Duties of the

Company Secretary

 By Mark Robertson Shaw

 

 

 

 

CONTENTS 

Foreword 

Introduction 

Role of the Company Secretary 

Duties as a Deemed Director 

Established and Best Practice 

Core Duties of the Company Secretary 

Additional Duties of the Company Secretary 

Powers of the Company Secretary 

Appendix: Offences under the Companies Act 1993 

 

 

 

Copyright 2000  

IMPORTANT DISCLAIMER: 

This publication is sold on the understanding that the author and editor are not responsible for the consequence of any actions taken on the basis of information in this work nor for any errors or omissions.  The Institute, the author and editor expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything done and of the consequence of anything done or omitted to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication.  

All rights reserved.   

No part of this work covered by copyright may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying , recording tape, or information and retrieval systems) without the written permission of the Author. 

 

 

 

FOREWORD 

This document has been produced by the Chartered Institute of Corporate Management in consultation with member and non-member company secretaries. It is intended to be an authoritative guide to the duties of the company secretary in New Zealand public and private registered companies. Its purpose is to distinguish between the duties which all company secretaries should perform (core duties) and those which they often perform (additional duties). Core duties are defined as those for which the company secretary is responsible as a deemed director of the company and those undertaken as a matter of established and best practice. Our list of core duties is therefore a distillation of statue, common law and good practice. 

For those who are newly appointed to the office of company secretary, this document should provide invaluable guidance as to the extent of the company secretary’s duties and responsibilities. Experienced professionals will also find the document useful because it focuses on those areas where the company secretary may be held personally liable for the company’s failure to comply with the law. 

As a deemed director of the company at the centre of the decision making process, the company secretary is in a powerful position of influence. 

The company secretary should assist and guide the directors in their pursuit of profit and growth but should also act with integrity and independence to protect the interests of the company, its shareholders and its employees. Today’s company secretary should play a proactive and central role in the governance of the company. This requires excellent communication skills, a thorough knowledge of the company’s business and applicable regulations, strength of character, integrity, and above all a professional approach. 

We record our appreciation and thanks to Mark Robertson Shaw of The F.I.R.S.T. Foundation who prepared  this booklet.

 

INTRODUCTION 

Whilst the law does not now require every NZ registered company to appoint a company secretary the appointment of a company secretary by the board of directors is essential element of the governance structure. As directors have come under increased pressure to govern their companies better they have had to place more reliance on company secretaries to perform increasingly complex tasks more efficiently and, what is becoming more important, to keep the company out of court. 

However, the law does not state explicitly what the company secretary should do once appointed. Indeed, no references to the company secretary in the Companies Act 1993 might lead a person newly appointed to the post to underestimate the extent of the responsibilities acquired. 

A closer examination of the law and modern business practice reveals that the company secretary in likely to be a deemed director of the company with a central role in the governance and administration of its affairs 

 

ROLE OF THE COMPANY SECRETARY 

The role of the company secretary is: 

 

DUTIES AS A DEEMED DIRECTOR OF THE COMPANY 

The company secretary 

The company secretary’s duties as an officer of the company form the basis of what we have defined as core duties and are those which all company secretaries must attend to in order to comply with the law, regardless of the terms of their individual contracts of employment. 

It is vital that company secretaries are aware of their duties and potential liabilities as a deemed director .1. of the company. The fiduciary duties of directors apply equally to executives occupying senior management positions in the company and authorised to act on its behalf  2. This usually includes the company secretary who, in any event, as an officer has the following duties: to act in good faith in the interests of the company; not to act for any collateral purpose; to avoid conflicts of interest; and not to make secret profits from dealings for and on behalf of the company. 

Company secretaries must take care to ensure that, where certain of their responsibilities are delegated, such tasks are properly executed since they can be held accountable in law for any failure of the company to comply.

1.     s.130 of the Companies Act 1993

2.     s.126 of the Companies Act 1993

ESTABLISHED AND BEST PRACTICE 

Some matters have been deemed by the Institute to be core duties even though they cannot be supported by statutory references. 

For example, ensuring compliance with Stock Exchange rules and regulations has been included in the list of core duties. However, the rules of the New Zealand Stock Exchange, which is the competent authority in New Zealand for the purposes of admission of securities to listing, do not provide for the personal liability of the company secretary 

The penalties imposed by the Stock Exchange for non-compliance with its rules are normally directed towards the directors or company itself and can include a public reprimand of the directors, suspension or withdrawal of the company’s listing. There is, therefore, no strict legal basis on which to include compliance with Stock Exchange regulation in the list of core duties. 

