duties under the Close Corporations Act, 1988, that he or she is not aware of any contravention of the said Act by the close corporation or its members or of any circumstances which may render the members of the close corporation together with the close corporation jointly and severally liable for the corporation’s debts.
(5)Where a conversion under this section takes place, the shares or the nominal value of the shares to be held in the company by the members individually, need not necessarily be in proportion to the members’ interests as stated in the founding statement of the close corporation concerned.
(6)The Registrar must give notice in the Gazette of the conversion of a close corporation into a company.

34. Effect of conversion of close corporation into a company

(1)On the registration of a company converted from a close corporation, all the assets, liabilities, rights and obligations of the corporation vest in the company.
(2)Any legal proceedings instituted before the registration by or against the close corporation, may be continued by or against the company, and any other thing done by or in respect of the corporation, is deemed to have been done by or in respect of the company.
(3)The juristic person which existed as a close corporation before the conversion must, notwithstanding the conversion, continue to exist as a juristic person but in the form of a company.
(4)On the production by a company which has been converted from a close corporation of a certificate of incorporation referred to in section 70 to any registrar or other officer charged with the maintenance of a register under any law, and on compliance with the requirements of that registrar or officer as to the form of application and the payment of any required fee, that registrar or other officer must make in his or her register all those alterations as are necessary because of the change effected by the conversion of the close corporation into a company.
(5)No transfer or stamp duty is payable in respect of alterations made in a register under subsection (4).

Part 4 – Limitations on Partnerships and Associations for Gain


35. Prohibition of associations or partnerships exceeding 20 members and exemption

(1)A company, association, syndicate or partnership consisting of more than 20 persons must not be permitted or formed in Namibia for the purpose of carrying on any business that has as its object the acquisition of gain by the company, association, syndicate or partnership, or by its individual members, unless it is registered as a company under this Act, or was formed in terms of the repealed Act or any law which was in existence before the repealed Act.
(2)The Board may by notice in the Gazette -(a)exclude any association, syndicate or partnership, formed -(i)by persons qualified to carry on any organised professions designated by the Board in that notice;(ii)for the purpose of carrying on any profession or any combinations of any professions designated by the Board,from subsection (1);(b)include or exclude any other company, association, syndicate or partnership in or from subsection (1).

36. Unregistered associations carrying on business for gain not corporate bodies

No association of persons formed after the commencement of this Act for the purpose of carrying on any business that has for its object the acquisition of gain by the association or by the individual members, is a body corporate, unless it is registered as a company under this Act, or was formed in terms of the repealed Act or any law which was in existence before the repealed Act.

Chapter 4
FORMATION, OBJECTS, CAPACITY, POWERS, NAMES, REGISTRATION AND INCORPORATION OF COMPANIES, INCIDENTAL MATTERS AND DEREGISTRATION


Part 1 – Formation, Capacity, Powers and Objects


37. Mode of forming company

Any seven or more persons, where the company to be formed is a public company, or any two or more persons, where the company to be formed is a private company, or any one person, where the company to be formed is a private company with a single member, may, for any lawful purpose, form a company having a share capital or a company limited by guarantee and secure its incorporation by complying with the requirements of this Act in respect of the registration of the memorandum and articles.

38. Capacity, powers and objects

(1)Subject to this section a company has the capacity and powers of a natural person of full capacity in so far as a juristic person is capable of having that capacity or of exercising those powers.
(2)The memorandum of a company -(a)may state the objects of a company;(b)must state the objects of the company where it is so required by this Act or any other law,but, where the objects of a company, or where any exclusion or qualification in terms of section 39 with regard to the objects or powers of the company, including an existing company, is stated, it only serves to restrict the capacity and powers of the company internally as between the company, its directors and its members, unless a person dealing with the company had actual knowledge or ought reasonably to have known of that statement of the objects of the company or of any exclusion or qualification in terms of section 39 with regard to the objects or powers of the company stated in the company’s memorandum.
(3)A non-profit association incorporated under section 21 must state its object in its memorandum as provided in subsection (1)(b) of that section.
(4)Subject to subsections (2)(b) and (3), any existing company may at any time after the commencement of this Act, in accordance with section 62(4), by resolution alter its memorandum in order to remove any objects stated in its memorandum and that alteration becomes effective on the date of registration of the resolution.
(5)Subsection (2) must not be construed as in any way limiting the right of a company to -(a)claim damages from a director, officer or agent of the company for a transaction concluded; or(b)obtain a restraining order against a director, officer or agent from entering into a proposed transaction,where that transaction falls outside the objects or the powers of the company.

39. Ancillary objects and powers of company

(1)Where the objects of a company are stated in its memorandum, there must be included in those objects unlimited objects ancillary to those stated objects except those specific ancillary objects which are expressly excluded in its memorandum.
(2)Subject to any limitation imposed by this Act, a company referred to in subsection (1) has plenary powers, including the common powers stated in Schedule 2 to this Act, to enable it to realise its objects and ancillary objects, except those specific powers which are expressly excluded or qualified in its memorandum.

40. Dealings between company and other persons

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 any property, rights or interests from the company that -(a)a person named as a director of the company in the most recent return lodged with the Registrar under section 224 -(i)is not a director of the company;(ii)has not been duly appointed; 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;(b)a person held out by the company as a director, officer or agent of the company -(i)has not been duly appointed; or(ii)does not have authority to exercise a power which a director, officer or agent 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, officer or agent of the company with authority to exercise a power which a director, officer 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;(d)a document issued on behalf of a company by a director, an officer or agent of the company with actual or usual authority to issue the document is not valid or genuine,unless that person has, or ought reasonably to have, by virtue of his or her position with or relationship to the company, knowledge of the matters referred to in paragraphs (a), (b), (c) or (d), as the case may be.

41. No constructive knowledge

A person is not affected by, or deemed to have notice or knowledge of the contents of, the memorandum or articles of, or any other document relating to a company, merely because the memorandum, articles or other document -(a)is registered by, or lodged with, the Registrar; or(b)is available for inspection or kept at the registered office of a company in accordance with this Act.

42. Power as to pre-incorporation contracts

Any contract made in writing by a person professing to act as agent or trustee for a company not yet incorporated is capable of being ratified or adopted by or otherwise made binding upon and enforceable by that company after it has been duly incorporated as if it had been duly incorporated at the time when the contract was made and that contract had been made without its authority, but, the memorandum on its registration, must contain a statement with regard to the ratification or adoption of or the acquisition of rights and obligations in respect of that contract, and that two copies of that contract, one of which must be certified by a notary public, have been lodged with the Registrar together with the lodgement for registration of the memorandum and articles of the company.[The Act uses the spelling “lodgment” instead of “lodgement” in all other provisions.]

43. Loans made and security provided by subsidiary

(1)For the purposes of this section -(a)“funds” include money, shares, debentures or any other property;(b)“loan” includes any credit extended by a company, if the debt concerned is not payable or being paid in accordance with the normal business practice of the company in respect of the payment to it of other debts of the same kind;(c)security” includes a guarantee.
(2)If -(a)any funds of a company were employed directly or indirectly, whether through the instrumentality of its subsidiary or otherwise, in a loan to any company which is its holding company or which is a subsidiary of that holding company but not a subsidiary of itself; or(b)a company directly or indirectly, whether through the instrumentality of its subsidiary or otherwise, provided any security to another person in connection with an obligation of any company which is its holding company or which is a subsidiary of that holding company but not a subsidiary of itself,particulars of that loan or security, as the case may be, must be stated in the annual financial statements of the company for every year during which that loan or security was in operation.
(3)Subsection (2) does not apply in respect of loans made or security provided in good faith in the ordinary course of the business of a company actually and regularly carrying on a business a substantial part of which is the making of loans or the provision of security, as the case may be.
(4)Any director or officer of a company who fails to take all reasonable steps to secure compliance with subsection (2) commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.
(5)In any prosecution against any director or officer of a company under subsection (4), the defence referred to in section 292(5) is, with the necessary changes, available to him or her.
(6)Any director or officer of a company who authorises or permits or is a party to the making of any loan or the provision of any security contemplated in subsection (2)(a), is liable to the company for any damage directly arising from the making of that loan or the provision of that security on terms or conditions which, at the time of the making of that loan or the provision of that security, were not fair to the company or failed to provide reasonable protection for its business interests.
(7)A director or officer who has paid any amount as damages by virtue of subsection (6) may recover that part of that amount as the Court considers equitable, from any other director or officer who is in terms of that subsection also liable to the company for the same damage.
(8)For the purposes of subsections (6) and (7), “director or officer” of a company includes any director or officer of a holding company of that company, and for the purposes of recovery of the damages as are contemplated in subsection (6) sections 274, 275 and 276 do, with the necessary changes, apply as if a director or officer or past director or officer of that holding company was a director or officer or past director or officer of that company, respectively.
(9)In enquiring, for the purposes of subsection (6), whether or not any terms or conditions were fair to the company or failed to provide reasonable protection for its business interests, regard must be had, without prejudice to the generality of the enquiry, to -(a)whether, in view of the financial position of the parties, the loan should have been made or the security should have been provided at all;(b)in the case of a loan, whether security has been or should in the circumstances have been provided, and whether any security provided is adequate;(c)the consideration for the loan or security, including any interest or other benefit received;(d)the term of the loan or security; and(e)the manner of repayment of the loan or discharge of the security.
(10)This section does not derogate from any other rule of law relating to the liability of a director or officer of a company.
(11)This section does not apply to anything done by a company with the consent of all its members.

44. No financial assistance to purchase shares of company or holding company

(1)A company must not give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares of the company, or where the company is a subsidiary company, of its holding company.
(2)Subsection (1) must not be construed as prohibiting -(a)the lending of money in the ordinary course of its business by a company whose main business is the lending of money;(b)the provision by a company, in accordance with any scheme for the time being in force, of money for the subscription for or purchase of shares of the company or its holding company by trustees to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company; or(c)the making by a company of loans to persons, other than directors, in the employment of the company with a view to enabling those persons to purchase or subscribe for shares of the company or its holding company to be held by themselves as owners; or(d)the provision of financial assistance for the acquisition of shares in a company or its holding company -(i)with the prior approval of the particular transaction given by special resolution at a general meeting; and(ii)if there are reasonable grounds for believing that -(aa)the company is, or would after payment be, able to pay its debts as they become due in the ordinary course of business; or(bb)the consolidated assets of the company fairly valued would after the payment be more than the consolidated liabilities of the company.
(3)Any company which and every director or officer of that company who contravenes subsection (1), commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(4)For the purpose of subsection (3) “director”, in relation to a company, includes any person who at the time of the alleged contravention was a director of the company.
(5)It is a defence in any proceedings under this section against any director or officer of a company if it is proved that the accused was not a party to the contravention.

45. Company not to be member of its holding company

(1)Save as is provided in subsection (2), if shares in a company are acquired in accordance with section 95 by its subsidiary, for so long as those shares are held by the subsidiary -(a)no voting rights attaching to those shares may be exercised; and(b)the votes able to be cast at any meeting of shareholders must be reduced by the votes in respect of shares held by the subsidiary,but this subsection does not apply where the shares are acquired in a subsidiary of the holding company which is also a subsidiary of the acquiring company.
(2)Subsection (1) does not apply in relation to a subsidiary acting in a representative capacity or as a trustee, unless the holding company or its subsidiary is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
(3)In relation to a company limited by guarantee which is a holding company, the reference in this section to shares of a company, must be construed as including a reference to the interest of its members as such, whatever the form of that interest.
(4)For the purposes of this section “acquire” includes any shares that the subsidiary becomes entitled to in any other manner.

46. No division into interests, rights to profits or shares in guarantee companies

(1)In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member is void.
(2)Any provision in the memorandum or articles or in any resolution of a company limited by guarantee, purporting to divide the undertaking of the company into shares or interests is void.

Part 2 – Names of Companies


47. Names of companies not to be undesirable

The Registrar must not register a memorandum containing a name for a company to be incorporated if the Registrar reasonably believes that the name is undesirable.

48. Reservation of name

(1)The Registrar may, on written application on the prescribed form and on payment of the prescribed fee, reserve a name or a shortened form of the name of a company, pending the registration of a memorandum or a change of name by that company or the registration of a shortened form of the name.
(2)If the name of a company or a shortened form thereof is in a language other than the official language, a translation of the name in the official language, in so far as it is possible, must be submitted to the Registrar together with the application referred to in subsection (1).
(3)A reservation referred to in subsection (1) is for a period not exceeding two months or any extended period, not exceeding in all three months, which the Registrar, on payment of the prescribed fee, may in the special circumstances of any case allow.

49. Registration of shortened form of name or defensive name

(1)The memorandum of any company to be incorporated may contain one shortened form of the company’s name, and any company may, on the prescribed form and on payment of the prescribed fee, apply to the Registrar for the registration of that shortened form of its name, if the shortened form of the name is not undesirable.
(2)Any person may on application on the prescribed form and on payment of the prescribed fee apply to the Registrar -(a)to register any name as a defensive name; or(b)to renew the registration of a name as a defensive name,which the Registrar reasonably believes is not undesirable and in respect of which that person has furnished proof, to the satisfaction of the Registrar, that he or she has a direct and material interest.
(3)If the defensive name referred to in subsection (2) is in a language other than the official language, a translation in the official language, in so far as it is possible, must be submitted to the Registrar together with the application referred to in that subsection.
(4)If the Registrar grants any application referred to in subsection (2), he or she must register the name in question as a defensive name for a period not exceeding two years or renew the registration of the name in question as a defensive name for a period not exceeding two years, as the case may be.
(5)The Registrar must register a shortened form of the name of the company concerned or a defensive name, and where a registration is effected pursuant to an application under subsection (1) or (2), the Registrar must give notice of the registration in the Gazette.

50. Change of name and effect

(1)Any company may by special resolution change its name to a name which the Registrar reasonably believes not to be undesirable.
(2)Where a company changes its name, it must at the same time, if a shortened form of the name of the company has been registered under section 49(5), and that shortened form is no longer applicable to the name of the company as changed, apply on the prescribed form and on payment of the prescribed fee -(a)to change that shortened form of the name to a new shortened form of the name approved by the Registrar; or(b)to deregister that former shortened form of the name of the company.
(3)Where the name or shortened form of the name of a company is changed -(a)the company must, if that changed name is not in the official language, submit to the Registrar, in so far as it is possible, a translation of the name in the official language; and(b)the Registrar must -(i)enter the new name or shortened form of the name in the register in place of the former name or shortened form of the name;(ii)issue a certificate of incorporation altered to meet the circumstances of the case or a certificate that the new name or shortened form of the name, has been entered in the register in place of the former name or shortened form of the name; and(iii)give notice of the change of name or shortened form of the name in the Gazette.
(4)A change of name of a company does not affect any rights, debts, liabilities or obligations of the company, nor render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced by or against it prior to that change of name, may, notwithstanding that change of name, be continued or commence by or against the company under its new name.
(5)On the production by a company of an amended certificate of incorporation or a certificate of the change of the name of that company or a certified copy to any registrar or other officer charged with the maintenance of a register under any law, and on compliance with the requirements of that registrar or officer as to the form of application, if any, and the payment of any fee prescribed by that law, if any, that registrar or other officer must make in his or her register all alterations which are necessitated by the change of the name of the company.

51. Order to change name

(1)If within a period of one year after the registration of any memorandum or shortened form of a name of a company or after the registration or the renewal of the registration of a name referred to in section 49(2) or after the date of an amended certificate of incorporation or a certificate of change of name or shortened form of a name referred to in section 50(2), it appears that the name contained in the memorandum or shortened form of that name or the name referred to in section 49(2) or the changed name or the shortened form of that changed name referred to in the last-mentioned certificate is undesirable, the Registrar must within that period order the company concerned or the person referred to in section 49(2) to change the name or shortened form of the name.
(2)If within a period of one year after the registration of any memorandum or shortened form of a name of a company or a name referred to in section 49(2) or after the date of an amended certificate of incorporation or a certificate of change of name or shortened form of a name referred to in section 50(2), any person lodges an objection in writing with the Registrar against the name contained in the memorandum or shortened form of that name or the name referred to in section 49(2) or the changed name or the shortened form of that changed name referred to in the last-mentioned certificate, on the grounds that that name or shortened form of a name is calculated to cause damage to the objector or is undesirable, the Registrar may, if he or she is satisfied that the objection is sound, order the company concerned or the person referred to in section 49(2) to change the said name or shortened form of a name.
(3)Within a period of two years after the registration of any memorandum or shortened form of a name of a company or a name referred to in section 49(2) or after the date of an amended certificate of incorporation or a certificate of change of name or shortened form of a name referred to in section 50(2), a person who has not lodged any relevant objection in terms of subsection (2) may apply to the Court for an order directing the company concerned or the person referred to in section 49(2) to change the said name or shortened form on the grounds that the said name or shortened form is undesirable or is calculated to cause damage to the applicant, and the Court may on that application make an appropriate order.
(4)If, at any time, the Registrar reasonably believes that the name of a company, or the shortened form of a name of a company, gives so misleading an indication of the nature of its activities as to be calculated to deceive the public, the Registrar may order the company concerned to change its name or the shortened form of its name, as the case may be.

52. Provisions as to order to change name

(1)The order issued by the Registrar under section 51, including the reasons for that an order, for the change of a name of a company or a shortened form of a name of a company or a name referred to in section 49(2) must be issued by the Registrar in writing and sent by registered post to the company at its registered office, or to the person referred to in section 49(2) at that person’s last-known address, and must require that company or person -[The word “that” in the phrase “that an order” should probably be “such”, to produce the phrase “such an order”.](a)to comply with the order within two months from the date of its issue; or(b)to give reasons within two months from the date of its issue to the Registrar as to why that name or shortened form of a name of a company should not be changed.
(2)The Registrar may, on good cause shown, extend the period of two months referred to in subsection (1) for any further period not exceeding two months.
(3)If a company or a person has submitted reasons as to why the name or shortened form of a name of a company should not be changed, the Registrar may, after consideration of those reasons, either withdraw that order or make a final order and subsections (1)(a) and (2) do, with the necessary changes, apply with regard to that final order.
(4)If a company or person referred to in subsection (1), as the case may be, fails to comply with any order issued by the Registrar under subsection (1) or (3) within the period or extended period referred to in subsection (1) or (2), as the case may be, or if that company or person has applied to Court for relief under section 54 and the Court has upheld the Registrar’s order and that company or person fails to comply with that order within two months from the date of the final decision by the Court, that company or person commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

53. Registrar may call for affidavits and shall give reasons for decisions as to names

(1)The Registrar may for the purposes of any decision as to any name or shortened form of a name referred to in section 47, 48, 49, 50 or 51 call for any evidence on affidavit or otherwise which is necessary.
(2)The Registrar must with regard to any decision or order of the Registrar under section 47, 48, 49 or 50 furnish written reasons for that decision or order.

54. Recourse to Court in matters as to names

Any company or person aggrieved by any decision or order of the Registrar under section 47, 48, 49, 50 or 51 may, within one month after the date of that decision or order, apply to the Court for relief, and the Court has power to consider the merits of that matter, to receive further evidence and to make any appropriate order.

55. Formal requirements as to names of companies

(1)Subject to this section -(a)the name of a public company having a share capital must include, as its last word, the word “Limited”;(b)the name of a private company having a share capital must include as its last two words, the words “(Proprietary) Limited”;(c)the name of a company limited by guarantee must include -(i)the word “Limited” as its last word; and(ii)the statement “(Limited by Guarantee)” subjoined to that name.
(2)There must be included in the name of any external company, the memorandum of which has been registered under this Act, the statement “Incorporated in ... (stating the name of the foreign country concerned)” subjoined to that name.
(3)The name of a non-profit association incorporated under this Act must not include the word and statement referred to in subsection (1)(c), but the statement “Non- profit association incorporated under section 21” must be included in and be subjoined to that name, but an association incorporated not for gain under the repealed Act may instead of that statement include in and subjoin to its name the statement “Incorporated Association not for Gain”.
(4)The name of a private company having a share capital and the memorandum of which contains the provision referred to in section 60(b), must not include the words referred to in subsection (1)(b), but must include the word “Incorporated”, as its last word, in its name.
(5)If a company is being wound up by the Court or voluntarily or is placed under judicial management, the statement “In Liquidation”, “In Voluntary Liquidation” or “Under Judicial Management”, as the case may be, must be included in and be subjoined to the name of the company concerned and if the winding-up order or judicial management order is discharged, or the voluntary winding-up ceases, that statement must be omitted from the name of that company.
(6)The addition to or omission from the name of any company of the words or statements provided for by this section as a result of -(a)the conversion of a company into another type or form of company;(b)the insertion in or deletion from the memorandum of a private company of the provision referred to in section 60(b); or(c)the discharge of a winding-up order or judicial management order or the cessation of voluntary winding-up,must not be taken to be a change of name for the purposes of section 50(1), except that subsections (2), (3) and (4) of that section apply in the case of that addition or omission as if it were a change of name.
(7)If a company is being wound up by the Court, or voluntarily, or is placed under judicial management, the Registrar must, on receipt of a copy of the relevant order of Court or on registration of a special resolution for the voluntary winding-up of the company in terms of section 354, alter the register to include in and subjoin to the name of the company concerned the statement “In Liquidation”, “In Voluntary Liquidation” or “Under Judicial Management”, as the case may be, and if the winding-up order or judicial management order is discharged, or the winding-up ceases, the Registrar must likewise on receipt of a copy of the relevant order of Court, alter the register to omit that statement from the name of the company concerned.
(8)If any company fails to comply with subsection (1), (2), (3), (4), (5) or (6) or in any way uses a name in contravention of any of those provisions, it commits an offence and is liable to a fine which does not exceed N$400.

56. Use and publication of name by company

(1)Every company must -(a)display its name on the outside of its registered office and every office or place in which its business is carried on, in a conspicuous position and in characters easily legible;(b)have its name engraved in legible characters on its seal ; and(c)have its name and registration number mentioned in legible characters in all notices and other official publications of the company and in all bills of exchange, promissory notes, endorsements, cheques, and orders for money or goods purporting to be signed by or on behalf of the company and in all letters, delivery notes, invoices, receipts, and letters of credit of the company.
(2)For the purposes of subsection (1) -(a)the abbreviations “Ltd”, “Pty”, “Inc”, “Co” and “&” may be used for the words “Limited”, “Proprietary”, “Incorporated”, “Company” and “and” in a company’s name; and(b)a company must not use the shortened form of its name unless it is used in conjunction with its name.
(3)A director or officer of a company or a person acting on its behalf must not -(a)use or authorise the use of any seal purporting to be a seal of the company whereon its name is not so engraved as contemplated in subsection (1)(b);(b)issue or authorise the issue of any notice or other official publication of the company, or sign or authorise to be signed on behalf of the company any bill of exchange, promissory note, endorsement, cheque or order for money or goods, wherein its name is not mentioned in the manner contemplated in subsection (1)(c); or(c)issue or authorise the issue of any letter, delivery note, invoice, receipt or letter of credit of the company wherein its name is not mentioned in the manner contemplated in subsection (1)(c).
(4)Any director, officer or person referred to in subsection (3) who contravenes that subsection commits an offence and is liable to a fine which does not exceed N$400.
(5)A director, officer or person referred to in subsection (3) who contravenes that subsection is further liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount stated on the document if non- compliance with subsection (3) results in default of payment by the company.
(6)A company which contravenes or fails to comply with subsection (1) commits an offence and is liable to a fine which does not exceed N$400.

57. Improper use of word “Limited” or “Incorporated” an offence

Any person trading or carrying on business under a name or title of which the word “Limited” or “Incorporated” is the last word, commits, unless the entity is incorporated under this Act or any other law, an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

58. Savings provisions regarding certain existing name registrations

[The heading of section 58 in the ARRANGEMENT OF SECTIONS is “Savings regarding certain existing name registrations”.]Any registration before the date of coming into operation of this Part in terms of a provision of the repealed Act of a name, or a translated name, of an existing company, or any shortened form of the name, in a language other than the official language, or of any name, translated name, or shortened form, of a company, containing a word or expression in the other language, is for the purposes of this Act -(a)deemed to be proper registration under the corresponding provisions of this Act; and(b)the use of that name, translated name or shortened form or any word or expression contained in that name, translated name or shortened form is deemed to be sufficient compliance with the requirements of sections 55 and 56(2)(a).

