The Myanmar Companies Law

(The Pyidaungsu Hluttaw Law No. 29, 2017)
The 3rd Waning of Nadaw, 1379 M.E.
( 6 December, 2017)

The Pyidaungsu Hluttaw hereby enacts this law.

Part I
Effectiveness and Definitions

Chapter I
Title, Effectiveness, and Definitions

1. (a) This law shall be called the Myanmar Companies Law.

(b) This law shall have effect on the date, by notification, prescribed by the President of the Union.

(i) Applicable law means existing laws of the Union and any laws, rules, regulations, by-laws, notifications and orders effected on the relevant matter;

(ii) Associate:

(aa) specifically, in relation to a company, means:

(i) a director or a secretary of the company;

(ii) a related body corporate;

(iii) a director or a secretary of a related body corporate; and

(iv) any person who controls the company, or who is controlled by the company;

(bb) generally, in relation to any person (including a company), means:

(i) any person who works together with the person who acts, or will act in relation to the relevant matter; or

(ii) any person who associates or will associate legally or illegally by any other way, in relation to the relevant matter; or

(iii) any prescribed person in relation to the relevant matter;

(cc) a person who may be prescribed as an associate under sub-clause (aa) or (bb), shall, however, not be included in any case merely by the following causes:

(i) advising a person or acting on behalf of him in the performance of duties in relation to any profession or business; or

(ii) being appointed as a representative or proxy of a person for the meeting of members of a company or a class member of a company;

(iii) Authorised Officer means any ordinarily resident in the Union appointed by any overseas cooperation to act as its representative for the purpose of this law ;

(iv) Board or Board of director means directors of the company working together as a board of director of any company or body corporate. In the case of the company which has a single director, the board of director means the single director;

(v) Company means a company incorporated and registered under this law or any existing company;

(vi) Contributory means all persons liable to contribute to the assets of a company when winding up the company. In addition, it also includes the person alleged to be a contributory in the proceedings, and the proceedings before making the final decision for determination of the persons who are to be contributories;

(vii) Corporation means a body corporate formed under any law other than this law, including any law of any other country whether or not it is registered under this law;

(viii) Court means a court having jurisdiction under this law;

(ix) Debenture means a certificate of security issued by a company to borrow money from such company. It also includes any debenture stock;

(x) For the purposes of this law , Director means :

(aa) any person who is appointed to the position of a director or is appointed to the position of an alternate director and is acting in that position of a company or other body corporate; or

(bb) any person who is acting as follows although he is not appointed to the position of a director or an alternate director of a company or other body corporate:

(i) a person who is acting as if appointed to the position of a director; or

(ii) a person who instructs the directors of a company or body corporate to follow his instruction or desire, or exercises the powers of the board of directors or controls the powers of them;

The provision of subsection (bb) (ii) does not apply merely due to the fact that the directors act on the advice of a person given in the proper performance of his professional capacity or the said person has a business relationship with the directors, companies or bodies;

(xi) Existing company means any company incorporated and registered under any repealed law;

(xii) Expert means any engineer, appraiser, accountant and a person who gives the professional authority to make a statement for the matters of section 214;

(xiii) Financial assistance includes the support of finance by means of making a loan, providing security, providing a guarantee, release of any obligation or debt or any other thing;

(xiv) Foreign company means a company incorporated in the Union in which an overseas corporation or any other foreigner or combination of them, directly or indirectly, having an ownership interest of more than 35 percent;

(xv) Holding company related to a company means a holding company which is a related subsidiary;

(xvi) Ministry means the Ministry of the Union or its successor body, or a body formed under an applicable law which is responsible for the administration and supervision of the registrar or implementation of this law;

(xvii)Officers means any person who may perform the following matters in a company or body corporate:

(aa) a person who makes decisions or participates in that making of decisions that affect, wholly or partly, the business of the company or body corporate; or

(bb) a person who has the post which affects significantly the financial standing of the company or body corporate;

(xviii)Option means a right to purchase or sell shares or securities at an agreed price within a period of time;

(xix) Ordinarily resident means a person who is a permanent resident under the applicable law or resides at least 183 days in the Union for each 12-month period. The 12-month period means:

(aa) in the case of an existing company or body corporate registered under any repealed law, the commencing from the date of effectiveness of this law;

(bb) in the case of any company or body corporate registered under this law, the period commencing from the date of its registration;

(xx) Ordinary resolution means a resolution passed by majority votes of members of the company who are present in person or proxy with intent to pass duly as an ordinary resolution by stating in a notice for a general meeting;

(xxi) Overseas corporation means a body corporate or company incorporated outside the Union;

(xxii)Ownership interest means an interest which is legal or equitable or prescribed in a company. A company may have ownership interest, including the following means:

(aa) a direct shareholding in the company; or

(bb) a direct or an indirect shareholding in another company which holds a direct, or an indirect shareholding in the company; or

(cc) agreeing as the holder to supervise directly or indirectly for the voting right on any resolution of the company;

(xxiii)Prescribed means facts or matters prescribed by rules, regulations, by-laws, notifications, orders, directives, tables or forms made under this law;

(xxiv)Previous law means the Myanmar Companies Act, 1914;

(xxv)Private company means a company incorporated under this law or any repealed law and it shall apply the following restrictions:

(aa) it shall not exceed fifty members without including the company servant;

(bb) it shall not make any offer to the public for purchasing shares, debentures or other securities of the company;

(cc) it may restrict the transfer of shares in accordance with the constitution;

Provided that, where two or more persons jointly hold one or more shares of the company, they, for the purpose of this definition, shall be treated as a single member;

(xxvi) Promoter means, for the purposes of section 214, any person who compiles to prepare the misleading or untrue statement in the prospectus, wholly or partly. Provided that, in this expression, it does not apply to the persons who act in the professional for persons engaged in the formation of the company;

(xxvii) Prospectus means any prospectus or notice or circular or advertisement or other invitation of a company which offers to the public for purchase any shares or debentures or other securities of a company. However, it shall not include any advertisement which shows only about the prospectus of the company has been legally compiled;

(xxviii) Public company means a company incorporated under this law or under any repealed law, which is not a private company;

(xxix) Registered interests means any securities compiled by a company with a register under the provisions of Chapter XIII.

(xxx) Registered office means a place which has been the longest registered office of a company during the six consecutive months before the submission application to wind up the company in the matters of jurisdiction in relation to winding up the company;

(xxxi)Registrar means the Directorate of Investment and Company Administration or its successor, or the Union level organization, or any person who has the position of Director General, designated to perform the duty of registration of companies under this law, and exercise the other powers and perform the other functions and duties assigned to the registrar under this law or any other applicable law;

(xxxii)Related body corporate of a body (including a company) means:

(aa) any holding company of the body corporate;

(bb) any subsidiary of the body corporate; or

(cc) any subsidiary of a holding company of the body corporate;

(xxxiii) Related person means;

(aa) when relating to a body corporate, including a company, a person who controls the body corporate;

(bb) when relating to a person including a body corporate;

(i) any associate of the person other than a related body corporate of that person;

(ii) any spouse, parent or child of any associate of that person; and

(iii) any body corporate controlled by any person referred to the above sub-clause (aa) or (bb), (i) and (ii);

(xxxiv) Designated bank means any bank recognized or authorized under the Financial Institutions Law or any other applicable law to perform the relevant functions and activities;

(xxxv) Security interest means any charge, lien, mortgage or any other form of security interest prescribed or recognized under this law or any other applicable law;

(xxxvi) Share means a share in the share capital of a company;

(xxxvii) Signature means any sign to be recognized on any document submitted or produced to the registrar. It may consist of the name of signer on the electronic form by methods accepted by the registrar which need not be an original ink signature on paper. To sign on any document submitted or produced to the registrar in this law means a signature;

(xxxviii) Small company means a company, which is consistent with the following conditions, other than a public company or a subsidiary of the public company:

(aa) having not more than 30 employees in such company and its subsidiaries or having less than the number prescribed under this law; and

(bb) having less than 50 million Kyats of the total income of the previous financial year in such company and its subsidiaries or having less than the amount prescribed under this law;

(xxxix) Solvency test shall be in accordance with the accounting standards applicable to such companies or prescribed from time to time in any of the following:

(a) the company is able to pay its debts as they become due in the normal course of business; and

(b) assets of the company exceed its liabilities;

(xl) Special resolution means a resolution passed by a majority vote not less than three-fourths votes of members of the company entitled to vote presented in person or representative at a general meeting. It is stated in the notice that intended to pass duly as a special resolution;

(xli) Subsidiary means:

(aa) a company is a subsidiary of other company if it is consistent with the following circumstances:

(i) controlling the composition of the board of such company by the other company; or

(ii) exercising or controlling the exercise of, more than half of the maximum number of votes that may be exercised at a meeting of such company by the other company; or

(iii) holding more than half of the issued shares of such company, other than shares that have no right to participate beyond a specified amount in a distribution of either profits or capital by the other company; or

(iv) having the entitlement to receive more than half of every dividend paid on shares issued by such company, other than shares that have no right to participate beyond a specified amount in a distribution of either profits or capital; or

(bb) a subsidiary established by such company which is consistent with any circumstances of the above sub-clause (aa) is also a subsidiary of the other company;

(xlii) Transitional period means the period of 12 months commencing from the date of effectiveness of this law;

(xliii)Ultimate of signing related to a company means a company which holds shares of the related company and is itself not a subsidiary of any company;

(xliv)Union means the Republic of the Union of Myanmar;

(xlv) Union Minister means the Union Minister or any union minister level person responsible to administer under this law and supervise the registrar;

(xlvi) Vendor means all persons who have entered into any contract for sale or purchase for the matters of section 205 in the following situations:

(aa) not being fully paid the purchase-money at the date of issue of the prospectus for any property to be acquired by the company; or

(bb) being paid or received to be paid the purchase-money wholly or partly out of the proceeds offered for subscription by the prospectus of the company; or

(cc) depending on the result of proceeds offered for subscription by the prospectus, the validity or fulfillment of the contract.

Part II
Constitution, Incorporation and Powers of Companies

Chapter II
Companies and Corporations

Companies and bodies corporate that may be incorporated and registered

2. The following types of company may be incorporated and registered under this law:

(a) a company limited by shares, which may be either:

(i) a private company which may have no more than 50 members not including persons who are in the employment of the company; or

(ii) a public company which may have any number of members;

(b) a company limited by guarantee which may have any unlimited number of members; and

Other corporations that may be registered under this law

3. As further provided by and subject to Chapter IX, the following bodies corporate formed under this law or other laws may be registered under this law:

(a) a business association;

(b) an overseas corporation;

(d) such other entities as may be prescribed by the Union Minister from time to time.

Chapter III

Essential Requirements and Powers of Companies

Essential Requirements of Companies

4. (a) A company registered under this law shall have the following facts:

(i) a name;

(ii) a constitution;

(iii) at least one share in issue (provided that a company limited by guarantee need not have a share capital);

(iv) at least one member;

(v) subject to sub-section (vi), at least one director who shall be ordinarily resident in the Union;

(vi) if the company is a public company, at least three directors, one of whom shall be a Myanmar citizen who is ordinarily resident in the Union; and

(vii) a registered office address in the Union.

(b) A company may appoint a company secretary and have a common seal.

Capacity and powers of companies

5. (a) A company:

(i) will be a legal entity in its own right separate from its members having full rights, powers, and privileges and continuing in existence until it is removed from the register; and

(ii) subject to this law and any other law, has both within and outside the Union full legal capacity to carry on any business or activity, do any act, or enter into any transaction, including the power to:

(aa) issue shares, debentures or securities which convert into shares in the company;

(bb) grant options to subscribe for shares or debentures in the company;

(cc) grant a security interest over any of its property; and

(dd) distribute any of the company’s property among the members, in kind or otherwise.

(b) The constitution of a company may contain a provision relating to the capacity, rights, powers, or privileges of the company only if the capacity of the company or those rights, powers, and privileges are restricted.

(c) A company may act as a holding company of another company and incorporate and hold shares in any number of subsidiaries.

Chapter IV
Incorporations and Registrations of Company under this Law

Mode of incorporating a company

6. (a) Any person or persons in association may apply to the registrar to incorporate and register a company under this law:

(i) a company having the liability of its members limited by the constitution to the amount, if any, unpaid on the shares respectively held by them in a company limited by shares; or

(ii) a company having the liability of its members limited by the constitution to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up in a company limited by guarantee; or

(iii) a company not having any limit on the liability of its members in an unlimited company.

(b) The application to the registrar for the registration of any company under this law shall be made in the prescribed form and shall state the following facts:

(i) the proposed name of the company;

(ii) the proposed type of the company;

(iii) the full name and address of each applicant;

(iv) the full name, date of birth, gender, nationality and address of every director and any secretary of the proposed company;

(v) that each individual named as a director or secretary of the proposed company has given their written consent to act as a director or secretary of the proposed company;

(vi) the address of the registered office of the proposed company, which in the absence of any other notice will be taken to be the address for service of documents to the proposed company;

(vii) the address of the company's principal place of business if different to the registered office; and

(viii) in the case of a private, public or unlimited company:

(aa) the full name and address of every member of the proposed company;

(bb) that each member of the proposed company has given their written consent to be a member and subscribe for the shares to be allotted to them;

(cc) the number and class of shares to be issued to each member;

(dd) the currency in which the company's share capital is to be denominated;

(ee) the amount that each member agrees to pay for each share;

(ff) whether these shares will be fully paid on registration;

(gg) whether the proposed company has an ultimate holding company;

(hh) whether the proposed company will, on incorporation, be a foreign company;

(ix) in the case of a company limited by guarantee:

(aa) the full name and address of every member of the proposed company;

(bb) that each member of the proposed company has given their written consent to be a member;

(cc) the proposed amount of the guarantee that each member agrees to provide;

(dd) if the company have a share capital:

(i) the number and class of shares to be issued;

(ii) the currency in which the company's share capital is to be denominated;

(iii) the amount (if any) each member agrees to pay for each share; and

(iv) whether these shares will be fully paid on registration.

(i) be signed by each applicant;

(ii) include a declaration by each applicant that all matters stated in the application are correct; and

(iii) where the company proposes to use a constitution which differs in any substantive way from the model constitution, be accompanied by a copy of the proposed company's constitution certified by at least one applicant, otherwise a statement that the company proposes to use the model constitution.

(d) The prescribed fee shall be paid to the registrar when filing the application.

(e) Duplicate originals of the application and all documents accompanying it shall be kept by the applicants together with the originals of the consents referred to in sub-sections (b)(v), (viii) and (ix). On incorporation, these should be passed to the company and then maintained with the company's records.

7. The penalty for an applicant making a false declaration in an application under section 6 shall be a fine of 2,500,000 kyats.

Registration

8.(a) When the registrar receives a completed application which upon any necessary examination meets the requirements of this law, the registrar shall:

(i) register the application; and

(ii) issue a certificate of incorporation which states:

(aa) the company's name;

(bb) the company's type;

(cc) that the company is incorporated and registered as a company under this law;

(dd) the date of registration; and

(ee) any other matters that may be prescribed.

(b) The registrar shall keep a record of the registration.

(c) The registrar may not require the submission of any other documents in connection with the registration other than those referred to in sub-sections 6(b) and (c) or save as may be prescribed by the Union Minister.

Effect of registration

9.From the date of registration mentioned in the certificate of incorporation, the members named in the application shall become members of the company having a separate legal personality and the name contained in the certificate of incorporation. Without limiting section 5 or any other provision of this law, the company will be capable forthwith of exercising all the functions of an incorporated company, and have perpetual succession.

Conclusiveness of certificate of incorporation

10.A certificate of incorporation given by the registrar under section 8 shall be conclusive evidence that all the requirements of this law in respect of registration have been complied with, and that from the date of incorporation stated in the certificate the company is incorporated and duly registered under this law.

Chapter V
Company Constitution

Requirement for and effect of the constitution

11.(a) Each company will have a constitution the effect of which is to bind, in accordance with its terms, the company and the members thereof to the same extent as if they respectively have been signed by each member and contained a covenant on the part of each member, the member’s heirs, and legal representatives, to observe all the provisions of the constitution, subject to the provisions of this law.

(b) The company, the board, each director and each member of the company will have the rights, powers, duties and obligations set out in this law except to the extent that they are modified, in accordance with this law, by the constitution.

(c) Each of the members of the company named in the application for incorporation and each subsequent member shall be deemed to be bound by the constitution.

(d) All money payable by any member to the company under the constitution shall be a debt due from the member to the company.

Contents of a constitution

12.(a) The constitution may contain the matters contemplated in this law for inclusion and such other matters that the company wishes to include, provided that at all times the constitution has no effect to the extent that it is inconsistent with this law.

(b) With the consent of the members of the company, the constitution shall state the objectives of the company.

(d) Subject to sub-section (e), the memorandum of association, any articles of association and any other constituent document of an existing company shall take effect as the constitution of such company following the commencement of this law, provided that at all times the constitution has no effect to the extent that it is inconsistent with this law.

(e) The objectives expressed in the former memorandum of association of an existing company, unless removed by the members voting to amend the constitution in accordance with the requirements of this law, will continue to apply until the end of the transition period. The objectives will be deemed to have been removed after this time unless a notice in the prescribed form confirming the passing of a special resolution to maintain them is filed with the registrar. This sub-section is without prejudice to section 29.

Additional requirements for constitutions of limited companies

13. The constitution of a company limited by shares shall state as follows:

(a) the name of the company with “Limited” or "Ltd" as the last word in its name if it is a private company and "Public Limited Company" or "PLC" if it is a public company;

(b) the liability of the members is limited;

(d) the initial subscribers for shares in the company and any subsequent subscriber shall take at least one share.

Additional requirements for the constitutions of a company limited by guarantee

14.(a) The constitution of a company limited by guarantee shall state as follows:

(i) the name of the company, with “Limited by Guarantee" or "Ltd Gty” as the last words in its name;

(ii) the liability of the members limited by any amount of the guarantee; and

(iii) each member undertakes to contribute to the assets of the company for payment of the amount in the event of its being wound up while he is a member or within one year afterwards, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amounts as may be required not exceeding a specified amount.

(b) If the company has a share capital:

(i) it shall also state the classes of shares which the company proposes to issue and the currency denomination of such shares; and

(ii) a subscriber of the constitution shall take at least one share.

(c) In the case of a company limited by guarantee and not having a share capital, and registered after the commencement of the previous law, every provision in the constitution 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 shall be void.

Additional requirements for the constitution of an unlimited company

15. The constitution of an unlimited company shall state as follows:

(a) the name of the company with "Unlimited" as the last word in its name;

(b) the liability of member is unlimited;

(d) that initial subscribers for shares in the company and any subsequent subscriber shall take at least one share.

Format of constitution

16.The constitution of a company:

(a) shall be written in Myanmar language; and

(b) may also be written in both English and Myanmar; and

Alteration of constitution

17. Subject to the provisions of this law, and to any additional conditions contained in its constitution, a company may, by special resolution, alter or add to the provisions of its constitution, and any alteration or addition so made shall be as valid as if originally contained in the constitution, and be subject in like manner to alteration by the special resolution.

Procedure on approval of the alteration

18.(a) A notice in the prescribed form together with a copy of the constitution as altered, shall, within 28 days from the date of the passing of the special resolution to amend it, be filed by the company with the registrar, and he shall register the same and the certificate shall be conclusive evidence that all the requirements of this law with respect to the alteration have been complied with, and thenceforth the constitution so altered shall be the constitution of the company.

(b) The court may, by order at any time, extend the time for the filing of documents with the registrar under this section for such period as the court thinks fit.

Effect of failure to register the alteration within 28 days

19. No such alteration of the constitution shall have any effect until registration thereof has been duly effected in accordance with the provisions of section 18.

Effect of alteration of constitution

20. Notwithstanding anything in the constitution of a company, no member of the company shall be bound by an alteration made in the constitution after the date on which he became a member if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date to contribute to the share capital of, or otherwise to pay money to, the company: Provided that this section shall not apply in any case where the member agrees in writing either before or after the alteration is made to be bound thereby.

Copies of constitution to be given to members

21. Every company shall send a copy of constitution to every member, at his request and within 14 days thereof, on payment of such reasonable sum as the company may specify not to exceed such amount as may be prescribed.

22. If a company makes default in complying with the requirements of section 21, it shall be liable for each offence to a fine of 100,000 kyats.

Alteration of constitution to be noted in every copy

23. Where an alteration is made to the constitution of a company, every copy of the constitution issued after the date of the alteration shall be in accordance with the alteration.

24. If, where an alteration has been made to the constitution of a company, the company at any time after the date of the alteration issues any copies of the constitution which are not in accordance with the alteration, it shall be liable to a fine of 100,000 kyats for each copy so issued, and every director or other officer of the company who is knowingly and willfully in default shall be liable to the same penalty.

Chapter VI
Company Names

Name of company and change of name

25.(a) A company shall not be registered by a name identical with that by which a body corporate in existence is already registered, or so nearly resembling that name as to be calculated to deceive or otherwise likely to mislead or cause confusion, except where the body corporate in existence is in the course of being dissolved and signifies its consent to the registrar.

(b) If a company, through inadvertence or otherwise, is, without such consent as aforesaid, registered by a name identical with that by which a body corporate in existence is previously registered, or so nearly resembling it as to be calculated to deceive or otherwise likely to mislead or cause confusion, the first-mentioned body corporate may, with the sanction of the registrar, change its name.

(i) contains any of the following words, namely, “National Government”, “State”, “Central Bank”, “Union Government”, “President”, "Ministry" or any word which suggests or is calculated to suggest the patronage of the Government of Myanmar or of any ministry, department, office or agency thereof; or

(ii) contains the word “Municipal”, or any word which suggests or is calculated to suggest connection with any state, regional, municipality or other local authority or with any society or body incorporated by applicable law.

(d) Any company may, by the special resolution and subject to compliance with this law and the filing of notice in the prescribed form with the registrar, change its name. The company shall make the filing within 28 days of the special resolution being passed.

(e) Where a company changes its name, the registrar shall, provided that the new name is available and does not breach this law or any other law, enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case. On the issue of such a certificate, the change of name shall take effect.

(f) No such alteration of the name shall have any operation until registration thereof has been duly effected in accordance with the provisions of sub-sections (d) and (e), and if such registration is not effected within 28 days after the passing of the special resolution such alteration shall be absolutely null and void.

(g) The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

Direction to change name

26.(a) If the registrar believes on reasonable grounds that a company should not have been registered under the name it is registered under, the registrar may serve written notice on the company to change its name by a date specified in the notice, being a date not less than 60 days after the date on which the notice is served.

(b) If the company does not change its name within the period specified in the notice, the registrar may enter on the register a new name for the company selected by the registrar, being a name under which the company may be registered under this part.

(c) If the registrar registers a new name under sub-section (b), the registrar must issue a certificate of incorporation for the company recording the new name of the company, and the registration of the new name shall have effect as if the name of the company has been changed under section 25.

Use of a company name

27. A company shall ensure that its name is clearly stated in:

(a) every written communication sent by or on behalf of the company; and

(b) every document issued or signed by or on behalf of the company that evidences or creates a legal obligation of the company.

Chapter VII
Company Dealings

Validity of actions

28.(a) Without limiting any provision of this law, no act of a company and no transfer of property to or by a company is invalid merely because the company does not have the capacity, the right, or the power to do the act or to transfer or take a transfer of the property.

(b) The fact that an act may not be considered in the best interests of a company does not affect the capacity of the company to do the act.

Contracts and execution of documents

29.(a) Subject to any law that requires a particular procedure to be complied with in relation to a contract, a company’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the company’s express or implied authority and on behalf of the company. The power may be exercised without using a common seal.

(b) A company may execute a document without using a common seal if the document is signed by:

(i) the director, if the company has only one director;

(ii) two directors of the company; or

(iii) a director and a company secretary of the company.

(c) A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:

(i) the director, if the company has only one director;

(ii) two directors of the company; or

(iii) a director and a company secretary of the company.

(d) A company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with sub-section (b) or (c).

(e) This section shall not limit the ways in which a company may execute a document including a deed, including as may be provided elsewhere in this law.

Dealings between a company and other persons

30.(a) A person is entitled to make the assumptions in section 31 in relation to dealings with a company. The company or any guarantor of the company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.

(b) A person is entitled to make the assumptions in section 31 in relation to dealings with another person who has, or purports to have, acquired title to property from a company. The company and the other person are not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect.

(c) The assumptions may be applied by a person who deals with a company even if a director, an officer or agent of the company acts fraudulently, or forges a document, in connection with the dealings.

(d) A person is not entitled to make an assumption in section 31 if at the time of the dealings they knew or suspected that:

(i) the assumption is incorrect;

(ii) a director, an officer or agent acted fraudulently;

(iii) the relevant document is a forgery; or

(iv) the relevant matter is contrary to an applicable law.

Assumptions that may be made by persons dealing with companies

31.(a) A person may assume that the company’s constitution has been complied with.

(b) A person may assume that anyone who appears from information on the register to be a director or a secretary of the company:

(i) has been duly appointed; and

(ii) has authority to exercise the powers and perform the duties customarily exercised or performed by a director or secretary as applicable.

(i) has been duly appointed; and

(ii) has authority to exercise the powers and perform the duties customarily exercised or performed by that kind of officer or agent.

(d) A person may assume that anyone held out by the company as a director, or other officer, secretary or agent of the company with authority to exercise a power which a director or other officer, secretary or agent of a company does not customarily have authority to exercise, does have authority to exercise that power.

(e) A person may assume that the directors, other officers, secretaries and agents of the company properly perform their duties to the company.

(f) A person may assume that a document has been duly executed by the company if the document appears to have been signed in accordance with sub-section 29(b).

(g) A person may assume that a document has been duly executed by the company if the company’s common seal appears to have been fixed to the document in accordance with sub-section 29(c) and the fixing of the common seal appears to have been witnessed in accordance with that sub-section.

(h) A person may assume that a director, other officer, secretary or agent of the company who has authority to issue a document or a certified copy of a document on its behalf also has authority to warrant that the document is genuine or is a true copy.

Chapter VIII
Activities Prior to Registration

Pre-incorporation expenses

32.Subject to the following provisions in this chapter, the expenses properly incurred before registration in promoting and setting up a company may be paid out of the company’s assets.

Pre-incorporation contracts

33.(a) In this section and in sections 34 to 36, the term pre-incorporation contract means:

(i) a contract purporting to be made by a company before its incorporation; or

(ii) a contract made by a person on behalf of a company before and in contemplation of its incorporation.

(b) A pre-incorporation contract may be ratified by the company within any period specified in the contract, or if no period is specified, then within a reasonable time after the incorporation of the company.

(c) A contract that is ratified is as valid and enforceable as if the company had been a party to the contract when it is made.

(d) A pre-incorporation contract may be ratified by a company by the directors passing a resolution to this effect or otherwise in the same manner as a contract may be entered into on behalf of a company under section 29.

(e) If a pre-incorporation contract has not been ratified by a company, or validated by the court under section 35, the company may not enforce it or take the benefit of it.

Implied warranty in pre-incorporation contracts

34.(a)Except to any express provision in the pre-incorporation contract, there is an implied warranty by the person who purports to make a pre-incorporation contract:

(i) that the company will be incorporated within any period specified in the contract, or if no period is specified, then within a reasonable time after the making of the contract; and

(ii) that the company will ratify the contract within any period specified in the contract, or if no period is specified, then within a reasonable time after the incorporation of the company.

(b) The amount of damages recoverable in an action for breach of a warranty implied by sub-section (a) is the same as the amount of damages that would be recoverable in an action against the company for damages for breach by the company of the unperformed obligations under the contract if the contract has been ratified and cancelled.

(c) If, after its incorporation, a company enters into a contract in the same terms as, or in substitution for, a pre-incorporation contract not being a contract ratified by the company under section 33, the liability of a person under sub-section (a) including any liability under an order made by the court for the payment of damages is discharged.

Failure to ratify

35.(a) A party to a pre-incorporation contract that has not been ratified by the company after its incorporation may apply to the court for an order with regard to the following:

(i) directing the company to return property, whether real or other, acquired under the contract to that party;

(ii) for any other relief in favour of that party relating to that property or the contract; or

(iii) validating the contract whether in whole or in part.

(b) The court may, if it considers it is just and equitable to do so, make any order or grant any relief it thinks fit and may do so whether or not an order has been made under sub-section 34(b).

Breach of pre-incorporation contract

36. In proceedings against a company for breach of a pre-incorporation contract which has been ratified by the company, the court may, on the application of the company, any other party to the proceedings, or of its own motion, make such order for the payment of damages or other relief as the court considers just and equitable, in addition to or in substitution for any order which may be made against the company, against a person by whom the contract is made.

Chapter IX
Other Corporations Authorized to Register or Taken to be Registered under this Law

Corporations Formed under Other Laws in Force in the Union

Corporations capable of being registered

37.(a) With the exceptions and subject to the provisions contained in this chapter, any corporation formed under any other applicable law in force at any time in the Union may register under this law as an unlimited company, or as a company limited by shares, or as a company limited by guarantee, and the registration shall not be invalid by reason that it has taken place with a view to the company being wound up.

(b) All corporations formed under the Special Company Act, 1950 or any company act in force prior to the previous law which are in existence upon the commencement of this law shall be registered under this law as companies limited by shares, pursuant to this law and subject to any requirements as may be prescribed.

Addition of “Limited” to the name

38.When a corporation is registered in pursuance of this law with limited liability, the words “Limited” or "Public Limited Company" or equivalent applicable terms set out in Chapter VI shall form and be registered as part of its name.

Certificate of registration of existing corporations

39.On compliance with the requirements of this Chapter and the applicable requirements of this law with respect to registration, and on payment of the prescribed application fee, the registrar shall register the corporation under this law and, thereupon the corporation shall be taken to be registered and incorporated under this law, and shall have perpetual succession and, if its necessary shall have a common seal.

Business Associations

Limits on associations

40. Without limiting any other applicable law:

(a) no association shall be formed under this law for the purpose of carrying on any other business that has for its object the acquisition of gain by the association, or by the individual members thereof;

(b) every member of an association carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.

41.Any person who is a member of an association formed in contravention of section 40 shall be punishable with fine of 150,000 kyats.

Power to register associations established for business and similar purposes

42.(a) Where it is proved to the satisfaction of the registrar that an association capable of being formed as a limited company has been or is about to be formed for promoting business, or any other economic development object, and applies or intends to apply its profits (if any) or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the registrar may register by licence the association as a corporation under this law with limited liability, with the addition of the word “Incorporated” to its name, and the association may be registered accordingly.

(b) A license by the registrar under this section may be granted subject to such regulations and on such conditions as the registrar thinks fit, and those conditions and regulations shall be binding on the association, and shall, if the registrar so directs, be inserted in the constitution of the association.

(c) The association shall on registration enjoy all the privileges of limited companies, and be subject to all their obligations, except those of using the word “Limited” as any part of its name.

(d) A license under this section may at any time be revoked by the registrar, and upon revocation the registrar shall remove the association from the register, and the association shall cease to enjoy the exemptions and privileges granted by this section, provided that before a licence is so revoked, the registrar shall give to the association reasonable notice in writing, being not less than 28 days, of that intention, and shall afford the association during this notice period an opportunity of submitting a representation in opposition to the revocation.

(e) The registrar may:

(i) vary the licence by making it subject to such conditions and regulations as the registrar thinks fit, in lieu of, or in addition to, the conditions and regulations, if any, to which the license may formerly subject, or

(ii) issue a new licence in lieu of the licence formerly granted.

(f) The Union Minister may give a direction to the registrar in respect of the variation or issue of a licence or the exercise of the registrar's discretion under sub-section (e).

(g) This section shall applies without limiting, and subject to any other applicable law.

Registration of Overseas Corporations

When an overseas corporation may carry on business in the Union

43.(a) An overseas corporation or any other body corporate shall not carry on business in the Union unless it is registered under this chapter.

(b) An overseas corporation or other body corporate is not deemed to carry on business in the Union merely because in the Union it:

(i) is or becomes a party to a legal proceeding or settles a legal proceeding or a claim or dispute;

(ii) holds meetings of its directors or shareholders or carries on other activities concerning the management of its internal affairs;

(iii) maintains a bank account;

(iv) effects a sale of property through an independent contractor;

(v) solicits or procures an order that becomes a binding contract only if the order is accepted outside the Union;

(vi) lends money, creates evidence of a debt or creates a charge on property;

(vii) secures or collects any of its debts or enforces its rights in relation to securities relating to those debts;

(viii) conducts an isolated transaction that is completed within a period of 30 days, not being one of a number of similar transactions repeated from time to time; or

(ix) invests its funds or holds property.

(c) The registrar may issue further guidelines from time to time regarding the matter of whether an overseas corporation or other body corporate is carrying on business in the Union, provided such guidelines are not inconsistent with this section.

(d) The Union Minister may also prescribe, whether on the application of any person or of the Union Minister’s own motion, whether or not a body corporate, or a class of bodies corporate in the same circumstances, will be taken to be carrying on business in the Union.

Name of the overseas corporation

44.(a)An overseas corporation shall not be registered if it has a name identical to that of a body corporate in existence that is already registered, or so nearly resembling that name as to be calculated to deceive or otherwise likely to mislead or cause confusion, except where the body corporate in existence is in the course of being dissolved and signifies its consent to the registrar. The overseas corporation may also include its country of incorporation or some other distinguishing word or phrase in its name to avoid such potential confusion.

(b) An overseas corporation that changes its name must file with the registrar a notice in the prescribed form of the change of name within 28 days of the change of name. The provisions of sub-section (a) apply to a registration of a change of name with all necessary changes and, subject to compliance with this law, the registrar will register the change of name.

(c) The registrar may direct an overseas corporation to change the name under which it is registered if necessary to ensure compliance with this law and the overseas corporation shall comply with such direction by doing all that is necessary to change its registered name within two months of receiving the registrar's direction.

45.If an overseas corporation fails to comply with any part of section 44, it and every director and the authorized officer will be liable to a fine of 150,000 kyats.

Validity of transactions

46.A failure by an overseas corporation to comply with section 43 or 44 does not affect the validity or enforceability of any transaction entered into by the overseas corporation.

Application for registration

47.(a) An application for registration of an overseas corporation under this part shall be delivered to the registrar and shall be:

(i) in the prescribed form; and

(ii) signed by or on behalf of the overseas corporation.

(b) In addition to provision of sub-section (a), the application shall:

(i) state the name of the overseas corporation;

(ii) state the full names, date of birth, gender, nationalities and residential addresses of the directors and any secretary of the overseas corporation at the date of the application;

(iii) state that the overseas corporation has appointed an authorized officer, and provide the full name, date of birth and residential address of the authorized officer appointed by the overseas corporation who will be authorized to accept service of documents in the Union of documents on behalf of the overseas corporation;

(iv) state that the person named as the authorized officer has given their written consent to act as authorized officer the overseas corporation;

(v) the full address of the registered office in the Union of the overseas corporation;

(vi) state the full address of the place of business in the Union of the overseas corporation if it is different to the registered office or, if the overseas corporation has more than one place of business in the Union, the full address of the principal place of business in the Union of the overseas corporation;

(vii) state the full address of its registered office or principal place of business in its place of origin;

(viii) include a declaration by the overseas corporation that all matters stated in the application are true and correct; and

(ix) have attached evidence of incorporation of the overseas corporation and a copy of the instrument constituting or defining the constitution of the corporation, and, if not in Myanmar language, a Myanmar language translation of such documents and a summary statement in the English language duly certified by a director in that behalf shall be filed.

(d) Duplicate originals of the application and all documents accompanying, together with the original of the consent referred to in sub-sections (b) (iv), shall be kept by the authorized officer and maintained with the overseas corporation’s records.

48.The penalty for the overseas corporation making a false declaration in an application under section 47 shall be a fine of 5,000,000 Kyats.

Registration of overseas corporation

49.(a) When the registrar receives a completed application which meets the requirements of this law for the registration of an overseas corporation, the registrar shall register the application in a section of the register maintained for this chapter and issue a certificate of registration which states:

(i) the corporation's name;

(ii) that the corporation is registered as an overseas corporation under this law;

(iii) the date of registration; and

(iv) any other matters that may be prescribed.

(b) The registrar shall keep a record of the registration.

(c) Unless the registrar forms the view on reasonable grounds that additional documentation is needed to establish the good standing of the overseas corporation, the registrar may not require the submission of any other documents in connection with the registration other than those referred to in or required under section 47 or save as may be prescribed by the Union Minister.

Use of name by overseas corporation

50. Every overseas corporation that carries on business in the Union shall ensure that its full name, and the name of the country where it is incorporated in the following matters are:

(a) clearly stated in written communications sent by or on behalf of the corporation;

(b) clearly stated in documents issued or signed by or on behalf of the company that evidence or create a legal obligation of the corporation; and

(c) prominently displayed at the registered office and principal place of business of the overseas corporation in Myanmar.

Alteration of details

51. An overseas corporation that carries on business in the Union shall submit the change or alteration notice in the prescribed form within 28 days to the registrar for the following matters:

(a) an alteration to the instrument constituting or defining the constitution of the overseas corporation;

(b) a change in the directors or in the names or residential addresses of the directors of the overseas corporation;

(c) a change in the address of the registered office or principal place of business of the overseas corporation overseas;

(d) a change in the address of the registered office or principal place of business of the overseas corporation in the Union. Notice of the proposed change shall be given prior to the company effecting the change in the address of its registered office or principal place of business; and

(e) a change in the authorized officer or the address of the authorized officer or the appointment or change in details of any other person authorized to accept service of documents in the Union on behalf of the overseas corporation. Notice of this change shall be made within seven days.

52.If an overseas corporation fails to comply with section 51, every director and the authorized officer will be liable to a fine of 250,000 kyats.

Annual filings by overseas corporation

53.(a) Every overseas corporation carrying on business in the Union shall file with the registrar:

(i) an annual report in prescribed form within 28 days of the end of its financial year; and

(ii) at least once each calendar year and at intervals of no more than 15 months:

(aa) a balance sheet made up to the end of its last financial year;

(bb) a copy of its cash flow statement for its last financial year; and

(cc) a copy of its profit and loss statement for its last financial year;

in such form and containing such particulars and including copies of such documents as the corporation is required to prepare by the law in its place of origin.

(b) The registrar may require the company to prepare and file any of the financial statements referred to in sub-section (a) in respect of its business in the Union if the corporation is not required under a law in its place of origin to file the statements referred to in sub-section (a). Such statements will be prepared in such form as the corporation would have been required to prepare if it is incorporated as a public company under this law, or in such form as may otherwise be prescribed. In exercising its discretion under this sub-section the registrar may consider whether the overseas corporation’s business in the Union would qualify it as a small company.