In practice, the duties are closely related to the company secretary’s other duties as an officer of the company. Indeed, it would be almost impossible for company secretaries of public companies to perform their statutory duties without some involvement in Stock Exchange compliance. It is therefore a matter of best practice that the company secretary should be responsible for this area. The fact that it is also established practice in virtually all public companies means that it must also be included as a core duty.

  

ETHICAL CONSIDERATIONS AND THE COMPANY SECRETARY 

A company’s ethics are usually judged by the way it treats shareholders and other members of the public who are affected by its activities. The fraudulent activities of a number of corporate executives, and the business failures to which they have sometimes given rise, have been widely publicised in New Zealand. 

As a reaction to the revelations after the 1987 crash, where personal greed and short-term advantage were in certain well-known organisations, put ahead of fairness or reputation, a remarkable change in attitude has taken place. Over the last few years prominent business leaders have become more focussed on business ethics, which have gained the attention of a wider audience. 

The Institute’s Code of Ethics (Appendix II) is a practical framework for correct behaviour, with an emphasis on fairness and good conduct towards those with whom the corporate manager deals. It is not an esoteric treatise on professional conduct but a practical working document. 

Occasionally it will be necessary for the company secretary to show firmness and follow a certain course of action despite criticism, discontent, and even hostility of directors, as well as perhaps senior colleagues within the organization.  Although the contribution of the company secretary must be positive and constructive, as there is no point in being unnecessarily rigid, there will be times when “no” must be said. 

It may be that the company secretary needs greater protection than other employees and should not be subject to the threat of summary dismissal for putting forward a point of view which may be unpalatable to the directors. 

A reputation for reliable and fair dealing is a valuable asset assisting companies to survive and achieve their long-term goals. While most companies want to be considered behaving ethically, there is no simple answer, no universally accepted set of principles, and no agreement about what are ethical issues. 

The company secretary is therefore essential in helping to uphold proper ethical standards of governance

 

CORE DUTIES OF THE COMPANY SECRETARY 

The core duties of the company secretary of a New Zealand company limited by shares are as follows:

1.      Board Meetings

Co-ordinating the operation of the company’s formal decision making and reporting machinery; formulating meeting agendas with the chairman and /or the chief executive; attending and minuting of the meetings; maintaining minute books; certifying copies of minutes; and ensuring that correct procedures are followed. 

2.      General Meetings

Originating and obtaining internal and external agreement to all documentation for circulation to shareholders; co-ordinating the administration and minuting of meetings; and ensuring that correct procedures are followed.

3.      Company Constitution

Ensuring that the company complies with its constitution; drafting and incorporating amendments in accordance with correct procedures

4.      General Compliance

Monitoring and ensuring compliance 3 with relevant legal requirements, particularly under the Companies Act.

5.      Stock Exchange Requirements

Monitoring and ensuring compliance with the requirements of the New Zealand Stock Exchange; managing relations with the exchange through the company’s brokers; releasing information to the market; ensuring the security of unreleased price-sensitive information; and making applications for listing of additional issues of securities

 3      The company secretary may not be personally involved with all areas of compliance and ‘ensuring compliance’ may read as ensuring that satisfactory arrangements are in place to secure compliance 

4      If the company is quoted on an overseas Stock Exchange, the company secretary will also be responsible for monitoring and ensuring compliance with that exchange’s regulations and procedures

 

6.      Statutory Registers & Books

Maintaining the following books and statutory registers 

7.      Statutory Returns

Filing information with the Registrar of Companies to report certain changes regarding the company or to comply with requirements for periodic filing. Of particular importance in this regards are: 

8.      Report & Accounts

Co-ordinating the publication and distribution of the company’s annual report and accounts and interim statement in consultation with the company’s internal and external advisers and, in particular preparing the directors’ report. 