Part 3 – Memorandum of Association


59. Requirements for memorandum of association

(1)The memorandum of a company must state the purpose, referred to in section 37, for which it is to be formed and incorporated, describing the business which the company is to carry on, or, in the case of a non-profit association, the object it is to promote, and in addition -(a)the name of the company;(b)where the company in terms of section 38 elected to state or must state its objects -(i)the objects of the company, stating the general nature of the business which it is contemplated the company will be entitled to carry on;(ii)the specific ancillary objects, referred to in section 39(1), if any, which are excluded from the unlimited ancillary objects of the company;(iii)the specific powers or part of any powers of the company, referred to in section 39(2), if any, which are excluded from the plenary powers or the powers set out in Schedule 2.
(2)If the company is to have a share capital, the memorandum must state -(a)the amount of the share capital with which it is proposed to be registered and the division of the share capital into shares of a fixed amount;(b)the number of shares if the company is to have shares of no par value; and(c)the number of shares which each subscriber undertakes to take up, stated in words opposite his or her name, subject to the requirement that no subscriber may take less than one share.
(3)If the company is to be a company limited by guarantee, the memorandum must state -(a)that the liability of the members is limited to the amount referred to in paragraph (b); and(b)that each member undertakes to contribute to the assets of the company in the event of its being wound up while a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he or she ceases to be a member, and of the costs, charges and expenses of the winding-up, and for adjustment of the rights of the contributories among themselves, any amount which may be required, not exceeding a specified amount but not less than one Namibian dollar.

60. Memorandum may contain special conditions and provide for unlimited liability of directors

The memorandum of a company may, in addition to the requirements of section 59 -(a)contain any special conditions which apply to the company, and the requirements, if any, additional to those provided for in this Act for the alteration of those conditions;(b)in the case of a private company, provide that the directors and past directors are liable jointly and severally, together with the company, for debts and liabilities of the company which are or were contracted during their periods of office, in which case those directors and past directors are so liable.

61. Form and signing of memorandum

(1)The memorandum must be and be completed in the form prescribed.
(2)The memorandum of a public company must be signed by not less than seven subscribers and of a private company by one or more subscribers, stating their full names, occupations and residential, business and postal addresses, and each subscriber must sign the memorandum in the presence of at least one witness who must attest the signature and state his or her residential, business and postal address.

Part 4 – Alteration of Memorandum


62. Alteration of memorandum as to special conditions and other provisions

(1)Subject to subsection (3) and unless prohibited by the condition itself, a special condition contained in the memorandum may be altered by special resolution or in the manner specified in that special condition.
(2)Any private company may at any time by special resolution and with the written consent of each person being then a director of the company, incorporate in its memorandum the provision referred to in section 60(b).
(3)A private company may by special resolution alter or remove the provision referred to in section 60(b) and contained in its memorandum provided the alteration or removal is confirmed by the Court if it is satisfied that that alteration or removal would be just and equitable.
(4)Any other provision of the memorandum of a company may be altered by special resolution.
(5)Nothing in this section authorises any alteration of a memorandum constituting a variation or abrogation of the special rights of any class of members, except that those rights may be altered or abrogated in the manner provided for in the memorandum for that variation or abrogation.

63. Lodgment of altered memorandum

(1)The Registrar may, in writing, request any company which has lodged a special resolution altering its memorandum, to lodge, within 14 days after the date of the request, a copy of the memorandum as so altered.
(2)Any company which fails to comply with any request under subsection (1) commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

Part 5 – Articles of Association


64. Companies to have articles

(1)There must be registered with the memorandum of a company, articles of association, prescribing articles for the company.
(2)The articles of a company having a share capital -(a)if a public company, may consist of the articles contained in Table A of Schedule 1; and(b)if a private company, may consist of the articles contained in Table B of Schedule 1,subject to any additions, omissions and modifications which are stated in the articles, and the articles contained in the said Schedule do, so far as applicable and not excluded or modified, apply to that company, but, any condition contained in the articles of a company for compulsory loans to be made by members of the company to the company is invalid.

65. Form and signing of articles

(1)The articles must be and be completed in the form prescribed.
(2)The articles must be signed by each subscriber of the memorandum stating his or her full name, occupation and residential, business and postal address, in the presence of at least one witness who must attest the signature and state his or her residential, business and postal address.

66. Consolidation of articles

A company may at any time after the registration of its articles, submit to the Registrar a document in the prescribed form, containing a consolidated and full statement of all the articles applying to the company and, on payment of the prescribed fee, the Registrar must, if satisfied that the articles of the company have been truly stated in the consolidated document, endorse on that document a certificate to the effect that the articles stated therein constitute the articles of the company as at the date of the certificate.

67. Alteration of articles

(1)Subject to the conditions contained in its memorandum, a company may, by special resolution, alter or add to its articles and any alteration or addition so made is as valid as if originally contained therein, and is subject in like manner to alteration by special resolution.
(2)Section 63 which relates to the lodgment of a copy of an altered memorandum does, with the necessary changes, apply to the lodgment of altered articles.

Part 6 – Registration, Incorporation and Deregistration


68. Registration of memorandum and articles

(1)If a memorandum and articles complying with the requirements of this Act together with two certified copies are lodged with the Registrar in the manner prescribed, the Registrar must, on payment of the prescribed fee and any other additional prescribed fee, register that memorandum and articles, impress his or her seal on one copy and endorse the date of registration and the certificate provided for in section 70.
(2)Any memorandum and articles lodged for registration must be delivered and uplifted at the Registration Office personally by a subscriber or by a person authorised by the subscriber in writing.
(3)On the registration of the memorandum and articles of a company the Registrar must allocate a registration number to the company concerned.

69. Memorandum and articles to be in official language

(1)The memorandum and articles of a company must be in the official language.
(2)If the memorandum or articles of an existing company is in any language other than the official language, the company must, within two years after the commencement of this Act, by special resolution, substitute that existing memorandum or those articles with a translation in the official language and no fee is payable with regard to that substitution.

70. Certificate of incorporation and its evidential value

(1)On the registration of the memorandum and articles of a company the Registrar must endorse on the memorandum and articles, a certificate signed and sealed by him or her that the company is incorporated.
(2)A certificate of incorporation given by the Registrar in respect of any company is on its mere production, in the absence of proof of fraud, conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental to the registration, have been complied with, and that the company is a company duly incorporated under this Act.

71. Effect of incorporation on company and members

(1)From the date of incorporation stated in the certificate of incorporation, the subscribers of the memorandum together with other persons who may become members of the company, become a body corporate with the name stated in the memorandum, capable of exercising all the functions of an incorporated company, and having perpetual succession, but with liability, if any, on the part of the members to contribute to the assets of the company in the event of its being wound up as provided by this Act.
(2)The memorandum and articles bind the company and its members to the same extent as if they respectively had been signed by each member, to observe all the provisions of the memorandum and of the articles, subject to this Act.

72. Liability of members where membership reduced below minimum

If any public company other than a wholly owned subsidiary carries on business for more than six months while it has less than seven members, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is so carrying on business, is liable for the payment of the whole of the debts of the company contracted during that time and may be sued for the same without any other member being joined in the action.

73. Rights of members to copies of memorandum and articles

(1)A company must send to every member at that member’s request, at cost or any lesser amount which the company may determine, a copy of its memorandum and of its articles, or must, if so requested, afford to a member or the duly authorised agent of a member adequate facilities for making a copy of that memorandum and articles.
(2)Any company which fails to comply with any request under subsection (1), commits an offence and is liable to a fine which does not exceed N$400.

74. Cancellation of registration of memorandum and articles

(1)If a company has failed, for a period of more than two years, to lodge with the Registrar an annual return in compliance with section 181, or when the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he or she must, in accordance with subsection (10), send to the company by certified post a letter enquiring whether it is carrying on business or is in operation.
(2)If the Registrar does not within one month after sending the letter receive any answer or receives an answer to the effect that the company is not carrying on business or is not in operation, the Registrar may publish in the Gazette and send to the company by certified post a notice that at the expiry of two months from the date of that notice that company will, unless good cause is shown to the contrary, be deregistered.
(3)At the expiry of the period mentioned in any notice referred to in subsection (2) or on receipt from any company of a written statement signed by every director to the effect that the company has ceased to carry on business and has no assets or liabilities, the Registrar may, unless good cause to the contrary has been shown by the company, deregister the company concerned, and must give notice to that effect in the Gazette and the date of the publication of that notice in the Gazette is deemed to be the date of deregistration.
(4)Notwithstanding the deregistration contemplated in subsection (3), the liability of every director, officer and member of the company continues and may be enforced as if the company had not been deregistered.
(5)The Registrar must cancel the registration of the memorandum and articles of a company which is deregistered under this section.
(6)When any company has been deregistered the books and papers of the company may be disposed of in any way which the Registrar may direct.
(7)After five years from the deregistration of a company, no responsibility rests on any person to whom the custody of the books and papers has been committed, because of the same not being forthcoming to a person claiming to be interested therein.
(8)The Court may, on application by any interested person or the Registrar, if it is satisfied that a company was at the time of its deregistration carrying on business or was in operation, or otherwise that it is just that the registration of the company be restored, make an order that the registration be restored accordingly, and after which the company is deemed to have continued in existence as if it had not been deregistered.
(9)An order referred to in subsection (8) may contain directions and make provision which the Court considers just for placing the company and all other persons in the position, as nearly as may be, as if the company had not been deregistered.
(10)A letter or notice under this section must be addressed to the company at its registered office, its postal address and to the care of the directors or officers and the auditor of the company or may, if there is no director, officer or auditor of the company whose name and address is known to the Registrar, be sent to each of the persons who signed the memorandum of the company, at the address mentioned in the memorandum.

Part 7 – Incidental Matters


75. Issued copies of memorandum or articles to embody alterations

(1)Every copy of the memorandum or articles of a company issued after the date on which any alteration has been made, must include the alteration.
(2)A company which, after the date of any alteration, issues a copy of its memorandum or articles which does not include an alteration commits an offence and is liable to a fine which does not exceed N$400.

76. Contracts by companies

(1)Contracts on behalf of a company may be made as follows -(a)any contract which if made between individual persons would by law be required to be in writing signed by the parties liable to be sued on that contract may be made on behalf of the company in writing signed by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged;(b)any contract which if made between individual persons would by law be valid though made orally only and not reduced to writing, may be made orally on behalf of the company by any person acting under its authority, expressed or implied, and may in the same manner be varied or discharged.
(2)All contracts made in accordance with this section are valid and bind the company and its successors and all other parties.

77. Promissory notes and bills of exchange

A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of or by or on behalf or on account of, the company by any person acting under its authority.

78. Service of documents on companies

Any notice, order or other document which by this Act may be or is required to be served on any company, including any external company, may be served by delivering it at or sending it by registered post to the registered office or postal address of the company.

79. Arbitration between companies and others

(1)A company may agree to refer and may refer to arbitration any existing or future difference between itself and any other company or person.
(2)Companies which are parties to an arbitration may delegate to the arbitrator power to settle or determine any matter capable of being lawfully settled or determined by the companies themselves or by their directors or other managing body.

Chapter 5
SHARE CAPITAL, ACQUISITION BY COMPANIES OF OWN SHARES, SHARES, ALLOTMENT AND ISSUE OF SHARES, MEMBERS AND REGISTER OF MEMBERS, DEBENTURES, TRANSFER AND RESTRICTIONS ON OFFERING SHARES FOR SALE


Part 1 – Share Capital


80. Division of share capital into shares having par value or having no par value

The share capital of a company may be divided into shares having a par value or may be constituted by shares having no par value, but, all the ordinary shares or all the preference shares must consist of either the one or the other.

81. Company may alter share capital and shares

(1)Subject to sections 62 and 108 a company having a share capital, if so authorised by its articles, may by special resolution -(a)increase its share capital by new shares of any amount, or increase the number of its shares having no par value;(b)increase its share capital constituted by shares of no par value by transferring reserves or profits to the stated capital, with or without a distribution of shares;(c)consolidate and divide all or any part of its share capital into shares of larger amount than its existing shares or consolidate and reduce the number of the issued no par value shares;(d)increase the number of its issued no par value shares without an increase of its stated capital;(e)subdivide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum;(f)subject to this Act, convert all of its ordinary or preference share capital consisting of shares having a par value into stated capital constituted by shares of no par value, but an existing company must not convert any share capital which is not fully paid up;(g)subject to this Act, convert its stated capital constituted either by ordinary or preference shares of no par value into share capital consisting of shares having a par value;(h)cancel shares which at the time of the passing of the resolution in that regard, have not been taken or agreed to be taken by any person and diminish the amount of its authorised share capital by the amount of the shares so cancelled or may cancel shares of no par value which have not been taken or agreed to be taken; or(i)convert any of its shares, whether issued or not, into shares of another class.
(2)Where under subsection (1) a company -(a)increases its share capital by shares of a fixed amount, it must pay to the Registrar the prescribed amount for each N$1 000, or part of it, by which the share capital is increased;(b)increases the number of its shares of no par value, it must -(i)lodge with the Registrar, in the prescribed manner, a certificate given by the auditor of the company showing the value of each issued share arrived at by dividing the number of issued shares into the stated capital; and(ii)pay to the Registrar the prescribed amount for each N$1 000 or part of it calculated by multiplying the number by which the number of the shares has been increased by the value of each share as certified under subparagraph (i).
(3)If, in the case of a company which has converted its share capital under subsection (1)(f) and thereafter passed a special resolution to convert its stated capital as contemplated in subsection (1)(g), shares which at the time of the passing of that special resolution have not been taken or agreed to be taken by any person -(a)are converted as so contemplated, subsection (2)(a) does, with the necessary changes, apply in respect of any amount by which the share capital of the company is increased, which amount is the amount by which the nominal share capital after the conversion under subsection (1)(g) exceeds the nominal share capital before the conversion under subsection (1)(f);(b)are not converted as so contemplated, those shares must be cancelled, with the necessary changes, in accordance with subsection (1)(h).

82. Premiums received on issue of shares to be share capital, and limitation on application thereof

[The heading of section 82 in the ARRANGEMENT OF SECTIONS is “Premiums received on issue of shares to be share capital, and limitation on application”.]
(1)Where a company which is not a banking institution in terms of the Banking Institutions Act, 1998 (Act No. 2 of 1998), issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares must be transferred to an account to be called the “share premium account”.
(2)Where assets are acquired by the issue of shares of a company and no consideration is recorded, the assets so acquired must be valued and if the value of the assets is more than the par value of those shares, the difference between the par value of the shares and the value of the assets so acquired must be transferred to the share premium account.
(3)The share premium account may, notwithstanding anything contained in subsection (1), be applied by the company -(a)in paying up unissued shares of the company to be issued to members of the company as fully paid capitalisation shares;(b)in writing off -(i)the preliminary expenses of the company;(ii)the expenses of, or the commission paid or discount allowed on, the creation or issue of any shares of the company;(c)subject to subsections (4) and (5), in providing for the premium payable on redemption of any redeemable preference shares of the company; or[paragraph (c) amended by Act 9 of 2007](d)for the payment of a premium in the case of any acquisition of shares in accordance with sections 89 to 91, inclusive.
(4)The premium contemplated in subsection (3)(c) may not be so provided unless it is payable according to the terms of issue of the shares concerned and those terms have been embodied in the articles of the company as from a date prior to the date on which those shares were allotted and issued or on a later date allowed by the Court on application to it.[subsection (4) substituted by Act 9 of 2007]
(5)In the case of ordinary shares which are converted into redeemable preference shares redeemable at a premium, only that portion of the amount standing to the credit of the share premium account which arose on the original issue of those shares may be applied in providing for the premium payable on redemption.[subsection (5) inserted by Act 9 of 2007]
(6)Subsections (4) and (5) do not apply in respect of redeemable preference shares issued before the commencement of this Act.[subsection (6) inserted by Act 9 of 2007]

83. Proceeds of issue of shares of no par value to be stated capital

(1)The whole of the proceeds of an issue of shares having no par value is paid-up share capital of a company and must be transferred to an account to be called the “stated capital account”.
(2)If shares having no par value are issued by a company for a consideration other than cash, a sum equal to the value of the consideration as determined by the directors must be transferred to the stated capital account.
(3)The stated capital account may, notwithstanding anything contained in subsection (1) or (2), be applied by a company in writing off -(a)the preliminary expenses of the company; or(b)the expenses of, or the commission paid on, the creation or issue of those shares.

84. Effect of conversion of par value share capital into no par value share capital and vice versa

(1)Where a company converts all its ordinary or preference shares having a par value, or both the ordinary and preference shares, into shares without par value, there must be transferred to the stated capital account of the company -(a)the whole of the ordinary or preference share capital, as the case may be; and(b)the whole of the share premium account or that part contributed to it by the shares so converted.
(2)Where a company converts all its ordinary or preference shares of no par value or both those ordinary and preference shares into shares having a par value, there must be transferred to the share capital account of the company the whole of the stated capital account or that part contributed to it by the shares so converted.
(3)Fractions, fractional surpluses or amounts arising in respect of the nominal share capital or the stated capital may be rounded off but material reductions must be placed to non-distributable reserves.

85. Payment of interest out of capital in certain cases

(1)Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of works or buildings or for the provision of plant, which cannot be made profitable for a lengthy period, the company may pay interest on the share capital for the period and subject to the conditions and restrictions in this section mentioned, and may charge the same to capital as part of the cost of construction of the works or buildings or the provision of plant.
(2)Payment must not be made under subsection (1) unless it is authorised by the articles or by special resolution of the company, and the approval of the Board has first been had and obtained.
(3)The Board may, before approving payment under subsection (2), at the expense of the company, appoint a person to enquire into and report to him or her on the circumstances of the case, and may before making the appointment require the company to give sufficient security for the payment of the costs of the enquiry.
(4)Any payment contemplated in this section must be made only for a period which may be determined by the Board and that period must in no case extend beyond the close of the half-year next after the half-year during which the works or buildings have been actually completed or the plant provided.
(5)The rate of any interest payable under subsection (1) must not exceed 10 per cent per annum or any other rate which may be determined by the Board.
(6)The payment of the interest does not operate as a reduction of the amount paid up on the shares in respect of which it is paid.
(7)For the purposes of subsection (4) the expression “half-year” in relation to a company, means the period of six months commencing on the first or ending on the last day of the financial year of that company.

86. Restriction of power to pay commission and discounts

(1)A company may pay commission to any person in consideration of that person subscribing or agreeing to subscribe, whether absolute or conditional, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company if -(a)the payment of the commission is authorised by the articles;(b)the commission paid or agreed to be paid does not exceed 10 per cent of the price at which shares are issued or any lesser rate fixed by the articles;(c)the amount or rate per cent of the commission paid or agreed to be paid is -(i)in the case of shares offered to the public, disclosed in the prospectus; or(ii)in the case of shares not offered to the public, disclosed in a statement in the prescribed form and where any circular or notice, not being a prospectus, inviting subscription for shares is issued, also disclosed in that circular or notice; and(d)the number of shares for which persons have agreed, for a commission, to subscribe absolutely, is disclosed in the manner specified in paragraph (c).
(2)The statement referred to in subsection (1)(c)(ii) must be lodged with the Registrar for registration before the payment of the commission to which the statement relates.
(3)Save as otherwise provided in subsection (1) and subject to section 87, a company must not apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of that person subscribing or agreeing to subscribe, whether absolute or conditional, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares of the company, whether the shares or money be so applied by being added to the purchase price of any property acquired by the company or to the contract price of any work to be executed for the company or the money be paid out of the nominal purchase price or contract price, or otherwise.
(4)Nothing in this section affects the power of any company to pay any brokerage which it has before this Act been lawful for a company to pay.
(5)A vendor to, promoter of, or other person who receives payment in money or shares from, a company, must have 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 this section.
(6)A company which fails to comply with the requirements of subsection (2) relating to the lodging of the statement referred to in that subsection with the Registrar, and every director and officer of the company who knowingly is a party to that failure, commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

87. Issue of shares of par value at discount

(1)A company may issue at a discount shares having a par value of a class already issued if the following conditions have been complied with -(a)the issue must be authorised by special resolution of the company specifying the maximum rate of discount at which the shares are to be issued;(b)not less than one year must, at the date of issue, have elapsed since the date on which the company became entitled to commence business or the date of the first issue of the class of shares;(c)the issue must be sanctioned by the Court; and(d)the shares to be issued at a discount must be issued within one month after the date on which the issue is sanctioned by the Court or within any extended time which the Court may allow.
(2)The Court may, on application for an order sanctioning the issue of shares contemplated in subsection (1), having regard to all the circumstances of the case, make an order on appropriate terms and conditions.
(3)Every prospectus relating to the issue of shares by the company after the issue of the shares at a discount under this section must contain particulars of the discount allowed on the issue of those shares or of so much of that discount as has not been written off at the date of the issue of the prospectus.
(4)A company which fails to comply with subsection (3), and every director and officer of the company who knowingly is a party to that failure, commits an offence and is liable to a fine which does not exceed N$2 000.

88. Issue price of shares of no par value requiring special resolution

(1)A company must not issue shares having no par value of a class already issued at a price lower than an amount arrived at by dividing that part of the stated capital contributed by already issued shares of that class, by the number of issued shares of that class, unless the issue price of those shares is authorised by a special resolution of the company.
(2)The notice convening the meeting for the purpose of passing the special resolution referred to in subsection (1) must be accompanied by a report by the directors setting out the reasons for the proposed lower issue price.
(3)A special resolution under subsection (1) must not be registered in the Registration Office unless the copy lodged with the Registrar is accompanied by a copy of the report by the directors referred to in subsection (2).
(4)This section does not apply where the issue of shares is in pursuance of an offer for subscription to all existing members in proportion to their shareholdings, whether with or without the right to renounce in favour of other persons.

Part 2 – Acquisition by Companies of Own Shares


89. Approval of acquisition of own shares by special resolution

(1)Subject to this section, sections 90 and 91 and any other applicable law, a company may by special resolution, if authorised by its articles, approve the acquisition of shares issued by that company.
(2)The approval by special resolution may be a general approval or a specific approval for a particular acquisition.
(3)If the approval is a general approval, it is valid only until the next annual general meeting of the company, but it may be varied or revoked by special resolution by any general meeting of the company at any time before that annual general meeting.

90. Company to be solvent

A company must not make any payment in whatever form to acquire any share issued by the company if there are reasonable grounds for believing that -(a)the company is, or would after the payment be, unable to pay its debts as they become due in the ordinary course of business; or(b)the consolidated assets of the company fairly valued would, after the payment, be less than the consolidated liabilities of the company.

91. Consequences of acquisition with regard to shares

(1)In the case of the acquisition of par value shares issued by the company, the issued capital must be decreased by an amount equal to the par value of the shares so acquired.
(2)In the case of the acquisition of no par value shares issued by the company, the stated capital of the class of shares so acquired must be decreased by an amount derived by multiplying the number of shares of that class so acquired with the amount arrived at by dividing the stated capital contributed by issued shares of that class by the number of issued shares of that class.
(3)If par value shares are acquired at a premium over the par value, the premium may be paid out of reserves, including statutory non-distributable reserves.
(4)Shares issued by a company and acquired under this section must be cancelled as issued shares and restored to the status of authorised shares forthwith.
(5)Shares in the capital of a company may not be acquired under this section if, as a result of that acquisition, there would no longer be any shares in issue other than convertible or redeemable shares.

92. Liability of directors and shareholders under certain circumstances

(1)The directors of a company who, contrary to section 90, allow the company to acquire any share issued by it, are jointly and severally liable to restore to the company any amount so paid and not otherwise recovered by the company, subject to any relief granted by the Court under section 256.
(2)A director who is liable under subsection (1) may apply to the Court for an order compelling a shareholder or former shareholder to pay to the company any consideration that was paid to that shareholder contrary to section 90.
(3)Where the acquisition by the company of shares issued by it is in contravention of section 90, any creditor who was a creditor at the time of the acquisition, or who is a creditor because of a cause of debt which arose before that acquisition, or any shareholder, may apply to the Court for an order, and the Court may, if it finds it equitable to do so -(a)order a shareholder or former shareholder to pay to the company any money or return any consideration that was paid or given by the company to acquire the shares;(b)order the company to issue an equivalent number of shares to the shareholder or former shareholder; or(c)make any other appropriate order.
(4)An action to enforce a liability imposed by this section must be instituted within three years after the date of the acquisition.
(5)Nothing contained in this section limits or diminishes any liability which any person may incur under this Act or any other law, or the common law.
(6)For the purposes of this section and section 95, “director of a company” includes any director of a holding company of that company.

93. Procedure of acquisition of certain shares by company

(1)Save as is provided in subsection (2), a company that proposes to acquire shares issued by it must -(a)deliver or mail a copy of the written offering circular in the prescribed form, to each registered shareholder on record as at the date of the offer in any manner which is provided in the articles of the company for the sending of any notice of a meeting of shareholders, stating the number and the class or kind of its issued shares which the company proposes to acquire, and specifying the terms and reasons for the offer;(b)lodge a copy of the offering circular with the Registrar within 15 days of the date that it is delivered or mailed to the shareholders of the company.
(2)Subsection (1) does not apply -(a)to the extent that it is dispensed with in terms of the special resolution passed in terms of section 89;(b)in the case of a company whose shares are listed on a stock exchange within Namibia, to the acquisition by that company of shares in terms of transactions effected on that stock exchange in accordance with the rules and listing requirements of that exchange.
(3)Sections 168 to 171 relating to the civil liability of directors or promoters of a company for untrue statements in prospectuses, the civil liability of experts for untrue statements, criminal liability for untrue statements in prospectuses and the retention of liability for untrue statements under the common law respectively, do, with the necessary changes, apply to all documents issued in terms of subsection (1).
(4)Where in response to any offer to acquire shares, the shareholders propose to dispose of a greater number of shares than the company offered to acquire, the company must acquire from all of the shareholders who offered to sell, on a proportional basis as nearly as possible disregarding fractions, except that this subsection does not apply to the acquisition of shares in terms of transactions effected on a stock exchange within Namibia.
(5)A company that acquires shares issued by it must, within 30 days and in the prescribed form, notify the Registrar of the date of the acquisition, the date, number and class of shares that it has acquired.
(6)A stock exchange within Namibia may, in addition to any requirements contained in this Act, determine further requirements with which a company whose shares are listed on that exchange must comply with prior to that company acquiring its own shares.