(c) The registrar may require any financial statements filed under this section to be audited. In exercising its discretion under this sub-section the registrar may consider whether the overseas corporation’s business in the Union would qualify it as a small company.

54.If an overseas corporation fails to comply with any requirements of section 53, it and every director and the authorized officer will be liable to a fine of 250,000 kyats in respect of each breach.

Overseas corporation ceasing to carry on business in the Union

55.(a) Within 21 days after ceasing to carry on business in the Union, an overseas corporation shall file a notice in the prescribed form stating that it has so ceased, and, subject to being satisfied of compliance with other applicable laws, the registrar will remove the overseas corporation's name from the register.

(b) Where the registrar reasonably believes that an overseas corporation does not carry on business in the Union, it may send to the overseas corporation a notice to that effect and stating that, if no answer showing cause to the contrary is received within 28 days from the date of the notice, a notice will be published in the gazette with a view to striking the overseas corporation’s name off the register.

(c) Unless the registrar receives, within 28 days after the date of the notice, an answer to the effect that the overseas corporation is still carrying on business in the Union, it may publish in the gazette, and send to the overseas corporation a further notice that, at the end of 3 months after the date of the notice, the overseas corporation’s name will, unless cause to the contrary is shown, be struck off the register.

(d) At the end of the period specified in a notice sent under sub-section (c), the registrar may, unless cause to the contrary has been shown, remove the overseas corporation’s name off the register and shall publish in the gazette notice of the removal.

(e) The registrar shall remove an overseas corporation from the register after receipt of a notice given by an official liquidator in accordance with the provisions of part V.

(f) Where an overseas corporation commences to be wound up, or is dissolved or deregistered, in its place of origin:

(i) the authorized officer shall, within the period of 28 days after that day file notice of that fact in the prescribed form and, when a liquidator is appointed, notice of the appointment; and

(ii) the court shall, on application by the person who is the liquidator for the overseas corporation’s place of origin, or by the registrar, appoint a liquidator of the overseas corporation in the Union.

(g) Where the registrar receives notice from an authorized officer of an overseas corporation that the overseas corporation has been dissolved or deregistered, the registrar shall remove the overseas corporation's name from the register.

(h) A liquidator of an overseas corporation appointed by the court:

(i) shall, before any distribution of the overseas corporation’s property is made, by advertisement in a daily newspaper circulating generally in the Union, invite all creditors to make their claims against the overseas corporation within a reasonable time before the distribution; and

(ii) shall not, without obtaining an order of the court, pay out a creditor of the overseas corporation to the exclusion of another creditor of the overseas corporation; and

(iii) shall, unless the court otherwise orders, recover and realize the property of the overseas corporation in the Union and shall pay the net amount so recovered and realized to the liquidator of the overseas corporation for its place of origin.

(iv) Where an overseas corporation has been wound up so far as its business in the Union is concerned and there is no liquidator for its place of origin, the liquidator may apply to the court for directions about the disposal of the net amount recovered under sub-section (h).

Service of documents on overseas corporations registered under this law

56.(a) A document may be sent to an overseas corporation by leaving it at or by sending it by post to:

(i) its registered office in the Union; or

(ii) the address of its authorized officer, in each case, as notified in accordance with this law.

(b) Without limiting the operation of sub-section (a), if two or more directors of the overseas corporation reside in the Union, a document may be served on the overseas corporation by delivering a copy of the document personally to at least two of those directors.

(c) Where a liquidator of an overseas corporation has been appointed, a document may be served on the overseas corporation by leaving it at, or by sending it by post to, the last address of the office of the liquidator notice of which has been lodged.

(d) Nothing in this section affects the power of the court to authorize a document to be served on an overseas corporation in any other manner provided by an applicable law.

Chapter X
Change of Company Type

Changing of company type

57.(a) A company may change to a company of a different type as provided in this section by passing a special resolution resolving to change type and complying with this chapter.

(b) The following changes may be made subject to compliance with this chapter:

(i) a private company may change to a public company;

(ii) a public company may change to a private company;

(iii) a company limited by guarantee may change to a public or a private company; and

(iv) an unlimited company may change to a public or a private company.

Applying for a change of type

58.(a) A company shall file with the registrar an application in the prescribed form to change its company type which includes the following statements:

(i) a statement confirming that the special resolution that resolves to change the type of the company, specifying the new type and the company’s new name if a change of name is made has been duly passed;

(ii) a statement confirming that the special resolution that resolves to amend the company’s constitution (if any) has been duly passed and a copy of the amended constitution where the company proposes to use a constitution which differs in any substantive way from the model constitution;

(iii) a statement which updates any other changes arising in connection with the change of company type to the particulars of the company which are maintained on the register by the registrar; and

(iv) for a company limited by guarantee changing to a private or a public company:

(aa) a statement confirming that in the directors’ opinion the company’s creditors are not likely to be materially prejudiced by the change of type and that sets out their reasons for that opinion; and

(bb) if the company limited by guarantee does not have a share capital, a statement confirming that special resolution approving the issue of shares has been duly passed and a statement containing the information required by sub-section 6(b)(viii).

(b) The company shall give a notice in the Gazette and by publication in a daily newspaper circulating generally in the Union that it has filed an application with the registrar to alter the details of the company’s registration to change the company type.

(c) The notice issued by the company under sub-section (b) shall also state that the registrar will, if it is satisfied that the application complies with sub-section (a), alter the details of the company’s registration 28 days after the notice has been published in the gazette unless an order by the court prevents it from doing so.

(d) Subject to an order made by the court within that 28 day period, after the 28 day period has passed the registrar shall alter the details of the company’s registration to change the company type if it is satisfied that the application complies with sub-section (a).

(e) A change of company type under this section takes effect when the registrar alters the details of the company’s registration to change in company type and the registrar shall give the company a new certificate of registration after it alters the details of the company in the register. The company’s name is the name specified in the certificate of registration issued under this section.

Effect of a change of type

59.(a) A change of type does not:

(i) create a new legal entity;

(ii) affect the company’s existing property, rights or obligations except as against the members of the company in their capacity as members; or

(iii) render defective any legal proceedings by or against the company or its members.

(b) On the change of type of a company from a company limited by guarantee to a company limited by shares:

(i) the liability of each member and past member as a guarantor on the winding up of the company is extinguished;

(ii) the members whose membership arisen solely from the giving or the agreement to give the guarantee cease to be members of the company however they will continue to be members of the company if they are issued with shares in the company upon the change of company type; and

(iii) if shares are to be issued to any person as specified in the list of members required to be included in the statement required under sub-section 58(a)(iv)(bb):

(aa) the shares are taken to be issued to that person; and

(bb) the person is taken to have consented to be a member of the company; and

(cc) the person becomes a member of the company.

Part III
Shares and Matters Relating to a Company’s Capital

Chapter XI

Shares and Other Securities

Share Capital

Nature of shares and other securities

60.(a)The shares or other securities of any member in a company shall be moveable property, transferable in the manner provided or permitted by this law and any other applicable law and subject to the constitution of the company.

(b) A share will not have a nominal or par value.

Rights and powers attaching to shares

61.(a)Subject to sub-section (b), a share in a company confers on the holder of such share as follows:

(i) the right to one vote on a poll at a meeting of the company on any resolution;

(ii) the right to an equal share in dividends; and

(iii) the right to an equal share in the distribution of assets of the company.

(b) The rights specified in sub-section (a) may be negated, altered, or added to by the constitution of the company or in accordance with the terms on which the share is issued.

Types of shares and other securities in a company

62.(a)A company’s power to issue shares and other securities, and determine the terms of such shares and other securities, includes the power to issue:

(i) shares of different classes;

(ii) shares which may be redeemable;

(iii) shares which have preferential or restricted rights to distributions of capital or income;

(iv) shares which have special, limited, or conditional voting rights; and

(v) shares which do not have voting rights, as provided by and subject to this law, any other applicable law, the constitution of the company or the terms of issue.

(b) As provided by and subject to this law, any other applicable law, the constitution of the company or the terms of issue, a company may also issue:

(i) options to acquire shares;

(ii) other securities which convert into shares; and

(iii) other interests.

Share Issues

Issue of shares

63.(a) Subject to the constitution of the company, this law and any other applicable law, the board of a company may issue shares or other securities at any time, to any person, on the terms and in any number the board thinks fit.

(b) Subject to the constitution of the company, shares may be issued fully or partly paid. If the shares are issued partly paid, the terms of issue shall specify when calls may be made and the shareholder is liable to pay such calls.

(c) A company’s constitution may provide that where the directors decide to increase the capital of the company by the issue of further shares, such shares shall be offered to the members in proportion to the existing shares held by each member irrespective of class.

Consideration for issues of shares

64.(a) The consideration for which a share is issued may take any form as determined by the board.

(b) If the consideration for the issue is to be other than cash the board shall:

(i) record the consideration in sufficient detail to identify it;

(ii) determine the reasonable present cash value of the consideration for the issue and record this and the basis for assessing it; and

(iii) resolve that, in its opinion:

(aa) the consideration for and the terms of the issue of shares are fair and reasonable to the company and to all existing members; and

(bb) the present cash value of such consideration is not less than the amount to be credited for the issue of the shares.

(c) Any contract entered into in connection with the subscription for an issue of shares for consideration other than cash shall be stamped as required under applicable law and maintained with the books and records of the company.

65.The penalty for a director who fails to comply with sub-section 64(b) is a fine of 250,000 kyats.

Exceptions regarding non-cash consideration

66.Sub-section 64(b) shall not apply to:

(a) the exercise of any option to acquire shares in the company;

(b) the conversion of any other securities which convert into shares in the company;

(c) the issue of shares that are fully paid up from the reserves of the company to all members of the same class in proportion to the number of shares held by each member;

(d) the consolidation and division of shares or any class of shares in the company in proportion to those shares or the shares in that class; or

(e) the subdivision of shares or any class of shares in the company in proportion to those shares or the shares in that class.

Consideration for issues of convertible securities

67.(a)The consideration for which an option to acquire shares in a company or other convertible security is issued may take any form as determined by the board.

(b) If the consideration for the issue of these options or other convertible securities, or the shares to be issued on the subsequent exercise or conversion of them, is to be other than cash the board shall:

(i) record the consideration in sufficient detail to identify it;

(ii) determine the reasonable present cash value of the consideration for the issue and subsequent exercise or conversion and record this and the basis for assessing it; and

(iii) resolve that, in its opinion:

(aa) the consideration for and the terms of the issue of options or other convertible securities, and the shares upon the subsequent exercise or conversion of these securities, is fair and reasonable to the company and to all existing members; and

(bb) the present cash value of such consideration is not less than the amount to be credited for the issue of the options, other securities or shares.

(c) Any contract entered into in connection with the subscription for an issue of options or other convertible securities for consideration other than cash shall be stamped as required under applicable law and maintained with the books and records of the company.

68.The penalty for a director who fails to comply with sub-section 67(b) is a fine of 250,000 kyats.

Consent to issue of shares affecting liability

69.The issue of a share that either increases the liability of, or imposes a liability on, a person to the company is void if that person does not first consent in writing to becoming the holder of the share.

Power of company to arrange for different amounts being paid on shares

70.A company, subject to its constitution, may do any one or more of the following things, namely:

(a) make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares;

(b) accept from any member who assents to the whole or a part of the amount remaining unpaid on any shares held by him although no part of that amount has been called up;

Recording and timing of issues of securities

71.(a)Within 21 days of the issue of shares or other securities the company shall:

(i) update the relevant register of the company; and

(ii) file a notice in the prescribed form with the registrar in respect of the issue of shares or other securities. The notice shall record the consideration paid for the issue of shares or other securities and whether the shares or other securities are fully or partly paid.

(b) A share or other security is deemed to be issued when the name of the holder is entered on the relevant register of the company.

72.If a company fails to comply with section 71, every director of the company knowingly involved is liable to a fine of 250,000 kyats.

Preference Shares

Requirements for issue of preference shares

73.A company may issue preference shares if the rights attached to the preference shares with respect to the following matters are set out in the company’s constitution or have been approved by special resolution of the company in respect of such shares:

(a) repayment of capital;

(b) participation in surplus assets and profits;

(d) voting;

(e) priority of payment of capital and dividends in relation to other shares or other classes of preference shares; and

(f) whether the shares are redeemable and, if so, the terms of redemption.

Redemption of redeemable preference shares

74.(a)Redeemable preference shares are preference shares that are issued on the terms that they are liable to be redeemed.

(b) Subject to sub-section (c), a redeemable preference share may be redeemed:

(i) at a fixed time or on the happening of a particular event;

(ii) at the company’s option; or

(iii) at the shareholder’s option.

(i) if the shares are fully paid up;

(ii) out of profits or out of the proceeds of a new issue of shares made for the purpose of the redemption; and

(iii) if the directors determine on reasonable grounds that the company would pass the solvency test following the redemption.

(d) Once the resolution is passed under sub-section (c), the amount becomes an amount due and payable on the date fixed for redemption.

(e) The redeemable preference shares are cancelled on redemption.

(f) The company must notify the registrar of the redemption in the form prescribed within 21 days of the redemption.

(g) A failure to comply with this section does not affect the validity of the redemption.

75.If a company fails to comply with section 74, every director of the company knowingly involved is liable to a fine of 250,000 kyats.

Debentures

Perpetual debentures

76.A condition contained in any debentures or in any deed for securing any debentures, whether issued or executed before or after the passing of this law, shall not be invalid by reason only that the debentures are made irredeemable or redeemable only on the happening of a contingency, however remote or on the expiration of a period however long.

Power to re-issue redeemed debentures in certain cases

77.(a) Where either before or after the commencement of this law a company has redeemed any debentures previously issued, the company, unless its constitution or the conditions of issue expressly otherwise provide, shall have power, or shall be deemed always to have had power, to keep the debentures alive for the purposes of reissue. Where a company has purported to exercise such a power the company shall have power, or shall be deemed always to have had power, to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place. Upon such re-issue the person entitled to the debentures shall have, or shall be deemed always to have had, the same rights and priorities as if the debentures have not previously been issued.

(b) Where with the object of keeping debentures alive for the purpose of re-issue they have, either before or after the commencement of this law, been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

(c) The re-issue of a debenture or the issue of another debenture in its place under the power by this section given to, or deemed to have been possessed by, a company, whether the re-issue or issue is made before or after the commencement of this law, shall be treated as the issue of a new debenture for the purposes of stamp-duty, but it shall not be so treated for the purposes of any provision limiting the amount or number of debentures to be issued:

Provided that, any person lending money on the security of a debenture re-issued under this section which appears to be duly stamped may give the debenture in evidence in any proceedings for enforcing his security without payment of the stamp-duty or any penalty in respect thereof, unless he has a notice or, but for his negligence, might have discovered that the debenture is not duly stamped, but in any such case the company shall be liable to pay the proper stamp-duty and penalty.

(d) Nothing in this section shall prejudice any power to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished, reserved to a company by its debentures or the securities for the same.

Specific performance of contract to subscribe for debentures

78.A contract with a company to take up and pay for any debentures of the company may be enforced by a decree for specific performance.

Transitional Provisions Regarding Share Warrants

Effect of share-warrants

79.Subject to sections 81 and 82, a share-warrant in issue as at the commencement of this law shall entitle the bearer thereof to the shares or securities therein specified, and the shares or securities may be transferred by delivery and cancellation of the warrant.

Registration of name of bearer of share-warrant

80.Subject to sections 81 and 82, the bearer of a share-warrant shall, subject to the constitution of the company, be entitled, on surrendering it for cancellation, to have their name entered as a member in the register of members; and the company shall be responsible for any loss incurred by any person by reason of the company entering in its register the name of a bearer of a share-warrant in respect of the shares therein specified without the warrant being surrendered and cancelled.

No further issuance of share warrants following commencement of this law

81. Following the commencement of this law, a company shall not issue any share warrants.

Deemed phasing out of share warrants

82.(a)All outstanding share warrants issued prior to the commencement of this law will, if not previously surrendered, continue to be valid, in accordance with their terms, until the end of the transition period or such other period as determined under sub-section (c), following which they will be deemed to have been surrendered and cancelled.

(b) The company shall not be responsible for any loss incurred by any person by reason of such cancellation of share warrants pursuant to sub-section (a).

(c) On the written application of the relevant company the registrar may extend the period referred to in sub-section (a) and make incidental arrangements for the phasing out of the relevant warrants if satisfied on reasonable grounds that the deemed cancellation and surrender of the warrants at the end of the transition period would not be in the best interests of the company.

Chapter XII
Transfers of Shares and Other Securities

Transfer requirements

83.(a)Subject to the constitution of the company and without limiting any other applicable law, shares and other registrable interests in a company may be transferred by entry of the name of the transferee on to the relevant register of the company maintained under Chapter 13.

(b) An application for the registration of the transfer of shares or other registrable interests in a company may be made either by the transferor or the transferee and, subject to the provisions of sub-sections (c) and (d), the company shall enter in the relevant register the name of the transferee and the other information required under Chapter 13.

(c) Save as provided under any other applicable law, a company shall not register a transfer of shares in or other registrable interests in the company unless an instrument of transfer in the prescribed form, duly stamped and executed by the transferor and the transferee to the company, the transferee, has been delivered to the company along with:

(i) the relevant certificate evidencing the shares or interests proposed to be transferred; and

(ii) a declaration by the transferor or transferee or both of them as to whether as a result of the transfer an overseas corporation or other foreign person or combination of them will acquire or cease to have an ownership interest in the company’s shares.

(d) The company may, if expressly authorized by its constitution or the terms of the relevant security, or if otherwise permitted under this law or other applicable law, or if required to ensure compliance with this law or other applicable law, refuse to register a transfer if the board, within 21 days of receipt of the application for transfer and other documents required by this section, passes a resolution to this effect setting out the reason for refusing the transfer and sends to the transferee and the transferor notice of the refusal, including the reasons for such refusal, within a further 7 days of passing the resolution.

(e) Nothing in sub-section (c) shall prejudice any power of the company to register as shareholder or holder of any registrable interest in the company any person to whom any shares or interest in the company has been transmitted by operation of law.

84.If default is made in complying with sub-sections 83(c) or (d), every director, knowingly involved is liable to a fine of 150,000 kyats.

85.If a transferee or transferor knowingly or recklessly makes an incorrect statement to the company in a declaration made under sub-section 83(c)(ii), then they will be liable to a fine of 750,000 Kyats.

Notification of transfer

86.(a)Within 21 days of the registration of the transfer of shares or other registrable securities the company shall file a notice of the transfer in the prescribed form with the registrar.

(b) If as a result of the transfer the company has either become or ceased to be a foreign company, the notice shall state this.

(c) A failure to comply with this section does not affect the validity of a transfer of shares or other registrable securities.

87.If a company fails to comply with section 86, every director of the company knowingly involved is liable to a fine of 750,000 Kyats.

Transfer by legal representative

88.A transfer of the share or other interest of a deceased member or holder of another interest in a company made by his legal representative shall, although the legal representative is not himself a member or holder of an interest, be as valid as if he has been a member or holder of an interest at the time of the execution of the instrument of transfer.

Chapter XIII
Registers and Certification of Interests in a Company

Certificate of shares to be evidence of title

89.(a)A certificate, under the common seal of the company or otherwise executed by the company in accordance with section 29, specifying any shares or security held by any member, shall be prima facie evidence of the title of the member to the shares or security therein specified.

(b) Subject to any other applicable law, every company shall, within 28 days after the allotment of any of its shares, debentures, debenture stock or other registrable interests, and within 28 days after the registration of the transfer of any such shares, debentures, debenture stock or other registrable interests, complete and have ready for delivery the certificates of all shares, the debentures, and the certificates of all debenture stock or other registrable interests allotted or transferred, unless the conditions of issue of the shares, debentures, debenture stock or other registrable interests otherwise provide.

(i) the name of the company;

(ii) the address of the registered office of the company;

(iii) in the case of a share certificate, the number of shares, class of the shares, the amount paid on the shares, the amount (if any) unpaid on the shares and the extent to which the shares are paid up; and

(iv) in the case of a certificate for other registrable interests, the number, type, and amount paid for such securities and, if the securities are convertible, the number of shares or other interests they convert into.

(d) Failure to comply with this section shall not affect the rights of any holder of shares or registrable interests.

Register of members

90.(a)The persons named as members in the application for incorporation of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.

(b) Every other person who agrees to become a member of a company, and whose name is entered in its register of members, shall be a member of the company.

(c) Subject to any other applicable law, every company shall keep an up to date register of its members, and enter therein the following particulars:

(i) the names, addresses and nationalities of the members;

(ii) the date at which each person is entered in the register as a member; and

(iii) the date at which any person ceased to be a member.

(d) Subject to any other applicable law, if the company has a share capital, then the company’s register of members shall also show:

(i) the date on which every allotment of shares takes place;

(ii) the number of shares in each allotment;

(iii) the shares held by each member;

(iv) the class of shares;

(v) the share numbers and share certificate numbers of the shares;

(vi) the amount paid on the shares;

(vii) whether or not the shares are fully paid; and

(viii) the amount unpaid on the shares (if any).

Index of members of company

91.(a) Every company having more than fifty members shall, unless the register of members is in such a form as to constitute in itself an index, keep an up to date index of the names of the members of the company, and shall, within 14 days after the date on which any alteration is made in the register of members, make any necessary alteration in the index.

(b) The index shall, in respect of each member, contain a sufficient indication to enable the account of that member in the register to be readily found.

Register of option holders

92.(a) Subject to any other applicable law, every company that grants options over unissued shares or other interests in it shall keep a register of option holders which records the following particulars:

(i) the names, addresses and nationalities of the option holders and a statement of the number and description of the shares or other interests in the company over which the options are granted;

(ii) the date at which each person is entered in the register as a holder of options over shares in the company;

(iii) the period during which the options may be exercised or the time at which the options may be exercised;

(iv) any event that shall happen before the options can be exercised;

(v) any consideration paid for the grant of the options;

(vi) any consideration to be paid for the exercise of the options or the method by which that consideration is to be determined; and

(vii) the date at which any person ceased to be a holder of options over shares in the company.

(b) The register of option holders shall be updated whenever options are exercised or expire.

(c) A company shall only be required to update the register of option holders in respect of any transfer of an option if the person transferring the option gives the company notice of the transfer. A failure of a company to register the transfer of the option shall not affect the validity of the transfer of the option.

Register of debenture holders

93.Subject to any other applicable law, every company that issues debentures shall keep a register of debenture holders which records the following particulars:

(a) the names, addresses and nationalities of the debenture holders and a statement of the amount and description of the debentures that are issued to or held by them;

(b) the date at which each person is entered in the register as a debenture holder; and

Registers of other interests

94.(a) Subject to any other applicable law, a company shall maintain a register in respect of any other interest in its share capital, or security giving a right to acquire such an interest, that it has issued, which records the following particulars:

(i) the names, addresses and nationalities of the interest holders and a statement of the amount and description of the interests that are issued to or held by them;

(ii) the date at which each person is entered in the register as the holder of the interest;

(iii) the date at which any person ceased to be a holder of the interest; and

(iv) if applicable, details relevant to the expiry, exercise or conversion of the interest.

(b) If the register of an interest under this section is a register of the holders of securities which convert into shares in the company, the register shall be updated whenever the interests are converted or expire.

(c) A company shall only be required to update a register of the type referred to in sub-section (b) in respect of any transfer of the registered interest if the person transferring the interest gives the company notice of the transfer. A failure of a company to register the transfer of the interest shall not affect the validity of the transfer of the interest.

Registers and indexes to be maintained at the company’s registered office

95.(a)Subject to sub-sections (b) and (c), all registers and indexes in respect of a company maintained under this chapter shall be kept at the registered office or principal place of business of the company.

(b) A company may appoint some other person within the Union to maintain the company’s registers and indexes. In such cases, the company’s registers and indexes may be maintained on the company’s behalf at the office of that other person.

(c) Every company shall, within 21 days of the company’s registers and indexes being maintained at a place other than the company’s registered office or principal place of business, file with the registrar a notice in the prescribed form of the place where the company’s registers and indexes, as applicable, are maintained and shall, within 21 days of any change in the place at which the company’s registers and indexes, as applicable, are maintained, file with the registrar a notice in the prescribed form of the change.

Notification of changes to a register

96.(a)A company shall, file with the registrar a notice in the prescribed form detailing any changes it makes to a register maintained in accordance with section 90.

(b) The filing shall be made within 21 days of the relevant change.

Annual return, list of members and summary

97.(a) Every company shall, within two months from its incorporation and thereafter once at least in every year but no later than one month after the anniversary of its incorporation, file a return of its particulars with the registrar in the prescribed form.

(b) Save as may be excepted under any applicable law, the return shall include the following information:

(i) the registered name of the company;

(ii) the registration number of the company;

(iii) the address of the registered office of the company and, if different, the address of the place where the register of members is kept;

(iv) in the case of a public company, a list of the 50 members or such other number of members if the company has less than 50 members, holding the largest number of shares in the company and their respective names, addresses and nationalities and shareholdings;

(v) in any other case, a list of all members of the company and their respective names, addresses and nationalities and shareholdings and a list of persons who ceased to be members since the date of the last filing;

(vi) the date of the last annual general meeting of the company (if applicable);

(vii) particulars of the company’s principal activity or activities at the date to which the accounts of the company are made up and at the date of the annual return;

(viii) a summary distinguishing between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash;

(ix) the amount of the share capital of the company, and the number of the shares into which it is divided;

(x) the amount called up on each share;

(xi) the total number of shares forfeited or cancelled since the date of the last return;

(xii) whether the company has either become or ceased to be a foreign company since the date of the last return and the date on which such change occurred;

(xiii) the names of the company’s subsidiaries, holding companies and ultimate holding company, if any;

(xiv) the names, addresses, gender and nationalities of the persons who at the date of the return are the directors of the company and of the persons (if any) who at the said date are the secretaries of the company, and the changes in the personnel of the directors and secretaries since the last return together with the dates on which they took place;

(xv) confirmation that the mortgages and charges which are required to be registered with the registrar under this law have been registered; and

(xvi) such other items as may be prescribed from time to time.

(c) In ad dition to filing such particulars with the registrar, the above list and summary shall be contained in a separate part of the register of members. The return and copy maintained with the register shall be signed by a director or by a secretary of the company and state that the list and summary state the facts as they have stood on the day aforesaid.

(d) A private company shall send together with the annual return required by sub-section (a) a certificate signed by a director, secretary or other officer of the company that the company has not, since the date of the last return or, in the case of a first return, since the date of the incorporation of the company, issued any invitation to the public to subscribe for any shares or debentures of the company.

Trusts not to be entered on register

98.(a)No notice of any trust, expressed, implied or constructive, shall be entered on the register, or be receivable by the registrar.

(b) Notwithstanding sub-section (a), the legal representative of a deceased person who is registered as holding a share or interest in a register of a company is, with the consent of the company, entitled to be registered as the holder of that share or interest as personal representative of the deceased person.

(c) Notwithstanding sub-section (a), the trustee, executor, administrator or assignee of the property of a bankrupt person who is registered as holding a share or interest in a register of a company is, with the consent of the company, entitled to be registered as the holder of that share or interest as trustee, executor, administrator or assignee of the property of the bankrupt person.

Inspection of registers

99.(a)All registers and indexes in respect of a company maintained under this law shall, during business hours subject to such reasonable restrictions, as the company in general meeting may impose, so that not less than two hours in each day be allowed for inspection during ordinary business hours, be open to the inspection of any member gratis, and, in the case of a public company, to the inspection of any other person on payment of a reasonable sum specified by the directors for each inspection. Any such member or other person may make extracts therefrom.

(b) Any member or, in the case of a public company, other person may require a copy of a register, index, or of any part thereof, or of the list and summary required by this law, or any part thereof, on payment of a reasonable sum specified by the directors and the company shall cause any copy so required by the member or person to be sent to that member or person within a period of 10 days commencing on the day next after the day on which the requirement is received by the company with the applicable payment.

100.If any inspection required under sub-section 99(a) is refused, or if any copy required under sub-section 99(b) is not sent within the proper period, the company and every director and other officer of the company who is in default shall be liable in respect of each offence to a fine of 250,000 kyats and the registrar may by an order compel an immediate inspection of the register and index or direct that copies required shall be sent to the persons requiring them.

Power of court to rectify register

101.(a)If:

(i) the name of any person is wrongly entered in or omitted from a register maintained by a company under this law; or

(ii) default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member, the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

(b) The court may either refuse the application, or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved, and may make such order as to costs as it in its discretion thinks fit.

(c) 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 name entered in or omitted from the register, and generally may decide any question necessary or expedient to be decided for rectification of the register:

Provided that the court may direct an issue to be tried in which any question of law may be raised; and an appeal from the decision on such an issue shall lie in the manner directed by the Code of Civil Procedure on the grounds mentioned in section 100 of that code.

Notice to registrar of rectification of register

102. The court, when making an order for rectification of the register, shall, by its order, direct notice of the rectification to be filed with the registrar within 14 days from the date of the completion of the order.

Register of members to be evidence

103.(a)Without prejudice to any other provision of this law or other applicable law, the register of members shall be prima facie evidence of any matters by this law directed or authorized to be inserted therein, including the title to the shares of the registered member.

(b)A company may treat the registered holder of a share as the only person entitled to:

(i) exercise the right to vote attaching the share;

(ii) receive notices;

(iii) receive distributions in respect of the share; and

(iv) exercise all rights and powers attaching to the share.

Defaults in relation to registers and filings

104. It shall be the duty of every director and officer of a company to take reasonable steps to ensure that the registers and indexes are maintained and made available, that relevant filings are made in accordance with this Chapter and that all other obligations of the company under this Chapter are met.

105. If a default is made in complying with section 104, the company and every director and other officer of the company who is knowingly and willfully involved in the default shall be liable to a fine of 500,000 Kyats.

Chapter XIV
Dividends

Making of dividends

106.(a)Subject to sections 107 and 109 and its constitution, the board of a company, other than a company limited by guarantee, may determine that a dividend is payable to its shareholders and fix the amount, the time for payment and the method of payment.

(b) The methods of payment may include cash, the issue of shares, the grant of options and the transfer of assets.

(c) Subject to the constitution, the determination of a dividend does not cause the company to incur a debt and the determination may be revoked at any time before payment. A debt only arises when the time fixed for payments arrives.

Requirements for dividends

107.(a)The company may not pay a dividend unless:

(i) the company will, immediately after the payment of the dividend, satisfy the solvency test;

(ii) the making of the dividend is fair and reasonable to the company’s shareholders as a whole; and

(iii) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.

(b) If, after a dividend is determined and before it is paid, the board ceases to be satisfied that the requirements of sub-section (a) will be met, the dividend may not be paid and if such dividend is paid by the company it shall be deemed not to have been authorized.

Default in complying with section 107

108.(a)If a company makes default in complying with the requirements of section 107 it shall be liable to a fine of 500,000 Kyats, and every director or other officer of the company who knowingly and willfully permits the default shall be liable to the same penalty.

(b) In addition to sub-section (a), if the company becomes insolvent following and in connection with the payment of a dividend, every director of the company who knowingly and willfully permitted the payment of the dividend in default of section 107 shall also be liable to the creditors of the company to the extent of the dividend where the debts due by the company to the respective creditors exceed the recoverable assets of the company and such amount may be recovered from them by the creditors or the liquidator suing on behalf of the creditors.

Further matters affecting the payment of dividends

109.(a)The board of a company shall not determine a dividend:

(i) in respect of some but not all of the shares in a class; or

(ii) that is of a greater value per share in respect of some shares of a class than it is in respect of other shares of the same class, unless, in respect of partly paid shares, the amount of the dividend in respect of a share of that class is in proportion to the amount paid on those shares.

(b) A company may, subject to its constitution, issue shares to any shareholders who have agreed to accept the issue of shares, wholly or partly, in lieu of a proposed dividend, provided that:

(i) the right to receive shares, wholly or partly, in lieu of the proposed dividend has been offered to all shareholders of the same class on the same terms;

(ii) all shareholders’ agreeing to receive shares relative voting rights and distribution rights shall be maintained;

(iii) the offer shall remain open for acceptance for a period of at least 21 days;

(iv) the shares issued to each shareholder are issued on the same terms and subject to the same rights as the shares issued to all shareholders in that class who agree to receive the shares; and

(v) the provisions of section 63 and section 71 have, insofar as applicable, been complied with.

110.If a company makes default in complying with the requirements of section 109, it shall be liable to a fine of 1,000,000 kyats, and every director or other officer of the company who knowingly and willfully permits the default shall be liable to the same penalty.

Capitalization of profits

111.Without contradiction of section 109, a company may capitalize profits. The capitalization need not be accompanied by the issue of shares.

Chapter XV
Transactions and Matters Affecting Share Capital

Alteration of Share Capital

Power of company limited by shares to alter its share capital

112.(a)A company limited by shares, subject to its constitution, may alter its share capital as follows, it may:

(i) issue new shares where it thinks necessary for the increase of share capital of the company in accordance with the provisions of Chapter XI;

(ii) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares subject to the ordinary resolution passed at a general meeting. If a company has any amount unpaid on the shares, it shall divide equally among the replacement shares;

(iii) sub-divide its shares or any of them into shares of smaller amount than originally issued by the ordinary resolution passed at a general meeting. However, in the sub-division, the proportion between the amount paid and the amount unpaid on each reduced share shall be the same as it is in the case of the share from which the reduced share is derived;

(iv) convert an ordinary share into a preference share by a special resolution passed at a general meeting;

(v) convert a preference share into an ordinary share by a special resolution passed at a general meeting;

(vi) redeem any redeemable preference share in accordance with the provision of Chapter XI of this part;

(vii) reduce its share capital in the manner set out in this Chapter;

(viii) buy back shares in the manner set out in this Chapter; and

(ix) provide financial assistance related to the purchase of its shares in the manner set out in this Chapter;

(b) Subsection (a) shall not limit any other right to alter share capital under this law or other applicable law, and prejudice the provisions of any other Chapter of this law.

Notice to registrar of consolidation of share capital

113.Where a company having a share capital altered its share capital in the manner provided by section 112(a)(ii) to (vii), it shall file a notice with the registrar in the prescribed form within 21 days of the alteration, specifying the shares consolidated, divided or sub-divided.

114.Where a company makes default in complying with the requirements of section 113, it shall be liable to a fine of 1,000,000 kyats, and every director or other officer of the company who knowingly and willfully authorizes or permits the default shall be liable to the same penalty.

Reduction of share capital

115.(a)A company limited by shares, subject to its constitution, may reduce its share capital in any of the following ways, without limiting the permit under this law or another applicable law:

(i) it may extinguish or reduce the liability on any of its shares in respect of share capital unpaid;

(ii) it may cancel, either with or without extinguishing or reducing liability on any of its shares, any paid-up share capital which is lost or unpresented by available assets;

(iii) it may return, either with or without extinguishing or reducing liability on any of its shares, any paid-up share capital which is in excess of the wants of the company.

(b) The company shall not reduce share capital, if it is not consistent with the following facts:

(i) after the company reduced the share capital immediately, satisfying the solvency test;

(ii) the reduction of share capital is fair and reasonable to the whole shareholders of the company;

(iii) the reduction of share capital does not materially prejudice the liability of the company to pay its creditors;

(iv) approving by shareholders under section 116.

(d) An equal reduction of share capital shall meet the following conditions:

(i) it relates only to ordinary shares;

(ii) it applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold; and

(iii) it is made on the same terms for each ordinary shareholder.

(e) The reduction of share capital by other means under this section ,other than subsection(d), are selective reduction.

Shareholder approval

116.(a)If the reduction of share capital is an equal reduction, it shall be approved by an ordinary resolution passed at a general meeting of the company.

(b) If the reduction of share capital is a selective reduction, it shall be approved by either:

(i) a special resolution passed at a general meeting of the company, with no votes being cast in favour of the resolution by any person who is to receive consideration as part of the reduction or whose liability to pay amounts unpaid on shares is to be reduced , or by their associate; or

(ii) a resolution agreed by all ordinary shareholders at a general meeting.

(c) If the reduction of share capital involves in the cancellation of shares, the reduction shall be approved by a special resolution passed at a meeting of the shareholders whose shares are to be cancelled.

(d) The company shall include with the notice of the meeting a statement setting out all information known to the company that is material to the decision on how to vote on the resolution, including the approval that the requirements of subsection 115(b)(i) to(iii) will be met.

(e) Before the notice of the meeting is sent to shareholders, the company shall lodge with a copy of following documents to the registrar:

(i) the notice of the meeting; and

(ii) any document relating to the reduction of share capital attached with the notice of the meeting to be sent to shareholders.

The company shall also publish a notice of its intention to call a meeting to approve a reduction of share capital in any daily newspaper circulating generally in the Union stating that the notice of the meeting and associated documents have been filed with the registrar.

(f) The registrar shall determine to send the notice of the meeting to the shareholders within 28 days of the receipt of the documents in subsection (e). If the registrar has determined to send the notice, or a determination is not issued within the period, the company may send the notice of the meeting to members of the company.

(g) In making a determination under subsection (f), the registrar may direct the company to clarify or vary any document submitted under subsection (e) when he considered that it is necessary for the protection of shareholders or creditors.

(h) The registrar may determine that the company shall not release the notice of meeting within the time provided by subsection (f) if he finds that the requirements of subsection (d) of this section have not been complied with or for the similar significant causes.

(i) The company shall lodge a copy of any resolution under subsection (b) within 21 days after the resolution is passed to the registrar. It shall publish a notice of the passing of such resolution and the summary details of the reduction of share capital in any daily newspaper circulating generally in the Union. The company shall not make the reduction of share capital until 28 days after the publication of such notice in the newspaper.

(j) The registrar shall not owe any obligations to a company, members of a company or any other person in connection with the performance of its provisions under subsections (f), (g) and (h) of this section, notwithstanding that the company becomes insolvent or suffers any loss.

(k) Although the registrar does not have any liability under subsection (j), the rights of company under section 428 shall not be limited to appeal the decision of the registrar.

Consequences of failure to comply with reduction requirements of share capital

117.(a)The company shall not make the reduction of share capital under section 115 unless it complies with sections 115 and 116.

(b) A contravention of any provisions of section 115 and section 116 shall not affect the validity of reduction of share capital or any contract or transaction connected with it.

118.If a company makes default in complying with the requirements of section 117(a), it shall be liable to a fine of 5,000,000 kyats, and every director, or other officer of the company who knowingly and willfully permits the default shall be liable to the same penalty.

119.In addition to section 118, if the company becomes insolvent after reducing in connection with the reduction of share capitals, every director of the company who knowingly and willfully permitted a reduction in default of section 117(a) shall be liable to the creditors of the company to the extent of the reduction where the debts due by the company to the respective creditors exceeded the recoverable assets of the company. Such amount may be recovered from them by the creditors or the liquidator suing on behalf of the creditors.