9.      Share Registration

Maintaining the company’s register of members; dealing with transfers and other matters affecting shareholdings; and dealing with queries and requests from shareholders 5 

5      Although this may be dealt with by external service registrars, the company(including the company secretary) may still be held liable for any failure to comply with the law. The company secretary will therefore be responsible for liaison with the registrars and resolving matters of particular sensitivity

10.    Shareholder Communication

Communicating with the shareholders (i.e. through circulars); payment of dividends and interest; issuing documentation regarding rights issues and capitalisation issues; general shareholder relations; and relations with institutional shareholders and their investment protection committees

11.    Shareholder Monitoring

Monitoring movements on the register of members to identify an apparent “stake-building’ in the company’s shares by potential takeover bidders; and making inquiries of members as to beneficial ownership of holdings

12.  Share and Capital Issues & Restructuring

Implementation of changes in the structure of the company’s share and loan capital and devising; implementing and administering directors’ and employees’ share participation schemes

13.   Acquisitions & Disposals

Participating as a key member of the company team established to implement corporate acquisitions and disposals; protecting the company’s interests by ensuring the effectiveness of all documentation and that due diligence disclosures enable proper commercial evaluation prior to completion of the transaction

14.  Corporate Governance

Reviewing developments in corporate governance and advising and assisting the directors with respect to their duties and responsibilities and compliance with their personal obligations under company law and, if applicable Stock Exchange requirements.

15.   Non-Executive Directors

Acting as a channel of communication and information for non-executive directors

16.   Company Seal

Ensuring the safe custody and proper use of the company seal

17.  Registered Office

The establishment and administration of the registered office; the receipt, co-ordination and distribution of official correspondence received by the company at its registered office; and ensuring the provision of facilities for the public inspection of company documents

18.   Subsidiary Companies

            The administration of subsidiary companies; implementing changes to, and maintaining a record of the group’s         structure 

ADDITIONAL DUTIES OF THE COMPANY SECRETARY  

In contrast with the duties and responsibilities arising from the list of offences in Appendix A, the duties which the company secretary commonly undertakes in areas such as accounting, property, pensions and insurance management cannot be considered to be core duties. However, these duties frequently take up a substantial proportion of the company secretary’s time and their importance should not be underestimated. 

The professional background, previous work experience and general personal capabilities of the company secretary will generally dictate the nature and scope of these additional responsibilities. For example, a lawyer is more likely to undertake litigation, an accountant more likely to manage a treasury function, and a Chartered Secretary more likely to manage property, pensions and insurance matters. However, these examples are merely examples and, in practice, there are very few areas that are the exclusive preserve of any category of professional,. Most company secretaries will be involved in one or more of the following activities:

LEGAL 

Commercial law                    Intellectual property

Conveyancing                       Contract drafting

Contract vetting                    Contracts negotiation

Property management           Litigation 

 

ACCOUNTING/FINANCE 

Payroll                                Treasury

Taxation                             Project finance

Financial accounting           Corporate finance

Internal audit                      Credit control

Financial management        Management accounting 

 

PERSONNEL & EMPLOYEE BENEFITS 

Employment law                  Personnel administration

Profit share schemes           Other employee benefits 8

Pensions administration        Employee Executive  Schemes

 Share Option & trusteeship 

8.     Most commonly the administration of company cars, health insurance and life assurance schemes

GENERAL ADMINISTRATION 

Insurance administration        Risk management

Facilities management           Premises administration

Office administration            Computer systems

Charitable donations   

GENERAL MANAGEMENT

Strategic planning                  Corporate planning

Directorships of group           Liaising with professional advisers

subsidiaries

Most company secretaries could probably add to the above list, particularly where their company’s business is subject to further specific external regulation. As a general rule, company secretaries of small to medium sized companies are more likely to be involved in a wider range of administrative duties than their counterparts in larger companies

POWERS OF THE COMPANY SECRETARY 

While the 1993 Companies Act does not deal with the office of company secretary, or any other officer of the company, the procedural burden the Act imposes on the board and individual directors means that the corporate manager with company secretarial duties means that the corporate manager with company secretarial duties is need now more than ever before. It is immaterial that the position of secretary in no longer provided for in the Act 

In companies, management powers or duties will be delegated either formally or informally by the board, and a person to whom they are delegated may in certain circumstances be a deemed director as a result. A delegatee cannot in turn delegate responsibility for a duty or power and thereby avoid being a deemed director. Liability or responsibility for the administration of companies may be placed on employees of a company in three distinct areas. As: 

Section 126 of the Companies Act 1993 provides that a director includes any person occupying a position of director whether named as a director or not. The section includes an extended definition of ‘director’ which applies only in relation to certain directors’ duties. In general terms, “director” includes a: 

·        de facto controller of the company; 

·        delegate of the board; or 

·        shareholder in certain circumstances. 

