An Ordinance to provide for the establishment of business
corporations in the Republic of New Lemuria and to provide for matters
incidental or consequential thereto. (continued)
Part VIII
Corporate Records and Reports
Requirement for Keeping Books of Account, Minutes and
Records of Shareholders
76. (1) Every corporation formed under this Ordinance shall
keep correct and complete books and records of account and shall keep minutes of
meetings of shareholders, of actions taken on consent by shareholders, of all
meetings of the board of directors, of actions taken on consent by directors and
of meetings of the executive committee, if any.
(2) Every corporation formed under this ordinance shall keep
a record containing the names and addresses of all registered shareholders, the
number and class of shares held by each and the dates when they respectively
became the owners of record thereof. In addition, any such corporation which
issues bearer shares shall maintain a record of all certificates issued in
bearer form, including the number, class and dates of issuance of such
certificates.
(3) Any of the foregoing books, minutes or records may be in
written form or in any other form capable of being converted into written form
within a reasonable time.
Shareholders' Right to Inspect Books and Records
77. (1) Any shareholder or holder of a voting trust
certificate, in person or by attorney or other agent, may during the usual hours
of business, inspect, for a purpose reasonably related to his interests as a
shareholder, or as the holder of a voting trust certificate, and make copies or
extracts from the share register, books of account, and minutes of all
proceedings.
(2) Any inspection authorized by subsection (1) may be denied
to a shareholder or other person who within five years sold or offered for sale
a list of shareholders of a corporation or aided or abetted any person in
procuring for sale any such list of shareholders or who seeks such inspection
for a purpose which is not in the interest of a business other than the business
of the corporation or who refuses to furnish an affidavit attesting to his right
to inspect under this section.
(3) The right of inspection stated by this section may not be
limited in the articles or bylaws.
Directors' Right of Inspection
78. Every director shall have the absolute right at any
reasonable time to inspect all books, records, documents of every kind, and the
physical properties of the corporation, domestic or foreign, of which he is a
director, and also of its subsidiary corporations. Such inspection by a director
may be made in person or by agent or attorney, and the right of inspection
includes the right to make extracts.
Enforcement of Right of Inspection
79. Upon refusal of a lawful demand for inspection of records
required to be maintained under this Ordinance, the person making the demand may
apply to the High Court for an order directing the corporation to show cause why
an order should not be granted permitting such inspection by the applicant. Upon
the return day of the order to show cause, the High Court shall hear the parties
summarily, by affidavit, or otherwise, and if it appears that the applicant is
qualified and entitled to such inspection, the High Court shall grant an order
compelling such inspections and awarding such further relief as the High Court
may deem just and proper. On order of the High Court issued under this section,
all officers and agents of the corporation shall produce such records ordered to
be produced in their custody or power, under penalty of punishment for contempt
of court. All expenses of the production shall be defrayed by the applicant
unless the High Court order them to be paid or shared by the corporation.
Annual and Interim Reports
80. Upon the written request of any person who shall have
been a shareholder of record for at least six months immediately preceding his
request, or of any person holding, or thereunto authorized in writing by the
holders of at least five percent of any class of the outstanding shares, the
corporation shall give or mail to such shareholder an annual balance sheet and
profit and loss statement for the preceding fiscal year, and, if any interim
balance sheet or profit and loss statement has been distributed to its
shareholders or otherwise made available to the public, the most recent such
interim balance sheet or profit and loss statement. The Corporation shall be
allowed a reasonable time to prepare such annual balance sheet and profit and
loss statement.
Part IX
Amendments to Articles of Incorporation
Right to Amend Articles of Incorporation
81. A corporation may amend its articles of incorporation
from time to time in any and as many respects as may be desired, provided such
amendment contains only such provisions as might lawfully be contained in the
original articles of incorporation filed at the time of making such amendment.
Reduction of Stated Capital by Amendment
82. Reduction of stated capital which is not authorized by
action of the board may be effected by an amendment of the articles of
incorporation, but no reduction of stated capital shall be made by amendment
unless after such reduction the stated capital exceeds the aggregate
preferential amount payable upon involuntary liquidation upon all issued shares
having preferential rights in assets plus the par value of all other issued
shares with par value.