Share buy-backs

120.(a)A company may buy back its own share if:

(i) the company, immediately after the shares buy-backs, satisfies the solvency test;

(ii) the shares buy-backs is fair and reasonable to the whole shareholders of company;

(iii) the shares buy-backs does not prejudice the ability of a company to pay its creditors; and

(iv) the procedures in section 122 are followed and it is approved by shareholders under section 121.

(b) The shares buy-backs may be equal or selective.

(i) the offer of shares buy-back relates only to ordinary shares;

(ii) the offers is to be made to every person who holds ordinary shares to buy back the same percentage of their ordinary shares;

(iii ) all of ordinary shareholder have an opportunity to accept the offers ;

(iv) the shares buy-back agreements are not entered into until a specified time for acceptance of offers has closed; and

(v) the terms of all the offers are the same.

(d) All shares buy-back by other means under this section, except as set out in subsection (c), are selective buy-backs.

Shareholder approval

121.(a)An agreement for an equal shares buy-back shall be approved by an ordinary resolution passed at a general meeting of the company or shall be made conditional to such approval.

(b) An agreement for the selective shares buy-back shall be approved , or be made subject to approval after obtaining it, by any of the following means :

(i) a special resolution passed at a general meeting of the company, with no votes being cast in favour of the resolution by any person who is to receive consideration as part of the shares buy-back, or by their associates; or

(ii) a resolution agreed to by all ordinary shareholders at a general meeting.

(c) The company shall include with the notice of the meeting and a statement setting out all information known to the company that is material to the decision on how to vote on the resolution, including the confirmation that the requirements of section 120(a)(i) to(iii) will be met.

(d) Before the notice of the meeting is sent to shareholders and the shares buy-back offer is executed, the company shall lodge to the registrar a copy of:

(i) the notice of the meeting;

(ii) a document setting out the terms of the shares buy-back offer; and

(iii) any document relating to the shares buy-back that accompany with the notice of the meeting sent to shareholders.

The company shall also publish a notice of its intention to call a meeting to approve a buy-back offer in a daily newspaper circulating generally in the Union stating that the notice of meeting and associated documents have been filed with the registrar.

(e) The registrar shall determine to send the notice of meeting to shareholders within 28 days from the date of the receipt of the documents referred to in subsection (d). If the registrar has determined to send the notice or a determination is not issued within this period, the company may send the notice of the meeting and execute the buy-back if it has obtained the shareholder approval.

(f) If the registrar makes a determination under subsection (e), he may direct the company to clarify or vary any document submitted under subsection (d) when he considered that it is necessary for the protection of shareholders or creditors.

(g) The registrar may determine that the company shall not enter into the buy-back offer and release the notice of meeting within the time provided by subsection (e) if he satisfied it is the reasonable ground that the requirements of subsection (c) have not been complied with or for similarly significant cause.

(h) The company shall lodge a copy of any resolution under subsection (b) within 21 days after it is passed to the registrar. It shall publish a notice of the passing of such resolution and the summary of details of the buy-back in a daily newspaper circulating generally in the Union. The company shall not complete the buy-back until 28 days after publication of such notice in the newspaper.

(i) The registrar shall not owe any obligations to a company, members of a company or any other person in connection with the performance under subsections (e) to (g) of this section, notwithstanding that the company becomes insolvent or suffers any loss.

(j) Although the registrar does not have any liability under subsection (i), the rights of company under section 428 shall not be limited to appeal the decision of the registrar.

Matters related to the buy-back offer

122.(a)The company shall include with any offer to buy back shares a statement setting out all information known to the company that is material to the decision whether to accept the offer .

(b) When a company enters into an agreement to buy back shares, all rights attaching to the shares are suspended. If the agreement is terminated, the suspension is cancelled.

(c) A company shall not dispose of buy-back shares. An agreement entered into in contravention of this subsection is voided.

(d) After the registration of transfer to the company of shares buy back, the shares are cancelled forthwith.

Consequences of failure to comply with buy-back requirements

123.(a)The company shall not buy-back the share under section 120 unless it complies with sections 121 and 122.

(b) A contravention of the provision of sections 121 and 122 by the company shall not affect the buy-back shares or any contract or transaction connected with it.

124.If a company makes default in complying with the requirements of subsection 123(a), it shall be liable to a fine of 5 million kyats, and every director, or other officer of the company who knowingly or willfully permits the default shall be liable to the same penalty.

125.In addition to section 124, if the company becomes insolvent after buy backing in connection with such buy-back , every director of the company who knowingly and willfully permitted a reduction in default of subsection 123(a) shall be liable to the creditors of the company to the extent of the consideration paid where the debts due by the company to the creditors exceeded the recoverable assets of the company, and such amount may be recovered from such directors by the creditors or the liquidator suing on behalf of the creditors.

Variation of Shareholder’s Rights

Varying rights of holders of classes of share

126.(a)If the constitution of a company sets out the procedure for varying or cancelling rights attached to shares in a class of shares or, for a company without a share capital, rights of members in a class of members, those rights may be changed or cancelled only in accordance with the procedure. The procedure may be varied only in accordance with the stipulations of it.

(b) If the constitution of the company does not include a procedure in subsection (a), those same rights may be varied or cancelled only by the special resolution of the company. In addition to:

(i) it may make by the special resolution of the following members passed at a meeting:

(aa) for a company with a share capital, the shareholders of the said class of shares;

(bb) for a company without a share capital, the class of members whose rights are being varied or cancelled; or

(ii) the written consent of members with at least 75% of the votes in the said class may be made.

(c) The company shall give a written notice of the variation or cancellation to the members of the class within seven days after the variation or cancellation is made.

(d) The company shall, within 21 days of the passing of the relevant resolutions or receipt of the relevant agreement, file with the registrar a notice in the prescribed form of the variation made under this section and any changes to its share capital structure, in compliance with the application made under subsection (e).

(e) If the holders of not less in the aggregate than ten per cent of the issued shares of a class that has been varied in accordance with this section, being persons who do not consent to or vote in favour of the resolution for the variation, continue to oppose the variation, they may apply to the court to have the variation cancelled. Where any such application is made, the variation shall not have effect unless and until it is confirmed by the court.

(f) An application under subsection (e) shall be made within 21 days after the date on which the consent is given or the resolution is passed. The application may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(g) On any such application, the court may, if it is satisfied having regard to all the circumstances of the case that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application. If not so satisfied, the court shall confirm the variation.

(h) The decision of the court on any such application shall be final and conclusive.

(i) The company shall send a copy of the order to the registrar within 21 days after receiving any order made on any such application.

(j) The duty of every officer of the company is to take necessary measure in accordance with the procedures of this section and make the relevant submission.

(k) The expression “variation” and “varied” in this section include “abrogation” and “abrogated”.

127. If a company makes in default in complying with section 126(j), the company and every director or other officer of the company who is knowingly and willfully involved in the default shall be liable to a find of one million kyats.

Financial Assistance

Restrictions on a company providing financial assistance for purchase of its own shares

128.(a)Save as provided in this section or section 130, a company limited by shares, other than a private company which is not a subsidiary of a public company, shall not give, whether directly or indirectly, any financial assistance for the purpose or in connection with a purchase made or to be made by any person of any shares in the company or a holding company of the company;

Provided that, nothing in this section shall be taken to prohibit, where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business.

(b) Nothing in this section shall affect the right of a company to redeem any shares, reduce its share capital or undertake any transaction or procedure affecting its share capital as provided in this Chapter XV.

129.If a company acts in contravention of section 128, the company and every director or other officer of the company who is knowingly and willfully in default shall be liable to a fine of 2.5 million kyats.

Permitting a company to provide financial assistance

130.(a)A company to which section 128 applies may provide financial assistance to acquire shares in the company or a holding company of the company only if :

(i) the board of director is satisfied on reasonable grounds resolves that:

(aa) the company should give the financial assistance;

(bb) the giving of the financial assistance is in the best interests of the company;

(cc) the giving of the financial assistance is fair and reasonable to the shareholders of a company as a whole;

(dd) the financial assistance does not materially prejudice the ability of a company to pay its creditors; and

(ee) the company will, immediately after giving the financial assistance, satisfy the solvency test; or

(ii) the assistance is approved by shareholders under section 133.

(b) After the giving of financial assistance is authorized by a board of director under subsection (a) (i) and before it is made, if the board of director ceases to be satisfied on a reasonable ground that the company will satisfy the requirements of subsection (a) (i) immediately after the financial assistance is given, any financial assistance made by the company shall be deemed not to have been authorized.

131.If a company makes default in complying with the requirements of section 130, it shall be liable to a fine of 2.5 millions kyats and every director or other officer of the company who knowingly and willfully permits the default shall be liable to the same penalty.

132.In addition to section 131, if the company becomes insolvent after the giving of such financial assistance, every director of the company who knowingly and willfully permitted the giving of financial assistance in default of subsection 130(a) shall be liable to the creditors of the company to the extent of the amount of financial assistance provided where the debts due by the company to the creditors exceeded the recoverable assets of the company. Such amount may be recovered from them by the creditors or the liquidator suing on behalf of the creditors.

Shareholder approval

133.(a)Shareholder approval for financial assistance by a company shall be given by :

(i) a special resolution passed at a general meeting of the company, with no votes being cast in favour of the resolution by the person acquiring the shares or by their associates; or

(ii) a resolution agreed to by all ordinary shareholders at a general meeting.

(b) If the company is a subsidiary of a public company listed in the Union immediately after the acquisition referred to in section 130 by the company, the financial assistance shall be approved by a special resolution passed at a general meeting of that company.

(i) is a company incorporated under this law but not listed in the Union; and

(ii) is not itself a subsidiary of another company incorporated under this law.

The financial assistance shall be approved by a special resolution passed at a general meeting of the holding company.

A company that calls a meeting for the purpose of subsection (a) ,(b) or (c) shall include with the notice of the meeting a statement setting out all the information known to the company that is material to the decision on how to vote on the resolution.

(d) Before the notice of the meeting that is called by a company for the purpose of subsection (a), (b) or (c) is sent to members of the company, the company shall lodge with the registrar a copy of following documents:

(i) the notice of the meeting; and

(ii) any document relating to the financial assistance that will accompany the notice of the meeting to be sent to members.

(e) The company shall file with the registrar, at least 21 days before giving the financial assistance, a notice in the prescribed form stating that the assistance has been approved under this section .

(f) A special resolution passed for the matters contained in subsection (a),(b) or(c) shall be lodged with the registrar by the company, public company listed in the Union, or holding company within 14 days after it is passed;

(g) The duty of every director and other officer of a company shall be liable to take reasonable steps to ensure that the procedures of this section are followed and that all relevant filings are made.

134.If the company makes defaults in complying with section 133(g), the company and every director or other officer of the company who is knowingly and willfully involved in the default shall be liable to a fine of 2.5millions kyats.

Effect of contravention

135.If a company provides financial assistance in contravention of section 128, the contravention shall not affect the financial assistance or of any contract or transaction connected with it.

Prohibition on Self-Acquisition of Shares

Directly acquiring shares

136.A company shall not acquire in itself except the following matters:

(a) a buy-back made under this Chapter;

(b) the act by the order of the court.

Taking security over shares

137.A company shall not take security over shares in itself or a holding company that controls it.

Issuing or transferring shares to a subsidiary

138.The issue of shares by a company or the transfer of shares in a company to a subsidiary is void unless the following causes occurs:

(a) the subsidiary transferee holds the shares as a trustee only and without any beneficial interest in the shares; or

(b) the transfer is by a holding company of the company and the subsidiary transferee is also a subsidiary of that holding company.

Exemptions

139.Without limiting any power outside of this section, the Union Minister may prescribe circumstances where any of the matters prohibited or made void by sections 136(a), 137 and 138 may be permitted and effective.

Continuing Duties

Other duties continue to apply

140.A director shall not be relieved from any of their duties under this law or the vested duties, including under part IV relating to a matter affecting share capital merely because the matter is authorized by the provisions of this Chapter or the constitution or is approved by a resolution of members under the provisions of this Chapter.

Part IV
Management and Administration, Offers to the Public, Mortgage and Charge for Securities, Maintenance of Company Accounts

Chapter XVI

Office and Name of Company

Registered office of company

141.(a)A company shall, as from the date of its cooperation, have a registered office to which all communications and notices may be addressed.

(b) The company need not carry on businesses in the premises at the address of its registered office. Provided that, the person who occupies such place shall obtain and retain with its records the consent to the use of premises of the company as its registered office. If such consent is withdrawn, the company shall identify a new registered office. The registrar may require the company to produce evidence of the consent required under this subsection.

(c) Notice of the registered office setting out a complete address shall be given in the application for incorporation and notice of any subsequent proposed change therein shall be given in the prescribed form prior to the date of the change to the registrar. The registrar shall record such change.

(d) The inclusion in the annual return of a company of the statement as to the address of its registered office shall not be taken to satisfy the obligation imposed by this section.

(e) If the registrar believes that any of the following matters occurs, the registrar may give notice to any resident director that it intends to change the address of the registered office to the address of the director:

(i) if the registered office is at premises in which, the company is no longer carrying on business at those premises the company is carrying on business ;or

(ii) If the registered office is not at premises in which the company is carrying on business, the occupier of those premises has not consented or has withdrawn its consent to the use of the company of those premises as its registered office or such occupier themselves no longer occupies such premises;

If the company has not notified a new address of the registered office within 28 days of the issue of such notice then the registrar may so change the registered office address.

142. If a company fails to comply with the requirements of section 141, it shall be liable to a fine of four million kyats.

Publication of name by a limited company

143.Every limited company:

(a) shall display its name at its registered office, at every office or place in which its business is carried on that is open to the public, in a conspicuous position, in legible Myanmar and English character;

(b) shall have its name engraved in legible characters on its seal if the company has a seal;

(i) written communications sent by or on behalf of the company; and

(ii) documents issued or signed by or on behalf the company that create a legal obligation of the company;

Penalties for non-publication of name

144.(a)If a limited company does not conspicuously display its name in manner provided by this law, it shall be liable to a fine of five thousands kyats, and every officer of the company, who knowingly and willfully authorizes or permits the default, shall be liable to the same penalty.

(b) If any officer of a limited company or any person on its behalf, uses or authorizes the use of any seal purporting to be a seal of the company on which its name is not so engraved as aforesaid, or issues or authorizes the issue of any communication or document referred to in subsection 143(c) wherein its name is not mentioned in manner aforesaid, he shall be liable to a fine of five thousand kyats. In the case of a document evidencing or creating a legal obligation of the company, they shall be personally liable to the same extent as the company if the company fails to discharge the obligation unless:

(i) the person who issued and signed the document proves that the person in whose favor the obligation is aware or is entitled to assume that the obligation is incurred by the company; or

(ii) the court finds that it would not be just or equitable for the person who issued or signed the document to be so liable.

Chapter XVII
Meetings and Proceedings of Companies

Meetings of directors

145.(a)Subject to the constitution of a company:

(i) a meeting of directors may be called by a director giving notice within a reasonable time to every other director;

(ii) a meeting may be called or held using any method consented to by all directors or as provided in the constitution of the company;

(iii) the quorum for a meeting of directors is two directors or such other numbers as specified in the constitution of the company, and a quorum shall be present at all times during the meeting; and

(iv) a resolution shall be passed by a majority of the votes cast by the directors entitled to vote on the resolution.

(b) The directors shall elect a chair to chair meetings of directors and meetings of the company. If the elected chair is absent from all or part of a meeting, a replacement chair may be elected.

Annual general meeting

146.(a)Subject to this section, a general meeting of every company shall be held as its annual general meeting within 18 months from the date of its incorporation and thereafter once at least in every calendar year .It shall be held not more than fifteen months after the holding of the last preceding annual general meeting.

(b) The matters of the annual general meeting to be discussed shall, where required by this law or other applicable law, include the following matters, even if not referred to in the notice of the meeting:

(i) where the company is required to prepare such report, the consideration of annual financial report, the report of directors, and the report of auditor;

(ii) the election of directors;

(iv) where the company is required to appoint an auditor, the appointment of the auditor.

(c) The chair shall allow a reasonable opportunity for the members to ask questions or make comments about the management of the company.

(d) The auditor of the company shall attend the annual general meeting and the chairperson shall allow a reasonable opportunity for the members to ask the auditor questions about the audit, audit report or accounts of the company.

(e) This section shall not apply to a small company unless:

(i) the constitution of the company applies this section or includes any similar requirements;

(ii) the members determine to apply this section by passing an ordinary resolution; or

(iii) the registrar determines that this section should apply.

Default in complying with section 146

147.If default is made in holding an annual general meeting in accordance with the provisions of section 146:

(a) the company and every director or officer of the company who is knowingly and willfully a party to the default shall be liable to a fine of 2.5 million kyats; and

(b) the court may, on the application of any member of the company, call or direct the calling of an annual general meeting of the company and make such ancillary directions regarding the conduct of the meeting as the court thinks fit.

Statutory meeting of company

148.(a)Every public company and every company limited by guarantee and having a share capital shall, within period of not less than 28 days or more than six months from the date at which the company is incorporated, hold a general meeting of the members of the company, which shall be called the statutory meeting.

(b) The director shall, at least 21 days before the day on which the meeting is held, circulate a report in this law referred to as the statutory report certified as required by this section to every member of the company.

(c) The statutory report shall be certified by not less than two directors of the company, or by the chair person of the directors if it is authorized in this behalf by the directors, or by the sole director in the case of a company with only one director, and shall state:

(i) the total number of shares allotted, distinguishing between shares allotted for cash and shares allotted as fully or partly paid up otherwise than in cash, and stating in the case of shares partly paid up the extent to which they are so paid up, and in either case the consideration for which they have been allotted;

(ii) the total amount of cash received by the company in respect of all the shares allotted, distinguished as aforesaid;

(iii) an abstract of the receipts of the company and of the payments made up to a date within seven days of the date of the report, exhibiting under distinctive headings the receipts of the company from shares and debentures and other sources, the payments made, and particulars concerning the balance remaining in hand, and an account or estimate of the preliminary expenses of the company showing separately any commission or discount paid on the issue or sale of shares;

(iv) the names, addresses, nationality and descriptions of the directors, auditors, managing agents and managers and secretary, if any, of the company and the changes, which have occurred since the date of the incorporation;

(v) the particulars of any contract, the modification of which is to be submitted to the meeting for its approval, and the particulars of the modification or proposed modification;

(vi) the extent to which underwriting contracts, if any, have been carried out;

(vii) the arrears, if any, due on calls from directors; and

(viii) the particulars of any commission or brokerage paid or to be paid in connection with the issue or sale of shares to any director or officer.

(d) The statutory report shall, so far as it relates to the shares allotted by the company, and to the cash received in respect of such shares and to the receipts and payments of the company, be certified by the auditors of the company.

(e) The directors shall deliver a copy of the statutory report certified as required by this section to the registrar for registration after sending thereof to the members of the company.

(f) The directors shall cause a list showing the names, descriptions, nationalities and addresses of the members of the company, and the number of shares held by them respectively, to be produced at the commencement of the meeting, and to remain open and accessible to any member of the company during the continuance of the meeting.

(g) The members of the company present at the meeting shall be at liberty to discuss any matter relating to the formation of the company or arising out of the statutory report, whether previous notice has been given or not, but no resolution of which notice has not been given in accordance with the constitution or this law shall be passed.

(h) The meeting may adjourn from time to time, and at any adjourned meeting any resolution of which notice has been given in accordance with the constitution or this law, either before or subsequently to the former meeting, may be passed. The adjourned meeting shall have the same powers as an original meeting.

(i) If a petition is presented to the court in manner provided by Part V for winding up the company on the ground of default in filing the statutory report or in holding the statutory meeting, the court may, instead of directing that the company be wound up, give directions for the statutory report to be filed or a meeting to be held, or make such other order as may be just.

149.If it is failed to comply with the provisions of section 148, every director of the company who is guilty of or who knowingly and willfully authorizes or permits the default shall be liable to a fine of 2.5million kyats .

Meetings

150.A general meeting of a company may be classified as:

(a) an annual general meeting held pursuant to section 146;

(b)a statutory meeting held pursuant to section 148; or

(c) a special general meeting which will be any other general meeting of members called pursuant to the rights and procedures set out in this law, including section 151(a).

Chapter XXXII

Provisions relating to Effectiveness and Transitional Provisions

151.(a) A general meeting of a company:

(i) shall be held for a proper purpose, and at a reasonable time and place;

(ii) shall be quorate if at least two members are present at all times during the meeting or such larger number as may be specified in the constitution of the company;

(iii) subject to the constitution of the company, shall be chaired by a person elected by the directors , provided that if such person does not attend the meeting, the members present shall elect the chair;

(iv) subject to the constitution of the company, shall be adjourned if members present holding a majority of votes at the meeting agree or direct the chair to do so;

(v) may be attended by the auditor of the company, and the auditor shall be entitled to receive all notices of meeting and be heard at the meeting on any part of the business of the meeting that concerns the auditor;

(vi) may be called by the chairman of the board of directors from time to time;

(vii) subject to the constitution, may be called by any other director or other person or persons as provided in the constitution;

(viii) shall be called by a director if duly requisitioned by members in accordance with subsection (b);

(ix) may be called and arranged by members holding not less than one-tenth of the votes that may be cast at a general meeting of the company, provided such members pay the expenses of calling and holding the meeting and call the meeting in the same manner , as nearly as possible , in which meetings of the company may be called by directors; and

(x) may be called by order of the court if it is impracticable to be called in any other way or if it otherwise thinks just and equitable to call the meeting. The court may make the order on application by any director or member who would be entitled to vote at the meeting. The court may make such ancillary directions regarding the conduct of the meeting as the court thinks fit.

(b) Notwithstanding anything in the constitution, the directors of a company which has a share capital shall, on the requisition of the holders of shares providing not less than one-tenth of the votes that may be cast at a general meeting of the company or by at least 100 members who are entitled to vote at a general meeting forthwith proceed to call a general meeting of the company if the proposed business to be conducted is of the kind that could properly be considered at a general meeting.

(c) The requisition shall be in writing, and state the objectives of the meeting and any resolution to be proposed. It shall be signed by the requisitionists and deposited at the registered office of the company .It may consist of several documents in like form and each signed by one or more requistionists.

(d) Save where the directors have reasonably determined that the meeting should not be called under subsection (b) and notified this fact to the requistionists if the directors do not proceed within 21 days from the date of the requisition being so deposited to cause a meeting to be called, the requistionists or a voting majority of them may themselves call the meeting. But, in either case any meeting so called shall be held within three months from the date of the deposit of the requistition.

(e) Any meeting called under this section by the requisitionists shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by directors. If the requistionists ask the company for a copy of the register for this purpose, the company shall provide it to them.

(f) Any reasonable expenses incurred by the requistionists by reason of the failure of the directors duly to convene a meeting shall be repaid to the requistiionists by the company. Any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration for their services to such of the directors as were in default.

(g) Members holding shares providing not less than one-tenth of the votes that may be cast at a general meeting of the company, or at least 100 members who are entitled to vote at a general meeting, may give notice to the company of a proposed resolution to be changed at a meeting of the company.

(h) Any notice under subsection (g) shall be in writing, and set out the wording of the proposed resolution. It shall be signed by the members proposing to change it. The notice may also be accompanied by a short explanatory statement.

(i) If the proposed resolution referred to in subsection (g) is one that could be put at a general meeting and neither the proposed resolution or any accompanying explanatory statement is unduly long or defamatory, the company shall include the notice and any explanatory statement with the next notice of meeting to be sent by the company, provided that the notice need not be sent if the next general meeting is to occur within two months of receipt of the notice of resolution. But, a further provided that the notice shall be sent and a general meeting held within 12 months from the date of the receipt.

(j) Subject to compliance with the requirements for meeting notification and voting provided under this law, and further provided that the company shall ensure at all times that meetings are held in a manner that enables all members to participate and for the meeting to be properly conducted, a company may provide in its constitution for a general meeting to be called or held using any method which is available to members.

Provisions as to notification of meetings and voting

152.(a)The following provisions shall have effect with respect to the calling of meetings of a company:

(i) a meeting of a company may be called by not less than 21 days notice in writing or such longer period provided by the constitution of the company, or by 28 days notice in writing in the case of a public company. But, with the consent of all the members entitled to receive notice of some particular meeting, that meeting may be convened by such shorter notice and in such manner as those members may think fit;

(ii) written notice of the meeting of a company shall be given to every member entitled to vote at the meeting, every director and the auditor. The notice may be given:

(aa) personally;

(bb) by post or other direct delivery to the member’s address recorded in the register of members or such other address notified by the member for this purpose;

(cc) electronically to the fax number or electronic address notified by the member for this purpose; or

(dd) otherwise in the manner specified in the constitution, but the accidental omission to give notice to, or the non-receipt of notice by, any member shall not invalidate the proceedings at any meeting;

(iii) the notice of meeting shall:

(aa) set out the place, date and time for the meeting;

(bb) state the general nature of the business of the meeting;

(cc) state whether the meeting is an annual general meeting, statutory meeting or special general meeting;

(dd) set out the resolutions to be proposed at the meeting, including whether any are special resolutions or resolutions proposed by members, with any necessary explanatory material;

(ee) provide information and instructions regarding the appointment of proxies or corporate representatives, including the time by which notices of such appointments may be received and the manners in which such notices of appointments may be sent; and

(ff) include any other information required to be provided by the constitution or under this law;

(iv) any shareholder whose name is entered in the register of members of the company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

(b) Subject to the constitution of the company, the following provisions shall have effect with respect to voting at meetings of a company:

(i) subject to the rights or restrictions attached to any class of shares, at a meeting of a company:

(aa) on a show of hands each member has one vote;

(bb) on a poll, each member has one vote for each share they hold;

(cc) if a share is jointly held, only one of the named holders is entitled to vote; and

(dd) the chair has a casting vote;

(ii) a challenge to any voting rights may only be made at the meeting and shall be finally determined by the chair;

(iii) a resolution put to the vote at a meeting shall be decided by a show of hands unless a poll is demanded;

(iv) a poll may be demanded on any resolution by:

(aa) the chair;

(bb) at least five members; or

(cc) members with at least 10% of the votes that may be cast on the poll;

(v) the poll may be demanded before a vote on a show of hands is taken or before or immediately after the results of the vote on a show of hands are declared;

(vi) the poll shall be conducted in the manner directed by the chair;

(vii) before any vote is taken on a show of hands or a poll the chair shall inform the meeting of any proxy votes received and how such votes are to be cast; and

(viii) on a show of hands, a declaration by the chair is conclusive evidence of the result. Provided that, this reflects the show of hands and proxies received.

(c) If it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in manner specified in the constitution of the company or this law, the court may, either of its own motion or on the application of any director of the company or of any member of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the court thinks fit. Where any such order is given, the court may give such ancillary or consequential directions as it thinks expedient. Any meeting called, held and conducted in accordance with any such order shall be deemed to be a meeting of the company duly called, held and conducted.

Appointment of corporate representatives to attend meetings of companies

153.(a)A company which is a member of another company may, by resolution of the directors, authorize any of its officials or any other individual person to act as its representative at any meeting of that other company. The person so authorized shall be entitled to exercise the same powers on behalf of the company that the company itself could exercise at a meeting of the other company or in voting on a resolution.

(b) A company may appoint more than one person under subsection (a). Provided that, only one representative may exercise those powers at any one time.

(c) In connection with the participation in a meeting of a company by a corporate representative appointed under sub-section (a), the company may request to see evidence of the due appointment of the corporate representative. It may stipulate a form of appointment by resolution of directors.

Appointment of proxies to attend meetings of companies

154.(a)A member entitled to attend and vote at a meeting of a company may appoint a proxy to attend the meeting and exercise the right of the member to votes on their behalf in accordance with this section and the constitution of a company.

(b) The proxy needs not be a member of the company. He shall be entitled to exercise the same powers on behalf of the member appointing them that the member itself could exercise at the meeting of the company or in voting on a resolution.

(c) The company may, by resolution of directors, stipulate the form by which a member may appoint a proxy and if it does this it must send the form to all members. The company may include with the form a list of persons willing to act as proxies.

(d) Whether or not a form is stipulated under sub-section (c), an appointment of a proxy shall be valid if it is signed by the member appointing the proxy and contains the following information:

(i) the name and address of the member ;

(ii) the name of a company;

(iii) the name of a proxy; and

(iv) the meetings at which the proxy may be used (which may be all meetings).

(e) For an appointment to be effective, the instrument appointing a proxy shall be received by the company at least 48 hours prior to the holding of the relevant meeting. The instrument may, in all cases, be sent to the registered office of the company or to another place, address or number as may be notified by the company in the notice of meeting.

(f) If a company receives more than one instrument from a member appointing a proxy, the last received instrument shall be taken to revoke the earlier one.

(g) The instrument appointing the proxy shall specify how the proxy is to vote on any resolution, or may provide that the proxy may exercise the voting rights at the discretion of proxy, and, if manner of voting is specified, the proxy shall vote in this way.

(h) If the member may not be entitled to vote on a resolution for any reason, the proxy shall not vote on the resolution on behalf of the member.

Ordinary resolutions

155.On any matter where the company is required by the law or its constitution to pass a resolution the matter may be passed by an ordinary resolution except where the law or the constitution of a company expressly requires the matter to be approved by a special resolution or other specified percentage or number of members.

Written resolutions in lieu of meetings

156.(a)A company with only one director need not have meetings of directors and may instead pass any necessary resolutions by recording them in writing and signing them.

(b) A company with only one member need not have meetings of members and may instead pass any necessary resolutions by recording them in writing and signing them.

(c) Any company may pass a resolution of directors without a meeting of directors being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. Separate copies of the document in the same form may be signed and the resolution is passed when the last director signs.

(d) Any private company may pass a resolution of members without a general meeting being held if all the members entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. Separate copies of the document in the same form may be signed and the resolution is passed when the last member signs.

(e) A company that passes a resolution under subsection (d) shall be taken to satisfy any requirement of its constitution or this law that a resolution be passed at a general meeting and further satisfies any requirement under this law:

(i) to give information or a document of members relating to the resolution with the document to be signed;

(ii) to lodge with the registrar a copy of a notice of meeting to consider the resolution and a copy of the document to be signed by members; and

(iii) to lodge a copy of a document that accompanies a notice of meeting to consider the resolution and a copy of the information or documents referred to in subsection(e)(i).

Minutes of proceedings of general meetings and of meeting of directors and of written resolutions

157.(a)Every company shall cause minutes of all proceedings of general meetings and of its directors and of any written resolutions that are passed to be entered in books kept. The relevant minutes or resolutions shall be recorded in this books within 21 days of the holding of the meeting or passing of the written resolution and shall be signed by the chairperson or any other authorised director.

(b) Any such minute or written resolution if purporting to be signed by the chairperson of the meeting at which the proceedings were had, or by the chairperson of the next succeeding meeting, shall be conclusive evidence of the proceedings or passing of the resolution.

(c) Until the contrary is proved, every general meeting of the company or meeting of directors in respect of the proceedings whereof minutes have been so made and signed shall be deemed to have been duly called and held, and all proceedings have thereat to have been duly had, and all appointments of directors or liquidators shall be deemed to be valid.

(d) The books containing the minutes of proceedings of any general meeting of a company and any written resolution of members, shall be kept at the registered office of the company or other place where the register of the company is kept in accordance with this law. It shall, during business hours, be open to the inspection of any member without charge, subject to reasonable restrictions as the company may by its constitution or in general meeting impose so that not less than two hours in each day be allowed for inspection.

(e) Any member shall, at any time after 7 days from the meeting, be entitled to be furnished within 7 days after he has made a request in that behalf to the company with a copy of any minutes or resolution referred to in subsection (d) at a reasonable sum specified by the directors.

158. If any inspection required under section 157(d) is refused, or if any copy required under section 157(e) of this section is not furnished within the time specified in section 157(e), the company and every director or other officer of the company who is knowingly and willfully in default shall be liable in respect of each offence to a fine of 1.5 million kyats.

159. In the case of any refusal or default expressed in section 158, the court may, by order, compel an immediate inspection of the books in respect of all proceedings of general meetings or written resolutions passed or direct that the copies required shall be sent to the persons requiring them.

Chapter XVIII
Directors, their Powers and Duties

Powers of directors

160.The powers of the directors shall be as set out below:

(a) the business of a company shall be managed by or under the direction of the board of directors or, in the case of a single director company, the single director;

(b) in managing the business of the company, the directors or single director may exercise all the powers of the company, subject to any powers which are required to be exercised by members as expressly set out in this law or the constitution of company;

(c) subject to the constitution of the company, the board of directors may confer on a managing director any of the powers that the directors can exercise;

(d) subject to the constitution of company, the board of directors may delegate any of its powers to:

(i) any committee of directors;

(ii) any director;

(iii) any employee of the company;

(iv) any other person;

(e) a delegate of powers under subsection (d) shall exercise such powers in accordance with any directions given by the board of directors and the exercise of powers by the delegate shall be the same effect as if the directors have exercised them;

(f) if the directors delegate a power under subsection (d), a director shall be responsible for the exercise of the power by the delegate as if the power has been exercised by the directors themselves unless the director can show the following grounds:

(i) reasonable grounds at all times that the delegate would exercise the power in conformity with the duties imposed on directors of the company by this law and the constitution of the company; and

(ii) reasonable grounds in good faith and after making proper inquiry if the circumstances indicated the need for inquiry that the delegate is reliable and competent in relation to the power delegated.

Access to information by directors

161.(a)A director may inspect books and records of the company at all reasonable times.

(b) A person who has ceased to be a director may, at all reasonable times during the period of seven years after ceasing to be a director, inspect and take copies of the books and records of the company for the purposes of a legal proceeding:

(i) to which the person is a party;

(ii) that the person proposes in good faith to bring; or

(iii) that the person has reason to believe the cause of action against them.

Restrictions on powers of directors

162.The directors of a public company, or of a subsidiary of a public company, or, if so provided in its constitution of a private company shall not, except with the consent of the company concerned in general meeting:

(a) sell or dispose of the main undertaking of the company; or

(b) remit any debt due by a director.

Restrictions on voting

163.(a)Subject to the constitution of the company and this section, if a director of a company has a material personal interest in a matter that relates to the affairs of the company that is being considered at a board meeting, the director shall not be present while the matter is being considered at the meeting or vote on the matter.

(b) Subject to the constitution of the company, a director may be present at a board meeting at which a matter in which the director has a material personal interest is being considered and vote on a matter if:

(i) under section 172, the director has disclosed the nature and extent of the interest and its relation to the affairs of the company and the other directors pass a resolution that identifies the director and the nature of the interest and states that those directors are satisfied that the interest should not disqualify the director from being present at the meeting or voting;

(ii) a resolution to the same effect as the board resolution referred to in subsection (b)(i) is passed at a general meeting; or

(iii) the interest is one that does not need to be disclosed under section 172.

(i) the director may vote on matters that relate to the interest;

(ii) any transactions that relate to the interest may proceed;

(iii) the director may retain benefits under the transaction even though the director has the interest; and

(vii) the company cannot avoid the transaction merely because of the existence of the interest.

Duties of Directors and Officers

Duties

164. Sections 165 to 172 shall provide the main duties imposed on directors and officers but shall not limit duties imposed under this law or any other applicable law.

Duty to act with care and diligence

165.(a)A director or an officer shall exercise their powers, and discharge their duties with the degree of care and diligence that a reasonable person would exercise in the following circumstances :

(i) if they were directors or officers of the company in the circumstances of the company ; or

(ii) if they occupied the office held by, and had the same responsibilities within the company as the director or officer.

(b) a director or other officer who, in the exercise of their powers and discharge of their duties, makes a decision to take, or not take, an action in relation to the operation of the business of the company, shall be taken to meet the requirements of subsection (a). The director or other officers shall be deemed to do any same legal or equitable duties, and the duty in section 170, if they:

(i) make the decision in good faith for a proper purpose;

(ii) do not have a material personal interest in the subject matter of the decision;

(iii) inform themselves about the subject matter of the decision to the extent they reasonably believe to be appropriate; and

(iv) rationally believe that the decision is in the best interests of the company.

Duty to act in good faith in the best interest of the company

166.(a)Subject to this section, a director or an officer shall exercise their powers and discharge their duties:

(i) in good faith and in the best interest of the company; and

(ii) for a proper matter.

(b) A director or an officer of a company that is a wholly-owned subsidiary may, when exercising powers or performing duties as a director or officer, if expressly permitted to serve it by the constitution of the company, act in a manner which they belief is in the best interests of that holding company of the company even though it may not be in the best interests of the company.

(c) A director or an officer of a company that is a subsidiary but not a wholly-owned subsidiary may, when exercising powers or performing duties as a director or an officer, if expressly permitted to serve it by the constitution of the company and with the prior agreement of the members other than its holding company, act in a manner which they belief is in the best interests of that holding company of the company even though it may not be in the best interests of the company.

(d) A director or an officer of a company that is carrying out a joint venture between the shareholders may, when exercising powers or performing duties as a director in connection with the performance of the joint venture, if expressly permitted to do so by the constitution of the company, act in a manner which they belief is in the best interests of a shareholder or shareholders, even though it may not be in the best interests of the company.

(e) In connection with the obligation under subsection (a) (i), when exercising their powers and discharging their duties a director or an officer shall have regard to:

(i) the likely long-term consequences of the decision including its impact on the:

(aa) employees of a company ;

(bb) business relationships of a company with customers and suppliers;

(cc) environment;

(dd) reputation of a company; and

(ii) the need to act fairly as between members of the company.

Duty regarding use of position

167.A director or an officer shall not improperly use their position to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the company.

Duty regarding to use of information

168.A director or an officer shall not improperly use information obtained by them as a director or an officer to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the company.

Duty to comply with the law and constitution

169.A director or an officer shall not act, or agree to the company acting, in a manner that contravenes this law or the constitution of company.

Duty to avoid reckless trading

170.A director or an officer shall not cause or allow the business of the company to be carried on, or agree to the business being carried on, in a manner likely to create a substantial risk of serious loss to the creditors of the company.

Duty in relation to obligations

171. A director or an officer shall not agree to a company incurring an obligation unless that director or officer believes at the time on reasonable grounds that the company will be able to perform the obligation when required to do so.