Section 126(1)(c) is the section of the act directly relevant to the company secretary as delegates of the board. In this section the definition of director includes: 

·        direct delegation – a person to whom a power or duty of the board has been directly delegated by the board with that persons consent 

·        exercise of power or duty of the board – a person who exercises a power or duty of the board with the consent of the board 

The first part of section 126(1)(c) applies where the board directly delegates the power or duty though formal instruction or direction as provided for in section 130 of the Act where there are no constitutional restrictions on doing so other than the powers listed in the Second Schedule to the Act. 

In the second part of section 126(1)(c) it is recognised that there may be no formal or direct act of delegation by the board. This applies where a person exercises a power or duty of the board without the express delegation but with the acquiescence of the board. 

The company secretary can only be deemed a director for certain purposes of certain sections of the Act: 

Sections 131-141      general directors’ duties and disclosure of directors’ interests in company transactions 

Sections 145-149      use of company information, relevant interests, and directors’ share interests 

Sections 298-299      voidable transactions 

Section 309      claims relating to debts payable after commencement of liquidation 

It is in the best interests of both the board and the delegate to establish procedures for delegation of particular powers or duties, along with suitable monitoring procedures to ensure the correct exercise of the power or duties delegated

  

APPENDIX I

 

OFFENCES UNDER THE COMPANIES ACT 

The company can be prosecuted for the following offences under the Companies Act 1993. The list of offences has been grouped under the same headings used in the list of core duties of the company secretary. 

  

1.      BOARD MEETINGS 

 Section 122(7)(a)    resolutions in lieu of meetings  

Section 189(5)(a)       company records 

Section 189(5)(b)       company records 

Section 190(3)         the form in which company records are kept 

Section 379         falsifying records 

 

2.      `GENERAL MEETINGS 

Section 25(5)(a)            use of a company name 

Section 122(7)(a)        resolutions in lieu of meetings  

Section 122(7)(b)        resolutions in lieu of meetings 

Section 304(6)             false claims by unsecured creditors in liquidations 

Section 305(11)         false claims by secured creditors in liquidations 

Section 377               to false statements 

Section 378                fraudulent use or destruction of property 

Section 379             falsifying records 

Section 380              carrying on business fraudulently 

Section 382(4)       persons prohibited from managing companies 

Section 383(5)        acting as a director of a company while prohibited by the Court 

Section 385(9)      acting as a director of a company or taking part in the management of a   company while prohibited by the Registrar 

 

3.      CONSTITUTION

 

Section 28(4)             adoption of a constitution or alteration to the constitution of a company 

Section 32(4)              adoption and alteration of a constitution 

Section 33(6)             a new form of constitution 

Section 34(3)             alteration to the constitution of a company by the Court 

Section 176(4)           alterations to the constitution of a company by the Court

Section 339(2)(a)        changes in the constitution of an overseas company 

Section 339(2)(b)          changes in the constitution of an overseas company 

 

4.      GENERAL COMPLIANCE 

Section 179(8)          d isclosure and use of information obtained in the course of an    investigation 

Section 189(5)(a)          company records 

Section 189(5)(b)        company records 

Section 190(3)            the form in which company records are kept 

Section 215(2)(a)     public inspection of company records 

Section 215(2)(b)       public inspection of company records 

Section 216(2)(a)       inspection of company records by shareholders 

Section 216(2)(b)    inspection of company records by shareholders 

Section 218(2)(a)  the obligation to provide copies of documents 

Section 218(2)(b)   obligation to provide copies of documents 

Section 243(10)  duty of a liquidator to summon meeting of creditor 

Section 250(7)    termination of the liquidation of a company 

Section 273(2)   certain prohibited conduct 

Section 274(2)    the duty to identify and deliver property 

Section 25(5)(b)    the use of a company name 

Section 280(3)   qualifications of liquidators 

Section 333(5)(a)    name reservation by overseas companies 

Section 333(5)(b)    name reservation by overseas companies 

Section 334(6)(a)          the registration of overseas companies 

Section 334(6)(b)      the registration of overseas companies 

Section 365(5)       Registrar's powers of inspection 

Section 366(4)       disclosure of information and reports obtained during an investigation 

Section 381       improper use of the word "Limited"  

5.      STOCK EXCHANGE REQUIREMENTS

 