94. Enforceability of contracts for acquisition by company of certain shares

(1)A contract with a company providing for the acquisition of shares issued by it is enforceable against the company, except if the company cannot execute the contract without being in breach of section 90.
(2)In an action brought on a contract referred to in subsection (1), the company has the burden of proving that execution of the contract is or will be in breach of section 90.
(3)Until the company has fully performed its obligations in terms of a contract referred to in subsection (1), shareholders who dispose of their share retain the status of claimants entitled to be paid as soon as the company is lawfully able to do so or, on liquidation, to be ranked subordinate to creditors and shareholders whose claims are in priority to the claims of the class of shares which they disposed of to the company, but in priority to the claims of the other shareholders.[The word “share” should be plural in the phrase “shareholders who dispose of their share”.]

95. Subsidiaries may acquire certain shares in holding company

(1)A subsidiary company may, if authorised by its articles, with the necessary changes, in accordance with sections 89 to 94, inclusive, acquire shares in its holding company to a maximum of 10 per cent in the aggregate of the number of issued shares of the holding company.
(2)Sections 89 and 93(1) to (4) do not apply if the subsidiary is a wholly owned subsidiary of the holding company.

96. Payments to shareholders

(1)A company may make payments to its shareholders subject to this section and if authorised by its articles.
(2)A company must not make any payment in whatever form to its shareholders if there are reasonable grounds for believing that -(a)the company is, or would after the payment be, unable to pay its debts as they become due in the ordinary course of business; or(b)the consolidated assets of the company fairly valued would after the payment be less than the consolidated liabilities of the company.
(3)For the purposes of this section “payment” includes any direct or indirect payment or transfer of money or other property to a shareholder of the company by virtue of the shareholder’s shareholding in the company, but excludes an acquisition of shares in terms of sections 89 to 91, inclusive, a redemption of redeemable preference shares in terms of section 104, any acquisition of shares in terms of an order of Court and the issue of capitalisation shares in the company.
(4)Section 92 in so far as it relates to the liability of the directors of a company to compensate the company where shares are acquired by the company contrary to section 90 applies, with the necessary changes, to any payment made contrary to this section.
(5)If payment to a holding company by a subsidiary is in the form of shares of the holding company, the shares so received by the holding company and for as long as those shares are held by the holding company -(a)no voting rights attaching to those shares may be exercised; and(b)the votes able to be cast at any meeting of the holding company must be reduced by the votes in respect of shares held by the holding company itself.

Part 3 – Shares and Allotment and Issue


97. Nature of shares and payment for shares

(1)The shares or other interest which any member has in a company are movable property, transferable in the manner provided by this Act and the articles of the company.
(2)A company must not allot or issue any shares unless the full issue price of or other consideration for those shares has been paid to and received by the company.
(3)Notwithstanding subsection (2), a company may allot or agree to allot shares not fully paid-up for the purpose of their being offered for sale to the public as fully paid-up shares, but -(a)if that offer is not made within one month from the date of the allotment or agreement, that allotment or agreement is void; or(b)if the offer to the public is made but not accepted in full within two months from the date of the allotment or agreement to allot, the allotment of, or the agreement to allot, the shares in respect of which the full issue price is not paid within that period, is void.

98. Uncertificated securities

(1)In this section -(a)“central securities depositor” means a public company incorporated in terms of this Act and registered as central securities depository in terms of any law relating to the custody and administration of securities;(b)“participant” means a depositary institution accepted by a central securities depository as a participant in terms of any law relating to the custody and administration of securities;(c)“subregister” means the record of uncertificated securities administered and maintained by a participant, which forms part of the relevant company’s register of members as referred to in this Act; and(d)“uncertificated securities” means securities as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985), which are by virtue of this section transferable without a written instrument and are not evidenced by a certificate, and includes options on indices of information as issued by a stock exchange on prices of any of the instruments mentioned in that definition, as well as any other instruments declared by the Registrar by notice in the Gazette to be securities.
(2)This section applies to uncertificated securities, notwithstanding any provision to the contrary contained in this Act or in any other law, the common law, an agreement or any articles.
(3)Where any provision of this Act is not expressly or impliedly amended by this section, this Act applies in respect of uncertificated securities in the same manner as it applies to securities in certificated form.
(4)A company must enter in its register of members, in respect of every class of securities, the total number of securities held in uncertificated form.
(5)A subregister which must form part of the relevant company’s register of members must, notwithstanding subsection (15), contain the details referred to in sections 112 and 140, but, the name of any person for whom a participant holds uncertificated securities as nominee must not form part of the subregister.
(6)A participant is responsible for entering the information referred to in sections 112 and 140 in a subregister and for ensuring the correctness of all transfers of uncertificated securities effected by the participant.
(7)A participant must, at the request of a company and against payment of such fee as may be prescribed by the Minister from time to time, furnish that company with such details of uncertificated securities in the company as are reflected in the subregister maintained by the participant.
(8)A person who wishes to inspect a subregister may do so only through the relevant company in terms of section 120.
(9)A company is, within seven days of the date of a request for inspection, required to produce a subregister which reflects at least the details referred to in subsection (6) at the close of business on the day on which the request for inspection was made.
(10)A participant must send out, to every person for whom the participant holds uncertificated securities, a regular statement setting out the number and identity of the uncertificated securities held on that person’s behalf.
(11)The cost and frequency of the statement referred to in subsection (10) will be prescribed but the cost must not be borne by the person for whom the uncertificated securities are held.
(12)Transfer of ownership in an uncertificated security is effected on the debiting and crediting, respectively, of both the account in the subregister from which the transfer is effected and the account in the subregister to which transfer is to be made, in accordance with the rules of a central securities depository.
(13)A transferee does, on the entry of the transferee’s name in a subregister, become a member of and must be recognised as a member by the company in respect of the uncertificated securities registered in the transferee’s name.
(14)Transfer of ownership and membership in accordance with subsections (12) and (13) occurs notwithstanding any fraud or illegality which may affect the uncertificated securities in respect of which the transfer was effected or which may have resulted in the transfer being effected, but, a transferee who was a party to or had notice of the fraud or illegality may not rely on this subsection.
(15)Section 140 does not apply to the transfer of ownership of uncertificated securities and also not to the acquisition of membership of a company as a result of such transfer.
(16)A company is liable to a participant for such fee as may be prescribed by the Minister from time to time in respect of the transfer of ownership of uncertificated securities in the company.
(17)Only a participant may effect the transfer of uncertificated securities in a subregister maintained by it.
(18)A participant may transfer uncertificated securities in a subregister administered and maintained by it, only on receipt of an instruction to transfer sent and properly authenticated in terms of the rules of a central securities depository or by order of the Court.
(19)Nothing in this section prejudices any power of a participant to effect transfer to a person to whom the right to any uncertificated securities of a company has been transmitted by operation of law or agreement.
(20)Section 121 does not apply to a subregister.
(21)Subject to subsection (22), a company must not issue certificates evidencing, or purporting to evidence, title to uncertificated securities of the company, and sections 102 and 147 do not apply to uncertificated securities.
(22)Any person who wishes to withdraw uncertificated securities held by a participant on that person’s behalf and to obtain a certificate in respect of all or part of those securities, must notify the participant, in which case -(a)the participant must, within seven days, notify the relevant company to provide such a certificate and remove the details of the uncertificated securities so withdrawn from the subregister maintained by that participant;(b)the company must, immediately on receipt of a notice from a participant, enter the relevant person’s name and details in respect of that person’s holding in the company’s register of members and indicate on that register that the securities so withdrawn are no longer held in uncertificated form;(c)the company must, within 14 days of receipt of the notice referred to in paragraph (a), prepare and deliver to the relevant person a certificate in respect of the securities so withdrawn, and notify the central securities depository that the securities are no longer held in uncertificated form; and(d)transfer of ownership or acquisition of membership in respect of the securities so withdrawn is not capable of being effected through a central securities depository while they remain in certificated form.
(23)A person who takes any unlawful action in consequence of which any of the following events occur in a register or subregister, namely-(a)the name of any person remains in, is entered in, or is removed or omitted;(b)the number of uncertificated securities is increased, reduced, or remains unaltered; or(c)the description of any uncertificated security is changed,is liable to any person who has suffered any direct loss or damage arising out of that action.
(24)A person who gives an instruction to transfer uncertificated securities must warrant the legality and correctness of any such instruction.
(25)The person referred to in subsection (24), must indemnify the company and the participant effecting the transfer against any claim and against any direct loss or damage suffered by them arising out of that transfer by virtue of an instruction referred to subsection (24).
(26)A participant who transfers uncertificated securities other than pursuant to an instruction to transfer that was sent and properly authenticated in terms of the rules of a central securities depository, must indemnify the company against any claim made on it and against any direct loss or damage suffered by it arising out of the transfer and that participant must, in addition, indemnify any person who suffers any direct loss or damage arising out of the transfer, against the loss or damage.
(27)Subject to subsection (28), when any new offer of securities is made by a company, the offeree may elect whether all or any part of the securities offered to the offeree must be issued in certificated or uncertificated form.
(28)A company must only issue or allot uncertificated securities to a person who is already a client of a participant or for whom a participant has agreed to act.
(29)The Minister may make regulations regarding matters which are supplementary and ancillary to this section and which are not inconsistent with another provision of this Act.
(30)Any person -(a)other than a participant, who effects the transfer of uncertificated securities in contravention of subsection (17);(b)who takes any unlawful action contemplated in subsection (23); or(c)who, without proper authority, accesses any computer system or record maintained by a participant or a central securities depository,commits an offence and is liable to a fine not exceeding N$500 000 or to imprisonment for a period which does not exceed two years or to both the fine and imprisonment.

99. Register and return as to allotments

(1)Every company having a share capital must keep, at its registered office or at the office where it is made up, a register of allotments of shares.
(2)Every company must, as soon as is reasonably possible after the allotment of any shares, enter in the register of allotments the names and addresses of the allottees, the number of shares allotted to each of them, the amount paid for those shares and in the case of shares allotted as fully paid-up otherwise than for cash, full particulars of the consideration in respect of which the allotment was made and of the transaction or contract concerned.
(3)Whenever a company makes any allotment of its shares, the company must within one month thereafter lodge with the Registrar -(a)a return in the form prescribed stating full particulars of the nominal and previously issued share capital or stated capital and the number and description of the shares comprised in the allotment;(b)in the case of shares allotted otherwise than for cash, a copy of the contract in writing constituting the title of the allottee to the allotment, together with any contract of sale, or for service or other consideration in respect of which that allotment was made or, if that contract is not in writing, a memorandum containing full particulars of the contract, and a return in the prescribed form stating the number and description of the shares so allotted, the name and address of that allottee and the consideration for which they have been allotted.
(4)If any allotment of shares becomes void as a result of any provision of this Act, the company must, within one month after the date on which that allotment becomes void, lodge a notice in the prescribed form to that effect with the Registrar.
(5)If default is made in complying with any of the requirements of this section, the company, and every director or officer of the company who knowingly is a party to the default, commits an offence and is liable to a fine which does not exceed N$2 000.
(6)Section 120 which relates to the inspection of the company’s register of members by any person does, with the necessary changes, apply to the inspection of and the furnishing of copies of or extracts from the register of allotments.

100. Certificate of shares or stock

(1)A certificate signed -(a)by two directors of a company;(b)by one director and one officer duly authorised by the directors; or(c)in the case of a company having only one director and no officer, by that director,and specifying any shares or stock of that company held by any member, is sufficient evidence of the title of the member to those shares or that stock.
(2)A signature referred to in subsection (1) may be affixed to the certificate by autographic or mechanical means.

101. Numbering of shares and share certificates

(1)The shares of a company having a share capital must, except in the case of shares or any particular class of shares which rank equally for all purposes, be distinguished by appropriate numbers.
(2)No provision in the articles of a company registered before the coming into operation of this Act requiring shares of that company to be numbered, applies in respect of shares which in terms of subsection (1) are not required to have distinguishing numbers.
(3)Where shares are not distinguished by appropriate numbers, the certificates of those shares must be so distinguished, and on the registration of transfer of those shares the certificate relating to those shares must, in addition to the distinguishing number, bear on its face an endorsement, in the form of a reference number or otherwise, so as to enable the immediately preceding holder of the shares to be identified.

102. Limitation of time for issue of share certificates

(1)Every company must, within two months or within any extended time, not exceeding one month which the Registrar on good grounds shown and on payment of the prescribed fee may grant, after the allotment of any of its shares, debentures or debenture stock, complete and have ready for delivery the certificates of all shares, the debentures or the certificates of all debenture stock allotted.
(2)If a company fails to comply with subsection (1), any person entitled to the certificates of shares, the debentures or the certificates of debenture stock in question may, by notice in writing, call on the company to comply, and if the company fails to comply with the notice within 10 days after service of the notice, the Court may on the application of that person make an order directing the company to comply within the time specified in the order, and, where appropriate, it may direct that any costs of or incidental to the application be borne by the company or by any director or officer of the company responsible for the failure to comply.
(3)A company which, and a director or officer of a company who intentionally fails to comply with subsection (1), commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

103. Validation of irregular creation, allotment or issue of shares

(1)If a company has purported to create, allot or issue shares and the creation, allotment or issue of those shares was invalid because of this Act or any other law or of the memorandum or articles of the company or otherwise, or the terms of the creation, allotment or issue were inconsistent with or not authorised by this Act, any law or the memorandum or articles of the company, the Court may on application made by the company or by any interested person and on being satisfied that in all the circumstances it is just and equitable to do so, make an order validating the creation, allotment or issue of those shares or confirming the terms of the creation, allotment or issue thereof, subject to any conditions which the Court may impose.
(2)The Court must, when making an order under subsection (1), direct that a copy of the order be lodged with the Registrar.
(3)On the registration of the copy of the order referred to in subsection (1) by the Registrar and after the payment of all prescribed fees, the shares are deemed to have been validly created, allotted or issued on the terms of the creation, allotment or issue and subject to any conditions imposed by the Court.

104. Redeemable preference shares

(1)Subject to this section, a company having a share capital, if so authorised by its articles, may issue preference shares which are, or at the option of the company, liable to be redeemed, except that -(a)the shares must not be redeemed except out of profits of the company which would otherwise be available for dividends or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;(b)where the shares are redeemed otherwise than out of the proceeds of a fresh issue, there must, out of profits which would otherwise have been available for dividends, be transferred to a reserve fund, to be called the “capital redemption reserve fund”, a sum equal to the nominal amount of the shares redeemed, or if shares of no par value, to the book value of the shares redeemed;(c)the shares must not be redeemed unless and until the premium, if any, payable on redemption, has been provided for out of the profits of the company or out of the company’s share premium account;(d)the redemption of the shares must be effected on the terms and in the manner provided for in the articles of the company.
(2)Where in pursuance of this section a company has redeemed or is about to redeem any preference shares, it has the power to issue shares, including, if the company so decides by special resolution, shares other than redeemable preference shares, up to the nominal amount of the shares redeemed or to be redeemed or in the case of preference shares of no par value, up to the book value of the shares redeemed or to be redeemed, as if those shares had never been issued, and the share capital of the company or the number of shares of no par value must, not for the purposes of section 81(2), be deemed to be increased by the issue of shares in pursuance of this subsection.
(3)Where new shares are issued before the redemption of the old shares, the new shares are not, for the purposes of any law relating to stamp duty, deemed to have been issued in pursuance of subsection (2), unless the old shares are redeemed within 30 days after the issue of the new shares.
(4)The capital redemption reserve fund may, notwithstanding this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid-up capitalisation shares or for the payment of the premium over the par value in the case of an acquisition of shares in terms of sections 89 to 91, inclusive.
(5)If a company has redeemed any redeemable preference shares, it must, within one month, give notice to that effect in the prescribed form to the Registrar specifying the shares so redeemed.
(6)A company which fails to comply with subsection (5) commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.
(7)For the purposes of subsections (1) and (2) “book value” in respect of preference shares of no par value, means that part of the stated capital contributed by the preference shares redeemed or to be redeemed.
(8)This section also applies in respect of any balance of any capital redemption reserve fund created by a company prior to 1 January 1974.

105. Conversion of shares into certain preference shares

If a company has converted any of its shares into preference shares which are, or at the option of the company are liable, to be redeemed, section 104 applies to those preference shares.

106. Conversion of shares into stock

(1)A company having a share capital, if so authorised by its articles, may by special resolution convert all or any of its paid-up shares into stock and reconvert that stock into any number of paid-up shares.
(2)Where a company has converted any of its shares into stock, the provisions of this Act which apply exclusively in respect of shares, cease to apply to so much of the share capital as has been so converted.

107. Share warrants to bearer

(1)A public company having a share capital, if so authorised by its articles, may, with respect to any paid-up shares, or to stock, issue a warrant stating that the bearer of the warrant is entitled to the shares or stock specified in the warrant, and may provide, by coupons or otherwise, for the payment of the future dividends on the shares or stock included in the warrant.
(2)A share warrant entitles its bearer to the shares or stock specified in it, and any shares or stock which may be transferred by the delivery of the share warrant.

108. Variation of rights in respect of shares

(1)If, in the case of a company the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for authorising the variation of the rights attached to any class of shares of the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and if in pursuance of that provision the rights attached to that class of shares are at any time varied, the holder of a share of that class, being a person who did not consent to or vote in favour of the resolution for the variation, may apply to the Court for an order under section 260.
(2)The expression “variation” in this section includes abrogation and the expression “varied” must be construed accordingly.
(3)The company must, within one month from the date of the consent or resolution referred to in subsection (1), lodge with the Registrar in the prescribed form the particulars of the consent or resolution, and where a company fails to comply with this provision, the company, and every director and officer of the company who knowingly is a party to that failure, commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

109. No offer of shares for sale to public without statement

(1)In this section, unless the context otherwise indicates, the word -(a)offer” includes an invitation to make an offer to purchase;(b)“shares” means the shares of a company, whether a company within the meaning of this Act or not, and includes debentures and units;(c)“unit” means any right or interest, by whatever name called, in a share,and for the purposes of this section a person must not, in relation to a company, be regarded as not being a member of the public because that person is a holder of shares of the company or a purchaser of goods from the company.
(2)A person must not, either orally or in writing, make an offer of shares for sale to the public or issue, distribute or publish any material which in its form and context is calculated to be understood as an offer for sale to the public, unless it is accompanied by a written statement (in this section referred to as the “written statement”) containing the particulars required by this section to be included in the offer.
(3)Subsection (1) does not apply -(a)if the shares to which the offer or material relates are shares which are listed by, or in respect of which permission to deal in them has been granted by, any stock exchange in Namibia recognised by the Board by notice in the Gazette for the purposes of this section, and the person making the offer or publishing the material so states in writing, specifying the name of the stock exchange;(b)if the offer is made or the material is published only to persons -(i)whose ordinary business or part of whose ordinary business it is to deal in shares, whether as principals or agents; or(ii)who are at the time of the offer the holders of shares of the same company;(c)in the case of an offer in that capacity, by an executor or administrator of a deceased estate or a trustee of an insolvent estate;(d)if the offer is made or the material is published for the purpose of a sale in execution or by public auction or by public tender; or(e)if the offer is accompanied by a prospectus registered under Chapter 6 of this Act.
(4)The written statement must be dated and signed by the person or persons making the offer or issuing, distributing or publishing the material, and if that person is a company, by every director of the company.
(5)The written statement must not contain any matter other than the particulars required by this section to be included, and must not be in characters less large or less legible than any characters used in the offer or in any document accompanying that statement.
(6)The written statement must contain particulars with respect to the following matters -(a)whether the person making the offer is acting as principal or agent and, if as agent, the name of that person’s principal and an address in Namibia where that principal can be served with process, and the nature and extent of the remuneration received or receivable by the agent for his or her services;(b)the date on which and the country in which the company was incorporated and the address of its registered office in Namibia or, if there is no such address, the address of its principal office abroad;(c)the share capital of the company and the number of shares which have been issued, the classes into which it is divided and the rights of each class of shareholders in respect of capital, dividends and voting and the number and amount of shares issued for cash and the number and amount issued for a consideration other than cash, and the dates on which and the prices at which or the consideration for which those shares were issued;(d)the dividends, if any, paid by the company on each class of shares during each of the five financial years immediately preceding the offer, and if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect;(e)the total amount of any debentures issued by the company and outstanding at the date of the statement, together with the rate of interest payable;(f)the names and addresses of the directors of the company;(g)whether or not the shares are listed or permission to deal therein has been granted by any stock exchange other than that referred to in subsection (3), and, if so, which, and, if not, a statement that they are not so listed or that no permission has been granted;(h)if the offer relates to units, particulars of the names and addresses of the persons in whom the shares represented by the units are vested, the date and the parties to any document defining the terms on which those shares are held, and an address in Namibia where that document or a copy can be inspected;(i)the dates on which and the prices at which the shares offered were originally issued by the company, and were acquired by the person making the offer or by that person’s principal, giving the reasons for any difference between those prices and the prices at which the shares are being offered;(j)if the shares were issued as partly paid-up shares under the repealed Act, to what extent they are paid-up; and(k)the date of registration of the written statement by the Registrar.
(7)For the purposes of subsection (6) the word “company” means the company by which the shares to which the statement relates were issued.
(8)There must be annexed to the written statement a copy of the last annual financial statements of the company and subsequent interim report and provisional annual financial statements, if any.
(9)Where the offer referred to in subsection (2) is in respect of shares of a public company, a copy of the written statement must be lodged with the Registrar for registration before it is issued, distributed or published, and that statement must not be issued, distributed or published more than three months after the date of that registration.
(10)Any person who contravenes this section commits an offence, and if that person is a body corporate, every director and officer of that body corporate commits the same offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(11)If any person is convicted of having made an offer in contravention of this section, the Court by which that person is convicted, may order that any contract made as a result of the offer is void, and where it makes that order, may give any consequential directions which are proper for the repayment of any money or the retransfer of any shares.

Part 4 – Members and Register of Members


110. Members of a company

(1)The subscribers of the memorandum of a company are deemed to have agreed to become members of a company on its incorporation, and must, as soon as reasonably possible after incorporation, be entered as members in its register of members.
(2)Every other person who agrees to become a member of a company and whose name is entered in its register of members, becomes a member of that company.
(3)A company must, subject to its articles, enter in the register as a member of the company by virtue of his or her office, the name of any person who submits proof of his or her appointment as the executor, administrator, trustee, curator or guardian in respect of the estate of a deceased member of the company or of a member whose estate has been sequestrated or of a member who is otherwise under disability or as the liquidator of any body corporate in the course of being wound up which is a member of the company, and any person whose name has been so entered in the register is for the purposes of this Act deemed to be a member of the company.
(4)Subject to section 221(2), the bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either for all purposes or for the purposes which are specified in the articles.

111. Trusts in respect of shares

A company is not bound to see to the execution of any trust, whether express, implied or constructive, in respect of any share.

112. Register of members

(1)Every company must, in the official language, keep a register of its members, and must, in that register, enter -(a)the names and addresses of the members and, in the case of a company having a share capital, a statement of the shares issued to each member, distinguishing each share by its number, if any, and by its class or kind, and of the amount paid or agreed to be considered as paid on the shares of each member; and(b)in respect of each member -(i)the date on which his or her name was entered in the register as a member; and(ii)the date on which he or she ceased to be a member.
(2)Where a company has converted any of its shares into stock, the register of members must show the amount of stock held by each member instead of the number of shares and the particulars relating to shares specified in subsection (1).
(3)Where a company has issued share warrants it must, on the issue of a share warrant, strike out of its register of members the name of the member then entered as holding the shares or stock specified in the warrant as if that member had ceased to be a member and must enter in the register -(a)the fact of the issue of the warrant;(b)a statement of the shares or stock included in the warrant, distinguishing each share by its number, if the share has a number; and(c)the date of the issue of the warrant.
(4)Until a share warrant is surrendered, the particulars must be the particulars required by this Act to be entered in the register of members, and on the surrender of the warrant, the date of the surrender must be entered as if it were the date on which a person ceased to be a member.
(5)The bearer of a share warrant is, subject to the articles of the company, entitled, on surrendering it for cancellation, to have his or her name entered as a member in the register of members, and the company is liable for any loss incurred by any person because of the company’s entering in its register the name of a bearer of a share warrant in respect of the shares or stock therein specified without the share warrant being surrendered and cancelled.
(6)The register of members may be kept either by making entries in bound books or by recording the particulars required in any other manner and, in the case of a person who has ceased to be a member, also by microfilm or microcard or by miniature photographic or other process which accurately reproduces and forms a durable medium for recording and reproducing those particulars.
(7)If the register of members is not kept by making entries in bound books, adequate precautions must be taken for guarding against falsification and facilitating its discovery.
(8)The register of members of an existing company kept under the repealed Act and continued under this Act in a language other than the official language is deemed to be sufficient compliance with subsection (1).