Duty to disclose certain interests

172.(a)A director of a company who has a material personal interest in a matter that relates to the affairs of the company shall give the other director notice of the interest unless:

(i) the interest:

(aa) arises because the director is a member of the company and is held in common with the other members of the company;

(bb) arises in relation to the remuneration of the director as a director of the company;

(cc) relates to a contract the company is proposing to enter into that is subject to approval by the members and will not impose any obligation on the company if it is not approved by the members;

(dd) arises merely because the director is a guarantor or has given an indemnity or security for all or part of a loan or proposed loan to the company;

(ee) arises merely because the director has a right of subrogation in relation to a guarantee or indemnity referred to in sub-clause (dd);

(ff) relates to a contract that insures, or would insure, the director against liabilities the director incurs as an officer of the company but only if the contract does not make the company or a related body corporate the insurer;

(gg) relates to any payment by the company or a related body corporate in respect of an indemnity permitted under section 181 or any contract relating to such an indemnity; or

(hh) is in a contract, or proposed contract, with or for the benefit of or on behalf of, a related body corporate and arises merely because the director is a director of the related body corporate;

(ii) the director has already given notice of the nature and extent of the interest and its relation to the affairs of the company in accordance with this section and the notice remains valid; or

(iii) the company only has one director, and that director and any related parties of the director are the only shareholders of the company. If the sole director, company has additional shareholders, a notice required to be given under subsection (a) shall be given to those shareholders.

(b) The notice of an interest may be given from time to time as required or the director of a company who has an interest in a matter may give the other directors standing notice of the nature and extent of the interest.

(c) The standing notice may be given at any time and whether or not the matter relates to the affairs of the company at the time the notice is given. Provided that, if a new director is appointed to the board of directors, any standing notices that have been previously given shall be refreshed at a new meeting of the board.

(d) The standing notice shall cease to be valid if the nature or extent of the interest materially increases above that disclosed in the notice.

(e) Any notice given under this section shall:

(i) give details of the nature and extent of the interest; and

(ii) be given at a board meeting and recorded in the minutes.

(f) A contravention of this section by a director shall not affect the validity of any act, transaction, agreement, instrument, resolution or other thing.

(g) In addition to provisions contained in this section shall apply to any law regarding conflicts of interest and to anything in the constitution of the company.

Appointment of Directors, their Remuneration and Cessation of Appointment

Appointment of Directors

173.(a)In default of and subject to any regulations in the constitution of a company:

(i) the initial directors of a company shall be the persons named in the application for incorporation made under part II of this law;

(ii) thereafter, the directors of the company shall be appointed by the members passing an ordinary resolution in a general meeting; and

(iii) any casual vacancy occurring among the directors may be filled up by the directors, even if those directors would not at the time constitute a quorum. But, the person so appointed shall be subject to approval of members at the next general meeting of the company held after their appointment, which shall be called within six months of the appointment.

(b) In the case of public companies, subject to the constitution of the company or any other applicable law, at each annual general meeting one third of the directors for the time being, or, if their number is not three or a multiple of three, then the number nearest to one third shall retire from the post. The directors to retire in any such meeting shall be those who have been longest in the post since the last election, but as between persons who became directors on the same day those to retire shall be determined by the chairperson.

(c) A resolution at a general meeting to appoint a director may only refer to one proposed director. However, separate resolutions to appoint additional directors may be made at the same meeting.

(d) The directors may appoint one or more of themselves to the office of managing director of the company for the period and on the terms as the directors see fit. A person shall cease to be a managing director if the cease to be a director.

(e) With the approval of the other directors, a director may appoint an alternate to exercise some or all of the powers of directors a specified period and when such alternate exercises the powers of directors the exercise is just as effective as if done by the director. The appointment shall be made in writing and given to the company. The appointment may be revoked by the appointing director at any time.

(f) The director of a private company who is the only director and only shareholder of the company may appoint another director by the written resolution.

(g) If a person who is a sole director and only shareholder of a company dies or becomes subject to an incapacity, the personal representative or trustee of the person may appoint a person as a director of the company.

(h) If there are no directors of a company or the number of directors is less than the quorum required for a board meeting and it is not possible or practicable to appoint directors in accordance with this law or the constitution of the company, a shareholder or the registrar may apply to the court to appoint one or more directors to the company. The court may make the appointment if it considers it is in the best interest of the company to appoint them and any appointment may be made on such terms and conditions as the court thinks fit.

Removal of directors

174.A company may, by ordinary resolution passed at a general meeting called for this purpose or by the written resolution passed in accordance with this law remove any director.

Qualification of director

175.(a)It shall be the duty of every director who is by the constitution of a company, required to hold a specified share qualification, and who is not already qualified, to obtain his qualification within two months after the appointment of the director, or such shorter time as may be fixed by the constitution.

(b) Only a natural person who is at least the age of 18 may be appointed as a director.

(d) A person who has been disqualified from acting as a director under this law or any other applicable law shall not act as a director during the period of their disqualification.

(e) A person who is an undischarged bankrupt shall not act as a director.

(f) This section shall not prejudice to any additional qualifications which a company may include in its constitution, however no constitutional qualification will be valid to the extent it is inconsistent with any of the qualifications required under this section.

(g) A person acting as a director may be liable for a breach of obligation or duty of a director under this law or any other applicable law, notwithstanding that any of the qualifications to them being appointed as a director have not been met.

(h) The registrar may, by notification, prescribe the qualifications, rights and duties of independent directors.

Validity of acts of directors

176.The acts of a director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or their failure to meet any applicable qualification for appointment whether under this law or the constitution of a company. Provided that, nothing in this section shall be deemed to validate any acts which would have been invalid even if the appointment of the person as a director had been effective.

Assignment of office by directors

177. If in the case of any company provision is made in the constitution or by any agreement entered into between any person and the company for empowering a director or an officer of the company to assign his office as such to another person, any assignment of office made in pursuance of the said provision shall, notwithstanding anything to the contrary contained in the said provision, be of no effect unless and until it is approved by a special resolution of the company.

Provided that, the exercise by a director of a power to appoint an alternate director to act for him during periods of unavailability shall not be deemed to be an assignment of office within the meaning of this section.

Provided that any such alternate director shall not exercise any powers as a director if andwhen the appointor is available.

Cessation of the post of director

178.(a)The post of a director shall be ceased if the director:

(i) fails to obtain within the time specified in subsection 175(a), or at any time thereafter ceases to hold the share qualification, if any, necessary for the appointment of a director ;

(ii) is found to be of unsound mind by a court of competent jurisdiction;

(iii) is adjudged bankrupt or an insolvent;

(iv) fails to pay calls made on the director in respect of shares held by the director within six months from the date of such calls being made;

(iv) absents themselves from three consecutive meetings of the directors or from all meetings of the directors for a continuous period of three months, whichever is the longer, without leave of absence from the board of directors or without appointing an alternate;

(v) resigns from their posts as a director by giving written notice to the company;

(vi) dies;

(vii) is removed from the post in accordance with this law or the constitution of the company;

(ix) ceases to hold or meet any of the qualifications required for the post of a director set out in this law or the constitution of the company.

(b) Nothing contained in this section shall be deemed to preclude a company from providing by its constitution that the post of a director shall be ceased on grounds additional to those specified in this section.

Secretaries

179.(a)A secretary may be appointed by a resolution of the directors.

(b) Only a natural person who is at least the age of 18 may be appointed as a secretary.

(d) A person who has been disqualified from acting as a director, an officer or a secretary under this law or any other applicable law may not act as a secretary during the period of their disqualification.

(e) This section shall not prejudice to any additional qualifications required to be held by a secretary which a company may include in its constitution, however no constitutional qualification will be valid to the extent it is inconsistent with any of the qualifications required under this section.

(f) The acts of a secretary shall be valid notwithstanding any defect that may afterwards be discovered in their appointment or their failure to meet any applicable qualification for appointment whether under this law or the constitution of a company. Provided that nothing in this section shall be deemed to validate any acts which would have been invalid even if the appointment of a person as a secretary has been effective.

Restrictions on Indemnities, Insurance, Relief from Liability and Provision for Unlimited Liability

Avoidance of provisions exempting liability of directors, officers and auditors

180. Save as provided in this Chapter, any provision whether contained in the constitution of a company or in any contract with a company or otherwise, for exempting any director or officer of the company, or any person , whether an officer of the company or not, employed by the company as an auditor, from any liability to the company which by virtue of this law or any other applicable rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company shall be void.

Indemnities

181.(a)Subject to this section, a company or a related body corporate shall not, directly or indirectly, indemnify a person against any of the following liabilities incurred as a director, an officer or auditor of the company:

(i) a liability owed to the company or a related body corporate; or

(ii) a liability that is owed to someone other than the company or a related body corporate and does not arise out of conduct in good faith.

(b) Subsection (a) shall not prohibit a company or a related body corporate from indemnifying a person for a liability against legal costs incurred in defending an action for a liability incurred as a director, an officer or auditor of the company unless the costs are incurred:

(i) in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (a);

(ii) in defending criminal proceedings in which the person is found guilty;

(iii) in defending proceedings brought by the registrar or liquidator for a court order if the grounds for making the order are found by the court to have been established; or

(iv) in connection with proceedings for relief to the person under this law in which the court denies the relief.

Insurance

182.(a)A company or a related body corporate shall not pay, or agree to pay, directly or indirectly, a premium for a contract insuring a person who is or has been a director, an officer or auditor of the company against a liability other than one for legal costs arising out of:

(i) conduct involving a willful breach of duty in relation to the company; or

(ii) a contravention of section 167 or 168.

(b) Subject to any other applicable law, subsection (a) shall not prohibit a company or a related body corporate from paying, or agreeing to pay, directly or indirectly, a premium for a contract insuring a person who is or has been a director, an officer or auditor of the company against a liability other than a liability referred to in subsections (a) (i) or (a) (ii).

Limited company that may have directors with unlimited liability

183.Without limiting any other provision of this law or other applicable law, in a limited company which is incorporated prior to the commencement of this law, the liability of the directors or of any director appointed prior to the commencement of the law may, if so provided by the constitution of the company, be unlimited.

Provision of Benefits to and Transactions with Directors, Officers and other Related Parties

Provision of retirement benefits

184.(a)Subject to this section, a company shall not give a person a benefit in connection with retirement of a person as an officer of the company or a related body corporate without having member approval under section 186 for the giving of the benefit.

(b) Sub-section (a) shall not restrict the payment of any benefits required to be paid by law or paid in good faith under or in connection with the contract of employment of the officer or similar engagement with the company.

Provision of benefits on transfer of undertaking or property

185.A company shall not give an officer or a former officer of the company or any related body corporate, or any spouse, relative or associate of the officer or former officer, a benefit in connection with the transfer of the whole or any part of the undertaking or property of the company or any related body without having member approval under section 186 for the giving of the benefit.

Approval of benefits by members

186.(a)A benefit of the kind referred to in section 184 or 185 may be given if it is approved at a general meeting of members of the company, its ultimate holding company, if any, and any other relevant related body.

(b) A notice of meeting prepared for any meeting held under subsection (a) shall provide details of the relevant benefit and all other material information relevant to the decision on how to vote on it.

(c) The officer or former officer referred to in section 184 or 185 or any person who would receive the benefit may not vote on any resolution concerning the giving of the benefit unless pursuant to a proxy from another person which directs them how to vote.

Remuneration of directors and other benefits to directors and related parties

187.(a)The board of director of a company may, subject to any restrictions contained in the constitution of the company and provisions of this law and any other applicable law, authorise:

(i) the payment of remuneration or the provision of other benefits by the company to a director or a related party of a director for services as a director or in any other capacity;

(ii) the payment by the company to a director or former director of compensation for loss of works;

(iii) the making of loans by the company to a director or a related party;

(iv) the giving of guarantees by the company for debts incurred by a director or a related party;

(v) the entering into of a contract to do any of the things set out in clauses (i), (ii), (iii), and (iv) or to the provision of any other kind of financial benefit to a director or a related party not otherwise regulated under this law; and

(vi) if the board is satisfied that:

(aa) such conduct is in the best interest of the company;

(bb) such conduct is reasonable in the circumstances; and

(cc) the payment or benefit or loan or guarantee or contract is made on terms that are no worse than arm’s length from the perspective of the company.

(b) The board of director shall ensure that forthwith after authorising the making of the payment or the provision of the benefit or the making of the loan or the giving of the guarantee or the entering into of the contract, as the case may be, particulars of the payment or benefit or loan or guarantee or contract are entered in the register of interests maintained by the company under section 189.

(c) The payment of remuneration or the giving of any other benefit to a director or related party in accordance with a contract authorised under subsection (a) need not be separately authorised under that subsection.

(d) Directors who vote in favour of authorising a payment, benefit, loan, guarantee, or contract under sub-section (a) shall sign a certificate stating that, in their opinion, the making of the payment or the provision of the benefit, or the making of the loan, or the giving of the guarantee, or the entering into of the contract is in the best interest of the company, is reasonable in the circumstances, and is on terms that are no worse than arm’s length from the perspective of the company, and the grounds for that opinion.

(e) Where a payment is made or other benefit provided or a guarantee is given to which subsection (a) applies and either:

(i) the provisions of subsections (a) and (d) have not been complied with; or

(ii) reasonable grounds do not exist for the opinion set out in the certificate given under subsection (d), the director or former director or related party to whom the payment is made or the benefit is provided, or in respect of whom the guarantee is given, as the case may be, is personally liable to the company for the amount of the payment, or the monetary value of the benefit, or any amount paid by the company under the guarantee, except to the extent to which he or she proves that the payment or benefit or guarantee is fair to the company at the time it is made, provided, or given.

(f) Where a loan is made to which subsection (a) applies and either:

(i) the provisions of subsections (a) and (d) have not been complied with; or

(ii) reasonable grounds do not exist for the opinion set out in the certificate given under subsection (d), the loan becomes immediately repayable to the company by the director or related party, notwithstanding the terms of any agreement relating to the giving of the loan, except to the extent to which he or she proves that the loan is fair to the company at the time it is given.

(g) The directors shall ensure that particulars of the payment or benefit or loan or guarantee or contract are disclosed to members at the next annual general meeting of the company.

Member approval of remuneration of directors and other benefits to directors and related parties

188.(a)The board of director of a company may, subject to any restrictions contained in the constitution of the company and provisions of this law and any other applicable law, authorise a payment or benefit or loan or guarantee or contract of the kind referred to in subsection 187(a) to a director or other related party of the company if it is approved by members under this section.

(b) Before the notice convening the relevant meeting is given, the company shall file with the registrar:

(i) a proposed notice of meeting setting out the proposed resolution;

(ii) a proposed explanatory statement setting out all information known to the company that is material to the decision on how to vote on the resolution including details of the director or related party receiving the payment or benefit or loan or guarantee or contract and details of such payment or benefit or loan or guarantee or contract; and

(iii) any other document that is proposed to accompany the notice convening the meeting and that relates to the proposed resolution.

(c) The registrar shall have 28 days to determine whether the company may release the notice of meeting to members. If the registrar determines that the notice may be sent, or a determination is not issued within this period, the company may send the notice of meeting.

(d) In making a determination under subsection (c), the registrar may direct the company to clarify or vary any document submitted under subsection (b) where this is considered reasonably necessary for the protection of members.

(e) The registrar may determine that the release of the notice of meeting shall not occur if satisfied on reasonable grounds that the requirements of subsection (b) (ii) have not been met or for similarly significant cause.

(f) The director or relevant related party shall not vote on the resolution at the general meeting unless pursuant to a proxy from another person which directs them how to vote.

(g) The company shall lodge with the registrar a copy of any resolution under subsection (a) within 14 days after it is passed.

Information about Directors and Others

Register of directors and secretaries

189.(a)Every company shall keep at its registered office or such other place where its register is kept a register of its of directors, any alternate directors and secretaries, containing with respect to each of them the following particulars:

(i) the director, alternate director or secretary’s present name in full, any former name in full, the individual’s date of birth, the individual’s usual residential address, the individual’s nationality and any other nationality held by the individual and the individual’s business occupation, if any, and if the individual’s holds any other directorship or directorships the particulars of such directorship or directorships;

(ii) any interests declared by a director under section 172; and

(iii) any benefits provided to a director under section 187.

(b) Each director, alternate director and secretary shall provide the company with the particulars required to be entered on the register maintained under subsection (a).

(c) The company shall, as part of its obligation to file an annual return under section 97, send the registrar a return in the prescribed form containing the particulars specified in the said register. The company shall file with the registrar a notice in the prescribed form of any change among its directors, alternate directors or secretaries, or in any of the particulars contained in the register within 28 days of the date of the change.

(d) The register to be kept under this section shall, during business, be open to the inspection of any member of the company hours subject to such reasonable restrictions as the company may, by its constitution or in general meeting, impose so that not less than two hours in each day be allowed for inspection without charge and of any other person on payment of a reasonable sum determined by the company for each inspection.

(e) If any inspection required under this section is refused, the court, on application made by the person to whom inspection has been refused and upon notice to the company, may, by order, direct an immediate inspection of the register.

Breach of the Provision of this Chapter

Consequences of breach of any requirement of this chapter

190.(a)If default is made in complying with the provisions of any section of this Chapter, every director and any other person subject to the applicable provision who is a party to the default shall be liable to a fine of 100 million kyats.

(b) Without limiting subsection (a), every director and any other person subject to the applicable provision of this chapter who is knowingly and wilfully a party to the default may also be:

(i) subject to such additional penalty as the court may determine in accordance with this law if the default has involved dishonesty on the part of the director or other person subject to the applicable provision; and

(ii) on the application of the registrar, disqualified from acting as a director or other officer of a company for such period as may be determined by the court.

(c) This section shall not limit any other liabilities of the director, any other person subject to the applicable provision of this Chapter or the company, or any actions which might be brought against them by any person under this law or any other applicable law including under sections 193 and 200 below.

Reliance on information or advice

191.(a)If the reasonableness of the director’s or officer’s reliance on information or professional or expert advice arises in proceedings brought to determine whether a director has breached a duty under this Chapter or an equivalent general law duty, the reliance of the director or officer’s reliance on the information or advice shall be taken to be reasonable if:

(i) the information or advice is given or prepared by:

(aa) an employee of the company whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned;

(bb) a professional adviser or expert in relation to matters that the director believes on reasonable grounds to be within the person’s professional or expert competence;

(cc) another director or officer in relation to matters within the director’s or officer’s authority; or

(dd) a committee of directors on which the director does not serve in relation to matters within the committee’s authority; and

(ii) the reliance is made in good faith and after making an independent assessment of the information or advice, having regard to the knowledge of director of the company and the complexity of the structure and operations of the company.

(b) The presumption in subsection (a) is rebuttable, and may be disproved by the person bringing the proceedings.

Chapter XIX
Rights and Remedies of Members

Actions by Members and Others in Case of Unfair Conduct

Unfair conduct

192.The court may make an order under section 193 if the conduct of affairs of a company, an actual, or proposed act, or omission by, or on behalf of a company, or a resolution, or a proposed resolution of members, or a class of members of a company causes to any of the following matters:

(a) contrary to the interests of every members; or

(b) oppression, or unfairness, or unfair discrimination against, a member or members whether in that position or other position;

For the purposes of this Chapter, a person to whom a share in the company has been transferred by will or by the law shall be taken to be a member of the company.

Orders the court may make

193.(a)The court may make any order under this section that it considers appropriate in relation to the company, including any of the following orders:

(i) to wind up a company;

(ii) to amend or repeal the existing constitution of a company;

(iii) to prescribe the terms and conditions for the conduct of affairs of the company in the future;

(iv) to purchase any shares by any member or person to whom a share in the company has been transmitted by will or by the law;

(v) to purchase any share with an appropriate reduction of share capital of the company;

(vi) to litigate, prosecute, defend or discontinue any proceeding for the company;

(vii) to authorize a member or a person to whom a share in the company has been transmitted by will or by operation of law to litigate, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;

(viii) to appoint a receiver of any or all of the property of the company;

(ix) to restrain a person from engaging in specified conduct or from doing a specified act;

(x) to require a person to do a specified act; or

(xi) to pay damages;

(b) If an order is made to wind up a company under this section, the provisions and amendment of this law, as may be necessary, relating to the winding up of companies shall be applied.

(c) If an order made under this section repeals or modifies the constitution of a company, the company shall not have the power under section 17 to modify or repeal the constitution if that modify or repeal would be inconsistent with the provisions of the order, unless permitted by the order or the company first obtains the leave of the court.

Application for an order of the court

194. An application for an order under section 193(a) in relation to a company may be made by the following persons:

(a) any member of the company, even if the application relates to an act or omission against the following persons:

(i) the member in a capacity other than as a member; or

(ii) another member in their capacity as a member;

(b) a person who has been removed from the register of members because of a selective reduction of capital;

(c) a person who has been ceased to be a member of the company if the application relates to the circumstances in which they ceased to be a member;

(d) a person to whom any share in the company has been transmitted by will or by operation of law; or

(e) a person whom the registrar thinks appropriate having regard to investigations it is conducting or has conducted in the affairs of the company matters connected with the affairs of the company.

Requirement to lodge order to the registrar

195.If an order is made under section 193(a), the applicant shall lodge a copy of the order with the registrar within 21 days after it is made.

Proceedings on behalf of a Company

Proceedings or intervening in, on behalf of a company

196.(a)Any of the following persons who granted permission under section 197 may bring proceedings on behalf of the company, or intervene in any proceedings to which the company is a party, taking responsibility on behalf of the company for those proceedings, or for a particular steps to make necessary activities such as mediation or settlement in such proceedings:

(i) a member, former member, or person entitled to be registered as a member of the company or of a related body; or

(ii) a director, former director, officer or former officer of a company.

(b) Proceedings brought on behalf of a company shall be brought in the name of the company.

(c) The right of any person prescribed in any other laws to bring or intervene in, proceedings on behalf of a company shall be abolished.

Applying for and granting leave to bring or intervene in proceedings

197.(a)Any person prescribed in section 196(a)(i) may apply to the court for granting leave to bring or to intervene in proceedings.

(b) The court shall grant the application if it is satisfied the following facts that:

(i) it is probable that the company may not itself bring the proceedings, or may take responsibility for them, or may not make necessary matters in them;

(ii) the applicant is acting in good faith;

(iii) it is in the best interests of the company for permission to the applicant;

(iv) if the applicant is applying for permission to bring proceedings, there is a serious question to be tried; and

(v) If any of the following matter is:

(aa) at least 14 days before making the application, the applicant shall give written notice to the company of the intention to apply for permission and of the reasons for applying; or

(bb) it is appropriate to grant leave even though sub-clause (aa) is not satisfied.

(c) A rebuttable presumption that the grant of permission is not in the best interests of the company arises if it is found that:

(i) the proceedings are:

(aa) by the company against a third party; or

(bb) by a third party against the company; and

(ii) the company has decided:

(aa) not to bring the proceedings;

(bb) not to defend the proceedings; or

(cc) to discontinue, settle or compromise the proceedings; and

(iii) all of the directors who participated in such decision:

(aa) act in good faith for a proper purpose;

(bb) do not have the personal interest in the decision;

(cc) inform themselves about the subject matter of the decision to the extent they reasonably believed to be appropriate; and

(dd) rationally believe that the decision is in the best interests of the company.

(d) The belief of directors that the decision is in the best interests of the company is a rational one except the belief is one that one ordinary person in their position would not hold.

(e) For the matters prescribed in subsection (c):

(i) a person is a third party if the person is not a related party of the company; and

(ii) proceedings by or against the company include any appeal to a decision made in such proceedings.

Substitution of another person for the person granted leave to bring or intervene in proceedings

198.(a)Any of the following persons shall apply to the court for an order that they are substituted for a person to whom permission has been granted under section 197:

(i) a member, former member, or a person entitled to be registered as a member of the company or of a related body; or

(ii) a director, former director, officer, or former officer of the company.

(b) The court shall make the order if it is satisfied that:

(i) the applicant is acting in good faith; and

(ii) it is appropriate to make the order in all the circumstances.

(i) the grant of leave shall be presumed that it is in favour of the substituted person; and

(ii) if the other person has already brought the proceedings or intervened, the substituted person shall be taken to have brought those proceedings or to have made that intervention.

Effect of ratification by members of company

199.(a)If the members of a company ratify or approve conduct, the ratification or approval:

(i) shall not prohibit a person from bringing or intervening in proceedings with leave under section 197, or from applying for leave; and

(ii) shall not have the effect that proceedings brought or intervened in with leave under section 197 shall be determined in favour of the defendant, or that an application for leave shall be refused.

(b) If members of a company ratify or approve conduct, the court may take the ratification or approval into account in deciding what order or judgment, including as to damages, to make in proceedings brought or intervened in with leave under section 197 or in relation to an application under such section. In doing this, the following matters shall be taken into account in such decision:

(i) knowing completely the conduct, when deciding whether the members of the company ratify or approve the conduct; and

(ii) whether the members who ratified or approved the conduct are acting for proper purposes.

General powers of the court

200.(a)The court may make any order, and give directions, that it considers appropriate in relation to proceedings brought or intervened in with leave, or an application for leave for the following matters:

(i) interim orders;

(ii) directions about the conduct of the proceedings, including requiring mediation;

(iii) an order directing the company or an officer of the company to do or not to do, any act; and

(iv) an order appointing any independent person to investigate the following matters and report to the court on:

(aa) the financial affairs of the company;

(bb) the matters or circumstances which gave rise to the cause of action the subject of the proceedings; or

(cc) the costs incurred in the proceedings by the parties in the proceedings and the persons granted leave.

(b) Any person appointed by the court under subsection (a)(iv) is entitled, on giving reasonable notice to the company, to inspect any books of the company for any purpose connected with their appointment.

(i) the court shall also make an order stating who is liable for the remuneration and expenses of the person appointed;

(ii) the court may vary the order at any time;

(iii) the persons who may be made liable under the order, or the order as varied, are:

(aa) all or any of the parties to the proceedings or application; and

(bb) the company; and

(iv) if the order or the order as varied, makes two or more persons liable, the order may also determine the nature and extent of the liability of each of those persons.

(d) Subsection (c) shall not affect the powers of the court as to costs.

Power of the court to make costs orders

201.The court may at any time make any orders it considers appropriate about the costs of the following persons in relation to proceedings brought or intervened in with leave under section 197 or an application for leave under such section:

(a) the person who applied for or is granted leave;

(b) the company; and

Chapter XX
Matters relating to Share Offers by Public Companies

Prospectus of a Company

Compliance with the provisions of the Chapter

202.(a)Other than subsection (b), this Chapter shall apply to public companies and any offer to sell their shares or other securities to the public. These provisions shall apply without limitation to any other provision of this law or other applicable law, and subject to such applicable laws.

(b) Other companies, other than a public company, shall not offer to sell their shares or other securities to the public or make an allotment of or an agreement to allot any securities of the company with a view to their being offered to sell to the public.

Filing of prospectus of a company

203.(a)Every prospectus issued by or on behalf of a company or in relation to any intended company shall be dated, and that date shall, unless there is a contradiction, be taken as the date of publication of the prospectus.

(b) A copy of every prospectus of a company signed by every person or on behalf of such person who is named therein as a director or proposed director of the company or by his agent authorized in writing, shall be filed for registration with the registrar on or before the date of its publication. No such prospectus shall be issued unless a copy thereof has been filed for registration with the registrar.

(c) The registrar shall not register any prospectus which does not state the date or the signature, in a manner required by this section.

(d) Every prospectus of a company shall state on the face of it that a copy has been filed for registration as required by this section.

204. If a prospectus is issued without a copy thereof being so filed in accordance with section 203, the company and each person who is knowingly a party to the issue of the prospectus shall be liable to a fine of 10,000,000 kyats.

Specific requirements as to particulars of prospectus of a company

205.(a)Every prospectus issued by or on behalf of a company or by or on behalf of any person who is or has been engaged or interested in the formation of the company shall state the following requirements:

(i) the contents of the constitution, with the names, descriptions, nationalities, and addresses of the initial shareholders and the number of shares subscribed for by them respectively, and the number of founders or management or deferred shares if the prospectus has the founders shares or management shares or deferred shares possessed by the directors and officers of the company , the nature and extent of the interest of the holders in the property and profits of the company, and the number of redeemable preference shares intended to be issued with the date or, where no date is fixed, the period of notice required and the proposed method of redemption;

(ii) the number of shares fixed by the constitution as the qualification of a director if the constitution of a company fix the number of shares as the qualification of a director and any conditions in the constitution as to the remuneration of the director;

(iii) the names , descriptions nationalities and addresses of the directors or proposed directors and of the officers or proposed officers ,and any provision and condition in the constitution or in any contract as to the appointment of officers and the remuneration payable to them;

(iv) the minimum subscription on which the directors may proceed to allotment, and the amount payable on application and allotment on each share, and in the case of a second or subsequent offer of shares, the number of shares and amount offered for subscription on each previous allotment made within the two preceding years, and the number of shares actually allotted, and the amount paid on the shares so allotted;

(v) the number and amount of shares and debentures and other securities which within the two preceding years have been issued, or agreed to be issued , as fully or partly paid up in cash or otherwise , and in the latter case the extent to which they are so paid up, and in either case the consideration for which those shares or debentures or other securities have been issued or agreed to be issued;

(vi) where shares or debentures or other securities is issued by the underwriters, the names of such underwriters, and the opinion of the directors that the underwriters are sufficient to discharge the underwriting obligations;

(vii) the names and addresses of the vendors of any property purchased or acquired or proposed to purchase or acquire by the company which is paid for wholly or partly out of the proceeds of the issue offered for subscription by the prospectus, and the amount payable in cash, shares or debentures or other securities to the vendor, and, where there is more than one vendor or the company is a sub-purchaser, the amount payable to each vendor:

However, where the vendors or any of them are a firm, the members of the firm shall not be treated as separate vendors;

(viii) the amount paid by the purchaser at each such transfer where any property prescribed in clause vii has been transferred by the sale the issue of the prospectus within the two years proceedings and ,where any such property is a business, the profits accruing form such business during each of the consecutive three years preceding the issue of the prospectus or the profit acquiring from during each year of existence of the business if less than three years, and a balance sheet of the business concerned made within a date not more than 90 days from the date of the issue of the prospectus appended to the prospectus ;

(ix) the amount paid or payable as purchase money where any such property as aforesaid is paid in cash or payable as purchase-money , in cash, shares , debentures or other securities, and the amount payable for a good will if the good-will for trading has the payable amount;

(x) the amount paid or payable as purchase money where the amount is paid within the two preceding years or is payable as commission for subscribing or agreeing to subscribe or procuring or agreeing to procure, subscriptions for any shares in , or debentures or other securities of , the company, or as discount in respect of share issued:

Provided that it shall not be necessary to state the commission payable to sub-underwriters;

(xi) the amount or estimated amount of preliminary expenses;

(xii) the amount paid within the two preceding years or intended to be paid to any promoter, and the consideration for any such payment;

(xiii) the dates of, and parties to, every material contract including contracts relating to the acquisition of property to which clause (vii) applies, and time and place at which any material contract or a copy thereof may be inspected, however, this requirement shall not apply to a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company, or to any contract entered into more than two years before the date of issue of the prospectus;

(xiv) the names and addresses of the auditors of the company if the company has auditors;

(xv) full particulars of the nature and extent of the interest of every director if the said director has the interest in the promotion of or in the property proposed to be acquired by the company, or the nature and extent of the interest of the firm where the interest of such a director consists in being a partner in a firm, or a statement of all sums paid or agreed to be paid to him or to the firm, in cash or shares or otherwise, by any person either to induce him to become, or to qualify him as a director or otherwise for services rendered by him or by the firm in connection with the promotion or formation of the company;

(xvi) the right of voting at meetings of the company, and the rights in respect of capital and dividends attached to, the several classes of shares respectively where the company has shares of more than one class; and

(xvii)the nature and extent of those restrictions where the constitution of the company imposes any restrictions upon the members of the company in respect of the right to attend, discuss or vote at meetings of the company or of the right to transfer shares, or upon the directors of the company in respect of their powers of management.

(b) Where the prospectus is issued by a company which has been carrying on business prior to the issue thereof, the prospectus shall set out the following reports in addition to the matters contained in subsection (a), namely:

(i) a report by the auditors of the company with respect to the profits of the company including its subsidiaries, if the company has a subsidiary, in each of the three financial years immediately preceding the issue of the prospectus and with respect to the rates of the dividends, if the company paid the rates of the dividends by the company for each class of shares in the company for each of the said three years, and particulars of each such class of shares on which such dividends have been paid, the fiduciary source from which the dividends have been paid and particulars of the cases in which no dividends have been paid on any class of shares for any of those years, and if no accounts have been made up for any part of a period of three years ending on a date three months before the issue of the prospectus, containing a statement of that fact; and

(ii) if the proceeds or any part of the proceeds of the issue of the shares or debentures or other securities are or is to be applied directly or indirectly in the purchase of any business, a report made by an accountant or accountants holding the certificate referred to in section 279, who shall be named in the prospectus, upon the profits of the business in respect of each of the three financial years immediately preceding the issue of the prospectus.

Provided that if, in the case of a company which has been carrying on business for less than three years, the accounts of the company have been made up only in respect of two years or any shorter period, this subsection shall have effect as if references to two years or such shorter period are substituted for references to three years.

(c) Subject to applicable laws, the statement referred to in subsection (a)(viii) and the report referred to in subsection (b) with respect to the profits of a company or business shall show clearly the trading results and all charges and expenses incidental thereto, excluding income or profits having no relation to the trading for the period covered and excluding also items of profit or income of a non-recurring nature. However, it includes amounts appropriated from profits to such purposes as payment of taxation or reserves.

(d) Where any part of the sums required for the matters set out in section 215(b) is to be provided out of sources other than share capital, particulars of the amount to be provided and the sources thereof.

(e) Where any prospectus mentioned in this section is published as a newspaper advertisement, it shall not be necessary in the advertisement to specify the contents of the constitution, or the initial shareholders, and the number of shares subscribed for by them.

(f) This section shall not apply to a circular or notice inviting existing members or debenture holders of a company to subscribe either for shares or for debentures or for other securities of the company, whether with or without the right to renounce in favour of other persons.

(g) The requirements of this section as to the amount or estimated amount of preliminary expenses, shall not apply to a prospectus issued more than one year after the date at which the company is entitled to commence business: Provided that this section shall apply to a prospectus filed in respect of a company which has been converted from a private company except the requirement as to the amount or estimated amount of preliminary expenses.

(h) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this law apart from this section.

Compliance with section 205 in the case of property taken on lease

206.Where any of the property to be acquired by the company is to be taken on lease, the expression “vendor” contained in section 205 shall be included the lessor, and the expression “purchase-money” shall be included the consideration for the lease, and the expression “sub-purchaser” shall be included a sub-lessee.

Invalidity of certain conditions as to waiver or notice

207.(a)Any condition requiring or binding any applicant for shares or debentures or other securities to waive compliance with any requirements of section 205, or purporting to affect him with a notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.

(b) Unless the form is issued with a prospectus which complies with the requirements of section 205, the form shall not be lawful to the issuance of any form of application for the shares in or debentures or other securities of a company.

Provided that this subsection shall not apply if it is found that the form of application is issued either:

(i) in connection with an invitation in good faith to a person to enter into an underwriting agreement with respect to the shares or debentures; or

(ii) in relation to shares or debentures or other securities which are not offered to the public.

208. If any person acts in contravention of the provisions of section 207(b), he shall be liable to a fine of 10,000,000 kyats.

Non-compliance with section 205

209. If a prospectus which is inconsistent with the provisions of section 205 is issued, each person who is knowingly responsible for the issue of such prospectus shall be liable to a fine of 10,000,000 kyats.

210. In the case of non-compliance with or contravention of any of the requirements of section 205, a director or any other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention if the director or other person proves the following circumstances that:

(a) as regards any matter not disclosed, not recognized and abided by the director or other person;

(b) the non-compliance or contravention of terms and conditions arisen from an honest mistake of fact on the director or any other person; or

(c) where it is found that the non-compliance or contravention is in respect of matters which in the opinion of the court are immaterial or should be exempted in all the circumstances of the case after the consideration, action for such matters shall be exempted.

Provided that, in the case of non-compliance with or contravention of the requirements contained in section 205(a)(xvi), no any director or other person shall incur any liability in respect of the non-compliance or contravention unless it is proved that the director or other person has knowledge of the matters not disclosed.

Obligations of companies where no prospectus is issued

211.(a)Unless a company issues a prospectus on or with reference to its formation, the company shall, before the first allotment of shares or debentures or other securities, file with the registrar a statement in lieu of prospectus signed by every person who is named therein as a director or a proposed director of the company or by his agent authorized in writing, in the form and the particulars prescribed by the Union Minister if failing to do so, the company shall not allot any of its shares or debentures or other securities.

(b) This section shall apply without limitation to any other provision of this law.

Document offering shares or debentures or other securities for sale to be deemed a prospectus of the company

212.(a)Where a company applied to provisions contained in this chapter allots or agrees to allot any shares in or debentures or other securities of the company with a view to all or any of those shares or debentures or other securities being offered for sale to the public, any document by which the offer for sale to the public is made shall be deemed to be a prospectus issued by the company. All laws and rules as to the contents of prospectuses and to liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses shall apply and have effect accordingly as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability of the persons by whom the offer is made in respect of mis-statements contained in the document or otherwise in respect thereof.

(b) For the purposes of this law it shall, unless there is no contravention, be evidence that an allotment of or an agreement to allot shares or debentures or other securities is made with a view to the shares or debentures or other securities being offered for sale to the public, if it is found the following matters occurs:

(i) that an offer of the shares or debentures or other securities or of any of them for sale to the public is made within six months after the allotment or agreement to allot; or

(ii) that at the date when the offer is made, the whole of the consideration to be received by the company in respect of the shares or debentures or other securities has not been received.

(c) Sections 209 and 210 shall apply to any person or persons making the offer as though they are persons named in a prospectus as directors of a company. Moreover, the provisions of section 205 shall have effect as if it required a prospectus to state, in addition to the matters required by that section to be stated in a prospectus:

(i) the net amount of the consideration received or to be received by the company in respect of the shares or debentures or other securities to which the offer relates; and

(ii) the place and time at which the contract under which the such shares or debentures or other securities have been or are to be allotted may be inspected.

(d) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or by all directors of the company on behalf of firm or not less than half of the partners and any such director or partner may sign by his agent authorized in writing.

Restriction on alteration of terms mentioned in prospectus or statement in lieu of prospectus of a company

213. A company shall not, at any time, vary the terms of a contract referred to in the prospectus or statement in lieu of prospectus, except subject to the approval of the company in general meeting.