Section 63(9)      stock exchange acquisitions of a company’s own shares subject to prior    notice  to shareholders 

Section 63(10)    stock exchange acquisitions of a company's own shares subject to prior   notice to shareholders 

Section 65(3)(a)    stock exchange acquisitions of a company's own shares without prior   notice to shareholders 

Section 65(3)(b) stock exchange acquisitions of a company's own shares without prior notice to shareholders

 

6.      STATUTORY REGISTERS 

Section 87(4)(a)       obligation to keep a share register 

Section 87(4)(b)     the obligation to keep a share register 

Section 88(5)(a)        the place where the share register must be kept 

Section 88(5)(b)     the place where the share register must be kept 

Section 90(2)      the duties of directors in relation to the share register 

 

7.      STATUTORY RETURNS  

Section 159(3)      the obligation to give notice of a change of directors 

Section 214(10)       the obligation to file an annual return 

Section 340(6)(a)    filing of annual returns by overseas companies 

Section 340(6)(b)  filing of annual returns by overseas companies 

 

8.      REPORTS & ACCOUNTS 

Section 108(6)             the requirement to satisfy the solvency test 

Section 140(4)                disclosure of directors' interests 

Section 194(4)             the keeping of accounting records 

Section 195(3)(a)          the place where accounting records must be kept 

Section 195(3)(b)      the place where accounting records must be kept 

Section 196(7)(a)    the appointment of an auditor 

Section 196(7)(b)    the appointment of an auditor

Section 206(3)        access to information by auditors 

Section 206(4)           access to information by auditors 

Section 208(2)               the duty to prepare an annual report 

Section 209(3)             the duty to send an annual report to shareholders 

 

9.      SHARE REGISTRATION 

Section 84(6)(a)           relates to the transfer of shares 

Section 84(6)(b)         the transfer of shares 

Section 85(2)(a)         the transfer of shares under an approved system 

Section 85(2)(b)       the transfer of shares under an approved system 

Section 95(7)(a)         share certificates 

Section 95(7)(b)      share certificates

 

10.  SHAREHOLDER COMMUNICATION 

Section 52(5)                                   distributions to shareholders 

Section 61(9)                                   procedure for making a certain type of offer to shareholders 

Section 61 (10)(a)                          procedure for making a certain type of offer to shareholders 

Section 61 (10)(b)                           the procedure for making a certain type of offer to shareholders 

Section 83(5)(a)                              statements of shareholder rights  

Section 83(5)(b)                            statements of shareholders' rights 

Section 107(8)                               unanimous assent to certain types of action 

Section 122(7)(b)                          resolutions in lieu of meetings 

Section 210(2)                            duty to send financial statements to shareholders who elect not to     receive an annual report 

 

11.  SHAREHOLDER MONITORING 

 

12.  SHARE & CAPITAL ISSUES AND RESTRUCTURING 

Section 40(7)                                   consideration for which shares are issued

Section 43(2)                                   the obligation of the board to deliver a notice of the issue of shares 

Section 44(5)                                   the issue of shares with the approval of shareholders 

Section 47(9)                               the consideration for which shares are issued 

Section 49(5)                                   consideration for which convertible securities, options, and shares are    issued  

Section 49(6)                                   consideration for which convertible securities, options, and shares are    issued  

Section 58(4)                               the acquisition by a company of its own shares 

Section 60(7)                                   offers to shareholders to acquire shares 

Section 61(9)                                   procedure for making a certain type of offer to shareholders 

Section 61 (10)(a)                      procedure for making a certain type of offer to shareholders 

Section 69(6)                                the redemption of shares at the option of a company 

Section 70(4)                               the requirement for a company to satisfy the solvency test on the     redemption of shares 

Section 71(8)                             special redemptions of shares 

Section 71(9)(a)                       special redemptions of shares 

Section 71(9)(b)                        special redemptions of shares 

Section 76(7)                            offers of financial assistance to acquire shares 

Section 77(4)                             requirement to satisfy the solvency test    

Section 78(8)                            offers of financial assistance                  

Section 78(9)(a)                    relates to offers of financial assistance in certain cases 

Section 78(9)(b)                        offers of financial assistance in certain cases 

Section 80(2)(a)                     relates to the provision of financial assistance not exceeding 5   percent of shareholders' funds 

Section 80(2)(b)                        provision of financial assistance not exceeding 5 percent of      shareholders' funds 

Section 221(6)                       the approval of an amalgamation proposal 

Section 222(6)                       short form of amalgamation 

Section 236(5)                    the approval of arrangements, amalgamations, and compromises   by the Court 

Section 237(3)                    the power of the Court to make additional orders in connection

                               with the approval of an arrangement or amalgamation or          compromise 

 

13.  ACQUISITIONS & DISPOSALS 

Refer to Section 12 above 

 

14.  COMPANY SEAL 

The 1993 Act does not require a company to have a company seal unless provided for by the company constitution and it should therefore be used in accordance with the conditions set out within the individual company constitution .For best practice the sections in the Companies Act 1955 should be used.