113. Index to register of members

(1)Every company having more than 50 members must, unless the register of members is in such form as to constitute in itself an index, keep an index of the names of the members of the company, and must, within 14 days after the date on which any alteration is made in the register of members, make any necessary alteration in the index.
(2)The index -(a)may be in the form of a card index;(b)is deemed to be a part of the register of members;(c)must in respect of each member, contain a sufficient indication to enable the account of that member in the register to be readily found.

114. Branch registers in foreign countries

(1)A company having a share capital may, if so authorised by its articles, cause to be kept in any foreign country a register of members resident in any foreign country (in this Part called a “branch register”).
(2)The company referred to subsection (1) must give to the Registrar notice on the prescribed form of the situation of the office where any branch register is kept, and of any change in that situation, and of the discontinuance of the office in the event of its being discontinued.

115. Provisions as to branch register

(1)A branch register is deemed to be part of the company’s register of members.
(2)A branch register must be kept in the same manner in which the register of members is by this Act required to be kept except that the notice referred to in section 121, must, for a reasonable period of time before the closing of the branch register, also be inserted in a newspaper circulating in the district where the branch register is kept.
(3)The company must transmit to its registered office a copy of every entry in its branch register as soon as may be after the entry is made and must cause to be kept at its registered office, duly entered up from time to time, a duplicate of its branch register, and the duplicate is, for the purposes of this Act, deemed to be part of the register of members.
(4)The company may discontinue to keep any branch register, and must, thereafter, transfer all entries in that register to some other branch register kept by the company or to the register of members.[The phrase “may discontinue to keep” should be “may discontinue keeping” to be grammatically correct.]
(5)Subject to this Act and to any law relating to stamp duty or estate duty, any company may by its articles make any provision in relation to the keeping of its branch registers.

116. Register of members to be evidence

The register of members of a company sufficient evidence of any matters directed or authorised to be entered therein by this Act.

117. Where register of members to be kept

(1)Subject to this section, the register of members of a company must be kept at its registered office.
(2)A company’s register of members may be kept at any office of the company in Namibia where the work of making it up is done, instead of at the company’s registered office, and where a company arranges with some other person (in this section called “agent”) for the making up of its register of members to be undertaken on behalf of the company by the agent, the register may be kept at the office of the agent in Namibia at which the work is done instead of at an office of the company.
(3)Any index of the names of the members of a company required to be kept in terms of section 113 must at all times be kept at the same place where the register of members is kept, and where the company keeps a branch register under section 114 the duplicate of the branch register required by section 115(3) to be kept at the company’s registered office must, notwithstanding anything to the contrary contained in section 115(3), at all times be kept at the same place where the company’s register of members is kept.
(4)Any company the register of members of which is not kept at its registered office must notify the Registrar in the prescribed form of the place where that register is kept and of any change in that place.
(5)The provisions of this section relating to the register of members of a company and the provisions of this Act relating to the inspection or production of that register or to the furnishing of copies of that register or any part of that register, do apply to any agent by whom that register is kept on behalf of a company in the same manner as they apply to the company.

118. Disposal of closed accounts in register

The parts of the register of members of a company pertaining to persons who have ceased to be members, in whatever manner kept under section 112, may be disposed of after the end of a period of 15 years after those persons have ceased to be members.

119. Offences in respect of register of members

Any company which or an agent referred to in section 117 who fails to comply with section 112, 113, 114, 115 or 117, commits an offence and is liable to a fine which does not exceed N$800.

120. Inspection of register of members

(1)The register of members of a company must, except when closed under this Act and subject to any reasonable restrictions which the company in a general meeting may impose, so that not less than two hours in each day be allowed for inspection during business hours, be open to inspection by any member or that member’s authorised agent free of charge and by any other person upon payment for each inspection of the prescribed amount or any lesser amount which the company may determine.
(2)Any person may apply to a company for a copy of or an extract from the register of members and the company must either furnish that copy or extract to the applicant at cost or any lesser amount which the company may determine for every page of the required copy or extract, or afford that person adequate facilities for making a copy or extract.
(3)If access to the register of members for the purposes contemplated in subsection (1) or (2) is refused or not granted or furnished within 14 days after a written request to that effect has been delivered to the company, the company, and every director or officer of the company who knowingly is a party to the refusal or failure, commits an offence and is liable to a fine which does not exceed N$800.
(4)In the case of refusal or failure as contemplated in subsection (3) the Court may, on application, by order compel an immediate inspection of the register and index concerned or direct that the copy or extract required be sent to the applicant requiring it and may direct that any costs of or incidental to the application be borne by the company or by any director or officer of the company responsible for the refusal or failure.
(5)This section does, with the necessary changes, apply also in respect of any register of transfers kept by a company.

121. Power to close register of members

A public company may, after giving notice of its intention to do so in the Gazette and in a newspaper circulating in the district in which its registered office is situated, close its register of members, or any part of it relating to holders of any class of shares, for a period or periods not exceeding in the aggregate 60 days in any year.

122. Rectification of register of members

(1)If -(a)the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or(b)default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member,the person concerned or the company or any member of the company, may apply to the Court for rectification of the register.
(2)The application referred to in subsection (1) must be made in accordance with the rules of Court or in any other manner which the Court may direct, and the Court may either refuse it or may order rectification of the register concerned and payment by the company, or by any director or officer of the company, of any damages sustained by any person concerned.
(3)On any application under this section the Court may decide any question relating to the title of any person who is a party to the application to have his or her name entered in or omitted from the register concerned, whether the question arises between members or alleged members or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for the rectification of the register.

Part 5 – Debentures


123. Creation and issue of debentures

A company, if so authorised by its memorandum or by its articles, may create and issue secured or unsecured debentures.

124. Security for debentures

(1)The binding of movable property as security for any debenture or debentures may be effected by -(a)a deed of pledge and the delivery of the movable property concerned to one or more debenture holders or to a trustee for debenture holders;(b)a notarial bond, collateral notarial bond or notarial surety bond executed in favour of one or more debenture holders or of a trustee for debenture holders; or(c)the pledging of incorporeal rights by means of cession of those rights, whether present or future, in due and proper form.
(2)The binding of a ship may be effected by a deed of mortgage in the form prescribed by the Merchant Shipping Act, 1951 (Act No. 57 of 1951), recorded in the register by the proper officer at the ship’s port of registry.
(3)The binding of immovable property as security for any debenture may be effected by a mortgage bond, collateral mortgage bond or surety bond executed in favour of one or more debenture holders or of a trustee for debenture holders.
(4)A wholly owned subsidiary is deemed to have and always to have had the power to mortgage any of its property as collateral security for the issue of debentures by its holding company.

125. Registration of bonds and annexure to bonds and deeds of pledge

(1)Any mortgage bond or notarial bond in pursuance of section 124 and any related subsequent transactions must, subject to the laws governing the registration of mortgage bonds and notarial bonds, be registered in a deeds registry.
(2)If a bond is in favour of one or more debenture holders, a certified copy of the debenture concerned must be annexed to that bond.
(3)If a bond is in favour of a trustee for debenture holders, certified copies of the debenture concerned and of the trust deed by which the trustee is appointed and in which the rights and duties of that trustee are defined, must be annexed to that bond.
(4)Certified copies of the debenture concerned and of any trust deed, if any, must be annexed to any deed of pledge where the debentures are secured by a pledge of movable property.

126. Debenture itself may be registered

If any debenture is executed before a notary public, it may, subject to section 125(1), be registered in a deeds registry in the same manner as if it were a notarial bond.

127. Issue of debentures at different dates and ranking of preference

In any bond or deed of pledge executed in favour of a trustee for debenture holders generally, provision may be made that the debentures thereby secured or to be secured may be issued from time to time and at different dates, as the company may determine, but all those debentures, whenever issued, must rank in preference concurrently with one another as from the date on which the pledge was constituted or the bond was registered.

128. Rights of debenture holders

(1)Every holder of a debenture secured by a pledge or a bond executed in favour of a trustee for debenture holders generally is, unless it is otherwise provided by the deed of pledge, bond or trust deed and copy of the debenture annexed to it, entitled to enforce his or her rights under that debenture as soon as it has been issued to him or her in the same manner as if he or she were himself or herself the pledgee or the holder of that bond.
(2)No notice of the cession of any debenture referred to in subsection (1) is necessary in order to confer on any cessionary the rights of the cedent.

129. Director or officer not to be trustee for debenture holders

A director or officer of a company cannot be a trustee for the holders of debentures of that company.

130. Liability of trustee for debenture holders

(1)Subject to this section, any provision contained in a trust deed for securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, is void in so far as it would have the effect of exempting a trustee from or indemnifying a trustee against liability for breach of trust where the trustee fails to show the degree of care and diligence required of him or her as trustee, having regard to the trust deed conferring on the trustee any powers, authorities or discretions.
(2)Subsection (1) does not have the effect of:(a)invalidating any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release or any provision enabling that release to be given -(i)with the consent of a majority of not less than three-fourths in value of the debenture holders present and voting in person or by proxy at a meeting summoned for the purpose; and(ii)with respect to specific acts or omissions or on the trustee dying or ceasing to act; or(b)invalidating any provision in force on 1 January 1953 so long as any person then entitled to the benefit of that provision or who is afterwards given the benefit thereof under subsection (3) remains a trustee under the relevant deed; or(c)depriving any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by that person while any provision referred to in paragraph (b) was in force.
(3)So long as any trustee under a trust deed remains entitled to the benefit of a provision saved by subsection (2)(b) or (c) the benefit of that provision may be given either -(a)to all trustees under the deed, present and future; or(b)to any named trustee or proposed trustee,by a resolution passed by a majority of not less than three-fourths in value of the debenture holders present in person or by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, at a meeting summoned for the purpose in any manner approved by the Court.

131. Power to re-issue redeemed debentures in certain cases

(1)Where a company has redeemed any debentures previously issued, not being debentures convertible into shares of the company, it, unless -(a)its articles or the conditions of issue of those debentures expressly otherwise provide; or(b)the debentures have been redeemed in pursuance of any obligation on the part of the company to redeem them, not being an obligation enforceable only by the person to whom the redeemed debentures were issued or that person’s successors in title,has and is deemed at all times to have had power to keep the debentures alive for the purpose of re-issue.
(2)Where a company has purported to exercise the power referred to in subsection (1), it has and is deemed at all times to have had power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place, and on that re-issue the person entitled to the debentures has and is deemed at all times to have had the same rights and priorities as if the debentures had not previously been issued.
(3)Where with the object of keeping debentures alive for the purpose of re-issue, they have been transferred to a nominee of the company, a transfer from that nominee is deemed to be a re-issue for the purposes of this section.
(4)Where a company had deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures are not deemed to have been redeemed because the account of the company has ceased to be in debit whilst the debentures remained so deposited.
(5)Nothing in this section prejudices any power reserved to a company by its debentures or securities, to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished.

132. Debenture to be described as secured or unsecured

A company must not issue a debenture, debenture certificate or prospectus relating to debentures unless the term “debenture” or some other term denoting a debenture used is qualified by the word “secured” or “unsecured”, as the case may be.

133. Form of debentures or debenture certificates

(1)A company must not issues a debenture or debenture certificate unless the conditions of the debenture concerned are stated on the debenture or on the debenture certificate.
(2)Any debenture or debenture certificate must be signed by one director of the company and an officer of the company duly authorised by the directors and must, in the case where the debenture concerned is not a bearer debenture and in the case of a debenture certificate, specify the debentures, other than bearer debentures, of that company held by the person named in that debenture or debenture certificate.
(3)Any signature referred to in subsection (2) may be affixed to a debenture or debenture certificate by autographic or mechanical means.
(4)Any debenture or debenture certificate issued in terms of this section is sufficient evidence of the title of the person named in that debenture or certificate or, in the case of a bearer debenture, of the bearer of the debenture.

134. Register of pledges and bonds

Subject to section 136, every company must keep at its registered office a register of pledges, cessions, notarial bonds, mortgage bonds and notarial debentures and enter in that register all pledges, cessions, notarial bonds, mortgage bonds and notarial debentures affecting property of the company, giving in each case a short description of the property pledged, ceded or bound, the amount of the pledge, cession or bond and the names and addresses of the persons in whose favour any pledge, cession, bond or debenture was executed or to whom any pledge has been delivered.

135. Register of debenture holders

Subject to section 136, every company must keep at its registered office a register of debenture holders showing the number of debentures issued and outstanding and whether or not they are payable to bearer and specifying the names and addresses of the holders, other than bearers.

136. Registers may be kept where made up

Section 117(2) and (4) relating to the keeping of a register of members and access to that register does, with the necessary changes, apply to the registers required to be kept under sections 134 and 135.

137. Inspection of registers and copies and extracts

(1)Section 120 in so far as it relates to the inspection of the register of members does, with the necessary changes, apply to the registers to be kept under sections 134 and 135 and section 120(3) does, with the necessary changes, apply to the furnishing of a copy of a trust deed referred to in subsection (2).
(2)A copy of any trust deed for securing any issue of debentures must be transmitted to every holder of those debentures at that holder’s request on payment of an amount equal to the cost of making that copy or a lesser amount as the company may determine.

138. Failure to keep registers

Any company which or any agent referred to in section 117(2), as applied by section 136, who fails to comply with section 134, 135 or 136, commits an offence and is liable to a fine which does not exceed N$800.

Part 6 – Forgery of Certificates as to Shares, Debentures and other Securities


139. Forgery, impersonation and unlawful engravings

Any person who -(a)with intent to defraud, forges, offers, utters or disposes of, knowing it to be forged or altered, any certificate as to shares, debentures or other securities as defined in section 141, any broker’s transfer form, certified broker’s form, share warrant or coupon issued in pursuance of this Act;(b)by means of any forged certificate, form, share warrant, coupon or other document, knowing it to be forged or altered, obtains or receives or endeavours to obtain or to receive any interest in any company or obtains or receives or endeavours to obtain or to receive any benefit, dividend or money payable in that respect;(c)by impersonating any owner of any interest in any company, including any share warrant or coupon issued in pursuance of this Act, obtains or endeavours to obtain any interest or share warrant or coupon or receives or endeavours to receive any benefit or money due to that owner, as if he or she were the true and lawful owner; or(d)without lawful authority or excuse -(i)engraves or makes on any plate, wood, stone, or other material any certificate as to any interest in a company or any share warrant or coupon or document purporting to be any interest, share warrant or coupon issued or made by any particular company in pursuance of this Act or to be a blank certificate, share warrant or coupon so issued or made or to be a part of that certificate, share warrant or coupon;(ii)uses plate, wood, stone or other material referred to in subparagraph (i) for the making or printing of any certificate, share warrant or coupon or document or of any blank certificate, share warrant or coupon or any part of it; or(iii)knowingly has in his or her custody or possession any plate, wood, stone or other material referred to in subparagraph (i),commits an offence and is liable to a fine which does not exceed N$40 000 or to be imprisoned for a period which does not exceed 10 years or to both the fine and imprisonment.

Part 7 – Transfer of Shares and Debentures


140. Registration of transfer of shares or interests

(1)Any transfer of shares of or interest in a company must be registered by the company by entering in its register of members the name and address of the transferee, the description of the shares, or interest transferred and the date of the registration of that transfer and, if it is a transfer of partly paid-up shares of or interest in an existing company, the amount outstanding on each share or interest, must be entered in that register.
(2)Notwithstanding anything in the articles of a company, it is not lawful for the company to register a transfer of shares of or interest in the company unless a proper instrument of transfer has been delivered to the company, but nothing in this section prejudices any power of the company to register as a member any person to whom the right to any share of the company has been transmitted by operation of law.
(3)On the application of the transfer of any share of or interest in a company, the company must enter in its register of members the matters specified in subsection (1) in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.
(4)The registration of any transfer of shares of or interest in a company is subject to the law relating to stamp duty and estate duty.

141. Definitions for purpose of transfer of listed shares or interests

In sections 142, 143, 144, 145 and 146, unless the context otherwise indicates -broker’s transfer form” means the form prescribed and any substantially similar form which is recognised by the law of the country in which the relevant transfer is registered;company” includes any issuer of a security;security” means any listed security as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);securities transfer form” means the form prescribed and any substantially similar form which is recognised by the law of the country in which the relevant transfer is registered.

142. Manner in which securities may be transferred

(1)Notwithstanding any law to the contrary or the memorandum or articles of any company or any contract relating to the transfer of any security -(a)a security may be transferred by means of a securities transfer form; or(b)a security may be transferred by means of a securities transfer form and a broker’s transfer form, but -(i)the broker’s transfer form must be prepared -(aa)by a stock-broker as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);(bb)by a banking institution registered, otherwise than provisionally, under the Banking Institutions Act, 1998 (Act No. 2 of 1998), and authorised in writing by the Registrar, at a branch designated by the Registrar;(cc)by a stock exchange in Namibia; or(dd)by a company authorised in writing by the Registrar and carrying on the business of a clearing-house for securities on that stock exchange,and must bear the signature of the stock-broker concerned or of a person in the service of the banking institution, stock exchange or company concerned or an authorised facsimile of that signature;(ii)the securities transfer form need not be completed with reference to the particulars relating to the transferee and the consideration passing;(iii)a separate broker’s transfer form may be used in respect of each person to whom transfer is passed.
(2)The execution of a securities transfer form or a broker’s transfer form need not be attested.
(3)Nothing in this section contained is to be construed as -(a)preventing the transfer of a security by means of any form authorised to be used under the repealed Act or any form prescribed at any time under this Act;(b)entitling the issuer of any security to refuse the registration of any person as the holder of that security on the ground that the transfer purports to be effected by means of a securities transfer form or a broker’s transfer form;(c)affecting the provisions of any law or of any memorandum or articles of any company or other body corporate or of any contract which deals with the manner in which any document is to be signed or sealed by or on behalf of any company or other body corporate; or(d)affecting the liability for the payment of any duty payable in respect of the registration of the transfer of any security.

143. Certification by company that security has been lodged for transfer

(1)If a company, by the signature of any person duly authorised to certify transfers of securities on behalf of the company, or of any officer or employee of a body corporate so authorised, endorses on any instrument of transfer referred to in section 142 and executed by or on behalf of the transferor, that the certificate relating to the security in question has been lodged with the company, the company is, for the purposes of this section, deemed to have certified that instrument.
(2)A certification is, for the purposes of this section, deemed to be signed if it purports to be authenticated by the signature or initials of any person whether by autographic or mechanical means, unless it is shown that the signature or initial is not that of a person authorised to certify transfer of securities on behalf of the company.
(3)The certification by a company in terms of subsection (1) must be taken as a representation by the company to any person acting on the faith of the certification that there have been lodged with the company the necessary documents relating to the securities mentioned in the instrument of transfer and that it appears from those documents that the title to the securities is held by the transferor named in the instrument of transfer.
(4)The representation referred to in subsection (3) must not be taken as a representation that the transferor named in the instrument of transfer in question has in fact any title to the security in question.
(5)Where any person acts on the faith of an incorrect certification negligently made by a company, that person is in the same position with reference to the company as if the certification had been fraudulently made.
(6)Subject to subsection (3), the delivery to any person of any instrument of transfer certified in terms of subsection (1) confers on that person the same rights as that person would have acquired before 1 January 1974 on the delivery to him or her of a certificate for the securities in question, and an instrument of transfer signed by the transferor in blank.
(7)The certificates of any securities in respect of which a company has certified any instrument of transfer as provided in this section, must on certification be cancelled by the company.

144. Duty of company with reference to person under contractual disability

(1)When a company records in its registers the transfer of any security, it is not be under any duty to satisfy itself that that transfer is within the contractual power of the transferor or transferee or that any legal requisite which obtains with reference to the ability of the transferor or transferee to transfer or to take transfer has been complied with or that any person signing any document relevant to the transfer on behalf of any person or company has been duly authorised to sign that document.
(2)Subsection (1) does not absolve any company from liability arising from any fraudulent act to which it is knowingly a party.

145. Warranty and indemnity by persons lodging documents of transfer

Any person who, for the purposes of the transfer of any security of any company, as principal or agent, lodges with that company any document relating to that transfer, is considered to have warranted that that document is genuine and that he or she, or when he or she is acting as agent, his or her principal jointly and severally with him or her, indemnifies that company against any claim made on it and against any loss or damage suffered by it arising out of a transfer registered by the company of the security referred to in that document.

146. Notice of refusal to register transfer and limitation of time for issue of certificates on transfer

(1)If a company refuses to register a transfer of any shares or debentures it must, within 30 days after the date on which the instrument of transfer was lodged with it, send to the transferor and the transferee notice of the refusal.
(2)Any company which fails to comply with subsection (1) commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.
(3)Every company must, unless it is entitled for any reason to refuse to register a transfer and does not register it, within 30 days after the date on which an instrument of transfer of any shares, debentures, debenture stock or securities is lodged with it, complete and have ready for delivery the certificates in respect of the shares, debentures, debenture stock or securities of which the transfer is to be registered.
(4)If default is made in complying with subsection (3), section 102(2) and (3) insofar as it relates to the issue and delivery of certificates for shares, debentures and debenture stock, does, with the necessary changes, apply.

147. Disclosure of beneficial interest in securities

(1)In this section, unless the context otherwise indicates -“beneficial interest”, in relation to a security, means -(a)the right or entitlement to receive any dividend or interest payable in respect of that security; or(b)the right to exercise or cause to be exercised, in the ordinary course, any or all of the voting, conversion, redemption or other rights attaching to that security,but does not include any interest held by a person in a unit trust or collective investment scheme in terms of the Unit Trusts Control Act, 1981 (Act No. 54 of 1981);“exchange” means a stock exchange in Namibia licensed in terms of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);security” means -(a)any listed security as defined in section 1 of the Stock Exchanges Control Act, 1985; and(b)any financial instrument which confers the right to convert that instrument into a listed security referred to in paragraph (a).
(2)A person is deemed to have a beneficial interest in a security if -(a)the spouse of the person married in community of property or the minor children of that person have a beneficial interest in that security;(b)that person acts in terms of an agreement with another person holding a beneficial interest and the agreement is in respect of the co-operation between them for the acquisition, disposal or any other matter relating to a beneficial interest in that security;(c)it is the holding company of a company that has a beneficial interest in that security;(d)a body corporate or trust has a beneficial interest in that security and -(i)the body corporate or its directors or the trustees are accustomed to act in accordance with the directions or instructions of that person; or(ii)that person is entitled to exercise or control the exercise of the majority of the voting rights at general meetings of the body corporate or trust; or(e)the security is held by virtue of any office by another person on that person’s behalf.
(3)Where securities of an issuer are registered in the name of a person, and that person (“the registered shareholder”) is not the holder of the beneficial interest in all of the securities held by the registered shareholder, the registered shareholder must, at the end of every three month period after the commencement of this Act, disclose to the issuer the identity of each person on whose behalf the registered shareholder holds securities and the number and class of securities issued by that issuer held on behalf of each of those persons.
(4)The information required in terms of subsection (3) must be furnished in writing within seven days of the end of the three month period referred to in that subsection.
(5)An issuer may by notice in writing require a person who is a registered shareholder of, or whom the issuer knows or has reasonable cause to believe to have a beneficial interest in, securities issued by that issuer, to confirm or deny whether or not that person holds a beneficial interest in those securities, and if the security is held for another person, the person to whom the request is made must disclose to the issuer the identity of the person on whose behalf that security is held.
(6)The registered shareholder may levy a fee for the furnishing of information requested which has been prescribed by the Minister.
(7)A notice under subsection (5) may, in addition, require the addressee to give particulars of the extent of the beneficial interest held during the three years preceding the date of the notice.
(8)The information required in terms of subsections (5) and (7) must be furnished within a reasonable time specified in the notice, but not later than 14 days from the date of receipt of the notice.
(9)All issuers of securities must establish and maintain a register of the disclosures made in terms of this section and must publish in their annual financial statements a list of the persons who hold beneficial interests equal to or in excess of five per cent of the total number of securities of that class issued by the issuer together with the extent of those beneficial interests.
(10)The register referred to in subsection (9) must be open to inspection as if it were a register contemplated in section 120.
(11)A person who fails to comply with this section or to make a disclosure as required by this section or who makes a false disclosure, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

Chapter 6
OFFERING OF SHARES AND PROSPECTUS


Part 1 – Interpretation


148. Definitions for purposes of offering of shares and prospectus

(1)In this Chapter, unless the context otherwise indicates -company” includes an external company;expert” means a geologist, engineer, architect, quantity surveyor, valuer, accountant, auditor, or any person holding himself or herself out to be such and any other person who professes to have extensive knowledge or experience or to exercise special skill which gives or implies authority to a statement made by him or her;letter of allocation” means any document conferring a right to subscribe for shares in terms of a rights offer;offer”, in relation to shares, means an offer made in any way, including by provisional allotment or allocation, for the subscription for or sale of any shares, and includes an invitation to subscribe for or purchase any shares;offer to the public” and any reference to offering shares to the public means any offer to the public and includes an offer of shares to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus concerned or in any other manner;promoter”, in relation to civil and criminal liability in respect of an untrue statement in a prospectus, means a person who was a party to the preparation of the prospectus or of the portion of it, containing the untrue statement but does not include any person by reason of that person acting in a professional capacity for persons engaged in procuring the formation of the company or preparing that prospectus;rights offer” means an offer for subscription, with a right to renounce in favour of other persons, to those members or debenture holders of a company who are not excluded from that offer under subsection (2), for any shares of that company or any other company, where a stock exchange within Namibia or a stock exchange recognised by the Board for the purposes of this definition by notice in the Gazette, has granted or has agreed to grant a listing for the shares which are the subject of the offer;untrue statement”, in relation to a prospectus or portion of it, includes -(a)a statement which is misleading in the form and context in which it is included and a statement is deemed to be included in a prospectus if it is contained in any report or memorandum which appears on the face of the prospectus or which is by reference incorporated or is attached to or accompanies the prospectus on registration; and(b)an omission from a prospectus of any matter, whether that matter is required to be included by this Act or not, where that omission is calculated to mislead, and that prospectus is deemed, in respect of that omission, to be a prospectus in which an untrue statement is included.
(2)Notwithstanding anything contained in the articles of a company, the company may, with the written approval of the Registrar and subject to any conditions which the Registrar may determine, exclude any category of members or debenture holders of the company not resident within Namibia from any rights offer.
(3)An application for a written approval referred to in subsection (2) must be accompanied by the prescribed fee.