Liability for statements in prospectus

214.(a)Where a prospectus invites any person to subscribe for shares in or debentures or other securities of a company, all director of the company at the time of the issue of the prospectus, and every person who has authorized the naming of himself and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time, and every promoter of the company, and every person who has authorized the issue of the prospectus, shall be liable to pay compensation to all persons who subscribe for any shares or debentures or other securities on the faith of the prospectus for all loss or damage they may have sustained by reason of any misleading or untrue statement therein, or in any report or memorandum appearing on the face thereof, or by reference incorporated therein or issued therewith, unless it is proved:

(i) with respect to misleading or untrue statements in writing without referring to statement in writing under permission of an expert or a public official document that he has reasonable ground to believe and does up to the time of the allotment of the shares or debentures or other securities, as the case may be, believe that the statement fairly represented the facts or is true;

(ii) with respect to misleading or untrue statements 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 it fairly represents the statement, or is a correct and fair copy of or extract from the report or valuation:

Provided that the director, person named as director, promoter or person who authorized the issue of the prospectus shall be liable to pay compensation as aforesaid if it is proved that he has no reasonable ground to believe that the person making the statement, report or valuation is competent to make it ;or

(iii) with respect to every misleading or 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 any official document, that it is a correct and fair representation of the statement or copy of or extract from the document; or

(iv) that a person has consented to become a director of the company who withdrew his consent before the issue of the prospectus, and that it is issued without his authority or consent;

(v) that the prospectus of the company is issued without his knowledge or consent, and that, on becoming aware of its issue, he forthwith gives reasonable public notice that it is issued without his knowledge or consent; or

(vi) that, after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any misleading or untrue statement therein, withdraws his consent thereto, and gives reasonable public notice of the withdraws and of the reason therefor.

(b) Where a company existing at the commencement of the previous law has issued shares or debentures or other securities, and for the purpose of obtaining further capital by subscriptions for shares or debentures or other securities issues a prospectus, a director shall not be liable in respect of any statement therein unless he has authorized the issue of the prospectus, or has adopted or ratified it.

(c) Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorized or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus is issued, and any other person who authorized the issue thereof, shall be liable to indemnify the person named as aforesaid against all damages, costs and expenses to which he may be made liable by reason of his name having been inserted in the prospectus, or in defending himself against any suit or legal proceedings brought against him in respect thereof.

(d) Every person who, by reason of his being a director or named as a director or as having agreed to become a director ,or of his having authorized the issue of the prospectus, is liable to make any payment under this section, may recover 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 become so liable is, and that other person is not , guilty of fraudulent misrepresentation.

Allotment

Restriction as to allotment

215.(a)No allotment shall be made of any share capital of a company offered to the public for subscription unless the amount stated in the prospectus as the minimum amount which in the opinion of the directors shall be raised by the issue of share capital in order to provide the sum or other amount to be provided in respect of matters specified in subsection (b), or such other amount prescribed by the Union Minister has been subscribed. The sum of at least five percent or such other percentage prescribed by the Union Minister thereof has been paid to or received in cash by the company.

(b) The matters for a minimum amount of share capital shall be made by the directors are the following:

(i) the purchase price of any property purchased or to be purchased, which is to be defrayed in whole or in part out of the proceeds of the issue;

(ii) any preliminary expenses payable by the company and any commission so payable to any person in consideration of his agreeing to subscribe for or of his procuring or agreeing to procure subscriptions for any shares in the company;

(iii) the repayment of any moneys borrowed by the company in respect of any of the foregoing matters; and

(iv) working capital.

(c) The amount prescribed in subsection (a) as the amount stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and shall be presumed as the minimum subscription under this law.

(d) All moneys received from applicants for shares shall be deposited and kept in a scheduled bank until returned in accordance with the provisions of subsection (f) or until the certificate to commence business is obtained under section 218.

(e) The amount payable on application on each share shall not be less than five per cent of the amount of the share.

(f) If the conditions aforesaid have not been complied with on the expiration of 180 days after the issue of the prospectus, all money received from applicants for shares shall be repaid to them without interest, and, if any such money is not so repaid within 190 days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the prescribed rate from the expiration of the 190 days. Provided that, a director shall not be liable if he proves that the loss of the money is not due to any misconduct or negligence on his part.

(g) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void.

(h) This section, except subsection (e) thereof, shall not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription.

216. In the event of any contravention of the provisions of section 215(d), every promoter, director or other person responsible for such contravention shall be liable to a fine of 1,000,000 Kyats.

Effect of irregular allotment

217.(a)An allotment made by a company to an application in contravention of the provisions of section 215 shall be avoidable at the instance of the applicant within 28 days after the holding of the statutory meeting of the company and not later, or , in any case where the company is not required to hold a statutory meeting or where the allotment is made after the holding of the statutory meeting , within 28 days after the date of the allotment and not later, shall be so voidable notwithstanding that the company is in course of being wound up.

(b) If any director of a company knowingly contravenes or permits or authorizes the contravention of any of the provisions of section 215 with respect to allotment, he shall be liable to compensate the company and the allottee respectively for any loss, damages or costs which the company or the allottee may have sustained or incurred thereby. Provided that, proceedings for recovery of any such loss, damages or costs shall not be made after the expiration of two years from the date of the allotment.

Restrictions on commencement of business

218.(a)A company to which the provisions of this Chapter applies shall not commence any business or exercise any borrowing powers unless:

(i) shares held subject to the payment of the whole amount in cash have been allotted to an amount not less in the whole than the minimum subscription;

(ii) every director of the company has paid to the company on each of the shares taken or contracted to be taken by them, and for which the director is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription or, in the case of a company which does not issue a prospectus inviting the public to subscribe for its shares, on the shares payable in cash;

(iii) there has been filed with the registrar a duly verified declaration by the secretary or one of the directors in the prescribed form that the aforesaid conditions have been complied with; and

(iv) in the case of a company which does not issue a prospectus of the company invited or proposed the public to subscribe for its shares, there has been filed with the registrar a statement in lieu of prospectus.

(b) The registrar shall, on the filing of a duly verified declaration in accordance with the provisions of this section, certify that the company is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled:

Provided that, in the case of a company which does not issue a prospectus inviting the public to subscribe for its shares, the registrar shall not give such a certificate unless a statement in lieu of prospectus has been filed with him.

(c) Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures or other securities or the receipt of any money payable on application for debentures or other securities.

219. If any company commenced business or exercised borrowing powers in contravention of section 218, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a fine of 1,000,000 kyats.

Commissions and Discounts

Power to pay certain commissions and prohibition of payment of other commissions and discounts

220.(a)A company to which this Chapter applies may pay a commission to any person in consideration of his subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for any shares in the company, if the payment of the commission is authorized by the constitution of the company and the commission paid or agreed to be paid does not exceed the amount or rate so authorized, and if 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 for subscription, disclosed in the prospectus; or

(ii) in the case of shares not offered to the public for subscription, disclosed in the statement in lieu of prospectus in the prescribed form signed and filed with the registrar, and where a circular or notice, not being a prospectus, inviting subscription for the shares is issued, also disclosed in that circular or notice.

(b) Except as provided in subsection (a) and section 221, no company shall 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 his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so applied by being added to the purchase-money of any property acquired by the company or to the contracted price of any work to be executed for the company, or the money be paid out of the nominal purchase-money or contracted price, or otherwise.

No restriction on lawful payments

221.Nothing in section 220 shall affect the power of any company to pay to a broker who is legally obtainable such payment, a vendor to, promoter of or a person who receives payment in money or shares from a company shall have and shall be deemed always to apply any part of the money or shares so received in payment of any commission if such payment directly made by the company is lawful under section 220.

Statement in balance sheet as to commissions and discounts

222.Where a company has paid any sums by way of commission in respect of any shares or the total amount so paid, or amount has not been written off, shall be stated in every balance-sheet of the company until the whole amount thereof has been written off.

Chapter XXI
Share Offers by Corporations Incorporated Outside the Union

Restriction on sale and offer for sale of shares

223.(a)It shall not be lawful for any person who makes the following:

(i) making any public offer of shares, debentures or other securities, or issue, circulate or distribute in the Union any prospectus offering for subscription or sale of shares in or debentures or other securities of a corporation incorporated or to be incorporated outside the Union, whether the corporation has or has not established, or when formed will or will not establish, a place of business in the Union unless:

(aa) a copy thereof, certified by at least two directors of the corporation, that has been approved by resolution of the managing body, shall be delivered for registration to the registrar before the making of the offer or issue or distribute the prospectus of a corporation in the Union;

(bb) the prospectus shall be stated on the face of such copy of a corporation that the copy has been so delivered;

(cc) the prospectus shall be dated; and

(dd) the prospectus shall apply to the provisions of this chapter and any other applicable laws; or

(ii) to issue to any person in the Union a form of application for shares in or debentures or other securities of such a corporation or intended cooperation as aforesaid, unless the form is issued with a prospectus which complies with this chapter and any other applicable laws. Provided that, this provision shall not apply if it is shown that the form of application is issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures or other securities.

(b) This section shall not apply to the sending of a prospectus or form of application to existing members or debenture holders of a corporation relating to shares in or debentures or other securities of the corporation, whether an applicant for shares or debentures or other securities will or will not have the right to renounce in favour of other persons. However, subject as aforesaid, this section shall apply to a prospectus or form of application whether issued on or with reference to the formation of a corporation or subsequently.

(c) A corporation shall be deemed as a company within the meaning of this law and any document offered for sale of any shares in or debentures or other securities of a corporation incorporated outside the Union to the public shall be deemed as a prospectus issued by the corporation under section 212 and such document shall also be deemed, for the purposes of this section, as a prospectus issued by the corporation,

(d) An offer of shares or debentures or other securities for subscription or sale to any person whose ordinary business or part of whose ordinary business it is to buy or sell shares or debentures or other securities, whether as principal or agent, shall not be deemed an offer to the public for the purposes of this section.

(e) The meanings of the expressions “prospectus”, “shares” and “debentures” and “securities” contained in sections 223 to 227, have the same meanings as when used in relation to a company incorporated under this law.

224.If any person knowingly offered for sale to the public or issued or distributed any prospectus, or issued a form of application for shares or debentures or other securities, in contravention of the provisions contained in section 223, he shall be liable to a fine of 10,000,000 kyats.

Particulars as to prospectus

225.(a)In complying with the provisions contained in this Chapter, in addition to complying with the provisions contained in section 223(a)(i)(bb) and (cc), a prospectus shall:

(i) contain particulars with respect to the following matters:

(aa) the objectives of the corporation;

(bb) the instrument constituting or defining the constitution of the corporation;

(cc) any enactments or provisions having the force of the incorporation of the corporation;

(dd) the said instrument, enactments or provisions, or copies thereof, and if they are written in any foreign language, an address in the Union where certify copy in the English and Myanmar certified in the prescribed manner can be inspected;

(ee) the date on which and the country in which the corporation is incorporated; and

(ff) whether the corporation has established a place of business in the Union and registered as an overseas corporation under this law and, if so, the address of its principal office in the Union;

(ii) subject to the provisions of this section, state the matters specified in section 205(b) and the reports specified in that section. Provided that, a reference to the constitution of the company shall be deemed as a reference to the constitution of the corporation as specified in section 205.

(b) Any condition requiring or binding any applicant for shares or debentures or other securities to waive compliance with the stipulations contained in this Chapter, or purposed to affect him with a notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void.

(c) In the event of non-compliance with or contravention of any of the requirements contained in this Chapter, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention if the director or other person proves that the following conditions:

(i) they are not cognizant and applied with regard to any matter not disclosed;

(ii) non-compliance or contravention of term and conditions arisen from an honest mistake of the director or other person; or

(iii) the non-compliance or contravention is not material matters or should be excused in consideration of all the circumstances of the case, in the opinion of the court: Provided that, in the event of non-compliance or contravention with respect to the matters specified in section 205(a)(xvi), a director or other person shall not incur any liability in respect of the non-compliance or contravention unless it is proved that he has knowledge of the matters not disclosed.

(d) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or other provisions contained in this law apart from this section or other applicable laws.

Restriction on activities for sale of shares

226.(a)No person shall go from house to house offering shares, debentures or other securities of a corporation incorporated outside the Union for subscription or purchase to the public.

(b) The expression “house” contained in this section shall not include an office used for business purposes.

227.Any person acting in contravention of section 226 shall be liable to a fine of 10,000,000 kyats.

Chapter XXII
Mortgages and Charges Granted by a Company

Power to grant mortgages and charges

228.(a)Subject to the constitution of a company and other applicable laws, and without limiting other powers conferred under this law or any other applicable law, a company shall have the power to create and grant mortgages and charges prescribed in section 229. The registrar shall register such mortgages and charges submitted by the company or mortgagee or chargee or person acting on their behalf in accordance with section 234.

(b) The following matters shall not be restricted by the Transfer of Immovable Property Restriction Law, or the provisions of any other applicable law having a similar effect, and such matters shall also not be presumed the breach of such provisions:

(i) the grant of a mortgage or charge prescribed in section 229; or

(ii) the exercise of rights by or on behalf of the mortgagee or chargee under such a mortgage or charge in implementation of realising the value of any property secured for the mortgage or charge.

Information as to Mortgages and Charges

Mortgages and charges to be void if not registered

229.(a)If all mortgages or charges created by a company after the commencement of this law are any type of the followings:

(i) any mortgage or charge for the purpose of securing any issue of debentures;

(ii) any mortgage or charge on uncalled share capital of the company;

(iii) any mortgage or charge on any immoveable property wherever situate or any interest therein;

(iv) any mortgage or charge on any book debts of the company;

(vi) any mortgage or a charge, not being a pledge on any moveable property of the company except stock-in-trade; or

(vi) a floating charge on the undertaking or property of the company;

Unless the particulars of the mortgage or charge in the prescribed form together with a copy of the instrument by which the mortgage or charge is created or evidenced, are filed with the registrar within 28 days after the date of its creation, it shall, in accordance with subsection (b), be void against the liquidator and any creditor of the company when any security on the company’s property or undertaking is thereby conferred. However, without prejudice to any contract or obligation for repayment of the money thereby secured, and when a mortgage or charge becomes void under this section, the money secured thereby shall immediately become payable.

(b) Subsection (a) shall apply to the following:

(i) in the case of a mortgage or charge created outside of the Union, comprising solely property situated outside of the Union, 28 days after the date on which the document or copy could, in due course of post and if dispatched with due diligence, have been received in the Union shall be substituted for 28 days after the date of the creation of the mortgage or charge as the time within which the particulars and document or copy shall be filed with the registrar;

(ii) Although the mortgage or charge is created in the Union, comprising property outside of the Union, the instrument created or purposed to create the mortgage or charge or a copy thereof verified in the prescribed manner may be filed for registration. Notwithstanding that further proceedings may be necessary to make the mortgage or charge to be valid or effective according to the law of the country in which the property is situated;

(iii) where a security on the payment of any book debts of a company created by negotiable instrument, the deposit of the instrument for the purpose of securing an advance to the company shall not, for the purposes of this section, be deemed as a mortgage or charge on those book debts; and

(iv) the holding of debentures relating to a charge on immoveable property shall not be deemed to be an interest in immoveable property.

(c) Where any mortgage or charge on any property of a company required to be registered under the provisions of this section has been so registered, any person acquiring such property or any part thereof, or any share or interest therein, shall be deemed to have a notice of the said mortgage or charge as from the date of such registration.

Registration of charges on properties acquired subject to charge

230.Where a company acquires any property which is subject to a charge or mortgage, it shall be created by the company after the acquisition of the property and if required to be registered under the provisions contained in this Chapter, the company shall deliver the particulars of the charge in the prescribed form, together with a copy in the prescribed manner to be a certified copy of the document by which the charge is created or is evidenced, to the registrar within 28 days after the date on which the such property is acquired. Provided that, if the property is situated and the charge is created outside the Union, 28 days after the date on which the copy of the instrument could, if dispatched with due diligence, have been received in the Union shall be substituted for 28 days after the acquisition of property as the time within which the particulars and the copy of the instrument are to be delivered to the registrar.

231.If default is made in complying with section 230, the company and every director or other officer of the company who is knowingly and wilfully in default shall be liable to a fine of 250,000 kyats.

Particulars in debentures proportionated entitled holders

232. Where a series of debentures containing or giving by reference to any other instrument any charge to the benefit of which the debenture-holders of that series are entitled pari passu is created by a company, it shall be deemed to be sufficient for the purposes of section 229 if there are filed with the registrar within 28 days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars:

(a) the total amount secured by the whole debentures;

(b) the dates of the resolution authorizing the issue of the whole debentures and the date of the covering deed, if any, by which the security is created or specified;

(d) the names of the trustees if there are trustees for the debentures, together with the deed containing the charge or a copy thereof verified in the prescribed manner, or if there is no such deed, one of the debentures, the registrar shall, on payment of the prescribed fee, enter those particulars in the register. Provided that, where more than one issue is made of debentures, there shall be filed with the registrar for entry in the register particulars of the date and amount of each issue. However, an omission to do this shall not affect the validity of the debentures issued.

Particulars in case of commission on debentures

233.Where any commission, allowance or discount has been paid or made either directly or indirectly by the company to any person in consideration of subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or purchasing or agreeing to purchase subscriptions, whether absolutely or conditionally, for any such debentures, in the particulars required to be filed for registration under sections 229 and 232, particulars as to the amount or rate per cent of the commission, discount or allowance so paid or made, shall be included. However, an omission to do this shall not affect the validity of the debentures issued: Provided that the deposit of any debentures as security for any debt of the company shall not be deemed, for the purposes of this provision be treated, as the issue of the debentures at a discount.

Register of mortgages and charges

234.(a)The registrar shall keep, with respect to each company, a register of all mortgages and charges created by the company after the commencement of this law and requiring registration under section 229, and shall, on payment of the prescribed fee, enter in the register, with respect to every such mortgage or charge, the date of creation, the amount secured, short particulars of the property mortgaged or charged, and the names of the mortgagees or persons entitled to the charge.

(b) the registrar shall return the instrument or the verified copy thereof to the person filing the same if there is an instrument filed in accordance with the provisions of section 229 or section 232 after making the entry required by subsection (a).

(c) The register kept in pursuance of this section shall be open to inspection by any person on payment of the prescribed fee.

235.The registrar shall keep a chronological index, with the prescribed particulars, of the mortgages or charges registered under this law.

Certificate of registration

236.The registrar shall give a certificate of the registration of any mortgage or charge registered in accordance with section 229, stating the amount thereby secured. Such certificate shall be conclusive evidence that the requirements of sections 229 to 234 as to registration has been complied with.

Endorsement of certificate of registration on debenture or certificate of debenture stock

237.The company shall cause a copy of every certificate of registration, given under section 236, to be endorsed on every debenture or certificate of debenture stock which is issued by the company, and the payment of which is secured by the mortgage or charge so registered. Provided that, nothing in the provisions of this section shall be construed as requiring a company to cause a certificate of registration of any mortgage or charge so given to be endorsed on any debenture or certificate of debenture stock which has been issued by the company before the mortgage or charge is created.

Duty of company and right of interested party as regards registration

238.(a)It shall be the duty of the company to file with the registrar for registration in the prescribed form the particulars of every mortgage or charge created by the company and of the issues of debentures of a series, requiring registration under section 229. Any person interested therein may apply for the registration of any such mortgage or charge.

(b) Whenever the terms or conditions or extent or operation of any mortgage or charge registered under this section are modified, the company is liable to send the particulars of such modification to the registrar. The provisions of this section as to registration of a mortgage or a charge shall apply to such modification of the mortgage or charge as aforesaid.

Copy of Instrument creating mortgage or charge to be kept at the registered office

239.Every company shall keep each copy of every instrument creating any mortgage or charge requiring registration under section 229 at the registered office of the company. Provided that, in the case of a series of uniform debentures, if a copy of one such debenture is kept, it shall be sufficient.

Registration of appointment of receiver

240.If any person obtains an order for the appointment of a receiver of the property of a company, or appoints as a receiver under any powers contained in any instrument, he shall, within 28 days from the date of the order or of the appointment under the powers contained in the instrument, file a notice of the fact with the registrar in the prescribed form, and he shall enter the fact in the register of mortgages and charges.

241.Each person made default in complying with the requirements of section 240 shall be liable to a fine of 250,000 Kyats.

Filing of accounts of receivers

242.(a)Every receiver of the property of a company who has been appointed under the powers contained in any instrument, and who has taken possession, shall once in every six months while he remains in possession, and also on ceasing to act as receiver, file with the registrar an abstract in the prescribed form of his receipts and payments during the period to which the abstract relates, and shall also, on ceasing to act as receiver, file with the registrar a notice to that effect, and the registrar shall enter a notice in the register of mortgages and charges.

(b) Where a receiver of the property of a company has been appointed, every invoice, order for goods, or business letter issued by or on behalf of the company, or the receiver of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver has been appointed.

243.If default is made in complying with the requirements of section 242, the company, and every director or other officer of the company, and every receiver, who knowingly and wilfully authorizes or permits the default, shall be liable to a fine of 250,000 kyats.

Rectification of register of mortgages

244.(a)If the court, on being satisfied that the omission to register a mortgage or charge within the time required by section 229, or that the omission or misstatement of any particular with respect to any such mortgage or charge, or the omission to give intimation to the registrar of the payment or satisfaction of a debt for which a charge or mortgage is created, is accidental or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or share-holders of the company, or that on other grounds it is just and equitable to grant relief, the court may, on the application of the company or any person interested and on such terms and conditions as seem to the court just and expedient, order that the time for registration be extended, or, as the case may be, that the omission or misstatement be rectified, and may make such order as to the costs of the application as it thinks fit.

(b) Where the court extends the time for the registration of a mortgage or charge, such order shall not prejudice any rights acquired in respect of the property concerned prior to the time when the mortgage or charge is actually registered

Registration of compliance by mortgages and charges

245.(a)The company has the duty to submit to the registrar of the payment or compliance of any charge or mortgage requiring registration under section 229 within 28 days from the date of the payment or compliance thereof. Moreover, the mortgagee or chargee shall submit in writing that payment or compliance of the charge or mortgage may be recorded.

(b) Upon receipt of submission under subsection (a), the registrar shall, if no cause is shown, enter a record on the register and if required, shall furnish the company with a copy thereof.

Offences and penalties

246.(a)If any company defaults in filing with the registrar for registration the following particulars, then, unless the registration has been effected on the application of some other person, the company, and every director and other officer of the company or each person who is knowingly a party to the default shall be liable to a fine of 250,000 kyats:

(i) of any mortgage or charge created by the company; or

(ii) of the payment of a debt or compliance in respect of any mortgage or charge has been registered under section 229 or section 230; or

(iii) of the issues of debentures of a series, requiring registration with the registrar under the foregoing provisions of this law.

(b) Subject as aforesaid, if any company makes default in complying with any of the requirements of this law as to the registration with the registrar of any mortgage or charge created by the company, the company, and every director and other officer of the company who knowingly and wilfully authorizes or permits the default, shall, without prejudice to any other liability, be liable to a fine of 250,000 kyats.

(c) If any person knowingly and willfully permits the delivery of any debenture or certificate of debenture stock requiring registration with the registrar under the foregoing provisions of this law without a copy of the certificate of registration being endorsed upon it, he shall, without prejudice to any other liability, be liable to a fine of 250,000 Kyats.

247.Every company shall keep a register of mortgages and charges and enter therein all mortgages and charges on property of the company and all floating charges on the undertaking or on any property of the company, short description of the property mortgaged or charged, the amount of the mortgage or charge and the names of the mortgagees or persons concerned.

248.If any director or other officer of the company knowingly and willfully permits the omission of any entry required to be made under section 247, he shall be liable to a fine of 250,000 kyats.

Right to inspect copies of instruments creating mortgages and charges and register of the company with regard to mortgages and charges

249.Any creditor or member of the company shall, the copies kept at the registered office of the company under section 239 of instruments creating any mortgage or charge requiring registration under this law with the registrar and the register of mortgages and charges kept in accordance with section 247, be permitted to inspect without fee at reasonable time, and any other person shall also be permitted to inspect, on payment on reasonable fee as the company may specify, the register of mortgages and charge.

250. If an inspection of the copies or register under section 249 is refused, the company shall be liable to a fine of 250,000 kyats, and every director or other officer of the company who knowingly permits the refusal shall incur the same penalty. In addition to such penalties, the court may by order permit an immediate inspection of the copies or register.

Right to inspect the register of debenture-holders and to have copies of trust-deed

251.(a)Every register of holders of debentures of a company shall, except when closed in accordance with the constitution during such period or periods not exceeding in the whole 30 days in any year as may be specified in the constitution, be open to the inspection of the registered holder of any such debentures, and of any holder of shares in the company, but subject to such reasonable restrictions as the company may in general meeting impose, so that at least two hours in each day are appointed for inspection, and every such holder may require a copy of the register or any part thereof on payment of such reasonable fee as the company may specify.

(b) A copy of any trust-deed for securing any issue of debentures shall be forwarded to every holder of any such debentures at his request on payment of the reasonable sum as may be specified by the company.

252. If inspection is refused, or a copy is refused or not forwarded as required under section 251, the company shall be liable to a fine of 250,000 kyats, and every director and other officer of the company who knowingly authorizes or permits the refusal shall incur the same penalty, and the court may, by order, compel an immediate inspection of the register.

Payments of certain debts out of assets subject to floating charge in priority to claim under the charge

253.(a)Where either a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge, or possession is taken by or on behalf of those debenture-holders of any property comprised in or subject to the charge, then, if the company is not at the time in course of being wound up, the debts which in every winding up are under the provisions of part V relating to preferential payments to be paid in priority to all other debts, shall be paid forthwith out of any assets coming to the hands of the receiver or other person taking possession as aforesaid in priority to any claim for principal or interest in respect of the debentures.

(b) The prescribed time mentioned in the provisions of part V shall be reckoned from the date of the appointment of the receiver or of possession being taken as aforesaid, as the case may be.

(c) Every payments made under this section shall be recouped, as far as may be, out of the assets of the company available for payment of creditors.

Chapter XXIII
Appointment of Receivers, Maintaining Books of Account and Registration of Charges Granted by Overseas Corporations

Registration of charges by overseas corporations

254.The provisions of sections 228 to 239 and 244 to 252 shall apply to charges on properties in the Union which are created in the Union, possessed by a corporation incorporated outside the Union which has an established place of business in the Union and which is registered as an overseas corporation under this law or possession of the charges on properties in the Union.

Notice of appointment of receiver

255.The provisions of sections 240 to 243 shall apply to the case of all corporations incorporated outside the Union which has an established place of business in the Union and which is registered as an overseas corporation under this law as necessary.

Maintaining books of account and records

256.The provisions of section 258 shall apply to the case of all corporations incorporated outside the Union but having an established place of business in the Union and which is registered as an overseas corporation under this law to the extent of requiring them to keep at their principal place of business in the Union the financial records required by that section with respect to money received and expended, sales and purchases made, and assets and liabilities in relation to its business in the Union.

Chapter XXIV
Financial Reports and Audit

Application of this Chapter

257.(a)The provisions contained in this Chapter shall be applied subject to the requirements of or made under the Myanmar Accountancy Council Law and other applicable laws for the following matters:

(i) books of account to be maintained;

(ii) the financial statements and reports to be provided to members of the company;

(iii) the accounting standards to be followed in maintaining such books of account and reports; and

(iv) the auditing standards to be followed in the audit of such accounts.

(b) In the case of any conflict between the requirements of or made under this chapter and those of or made under the Myanmar Accountancy Council Law, the requirements of or made under the Myanmar Accountancy Council Law will prevail.

(i) the constitution of the company applies those sections or includes any similar requirements;

(ii) the members of the company determine to apply those sections by passing an ordinary resolution; or

(iii) the registrar determines that such provisions should apply.

Maintaining record for preparation of financial statements, books of account and account in company

258.(a)Every company shall maintain written financial records to enable the preparation of financial statements in Myanmar or English in accordance with applicable accounting standards with respect to the following matters:

(i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure of the company takes place;

(ii) the sale and purchase of goods by the company;

(iii) the assets and liabilities of the company; and

(iv) any other financial matters prescribed under this law or other applicable law.

(b) The records shall be kept at the registered office of the company or at such other place as the directors think fit, and shall be open to inspection by the directors during business hours.

259.If any director or other officers caused to the default by the company due to their knowingly act or omission in complying with the requirements of section 258, they shall, in respect of such offence, be liable to a fine of 750,000 kyats.

Annual balance-sheet

260.(a)The directors of every company to which in this section applies shall hold within eighteen months after the incorporation of the company, and subsequently once at least in every calendar year, explain, in general meeting of the company, financial statements required by this law or other applicable law. It includes a balance-sheet and profit and loss account, or in the case of a company not trading for profit an income and expenditure account for the period, in the case of the first account since the incorporation of the company, and in any other case since the preceding account, made up to a date not earlier than the date of the meeting by more than nine months, or in the case of a company carrying on business or having interests outside the Union by more than twelve months. Provided that, the registrar may for any special reason, extend such period not exceeding three months.

(b) The financial statements shall be audited by the auditor of the company as hereinafter provided, and the report of auditor shall be attached with such statement, or there shall be inserted at the foot thereof a reference to the report. Such report shall be explained in general meeting of the company and shall be open to inspection by any member of the company.

(c) Every company to which this section applies shall send a copy of such financial statements, so audited, together with a copy of the auditors’ report, to the registered address of every member of the company attached with the notice calling the meeting. Moreover, such copy shall be deposited at the registered office of the company for the inspection of the members of the company during a period of at least 21 days before that meeting. Without impacting this law or any other applicable law, the constitution of the company may provide for the electronic delivery of the financial statements to members under this section.

Report of the director

261.(a)The directors of any company to which this section applies shall make out a report with respect to the state of the company’s affairs, the amount, if any, which they recommend should be paid by way of dividend, and the amount, if any, which they propose to carry to any reserve fund, general reserve or reserve account shown specifically on the balance-sheet, or to a reserve fund, general reserve or reserve account to be shown specifically in any subsequent balance-sheet provided with any subsequent financial statements and include with the financial statements.

(b) The report referred to in subsection (a) shall include a fair review of the business of company, including a description of the primary business of company, an analysis of the performance of company during the year, a description of risks and uncertainties facing the company and any other matters which may be prescribed. The report may be signed by the chairman of the directors on behalf of the directors if authorized in that behalf by the directors.

(c) The provisions contained in section 259 shall apply to any person being a director or other officer who is knowingly and wilfully guilty of a default in complying with this section.

Contents of balance-sheet

262.(a)The balance-sheet included with the financial statements of any company to which this section applies shall contain a summary of the property and assets and of the capital and liabilities of the company, giving such particulars as will disclose the general nature of those liabilities and assets and how the value of the fixed assets has been arrived at.

(b) The balance-sheet shall be in the form applied by the applicable accounting standards or in such other form as required to comply with any applicable law.

(c) The profit and loss account included with the financial statements of any company expressed in this section shall include particulars showing the total of the amount paid, whether as fees, percentages or otherwise, to the directors, respectively, as remuneration for their services, and, where a special resolution passed by the members of the company so requires, to any officer, and the total of the amount written off for depreciation. If any director of the company is by virtue of the nomination, whether direct or indirect, of the company, a director of any other company, any remuneration or other emoluments received by him for his own use, whether as a director of, or otherwise in connection with the management of, that other company, shall be shown in a note at the foot of the account or in a statement attached thereto.

Balance-sheet to be included particulars as to subsidiaries

263.(a)Where a company to which this section applies is a holding company there shall be annexed to the balance-sheet of the holding company in accordance with the accounting standards issued by the Myanmar Accountancy Council the audited consolidated financial statement of its subsidiary or subsidiaries required to be prepared under this law or other applicable law.

(b) If for any reason the directors of the holding company are unable to obtain required information for the preparation of the statement in subsection (a), the directors who sign the balance-sheet shall so report in writing and their report shall be annexed to the balance-sheet in lieu of the statement.

(c) The holding company may by a resolution, authorize representatives named in the resolution to inspect the financial records kept in accordance with section 258 by any subsidiary. After resolution being passed, those financial records shall be open to inspection by those representatives at any time during business hours.

(d) The rights conferred by section 268 upon members of a company may be exercised in respect of any subsidiary by members of the holding company as if they are members of that subsidiary.

Authentication of balance-sheet

264.The balance-sheet required to be maintained by a company to which this Chapter applies, shall be signed by one director and any other officer. However, when there is one director, such director of the company shall sign.

265.If any default is made in explaining to the company or in issuing a financial statement required under this Chapter, or if any balance-sheet and profit and loss account, or income and expenditure account or other financial statement, is issued, circulated or published which does not comply with the requirements laid down by and under sections 260, 262, 263 and 264, the company and every director and other officer of the company who is knowingly and willfully a party to the default shall be liable to fine of 5,000,000 Kyats.

Copy of financial statements to be forwarded to the registrar

266.(a)After the financial statements have been explained at the general meeting of the company, a copy of the financial statements, signed by a director or secretary of the company, shall be filed with the registrar at the same time as the copy of the annual list of members and summary prepared in accordance with the requirements of section 97.

(b) If the general meeting before which the financial statements are submitted, does not adopt the financial statements, a statement of that fact and of the reasons therefor shall be annexed to the financial statements and to the copy thereof required to be filed with the registrar.

267.If a company makes default in complying with the requirements of section 266, the company and every director or other officer of the company who knowingly and wilfully authorizes or permits the default shall be liable to a fine of 250,000 kyats.

Right of member of company to copies of the financial statements and report of the auditor

268.Save as otherwise provided in this law, any member of a company shall be entitled to be furnished with copies of the financial statements prepared by the company under the provisions of this Chapter.

Investigation by the Registrar

Call for information or explanation by the registrar

269.(a)Where the registrar, after scrutinizing any document which is required to submit to him by the company under the provisions of this law, is of opinion that any information or explanation is necessary in order to full particulars of the related matter, he may, with written notice, call on the company submitting the document to furnish in writing such information or explanation within such time as the registrar may specify in his notice.

(b) On the receipt of a notice under subsection (a), it shall be the duty of all persons who are or have been directors or officers of the company to furnish such information or explanation to the best of their ability.

(c) On receipt of such information or explanation the registrar may annex the same to the original document submitted to the registrar. Any additional document so annexed by the registrar shall be subject to the same provisions as to inspection and the taking of copies as the original document is subject.

(d) If such information or explanation is not furnished within the specified time, or if after perusal of such information or explanation the registrar is of opinion that the document in question discloses an unsatisfactory state of affairs, or that it does not disclose a full and true statement of the related matters, the registrar shall report in writing the circumstances of the case to the Union Minister.

(e) If it is represented to the registrar in materials placed before the registrar by any contributory or creditor that the business of a company is carried on in fraud of its creditors or in fraud of persons dealing with the company or for a fraudulent purpose, the registrar may, after giving the company an opportunity of being heard by written notice, call on the company for information or explanation on matters specified in the notice within such time as the registrar may specify in the notice, and the provisions of subsections (b) and (d) of this section and section 270 shall apply to such notice. If upon investigation the registrar is satisfied that any representation on which the registrar has taken action under this subsection is frivolous or vexatious, the registrar shall disclose the identity of the informant to the company.

(f) The provisions contained in this section shall also apply to documents which are required to file to the liquidator under this law.

270.If any person refuses or neglects to furnish any such information or explanation as required under section 269, such person shall be liable to a fine of 5,000,000 kyats in respect of each offence, and the court may on the application of the registrar and upon notice to the company make an order on the company for production of such documents. If the court thinks that inspection is required by the registrar, it may prescribe terms and conditions and may allow the registrar for inspection thereof.

Inspections

Investigation of affairs of company by inspectors

271.(a)Subject to subsection (b), the Union Minister may appoint one or more competent inspectors to investigate the affairs of any company and to report thereon in such manner as the Union Minister may direct:

(i) in the case of any company having a share capital, on the application of members holding not less than one-tenth of the shares issued;

(ii) in the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company’s register of members;

(iii) in the case of any company, on a report by the registrar under section 269(d); or

(iv) in the case of any company, on a request by the registrar if the registrar reasonably believes that such an investigation is necessary in the public interest.

(b) Before appointing an inspector under subsection (a), the Union Minister shall believe the following grounds that:

(i) the company or one of its directors or officers may have committed an offence under this law or other applicable law; and

(ii) any application contained in subsection (a)(i) or (ii) is made in good faith and on reasonable grounds.

Power of the Union Minister to direct investigation

272.The Union Minister may, at any time, in the interest of the public, direct the investigation of the affairs of a company by one or more competent inspectors appointed in this behalf.

Application for inspection to be supported by evidence

273.An application made by any members of a company under section 271 shall be supported by such evidence as the Union Minister may require for the purpose of showing that the company or one of its directors or officers may have committed an offence under this law or other applicable law and that the applicants have good reason for, and are not actuated by malicious motives in requiring, the investigation and the Union Minister may, before appointing an inspector, require the applicants to give security for payment of the costs of the inquiry.

Inspection of books of Account and examination of officers

274.(a)All persons who are or have been directors or officers of the company have duty to produce to the inspectors all books of account and documents in their custody or power relating to the company.

(b) An inspector may examine any person in relation to business of the company.

275.If any person who has duty to produce any book or document or to answer any question, refuses relating to the affairs of the company under section 274, he shall be liable to a fine of 5,000,000 kyats in respect of each offence.

Results of investigation and submission of report

276.(a)After the investigation the inspectors shall report their opinion to the Union Minister, and a copy of the report to the Union Minister shall be forwarded to the registrar and another copy to the registered office of the company. Moreover, a further copy shall, at the request of the applicants for the investigation, be delivered to them.

(b) The Union Minister may direct the company to defray all expenses relating to the investigation and unless the Union Minister directs, such expenses shall be defrayed by the applicants. Provided that the expenses relating to the investigation held in pursuance of section 271 (a)(iii) or (iv) shall be paid out of the assets of the company and shall be recoverable as an arrear of revenue.

Institution of Prosecution

277.(a)In any report made under section 271 or section 272, if it appears to the Union Minister believes on reasonable grounds that any person has been guilty of any offence in relation to the company under this law or another applicable law, the Ministry shall seek the advice of the Union Attorney-General’s Office.

(b) If the Union Attorney-General’s Office advises that the case is one in which a prosecution ought to be instituted, the registrar shall cause proceedings to be instituted. All directors, officers and agents of the company, whether past or present other than the accused in the proceedings, have duties to give required assistance in connection with the prosecution.

(c) For the purposes of subsection (b), the expression “agents” in relation to a company shall be deemed to include the bankers and legal advisers of the company and any persons employed by the company as auditors, whether or not those persons are officers of the company.

(d) Any director or officer of the company convicted as the result of a prosecution initiated under this section shall not, without the leave of the court, be a director of or in any way, whether directly or indirectly, be concerned in or take part in the management of a company for a period of five years from the date of such conviction.

