COMPANIES ACT 1981 No. 89 of 1981 - SECT 34 Proprietary companies

COMPANIES ACT 1981 No. 89 of 1981 - SECT 34

34. (1) A company having a share capital (other than a no liability company)
may be incorporated as a proprietary company if a provision of its memorandum
or articles-

   (a)  restricts the right to transfer its shares;

   (b)  limits to not more than 50 the number of its members (counting joint
        holders of shares as one person and not counting any person in the
        employment of the company or of its subsidiary or any person who,
        while previously in the employment of the company or of its subsidiary
        was, and thereafter has continued to be, a member of the company);

   (c)  prohibits any invitation to the public to subscribe for, and any offer
        to the public to accept subscriptions for, any shares in, or
        debentures of, the company; and

   (d)  prohibits any invitation to the public to deposit money with, and any
        offer to the public to accept deposits of money with, the company for
        fixed periods or payable at call, whether bearing or not bearing
        interest.

(2) Where, upon the commencement of this Act, neither the memorandum nor the
articles of a company that is a proprietary company by virtue of paragraph (a)
of the definition of ''proprietary company'' in sub-section 5 (1) contains or
contain the restrictions, limitations and prohibitions required by sub-section
(1) of this section to be included in the memorandum or articles of a company
that may be incorporated as a proprietary company, the articles of the company
shall be deemed to include each such restriction, limitation or prohibition
that is not so included and a restriction on the right to transfer its shares
that is so deemed to be included in its articles shall be deemed to be a
restriction that prohibits the transfer of shares except to a person approved
by the directors of the company.

(3) Where a restriction, limitation or prohibition that is deemed to be
included in the articles of a company under sub-section (2) is inconsistent
with any provision already included in the memorandum or articles of the
company, that restriction, limitation or prohibition shall, to the extent of
the inconsistency, prevail.

(4) A proprietary company may, by special resolution, alter any restriction on
the right to transfer its shares included, or deemed to be included, in its
memorandum or articles or any limitation on the number of its members
included, or deemed to be included, in its memorandum or articles, but not so
that the memorandum and articles of the company cease to include the
limitation required by paragraph (1) (b) to be included in the memorandum or
articles of a company that may be incorporated as a proprietary company.