Part 2 – Offers to Public


149. Restrictions on offers to public

(1)A person must not offer any shares to the public otherwise than in accordance with this Act.
(2)A person must not offer to the public any shares of any company or body corporate which is not a company or which has not been exempted from this subsection by the Registrar by notice in the Gazette.
(3)Any person who contravenes this section, and, if that person is a company, any director or officer of that company who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

150. Offers not being offers to public

An offer of shares must not be construed as an offer to the public -(a)if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the shares becoming available to persons other than those to whom the offer was made;(b)if it is an offer for subscription to the members or debenture holders of the company without the right to renounce any right to take up those shares in favour of other persons;(c)if that offer can properly be regarded, in all the circumstances, as being a domestic concern of the persons making and receiving it; or(d)if it is a rights offer.

151. No offer for subscription to public without prospectus

(1)A person must not make any offer to the public for the subscription for shares unless the offer is accompanied by a prospectus complying with the requirements of this Act and registered in the Registration Office, and a person must not issue a prospectus which has not been so registered.
(2)Any person who contravenes this section and, if that person is a company, any director or officer of that company who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

152. Approval by stock exchange requirement for letters of allocation

(1)A person must not issue, distribute or deliver or cause to be issued, distributed or delivered a letter of allocation unless it is accompanied by documents which are required and have been approved by the stock exchange concerned.
(2)Any person who contravenes this section and, if that person is a company, any director or officer of that company who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

153. Rights offers

(1)A company desiring to issue a letter of allocation must lodge, with the Registrar for registration, a copy of that letter together with the prescribed fee and a copy of every document referred to in section 152 and every copy must be certified, by not less than two directors of the company, as a true copy of the original approved by the stock exchange concerned.
(2)Every copy referred to in subsection (1) must be accompanied by a copy of any contract referred to in that subsection and, if that contract is not in the official language, by a translation into the official language.
(3)As soon as the Registrar has registered the documents referred to in subsection (1), he or she must give notice of the registration to the company concerned or the person who lodged them on behalf of the company.
(4)Every letter of allocation which is issued must -(a)state on the face of it that a copy, together with copies of all other documents referred to in subsections (1) and (2), have been registered as required by this section; and(b)be accompanied by a copy of every document lodged in terms of subsection (1).
(5)Subsection (4) does not apply to any letter of allocation issued in connection with a renunciation of part of the rights to subscribe in terms of the rights offer.
(6)Sections 159, relating to the inclusion of a statement in a prospectus by an expert with the consent of the expert, 161(1), and (4), relating to the inclusion in a prospectus of a statement that issued shares are being underwritten and criminal liability relating to that statement, 162(1), (4) and (5), relating to the signing of prospectuses, 166, relating to the invalidity of conditions waiving the application of this Act to any transaction, 168, relating to the civil liability of directors for untrue statements contained in a prospectus, 169, relating to the civil liability of experts for untrue statements in prospectus, 170, relating to the criminal liability for untrue statements in prospectus and 171, relating to the retention of common law liability for untrue statements do, with the necessary changes, apply to a rights offer and all documents issued in connection therewith.
(7)Any person who contravenes this section, and if that person is a company, any director and officer of that company who knowingly is a party to that contravention, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

154. No offer for sale to public without prospectus

(1)A person must not make any offer to the public for the sale of any shares -(a)which have been, or have been agreed to be, allotted by the company concerned with a view to all or any of them being offered to the public; or(b)in respect of which it has been made known in any way at or about the time of, and in connection with, that offer, that the company concerned has applied or intends to apply for their listing by a stock exchange in Namibia or elsewhere,unless it is accompanied by a prospectus which complies with the requirements of this Act and registered in the Registration Office, and a person must not issue a prospectus which has not been so registered.
(2)For the purposes of subsection (1)(a) it is, unless the contrary is proved, sufficient evidence that an allotment of, or an agreement to allot, shares was made with a view to the shares being offered for sale to the public if it is shown that an offer for sale to the public in respect of those shares or any of them was made within 18 months after the allotment or the agreement to allot.
(3)Any person who contravenes subsection (1) and, if that a person is a company, any director or officer of that company who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

155. Application form for shares to be attached to prospectus

(1)A person must not issue, distribute or deliver or cause to be issued, distributed or delivered, any form of application in respect of shares of a company, unless the form -(a)is attached to a prospectus a copy of which has been registered in the Registration Office; and(b)bears on the face of it the date of registration of the prospectus.
(2)Subsection (1) does not apply if it is shown that the form of application was issued either -(a)in connection with an invitation made in good faith to enter into an underwriting agreement with respect to the shares; or(b)in relation to shares which were not offered to the public.
(3)Any person who contravenes -(a)subsection (1)(a) commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment; and(b)subsection (1)(b) commits an offence and is liable to a fine which does not exceed N$400.

Part 3 – Prospectus


156. Matters to be stated in prospectus

(1)Every prospectus issued in terms of this Act must contain a fair representation of the state of the affairs of the company, the shares of which are being offered and must state at least the matters specified in, and set out the reports referred to in, Part 1 and Part 2 of Schedule 3.
(2)If the intended offer relates to shares which are or are to be in all respects uniform with existing shares previously issued and a stock exchange within Namibia has not in respect of those first-mentioned shares granted or agreed to grant a listing, and that offer is made only to existing members or debenture holders of a company with the right to renounce in favour of other persons, the prospectus may state, instead of the matters referred to in subsection (1), at least the matters specified in Part 3 of Schedule 3.
(3)The information referred to in subsection (1) and (2) must -(a)be set out in print or type;(b)not be less conspicuous than that in which the additional matter of the prospectus is printed or typed;(c)be set out in separate paragraphs under the headings provided in Schedule 3 and in accordance with the instructions contained in Part 4 of that Schedule.
(4)Every prospectus in respect of an offer for the sale of shares under section 154(1)(a) must state, in addition to the matters specified in subsection (1) and (2) -(a)the net amount of the consideration received or to be received by the company in respect of the shares to which the offer relates; and(b)the place and time at which a contract under which the shares have been or are to be allotted to the issuer of the prospectus may be inspected.
(5)Any person who knowingly is a party to the issue of a prospectus in contravention of this section commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

157. Statement on face of issued prospectus

(1)Every prospectus issued must, on the face of it -(a)state that a copy of it has been registered as required by this Act; and(b)specify or refer to statements included therein specifying any documents required by sections 159 and 160 to be endorsed on or attached to or to accompany a prospectus when lodged for registration.
(2)Any person who knowingly is a party to the issue of a prospectus in contravention of subsection (1) commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

158. Consent of person named as director

A person must not be named as a director or proposed director of a company in any prospectus relating to shares of that company unless, at any time prior to the registration of that prospectus -(a)his or her written consent, in the prescribed form, to act as that director has been lodged with the company; and(b)the return referred to in section 224(2) reflecting the relevant particulars in regard to that person, has been lodged with the Registrar.

159. Consent by experts and others

(1)A prospectus which includes any statement or reference to any statement purporting to be made by an expert, must not be registered by the Registrar unless -(a)the expert has given, and has not, before the lodging of a copy of the prospectus for registration in the Registration Office, withdrawn his or her written consent to the issue with the statement or reference included in the form and context in which it is included;(b)a statement that the expert has given and has not so withdrawn his or her consent appears in the prospectus; and(c)that written consent is endorsed on or attached to the copy of the prospectus lodged for registration in the Registration Office.
(2)The Registrar must not register any prospectus which names any person as the auditor, legal practitioner, banker or broker of a company unless it is accompanied by the consent in writing of the person so named to act in the capacity stated and to his or her name being stated in the prospectus.

160. Contracts and translations to be attached to prospectus

(1)The Registrar must not register a prospectus unless there is attached to it a copy of any material contract required by Schedule 3 to be stated in a prospectus or, in the case of that contract not reduced to writing, a memorandum giving full particulars of the contract.
(2)There must be attached to a contract referred to in subsection (1) -(a)if it is in a language other than the official language, a certified translation into the official language; or(b)if it is partly in a language other than the official language, a copy embodying a certified translation of the part which is in another language.

161. Where issue is underwritten

(1)The Registrar must not register a prospectus containing a statement to the effect that the whole or any portion of the issue of the shares offered to the public, has been or is being underwritten until there is lodged with the Registrar a copy of the underwriting contract and a sworn declaration by the person named as underwriter, or, if that person is a company, by each of two directors of that company, or if that company has only one director, by that director, that to the best of the deponent’s knowledge and belief the underwriter is and will be in a position to carry out that underwriter’s obligations even if no shares are being applied for.
(2)If an offer of shares is made in respect of which no prospectus is required by this Act, the copy of the contract and sworn declaration referred to in subsection (1) must be lodged with the Registrar not later than the date of the proposed offer of shares.
(3)Any company which contravenes subsection (2), and any person or company and every director or officer of that company who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(4)If an underwriter is unable, when requested, to carry out that underwriter’s obligations under the underwriting contract, any person who has in connection with that contract made a sworn declaration as required by subsection (1) commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment, unless that person proves that when the declaration was made he or she believed and had reasonable grounds for believing that the underwriter was or would be able to carry out those obligations.

162. Signing, date and date of issue, of prospectus

(1)A prospectus in respect of an offer for the subscription of shares of a company must be signed by every person named in it as a director of the company or by the agent of that person authorised by that person in writing to sign on his or her behalf.
(2)A prospectus in respect of any other offer of shares must be signed by every person making that offer or by the agent of that person authorised by that person in writing to sign on his or her behalf or if the person making the offer is a company or firm, by two directors of that company, or if that company has only one director, by that director, or by not less than one-half of the partners in that firm or by an agent authorised by a director or partner in writing to sign on his or her behalf.
(3)Where a prospectus has been signed by or on behalf of directors of a company or partners in a firm as provided in subsection (2), every director of that company or partner in that firm is deemed to have authorised the issue of that prospectus notwithstanding that he or she has not signed it, unless he or she proves that it was issued without his or her knowledge, authority or consent.
(4)Every signature to a prospectus must be dated and the latest of those dates is deemed to be the date of the prospectus.
(5)The date of registration of any prospectus in the Registration Office must, unless the contrary is proved, be taken as the date of the issue of the prospectus.

163. Registration of prospectus

(1)The Registrar must not register a prospectus unless the requirements of this Chapter have been complied with and the prospectus is lodged with the Registrar for registration, together with any documents which are prescribed in this Chapter, within 14 days of the date of the prospectus.
(2)As soon as the Registrar has registered the prospectus, the Registrar must send notice of the registration to the person lodging the prospectus or to the company.

164. Time limit for issue of prospectus

(1)A company or any person must not issue a prospectus more than three months after the date of the registration, and if a prospectus is so issued, it is deemed to be a prospectus which has not been registered.
(2)A person who knowingly is a party to the issue of a prospectus in contravention of subsection (1), commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

165. Advertisement as to prospectus

(1)Every newspaper or other advertisement whatsoever offering or calling attention to an offer or intended offer of shares of a company to the public is deemed to be a prospectus issued by the person responsible for publishing or disseminating the advertisement and all the legal requirements as to the contents of prospectuses and as to the liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses apply to the advertisement, unless it contains no more information than the following -(a)the number and description of the shares concerned;(b)the name and date of registration of the company;(c)the general nature of the business or proposed business actually carried on or to be carried on by the company;(d)the names and addresses of the directors;(e)the places at and times during which copies of the prospectus may be obtained;(f)where all the shares which are the subject of an offer are intended to be offered only to the members of a company or debenture holders, as the case may be, with or without the right to renounce in favour of other persons -(i)the issue price of those shares;(ii)the ratio in which those shares will be offered to the members or debenture holders entitled to accept the offer; and(iii)the last day on which members or debenture holders must register as such in order to be entitled to receive the offer;(g)the last day for subscribing.
(2)No statement that, or to the effect that, the advertisement referred to in subsection (1) is not a prospectus prevents the operation of this section.

166. Waiver of requirements of this Chapter void

Any condition requiring any applicant for shares to waive compliance with any requirements of this Chapter or purporting to affect him or her with notice of any contract, document or matter not specifically referred to in the prospectus, is void.

167. Variation of contract mentioned in prospectus

A company must not, within one year after the date of registration of a prospectus, vary or agree to the variation of the terms of a contract referred to in that prospectus unless the variation in specific terms is authorised or ratified by a general meeting of members of the company of which notice has been given on a date not earlier than six months after the date of registration of the prospectus.

168. Liability for untrue statements in prospectus

(1)Where shares are offered to the public for subscription in pursuance of a prospectus, every person -(a)who is, at the time of the issue of the prospectus, a director of the company;(b)who becomes a director at any time between the issue of the prospectus and the holding of the first general meeting of the company at which directors are elected or appointed;(c)who with his or her authority is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time;(d)who is a promoter of the company; or(e)who has authorised the issue of the prospectus,is liable to pay compensation to all persons who have acquired any shares on the faith of the prospectus for the loss or damage they have sustained because of any untrue statement in the prospectus, or in any report or memorandum appearing on the face of, or issued with, or by reference incorporated in the prospectus.
(2)Where shares are offered to the public for sale in pursuance of a prospectus, every person -(a)who has made that offer;(b)who under section 162(3) is deemed to have authorised the issue of that prospectus; or(c)who is in relation to the company the shares of which are so offered, a person referred to in subsection (1),is liable to pay compensation to all persons who have acquired any shares on the faith of the prospectus for the loss or damage they have sustained because of any untrue statement in the prospectus, or in any report or memorandum appearing on the face of, or issued with, or by reference incorporated in the prospectus.
(3)The liability provided for in subsection (1) or (2) does not attach to any person if it is proved -(a)with respect to any untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that he or she had reasonable ground to believe, and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, believe that the statement was true;(b)with respect to any untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from the report or valuation of an expert, that it fairly represented the statement or was a correct and fair copy of or extract from the report or valuation and that the defendant had reasonable ground to believe and did up to the time of the issue of the prospectus believe that the person making the statement was competent to make it, and that that person had given the consent required by this Act to the issue of the prospectus or the making of the offer and had not withdrawn that consent before lodgment of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment or before the acceptance of the offer;(c)with respect to any untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official statement, that it was a correct and fair representation of the statement or copy of or extract from the document; or(d)that -(i)having consented to become a director of the company, he or she withdrew his or her consent before the issue of the prospectus and that it was issued without his or her authority or consent; or(ii)the prospectus was issued without his or her knowledge or consent and that on becoming aware of its issue, he or she immediately gave reasonable public notice that it was issued without his or her knowledge or consent; or(iii)after the issue of the prospectus and before allotment or acceptance he or she, on becoming aware of any untrue statement, withdrew his or her consent and gave reasonable public notice of the withdrawal and of the reason for the withdrawal.
(4)Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director, and he or she has not consented to become a director, or has withdrawn his or her consent before the issue of the prospectus and has not authorised or consented to the issue of the prospectus, the directors of the company, other than those without whose knowledge or consent the prospectus was issued, and any other person who issued it or authorised the issue, are liable to indemnify the person named as director of the company, against all damages, costs and expenses for which he or she is liable because of his or her name having been so stated in the prospectus or in defending himself or herself against any action or legal proceedings brought against him or her in respect of the matter.
(5)Every person who because of his or her being a director or having been named as a director, or having agreed to become a director, or of his or her having authorised the issue of the prospectus or of his or her having become a director between the issue of the prospectus and the holding of the first general meeting of the company at which directors are elected or appointed, has satisfied any liability to make payment under this section, may recover a contribution, as in cases of contract, from any other person, who, if sued separately, would have been liable to make the same payment, unless the person who has satisfied that liability was, and that other person was not, guilty of fraudulent misrepresentation.

169. Liability of experts and others

(1)Where the consent of any person is required under section 159 and he or she has given that consent, that person is not, because of his or her having given it, liable as a person who has authorised the issue of the prospectus either -(a)under section 168(1) or (2) to compensate persons subscribing or purchasing on the faith of the prospectus, except in respect of any untrue statement purporting to be made by him or her as an expert; or(b)under section 168(4) to indemnify any person against liability under section 168(1) or (2).
(2)The person referred to in subsection (1) is, in respect of any untrue statement purporting to be made by him or her as an expert, liable under section 168(1) or (2), unless one of the following things, is proved, namely -(a)that having given his or her consent he or she withdrew it in writing before lodgment of a copy of the prospectus for registration;(b)that after lodgment of a copy of the prospectus for registration and before allotment to, or before acceptance by, the person complaining, he or she, on becoming aware of the untrue statement, withdrew his or her consent in writing and gave reasonable public notice of the withdrawal and of the reason for withdrawal; or(c)that he or she was competent to make the statement and that he or she had reasonable grounds to believe and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, believe that the statement was true.
(3)Where under section 159 the consent of any person is required to the issue of a prospectus, and that person either has not given that consent or has withdrawn it before the issue of the prospectus, that person is entitled to indemnity under section 168 as if he or she had without his or her consent been named in the prospectus as a director of the company.

170. Offences in respect of untrue statements in prospectus

(1)Where a prospectus contains a statement which is untrue, every person referred to in section 168(1) or (2) does, subject to subsections (3) and (4), commit an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.
(2)Where there is published with or as part of a prospectus a report of any expert or an extract from that report and the report or extract contains a statement which is untrue, the expert does, provided that expert has given his or her consent to the inclusion of that statement in the prospectus in the form and context in which it appears, and subject to subsections (3) and (4), commit an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.
(3)In any prosecution under this section of any person it is a defence if it is proved either that the untrue statement was immaterial or -(a)with respect to any untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that the person charged had, after reasonable investigation, reasonable ground to believe and did up to the time of the allotment of the shares or acceptance of the offer believe that the statement was true, and that there was no omission to state any material fact necessary to make the statement as set out not misleading;(b)with respect to any untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that the person charged had reasonable ground to believe and did believe that the person making the report or valuation was competent to make it;(c)with respect to any untrue statement purporting to be a statement made by an ignore or contained in what purports to be a copy of or extract from a public official document, that it was a correct and fair representation of the statement or copy of or extract from the document.
(4)In any prosecution under this section of any person it is a defence if it is proved -(a)that having consented to become a director of the company he or she withdrew his or her consent before the issue of the prospectus, and that it was issued without his or her authority or consent;(b)that the prospectus was issued without his or her knowledge or consent, and that on becoming aware of its issue he or she immediately gave reasonable public notice that it was issued without his or her knowledge or consent; or(c)that after the issue of the prospectus and before allotment or acceptance, he or she, on becoming aware of any untrue statement, withdrew his or her consent and gave reasonable public notice of the withdrawal, and of the reason for the withdrawal.

171. No diminution of liability under any other law or common law

Nothing in this Chapter contained limits or diminishes any liability which any person may incur under this Act apart from this Chapter, or under any other law, or under the common law.

Part 4 – Allotment and Acceptance after Offer to Public


172. Time limit as to allotment or acceptance

(1)A company must not allot any shares offered to the public for subscription and an offeror must not accept any offer to purchase any shares offered for sale to the public unless the application concerned is received by the company or the offeror, as the case may be, before the expiry of a period of four months after the date of registration of the prospectus.
(2)Any director or officer of a company or any offeror or, if the offeror is a company, any director or officer of that company who knowingly contravenes or permits the contravention of subsection (1) with respect to allotment or acceptance of an offer commits an offence and is liable to a fine which does not exceed N$2 000.

173. No allotment unless minimum subscription received

(1)Shares must not be allotted on any application made in pursuance of a prospectus for subscription unless the amount stated in that prospectus as the minimum amount which in the opinion of the directors of the company concerned must be raised by the issue of share capital in order to provide for the matters specified in paragraph 21 of Schedule 3 to this Act has been subscribed and the amount so stated has been paid to and received by the company.
(2)For the purposes of subsection (1) -(a)an amount stated in any cheque received by the company must not be taken to have been paid to and received by it until the amount of the cheque has been unconditionally credited to its account with its bankers; and(b)any amount paid to and received by the company must be reduced by the amount of any money, bill, promissory note or cheque which it has at any time delivered to the payer otherwise than in discharge of a genuine debt due to that payer by the company.
(3)The amount so stated in the prospectus must be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as “the minimum subscription”.
(4)The amount paid on application must be set apart by the directors as a separate fund in a separate account with a banking institution registered under the Banking Institutions Act, 1998 (Act No. 2 of 1998), and is not be available for the purposes of the company or for the satisfaction of its debts until the minimum subscription has been made up.
(5)If the requirements provided for in subsection (1) have not been complied with at the end of 60 days after the issue of the prospectus, all moneys received from applicants for shares must, as soon as is reasonably possible, be repaid to them without interest, and, if that money is not so repaid within a period of 80 days after the issue of the prospectus, the directors and officers of the company are jointly and severally liable to repay that money with interest at the rate of six per cent per annum or any other rate which has been determined by the Board by notice in the Gazette reckoned from the end of the period of 80 days.
(6)It is a defence to any claim under subsection (5), or any charge under subsection (7), to prove that the default which is the subject of the claim or charge, was not due to any misconduct or negligence on the part of the defendant or the accused.
(7)Any director or officer of the company who knowingly contravenes or permits the contravention of this section, does, in addition to any other liability incurred under subsection (5), commit an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.

174. No allotment or acceptance if application form not attached to prospectus

(1)A company must not allot any shares offered to the public for subscription and an offeror must not accept any offer to purchase any shares offered for sale to the public unless the subscription or offer has been made on an application form which has been attached to a prospectus as required by section 155 or unless it is shown that the applicant, at the time of the application concerned, was in fact in possession of a copy of the prospectus or was aware of its contents.
(2)Any director or officer of a company or any offeror or if the offeror is a company, any director or officer of that company who knowingly contravenes or permits the contravention of subsection (1), commits an offence and is liable to a fine which does not exceed N$2 000.

175. Voidable allotment

(1)An allotment made by a company to an applicant, or the acceptance of an offer made by an applicant, in contravention of section 172, 173 or 174 is voidable at the instance of the applicant concerned within 30 days after the date of allotment or acceptance, and not later.
(2)Subsection (1) applies notwithstanding that the company concerned may be in the course of being wound up.
(3)When an allotment or an acceptance is declared void under subsection (1), every director and every officer of the company concerned or the offeror, and if the offeror is a company, every director and every officer of the company, becomes liable to compensate the company concerned and the applicant for any loss, damages or costs which that company or the applicant has sustained or incurred.
(4)Proceedings to recover any loss, damages or costs referred to in subsection (3) must not be commenced after the expiry of two years from the date of the relevant allotment or acceptance.