 

15.  REGISTERED OFFICE 

Section 188(6)                           requirement to change a company's registered office 

 

 

APPENDIX II

 

OFFENCES UNDER THE COMPANIES ACT 

The company can be prosecuted for the following offences under the Companies Act 1993. The list of offences has been grouped under the same headings used in the Companies Act Part XXI Sections 373 - 374. 

PENALTY FOR FAILURE TO COMPLY WITH ACT 

A person convicted of an offence against any of the following sections is liable to-a fine not exceeding $5,000:

 

Section 25(5)(a)                              use of a company name 

Section 40(7)                                   consideration for which shares are issued 

Section 49(5)                                   consideration for which convertible securities, options, and shares are       issued  

Section 52(5)                                   distributions to shareholders 

Section 60(7)                                  offers to shareholders to acquire shares 

Section 61(9 )                               procedure for making a certain type of offer to shareholders 

Section 61 (10)(a)                       procedure for making a certain type of offer to shareholders 

Section 63(9)                             stock exchange acquisitions of a company’s own shares subject to prior       notice  to shareholders 

Section 65(3)(a)                          stock exchange acquisitions of a company's own shares without prior   notice to shareholders 

Section 69(6)                                         the redemption of shares at the option of a company 

Section 70(4)                               the requirement for a company to satisfy the solvency test on the     redemption of shares 

Section 71(8)                             special redemptions of shares 

Section 71(9)(a)                       special redemptions of shares 

Section 76(7)                            offers of financial assistance to acquire shares 

Section 77(4)                     requirement to satisfy the solvency test 

Section 78(8)                            offers of financial assistance 

Section 78(9)(a)    relates to offers of financial assistance in certain cases 

Section 80(2)(a) relates to the provision of financial assistance not exceeding 5      percent of shareholders' funds 

Section 83(5)(a)          statements of shareholder rights 

Section 84(6)(a)                    relates to the transfer of shares 

Section 85(2)(a)                    the transfer of shares under an approved system 

Section 95(7)(a)          share certificates 

Section 108(6)             the requirement to satisfy the solvency test 

Section 122(7)(a)        resolutions in lieu of meetings  

Section 218(2)(a)                  the obligation to provide copies of documents 

Section 221(6)                       the approval of an amalgamation proposal 

Section 222(6)                       short form of amalgamation 

Section 243(10)                     duty of a liquidator to summon meeting of creditor 

 

A person convicted of an offence against any of the following sections is liable to-

a fine not exceeding $10,000

 

Section 34(3)                                               alteration to the constitution of a company by the Court 

Section 87(4)(a)                                          obligation to keep a share register 

Section 88(5)(a)                                          the place where the share register must be kept 

Section 90(2)                                               the duties of directors in relation to the share register

Section 140(4)                                       disclosure of directors' interests 

Section 179(8)                                       disclosure and use of information obtained in the course of an    investigation 

Section 189(5)(a)                                  company records 

Section 195(3)(a)                                  the place where accounting records must be kept 

Section 196(7)(a)                                  the appointment of an auditor 

Section 206(4)                                       access to information by auditors 

Section 215(2)(a)                                  public inspection of company records 

Section 216(2)(a)                                  inspection of company records by shareholders 

Section 250(7)                                       termination of the liquidation of a company 

Section 280(3)                    qualifications of liquidators 

Section 333(5)(a)                            name reservation by overseas companies 

Section 334(6)(a)                            the registration of overseas companies 

Section 339(2)(a)                            changes in the constitution of an overseas company 

Section 340(6)(a)                            filing of annual returns by overseas companies 

Section 365(5)                    Registrar's powers of inspection 

Section 366(4)                    disclosure of information and reports obtained during an investigation 

Section 381                                     improper use of the word "Limited" 