Report of inspectors to be presumed as evidence

278.A copy of the report of any inspectors appointed under this law, authenticated by the seal of the company whose affairs they have investigated or by the Union Minister, shall be admissible in any legal proceeding as evidence of the opinion of the inspectors in relation to any matter contained in the report.

Auditors

Qualifications and appointment of auditors

279.(a)No person shall be appointed or act as an auditor of a public company or a subsidiary of a public company unless he holds a certificate from such other person or body authorised under an applicable law entitling him to act as an auditor of companies:

Provided that a firm whereof all the partners practising in the Union hold such certificates may be appointed by its firm-name to be auditor of a company, and may act in its firm-name.

(b) Every company expressed in this section shall, at each annual general meeting, appoint an auditor or auditors to hold office until the next annual general meeting.

(c) If an appointment of an auditor is required and is not made at an annual general meeting, the Union Minister may, on the application of any member of the company, appoint an auditor of the company for the current year, and fix the remuneration to be paid to the auditor by the company for his services.

(d) The following persons shall not be appointed as auditors of the company:

(i) any director or officer of the company; and

(ii) a partner of such director or officer; and

(iii) in the case of a public company or a subsidiary of a public company any person in the employment of such director or officer; and

(iv) any person indebted to the company, and if any person after being appointed auditor becomes indebted to the company his appointment shall thereupon be terminated.

(e) A person, other than a retiring auditor, shall not be capable of being appointed auditor at an annual general meeting unless a notice of an intention to nominate that person to the office of auditor has been given by a member of the company to the company not less than 14 days before the date on which notices for such annual general meeting shall be sent to members, and the company shall send a copy of any such notice to the retiring auditor, and shall give notice thereof to its members, with the notice of meeting and if desired by advertisement or in any other mode allowed by the constitution of the company:

Provided that, if after a notice of the intention to nominate an auditor has been given to the company, the notice of an annual general meeting is sent 14 days or less after the notice has been given, the requirements of this section as to time in respect of such a notice of the intention to nominate an auditor shall be deemed to have been satisfied, and the notice shall be sent or given at the same time as the notice of the annual general meeting.

(f) The first auditors of a company may be appointed by the directors before the statutory meeting, and if so appointed shall hold office until the first annual general meeting unless previously removed by a resolution of the members of the company in general meeting, in which case such members at that meeting may appoint auditors.

(g) The directors may fill any casual vacancy in the office of auditor. However, while any such vacancy continues the surviving or continuing auditor or auditors (if any) may act.

(h) The remuneration of the auditors of a company shall be fixed by the company in general meeting, except that the remuneration of any auditors appointed before the statutory meeting, or to fill any casual vacancy, may be fixed by the directors.

(i) This section applies without limitation to the requirements of any other applicable law.

Duties and powers of auditors

280.(a)Every auditor of a company shall have a right of access at all times to the financial records, books and accounts and vouchers of the company, and shall be entitled to require from the directors and officers of the company such information and explanation as may be necessary for the performance of the duties of the auditors.

(b) The auditors shall make a report to the members of the company on the accounts examined by them, and on every financial statement laid before the company in general meeting during their tenure of office, and the report shall state:

(i) whether or not they have obtained all the information and explanations they have required;

(ii) whether or not in their opinion the financial statements referred to in the report are drawn up in conformity with the applicable law;

(iii) whether or not the financial statements exhibit truly and fairly the state of the company’s affairs according to the best of their information and the explanations given to them, and as shown by the books of account of the company; and

(iv) whether in their opinion financial records have been kept by the company as required in accordance with the provisions of this Chapter.

(c) Where any of the matters referred to in subsection (b) is answered in the negative or with a qualification, the report shall state the reason for such answer.

(d) The auditors of a company shall be entitled to receive a notice of and to attend any general meeting of the company at which any accounts which have been examined or reported on by them are to be laid before the company. Moreover, they may also be made any statement or explanation they desire with respect to the accounts.

(e) Where an auditor resigns or is replaced in accordance with the provisions of this Chapter, the auditor who has resigned or been replaced may make such statement or report to the company concerning the financial affairs of the company as the auditor, acting reasonably, in good faith and consistent with the auditor’s duties and professional obligations, if he considers necessary. The directors shall send the report to members of the company and submitted to the registrar within 28 days from the date of receipt. The directors may comment on the report submitted by the auditor that they consider necessary.

(f) This section shall apply without limitation to any other provision of this law or any other applicable law.

281.If any report of the auditor is made without complying with the requirements of section 280, every auditor who is knowingly and wilfully a party to the default shall be liable to a fine of 5,000,000 kyats.

Application to company in which the government holds shares

282.In the case of a company in which the government holds any share the following provisions shall apply notwithstanding anything contained in sections 260, 279 and 280:

(a) the auditor of a company in which the government holds any share shall be appointed or reappointed by the Union Minister on the advice of the Union Auditor-General;

(b) the Union Auditor-General shall have the following powers:

(i) to direct the manner in which the company’s accounts be audited by the auditor appointed in pursuance of subsection (a) and to give such auditor instructions in regard to any matter relating to the performance of his functions as such;

(ii) to conduct a supplementary or test audit of the company’s accounts by such person or persons as he may authorise in this behalf, and for the purposes of such audit, to require information or additional information to be furnished to any person or persons so authorised, on such matters, by such person or persons, and in such form, as the Union Auditor-General may, by general or special order, direct; and

(iii) to require the company to produce such records or documents in its possession or under its control to him for the purposes of audit or supplementary or test audit of account of the company and at such time as may be specified by him;

(c) any order requiring any information, records or documents to be furnished or produced by a company may also be addressed to any person who is, or has at any time been, an officer or employee of the company. All the provisions contained in this section, shall apply in relation to such person as they apply in relation to the company;

(d) the auditor aforesaid shall submit a copy of his audit report to the Union Auditor-General who shall have the right to comment upon, or supplement, the audit report in such manner as he may think fit;

Delegation

283.The matters in section 282 to be done by the Auditor-General of the Union may be done by any person authorised by him, either generally or specially.

Penalty

284. If a company in which the government holds any share fails to comply with an order made under section 282, the company and every director or other officer or employee thereof who is in default shall be punishable with imprisonment which may extend to two years or with a fine of 5,000,000 Kyats.

Rights of preference shareholders as to receipt and inspection of reports

285. Holders of preference shares and debentures of a company shall have the same right to receive and inspect the financial statements of the company and the reports of the auditors and other reports as is possessed by the holders of ordinary shares in the company.

Chapter XXV
Arbitration, Compromise with Creditors and Members of a Company and Buy-out Rights

Power of the company to refer the dispute matters to arbitration

286.Without limiting any other means exercised by a company for resolving any dispute, a company may, by written agreement, refer to arbitration any existing or future difference, in accordance with the Arbitration Law or other applicable law, between company and any other company or any other person to arbitration.

Power to compromise with creditors and members of the company

287.(a)Where a compromise or arrangement is proposed between a company and its creditors or any class of them, or between the company and its members or any class of them, the court may, on the application in a summary way of the company or of any creditor or member of the company or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors or of the members of the company or class of members, as the case may be, to be called, held and conducted in such manner as the court directs.

(b) If a majority in number representing three-fourths in value of the creditors or class of creditors, or members or class of members, as the case may be, present either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the court, be binding on all the creditors or the class of creditors, or on all the members or class of members, as the case may be, and also on the company, or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company.

(c) An order made under subsection (b) shall have no effect until a certified copy of the order has been filed with the registrar, and a copy of every such order shall be annexed to every copy of the constitution of the company issued after the order has been made.

(d) The court may, at any time after an application has been made to it under this section, stay the commencement or continuation of any suit or proceeding against a company on such terms as it thinks fit and proper until the application is finally disposed of.

(e) The expression “company” contained in this section means any company liable to be wound up under this law, and for the purposes of this section unsecured creditors who may have filed suits or obtained decrees shall be deemed to be of the same class as other unsecured creditors.

(f) Any order made by the court shall be appealed to a higher court in accordance with the law.

288.If a company makes default in complying with section 287(c), the company and every director or other officer of the company who is knowingly and wilfully in default shall be liable to a fine of 150,000 kyats.

Provisions for facilitating arrangements and compromises

289.(a)Where an application is made to the court under section 287 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies, and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme, referred to as a “transferor company” in this section, is to be transferred to another company, referred to as “the transferee company” in this section, the court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters:

(i) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company;

(ii) the allotting or appropriation by the transferee company of any shares, debentures, securities, or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person;

(iii) the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company;

(iv) the dissolution, without winding up, of any transferor company;

(v) the provision to be made for any persons who, within such time and in such manner as prescribed by the court, dissent from the compromise or arrangement;

(vi) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out.

(b) Where an order made under this section provides for the transfer of property or liabilities, that property shall, by virtue of the order, be transferred to and vest in, and those liabilities shall, by virtue of the order, be transferred to and become the liabilities of, the transferee company, and in the case of any property, if the order so directs, freed from any charge which is by virtue of the compromise or arrangement to cease to have effect.

(c) Where an order is made under this section, every company in relation to which the order is made shall deliver a certified copy thereof to the registrar for registration within 14 days after the completion of the order.

(d) The expression “property” contained in this section includes property, rights and powers of every description, and the expression “liabilities” also includes duties.

(e) Notwithstanding the provisions of section 287(e), the expression “company” contained in this section does not include any company other than a company within the meaning of this law.

290. If default is made in complying with section 289(c), the company and every director or other officer of the company who is knowingly and willfully in default shall be liable to a fine of 150,000 kyats.

Power to acquire shares in a public company of shareholders dissenting from a contract approved by majority

291.(a)Without limiting any other applicable law, where a contract involving the transfer of shares or any class of shares in a public company, referred to as “the transferor company” in this section, to another company, referred to as the “transferee company” in this section, has within four months after the making of the offer in that behalf by the transferee company been approved by the holders of not less than three-fourths in value of the shares affected, the transferee company may, at any time within two months after the expiration of the said four months, give notice in the specified manner to any dissenting shareholder that it desires to acquire his shares, and where such a notice is given the transferee company shall, unless on an application made by the dissenting shareholder within 28 days from the date on which the notice is given the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders are to be transferred to the transferee company.

(b) Where a notice has been given by the transferee company in accordance with the provisions of this section and the court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of 28 days from the date on which the notice has been given or, if an application to the court by the dissenting shareholder is then pending, after that application has been disposed of, subject to compliance with any other applicable law, transmit a copy of the notice to the transferor company and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire. The transferor company shall thereupon register the transferee company as the holder of those shares.

(c) Any sums received by the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration are respectively received.

(d) The expression “dissenting shareholder” contained in this section includes a shareholder who has not assented to the contract and any shareholder who has failed or refused to transfer his shares to the transferee company in accordance with the scheme or contract.

Part V
Winding Up

Chapter XXVI
Winding Up a Company

Methods of winding up a company

292. (a) The winding up of a company may be either:

(i) by the court; or

(ii) voluntary; or

(iii) subject to the supervision of the court.

(b) The provision of this law with respect to winding up apply, unless the contrary appears, to the winding up of a company in any of these methods.

Contributories

Liability as contributories of present and past members

293.(a)In the event of a company being wound up, every present and past member shall, subject to the provisions of this section, be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, with the qualifications following:

(i) a past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up;

(ii) a past member shall not be liable to contribute in respect of any debt, or liability of the company contracted after he has ceased to be a member;

(iii) a past member shall not be liable to contribute unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this law;

(iv) in the case of a company limited by shares, no contribution shall be required from any member exceeding the amount (if any) unpaid on the shares in respect to which he is liable as a present or previous member;

(v) in the case of a company limited by guarantee, no contribution shall be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up;

(vi) nothing in this law shall invalidate any provision contained in any policy insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract;

(vii) a sum due to any member of a company in his character of a member, by way of dividends, profits or otherwise, shall not be deemed to be a debt of the company payable to that member in a case of competition between himself and any other creditor not a member of the company; but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.

(b) In the winding up of a company limited by guarantee which has a share capital, every member of the company shall be liable, in addition to the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up, to contribute to the extent of any sums unpaid on any shares held by him.

Liability of directors whose liability is unlimited

294.In the winding up of a limited company any director, whether past or present, whose liability is, in pursuance of this law or under the constitution of the company, unlimited, shall, in addition to his liability (if any) to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of the winding up a member of an unlimited company. However:

(a) a past director shall not be liable to make such further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up;

(b) a past director shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he has ceased to hold office;

(c) subject to the constitution of the company a director shall not be liable to make such further contribution unless the court deems it necessary to require that contribution in order to satisfy the debts and liabilities of the company, and the costs, charges and expenses of the winding up.

Liability of a contributory

295.The liability of a contributory shall create a debt payable at the time specified in the calls made on him by the liquidator.

Matter in case of death of member

296.(a)If a contributory dies either before or after he has been placed on the list of contributories his legal representatives and his heirs shall be liable in a due course of administration to contribute to the assets of the company in discharge of his liability and shall be contributories accordingly.

(b) If the legal representatives or heirs make default in paying any money ordered to be paid by them, proceedings may be taken for administering the property of deceased contributory, whether immovable, or both and of compelling payment thereout of the money due.

Matter in case of insolvency of member

297.If a contributory is adjudged insolvent either before or after he has been placed on the list of contributories, then:

(a) his assignees shall represent him for all the purposes of the winding up, and shall be contributories accordingly, and may be called on to admit to proof against the estate of the insolvent, or otherwise to allow to be paid out of his assets in due course of law, any money due from the insolvent in respect of his liability to assets of the company, and

(b) there may be proved against the estate of the insolvent the estimated value of his liability to future calls as well as calls already made.

Winding up by the Decision of a Court

Circumstances in which company may be wound up by the decision of a court

298. A company may be wound up by the court:

(a) if the company has by resolution resolved that the company be wound up by the court;

(b) if default is made in filing the statutory report or in holding the statutory meeting;

(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;

(d) if the number of members is reduced below one;

(e) if the company is unable to pay its debts; or

(f) if the court is of opinion that it is just and equitable that the company should be wound up.

Company when deemed unable to pay its debts

299.(a)For the purpose of this Chapter, a company shall be deemed to unable to pay its debts:

(i) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 250,000 kyats, has served on the company, by causing the same to be delivered by the registered post or otherwise at its registered office, a demand under his hand requiring the company to pay the sum, so due and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor;

(ii) if execution or other process issued on a decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

(iii) if it is proved to the satisfaction of the court that the company is unable to pay its debts and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company.

(b) The demand referred to in clause (i) of subsection (a) shall be deemed to have been duly given under the hand of the creditor if it is signed by an agent or legal adviser duly authorized on his behalf, or in the case of a firm if it is signed by such agent or by a legal adviser or any one member of the firm on behalf of the firm.

Winding up may be referred to subordinate courts

300.Where a court makes an order for winding up a company under this law, it may, if it thinks fit, direct all subsequent proceedings to be had in a subordinate court and thereupon such court shall, for the purpose of winding up the company, be deemed to be “the court” within the meaning of this law, and shall have, for the purposes of such winding up, all the jurisdiction and powers of the subordinate court.

Transfer of winding up a company from one court to another

301.If during the progress of winding up in a court it is made to appear to the court that the same could be more conveniently prosecuted in any other court having jurisdiction to wind up companies, the court may transfer the same to such other court, and thereupon the winding up shall proceed in such other court.

Provisions as to application for winding up a company

302. An application to the court for the winding up of a company shall be by petition presented, subject to the provisions of this section, either by the company, or by any creditor or creditors including any contingent or prospective creditor or creditors, contributory or contributories, or by all or any of those parties, together or separately, or by the registrar. Provided that:

(a) a contributory shall not be entitled to present a petition for winding up a company unless the shares in respect of which he is a contributory or some of them either were originally allotted to him or have been held by him, and registered in his name, for at least six months before the commencement of the winding up, or have devolved on him through the death of a former holder.

(b) the registrar shall not be entitled to present a petition for winding up a company:

(i) except on the ground that from the financial condition of the company as disclosed in its balance-sheet or from the report of an inspector appointed under section 271 if appears that the company is unable to pay its debts, and

(ii) unless the previous sanction of the Union Minister has been obtained to the presentation of the petition, provided that no such sanction shall be given unless the company has first been afforded an opportunity of being heard;

(c) a petition for winding up a company on the ground of default in filling the statutory report or in holding the statutory meeting shall not be presented by any person except a shareholder, nor before the expiration of 14 days after the last day on which the meeting ought to have been held;

(d) the court shall not give a hearing to a petition for winding up a company by a contingent or prospective creditor until such security for costs has been given as the court thinks reasonable and until a prima facie case for winding up has been established to the satisfaction of the court.

Effect of winding up order

303.An order for winding up a company shall operate in favour of the entire creditor and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.

Commencement of winding up by a court

304.A winding up a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.

Court may grant injunctions

305.The court may, at any time after the presentation of the petition for winding up a company under this law, and before making an order for winding up the company, upon the application of the company or of any creditor or contributory of the company, restrain further proceedings in any suit or proceeding against the company, upon such terms as the court thinks fit.

Powers of a court on hearing petition

306.(a)On hearing the petition the court may dismiss it with or without costs, or adjourn the hearing conditionally or unconditionally, or make any interim order or other order that it deems just, but the court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

(b) Where the petition is presented on the ground of default in filling the statutory report or in holding the statutory meeting, the court may order the costs to be paid by any persons who, in the opinion of the court, are responsible for the default.

(c) Where the court makes an order for the winding up of a company it shall, except where a liquidator is appointed simultaneously, forthwith cause intimation thereof to be sent to the official receiver.

Suits stayed on winding up order

307. When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by permission of the court, and subject to such terms as the court may impose.

Vacancy in the office of a liquidator

308.(a)For the purposes of this law, so far as it relates to the winding up of companies by the court, the term “official receiver” means the official receiver attached to the court, or, if there is no such official receiver, then such person as the Union Minister may, by notification in the gazette, appoint for the purpose.

(b) On the making of a winding up order, the official receiver shall become the official liquidator of the company, and shall continue to act as such until his further continuance is terminated by an order of the court.

(c) The official receiver shall, as such official liquidator forthwith, take into his custody, and control all the books, documents and the assets of the company,

(d) The official receiver shall be entitled to such remuneration as the court shall fix.

Copy of winding up order to be filed with the registrar

309.(a)On the making of a winding up order it shall be the duty of the petitioner in winding up proceedings and of the company to file with the registrar a copy of the order within a month from the date of the making of the order.

(b) On the filling of a copy of a winding up order, the registrar shall make a minute thereof in his books relating to the company, and shall notify in the gazette that such an order has been made.

(c) Such order shall be deemed to be a notice of discharge to the servants of the company, except when the business of the company is continued.

Power of a court to stay winding up

310. The court may, at any time after an order for winding up, on the application of any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit.

Court may accept the desire of creditors or contributories

311. The court may, as to all matters relating to a winding up, have regard to the desire of the creditors or contributories as proved to it by any sufficient evidence.

Official Liquidators

Appointment of an official liquidator

312.(a)For the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose, the court may appoint a person or persons other than the official receiver to be called an official liquidator or official liquidators.

(b) The court may make such an appointment provisionally at any time after the presentation of a petition and before the making of an order for winding up, but shall before making any such appointment give a notice to the company, unless for reasons to be recorded it thinks fit to dispense with a notice.

(c) If more persons than one are appointed to the office of official liquidator, the court shall declare whether any act by this law required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons.

(d) The court may determine whether any, and what, security is to be given by any official liquidator on his appointment.

(e) The acts of an official liquidator shall be valid notwithstanding any defect that may afterwards be discovered in his appointment. Provided that, nothing in this subsection shall be deemed to give validity to acts done by an official liquidator after his appointment has been shown to be invalid.

(f) A receiver shall not be appointed with regard to the assets in the hands of an official liquidator.

Resignations, removals, filling up vacancies and giving compensation

313.(a) Any official liquidator may resign or be removed by the court on due causes shown.

(b) Any vacancy in the office of an official liquidator appointed by the court shall be filled up by the court and until the vacancy is so filled up the official receiver shall be and act as the official liquidator.

(c) There shall be paid to the official liquidator such salary or remuneration, by way of percentage or otherwise, as the court may direct. If more liquidators than one are appointed, such remuneration shall be distributed amongst them in such proportions as the court directs.

An official liquidator

314.The official liquidator shall be described as the official liquidator of the particular company in respect of which he is appointed, and not by his individual name.

Submission of matters that to be performed to the liquidator

315. (a) Where the court has made a winding up order or appointed an official liquidator provisionally, there shall, unless the court thinks fit to order otherwise and so orders, be made out and submitted to the official liquidator a statement as to the affairs of the company verified by an affidavit and containing the following particulars, namely:

(i) the assets of the company, stating separately the cash balance in hand and at the bank, if any;

(ii) the debts and liabilities;

(iii) the names, residences and occupation of the creditors, stating separately the amount of secured debts and unsecured debts, and in the case of secured debts particulars of the securities, their value and the dates when they are given; and

(iv) the debts due to the company and the names, residences and occupation of the persons from whom they are due and the amount likely to be realised therefrom.

(b) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by any person who is at that date the secretary of the company, or by such of the persons hereinafter in this subsection mentioned as the official liquidator, subject to the direction of the court, may require to submit and verify the statement, that is to say, persons:

(i) who are or have been directors or officers of the company;

(ii) who have taken part in the formation of the company at any time within one year before the relevant date; or

(iii) who are in the employment of the company or have been in the employment of the company within the said year, and are in the opinion of the official liquidator capable of giving the information required.

(c) The statement shall be submitted within 21 days from the relevant date, or within such extended time as the official liquidator or the court may, for special reasons, appoint.

(d) Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official liquidator may consider reasonable, subject to an appeal to the court.

(e) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom.

(f) For the purposes of this section, “relevant date” means, in a case where a provisional liquidator is appointed, the date of his appointment and, in a case where no such appointment is made, the date of the winding up order.

316.If any person, without reasonable excuse, knowingly and willfully makes default in complying with the requirements of section 315, he shall be liable to a fine of 1,000,000 kyats.

317.Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of an offence under section 182 of the Penal Code and shall, on the application of the liquidator or of the official receiver, be punishable accordingly.

Statement by a liquidator

318.(a)In a case where a winding up order is made, the official liquidator shall, as soon as practicable after receipt of the statement to be submitted under section 315, and not later than four months, or with the leave of the court, six months from the date of the order, or in a case where the court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the court:

(i) as to the amount of capital issued, subscribed, and paid up, and the estimated amount of assets and liabilities, giving separately under the heading of assets particulars of:

(aa) cash and negotiable securities;

(bb) debts due from contributories;

(cc) debts due to and securities, if any, available to the company;

(dd) moveable and immovable properties belonging to the company; and

(ee) unpaid calls;

(ii) if the company has failed, as to the causes of the failure; and

(iii) whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of the business thereof.

(b) The official liquidator may also, if he thinks fit, make a further report, or further reports, stating the manner in which the company is formed and whether in his opinion any fraud has been committed by any person in its promotion or formation, or by any director or other officer of the company in relation to the company since the formation thereof, and any other matter which in his opinion it is desirable to bring to the notice of the court.

Custody of company’s property

319.(a)The official liquidator, whether appointed provisionally or not, shall take into his custody, or under his control, all the property, effects and actionable claims to which the company is or appears to be entitled.

(b) All the property and effects of the company shall be deemed to be in the custody of the court as from the date of the order for the winding up of the company.

Committee of inspection in compulsory winding up

320.(a)The official liquidator shall, within a month from the date of the order for the winding up of a company, convene a meeting of the creditors of the company as ascertained from the books and documents of the company for the purpose of determining whether or not a committee of inspection shall be appointed to act with the liquidator, and who are to be members of the committee, if appointed.

(b) The official liquidator shall, within 7 days from the date of the creditors’ meeting, convene a meeting of the contributories to consider the decision of the creditors and to accept the same with or without modifications.

(c) If the contributories do not accept the decision of the creditors in its entirely, it shall be the duty of the official liquidator to apply to the court for directions as to whether there shall be a committee of inspection and, if so, what shall be the composition of the committee, and who shall be members thereof.

(d) The committee of inspection appointed under this section shall consist of not more than twelve members being creditors and contributories of the company, or persons holding general or special powers-of-attorney from creditors or contributories, in such proportions as may be agreed on by the meetings of creditors and contributories, or as, in case of difference, may be determined by the court.

(e) The committee of inspection shall have the right to inspect the accounts of the official liquidator at all reasonable times.

(f) The committee shall meet at such time as they may, from time to time, appoint, and, falling such appointment, at least once a month, and the liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary.

(g) The committee may act by a majority of their members present at a meeting, but shall not act unless a majority of the committee is present.

(h) A member of the committee may resign by a notice in writing signed by him and delivered to the liquidator.

(i) If a member of the committee becomes bankrupt, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee without the permission of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.

(j) A member of the committee may be removed by an ordinary resolution at a meeting of creditors if he represents creditors, or of contributories if he represents contributories, of which at least 7 days’ notice has been given, stating the object of the meeting.

(k) On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, re-appoint the same or appoint another creditor or contributory to fill the vacancy.

(l) The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.

Powers of an official liquidator

321.The official liquidator shall have the power, with the sanction of the court, to do the following things:

(a) to institute or defend any suit or prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company;

(b) to carry on the business of the company so far as may be necessary for the beneficial winding up of the same;

(c) to sell the immovable and movable property of the company by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels;

(d) to do all acts and to execute, in the name and on behalf of the company, all deeds, receipts, and other documents, and for that purpose to use, when necessary, the company’s seal;

(e) to prove, frank and claim in the insolvency of any contributory for any balance against his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent, and rateably with the other separate creditors;

(f) to draw, accept, make and indorse any bill of exchange, cheque or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill, cheque, or note has been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business;

(g) to raise, on the security of the assets of the company, any money requisite.

(h) to take out, in his official name, letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself. Provided that, nothing herein empowered shall be deemed to affect the rights, duties and privileges of the Union Auditor General.

(i) to do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

Discretion of an official liquidator and provision for legal assistance to an official liquidator

322.(a)The court may provide by any order that the official liquidator may exercise any of the above powers without the sanction or intervention of the court, and, where and official liquidator is provisionally appointed, may limit and restrict his powers by the other appointing him.

(b) The official liquidator may, with the sanction of the court, appoint a legal practitioner entitled to appear before the court to assist him in the performances of his duties. Provided that, where the official liquidator is a legal practitioner, he shall not appoint his partner unless the letter consents to act without remuneration.

Liquidator to keep books containing proceedings of meetings and to submit account of his receipts to a court

323.(a)The official liquidator of a company which is being wound up by the court shall keep, in manner prescribed, proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed. Any creditor or contributory may, subject to the control of the court, personally or by an agent, inspect any such books.

(b) Every official liquidator shall, at such times as may be prescribed but not less than twice in each year during the liquidator’s tenure of office, present to the court an account of his receipts and payments as such liquidator.

(c) The account shall be in the prescribed form, shall be made in duplicate, and shall be verified by a declaration in the prescribed manner.

(d) The court shall cause the account to be audited in such manner as it thinks fit, and for the purpose of the audit the liquidator shall furnish the court with such vouchers and information as the court may require, and the court may, at any time, require the production of and inspect any books or accounts kept by the liquidator.

(e) When the account has been audited, one copy thereof shall be filed and kept by the court, and the other copy shall be delivered to the registrar for filing, and each copy shall be open to the inspection of any creditor, or of any person interested.

Exercise and control of liquidator’s powers

324.(a)Subject to the provisions of this law, the official liquidator of a company which is being wound up by the court shall, in the administration of the assets of the company and in the distribution thereof among its creditors, have regard to any directions that may be given by resolution of the creditors or contributories at any general meeting or by the committee of inspection, and any directions given by the creditors or contributories at any general meeting shall, in case of conflict, be deemed to override any directions given by the committee of inspection.

(b) The official liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be the liquidator’s duty to summon meetings at such times as the creditors or contributories, by resolution, may direct, or whenever requested in writing to do so by one-tenth in value of the creditors or contributories, as the case may be.

(c) The official liquidator may apply to the court in manner prescribed for directions in relation to any particular matter arising in the winding up.

(d) Subject to the provisions of this law, the official liquidator shall use the liquidator’s own discretion in the administration of the assets of the company and in the distribution thereof among the creditors.

(e) If any person is aggrieved by any act or decision of the official liquidator, that person may apply to the court, and the court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just in the circumstances.

Ordinary Powers of a Court

Settlement of list of contributories and application of assets

325.(a)As soon as may be practicable after making a winding up order, the court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of this law, shall cause the assets of the company to be collected and applied in discharge of its liabilities.

(b) In settling the list of contributories, the court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.

Power to deliver the property

326.The court may, at any time after making a winding up order, require any contributory for the time being settled on the list of contributories and any trustee, receiver, banker, agent, or officer off the company to pay, deliver, surrender or transfer forthwith, within such time as the court directs, to the official liquidator any money, property or documents in his hands to which the company is prima facie entitled.

Power to order payment of debts by contributories

327.(a)The court may, at any time after making a winding up order, make an order on any contributory for the time being settled on the list of contributories to pay, in manner directed by the order, any money due from the contributory or from the estate of the person whom the contributory represents to the company exclusive of any money payable by the contributory or the estate by the virtue of any call in pursuance of this law.

(b) The court in making such an order may, in the case of an unlimited company, allow to the contributory by way of set-off any money due to the contributory or to the estate which the contributory represents from the company on any independent dealing or contract with the company, but not any money due to the contributory as a member of the company in represent of any dividend or profit, and may, in the case of a limited company, make to any director whose liability is unlimited or to the director’s estate the like allowance:

Provided that, in the case of any company whether limited or unlimited, when all the creditors are paid in full, any money due on any account whatever to a contributory from the company may be allowed to the contributory by way of set-off against any subsequent call.

Power of a court to make calls

328.(a)The court may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on and order payment therefore by all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.

(b) In making the call the court may take into consideration the probability that some of the contributories may partly or wholly fail to pay the call.

Power to order payment into a bank

329.The court may order any contributory, purchaser or other person from whom money is due to the company to pay the same into the account of the official liquidator in any schedule bank instead of to the official liquidator, and any such order may be enforced in the same manner as if it has directed payment to the official liquidator.

Regulation of account dealing with a court

330.All moneys, bills, cheques, notes and other securities paid and delivered into the bank where the liquidator of the company may have his account, in the event of a company being wound up by the court, shall be subject in all represents to the orders of the court.

Order on contributory conclusive evidence

331.(a)An order made by the court on a contributory shall, subject to any right of appeal, be conclusive evidence that the money, if any, thereby appearing to be due or ordered to be paid is due.

(b) All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings whatsoever.

Power to exclude creditors not proving in time

332.The court may fix a time or times within which creditors are to prove their debts or claims, or to be excluded from the benefit of any distribution made before those debts are proved.

Adjustment of rights of contributories

333.The court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.

Power to order costs

334.The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the court thinks just.

Dissolution of a company

335.(a)When the affairs of a company have been completely wound up, the court shall make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.

(b) The order shall be reported within 15 days of the making thereof by the official liquidator to the registrar, who shall make in his books a minute of the dissolution of the company.

336.If the official liquidator makes default in complying with the requirements of section 335, he shall be liable to a fine of 400,000 Kyats.

Extraordinary Powers of a Court

Power to summon persons assumed of having property of a company

337.(a)The court may, after it has made a winding up order, summon before it any officer of the company or person known or suspected to have in their possession any property of the company, or supposed to be indebted to the company, or any person whom the court deems capable of giving information concerning the trade, dealings, affairs or property of the company.

(b) The court may examine such person on oath concerning the same, either by word of mouth or on written interrogatories, and may reduce such person’s answers to writing and require them to sign them.

(c) The court may require such person to produce any documents in their custody or power relating to the company but, where the person claims any lien on documents produced by them, the production shall be without prejudice to that lien. In addition, the court shall have jurisdiction in the winding up to determine all questions relating to that lien.

(d) If an person so summoned, after being tendered a reasonable sum for their expenses, refuses to come before the court at the time appointed, not having a lawful impediment made known to the court at the time of its sitting, and allowed by it, the court may cause the person to be apprehended and brought before the court for examination.

Power to order public examination of promoters, directors, etc

338.(a)When an order has been made for winding up a company by the court, and the official liquidator has applied to the court stating that in the liquidator’s opinion a fraud has been committed by any person in the promotion or formation of the company or by any director or other officer of the company, in relation to the company since its formation, the court may, after consideration of the application, direct that any person who has taken any part in the promotion or formation of the company, or has been a director or other officer of the company, shall attend before the court on a day appointed by the court for that purpose. In addition, the court be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to the person’s conduct and dealings as director of other officer thereof.

(b) The official liquidator shall take part in the examination, and for that purpose may, if specially authorized by the court in that behalf, employ such legal assistance as may be sanctioned by the court.

(c) Any creditor or contributory may also take part in the examination either personally or by any person entitled to appear before the court.

(d) The court may put such question to the person examined as the court thinks fit.

(e) The person examined shall be examined on oath, and shall answer all such questions as the court may put or allow to be put to them.

(f) A person ordered to be examined under this section may, at their own cost, employ any person entitled to appear before the court, who shall be at liberty to put to the person being examined such questions as the court may deem just for the purpose of enabling the person to explain or qualify any answers given by the person. Provided that, if the persons is, in the opinion of the court, exculpated from any charges made or suggested against them the court may allow the person such costs as in its discretion it may think fit.

(g) Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against the person in civil proceedings, and shall be open to the inspection of any creditor or contributory at all reasonable times.

(h) The court may, if it thinks fit, adjourn the examination from time to time.

(i) An examination under this section may, if the court so directs, and subject to any rules in this behalf, be held before any Judge or officer of the court, being an official referee, master, register or deputy registrar, and the powers of the court under this section as to the conduct of the examination, but not as to costs, may be exercised by the person before whom the examination is held.

Power to arrest absconding contributory

339.The court, at any time either before or after making a winding up order, on proof of probable cause for believing that a contributory is about to quit the Union or otherwise to abscond, or to remove or conceal any of their property for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company, may cause the contributory to be arrested and their books and papers and movable property to be seized, and the contributory and them to be safely kept until such time as the court may order.

Saving of other proceedings

340.Any powers by this law conferred on the court shall be in addition to, and not in restriction of, any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.

Enforcement of an Appeal from Orders

Power to enforce orders

341.All order made by a court under this law may be enforced in the manner in which decrees of such court made in any suit pending therein may be enforced.

Order made in any court to be enforced by other courts

342.Any order made by a court for or in the course of the winding up of a company shall be enforced in any place in the Union, other than that in which such court is situated. The court that would have had jurisdiction in respect of such company if the registered office of the company has been situated at such other place, and in the same manner in all respect as if such order has been made by the court that is hereby required to enforce the same.

Mode of dealing with orders to be enforced by other courts

343.Where any order made by one court is to be enforced by another court, a certified copy of the order so made shall be produced to the proper officer of the court required to enforced the same, and the production of such certified copy shall be sufficient evidence of such order having been made and thereupon the last-mentioned court shall take the requisite steps in the matter for enforcing the order, in the same manner as if it were the order of the court enforcing the same.

Appeals from Orders

344.Re-hearings of and appeals from any order or decision made or given in the matter of the winding up of a company by the court may be had in the same manner and subject to the same conditions in and subject to which appeals may be had from any order or decision of the same court in cases within its ordinary jurisdiction.

Voluntarily Winding Up a Company

Circumstances in which company may be wound up voluntarily

345. A company may be wound up voluntarily under these circumstances:-

(a) when the period (if any) fixed for the duration of the company by the constitution of the company expires, or the event (if any) occurs on the occurrence of which the constitution provides that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily;

(b) if the company resolves by special resolution that the company be wound up voluntarily; or

(c) if the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up; and the expression resolution for voluntarily winding up when used hereafter in this part means a resolution passed under sub-sections (a), (b) or (c) of this section.

Commencement of voluntarily winding up a company

346.A voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntarily winding up.

Effect of voluntary winding up on status of a company

347.When a company is wound up voluntarily, the company shall, from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof. However, the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its constitution, continue until it is dissolved.

Notice of resolution to wind up voluntarily

348.A notice of any special resolution for winding up a company voluntarily shall be given by the company within 10 days of the passing of the same by advertisement in the gazette and also in a daily newspaper circulating generally in the Union.

349. If a company makes default in complying with the requirements of section 348, it shall be liable to a fine of 250,000 Kyats and every director or other officer of the company who knowingly and willfully authorizes or permits the default shall be liable to the same penalty.

Declaration of solvency

350.(a)Where it is proposed to wind up a company voluntarily, the director of the company or, in the case of a company having more than two directors, the majority of the directors may, or in the case of a company with only one director, that sole director, at a meeting of the directors held before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a declaration verified by an affidavit to the effect that they have made a full inquiry into the affairs of the company, and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within a period, not exceeding three years, from the commencement of the winding up.

(b) Such declaration shall be supported by a report of the company’s auditors on the company’s affairs, and shall have no effect for the purposes of this law unless it is delivered to the registrar for registration before the date mentioned in subsection (a).

(c) A winding up in the case of which a declaration has been made and delivered in accordance with this section is in this law referred to as a “members” voluntary winding up, and a winding up in the case of which a declaration has not been made and delivered as aforesaid is in this law referred to as a “creditors” voluntary winding up.

Voluntarily Winding Up by the Members of a Company

Provisions relating to voluntarily winding up by the members of a company

351.The provisions contained in section 352 to 357, shall apply in relation to the voluntarily winding up by the members of the company.

Power of a company to appoint and fix remuneration of liquidators

352.(a)The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them.

(b) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting, or the liquidator, sanctions the continuance thereof.

Power to fill vacancy in office of a liquidator

353.(a)if a vacancy occurs by death, resignation or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.

(b) For that purpose a general meeting may be convened by any contributory or, if there are more liquidators than one, by the continuing liquidators.

(c) The meeting shall be held in manner provided by this law or by the constitution, or in such manner as may, on application by any contributory or by the continuing liquidators, be determined by the court.

Power of a liquidator to accept shares as consideration for the sale of property of a company

354.(a)Where a company is proposed to be, or is in course of being, wound up altogether voluntarily, and the whole or part of its business or property is proposed to be transferred or sold to another company, whether a company within the meaning of this law or not in this section called “the transferee company”, the liquidator of the first mentioned company “in this section called the transferor company” may, with the sanction of a special resolution of that company conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive, in compensation or part compensation for the transfer or sale, shares, policies, or other like interests in the transferee company, for distribution among the members of the transferor company, or may enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies, or other like interest or in addition thereto, participate in the profits of or receive any other benefit from the transferee company.

(b) Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company.