176. Minimum interval before allotment or acceptance

(1)Allotment of shares or acceptance of an offer in respect of shares of a company must not be made in pursuance of a prospectus, and proceedings must not be taken on applications made in pursuance of a prospectus, until the beginning of the third day after that on which the prospectus is first issued or any later time which is specified in the prospectus.
(2)The beginning of the third day or the later time is in this Chapter referred to as “the time of the opening of the subscription lists or offer”.
(3)For the purposes of subsection (1), the reference to the day on which the prospectus is first issued must be construed as a reference to the day on which it is first issued as a newspaper advertisement, or, if it is not issued as a newspaper advertisement before the third day after that on which it is first issued in any other manner, as a reference to the day on which it is first issued in any other manner.
(4)The validity of an allotment or acceptance is not affected by any contravention of subsection (1), but, if there is any contravention, the company concerned, and every director and every officer of the company and the offeror, and, if the offeror is a company, every director and every officer who knowingly is a party to the contravention, commits an offence and is liable to a fine which does not exceed N$4 000.
(5)An application for shares of a company which is made in pursuance of a prospectus is not revocable before the expiry of the third day after the time of the opening of the subscription lists or offer or the giving before the expiry of the said third day, of a public notice under section 168 having the effect of excluding or limiting the liability under that section of the person giving that notice.
(6)In reckoning any number of days for the purposes of this section, Saturdays, Sundays and public holidays must not be taken into account.

177. Conditional allotment if prospectus states shares to be listed by stock exchange

(1)A prospectus containing a statement to the effect that application has been or will be made for permission for the shares offered thereby to be dealt in on a stock exchange must not be issued unless that application has been made in accordance with the requirements of the stock exchange concerned on or before the date of issue of the prospectus and it names the particular stock exchange to which the application has been made.
(2)Any allotment of shares in pursuance of a prospectus referred to in subsection (1) is subject to the condition that the application for permission for those shares to be dealt in on the stock exchange concerned, is granted or that an appeal against a refusal of that application, is upheld.
(3)Any money received in respect of applications for shares in pursuance of a prospectus referred to in subsection (1) must be set apart by the directors of the company as a separate fund in a separate account with a banking institution registered under the Banking Institutions Act, 1998 (Act No. 2 of 1998), and is not be available for the purposes of the company or for the satisfaction of its debts so long as the company may in terms of subsection (4) become liable for the repayment.
(4)If any issue of shares in pursuance of a prospectus referred to in subsection (1) is oversubscribed, the directors of the company must, as soon as is reasonably possible, repay the amounts oversubscribed to the applicants.
(5)Where the application for permission to deal in the shares on a stock exchange has been refused and no appeal has been noted or when an appeal against the refusal of an application has been dismissed or an appeal against the granting of an application has been upheld, the company must, within 14 days, repay all moneys received in respect of applications made in pursuance of the prospectus together with any interest earned, if any.
(6)If the money contemplated in subsection (5) is not repaid within 14 days after the company becomes liable to repay it, the directors and officers of the company, together with the company, are jointly and severally liable to repay that money with interest at the rate of six per cent or any other rate which has been determined by the Board by notice in the Gazette per annum from the expiry of the 14th day.
(7)If subsection (1), (3) or (5) is contravened or not complied with, the company, and every director or officer of the company who knowingly is a party to that contravention or non-compliance, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.
(8)It is a defence to any claim under subsection (6) or any charge under subsection (7) to prove that the default which is the subject of the claim or the contravention or non-compliance was not due to misconduct or negligence on the part of the defendant or the accused.
(9)This section -(a)does in relation to any shares agreed to be taken by a person underwriting an offer of the shares by a prospectus, have effect as if that person had applied in pursuance of the prospectus;(b)must, in the case of a prospectus offering shares for sale, be construed, except in so far as the context otherwise indicates -(i)as if any reference to the allotment of shares were a reference to the acceptance of the offer;(ii)subject to subparagraph (iii), as if any reference to a company by which a prospectus has been issued, or a director or officer, were a reference to the person by whom the shares have been offered; and(iii)where the person by whom the shares have been offered is a company, as if the reference to a director or officer of a company by which a prospectus has been issued, were a reference to a director or officer of the company by which the shares have been offered for sale.
(10)In calculating any number of days for the purposes of this section, Saturdays, Sundays and public holidays must not be taken into account.

Chapter 7
ADMINISTRATION OF COMPANIES


Part 1 – General


178. Postal address and registered office of company

(1)Every company, including every external company, must have in Namibia -(a)a postal address to which all communications and notices may be addressed; and(b)a registered office to which all communications and notices may be addressed and at which all process may be served.
(2)On incorporation of a company, notice of the situation of the registered office and of the postal address must be given to the Registrar.
(3)At least 21 days’ notice of any intended change in the situation of the registered office or of the postal address must be given to the Registrar, but, if less than 21 days’ notice of an intended change in the situation of the registered office or postal address is given, the Registrar may determine the date on which the change will take effect.
(4)Particulars of which notice was given to the Registrar in terms of subsection (2) or (3), must be recorded by the Registrar, and the Registrar must notify the company of the date on which the particulars of any change referred to in subsection (3) have been recorded by him or her.
(5)A change in the situation of the registered office or of the postal address of a company does not, for the purposes of this Act, take effect unless the Registrar has recorded the particulars of the change.
(6)Any notice referred to in this section must be in the prescribed form.
(7)A company which fails to comply with any requirement of this section, commits an offence and is liable to a fine which does not exceed N$2 000.

179. Names of directors to be stated on certain documents of company

(1)A company must not issue or send to any person in Namibia any trade catalogue, trade circular or business letter bearing the company’s name unless there is stated on it in respect of every director -(a)his or her present forenames, or the initials, and present surname;(b)any former forenames and surnames not being those referred to in section 223(3);(c)if not Namibian, his or her nationality.
(2)Any company which fails to comply with any provision of subsection (1), commits an offence and is liable to a fine which does not exceed N$200.

180. Certificate to commence business

(1)A company having a share capital must not commence business or exercise any borrowing powers unless and until the Registrar has under this section issued under his or her hand and seal a certificate entitling the company to commence business.
(2)In the case of a public company which has issued a prospectus for the subscription for shares before a certificate to commence business has been issued, the certificate to commence business must be issued on the application of the company in the prescribed manner accompanied by an affidavit by a director or secretary of the company to the effect -(a)that every director has paid to the company for each of the shares taken or contracted to be taken by him or her, and for which he or she is liable to pay in cash, the full subscription price;(b)that shares paid for in cash have been allotted to a total amount of not less than the minimum subscription stated in the prospectus; and(c)that no money is or may become repayable to applicants for any shares which have been offered to the public because of the refusal of an application for permission for the shares to be dealt in on a stock exchange or the dismissal of an appeal against that refusal,and accompanied by the return prescribed by section 224(2) and proof of payment of the annual duty referred to in section 182.
(3)In the case of every company having a share capital, a certificate to commence business must be issued on the application of the company in the prescribed manner accompanied by -(a)a statement of the opinion of each director to the effect that the capital of the company is adequate for the purposes of the company and its business or, if he or she is of the opinion that it is inadequate, the reasons and the manner in which and the sources from which the company is to be financed and the extent of the financing;(b)the return referred to in section 224(2);(c)proof of payment of the annual duty referred to in section 182;(d)the consent to act as auditor, if not already lodged.
(4)Any certificate to commence business issued by the Registrar is conclusive evidence that the company is entitled to commence business.
(5)Any contract made by a company before the date on which it is entitled to commence business is provisional only and becomes binding on the company on that date and not earlier.
(6)Until a certificate entitling a company to commence business is issued, the directors and the subscribers of the memorandum of the company are jointly and severally liable for all the debts and liabilities arising from any business conducted by the company in contravention of subsection (1).
(7)Nothing in this section prevents the simultaneous offer for subscription or allotment of any shares and debentures of the company or the receipt of any money payable on application for debentures.
(8)If a company contravenes subsection (1), every person who is responsible for or knowingly is a party to the contravention does, in addition to any other liability incurred, commits an offence and is liable to a fine which does not exceed N$400 for every day during which the contravention continues.
(9)This section does not apply to an existing company which was entitled, under the repealed Act, to commence business or exercise borrowing powers.

181. Annual return

(1)Every company having a share capital must, not later than one month after the end of its financial year, and, where any financial year is changed, also not later than one month after the end of that financial year, in the prescribed form, lodge with the Registrar a return, referred to as the annual return, specifying the following particulars in regard to the company as at the date of the end of its financial year -(a)the name of the company, its registration number, the situation of its registered office and its postal address and the place where the registers of members, debenture holders, allotments, interests in shares and debentures under section 238 and interests in contracts under section 248 are kept, if they are not kept at the registered office;(b)a description of the business actually carried on by the company;(c)the date on which its financial year ends;(d)the date on which its last annual general meeting was held and, if an extension of time was applied for, a statement to that effect;(e)in the case of a public company, the date on which the last interim report was issued by the company;(f)the full names, addresses and dates of appointment of the directors and officers of the company;(g)the name and address of the auditor of the company;(h)the nominal and issued share capital, its division into shares and the amount of any share premium account or the stated capital and the number of issued and unissued shares of no par value, and any changes therein during the period covered by the returns, specifying each class of shares;(i)the amount of any undistributable reserve fund of the company, to the extent that it consists of an amount transferred from its share premium account;(j)the amount and class of debentures issued and any changes therein during the period covered by the return;(k)in the case of a public company, whether it has issued any share warrants and their particulars;(l)a list of the special resolutions passed and the forms, notices and returns prescribed by this Act lodged with the Registrar during the period covered by the return and the respective dates on which they were so lodged; and(m)in the case of a private company, the number of its members; and(n)any other matters which may be prescribed.
(2)Every company limited by guarantee must, not later than one month after the end of its financial year, lodge with the Registrar a return in the prescribed form, specifying the particulars referred to in subsection (1)(a), (c), (d), (f), (g), (l) and (n), as at the date of the end of its financial year.
(3)The return referred to in subsection (1) or (2) must be signed by one of the directors and the secretary, if any, of the company and a copy of the return must be kept in the registered office of the company.
(4)A private company must annex to any return required to be lodged by it in terms of this section a certificate in the prescribed form, signed by a director or the secretary, if any, of the company to the effect that the company has during the period covered by the return complied with the requirements of section 22(1)(b) and (c).
(5)Every return under this section must be accompanied by proof of payment of the annual duty referred to in section 182.
(6)Any company which fails to comply with any requirements of this section, commits an offence and is liable to fine which does not exceed N$40 for every day during which the contravention continues.
(7)Section 120 in so far as it relates to the inspection of the register of members of a company and the furnishing of copies or extracts does, with the necessary changes, apply to the annual return by a company.

182. Annual duty

(1)Subject to section 183, every company other than a non-profit association incorporated under section 21, must -(a)before a certificate to commence business is issued to it; or(b)in the case of a company limited by guarantee, on its incorporation; andthereafter not later than one month after the end of every financial year, pay an annual duty.
(2)The Board must prescribe the rate of the annual duty, and the minimum and maximum annual duty payable in respect of each company.
(3)Subsection (1) applies to every company in respect of which no winding-up order has been granted or which has not been deregistered under section 74, but -(a)if any winding-up order is discharged or declared void, the company concerned must within 30 days thereafter pay the annual duty provided for in subsection (1), or a part of the duty as the Court may direct; or(b)if a company is deregistered under section 74(3) it ceases to be liable for payment of any annual duty provided for in subsection (1) which was owing by it on the date of its deregistration, but if any deregistered company is restored to the register of companies, the company concerned must within 30 days thereafter pay the annual duty provided for in subsection (1) or a part of the duty as the Court may direct.
(4)If a company commences business within its financial year, and there is an intervening period of six months or less between the date of commencement of business and the end of the financial year, the amount of the annual duty is half the amount of the annual duty payable for a full financial year.
(5)If a company changes its financial year under section 293(2)(b), the amount of the annual duty payable for the additional period is half of the annual duty payable for a full financial year.
(6)A company which fails to pay the prescribed annual duty within the prescribed period or pays an amount less than prescribed must pay the additional fees prescribed under section 186.

183. Annual duty payable by external company

(1)Every external company must pay an annual duty as prescribed under section 182(2), but, where an external company has established and maintains a place of business in Namibia solely for the purpose of maintaining a share registration office or a share transfer office, the annual duty payable by that company is the minimum annual duty payable under section 182(2).
(2)The annual duty referred to in subsection (1) is payable -(a)on lodgment of the memorandum of the external company for registration under section 328; and(b)thereafter not later than one month after the end of every financial year.
(3)Section 182(3), (4), (5), and (6) relating to the non-payment of annual duty after issue of a winding-up order or deregistration, reduction of annual duty payable in certain cases and payment of additional annual duty in certain cases does, with the necessary changes, apply in respect of the annual duty payable by an external company.

184. Enforcement of duty of company to make returns to Registrar

(1)If a company, having failed to comply with any provision of this Act which requires it to lodge with, deliver or send to the Registrar any return, annual financial statements or other document, or to give notice to him or her of any matter, fails to comply within 14 days after the Registrar, on his or her own initiative or on application by any member or creditor of the company, has sent to the company a reminder by certified post to the company’s registered office requiring it to do so, the Registrar may direct the company or any officer of the company, by written notice served on the company or officer or sent to the company or officer by certified post to the registered office of the company, to comply with the request within 30 days of the date on which the notice was served or sent.
(2)If the company on which or the officer on whom a notice referred to in subsection (1) was served or to which or whom, as the case may be, it was sent, within the period of 30 days fails to -(a)make good the default; or(b)satisfy the Registrar that, on good cause shown, a penalty ought not to be imposed,the Registrar may, by further written notice served on the company or officer concerned or sent to the company or officer by registered post to the registered office of the company, impose on that company or officer a penalty of an amount as may from time to time be prescribed.
(3)When the Registrar has served a notice on or sent a notice to a company or an officer under subsection (2), the Registrar may, not less than 21 days after the date on which that notice was served or sent, forward a certified copy to the clerk of the magistrate’s court in whose area of jurisdiction the registered office of the company is situated, who must record it, and that notice has the effect of a civil judgment of that magistrate’s court against the company or officer concerned.
(4)On application by the company or the officer, having received a notice referred to in subsection (1), the magistrate’s court in question may, before the clerk of that court has recorded the notice in terms of subsection (3), reduce the amount of the penalty, or set aside the imposition of the penalty, and the court may, where the clerk has already recorded the notice, exempt the company or officer wholly, or to the extent determined by the court, from the effect of the notice.
(5)If a penalty imposed by the Registrar under this section is reduced or set aside in terms of subsection (4), or the company or officer is so wholly or in part exempted from the effect of the notice, by the magistrate’s court in question, costs must not be awarded against the Registrar unless it be proved that he or she acted in bad faith or without reasonable care or diligence.
(6)Nothing in this section must be taken to prejudice the operation of any provision of this Act, imposing penalties on a company or its officers in respect of any default.

185. Extension of time

Where in terms of this Act anything is to be performed within a specified period of time, the Registrar may in any case, on application to him or her before or after the expiry of that period, and on payment of the prescribed fee, or generally, and on his or her own initiative, extend that period as he or she may deem fit subject to this Act, and where any period has been so extended, any reference in section 186 to that period must be construed as a reference to that period as so extended.

186. Additional fees in respect of late submissions or late payment of annual duty

Without derogating from this Act, a company or an external company which has failed within the time prescribed in the relevant provision to lodge any return or other document or to pay any annual duty required under section 99(3), 181, 182, 183, 208(1), 219(3), 224(2) and 284, may lodge that return or other document or pay the annual duty subject to the payment to the Registrar of the prescribed additional fee in respect of each failure.

Part 2 – Meetings of Company


187. Annual general meeting

(1)Every company must, at the times specified in this section, hold general meetings to be known and described in the notices calling those meetings as annual general meetings of that company.
(2)The meetings referred to in subsection (1) must be held -(a)in the case of the first meeting, within a period of 18 months after the date of the incorporation of the company concerned;(b)thereafter within not more than nine months after the end of every ensuing financial year of that company;(c)within not more than 15 months after the date of the last preceding annual meeting of that company.
(3)The annual general meeting of a company must deal with and dispose of the matters provided for in this Act and may deal with and dispose of any further matters which are provided for in the articles of the company and, subject to this Act, any matters capable of being dealt with by any general meeting of the company.
(4)The Registrar may, on application to him or her before, or, for the purposes of subsection (8), also after, the expiry of the period within which an annual general meeting of a company must be held and on good cause shown, and on payment of the prescribed fee, extend the period within which an annual general meeting of the company concerned must be held by a period not exceeding three months, but, notwithstanding any extension, the date for the holding of the first annual general meeting following the meeting in respect of which the extension is granted, must be determined as if that meeting had been held on the last day on which it should have been held if the extension had not been granted.
(5)If for any reason an annual general meeting of a company is not or cannot be held as provided in this section or any matter required by this Act to be dealt with and disposed of at that meeting is not dealt with at the meeting, the Registrar may, on application by the company or any member or the legal representative of that company or member and on payment of the prescribed fee, call or direct the calling of a general meeting of the company which must deemed to be an annual general meeting, and may give ancillary or consequential directions which the Registrar may think expedient, including directions modifying or supplementing, in relation to the calling, holding and conduct of the meeting, the operation of the company’s articles, and directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy, to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with that direction is, for all purposes deemed to be an annual general meeting of the company duly called, held and conducted.
(6)For the purpose of determining the date for the holding of the next succeeding annual general meeting of a company, after a meeting held in pursuance of subsection (5), subsection (4) does, with the necessary changes, apply.
(7)Any company which fails to comply with subsection (1) or with any direction given by the Registrar under subsection (5), and every director or officer of the company who knowingly is a party to the failure, commits an offence and is liable to a fine which does not exceed N$800.
(8)A company which has failed to hold its annual general meeting within the time or extended time contemplated in subsection (1) or (4), or as directed by the Registrar under subsection (5), is further liable to pay to the Registrar the prescribed additional fee for every day during which the default continues but not exceeding the prescribed maximum fee.
(9)A company need not hold any particular annual general meeting if all members entitled to attend that meeting agree in writing, and in that event a resolution in writing dealing with and disposing of -(a)the matters required by this Act to be dealt with and disposed of at an annual general meeting of a company; and(b)any other matters, if any, as may, in terms of subsection (2), be dealt with at that meeting,and signed by all members entitled to vote at that meeting, before the expiry of the period within which that meeting is to be held, is deemed to be a resolution passed at an annual general meeting of the company held in terms of this section on the date on which the last signature to that resolution is affixed.

188. General meetings

(1)General meetings of a company may, subject to its articles, be held from time to time.
(2)Any general meeting may, save in so far as is otherwise provided in the articles of a company and without derogation from any other provisions of this Act, be called by two or more members holding not less than one-tenth of its issued share capital or, in the case of a company not having a share capital, by not less than five per cent in number of the members of the company.

189. Calling of general meetings on requisition by members

(1)The directors of a company must, notwithstanding anything in its articles, on the requisition of -(a)100 members of the company or of members holding at the date of the lodging of the requisition not less than one-twentieth of such of the capital of the company as at the date of the lodgment carries the right of voting at general meetings of the company; or(b)in the case of a company not having a share capital, 100 members of the company or of members representing not less than one-twentieth of the total voting rights of all the members having at that date a right to vote at general meetings of the company,within 14 days of the lodging of the requisition issue a notice to members convening a general meeting of the company for a date not less than 21 and not more than 35 days from the date of the notice.
(2)The requisition must state the objects of the meeting and must be signed by the requisitionists and lodged at the registered office of the company, and may consist of several documents in like form, each signed by one or more requisitionists.
(3)If the directors do not within 14 days from the date of the lodging of the requisition issue a notice as required by subsection (1), the requisitionists or any of them numbering more than 50 or representing more than one-half of the total voting rights of all of them, may themselves on 21 days’ notice convene a meeting, stating the objects of the meeting, but the meeting so convened must not be held after the expiry of three months from that date.
(4)Any meeting convened under this section by the requisitionists must be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by the directors of the company concerned.
(5)Any reasonable expense incurred by the requisitionists because of the failure of the directors duly to convene a meeting must be repaid to the requisitionists by the company, and any sum so repaid must be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to those directors who were knowingly party to the default.
(6)Any director or officer of a company who knowingly is a party to a failure to convene a meeting as required by subsection (1) commits an offence and is liable to a fine which does not exceed N$400.

190. Convening of general meetings by Registrar

If all the directors of a company have become incapacitated or have ceased to be directors, the Registrar may, unless the articles of a company make other provision in that behalf, on the application of any member of the company or the legal representative of that member, and on payment of the prescribed fee, call or direct the calling of a general meeting of the company and may give any ancillary or consequential directions which the Registrar considers expedient, including directions modifying or supplementing, in relation to the calling, holding and conduct of the meeting, the operation of the company’s articles, and directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with any that direction, is, for all purposes, deemed to be a general meeting of the company duly called, held and conducted.

191. General meetings on order of Court

If, for any reason, it is impracticable to call an annual general meeting or other general meeting of a company in any manner in which meetings of that company may be called, or to conduct that meeting in the manner prescribed by the articles of a company or this Act, or if for any other reason the Court thinks fit to do so, it may, either of its own motion or on the application of the Registrar or any director of the company or of any member of the company or the legal representative of that member, order a meeting of the company to be called, held and conducted in any manner which it may direct and may in making an order give ancillary or consequential directions as it thinks expedient, including directions providing for one member or the legal representative of a member or any specified number of members present in person or by proxy to be deemed to constitute a meeting, and any meeting called, held and conducted in accordance with that order, is, for all purposes deemed to be an annual general meeting or a general meeting, as the case may be, of the company duly called, held and conducted.

192. Meetings of company with one member

In the case of a company having only one member, that member present in person or by proxy is deemed to constitute a meeting.

193. Duty of company to circulate notice of resolutions and statements by members

(1)Subject to this section, a company must, on the requisition in writing of the number of members referred to in subsection (2), and, unless the company otherwise determines, at the expense of the requisitionists -(a)give to members of the company entitled to receive notice of the next annual general meeting, notice of any resolution which may properly be moved and is intended to be moved at that meeting; and(b)circulate to members entitled to have notice of any general meeting sent to them, any statement of not more than one thousand words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting.
(2)The number of members necessary for a requisition under subsection (1) must be -(a)any number of members representing not less than one-twentieth of the total voting rights of all the members having at the date of the requisition a right to vote at the meeting to which the requisition relates; or(b)not less than one hundred members.
(3)Notice of any resolution referred to in subsection (1)(a) must be given and any statement referred to in subsection (1)(b) must be circulated to members of the company entitled to have notice of the meeting sent to them, by serving a copy of the resolution or statement on each member in any manner permitted for the service of notice of the meeting, and notice of that resolution must be given to any other member of the company by giving notice of the general effect of the resolution in any manner permitted for giving that member notice of meetings of the company.
(4)A copy of a resolution or statement referred to in subsection (1) must be served and notice of that resolution must be given in the same manner and, so far as practicable, at the same time as the notice of the meeting in question, or if it is not practicable to do so, as soon as practicable thereafter.
(5)A company is not bound under this section to give notice of any resolution or to circulate any statement unless -(a)there is lodged at the registered office of the company a copy of the requisition signed by the requisitionists or two or more copies which between them contain the signatures of all the requisitionists -(i)in the case of a requisition requiring notice of a resolution, not less than 30 days before the meeting; and(ii)in the case of any other requisition, not less than 10 days before the meeting; and(b)there is lodged or tendered with the requisition a sum reasonably sufficient to meet the company’s expenses in giving effect to the requisition.
(6)If, after a copy of a requisition requiring notice of a resolution has been lodged at the registered office of the company, an annual general meeting is called for a date 30 days or less after the copy has been lodged, the copy, though not lodged within the time required by this subsection, is deemed to have been properly lodged.
(7)The Court may absolve any company from the obligation to circulate any resolution or statement in terms of this section if, on the application either of the company or of any other interested person, the Court is satisfied that the rights thereby conferred are being abused to secure needless publicity for defamatory matter.
(8)An order under subsection (7) may include an order for the payment by the requisitionists of the costs or any portion of the costs incurred in connection with the relevant application, whether or not they are parties to the application.
(9)Notwithstanding anything contained in the articles of a company, the business which may be dealt with at an annual general meeting, must include any resolution of which notice has been given in accordance with this section, and, for the purpose of this subsection, notice is deemed to have been so given notwithstanding the accidental omission to give that notice to one or more members.
(10)If there is a failure to comply with subsection (1), every director or officer of the company who authorises or knowingly permits or is party to the failure, commits an offence and is liable to a fine which does not exceed N$4 000.

