Commonwealth Numbered Acts

COMPANIES ACT 1981 No. 89 of 1981 - SECT 36

36. (1) A corporation cannot be a member of a company that is its holding
company, and any allotment or transfer of shares in a company to its
subsidiary is void.

(2) Any purported acquisition of units of shares in a company that is a
holding company by its subsidiary is void.

(3) Neither sub-section (1) nor (2) applies where-

   (a)  the subsidiary is concerned as a personal representative; or

   (b)  the subsidiary is concerned as a trustee and-

        (i)    the holding company or a subsidiary of the holding company is
               not beneficially interested under the trust; or

        (ii)   the holding company or a subsidiary of the holding company is
               beneficially interested under the trust only by way of a
               security given for the purposes of a transaction entered into
               in the ordinary course of business in connection with the
               lending of money, not being a transaction entered into with a
               person associated with the holding company or a subsidiary of
               the holding company.

(4) This section does not prevent a subsidiary that was, at the commencement
of the Companies Ordinance 1962, a member of its holding company from
continuing to be a member but, subject to sub-section (3), the subsidiary does
not have a right to vote at meetings of the holding company or of any class of
members of the holding company.

(5) This section does not prevent a subsidiary from continuing to be a member
of its holding company if, at the time when it becomes a subsidiary of the
holding company, it already holds shares in that holding company, but, subject
to sub-section (3)-

   (a)  the subsidiary does not have a right to vote at meetings of the
        holding company or of any class of members of the holding company; and

   (b)  the subsidiary shall, within the period of 12 months or such longer
        period as the Court may allow after becoming the subsidiary of its
        holding company, dispose of all of its shares in the holding company.

(6) Subject to sub-section (3), sub-sections (1), (2), (4) and (5) apply in
relation to a nominee for a corporation that is a subsidiary as if references
in those sub-sections to such a corporation included references to a nominee
for it.

(7) In relation to a holding company that is either a company limited by
guarantee or an unlimited company, the reference in this section to shares
shall, whether or not the holding company has a share capital, be construed as
including a reference to the interest of its members as such, whatever the
form of that interest.