Procedure for Amendment
83. (1) Amendment of the articles of incorporation may be
authorized by vote of the holders of a majority of all outstanding shares
entitled to vote thereon at a meeting of shareholders or by written consent of
all shareholders entitled to vote thereon.
(2) Alternatively, any one or more of the following
amendments may be approved by the board:
(i) To specify or change the location of the office or
registered address of the corporation; and,
(ii) To make, revoke or change the designation of a
registered agent, or to specify or change the address of its registered agent.
(3) The articles of incorporation may be amendment by consent
in writing of all the incorporators provided the incorporators verify that no
shares have been issued.
(4) This section shall not alter the vote required under any
other section for the adoption of an amendment referred to therein, or alter the
authority of the board to authorize amendments under any other section.
Class Voting on Amendments
84. Notwithstanding any provisions in the articles of
incorporation, the holders of the outstanding shares of a class shall be
entitled to vote as a class upon a proposed amendment, and in addition to the
authorization of an amendment by vote of the holders of a majority of all
outstanding shares of the class if the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or decrease the
par value of the shares of such class, or alter or change the powers,
preferences or special rights of the shares of such class so as to affect them
adversely. If any proposed amendment would alter or change the powers,
preferences, or special rights of one or more series of any class so as to
affect them adversely, but shall not so affect the entire class, then only the
shares of the series so affected by the amendment shall be considered a separate
class for the purposes of this section.
Articles of Amendment
85. The articles of amendment shall be executed for the
corporation and acknowledged in accordance with the provisions of section 4 of
Part I, and shall be set forth:
(i) The name of the corporation, and if it has been changed,
the name under which it was formed;
(ii) The date its articles of incorporation were filed with
the Registrar of Companies;
(iii) Each section affected thereby;
(iv) If any such amendment provides for a change or
elimination of issued shares and, if the manner in which the same shall be
effected is not set forth in such amendment, then a statement of the manner in
which the same shall be effected;
(v) If any amendment reduces stated capital, then a statement
of the manner in which the same is effected and the amounts from which and to
which stated capital is reduced; and,
The articles of amendment shall be filed with the Registrar
of Companies in accordance with the provisions of Section 4 of Part I.
Effectiveness of Amendment
86. (1) Upon filing of the articles of amendment with the
Registrar of Companies, the amendment shall become effective as of the filing
date stated thereon and the articles of incorporation shall be deemed to be
amendment accordingly.
(2) No amendment shall affect any existing cause of action in
favor of or against the corporation, or any pending suit to which it shall be a
party, or the existing rights of persons other than shareholders; and in the
event the corporation name shall be changed, no suit brought by or against the
corporation under its former name shall abate of that reason.
Right of Dissenting Shareholders to Payment
87. A holder of any adversely affected shares who does not
vote on or consent in writing to an amendment to the articles of incorporation
shall, subject to and by complying with the provisions of Section 96 of Part X
have the right to dissent and to receive payment for such shares, if the
articles of amendment;
(i) Alter or abolish any preferential right of any
outstanding shares having preferences; or
(ii) Create, alter or abolish any provision or right in
respect of the redemption of any outstanding shares; or
(iii) Alter or abolish any preemptive right of such holder to
acquire shares or other securities; or
(iv) Exclude or limit the right of such holder to vote on any
matter, except as such right may be limited by the voting rights given to new
shares then being authorized of any existing or new class.
Restated Articles of Incorporation
88. (1) At any time after its articles of incorporation have
been amended, a corporation may by action of its board, without necessity of
vote of the shareholders, cause to be prepared a document entitled "Restated
Articles of Incorporation, which will integrate into one document its original
articles of incorporation ( or articles of consolidation) and all amendments
thereto, including those effected by articles of merger.
(2) The restated articles shall also set forth that this
document purports merely to restate but not to change the provisions of the
original articles of incorporation as amended and that there is no discrepancy
between the said provisions and the provisions of the restated articles.
(3) The restated articles shall be executed and filed as
provided in this section 85 of Part IX.
(4) A copy of the restated articles filed with the Registrar
of Companies in the manner provided in Section 4 of Part I shall be presumed,
until otherwise shown, to be the full and true articles of incorporation as in
effect on the date filed.
(5) A corporation may also integrate its articles of
incorporation and amendments thereto by the procedure provided in this Part for
amending the articles of incorporation.
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