194. Notice of meetings and resolutions

(1)Unless the articles of a company provide for a longer period of notice, the annual general meeting or a general meeting called for the purpose of passing a special resolution may be called by not less than 21 days’ notice in writing and any other general meeting may be called by not less than 14 days’ notice in writing.
(2)Any provision in the articles of a company providing for a shorter period of notice, not being of an adjourned meeting, is void.
(3)Notwithstanding subsection (1), a meeting of a company is deemed to have been duly called -(a)in the case of a meeting which is called on a shorter period of notice than is specified in that subsection or provided for in the company’s articles, if it is so agreed, before or at the meeting, by a majority in number of the members having a right to attend and vote at the meeting who hold not less than 95 percent of the total voting rights of all the members of the company; or(b)in the case of a meeting in respect of which notice as contemplated in subsection (1) has not been given, if it is so agreed in writing, before or at the meeting, by all the members of the company.
(4)No resolution of which special notice is required to be given in terms of this Act has effect unless notice of the intention to move it has been given to the company not less than 28 days before the meeting at which it is moved, and the company must give its members notice of that resolution at the same time, and in the same manner as it gives notice of the meeting, or, if that is not practicable, either by advertisement in a newspaper having an appropriate circulation or in any other manner allowed by the articles of the company, not less than 21 days before the meeting, but, if a meeting of the company is called for a date 28 days or less after notice of the intention to move that resolution has been given to the company, the notice, though not given within the time required by this subsection, is deemed to have been properly given for the purposes of the meeting.
(5)Any company which fails to give notice to its members as required by subsection (4) commits an offence and is liable to a fine which does not exceed N$400.

195. Manner of giving notice

Unless the articles of a company otherwise provide, notice of a meeting of a company must be served on every member of the company in the manner in which notices are required to be served in terms of Table A or Table B of Schedule 1, whichever is applicable to the company.

196. Representation of company or other body corporate at certain meetings

(1)A company or other body corporate may, by resolution of its directors or other governing body, authorise any person to act as its representative at any meeting of any company of which it is a member or at any meeting of any class of members of that company.
(2)Subsection (1) does, with the necessary changes, apply with reference to meetings of debenture holders and creditors of a company.
(3)A person authorised under subsection (1) is entitled to exercise on behalf of the company or other body corporate which he or she represents, the same powers as that company or body corporate could have exercised if it were an individual shareholder, debenture holder or creditor of the company in relation to which that person has been authorised to act.

197. Representation of members at meetings by proxies

(1)Any member of a company entitled to attend and vote at a meeting of the company, or where the articles of a company limited by guarantee so provide, any member of that company, is entitled to appoint another person, whether a member or not, as proxy to attend, speak, and vote in that member’s stead at any meeting of the company, but, unless the articles otherwise provide, a proxy is not entitled to vote except on a poll and a member of a private company is not entitled to appoint more than one proxy.
(2)In every notice calling a meeting of a company having a share capital and on the face of every proxy form issued at the company’s expense there must appear with reasonable prominence a statement that a member entitled to attend and vote at the meeting is entitled to appoint a proxy or, where it is allowed, one or more proxies, to attend and speak and vote in that member’s stead, and that a proxy need not also be a member of the company.
(3)If there is a failure to comply with the requirements of subsection (2) in respect of any meeting, every director and every officer of the company who authorises, knowingly permits or is party to the failure, commits an offence and is liable to a fine which does not exceed N$400.
(4)Any provision contained in a company’s articles is void in so far as it would have the effect of requiring the instrument appointing a proxy, or any other document necessary to show the validity of or otherwise relating to the appointment of a proxy, to be received by the company at its registered office or by any other person more than 48 hours before a meeting in order that the appointment may be effective.
(5)If, for the purposes of any meeting of a company, invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations are issued at the company’s expense to some only of the members entitled to notice of the meeting and to be represented by proxy, every director or officer of the company who authorises or knowingly permits or is a party to that issue, commits an offence and is liable to a fine which does not exceed N$400.
(6)Subsection (5) does not apply in respect of the issue to a member of a company at that member’s request in writing of a form of appointment naming a proxy or of a list of persons willing to act as proxy, if the form or list is available on request in writing to every member entitled to be represented at the meeting in question by proxy.
(7)If, for the purposes of any meeting of a company, invitations to appoint as proxy a person, or one of a number of persons, specified in the invitations or the instruments appointing a proxy, are issued at the company’s expense, that invitation or instrument appointing a proxy must -(a)contain adequate blank space immediately preceding the name or names of the person or persons specified therein to enable a member to write in the name and, if so desired, an alternative name of a proxy of that member’s own choice;(b)provide for the member to indicate whether that member’s proxy is to vote in favour of or against any resolution or resolutions to be put at the meeting or is to abstain from voting.
(8)The person present at a meeting of the company, whose name appears first in the list of names which have not been deleted in any instrument appointing a proxy becomes the validly appointed proxy of the member concerned.
(9)If a member does not indicate on the instrument appointing a proxy that that member’s proxy is to vote in favour of or against any resolution or resolutions or to abstain from voting, the proxy is entitled to vote as he or she thinks fit.
(10)If there is a failure to comply with any requirement of subsection (7), every director or officer of the company who authorises, knowingly permits or is party to the failure, commits an offence and is liable to a fine which does not exceed N$400.
(11)This section applies in relation to meetings of any class of members of a company as it applies in relation to general meetings of the company.

198. Quorum for meetings

Unless the articles of a company provide for a greater number of members entitled to vote to constitute a quorum at meetings of a company, the quorum for those meetings is -(a)in the case of a public company, three members entitled to vote, personally present, or if a member is a body corporate, represented;(b)in the case of a private company, not being a private company having one member, two members entitled to vote, present in person or by proxy or, if a member is a body corporate, represented; and(c)in the case of a wholly-owned subsidiary company, the representative of the holding company.

199. Chairperson of meetings

Unless the articles of a company otherwise provide, any meeting of the company may elect any member to be the chairperson of the meeting.

200. Compulsory adjournment of meetings

(1)If at any meeting of a company any member of the company who is present or represented and entitled to vote at the meeting demands an adjournment of the meeting on any ground stated by that member, the chairperson must put the demand to the vote of the meeting, and if a majority of the members present or represented and entitled to vote at the meeting or members present or represented and entitled to vote representing either personally or by proxy more than half of the share capital of the company represented at the meeting, vote in favour of an adjournment, the chairperson must adjourn the meeting to a day not earlier than seven days and not later than 21 days after the date of the meeting.
(2)When a meeting has been adjourned as contemplated in subsection (1) the company must, on a date not later than three days after the adjournment, publish in a newspaper circulating in Namibia a notice stating -(a)the time, date and place to which the meeting has been adjourned;(b)the matter before the meeting at the time when it was adjourned; and(c)the ground for the adjournment.
(3)A private company may, instead of publishing the notice in a newspaper as contemplated in subsection (2), send it by registered post to the members not later than three days after the adjournment.
(4)Any person acting as chairperson of a meeting of a company who fails to comply with any requirement of subsection (1) and any company which fails to comply with any requirement of subsection (2) and any director or officer of a company who knowingly is a party to the failure, commits an offence and is liable to a fine which does not exceed N$400.

Part 3 – Voting Rights and Voting


201. Voting rights of shareholders

(1)Subject to sections 202 and 203 and to the exceptions stated in section 204, every member of a company having a share capital has a right to vote at meetings of that company in respect of each share held by that member.
(2)Every member of a company limited by guarantee has, unless the articles otherwise provide, the right to vote at meetings of that company and has one vote.

202. Voting rights of preference shareholders

(1)Notwithstanding section 20(1), the articles of a company may provide that preference shares do not confer the right to vote at meetings of the company except -(a)during any period determined as provided in subsection (2) during which any dividend or any part of any dividend on those shares or any redemption payment thereon remains in arrear and unpaid; or(b)in regard to any resolution proposed which directly affects any of the rights attached to those shares or the interests of the holders, including a resolution for the winding-up of the company.
(2)The period referred to in subsection (1)(a) must be a period commencing on a day specified in the articles of the company concerned, not being more than six months after the due date of the dividend or redemption payment in question, or, where no due date is specified, after the end of the financial year of the company in respect of which that dividend accrued or that redemption payment became due.

203. Determination of voting rights

(1)A member of a public company having a share capital is -(a)if the share capital is divided into shares of par value, entitled to that proportion of the total votes in the company which the aggregate amount of the nominal value of the shares held by that member bears to the aggregate amount of the nominal value of all the shares issued by the company;(b)if the share capital is divided into shares of no par value, entitled to one vote in respect of each share that member holds.
(2)The voting rights of a member of a private company must, subject to section 20(1), be determined by the articles of the company.
(3)When any shares of a company are converted into stock, or have been so converted after 1 January 1953, this section does, with the necessary changes, apply as if that stock consisted -(a)in the case of shares of par value, of as many units of equivalent number and value as the number and nominal value of the shares so converted; or(b)in the case of shares of no par value, of as many units as the number of shares so converted.
(4)Notwithstanding this section, the articles of a company may provide -(a)for the chairperson of any meeting to have a casting vote; and(b)for the votes to which any member is entitled above a stated number to increase, not in direct proportion to the number of shares held, but in some lower proportion specified in those articles and may in that event further provide that no member is entitled to a number of votes exceeding the number so specified or that the number of votes to which any member is entitled be limited to a specified number.

204. Exceptions as regards voting rights

(1)Section 20(1) does not apply in respect of shares of a company which on 1 January 1974 had already been issued without voting rights, or in respect of issued shares, other than preference shares, in respect of which at that date there existed different voting rights or in respect of shares subsequently issued in respect of which there existed at that date a contractual right or obligation to issue those shares.
(2)If a company issues new shares, all the provisions of this Act as to voting rights must, save as provided in subsection (1), apply in respect of those new shares, and, for the purpose of determining the voting rights attached to those new shares as provided in section 203 all its shares are deemed to have been issued with voting rights in accordance with this Act.

205. Exercise of voting rights

(1)Any person present and entitled to vote as a member or as a proxy or as a representative of a body corporate at any meeting of the company has, on a show of hands, only one vote, irrespective of the number of shares that person holds or represents.
(2)On a poll at any meeting of a company, any member, including a body corporate, or that member’s proxy is entitled to exercise all voting rights as determined in accordance with this Act, but is not obliged to use all his or her votes or cast all the votes he or she uses in the same way.

206. Right to demand poll

(1)A provision contained in a company’s articles is void in so far as it has the effect -(a)of excluding the right to demand a poll at a general meeting on any question other than the election of the chairperson of the meeting or the adjournment of the meeting; or(b)of rendering ineffective a demand for a poll made -(i)by not less than five members having the right to vote at that a meeting;(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 at the meeting; or(iii)by a member or members entitled to vote at the meeting and holding in the aggregate not less than one-tenth of the issued share capital of the company.
(2)The instrument appointing a proxy to vote at a meeting of a company 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.

Part 4 – Special Resolutions


207. Requirements for special resolutions

(1)A resolution by a company is a special resolution if at a general meeting of which not less than 21 days’ notice has been given specifying the intention to propose the resolution as a special resolution, the terms and effect of the resolution and the reasons for it and at which -(a)members holding in the aggregate not less than one-fourth of the total votes of all the members entitled to vote, are present in person or by proxy; or(b)in the case of a company limited by guarantee, not less than one-fourth of the members entitled to vote are present in person or by proxy,the resolution has been passed, on a show of hands, by not less than three-fourths of the number of members of the company entitled to vote on a show of hands at the meeting who are present in person or by proxy or, where a poll has been demanded, by not less than three-fourths of the total votes to which the members present in person or by proxy are entitled.
(2)If less than one-fourth of the total votes of all the members entitled to attend the meeting and to vote or, in the case of a company limited by guarantee, less than one-fourth of the members of that company, are present or represented at a meeting called for the purpose of passing a special resolution, the meeting stands adjourned to a day not earlier than seven days and not later than 21 days after the date of the meeting and section 200(2) applies in respect of that adjournment.
(3)At the adjourned meeting the members who are present in person or by proxy and are entitled to vote may deal with the business for which the original meeting was convened and a resolution passed by not less than three-fourths of those members is deemed to be a special resolution even if less than one-fourth of the total votes are represented at that adjourned meeting.
(4)With the consent of a majority in number of the members of a company having the right to attend and vote at a meeting and holding in the aggregate not less than 95 per cent of the total votes of all those members, a resolution may be proposed and passed as a special resolution at a meeting of which less than 21 days’ notice has been given.
(5)A copy of the consent referred to in subsection (4) must, on the prescribed form, be lodged with the Registrar together with the copy of the special resolution.
(6)Notwithstanding subsection (1), a resolution may, with the written consent of all the members of the company, be proposed and passed as a special resolution at a meeting of which notice as contemplated in subsection (1) has not been given.
(7)The written consent referred to in subsection (6) must be in the prescribed form and copy of that notice must be lodged with the Registrar together with a copy of the special resolution.
(8)At any meeting at which a special resolution is submitted to be passed, a declaration by the chairperson that the resolution is carried is, unless a poll is demanded, sufficient evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.
(9)If a poll is demanded regard must be had, in computing the majority on the poll, to the number of votes cast for and against the resolution.
(10)For the purposes of this section notice of a meeting is, subject to this Act, deemed to have been duly given and the meeting must be taken to be duly held when the notice is given and the meeting is held in the manner provided by the articles of the company concerned.

208. Registration of special resolutions

(1)Within one month from the passing of a special resolution a copy of that resolution together with either a copy of the notice convening the meeting concerned or a copy of the consent contemplated in section 207(4) or (6), as the case may be, must be lodged with the Registrar, who must, subject to subsection (2), and on payment of the prescribed fee, register that resolution.
(2)The Registrar may refuse to register any special resolution lodged under subsection (1), except on an order of the Court, if that resolution appears to him or her to be contrary to this Act or to the memorandum or articles of the company concerned.
(3)A copy of every special resolution for the time being in force must be embodied in or annexed to every copy of the articles issued after the registration of the resolution.
(4)The company concerned must transmit a copy of a special resolution to any member at that member’s request, and on payment of an amount equal to the cost of making that copy or a lesser amount as the company may determine.
(5)Any company which fails to comply with any requirement of subsection (3) or (4) and every director or officer thereof who knowingly permits or is a party to the failure, commits an offence and is liable to a fine which does not exceed N$200.
(6)If a company makes default in lodging with the Registrar a copy of any special resolution, and the notice or the consent, as required by subsection (1), the company, and every director or officer who knowingly permits or is a party to the default, commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

209. Alteration of memorandum or articles to pass special resolution

Where this Act permits any company to do anything by special resolution subject to the condition that its memorandum or articles authorises it and its memorandum or articles do not provide for that authority, but do not prohibit it, the company concerned may convene a single meeting for the purpose of -(a)passing a special resolution for the creation of that authority in the memorandum or articles; and(b)passing the intended special resolution.

210. Special resolution to lapse unless registered

Any special resolution of which a copy is not lodged with the Registrar and registered within six months from the date of the passing of that resolution lapses and becomes, unless the Court otherwise directs, void.

211. Dates on which resolutions take effect

(1)A special resolution does not take effect until it has been registered by the Registrar under section 208.
(2)Any other resolution passed by a meeting of a company or of the holders of any class of shares of a company has effect as from the date on which it is passed.

Part 5 – Minutes, Minute Books and Reports of Meetings


212. Keeping of minutes of meetings

(1)Every company must, within one month after the date on which a meeting was held, cause minutes of the proceedings at any meeting of the company to be entered, in the official language, in one or more minute books kept for the purpose.
(2)The minute book referred to in subsection (1) must be kept at the registered office of the company or at the office where that minute book is made up.
(3)For the purpose of this section loose leaves of paper must not be regarded as constituting a minute book unless they are bound together permanently, without means provided for the withdrawal or insertion of leaves and the pages are consecutively numbered.
(4)The minutes of any meeting purporting to be signed by the chairperson of that meeting or by the chairperson of the next succeeding meeting are evidence of the proceedings.
(5)Minutes kept under the repealed Act by an existing company in a language other than the official language must be taken to be sufficient compliance with subsection (1).
(6)Any company which fails to comply with any requirement of subsection (1) or (2), and every director or officer who knowingly permits or is a party to the failure, commits an offence and is liable to a fine which does not exceed N$400 for every meeting in respect of which the contravention takes place.

213. Validity of proceedings

Where minutes have been made of the proceedings at any general meeting of a company, in accordance with section 212, the meeting is deemed to have been duly held and convened and all proceedings to have been duly had and all appointments of directors, managers, liquidators, auditors and officers are, until the contrary is proved, deemed to be valid.

214. Right of members to inspect minute books

(1)Any minute book of a company kept under section 212 must be open to inspection during business hours by any member of the company, without charge, at the registered office of the company or the office where it is made up, subject to any restrictions which may be provided for in the articles or imposed by the company in general meeting, but not less than two hours in each day must be allowed for inspection.
(2)Any member of a company is entitled to be furnished, within seven days after having made a written request to the company, with a copy of the minutes of the proceedings at any general meeting of the company, certified by the secretary or a director of the company as correct, at a charge not exceeding an amount equal to the cost of making the copy.
(3)If any inspection required under this section is refused or if any copy required under this section is not furnished within the proper time -(a)the Court may, on application made to it, order that the minutes in question be made available for inspection or that the copy required be furnished immediately or within any period which the Court may direct and may order the costs of the application to be paid by any director or officer of the company who is responsible for the default; and(b)the company, and every director or officer of the company who knowingly is a party to the default, commits an offence and is liable to a fine which does not exceed N$400.

215. Publication of reports of meetings

(1)A report purporting to be a report of the proceedings at any meeting of a company must not be circulated or advertised at the expense of the company unless it contains a fair summary of all material questions and comments, relevant to any matter before the meeting, which have been asked or made by members taking part in the proceedings, but it is not necessary to include in that report any matter which can reasonably be regarded as defamatory of any person or as detrimental to the interest of the company.
(2)Any director or officer of a company who authorises or knowingly permits or is a party to the circulation or advertising of a report contrary to subsection (1) commits an offence and is liable to a fine which does not exceed N$2 000, and if in any prosecution under this subsection the defence is raised that the matter omitted from a report was immaterial or could reasonably be regarded as defamatory of some person or as detrimental to the interests of the company, the burden of proving this lies on the person raising the defence.

Chapter 8
DIRECTORS


Part 1 – Number and Appointment


216. Number of directors

(1)Every public company must have at least two directors and every private company must have at least one director.
(2)Until directors are appointed, every subscriber to the memorandum of a company is deemed, for all purposes, to be a director of the company.

217. Determination of number of directors and appointment of first directors

Subject to the articles of any company, the number of directors of the company may be determined and the first directors may be appointed in writing by a majority of the subscribers to its memorandum.

218. Appointment of directors to be voted on individually

(1)At a general meeting of a company a motion for the appointment of two or more persons as directors of the company by a single resolution must not be moved, unless a resolution that it must be so moved has first been agreed to by the meeting without any vote being given against it.
(2)Subject to section 222, a resolution moved in contravention of this section is void, whether or not its being so moved was objected to at the time, but if a resolution so moved is passed, no provision for the automatic reappointment of a retiring director in default of another appointment applies.
(3)For the purposes of this section, a motion for approving a person’s appointment or for nominating a person for appointment must be treated as a motion for that person’s appointment.
(4)This section does not apply to a resolution altering the company’s articles.

219. Consent to act as director or officer

(1)Any person who, before the issue of a certificate to commence business, is appointed as a director or officer of a company having a share capital, must -(a)before that certificate is issued, sign and lodge with the company his or her written consent to act as a director or an officer, on a duly completed prescribed form containing the particulars prescribed; and(b)in the case of a director, either in the memorandum of the company subscribe for a number of shares not less than the number, if any, required to be held by a director as qualification shares, or sign and lodge with the Registrar a contract in the prescribed form in writing to subscribe for or otherwise acquire those shares.
(2)For the purposes of this section “qualification shares” means the qualification shares required to be held on appointment to the office of director or within a period determined by reference to the time of appointment.
(3)Any person who is appointed as a director or officer of a company at any time after it has become entitled to commence business must, within 28 days after the date of that appointment or within a further period which the Registrar may, on good cause shown and on payment of the prescribed fee, allow, lodge with the company his or her written consent to that appointment on the prescribed form referred to in subsection (1)(a), duly completed and signed by him or her.
(4)Subsection (3) does not apply to the reappointment of a retiring director.
(5)Failure to comply with subsection (1) or (3) does not affect the validity of an appointment.
(6)This section does not apply in respect of any person deemed to be a director under section 216(2).
(7)Any person appointed as a director or officer of a company in the circumstances referred to in subsection (1) or (3), who fails to comply with those subsections, commits an offence and is liable to a fine which does not exceed N$20 for every day during which the contravention continues.
(8)Any company which publishes, and every director or officer of the company who knowingly is a party to the publication of the name of any person as a director of the company when that person is not a director or has not validly been appointed as director of the company, commits an offence and is liable to a fine which does not exceed N$2 000.

220. Filling of vacancy where director is disqualified or removed

(1)If the articles of a company provide for the filling of casual vacancies in respect of directors, any vacancy created by the disqualification of any person from being a director of the company or by the removal of a director under this Act, may, subject to those articles, and if in the case of a removal, the vacancy is not filled at the meeting at which he or she is removed, be filled as a casual vacancy.
(2)A person appointed as a director under subsection (1) in the place of a director removed or disqualified under this Act must be treated, for the purpose of determining the time at which he or she or any other director is to retire, as if he or she had become director on the day on which the person in whose place he or she is appointed was last appointed a director.

221. Qualification shares of directors

(1)Without prejudice to the restrictions imposed by section 219, any director of a company who is, by its articles, required to hold a specified number of qualification shares, and who does not hold those qualification shares must vacate his or her office if he or she does not obtain those qualification shares within two months, or any shorter period which is provided in the articles of the company, from the date of his or her appointment, and he or she is not capable of being reappointed until he or she has obtained those qualification shares.
(2)For the purposes of articles of a company requiring a director to hold a specified number of shares as qualification shares, the bearer of a share warrant must not be regarded as the holder of the shares specified in the warrant.
(3)Any person who accepts an appointment or acts as a director of a company contrary to subsection (1), commits an offence and is liable to a fine which does not exceed N$40 for every day during which the contravention continues.

222. Validity of acts where appointment is defective

The acts of a director of a company are valid notwithstanding any defect that may afterwards be discovered in his or her appointment or qualification.

Part 2 – Register of Directors and Officers


223. Register of directors, officers and corporate secretaries

(1)Every company must in the official language, keep a register of directors and officers of the company and secretaries which are bodies corporate and cause to be entered in that register -(a)in respect of every director or officer -(i)his or her full forenames and surname and any former forenames and surname, identity number or, if he or she has no such number, date of birth, nationality if not a Namibian national, occupation, residential, business and postal addresses and the date of his or her appointment; and(ii)the name and registration number of every other company of which that director is a director;(b)in respect of every officer or secretary which is a body corporate, its name, its registration number, the address of its registered office and the date of its appointment; and(c)any changes occurring from time to time in the particulars referred to in paragraphs (a) and (b) and the dates and nature of those changes.
(2)Every company must, in addition to the particulars referred to in subsection (1), enter in the register concerned the name and date of appointment of the auditor of the company and the date and particulars of any change of that name and date of appointment.
(3)For the purposes of subsection (1)(a) “former forenames and surname” does not include -(a)in the case of a person adopted as a child, any forename and surname borne by him or her before his or her adoption;(b)any forename or surname previously borne by any person which was changed or disused before he or she attained the age of 18 years or has been changed or disused for a period of not less than 10 years; or(c)in the case of a married or divorced person, any forename or surname borne by him or her before his or her marriage.
(4)Section 117 in so far as it relates to the place where the register of members of a company must be kept and notice to the Registrar and section 120 in so far as it relates to the inspection of and copies of or extracts from that register, do, with the necessary changes, apply to the register to be kept under this section.
(5)A register of directors and officers kept under the repealed Act by an existing company in a language other than the official language is deemed to be sufficient compliance with subsection (1).
(6)Any company which fails to comply with subsection (1), (2) or (4), commits an offence and is liable to a fine which does not exceed N$2 000 and an additional fine which does not exceed N$40 for every day during which the contravention continues.

224. Duties of directors and others and of company in respect of register

(1)Any person in respect of whom the particulars referred to in section 223 are in terms of that section to be entered in the register mentioned in that section, must furnish those particulars in writing to the company concerned -(a)in the case of a person appointed as a director or officer of the company, within 28 days after the date of his or her appointment; and(b)in the case of a change in those particulars, but excluding any change contemplated in section 223(2) and a change by way of the vacation of office by the person concerned, within 14 days after the date of the occurrence of the change,and the company must, on receipt of those particulars or any change, enter that information in the register of the company.
(2)A company must, within 14 days after receipt of any particulars referred to in section 223(1)(a)(i) and (b) or of notice of any change in the particulars referred to in that section or after any director or officer or a secretary which is a body corporate has vacated office, lodge a return with the Registrar in the prescribed form reflecting the contents of the register after the particulars or the change or a statement that a vacation of office has occurred, have been entered in the register, but, any entry of a vacation of office previously advised to the Registrar, need not be reflected in that return.
(3)In respect of any of the matters referred to in section 219(1) the return referred to in subsection (2) must contain a statement, signed by a director, a secretary who is a body corporate or an officer of the company, that -(a)the consent, referred to in section 219, of the director or officer in respect of whom particulars are reflected in that return, has been obtained on a duly completed and signed prescribed form; and(b)any person appointed as director or officer of the company, is not disqualified under section 225 or 226.
(4)Any written consent referred to in section 219 must be retained by the company and the Registrar may by notice in writing require a company to transmit to him or her within 14 days after the date of the receipt of that notice, a certified copy of the consent of any director or officer of the company to act as such.
(5)Any person who or company or external company which fails to comply with this section commits an offence and is liable to a fine which does not exceed N$20 for every day during which the contravention continues.