(c) If any member of the transferor company who does not vote in favour of the special resolution expresses his dissent therefrom in writing addressed to the liquidator and left at the registered office of the company within 7 days after the passing of the special resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by arrangement or by arbitration in manner hereafter provided.

(d) If the liquidator elects to purchase the member’s interest, the purchase money shall be paid before the company is dissolved, and be raised by the liquidator in such manner as may be determined by special resolution.

(e) A special resolution shall not be invalid for the purposes of this section by reason that it is passed before or concurrently with resolution for voluntary winding up or for appointing liquidators, but if an order is made within a year for winding up the company by or subject to the supervision of the court, the special resolution shall not be valid unless sanctioned by the court.

(f) The provision of the Arbitration Law, other than those restricting the application of the Arbitration Law in respect of the subject matter of the arbitration, shall apply to all arbitrations in pursuance of this section.

Duty of a liquidator to call a general meeting at the end of each year

355.In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up and of each succeeding year, or as soon as thereafter as may be convenient within 90 days of the end of the year, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year and a statement in the prescribed form with respect to the position of the liquidation.

356.If the liquidator fails to comply with section 355, he shall be liable to a fine of 500,000 Kyats.

Final meeting and dissolution

357.(a)As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account and giving any explanation thereof.

(b) The meeting shall be called by advertisement specifying the time, place and objective thereof, and published 28 days at least before the meeting in the manner specified in section 348 for publication of a notice under that section.

(c) Within 7 days after the meeting, the liquidator shall send to the registrar a copy of the account, and shall make a return to him of the holding of the meeting and of its date. Provided that, if a quorum is not present at the meeting, the liquidator shall, in lieu of the said return, make a return that the meeting is duly summoned and that no quorum is present thereat, and upon such a return being made the provisions of this sub-section as to the making of the return shall be deemed to have been complied with.

(d) The registrar on receiving the account and either of the returns mentioned in sub-section (c) shall forthwith register them, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved. Provided that, the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

358. If a copy of the account is not sent or a return is not made in accordance with sub-section 357(c), the liquidator shall be liable to a fine of 150,000 Kyats.

359.It shall be the duty of the person on whose application an order of the court under sub-section 357(d) is made, within 21 days after the making of the order, to deliver to the registrar a certified copy of the order for registration, and if that person fails so to do he shall be liable to a fine of 150,000 Kyats.

Voluntarily Winding Up by Creditors

Provision relating to the voluntarily winding up by the creditors

360.The provisions contained in sections 361 to 372 shall relate to the voluntarily winding up by the creditors.

Meeting of creditors

361.(a)The company shall cause a meeting of the creditors of the company to be summoned for the day, or the next day of the following day, on which there is to be held the meeting at which the resolution for voluntary winding up is to proposed, and shall cause the notices of the said meeting of creditors to be sent to the creditors simultaneously with the sending of the notices of the said meeting of the company.

(b) The company shall cause a notice of the meeting of the creditors to be advertised in the manner specified in section 348 for the publication of a notice under that section.

(i) cause a full statement of the position of the company’s affairs together with a list of the creditors of the company and the estimated amount of their claims to be laid before the meeting of creditors to be held as aforesaid; and

(ii) appoint one of their number to preside at the said meeting.

(d) It shall be the duty of the director appointed to preside at the meeting of creditors to attend the meeting and preside thereat.

(e) If the meeting of the company at which the resolution for voluntary winding up is to be proposed is adjourned, and the resolution is passed at an adjourned meeting, any resolution passed at the meeting of the creditors, held in pursuance of sub-section (a), shall have effects as if it has been passed immediately after the passing of the resolution for winding up of the company.

362.If default is made:

(a) by the company in complying with sub-sections (a) and (b) of section 361;

(b) by the directors of the company in complying with sub-section (c) of section 361;

(c) by any director of the company in complying with sub-section (d) of section 361, the company, directors or director, as the case may be, shall be liable to a fine of 250,000 Kyats, and, in the case of default by the company, every officer of the company who is in default shall be liable to the same penalty.

Appointment of a liquidator

363.The creditors and the company at their respective meetings mentioned in section 361 may nominate a person to be a liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons, the person nominated by the creditors shall be a liquidator. If no person is nominated by the creditors the person, if any nominated by the company shall be a liquidator. Provided that, in the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination is made by the creditors, apply to the court for an order either directing that the person nominated by as a liquidator by the company shall be a liquidator instead of or jointly with the person nominated by the creditors, or appointing some other person to be a liquidator instead of the person appointed by the creditor.

Appointment of an inspection committee

364.(a)The creditors at the meeting to be held in pursuance of section 361 or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than five persons, and if such a committee is appointed the company may either, at meeting at which the resolution for voluntary winding up is passed or at any time subsequently in a general meeting, appoint such number of persons as they think fit to act as members of the committee not exceeding five in number.

(b) Provided that, the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection, and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court otherwise directs, be qualified to act as members of the committee, and on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.

Fixing of liquidator’s remuneration and cessation of director’s powers

365.(a)The committee of inspection, or if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators, and where the remuneration is not so fixed, it shall be determined by the court.

(b) On the appointment of a liquidator, all the powers of the directors shall cease, except so far as the committee of inspection, or if there is no such committee, the creditors, sanction the continuance thereof.

Power to fill the vacant of a liquidator

366.If a vacancy occurs by death, resignation or otherwise in the office of a liquidator, other than a liquidator appointed by or by the direction of the court, the creditors may fill the vacancy.

Application of section 354 in the case of voluntarily winding up by the creditors

367.The provisions of section 354 shall apply in the case of voluntarily winding up by the creditors as in the case of voluntarily winding up by the members, with the modification that the powers of the liquidator under the said section shall not be exercised except with the sanction either of the court or of the committee of inspection.

Duty of a liquidator to call meetings of a company and of creditors at the end of every year

368.In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or as soon as thereafter as may be convenient, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year and a statement in the prescribed form with respect to the position of the winding up.

369.If the liquidator fails to comply with section 368, he shall be liable to a fine of 500,000 Kyats.

Final meeting and dissolution

370.(a)As soon as the affairs of the company are fully wound up, the liquidator shall make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving any explanation thereof.

(b) Each such meeting shall be called by advertisement specifying the time, place and object thereof, and published 28 days at least before the meeting in the manner specified in section 348 for publication of a notice under that section.

(c) Within 7 days after the date of the meetings, or, if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the registrar a copy of the account, and shall make a return to him of the holding of the meetings and of their dates, provided that, if a quorum which for the purposes of this section shall be two persons is not present at either such meeting, the liquidator shall, in lieu of such return, make a return that the meeting is duly summoned and that no quorum is present thereat, and upon such a return being made the provisions of this sub-section as to the making of the return shall, in respect of that meeting, be deemed to have been complied with.

(d) The registrar on receiving the account and in respect of each such meeting either of the returns mentioned in sub-section (c) shall forthwith register them, and on the expiration of three months from the registration thereof the company shall be deemed to be dissolved, provided that, the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

371.If a copy of the account is not sent or return is not made in accordance with sub-section (c) of section 370 the liquidator shall be liable to a fine of 150,000 Kyats.

372.It shall be the duty of the person on whose application an order of the court under sub-section (d) of section 370 is made, within 10 days after the making of the order, to deliver to the registrar a certified copy of the order for registration, and if that person fails to do so he shall be liable to a fine of 150,000 kyats.

Voluntarily Winding Up by Creditors or Members

Provision applicable to every voluntarily winding up

373.The provision contained in sections 374 to 382 shall apply to every voluntarily winding up by members or creditors.

Distribution of property of a company

374.Subject to the provisions of this law as to preferential payments, the property of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application, shall, unless the constitution otherwise provide, be distributed among the members according to their rights and interests in the company.

Powers and duties of a liquidator in voluntary winding up

375.(a)The liquidator may:

(i) in the case of voluntarily winding up by members, with the sanction of a special resolution of the company, and in the case of voluntarily winding up by creditors, with the sanction of either the court or the committee of inspection, exercise any of the powers given by sub-sections (d), (e), (f) and (h) of section 321 to a liquidator in a winding up. The exercise by the liquidator of the powers given by this sub-section shall be subject to the control of the court and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of these powers;

(ii) without the sanction referred to in sub-section (a) of clause (i), exercise any of the other powers by this law given to the liquidator in a winding up by the court.

(iii) exercise the power of the court under this law of settling a list of contributories, and the list of contributories shall be prima facie evidence of the ability of the persons named therein to be contributories;

(iv) exercise the power of the court of making calls; and

(v) summon general meetings of the company for the purpose of obtaining the sanction of the company by a special resolution or for any other purpose he may think fit.

(b) The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.

(c) When several liquidators are appointed, any power given by this law may be exercised by such one or more of them as may be determined at the time of their appointment, or, in default of such determination, by any number not less than two.

Power of a court to appoint and remove a liquidator in voluntary winding up a company and notice by a liquidator of his appointment

376.(a)If from any cause whatever there is no liquidator acting, the court may appoint a liquidator.

(b) The court may, on cause shown, remove a liquidator and appoint another liquidator.

(c) The liquidator shall, within 21 days after their appointment, deliver to the registrar for registration a notice of appointment in the prescribed form.

377. If the liquidator fails to comply with the requirements of section376, they shall be liable to a fine of 150,000 kyats.

Arrangement when binding on creditors

378.(a)Any arrangement entered into between a company about to be, or in the course of being, wound up and its creditors shall, subject to the right of appeal under this section, be binding on the company if sanctioned by a special resolution, and on the creditors if acceded to by three-fourths in number and value of the creditors.

(b) Any creditor or contributory may, within 21 days from the completion of the arrangement, appeal to the court against it, and the court may thereupon, as it thinks just, amend, vary or confirm the arrangement.

Power to apply to a court to have questions determined or powers exercised

379.(a)The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls, staying of proceedings or any other matter, all or any of the powers which the court might exercise if the company are being wound up by the court.

(b) The liquidator or any creditor or contributory may apply for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding up.

(d) The court, if satisfied that the determination of the question or the required exercise of power or the order applied for will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.

Cost of voluntary winding up a company

380.All costs, charges and expenses properly incurred in the winding up, including the remuneration of the liquidator, shall, subject to the rights of secured creditors, if any, be payable out of the assets of the company in priority to all other claims.

Saving for rights of the creditors and contributories

381. The winding up of a company shall not bar the right of any creditor or contributory to have it wound up by the court, but in the case of an application by a contributory the court shall be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up.

Power of a court to adopt proceedings of voluntary winding up

382.Where a company is being wound up voluntarily, and an order is made for winding up by the court, the court may, if it thinks fit, by the same or any subsequent order, provide for the adoption of all or any of the proceedings in the voluntary winding up.

Winding up Subject to Supervision of a Court

Power to order winding up subject to supervision

383.When a company has, by a special resolution, resolved to wind up voluntarily, the court may make an order that the voluntary winding up shall continue, but subject to such supervision of the court, and with such liberty for creditors, contributories or others to apply to the court, and generally on such terms and conditions as the court thinks just.

Effect of petition for winding up subject to supervision of a court

384.A petition for the continuance of a voluntary winding up subject to the supervision of the court shall, for the purpose of giving jurisdiction to the court over suits, be deemed to be a petition for winding up by the court.

Court may have regard to the wishes of creditors and contributories

385.The court may, in deciding between a winding up by the court and a winding up subject to supervision, in the appointment of liquidators, and in all matters relating to the winding up subject to supervision, have regard to the wishes of the creditors or contributories as proved to it by any sufficient evidence.

Power of a court to appoint or remove liquidators

386.(a)Where an order is made for a winding up subject to supervision, the court may, by the same or any subsequent order, appoint any additional liquidator.

(b) A liquidator appointed by the court under this section shall have the same powers, be subject to the same obligations, and in all respects stand in the same position as if he has been appointed by the company.

(c) The court may remove any liquidator so appointed by the court or any liquidator continued under the supervision order, and fills any vacancy occasioned by the removal or by death or resignation.

Effect of a supervision order

387.(a)Where an order is made for a winding up subject to supervision, the liquidator may, subject to any restrictions imposed by the court, exercise all his powers without the sanction or intervention of the court, in the same manner as if the company were being wound up altogether voluntarily.

(b) Except as provided in sub-section (a), and save for the purposes of section 338, any order made by the court for winding up subject to the supervision of the court shall, for all purposes, including the staying of suit and other proceedings, be deemed to be an order of the court for winding up the company by the court, and shall confer full authority on the court to make calls, or to enforce calls made by the liquidators, and to exercise all other powers which it might have exercised if an order has been made for winding up the company altogether by the court.

Appointment of voluntary liquidators to office of an official liquidator

388.Where an order has been made for the winding up of a company subject to supervision, and an order is afterwards made for winding up by the court, the court may, by the last-mentioned order or by any subsequent order, appoint the voluntary liquidators or any of them, either provisionally or permanently, and either with or without the addition of any other person, to be official liquidator in the winding up by the court.

Supplementry Provisions

Avoidance of transfers after commencement of winding up and debts of all descriptions to be proved

389.(a)In the case of voluntary winding up every transfer of shares, except transfers made to or with the sanction of the liquidator, and every alteration in the status of the members of the company, made after the commencement of the winding up, shall be void.

(b) In the case of a winding up by or subject to the supervision of the court, every disposition of the property including actionable claims of the company, and every transfer of shares, or alteration in the status of its members, made after the commencement of the winding up, shall, unless the court otherwise orders, be void.

(c) In every winding up subject in the case of insolvent companies to the application in accordance with the provisions of this law regarding the Law of Insolvency all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or for some other reason do not bear a certain value.

Application of insolvency rules in winding up of insolvent companies

390.In the winding up of a insolvent company the same rules shall apply and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the Law of Insolvency with respect to the estates of persons adjudged insolvent, and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively entitled to by virtue of this section.

Preferential payments

391.(a)In a winding up there shall be paid in priority to all other debts:

(i) all revenue, taxes, cesses and rates, whether payable to the government or to a local authority, due from the company at the date hereinafter mentioned in sub-section (e) of section 391 and having become due and payable within the twelve months next before that dates;

(ii) all wages or salary of any clerk or servant in respect of service rendered to the company within the two months next before the said date;

(iii) all wages of any labourer or workman whether payable for time or piecework, in respect of services rendered to the company within the two months next before the said date;

(iv) compensation payable under the Workmen’s Compensation Act or other applicable law in respect of the death or disablement of any officer or employee of the company;

(v) all sums due to any employee from a provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the employees maintained by the company; and

(vi) the expenses of any investigation held in pursuance of clause (iii) of sub-section(a) of section 271 of this law.

(b) The foregoing debts shall:

(i) rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportion; and

(ii) so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company, and be paid accordingly out of any property comprised in or subject to that charge.

(c) subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them.

(d) in the event of a landlord or other person distraining or having distrained on any goods or effects of the company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be the first charge on the goods or effects so distrained on, or the proceeds of the sale thereof, provided that, in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom the payment is made;

(e) the date hereinbefore in this section referred to is:

(i) in the case of a company ordered to be wound up compulsorily which has not previously commenced to be wound up voluntarily, the date of the winding up order; and

(ii) in any other case, the date of the commencement of the winding up.

Disclaimer of property

392.(a)where any part of the property of a company which is being wound up consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property, or exercised any act of ownership in relation thereto, may, with the leave of the court and subject to the provisions of this section, by writing signed by him, at any time within twelve months after the commencement of the winding up or such extended period as may be allowed by the court, disclaim the property.

Provided that, where any such property has not come to the knowledge of the liquidator within 28 days after the commencement of the winding up, the power under this section of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the court.

(b) the disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests, and liabilities of the company, and the property of the company, in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any person.

(c) the court, before or on granting permission to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting permission, and make such other order in the matter as the court thinks just.

(d) the liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether he will or will not disclaim, and the liquidator has not, within a period of 28 days after the receipt of the application or such further period as may be allowed by the court, given a notice to the applicant that he intends to apply to the court for leave to disclaim, and in the case of a contract, if the liquidator, after such an application as aforesaid, does not, within the said period or further period, disclaim the contract, the company shall be deemed to have adopted it.

(e) the court may, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the nonperformance of the contract, or otherwise as the court thinks just, and any damages payable under the order to any such person may be proved by him as a debt in the winding up.

(f) the court may, on an application by any person who either claims any interest in any disclaimed property or is under any liability not discharged by this law in respect of any disclaimed property, and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any persons entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the court thinks just, and on any such vesting order being made the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose.

Provided that, where the property disclaimed is of a leasehold nature, the court shall not make a vesting order in favour of any person claiming under the company whether as under-lessee or as mortgagee except upon the terms of making that person:

(i) subject to the same liabilities and obligatons as those to which the company is subject under the lease in respect of property at the commencement of the winding up; or

(ii) if the court thinks fit, subject only to the same liabilities and obligations as if the lease has been assigned to that person at that date and in either event if the case so required as if the lease has comprised only the property comprised in the vesting order, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and, if there is no person claiming under the company who is willing to accept an order upon such terms, the court shall have power to vest the estate and interest of the company in the property in any person liable, either personally or in a representative character, and either alone or jointly with the company, to perform the lessee’s covenants in the lease, freed and discharged from all estates, encumbrances and interests created therein by the company.

(g) any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding up.

Fraudulent preference

393.(a)any transfer, delivery of goods, payment, execution or other act relating to property which would, if made or done by or against an individual, be deemed in his insolvency a fraudulent preference, shall, if made or done by or against a company, be deemed, in the event of its being wound up, a fraudulent preference of its creditors, and be invalid accordingly.

(b) for the purposes of this section the presentation of a petition for winding up in the case of a winding up by or subject to the supervision of the court, and a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond with the act of insolvency in the case of an individual.

(c) any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

Avoidance of certain attachments and executions

394.(a)where any company is being wound up by or subject to the supervision of the court, any attachment, distress or execution put in force without permission of the court against the estate or effects, or any sale held without permission of the court of any of the properties, of the company after the commencement of the winding up shall be void.

(b) nothing in this section applies to proceedings by the government.

Effect of floating charge

395.Where a company is being wound up, a floating charge on the undertaking or property of the company created within three months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge is solvent, be invalid except to the amount of any cash paid to the company at the time of, or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of five per cent per annum.

General scheme of liquidation may be sanctioned

396.(a)The liquidator may, with the sanction of the court when the company is being wound up by the court or subject to the supervision of the court, and with the sanction of a special resolution of the company in the case of a voluntary winding up, do the following things or any of them:

(i) pay any classes of creditors in full;

(ii) make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim, present or future, whereby the company may be rendered liable;

(iii) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, subsisting or supposed to subsist, between the company and a contributory, or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim, and give a complete discharge in respect thereof.

(d) the exercise by the liquidator of the powers of this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of these powers.

Power of a court to assess damages against delinquent directors

397.(a)where, in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present director or liquidator, or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the court may, on the application of the liquidator or of any creditor or contributory, made within three years from the date of the first appointment of a liquidator in the winding up, or of the misapplication, retainer, misfeasance or breach of trust, as the case may be, whichever is longer, examine into conduct of the promoter, director, liquidator or officer, and compel such person to repay or restore the money or property or any part thereof respectively with interest at such rate as the court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the court thinks just.

(b) The provision of this section shall apply notwithstanding that the offence is one for which the offender may be criminally responsible.

Penalty for falsification of books

398.If any director, officer or contributory of any company being wound up destroys, mutilates, alters or falsities or fraudulently secrets any books, papers or securities, or makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any person, such director, officer or contributory shall be liable to imprisonment for a term which may extend to seven years, and shall also be liable to fine.

Prosecution of delinquent directors

399.(a)If it appears to the court in the course of a winding up by, or subject to the supervision of, the court that any past or present director or other officer, or any of the company has been guilty of any offence in relation to the company for which he is criminally liable, the court may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the registrar.

(b) if it appears to the liquidator in the course of a voluntary winding up that any past or present director or other officer, or any member, of the company has been guilty of any offence in relation to the company for which the director, officer or member is criminally liable, the liquidator shall forthwith report the matter to the registrar and shall furnish to the registrar such information and give to the registrar such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator relating to the matter in question, as the registrar may require.

(c) where any report is made under sub-section (b) to the registrar, the registrar may, if the registrar thinks fit, refer the matter to the Union Minister for further inquiry, and the Union Minister shall thereupon investigate the matter and may, if the Union Minister thinks it is expedient, apply to the court for an order conferring on any person designated by the Union Minister for the purpose with respect to the company concerned all such powers of investigating the affairs of the company as are provided by this law in the case of a winding up by the court.

(d) if on any report to the registrar under sub-section (b) it appears to the registrar that the case is not one in which proceedings ought to be taken by the registrar, the registrar shall inform the liquidator accordingly, and thereupon, subject to the previous sanction of the court, the liquidator may take proceedings against the offender.

(e) if it appears to the court in the course of a voluntary winding up that any past or present director or other officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the registrar, the court may, on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report and on a report being made accordingly the provisions of this section shall have effect as though the report has been made in pursuance of the provisions of sub-section (b).

(f) if, where any matter is reported or referred to the registrar under this section, the registrar shall give the accused person an opportunity of making a statement in writing to him and if the registrar considers that the case is one in which a prosecution ought to be instituted, the registrar shall seek the advice of the Union Attorney General’s Office and if the registrar institutes proceedings after considering such advice, it shall be the duty of the liquidator and of every officer and agent of the company past and present other than the defendant in the proceedings to give all assistance in connection with the prosecution which the person is reasonably able to give. For the purposes of this sub-section, the expression “agent” in relation to a company shall be deemed to include any banker or legal adviser of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.

(g) if any person fails or neglects to give assistance in manner required by sub-section (f), the court may, on the application of the registrar, direct that person to comply with the requirements of the said sub-section, where any such applications is made with respect to a liquidator, the court may, unless it appears that the failure or neglect to comply is due to the liquidator not having in the liquidator’s hands sufficient assets of the company to enable the liquidator so to do, direct that the costs of the application shall be borne by the liquidator personally.

Penalty for false evidence

400.If any person, upon examination upon oath authorized under this law, or in any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this law, or otherwise in or about any matter arising under this law, intentionally gives wrong evidence, such person shall be liable to imprisonment for a term which may extend to seven years, and also be liable to fine.

Penalty provisions

401.(a)If any person, being a past or present director or other officer of a company which at the time of the commission of the alleged offence is being wound up, whether by or under the supervision of the court or voluntarily, or is subsequently ordered to be wound up by the court or subsequently passes a resolution for voluntary winding up:

(i) does not to the best of their knowledge and belief fully and truly discover to the liquidator all the property, real and personal, of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company;

(ii) does not deliver up to the liquidator, as the liquidator directs, all such part of the real and personal property of the company as is in the person’s custody or under their control, and which the person is required by law to deliver up;

(iii) does not deliver up to the liquidator, or as the liquidator directs, all books and papers in the person’s custody or under their control belonging to the company and which the person is required by law to deliver up;

(iv) within twelve months next before the commencement of the winding up or at any time therefore conceals any part of the property of the company or conceals any debt due to or from the company;

(v) within twelve months next before the commencement of the winding up or at any time thereafter fraudulently removes any part of the property of the company; or

(vi) makes any material omission in any statement relating to the affairs of the company;

(vii) knowing or believing that a false debt has been proved by any person under the winding up, fails for the period of a month to inform the liquidator thereof;

(viii) after the commencement of the winding up prevents the production of any book or paper affecting or relating to the property or affairs of the company; or

(ix) within twelve next before the commencement of the winding up or at any time thereafter, conceals, destroys, mutilates or falsities, or is privy to the concealment, destruction, mutilation, or falsification of, any book or paper affecting or relating to the property or affairs of the company;

(x) within twelve months next before the commencement of the winding up or at any time thereafter, makes or is privy to the making of any false entry in any book or paper affecting or relating to the property or affairs of the company;

(xi) within twelve months next before the commencement of the winding up or at any time thereafter, fraudulently parts with, alters or makes any omission in, or is privy to the fraudulent parting with, altering or making any omission in, any document affecting or relating to the property or affairs of the company;

(xii) after the commencement of the winding up or at any meeting of the creditors of the company within twelve months next before the commencement of the winding up, attempts to account for any part of the property of the company by fictitious losses or expenses;

(xiii) has within twelve months next before the commencement of the winding up or at any time thereafter, by any false representation or other fraud, obtained any property for or on behalf of the company on credit which the company does not subsequently pay for;

(xiv) within twelve months next before the commencement of the winding up or at any time thereafter, under the false pretence that the company is carrying on its business, obtains on credit, for or on behalf of the company, any property which the company does not subsequently pay for;

(xv) within twelve months next before the commencement of the winding up or at any time thereafter, pawn, pledges or disposes of any property of the company which has been obtained on credit and has not been paid for, unless such pawning, pledging or disposing is in the ordinary way of the business of the company; or

(xvi) is guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding up;

such person shall be punishable, in the case of the offences mentioned respectively in clauses (xiii), (xiv) and (xv) of this subsection, with imprisonment for a term not exceeding five years, and, in the case of any other offence, with imprisonment for a term not exceeding two years:

Provided that, it shall be a good defence to a charge under any of clauses (ii), (iii), (iv), (vi), (xiv) and (xv) of this subsection if the accused proves that they have no intent to defraud, and to a charge under any of clauses (i), (viii), (ix) and (x) of this subsection if the accused proves that they have no intent to conceal the state of affairs of the company or to defeat the law.

(b) Where any person pawns, pledges or dispose of any property in circumstances which amount to an offence under offence under clause (xv) of subsection (a), every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in such circumstances as aforesaid shall be punishable with imprisonment for a term not exceeding three years.

Meetings to ascertain wishes of creditors or contributories

402.(a)Whereby this law the court is authorized in relation to winding up to have regard to the wishes of creditors or contributories, as proved to it by any sufficient evidence, the court may, if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held and conducted in such manner as the court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the court.

(b) In the case of creditors, regard shall be had to the value of each creditor’s debt.

(c) In the case of contributories regard shall be had to the number of votes conferred on each contributory by this law, the constitution or the terms of their shares.

Documents of a company to be accepted as evidence

403.Where any company is being wound up, all documents of the company and of the liquidators shall, as between the contributories of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.

Inspection of documents

404.After an order for a winding up by or subject to the supervision of the court, the court may make such order for inspection by creditors and contributories of the company of its documents as the court thinks just, and any documents in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.

Disposal of documents of a company

405.(a)When a company has been wound up and is about to be dissolved, the documents of the company and of the liquidators may be disposed of as follows:

(i) in the case of a winding up by or subject to the supervision of the court, in such way as the court directs; or

(ii) in the case of a voluntary winding up, in such way as the company by special resolution directs.

(b) After three years from the dissolution of the company, no responsibility shall rest on the company or the liquidators, or any person to whom the custody of the documents has been committed, by reason of the same not being forthcoming to any person claiming to be interested therein.

Power of a court to declare dissolution of a company void

406.Where a company has been dissolved, the court may at any time within two years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order, upon such terms as the court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company has not been dissolved.

407.It shall be the duty of the person on whose application an order under section 406 is made, within 21 days after the making of the order, to file with the registrar a certified copy of the order, and if that person fails so to do he shall be liable to a fine of 250,000 kyats.

Information relating to pending liquidation

408.(a)Where a company is being wound up, if the winding up is not concluded within one year after its commencement, the liquidator shall, once in each year and at intervals of not more than twelve months, until the winding up is concluded, file in court or with the registrar, as the case may be, a statement in the prescribed form with respect to the proceedings in and position of the liquidation.

(b) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, themselves or by their agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement, and to receive a copy thereof or extract therefrom but any person untruthfully so stating themselves to be a creditor or contributory shall be deemed to be guilty of an offence under section 182 of the Penal Code, and shall be punishable accordingly on the application of the liquidator.

(c) When the statement is filed in a court, a copy shall simultaneously be filed with the registrar and shall be kept by the registrar along with the other records of the company.

409. If a liquidator fails to comply with the requirements of section 408, they shall be liable to a fine of 250,000 kyats.

Payment of a liquidator into a bank

410.(a)Every liquidator of a company which is being wound up by the court shall, in such manner and at such time as may be prescribed, pay the money receive by the liquidator into a scheduled bank:

Provided that if the court is satisfied that for the purpose of carrying on the business of the company or of obtaining advances or for any other reason it is for the advantage of the creditors or contributories that the liquidator should have an account with any other bank, the court may authorize the liquidator to make his payment into or out of such other bank as the court may select and thereupon those payments shall be made in the prescribed manner.

(b) If any such liquidator at any time retains for more than 10 days a sum exceeding an amount of 250,000 kyats, or such other amount as the court may in any particular case authorize the liquidator to retain, then, unless the liquidator explains the retention to the satisfaction of the court, the liquidator shall pay interest on the amount so retained in excess at the rate of twenty per cent, per annum and shall be liable to disallowance of all or such part of the liquidator’s remuneration as the court may think just and to be removed from their office by the court, and shall be liable to pay any expenses occasioned by reason of their default.

(c) A liquidator of a company which is being wound up shall open a special banking account and pay all sums received by them as a liquidator into such account.

Court or person before whom affidavit may be sworn

411.(a)Any affidavit required to be sworn under the provisions or for the purposes of this part may be sworn in the Union, or elsewhere, before any court, judge or person lawfully authorized to take and receive affidavits, or in any place outside the Union before any consul, vice-consul or ambassador of the Union.

(b) All courts, judges, judges, justices, commissioners, and persons acting judicially in the Union shall take a judicial notice of the seal or stamp or signature as the case may be of any court, judge, person, consul or vice-consul or ambassador attatched, appended or subscribed to any such affidavit or to any other document to be used for the purposes of this part.

Power of the Supreme Court to make rules

412.(a)The Supreme Court may, from time to time, make rules consistent with this law and with the Code of Civil Procedure concerning the mode of proceedings to be had for winding up a company in such court and in the court subordinate thereto, and for voluntary winding up both members’ and creditors’, for the holding of meetings of creditors and members in connection with proceedings under section 287 of this law, and generally for all applications to be made to the court under the provisions of this law, and shall make rules providing for all matters relating to the winding up of the companies which, by this law, are to be prescribed.

(b) Without prejudice to the generality of the foregoing power, the Supreme Court may by such rules enable or require all or any of the powers and duties conferred and imposed on the court by this law, in respect of the matters following, to be exercised or performed by the official liquidator and subject to the control of the court, the powers and duties of the court in respect of:

(i) holding and conducting meetings to ascertain the wishes of creditors and contributories;

(ii) settling lists of contributories and rectifying the register of members where required, and collecting and applying the assets;

(iii) require delivery of property of property or documents to the liquidator;

(iv) making calls;

(v) fixing a time within which debts and claims shall be proved:

Provided that, the official liquidator shall not, without the special permission of the court, rectify the register of members, and shall not make any call without the special permission of the court.

Chapter XXVII
Matters relating to Winding Up of Unregistered Companies

Winding up of unregistered companies

413.(a)For the purposes of this Chapter XXVII, “an unregistered company” shall not include a company registered under this law, but shall also be included any corporation, partnership, association or body corporate that may have been established under any other applicable law.

(b) Subject to the provisions contained in this part and the provisions of any other applicable law, any unregistered company may be wound up under this law. All the provisions of this law with respect to winding up a company shall apply to any unregistered company, with the following exceptions and additions:

(i) the principal place of business of a company in the Union shall be presumed to be the registered office of the company;

(ii) no unregistered company shall be wound up under this law voluntarily or subject to supervision;

(iii) the circumstances in which an unregistered company may be wound up are as follows:

(aa) if any unregistered company is dissolved, or has ceased to carry on business or is carrying on business only for the purpose of liquidation its affairs; or

(bb) if an unregistered company is unable to pay its debts; or

(cc) if a court thinks that it is just and equitable for an unregistered company should be wound up; and

(iv) an unregistered company shall, for the purpose of this law, be presumed to be unable to pay its debts if any of the following matters occur:

(aa) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding an amount of two hundred and fifty thousands kyats then due, has served on the unregistered company, by delivering at its principal place of business, or by delivering to a director or an officer of the company, or by otherwise serving in such manner as the court may approve or direct, and the unregistered company has for 21 days after the service of the demand omit to pay the sum, or if omit to secure or compound interest for it to the satisfaction of the creditor;

(bb) if any suit or other legal proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the unregistered company or from him in his character of member, and a notice in writing of the institution of the suit or other legal proceeding having been served on the unregistered company by delivering the same at its principal place of business or by delivering it to a director, or an officer of the unregistered company, or by otherwise serving the same in such manner as the court may approve or direct, the unregistered company has not within 10 days after service of the notice paid, secured or compounded interest for the debt or demand, or procured the suit or other legal proceeding to be stayed, or indemnified the defended to his reasonable satisfaction against the suit or other legal proceeding, and against costs, damages and expenses to be incurred by him by reason of the same;

(cc) if execution or other process issued on a decree or an order obtained in any court in favour of a creditor against the unregistered company, or any member thereof as such, or any person authorized to be sued as nominal defendant on behalf of the unregistered company, is returned unsatisfied; and

(dd) if it is otherwise proved to the satisfaction of the court that the unregistered company is unable to pay its debts.

(c) Nothing in this part shall affect any provisions for any corporation, partnership, association or unregistered company being wound up, or being wound up as a company or as an unregistered company under any law repealed by this law or other applicable law. However, the references in any repealed provisions shall be presumed as the provision (if any) of this law.

Contributories in winding up unregistered companies

414.(a)In the event of an unregistered company being wound up, every person shall be presumed to be a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves, or to pay or contribute to the payment of the costs and expenses of winding up the unregistered company. All contributories shall be liable to contribute to the assets of the unregistered company all sums due from them in respect of any such liability as aforesaid.

(b) In the event of any contributory dying or being declared insolvent, the provisions of this law shall apply with respect to the legal representatives and heirs of deceased contributories, and to the assignees of insolvent contributories.

Power to stay or restrain proceedings

415.The provisions of this law with respect to staying and restraining suits and legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order shall, in the case of an unregistered company, where the application to stay or restrain is by a creditor, extend to suits and legal proceedings against any contributory of the unregistered company.

Proceeding stayed on winding up an order of the company

416.Where an order has been made for winding up an unregistered company, no suit or other legal proceedings shall be proceeded with or commenced against any contributory of the unregistered company in respect of any debt of the unregistered company, except by permission of the court, and subject to such terms as the court may impose.

Directives relating to property in certain cases

417.If an unregistered company has no power to sue or be sued by its name, if it appears for any reason, the court shall, by the winding up an order of the company or by any subsequent order, trust all or part of moveable properties or immoveable properties, including entitlements and rights, duties, act of actions with regard to moveable properties and immoveable properties in respect of the unregistered company or trustees on behalf of it to the official liquidator by his name. After it, such property or any part of it stipulated in an order as shall be trusted as specified. The official liquidator shall, after giving such indemnity (if any) as the court directs, bring or defend in his official name any suit or other legal proceeding relating to that property, or necessary to be brought or defended for the purposes of effectually winding up the unregistered company and recovering its property.

Provisions of this part cumulative

418.The provisions of this part with respect to an unregistered company shall be in addition to, and not in restriction of any provisions hereinbefore in this law contained with respect to winding up companies by the court. The court and official liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under this law. But an unregistered company shall not, except in the event of its being wound up, be presumed to be a company under this law. It shall be presumed that it is the company only for the matters specified in this part.

Part VI
Powers of the Registrar and Registration Office

Chapter XXVIII
The Registrar, Registration Office, Registration of Documents, Powers of Inspection and Fees

The registrar

419.(a)On the commencement of this law, the Directorate of Investment and Company Administration or any successor agency shall have the powers, and perform the functions and duties, of the registrar.

(b) The registrar shall exercise powers, functions and duties prescribed from time to time in or under this law and any other applicable law, and have the power to carry out the necessaries in connection with exercising or exercise of its powers, functions and duties.

(c) The Union Minister may direct the registrar in relation to the exercise or performance of its powers, functions and duties.

(d) Without limiting the provisions of subsection (a) to (c), the registrar has the power to issue guidance as to the implementation of the law, of either a general or specific nature.

(e) For so long as the Directorate of Investment and Company Administration or any successor agency is assigned the role of registrar, the person holding the Office of Director General of the Directorate for Investment and Company Administration or equivalent office howsoever named may exercise the powers, and perform the duties and functions of the registrar. In doing so, he may delegate his powers, function and duties to any other officer or employee of Directorate of Investments and Company Administrations or any successor agency by the supervision of the Director General.

(f) The provision in this section does not limit any other way in which the registrar's powers may be delegated, under an applicable law.

Registration offices

420.(a)For the purpose of the registration of companies under this law, there shall be offices at such places as the Union Minister thinks fit, and no company shall be registered except at such an office.

(b) The Union Minister may direct a seal or seals to be prepared for the registration of companies or the authentication of required documents connected with the registration of companies.

Maintenance and inspection of registers and records

421.(a)The registrar shall maintain all registers required to be maintained by himself according to this law and all records submitted to him according to this law.

(b) The registrar shall perform the duties prescribed in subsection (a) in the manner it thinks fit, including by establishing systems and processes for the electronic authentication, submission, filing and maintenance of records and registers and for communicating with all bodies which may be registered according to this law. This subsection applies without limitation to the power to supervise such matters according to this law or any other applicable law.

(c) Without prejudice to subsection (g), neither registration nor refusal of registration of a document by the registrar shall affect occur the validity or invalidity of the document or the correctness or otherwise of the information contained in it.

(d) Without affecting the other relevant powers, the Union Minister may issue regulations, rules, orders or notifications necessary to be effective to the matters in respect of subsection (a) and (b). He may, particularly, perform regarding the development of systems for the electronic registration of documents and electronic communications between the registrars and bodies registered according to this law. In this matter, prescriptions requiring the re-registration of any bodies registered according to this law or for fees payable in connection with the operation of an electronic register may be prescribed. That fees may be different to the fees prescribed for registration actions and registration by non-electronic means.

(e) Any person may inspect the registers and records maintained by the registrar on payment of such fees as may be prescribed by the Union Minister.

(f) Any person may require a certificate or copy of the incorporation of a company, or extract of any other document or any part of other document to be kept with the records of the company submitted to the registrar according to this law, to be certified by the registrar on payment for the certificate, certified copy or extract, of such fees as prescribed by the Union Minister.

(g) Except a manifest error and subject to the rectification procedures in sections 422 and 423, a document certified and issued by the registrar according to subsection (f) shall, in any proceedings, be admissible as of equal validity with the original document.