 

A person convicted of an offence against any of the following sections of this Act is liable to a fine not exceeding $50,000 or imprisonment for a term not exceeding 2 years: 

Section 273(2)                    certain prohibited conduct 

Section 274(2)                    the duty to identify and deliver property

 

A person convicted of an offence against any of the following sections of this Act is liable to imprisonment for a term not exceeding 5 years or to a fine not exceeding $200,000:

 

Section 304(6)                    false claims by unsecured creditors in liquidations 

Section 305(11)                           false claims by secured creditors in liquidations 

Section 377                                 to false statements 

Section 378                               fraudulent use or destruction of property 

Section 379                               falsifying records

Section 380                               carrying on business fraudulently 

Section 382(4)                           persons prohibited from managing companies 

Section 383(5)                           acting as a director of a company while prohibited by the Court 

Section 385(9)                           acting as a director of a company or taking part in the management of a

                                        company while prohibited by the Registrar

 

 

 

PENALTIES THAT MAY BE IMPOSED ON DIRECTORS IN CASES OF FAILURE

BY BOARD OR COMPANY TO COMPLY WITH ACT

 

A director of a company who is convicted of an offence against any of the following sections of this Act is liable to a fine not exceeding $5,000:

 

Section 25(5)(b)                          the use of a company name 

Section 61 (10)(b)           the procedure for making a certain type of offer to shareholders 

Section 63(10)                             stock exchange acquisitions of a company's own shares subject to prior      notice to shareholders 

Section 65(3)(b)                          stock exchange acquisitions of a company's own shares without prior      notice to shareholders 

Section 71(9)(b)                        special redemptions of shares 

Section 78(9)(b)                        offers of financial assistance in certain cases 

Section 80(2)(b)                        provision of financial assistance not exceeding 5 percent of          shareholders' funds 

Section 83(5)(b)                        statements of shareholders' rights 

Section 84(6)(b)                          the transfer of shares 

Section 85(2)(b)                          the transfer of shares under an approved system 

Section 95(7)(b)                          share certificates 

Section 107(8)                           unanimous assent to certain types of action 

Section 122(7)(b)                      resolutions in lieu of meetings 

Section 188(6)                           requirement to change a company's registered office 

Section 218(2)(b)                      obligation to provide copies of documents 

 

A director of a company who is convicted of an offence against any of the following sections is liable to a fine not exceeding $10,000 

Section 28(4)                                   adoption of a constitution or alteration to the constitution of a company

Section 32(4)                                   adoption and alteration of a constitution 

Section 33(6)                                   a new form of constitution 

Section 43(2)                                   the obligation of the board to deliver a notice of the issue of shares 

Section 44(5)                                   the issue of shares with the approval of shareholders 

Section 47(9)                               the consideration for which shares are issued 

Section 49(6)                                   consideration for which convertible securities, options, and shares are     issued 

Section 58(4)                               the acquisition by a company of its own shares 

ection 87(4)(b)                              the obligation to keep a share register 

Section 88(5)(b)                          the place where the share register must be kept 

Section 159(3)                             the obligation to give notice of a change of directors 

Section 176(4)                           alterations to the constitution of a company by the Court 

Section 189(5)(b)                      company records 

Section 190(3)                             the form in which company records are kept 

Section 194(4)                             the keeping of accounting records 

Section 195(3)(b)                        the place where accounting records must be kept 

Section 196(7)(b)                        the appointment of an auditor 

Section 206(3)                           access to information by auditors 

Section 207(2)                    attendance of auditors at meetings of shareholders 

Section 208(2)                    the duty to prepare an annual report 

Section 209(3)                    the duty to send an annual report to shareholders 

Section 210(2)                    duty to send financial statements to shareholders who elect not to    receive an annual report 

Section 214(10)                               the obligation to file an annual return 

Section 215(2)(b)                            public inspection of company records 

Section 216(2)(b)                            inspection of company records by shareholders 

Section 236(5)                    the approval of arrangements, amalgamations, and compromises     by the Court 

Section 237(3)                    the power of the Court to make additional orders in connection

                               with the approval of an arrangement or amalgamation or

                               compromise

Section 333(5)(b)                            name reservation by overseas companies 

Section 334(6)(b)                            the registration of overseas companies 

Section 339(2)(b)                            changes in the constitution of an overseas company 

Section 340(6)(b)                            filing of annual returns by overseas companies 

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