Part 3 – Disqualifications of Directors


225. Disqualifications of directors

(1)Any of the following persons are disqualified from being appointed or acting as a director of a company -(a)a body corporate;(b)a minor or any other person under legal disability;(c)any person who is the subject of any order under this Act or deemed to have been issued under this Act disqualifying him or her from being a director;(d)save under authority of the Court -(i)an unrehabilitated insolvent;(ii)any person removed from an office of trust on account of misconduct;(iii)any person who has been convicted of insider trading or any other fraud-on-the-market offence;(iv)any person who has been convicted, whether in Namibia or elsewhere, of theft, fraud, forgery or uttering a forged document, perjury, an offence under any law for the prevention of corruption, or any offence involving dishonesty or in connection with the promotion, formation or management of a company, and has been sentenced to imprisonment without the option of a fine or to a fine to the equivalent of or exceeding N$1 000.
(2)Any person disqualified from being appointed or acting as a director of a company and who purports to act as a director or directly or indirectly takes part in or is concerned in the management of any company, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.
(3)Nothing in this section prevents a company from providing in its articles for any further disqualifications for the appointment of or the retention of office by any person as a director of that company.

226. Disqualification of directors, officers and others by Court

(1)The Court may make an order directing that, for any period which is specified in the order, a person, director or officer must not, without the leave of the Court, be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of any company when -(a)that person, director or officer, has been convicted of an offence in connection with the promotion, formation or management of a company;(b)the Court has made an order for the winding-up of a company and the Master has made a report under this Act stating that in his or her opinion a fraud has been committed -(i)by that person in connection with the promotion or formation of the company; or(ii)by any director or officer of the company in relation to the company since its formation;(c)in the course of the winding-up or judicial management of a company it appears that that person -(i)has been guilty of an offence referred to in section 430, whether or not he or she has been convicted of that offence; or(ii)has otherwise while an officer of the company committed any fraud in relation to the company or any breach of his or her duty to the company;(d)a declaration has been made in respect of any person under section 430(1);(e)that director or officer has persistently failed to comply with this Act or the repealed Act requiring any return, statement or other document to be lodged with or delivered or sent to, or notice to be given to, the Registrar, or that person has, where the company has failed to so comply, persistently failed to take all reasonable steps to obtain compliance;(f)that person has, while a director of a company, carried on the business of the company recklessly or with the intent to defraud creditors or for any fraudulent purpose or has been convicted of an offence in connection with that manner of carrying on of business.
(2)An order under subsection (1) may be made -(a)by the Court, on application by the Master, or, in the case of a company being wound up or under judicial management, by the Prosecutor-General in terms of section 407, or by the liquidator or the judicial manager or by any person who is a creditor or is or has been a member of that company; or(b)in the case of an order in the circumstances set out in subsection (1)(a) or (f), also summarily by the Court convicting the person concerned.
(3)A person who makes an application under this section must give not less than 10 days’ notice of his or her intention to apply for the order, to the person against whom the order is sought and the person against whom the order is sought may attend the hearing of the application and give evidence and call witnesses to give evidence on his or her behalf.
(4)Where an order under subsection (1) has been made, the person to whom the order relates must give not less than 10 days’ notice to the Master, the Prosecutor-General, the liquidator or the person who was the judicial manager of the company concerned, of any application he or she intends making for leave of the Court referred to in subsection (1), and the Prosecutor-General, liquidator or judicial manager must draw the attention of the Court to any matter which may appear to him or her to be relevant, and may give evidence and call witnesses.
(5)For the purposes of subsection (1)(b)(ii) the reference to an officer of a company must be construed as including a reference to any person in accordance with whose directions or instructions the directors of the company have been accustomed to act.
(6)An order may be made under subsection (1)(b)(ii) whether or not criminal proceedings have been instituted in respect of any matter on which the order is based.
(7)For the purposes of subsection (1)(e) it is sufficient proof that a person has so persistently failed to comply with this Act or has so persistently failed to take all reasonable steps to obtain compliance where the relevant company has so failed to comply, if within a period of five years before the date on which application is made to the Court for the relevant order -(a)that person has been found guilty on a criminal charge in connection with any defaults in respect of this Act;(b)a civil penalty has been imposed on that person under section 184,whether or not on the same occasion, at least three times.
(8)Any person who contravenes any order made under subsection (1), commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

227. Register of disqualification orders

(1)The Registrar must, at the Registration Office, keep a register of disqualification orders in which must be entered all disqualification orders made after the commencement of this Act by the Court under section 226 and any variation of, or leave granted by the Court with regard to, any order so entered.
(2)Sections 8 and 12 insofar as they relate to the inspection of documents in the Registration Office and the transmission of orders of the Court to the Registrar and the Master do, with the necessary changes, apply to this section.

228. Removal of directors and procedures in that regard

(1)A company may, notwithstanding anything in its memorandum or articles or in any agreement between it and any director, by resolution remove a director before the expiry of his or her period of office.
(2)Subsection (1) must not be construed as authorising the removal of a director of a private company who was holding office for life on 13 June 1949.
(3)Special notice must be lodged with the company of any proposed resolution to remove a director under this section or to appoint any person in the place of a director so removed at the meeting at which he or she is removed, and, on receipt of notice of the proposed resolution, the company must, as soon as is reasonably possible, deliver a copy of the notice to the director concerned who is, whether or not he or she is a member of the company, entitled to be heard on the proposed resolution at the meeting.
(4)If notice is given of a proposed resolution to remove a director under this section, and the director concerned makes representations not exceeding a reasonable length in writing to the company and requests their notification to members of the company, the company must, unless the representations are received by it too late for it to do so -(a)in any notice of the resolution given to members of the company, state that representations have been made; and(b)send a copy of the representations to every member of the company to whom notice of the meeting is sent, whether that notice is sent before or after receipt of the representations by the company.
(5)If a copy of representations referred to in subsection (4) is not sent as contemplated in that subsection because it was received too late or because of the company’s failure to do so, the director concerned may, without prejudice to his or her right to be heard orally, require that the representations be read at the meeting.
(6)A copy of the representations must not be sent out and the representations need not be read out at any meeting if, on the application of the company or of any other person who claims to be aggrieved, the Court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter.
(7)The Court may order the company’s costs or the costs of the person referred to in subsection (6) to be paid in whole or in part by the director concerned, notwithstanding that he or she is not a party to the application.
(8)Nothing in this section is to be construed as depriving a person removed from office of compensation or damages which may be payable to him or her in respect of the termination of his or her appointment as director or of any appointment terminating with that of director or as derogating from any power to remove a director which may exist apart from this section.

Part 4 – Restrictions on Directors, their Powers and Certain Acts


229. Restriction of power of directors to issue share capital

(1)Notwithstanding anything contained in its memorandum of articles, the directors of a company have no power to allot or issue shares of the company without the prior approval of the company in general meeting.
(2)The approval referred to in subsection (1) may be in the form of a general authority to the directors, whether conditional or unconditional, to allot or issue any shares in their discretion, or in the form of a specific authority in respect of any particular allotment or issue of shares.
(3)If any approval is given in the form of a general authority to the directors, it is valid only until the next annual general meeting of the company but it may be varied or revoked by any general meeting of the company before the annual general meeting.
(4)Any director of a company who knowingly takes part in the allotment or issue of any shares in contravention of subsection (1), is liable to compensate the company for any loss, damages or costs which the company may have sustained or incurred thereby, but proceedings to recover any such loss or those damages or costs must not be commenced after the expiry of two years from the date of the allotment or issue.

230. Restriction on issue of shares and debentures to directors

(1)A provision in any memorandum or articles or in any resolution of a company which authorises the directors to allot or issue any shares or debentures convertible into shares of the company at the discretion of the directors, must not authorise the allotment or issue of those shares or debentures to any director of the company or his or her nominee, or to any body corporate which is or the directors of which are accustomed to act in accordance with the directions or instructions of that director or nominee, or at a general meeting of which that director or his or her nominee is entitled to exercise or control the exercise of one-fifth or more of the voting power, or to any subsidiary of that body corporate unless -(a)the particular allotment or issue has before the allotment or issue been specifically approved by the company in general meeting;(b)those shares or debentures are allotted or issued under a contract underwriting the shares or debentures;(c)those shares or debentures are allotted or issued in proportion to existing holdings, on the same terms and conditions as have been offered to all the members or debenture holders of the company or to all the holders of the shares or debentures of the class or classes being allotted or issued; or(d)those shares or debentures are allotted or issued on the same terms and conditions as have been offered to members of the public.
(2)Any director of a company who contravenes or permits the contravention of this section commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment, and is further liable to compensate the company for any loss, damages or costs which the company may sustain or incur.
(3)Proceedings to recover any loss, damages or costs incurred under subsection (2) must not be commenced after the expiry of two years from the date of the allotment or issue.

231. Share option plans where director is interested

(1)An option or a right given directly or indirectly after 1 January 1974 to any director or future director of a company in terms of any scheme or plan, to subscribe for any shares of that company or to take up any debentures convertible into shares of that company on any basis other than that laid down in section 230(1)(c), is not valid unless authorised in terms of a special resolution of that company.
(2)For the purposes of subsection (1), the expression “future director” does not include a person who becomes a director of the company after the lapse of six months from the date on which the option or right is acquired by that person.
(3)An option or a right is not invalid in terms of this section if that director or future director of the company holds salaried employment or office in the company and is given that option or right in his or her capacity as an employee.

232. Directors not to deal in options in respect of listed shares and debentures

(1)A director of a company who purchases a right -(a)to call for delivery at a specified price, within a specified time of a specified number of shares or a specified amount of debentures which are listed by a stock exchange;(b)to make delivery at a specified price, within a specified time of a specified number of shares or a specified amount of debentures which are listed as contemplated in paragraph (a); or(c)to call for delivery at a specified price within a specified time or to make delivery at a specified price within a specified time of a specified number of shares or a specified amount of debentures which are listed as contemplated in paragraph (a),commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(2)Nothing in this section is to be taken as penalising a person who buys a right to subscribe for shares or debentures of a body corporate or buys debentures of a body corporate that confer on the holder of the right a right to subscribe for, or to convert the debentures, whole or in part, into, shares of that body corporate.
(3)In subsection (1) -(a)“shares” and “debentures” in relation to a director of a company, mean shares or debentures of that company or its subsidiary or holding company or a subsidiary of its holding company;(b)director” includes a person in accordance with whose directions or instructions the directors of a company are accustomed to act, and that person is deemed to be a director of the company.

233. Prohibition of tax free payments to directors

(1)A company must not pay to any of its directors, whether in an official or a personal capacity as a director, any remuneration free of any taxation in respect of his or her income, or otherwise calculated by reference to or varying with the amount of that taxation, or with the rate of taxation on incomes, except under a contract which was in force on 13 June 1949, and which provides expressly, and not merely by reference to the articles of the company, for payment of the remuneration.
(2)Any provision contained in the articles of a company, or in any contract other than the contract referred to in subsection (1), or in any resolution of a company or of its directors, providing for the payment to a director by way of remuneration of any amount to be determined in a manner prohibited by subsection (1), must be construed as if it provided for the payment of that amount without reference to the manner of determination of the amount.

234. Prohibition of loans to, or security in connection with transactions by, directors and managers

(1)A company must not, directly or indirectly make a loan to -(a)any director or manager of -(i)the company;(ii)its holding company; or(iii)any other company which is a subsidiary of its holding company; or(b)any other company or other body corporate controlled by one or more directors or managers of the company or of its holding company or of any company which is a subsidiary of its holding company,or provide any security to any person in connection with an obligation of that director, manager, company or other body corporate.
(2)For the purpose of subsection (1) -(a)“loan” includes -(i)a loan of money, shares, debentures or any other property; and(ii)any credit extended by a company, where the debt concerned is not payable or being paid in accordance with normal business practice in respect of the payment of debts of the same kind; and(b)one or more directors or managers of a company contemplated in subsection (1)(b) are deemed to control another company or body corporate only if -(i)that director or manager or his or her nominee is a member or that directors or managers or their nominees are members of that other company or body corporate and the composition of its board of directors is controlled by that director, manager or nominee or those directors, managers or nominees, and the composition is deemed to be so controlled if the director or manager or his or her nominee or the directors or managers or their nominees may, by the exercise of some power and without the consent or concurrence of any other person, appoint or remove the majority of the directors concerned, and that director, manager or nominee or those directors, managers or nominees are deemed to have power to appoint a director where a person cannot be appointed as a director without his or her or their consent or concurrence; or(ii)more than one-half of the equity share capital of that other company or body corporate or, if that other body corporate is a close corporation, more than 50 per cent of the interest in that corporation is held by that director, manager or nominee or those directors, managers, or nominees;(c)security” includes a guarantee.
(3)Subsections (1) and (2)(b) must not be construed as prohibiting a company from making a loan to, or providing security to any person in connection with an obligation of, its holding company or subsidiary or a subsidiary of that holding company.
(4)Subsection (1) does not apply -(a)in respect of -(i)the making of a loan by a company to its own director or manager;(ii)the provision of security by a company in connection with an obligation of its own director or manager;(iii)the making of a loan by a company to any other company or other body corporate controlled by one or more of the directors or managers of the first-mentioned company; or(iv)the provision of security by a company in connection with an obligation of any other company or other body corporate controlled by one or more of the directors or managers of the first-mentioned company,with the prior consent of all the members of the company or in terms of a special resolution relating to a specific transaction, but, in respect of any loan made or security provided before the commencement of this Act, that consent is deemed to have been given if the transaction concerned has subsequently, whether before or after the commencement, been ratified by all the members of the company;(b)subject to subsection (5), in respect of anything done to provide any director or manager with funds to meet expenditure incurred or to be incurred by him or her for the purposes of the company concerned or for the purpose of enabling him or her properly to perform his or her duties as director or manager of that company;(c)in respect of anything done in good faith in the ordinary course of the business of a company actually and regularly carrying on the business of the making of loans or the provision of security;(d)to the provision of money or making of loans by a company for the purposes contemplated in section 44(2)(b) and (c);(e)to the making of a loan or the provision of security with the approval of the company in general meeting for housing for its director or manager; or(f)in respect of -(i)the making of a loan by a company to a director or manager of its subsidiary; or(ii)the provision of security by a company to another person in connection with an obligation of a director or manager of its subsidiary,as long as that director or manager is not also a director or manager of that company itself.
(5)A loan must not be made or security provided by virtue of subsection (4)(b), except -(a)with the prior approval of the company given at a general meeting at which the amount of the loan or the extent of the security and the purposes of the loan are disclosed; or(b)that, if the approval contemplated in paragraph (a) is not given, as at or before the next annual general meeting of the company, on condition that the loan must be repaid or the liability under the security must be discharged, within six months from the conclusion of that annual general meeting.
(6)Any director or officer of a company who authorises, permits or is a party to the making of any loan or the provision of any security contrary to this section -(a)is liable to indemnify the company and any other person who had no actual knowledge of the contravention, against any loss directly resulting from the invalidity of that loan or security; and(b)commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(7)For the purposes of subsection (6) “director or officer of a company” includes, where the company is a subsidiary, any director or officer of its holding company.

235. Payments to directors for loss of office or in connection with arrangements and take-over schemes

(1)A company must not make any payment or grant any benefit or advantage to any director or past director of the company or of its subsidiary company or holding company or of any subsidiary of its holding company -(a)by way of compensation for loss of office or as consideration for or in connection with his or her retirement from office;(b)by way of compensation, consideration or for any other reason, for loss or retention of office or otherwise, in connection with any scheme referred to in section 319; or(c)by way of compensation, consideration or other reason in connection with any take-over scheme referred to in section 320,unless full particulars with respect to the proposed payment benefit or advantage have been disclosed to the members of the company and the making of the payment or the grant of the benefit or advantage has been approved by special resolution of the company.
(2)Any payment made or benefit or advantage granted contrary to subsection (1) is -(a)in the case of paragraphs (a) and (b) of that subsection, deemed to have been received by the director or past director concerned in trust for the company; and(b)in the case of paragraph (c) of that subsection, deemed to have been received by the director or past director concerned in trust for any persons who have sold their shares as a result of the take-over offer concerned.
(3)If in connection with any take-over scheme the price to be paid to a director or past director for any shares of the company held by that director is in excess of the price offered to other holders of those shares in terms of the take-over scheme or any benefit or advantage is granted to that director or past director, the excess or the money value of the benefit or advantage, as the case may be, is for the purposes of this section, deemed to have been a payment made contrary to subsection (1)(c).
(4)A director’s expenses of distributing any sum among persons entitled because of subsection (2)(b) must be borne by him or her and must not be retained out of that sum.
(5)Where in proceedings for the recovery of any payment, benefit or advantage deemed to have been received in trust, it is shown that -(a)the payment was made or the benefit or advantage was granted in pursuance of any arrangement entered into as part of an agreement in respect of any scheme or take-over scheme, or within one year before or two years after that agreement or the take-over offer; and(b)the company, or the transferee company under any scheme or the offeror in respect of any take-over scheme was privy to that arrangement,the payment, benefit or advantage is deemed, except in so far as the contrary is shown, to be one to which this section applies.
(6)This section does not apply to any payment made or benefit or advantage granted in good faith by way of damages for breach of contract or by way of a pension, including any superannuation allowance, gratuity or similar payment in respect of past services.
(7)Nothing in this section is to be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any payments, benefits or advantages as are mentioned in this section or with respect to any other payments, benefits or advantages made or granted or to be made or granted to the directors or past directors of a company.

236. Disposal of undertaking or greater part of assets of company

(1)Notwithstanding anything contained in its memorandum or articles, the directors of a company have no power, save with the approval of a general meeting of the company, to dispose of -(a)the whole or substantially the whole of the undertaking of the company; or(b)the whole or the greater part of the assets of the company.
(2)A resolution of the company approving a disposal referred to in subsection (1) has no effect unless it authorises or ratifies in terms the specific transaction.

Part 5 – Interests of and Dealings by Directors and Others in Shares of Company


237. Definitions for purposes of this Part

For the purposes of this Part -interest” includes, without derogating from the generality of the word, any option in respect of, any right to subscribe for or any right in or to any shares or debentures;officer” in relation to a company, includes any employee who would be in possession of any information consequent on his or her immediate relationship with the directors of the company immediately before a public announcement is to be made under section 241;past director” means a person who has ceased to be a director of the company concerned for a period not exceeding six months;person” means a person in accordance with whose directions or instructions any of the directors of a company is accustomed to act;shares and debentures of the company” means the shares and debentures of the company and of its subsidiary.

238. Register of interests of directors and others in shares and debentures of company

(1)Every public company having a share capital must keep a register of the material interests of its directors, past directors, officers and persons in the shares and debentures of the company and must, within seven days after receipt of any written notice referred to in section 240, cause to be entered in respect of each director, past director, officer or person -(a)a description of and the number or amount of shares or debentures held by each of them;(b)the nature and extent of any material interest whatever, direct or indirect, held by each of them, directly or indirectly, in respect of those shares or debentures;(c)in chronological order any change, including any contract for any change in the holding of or in the interests of each of them in any shares or debentures, specifying the consideration, if any, given or received or to be given or received; and(d)the date on which each entry in the register is made.
(2)Section 117 in so far as it relates to the place where the register of members of a company must be kept and notice to the Registrar and section 120 in so far as it relates to the inspection of and copies of or extracts from that register, do, with the necessary changes, apply to the register of interests to be kept under this section.
(3)The Registrar may at any time by notice in writing require a company to transmit to him or her, within 14 days after the date of that notice, particulars of the entries made in the register for the period as may be specified in the notice.
(4)Any company which fails to comply with this section or with any requirement of the Registrar under this section and every director and officer of that company who knowingly is a party to that failure, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

239. Directors to determine officers for purpose of register

(1)When the directors of a company have knowledge of any information concerning a transaction or proposed transaction of the company or of the affairs of the company, which, if it becomes publicly known, may be expected materially to affect the price of the shares or debentures of the company and that information has not been publicly announced, they must as soon as is reasonably possible, by resolution determine which officers of the company, whose names have not already been entered in the register under section 238, are to be taken to be possessed or to become possessed of that information in the course of their respective duties and must cause the names of those officers to be entered in that register.
(2)Every director of a company who fails to comply with the requirements of subsection (1), commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

240. Duty of directors and others as to register of interests

(1)There must be lodged with a company by -(a)every director, past director, officer and person of the company within one month after the date on which this section comes into operation;(b)every director within one month after his or her appointment as a director of the company;(c)every person within one month after he or she becomes entitled to direct or instruct any director of the company; and(d)every officer who has been determined by the directors in terms of section 239,a written notice, dated and signed by him or her or his or her authorised agent, containing the particulars referred to in section 238(1)(a) and (b).
(2)Every director, past director, officer and person referred to in subsection (1) must, within 14 days after the occurrence of any change referred to in section 238(1)(c), lodge with the company, a written notice, dated and signed by him or her or his or her authorised agent containing the particulars of the changes.
(3)The obligation imposed by subsection (2) on any officer ceases in respect of any change occurring after the time of the public announcement referred to in section 241.
(4)Any director, past director, officer or person who contravenes this section or who makes any statement in any notice under this section knowing it to be false or recklessly makes any statement which is false, commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

241. Offence to deal in shares with inside information before public announcement

Every director, past director, officer or person who has knowledge of any information concerning a transaction or proposed transaction of the company or of the affairs of the company which, if it becomes publicly known, may be expected materially to affect the price of the shares or debentures of the company and who deals in any way to his or her advantage, directly or indirectly, in those shares or debentures while that information has not been publicly announced on a stock exchange or in a newspaper or through the medium of the radio or television, or through other electronic media commits an offence and is liable to a fine which does not exceed N$8 000 or to be imprisoned for a period which does not exceed two years or to both the fine and imprisonment.

Part 6 – Interests of Directors and Officers in Contracts


242. Duty of director or officer to disclose interest in contracts

(1)A director of a company who is in any way, whether directly or indirectly, materially interested in a contract or proposed contract referred to in subsection (2), which has been or is to be entered into by the company or who so becomes interested in that contract after it has been entered into, must declare his or her interest and full particulars of his or her interest as provided in this Act.
(2)Subsection (1) applies to any contract or proposed contract which is of significance in relation to a company’s business and which is entered into or to be entered into -(a)in pursuance of a resolution taken or to be taken at a meeting of directors of a company; or(b)by a director or officer of the company who either alone or together with others has been authorised by the directors of the company to enter into that contract or any contract of a similar nature.
(3)For the purposes of subsection (1) a general notice in writing given to the directors of a company by a director to the effect that he or she is a member of a specified company or firm and is to be regarded as interested in any contract which may after the date of the notice and before the date of its expiry be made with that company or firm, is deemed to be a sufficient declaration of interest in relation to any contract or proposed contract so made or to be made, if -(a)the nature and extent of the interest of that director in that company or firm is indicated in that notice; and(b)at the time the question of confirming or entering into the contract in question is first considered or at the time that director becomes interested in a contract after it has been entered into, the extent of his or her interest in that company or firm is not greater than is stated in the notice.
(4)A general notice under subsection (3) may from time to time be amended and is not effective beyond the end of the financial year of the company but may from time to time be renewed.
(5)Any director or officer of a company who fails to comply with this section commits an offence and is liable to a fine which does not exceed N$4 000 or to be imprisoned for a period which does not exceed one year or to both the fine and imprisonment.
(6)Nothing in this section is to be taken to prejudice the operation of any rule of law restricting directors of a company from having any interest in contracts with the company.

243. Manner of and time for declaration of interest

(1)A declaration of interest by a director under section 242 is not effective unless it is made at or before the meeting of directors at which the question of confirming or entering into the contract is first taken into consideration and, if in writing, is read out to the meeting or each director present states in writing that he or she has read that declaration.
(2)If for any reason it is not possible for a director to make the declaration referred to in section 242 at or before a particular meeting of directors, he or she may make it at the first meeting of directors held thereafter at which it is possible to do so and must, in that event, state the reason why it was not possible to make it at the particular meeting.

244. Written resolution where director is interested

Notwithstanding any provision in the articles of a company permitting the taking of a resolution by way of a written resolution signed by directors, no resolution which concerns contracts or proposed contracts referred to in section 242 is valid unless that section and section 243 are complied with.

245. Disclosure by interested director or officer acting for company

(1)A director or