Rectification on errors of a register

422.(a)The registrar may:

(i) on the application of any person, rectify a register maintained by himself according to this law if the registrar is satisfied that any information has been wrongly entered in or omitted from the register; or

(ii) if the registrar knows that any particular has been incorrectly entered into the register due to a clerical error by himself, correct those particulars; or

(iii) on the application of any person, if it appears to the registrar, after consultation with a company, that the particulars have been incorrectly entered into a register maintained by a company due to a clerical error by the company, and the correction of such error would not be likely to affect any person, direct the company to correct those particulars on the register maintained by it.

(b) Before the registrar rectifies a register according to subsection (a) clauses (i), the registrar shall:

(i) give a written notice to the company that an application has been made to rectify the register in relation to that company by prescribing details of that application;

(ii) where the application has been made in relation to the registration of mortgages or charges, give a written notice to the mortgagee or charges that an application has been made to rectify the register in relation to them by prescribing details of that application; and

(iii) issue the public notice which includes the following facts:

(aa) the name of the applicant;

(bb) the name of the company;

(cc) the reasons for the details and rectifications to be made to the register; and

(dd) the date by which a written objection to the proposed rectification shall be submitted to the registrar and that a date shall be any date not less than 28 days after the date of the notice.

(c) Any person may deliver, a written objection with the forwarding letter of the registrar, to the registrar, not later than the date specified in accordance with subsection (b) (iii) (dd) and the registrar shall give a copy of the objection to the applicant for the rectification of the registrar.

(d) The registrar shall not rectify the register according to subsection (a) (i) if he receives a written objection with the forwarding letter of rectification by the date specified and occur that the objection has not been withdrawn.

Powers of the court

423.(a)If the registrar receives a written objection to a proposed rectification under section 422 (c), the applicant may, for the rectification of the register, apply to the court to make an order for such rectification.

(b) If an application is made for an order according to subsection (a):

(i) the application shall, as soon as practicable, notify the application to the registrar; and

(ii) the registrar may appear and be heard in relation to the application before the court.

(c) On an application for an order under subsection (a), the court may, if it is satisfied that any information has been wrongly entered into or omitted from the register, make an order that such register be rectified.

Application form for documents to be submitted to the registrar

424.(a)Any document requires to be submitted to the registrar in a prescribed application form shall:

(i) if an application form for the document is prescribed by any regulations, rules or notifications made according to this law:

(aa) be as the prescribed application form;

(bb) include the information, statements, explanations or other matters required in the application form; and

(cc) be accompanied by the other materials required in the application form; or

(ii) if an application form for the document is not prescribed by any regulations, rules or notifications but the registrar has approved an application form the document:

(aa) be as the approved application form;

(bb) include the information, statements, explanations or other matters required in the application form; and

(cc) be accompanied by any other materials required in the application form.

(b) Any document submitted according to this law shall apply to subsection (a) and unless there is anything repugnant to it, the document and any other materials submitted together with the relevant application form also include in any document thereof.

(i) a document submitted to the registrar according to this law requires to submit by the prescribed application form; and

(ii) any provision of this law stipulates or makes regulations, rules or notifications to specify information, statements, explanations or other matters that shall be included in the document or other materials that shall accompany the document;

that any other provision shall not exclude or limit the operations according to subsection (a) in relation to the prescribed application form and so the prescribed application form may also include information to be included in the form or to be accompanied the form.

Registration of documents

425.(a)On receipt of a document for inclusion in a register maintained according to this law, the registrar shall:

(i) in accordance with subsection (b), register such document in the applicable register ; and

(ii) in the case of a document that is not an annual return, give a written notice of the registration to the person from whom the document is received.

(b) If a document received by the registrar for registration according to this law:

(i) is not in the prescribed form, if any; or

(ii) does not comply with this law or regulations, rules or notifications made according to this law; or

(iii) is not printed or typewritten; or

(iv) where the whole or part of the register is kept electronically, is not in a form that enables particulars to be entered directly by electronic means; or

(v) has not been properly completed; or

(vi) contains material that is not clearly legible that registrar may refuse to register the document, and in that event, shall request either:

(aa) that the document be appropriately amended or completed and submitted for registration again; or

(bb) that a fresh document be submitted in its place.

Registrar's powers of inspection

426.(a)Without limiting powers available to any union minister, agency or authority or like person or body under an applicable law, the registrar may:

(i) for the following purpose of :

(aa) ascertaining whether or not a company or any director of a company is complying with this law; or

(bb) ascertaining whether or not the registrar should exercise any of his rights or powers confer according to this law; or

(cc) detecting offences break this law; and

(ii) if, in the registrar's opinion, it is in the public interest to do so, do any of the following:

(aa) require a person to submit relevant documents which are in his possession or supervision for inspection;

(bb) inspect and take copies of relevant documents;

(cc) take possession of relevant documents and remove them from the place where they are kept, and retain them for a reasonable time, for the purpose of taking copies;

(dd) retain relevant document for a period which is, in all the circumstances reasonable, if there are reasonable grounds for believing that they are evidence of the commission of an offence.

(b) The registrar shall consult with the Central Bank of Myanmar before exercising any of the powers conferred by subsection (a) if the purpose of exercising the power relates to a company that is a specified bank or other bank or financial institution which is under the supervision of the Central Bank of Myanmar according to an applicable law.

(c) A person shall not hinder or obstruct the registrar or a person authorized by the registrar while exercising any power conferred by subsection (a).

(d) If the registrar considers that a prosecution ought to be instituted, the registrar shall, after considering the advice of the Union Attorney General's Office after taking any action according to subsection (a), institute proceeding. This subsection shall not limit the other powers conferred to the registrar according to this law in relation to such matter.

427. Any person who knowing and willfully:

(a) fails to comply with any specification according to section 426 (a) (ii) (aa); or

(b) acts in contravention of section 426 (c) shall pay a fine of 10,000,000 kyats for each offence.

Appeal on registrar's decisions

428.(a)A person who is aggrieved by a decision of the registrar according to this law may appeal the decision to the Union Minister within 28 days after the date of notification of the decision.

(b) The Union Minister may, on an appeal according to subsection (a), confirm, amend or cancel the decision of the registrar.

Fees

429.(a)The other fees prescribed by the Union Minister shall be paid to the registrar in relation to the matters which fees are payable to the registrar according to this law.

(b) All fees paid to the registrar according to this law shall be accounted for to the budget of the Union.

Submission of audits and documents to the registrar

430.(a)If a company fails to amend the default within 21 days from the date of a notice after defaulting to comply with any provision of this law in relation to the submission of audits, or accounts, or other document, or notifying any other matter to the registrar, the court may, on an application made to the court by any member or creditor of the company or by the registrar, make an order directing to the company and the offices thereof to amend the default within the period specified by the court.

(b) The costs in relation to the application to be incurred by the responsible company or the officers thereof for default may be prescribed in any such order.

(c) Nothing in this section shall affect the operation of any provision of this law or any other provision imposed the penalties on a company or its officers in relation to any default as aforesaid, or limit any action of the registrar in relation to any company or other person from the company which is failure to comply with this law.

(d) If a company makes default in filing an annual report required under section 97, or where the registrar reasonably believes that any document submitted to it is fraudulent or contains a false declaration or information which could cause material damage to the interests of the company, its creditors or the public, the registrar may give a notice to the company that it intends to suspend the company's registration, and such suspension will take effect within 28 days unless the company makes good the default, including by the payment of any outstanding fees and prescribed penalties.

(e) The registrar shall, on the application of a company in relation to a suspension made by subsection (d), carry out as follows:

(i) revocation of the suspension and restoration of the company to the registrar's audit for the failure to file an annual return if the company accompanies the application required to file with all outstanding annual returns and associated filing fees, and prescribed late filing fee or penalty; or

(ii) revocation of the suspension and restoration of the company to the registrar's audit for submitting a document which is fraudulent or contains a wrong declaration or information which could cause material damage to the interests of the company, if the company accompanies the applications with the documents which have been corrected and contain accurate information to the reasonable satisfaction of the registrar, together with associated filing fees, and prescribed late fee or penalty.

(f) After six months from the date of the suspension of registration under subsection (d), the registrar may strike the name of that company off the register, and shall publish notice thereof in the gazette. The company shall be dissolved after that notice has been published in the gazette. Provided that, the liability (if any) of every director and member of the company shall continue and may be enforced as if the company had not been dissolved.

(g) If a company or members or any creditor thereof feels aggrieved by the company having been struck off the register, the court, on the application of the company or member or creditor, may, if satisfied that the company operated the business at the time of the striking off or there is other appropriate reason to be restored the company in the register, order to restore the name of the company in the register, and thereupon the company shall be deemed to have continued in existence as if its name had not been struck off; and the court may, by the order, give the directions and make the provisions as it thinks fit for the company and all other persons in charge in the same position, as if the name of the company had not been struck off.

(h) Subsection (d) applies without limitation to any other provisions of this law, including the registrar's powers to inspect documents, make investigations, issue a notice or initiate proceedings in relation to the offence of cancellation the winding up company from the audit or the powers for giving orders against a company or any relevant person as provided by the law.

Registrar may strike the defunct company off the register

431.(a)Where the registrar believes that a company is not carrying on business, the registrar shall send to the company by post, or by electronic or other means, a notice inquiring whether the company is carrying on business.

(b) If the registrar does not receive any answer within 28 days after sending the notice, he shall, within 60 days after the expiration of such period, send to the company by any means contained in subsection (a) referred to the first notice stating that no answer thereto has been received and that, if an answer is not received to the second notice within 28 days from the date thereof, a notice will be published in the gazette with a view to striking the name of the company off the register.

(c) If the registrar either receives an answer from the company that it is not carrying on business, or does not, within 28 days after sending the second notice, receive the answer, he may, unless there is any contrary, at the expiration of three months from the date of that notice, publish in the gazette, and send to the company by any means referred to in subsection (a) a notice that, the name of the company be struck off the register and the company will be dissolved.

(d) If, in any case where a company is being wound up, the registrar believes either that no liquidator is acting or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of six consecutive months after notice by the registrar demanding the returns has been sent by any means referred to in subsection (a), to the company, or to the liquidator at his last known place of business, the registrar may publish in the gazette and send to the company a like notice as is provided in subsection (c).

(e) The registrar may, unless any contrary is shown by the company after the expiration of the time mentioned in the notice, strike its name off the register, and shall publish this matter thereof in the gazette, and after publishing this notice in the gazette, the company shall be dissolved. Provided that, the liability (if any) of the director and all member of the company shall continue and may be enforced as if the company has not been dissolved.

(f) If a company or members or any creditor thereof feels aggrieved by the company having been struck off the register, the court, on the application of the company or member or creditor, may, if it is found that the company operated the business at the time of the striking off or there is other appropriate reasons to be restored the company in the register, order to restore the name of the company in the register. And thereupon the company shall be deemed to have continued in existence as if its name had not been struck off. The court may, by the order, give the directions and make the provisions as it thinks fit for the company and all other persons in charge in the same position, as if the name of the company had not been struck off.

(g) A notice under this section may be sent to the registered office, or by electronic means as notified by the company to the registrar, or advertise of in a daily newspaper circulating in the Union, or send to the directors, or the officers of the company. If the names and addresses of directors or officers of the company are not known to the registrar, such notice may be sent to each of the persons who are named as members of the company in the application for incorporation of the company, as the addresses mentioned in the basic principle of the constitution.

(h) The provisions of this section shall apply without affecting the registrar's powers under section 430 (d) or the other relevant powers conferred by this law.

Part VII
Proceedings and Offences

Chapter XXIX
Jurisdiction of the Courts and Legal Proceedings

Jurisdiction of the courts

432.The court having jurisdiction under this law shall be the High Courts of the Regions or States of the Union. However, the Supreme Court of the Union may confer jurisdiction to any District Court.

Proceedings

Non-cognizable offences

433.Notwithstanding anything in the Criminal Procedure Code, every offences against this law shall, for the purposes of the said Code, be presumed to be non-cognizable offences.

Power to instruct limited company to give security for the costs

434.Where a limited company is plaintiff or petitioner in any suit or other legal proceeding, the court may, if it appears that there is reason to believe that the company will be unable to pay the costs of the defendant when he succeeded in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.

Power of a court to grant relief in certain cases

435.(a) If, in any proceeding for negligence, default, contravention including in respect of an obligation under this law, breach of duty or breach of trust against a person to whom this section applies, it appears to the court hearing the case that the person is or may be liable in respect of the negligence, default, breach of duty or breach of trust, but that he has acted honestly and reasonable, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused for the negligence, default, breach of duty or breach of trust, the court may relieve him, either wholly or partly from his liability on such terms as the court may think fit.

(b) Where any person to whom this section applies has reason to apprehend that any claim will or might be made against him in respect of any negligence, omission, contravention including in respect of an obligation under this law, breach of duty or breach of trust, he may apply to the court for relief, and the court, on any such application, shall have the same power to relieve him as under this section which proceedings against that person for negligence, omission, breach of duty or breach of trust has been brought.

(i) directors of a company

(ii) secretaries of a company (if any);

(iii) any other officers of a company; and

(iv) persons employed by a company as auditors, whether they are or not officers of the company.

How to make the proceeding

436.The following persons may, in any proceedings for an offence under this law, make any information, charges, complaints or applications in accordance with this law:

(a) the registrar whether on the registrar’s own motion or in response to any application or request;

(b) any person, referred to in section 435, who has reason to apprehend that action may be taken against them for a breach of this law and may be entitled to apply for relief under this law; or

Registrar’s power to intervene in proceedings

437.(a)The registrar may intervene in any proceeding relating to a matter arising under this law.

(b) Where the registrar intervenes in a proceeding referred to in sub-section (a), the registrar is taken to be a party to the proceeding and, subject to this law, has all the rights, duties and liabilities of a party.

Time for instituting criminal proceedings

438.Notwithstanding anything in any other applicable law, proceedings for an offence against this law may be instituted within the period of six years commencing from the commencing date of the act or omission alleged to constitute the offence.

Notice relating to penalty

439.(a)Where the registrar has reason to believe that a person has committed an offence under this law where the penalty or maximum penalty is expressly prescribed in this section called a prescribed offence, the registrar may, subject to subsection (b), give a notice to that person in the prescribed form;

(i) alleging that the person has committed the prescribed offence and stating the prescribed particulars in relation to the prescribed offence:

(ii) stating the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty in respect to the prescribed offence; and

(iii) stating the following:

(aa) in the case of a prescribed offence constituted by a failure to do and act or thing:

(i) that the obligation to do the act or thing constitutes despite the service of the notice or the payment of the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty;

(ii) that if, within the period specific in the notice being a period of at least 21 days, the person pays the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice and does the act or thing, no further action will be taken against the person in relation to the prescribed offence; and

(iii) that if, at the end of the period specified in the notice, the person has not paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice or has not done the act or thing, proceedings may be instituted against the person; or

(bb) in the case of a prescribed offence, not being an offence constituted by a failure to do an act or thing:

(i) that if, within the period specified in the notice being a period of at least 21 days, the person pays the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice, no further action will be taken against the person in relation to the prescribed offence; and

(ii) that if, at the end of the period specified in the notice, the person has not paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice, proceedings may be instituted against the person.

(b) Sub-section (a) shall not empower the registrar to carry out the following:

(i) giving more than a notice to a person under that subsection (a) in relation to an alleged commission by that person of a particular prescribed offence; or

(ii) giving a notice to the person under that subsection (a) in relation to a prescribed offence unless proceedings could be instituted against that person for that offence in accordance with section 438.

(d) Where a notice under subsection (a) is given to a person in relation to a prescribed offence constituted by a failure to do a particular act or thing:

(i) if, within the period specified in the notice, the person pays the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice, and does the act or thing, no proceedings may be instituted against the person in respect of the prescribed offence;

(ii) if, at the end of the period specified in the notice, the person has paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice but has not done the act or thing, no proceedings may be instituted against the person in respect of the prescribed offence, however, the obligation to do that act or thing continues, and section 449 applies in relation to the continued failure to do that act or thing as if, on the day on which the person so paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty, the person has been convicted of an offence constituted by a failure to do that act or thing.

(iii) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice but has done the act or thing, proceedings may be instituted against the person in respect of the prescribed offence, or

(iv) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice and has not done the act or thing, the obligation to do that act or thing continues, and proceedings may be instituted against the person in respect of the prescribed offence.

(e) Where a notice under subsection (a) is given to a person in relation to a prescribed offence, not being an offence constituted by a failure to do a particular act or thing:

(i) if, within the period specified in the notice, the person pays the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice, no proceedings may be instituted against the person in respect of the prescribed offence; or

(ii) if, at the end of the period specified in the notice, the person has not paid the prescribed penalty or penalty determined by the registrar up to the maximum prescribed penalty to the authority specified in the notice, proceedings may be instituted against the person in respect of the prescribed offence.

(f) The payment of an amount by a person pursuant to a notice served on the person under this section in relation to a prescribed offence is not taken for any purpose to be an admission by that person of any liability in connection with the alleged commission of the prescribed offence.

(g) Except as provided by subsection (d) (i) and (ii) and subsection (e) (i), this section does not affect the operation of any provision of this law or any other applicable law in relation to the institution of proceedings in respect of offences that are prescribed offences for the purposes of this section.

Certain persons to assist in prosecutions

440.(a)Where a prosecution in respect of an offence against this law has been instituted, or the registrar is of the opinion that a prosecution in respect of an offence against this law ought to be instituted, against a person referred to as the defendant in this section, the registrar may assist in the prosecution of following persons:

(i) if the defendant is a person, require any person who is a partner, employee or agent of the defendant; or

(ii) if the defendant is a body, require any person who is an officer, employee or agent of the defendant;

and the person who is so required shall give all assistance in connection with the prosecution that person is reasonably able to give.

(b) A person who, in the opinion of the registrar, is as a defendant in the proceeding, a lawyer of any person, the registrar shall not make requirement that is expressed in subsection (a).

(c) If a person to whom sub-section (a) (i) or (ii) relates fails to give assistance as required by subsection (a), the person contravenes this section and, without affecting any penalty to which the person may be liable for the contravention, the court may, on the application of the registrar, order the person to comply with requirement within such time, and in such manner, as the court orders.

(d) In this section, agent, in relation to the defendant, includes a banker of the defendant and a person engaged as an auditor by the defendant, whether that person is an employee or an officer of the defendant or not.

Declarations, Orders and Prohibitions

Declarations of contravention in respect of duties

441.(a)The registrar may apply for a declaration of contravention, penalty order or a compensation order.

(b) In accordance with the provisions of this section, if the court is satisfied on the basis of probabilities that a person has contravened a provision of this law, it may, as an alternative to any penalty which may be imposed under section 190:

(i) make a declaration of contravention under this section; and

(ii) make a penalty order under section 442; or

(iii) make a compensation order under section 443.

(c) If a declaration of contravention is made under subsection (b), the company may apply for a compensation order if the registrar has not done so under subsection (a).

(d) Proceedings for a declaration of contravention, penalty order or compensation may be started no later than six years after the contravention.

(e) The court shall apply the rules of evidence and procedure for civil matters when hearing proceedings for a declaration of contravention, penalty order or compensation order, as provided by, and subject to, the applicable law.

(f) The court shall not make for a declaration of contravention, penalty order or a compensation order against a person of the person has been convicted of an offence constituted by the conduct that is substantially the same as the conduct constituting the contravention.

Penalty orders

442.(a)A court may order a person to pay to the budget of the Union a pecuniary penalty of 10,000,000 kyats if:

(i) a declaration of contravention by the person has been made under section 441; and

(ii) the contravention:

(aa) materially prejudices the interests of the company or its members; or

(bb) materially prejudices the company’s ability to pay its creditors.

(b) The penalty made by the court is a civil payable to the registrar on the Union’s behalf. The registrar may enforce the order as if it were an order made in civil proceedings against the person to recover a debt due by the person.

Compensation orders

443.(a)If a penalty order has not been applied for or made under section 442, the court may order a person to compensate a company for damage suffered by the company if:

(i) a declaration of contravention by the person has been made under section 441; and

(ii) the damage resulted from the contravention.

(b) The order shall specify the amount of the compensation.

(c) In determining the damage suffered by the company for the purposes of making a compensation order, the court may have regard to profits made by any person resulting from the contravention or the offence.

(d) A compensation order may be enforced as if it were a judgement of the court.

Prohibition orders

444.(a)If the following situations occur:

(i) an investigation is being carried out under this law in relation to an act or omission by a person that constitute or may constitute a contravention of this law;

(ii) a prosecution is made against a person for a contravention of this law; or

(iii) a civil proceeding has been begun against a person under this law, and the court considers it is necessary or desirable to do so for the purpose of protecting the interests of a person who called an aggrieved person in this section to whom the person referred to in clauses (i), (ii) and (iii), as the case may be, a person who called the relevant person in this section, is liable, or may be or become liable, to pay money, whether in respect of a debt, by way of damages or compensation or otherwise, or to account for property, the court may, on application by the registrar or by an aggrieved person, make one or more of the orders set out in subsection (b) below.

(b) The court may make one or more of the following orders in relation to subsection (a):

(i) an order prohibiting a person who is indebted to the relevant person or to an associate of the relevant person form making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed;

(ii) an order prohibiting a person holding money or other property, on behalf of the relevant person, or on behalf of an associate of the relevant persons, from paying all or any of the money, or transferring, or otherwise parting with possession of, the other property, to, or to another person at the direction or request of, the person on whose behalf the money or other property, is or are held;

(iii) an order prohibiting the taking or sending money of the relevant person or of an associate of the relevant person to out of the Union by a person;

(iv) an order prohibiting the taking, sending or transferring of property of the relevant person, or of an associate of the relevant person from a place in the Union to a place outside the Union by a person;

(v) an order appointing:

(aa) if the relevant person is a natural person, a receiver or trustee, having such powers as the court orders, of the property or of part of the property of that person; or

(bb) if the relevant person is a body corporate, a receiver or an official liquidator, having such powers as the court orders, of the property or of part of the property of that person;

(vi) if the relevant person is a natural person, an order requiring that person to deliver up to the court his or her passport and such other documents as the court thinks fit; or

(vii) if the relevant person is a natural person, an order prohibiting that person from leaving the Union without the approval of the court.

(c) An order under subsection (b) prohibiting conduct may prohibit the conduct either absolutely or subject to conditions.

(d) Where an application is made to the court for an order under subsection (a), the court may, if in the opinion of the court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application.

(e) On an application under subsection (a), the court shall not require the applicant or any other person, as a condition of granting an interim order under subsection (d), to give an undertaking as to damages.

(f) Where the court makes an order under this section on a person’s application, the court may, on application by that person or by any person affected by the order, make a further order discharging or varying the first mentioned order.

(g) An order made under subsection (a) or (c) may be expressed to operate for a specified period or until the order is discharged by a further order under this section.

Powers to grant injunctions

445.(a)Where a person has committed, is committing or is proposing to commit in conduct that constituted, constitutes or would constitute, the court may, on the application of the registrar, or of a person whose interests have been, are or would be affected by the conduct, grant a prohibition of such kind and on such terms as the court thinks appropriate, restraining the first mentioned person from committing in the conduct and, if in the opinion of the court it is desirable to do so, requiring that person to do any act or thing:

(i) contravention of this law;

(ii) attempting to contravene this law;

(iii) aiding, abetting, advising or procuring a person to contravene this law;

(iv) inducing or attempting to induce by threat, promise or otherwise, a person to contravene this law;

(v) being in any reason, party to or concerned in, directly or indirectly, the contravention by a person of this law; or

(vi) conspiring with others to contravene this law.

(b) Where a person has refused or failed, is refusing or failing, or is proposing to refuse or fail, to do an act or thing that the person is required by this law to do, the court may:

(i) on the application of the registrar; or

(ii) any person whose interests have been, are or would be affected by the refusal or failure to do that act or thing with the appropriate terms, grant an injunction to do that act or thing by that person.

(c) Where an application for an injunction under subsection (a) or (b) has been made, the court may, if the court determines it to be appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the court is satisfied that subsection applies.

(d) The court may discharge or vary an injunction granted under subsection (a) or (b).

(e) Where the registrar applies to the court for the grant of an injunction under this section, the court shall not require the applicant or any other person, as a condition of granting an interim injunction, to give an undertaking as to damages.

(f) In proceedings under this section against a person the court may make an order under section 444 in respect of the person.

(g) Where the court has power under this section to grant an injunction restraining a person from doing in particular conduct, or requiring a person to do a particular act or thing the court may, either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other persons.

No limitation on any other powers of the court

446. Nothing in this chapter shall affect the powers that the court has apart from this chapter.

Use of Books in Proceedings and Category of Books

Admissibility of books in evidence

447.(a)An original book kept by a company according to any provisions of this law is admissible in evidence as any proceeding and is prima facie evidence if the matters stated or recorded in the book.

(b) A document purporting to be an original book kept by a company is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (a).

Category of books and evidentiary value

448.(a)The books that are required by this law to be kept or prepared shall be kept or prepared as follow:

(i) by making entries in a bound or loose-leaf book; or

(ii) by recording or storing the matters concerned by means of a mechanical, electronic or other device; or

(iii) by any other manner approved by the registrar.

(b) Subsection (a) does not authorize a book to be kept or prepared by a mechanical, electronic or other device unless:

(i) the matters recorded or stored will be capable, at any time, of being reproduced in a written form; or

(ii) a reproduction of those matters is kept in a written form approved by the registrar.

(c) A company shall take all reasonable precaution, including such precautions, if any, as are prescribed, for guarding against damages to, destruction of or falsification of or in, and for discovery of falsification of or in, any book or part of a book required by this law to be kept or prepared by the company.

(d) Where a company records or stores any matters by means of a mechanical, electronic or other device, any duty imposed by this law to make a book containing those matters available for inspection or to provide copies of the whole or part of a book containing those matters is to be construed as a duty to make the matters available for inspection in written form or to provide a document containing a clear reproduction in writing of the whole or part of them, as the case may be.

(e) The registrar may issue directives to provide for how up to date the information contained in an instrument prepared for the purpose of subsection (d) shall be.

(f) if:

(i) because of the provisions this law, a book that this law requires to be kept or prepared is prima facie evidence of a matter; and

(ii) the book, or a part of the book, is kept or prepared by recording or storing matters including that matter by means of a mechanical, electronic or other device, a written document reproduction of that matter as so recorded or stored is prima facie evidence of that matter.

(g) A written reproduction of that matter as so recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is established, taken to be a reproduction of that matter.

Delivery and Authentication of Documents

Delivery of documents to a company

449.Without limiting any other way in which documents may be delivered, any document may be delivered to a company by the following ways:

(a) by sending it by himself or through the post to the registered office of the company;

(b) by delivery to a person named as a director of the company on the register maintained by the registrar under section 421;

(d) by serving it in accordance with any directions as to service given by the court in any proceedings; or

(e) by delivering in accordance with an agreement made with the company.

Delivery of documents to a registrar

450.A document may be delivered on the registrar by sending it to the registrar by post, or delivering it to the registrar, or by leaving it at the registrar’s office.

Authentication of documents

451. Without limiting any other way in which a document or proceeding may be authenticated by a company, or the assumptions that a person dealing with a company is entitled to make under section 31, a document or proceeding requiring authentication by a company may be signed by a director, secretary or other authorized officer of the company, and need not to be under its common seal.

Chapter XXX
Offences and Defenses

Specific Offences

Penalty for false statement

452.Whoever in any return, report, certificate, financial statement or other document, required by or for the purposes of any of the provisions of this law, wilfully makes, or authorizes the making of, a statement false or misleading in any material particular, knowing it to be false, or who omits, or authorizes the omission, from such document any matter knowing that the omission makes the document false or misleading, shall be liable to a penalty to be determined under the existing law.

Penalty for wrongful withholding or destruction of property

453.Any director or other officer or employee of a company who wrongfully obtains possession of any property of a company, or having any such property in his possession wrongfully withholds it or willfully applies it to purposes other than those expressed or directed in the articles and authorized by this law, shall, on the complaint of the company or any creditor or contributory thereof, be punishable with a penalty to be determined under the existing law, and may be ordered by the court trying the offence to deliver up or refund, within a time to be fixed by the court, any such property improperly obtained withheld or willfully misapplied.

Penalty for misapplication of securities by employers

454.(a)All moneys or securities deposited in a company by its employees in pursuance of their contracts of service with the company shall be kept or deposited by the company in a special account to be opened by the company for the purpose in scheduled bank, and no portion thereof shall be utilized by the company except for the purposes agreed to in the contract of service.

(b) Where a provident fund has been constituted by a company for its employees or any class of its employees, all, moneys contributed to such fund whether by the company or by the employees or accruing by way of interest or otherwise to such fund, shall be either deposited in a bank account with a financial institution duly licensed by the Central Bank of Myanmar or invested in securities mentioned or referred to in clauses (a) to (e) of section 20 of the Trust Act and in accordance with all applicable laws.

(c) Notwithstanding anything to the contrary in the rules of any fund to which subsection (b) applies or in any contract between a company and its employees, no employee shall be entitled to receive, in respect of such portion of the amount to his credit in such fund as is invested in accordance with the provisions of subsection (b), interest at a rate exceeding the rate of interest yielded by such investment.

(d) An employee shall be entitled, on request made in this behalf to the company, to see the bank's receipt for any money or security such as is referred to in subsection (a) and subsection (b).

(e) Any director or other officer of the company who knowing contravenes or permits or authorizes the contravention of the provisions of this section shall be liable to a penalty to be determined under the existing law.

Penalty for improper use of word "Limited"

455.If any person or persons trade or carry on business under any name or title of which “Limited” is the last word, that person or those person shall, unless duly incorporated company or organization with limited liability, be liable to a penalty to be determined under the existing law.

Offence for falsification of books

456.(a)The officer, former officer, employee, former employee, member or former member of a company who engages in conduct that result in the concealment, destruction, mutilation or falsification of any securities of or belonging to the company or any book affecting or relating to affairs of the company is guilty of an offence under this law.

(b) Where matter that is used or intended to be used in connection with the keeping of any book affecting or relating to affairs of a company is recorded or stored in an illegible form by means of mechanical device, an electronic device or any other device, a person who:

(i) records or stores by means of that devices matters that the person knows to be false or misleading in a material particular;

(ii) engages in conduct that results in the destruction, removal or falsification of matter that is recorded or stored by means of that device, or has been prepared for the purpose of being recorded or stored, or for use in compiling or recovering other matter to be recorded or stored by means of that device; or

(iii) having a duty to record or store matter by means of that device, fails to record or store the matter by means of that device:

(aa) with intent to falsify any entry and made or intended to be compiled, wholly or in part, from matter so recorded or stored; or

(bb) knowing that the failure so to record or store the matter will render false or misleading in a material particular other matter so recorded or stored; contravenes this subsection.

(c) It is a defense to a charge arising under subsection (a) or subsection (b) if the defendant proves that he or she it acted honestly and that in all the circumstances the act or omission constituting the offence should be excused.

(d) The provisions contained in this section shall operate without limitation to the provision of section 452.

General Offences

General penalty provisions

457.(a)A person, including a company, who:

(i) does an act or thing that the person is forbidden to do by or under any provision of this law;

(ii) does not do an act or thing that the person is required or directed to do by or under any provision of this law; or

(iii) otherwise contravenes any provision of this law; is guilty of an offence by virtue of this subsection, unless that provision or another provisions of this law provides that the person is not guilty of an offence.

(b) A person who is guilty of an offence against this law, whether by virtue of subsection (a) or otherwise, is punishable by a penalty not exceeding the penalty applicable to the offence.

(c) Where a provision of this law other than this section provides that the penalty applicable to a contravention of a particular provision of this law is a specified penalty, fine or otherwise, the penalty applicable to an offence constituted by a contravention of the particular provision is the specified penalty.

Offences committed partly in and partly out of the jurisdiction

458. If:

(a) a person does or omits to do an act outside the Union; and

(b) if that person had done or omitted to do that act in the Union, the person would, by reason of also having done or omitted to do an act in the Union, have been guilty of an offence against this law; the person is guilty of that offence.

Committing offences continuously

459.(a)Where by or under a provision of this law, an act is required to be done within a particular period or before a particular time, and failure to do the act within that period or before that time constitutes an offence; and the act is not done within that period or before that time, then:

(i) the obligation to do the act continues, after that period has ended or that time has passed, and whether or not a person is or has been convicted of the offence in relation to failure to do the act, until the act is done; and

(ii) subsection (c) also applies.

(b) Where by or under a provision of this law, an act is required to be done but neither a period nor a time for the doing of the act is specified, and the failure to do the act constitutes an offence and a person is or has been convicted of the offence in relation to failure to do the act, then:

(i) the obligation to do the act continues, despite the conviction, until the act is done; and

(ii) subsection (c) also applies.

(c) Where at a particular time, a person is the first convicted of the offence in relation to failure to do the act, and the failure to do the act continued after that time, then:

(i) the person is, in relation to failure to do the act, guilty of a further offence in respect of so much of the period throughout which the failure to do the act continued or elapsed after that time and before the relevant day in relation to the further offence; and

(ii) for the purposes of this law and any other applicable law the further offence is taken to be constituted by failure to do the act during so much of that period .

(d) Where a person is guilty, by virtue of subsection (c), of an offence in respect of the whole or part of a particular period, the penalty applicable to the offence is a fine of twenty five thousand kyats for each day in that period, or in that part of that period, as the case may be.

Defenses and Relief

Defense by a director or an officer

460.(a)Without limiting the provision of section 435, it is a defence to a director or an officer charged with an offence in relation to a duty imposed on the board of a company or a duty imposed on a director or officer if the director or officer proves that:

(i) the board, in the case of an offence in relation to a duty imposed on the board, takes all reasonable and proper methods to ensure that the requirements of this law would be complied with; or

(ii) the director or officer , in the case of an offence in relation to a duty imposed on the board, takes all reasonable and proper methods to ensure that the board complied with the requirements of this law;

(iii) the director or officer, in the case of an offence in relation to a duty imposed on the director or officer, took all reasonable and proper methods to ensure that the requirements of this law would be complied with; or

(iv) in the circumstances the director or officer could not reasonably have been expected to take methods to ensure that either the board or they complied with the stipulations of this law imposed on the board or them as applicable.

(b) Without limiting the provisions of section 435, it is a defence to a director or an officer charged with an offence in relation to a duty imposed on the company if the director or officer proves that:

(i) the company took all reasonable and proper methods to ensure that the stipulations of this law would be complied with;

(ii) the director or officer took all reasonable methods to ensure that the company complied with the stipulations of this law; or

(iii) in the circumstances the director or officer could not reasonably have been expected to take methods to ensure that the company complied with the stipulations of this law.

Relief from liability following declaration of contravention

461.(a)Without limiting the provision of section 435, if proceedings are brought against a person under this chapter and in the proceedings it appears to the court that the person has, or may have, contravened the provision of this law but that:

(i) the person has acted in good faith; and

(ii) having regard to all the circumstances of the case including, where applicable, those connected with the person's appointment as an officer, or employment of a company, the person ought fairly to be excused for the contravention; the court may receive the person either wholly or partly from a liability to which the person would otherwise be subject, or that might otherwise be imposed on the person because of the contravention.

(b) If a person thinks that proceedings will be begun against them under the provision of this part in respect of a possible contravention of the provision of this law, he may apply to the court for relief.

(c) On an application under subsection (b), the court may grant relief under subsection (a) as if the proceedings has been begun in the court.

(d) The provisions of this section does not limit any other powers the court may have to grant relief.

Part VIII
Miscellaneous

Chapter XXXI
Miscellaneous Provisions

Power to issue regulations, rules, orders, notifications and directives

462.(a)Without limiting any provision relating to it or power held by under this law or other applicable law:

(i) the ministry may, with the approval of the Union Government, issue rules, regulations, and bye-laws for the proper and efficient implementation, administration and enforcement of this law; and

(ii) the registrar may issue notifications, orders, directives, procedures, and forms for the proper and efficient implementation, administration and enforcement of this law;

(iii) in exercising clauses (i) and (ii), it may take an advice presented by organizations of relevant private business associations.

(b) All rules, regulations, bye-laws, notifications, orders, directives, or procedures made under subsection (a) shall be published in the gazette, and on such publication shall have effect as if enacted in this law.

Formation of special courts, tribunals, commissions or committees

463.(a)The ministry may, with the approval of the Union Government, issue necessary regulation, rules, orders, notifications, orders, directives and procedures for the establishment of tribunals, commissions or committees to assist with the administration and operation of this law. Such necessary regulations, rules, notifications, orders, directives and procedures shall not be inconsistent with this law but may include, provisions regarding to the following:

(i) the powers, duties, functions and procedures of the tribunal, or commission including the orders which may be issued by the tribunal, or commission or committee which may not exceed any powers, duties and functions conferred on the court pursuant to this law or any other applicable law;

(ii) any general or specific elements which are to be within the scope of the tribunal, commission or committee to consider or determine and processes for the review or appeal of decisions of the tribunal or commission or committee;

(iii) the number and qualifications of the tribunal or commission or committee members;

(iv) procedures for the appointment, removal or suspension of members of the tribunal, commission or committee and filling of any vacancies;

(v) the terms of engagement or employment of any members, commissioners or employees of the tribunal, commission or committee;

(vi) the terms of the tribunal or commission or committee, including temporary, permanent or ad-hoc nature of the tribunal or commission or committee; and

(vii) the funding of the tribunal or commission or committee and the capacity of the tribunal or commission or committee to levy fees and impose fees, fines or penalties.

(b) The ministry may also, with the consent of the Union Government, propose the establishment of a special court to assist with the implementation of this law to the Supreme Court of the Union.

Provisions relating to foreign companies

464.The provisions of this law relating to foreign companies shall not contrary the operation of any provision of the Transfer of Immovable Property Restrictions Law, 1987.

Chapter XXXII
Provisions relating to Effectiveness and Transitional Provisions

Provisions regarding the previous law

465.(a)The previous law, including the schedules, is repealed upon the commencement of this law.

(b) Following its repeal, anything done or in process under the previous law shall be taken to be done or in process under this law, subject to, and as further provisions by this Chapter.

Effectiveness of pending proceedings for winding up a company

466.The provisions of this law with respect to winding up shall not apply to any company of which the winding up has commenced before the commencement of this law. But, every such company shall be wound up in the same manner and with the same incidents as if this law had not been provided.

Effectiveness of documents

467.Every documents of transfer or other documents made before the commencement of this law, in pursuance of any enactment hereby repealed, shall be of the same force as if this law has not been passed, and for the purposes of that documents the repealed enactment shall be presumed to remain in full force.

Former registration offices, registers, and registrars continued effectiveness

468.(a)The existing registration offices of companies at the commencement of this law shall be continued as if they have been established under this law.

(b) Registers of companies kept in such existing offices shall respectively be presumed part of the registers for companies to be kept under this law.

(c) The existing registrar, and officers in those offices shall carry out their duties continuously. But, they shall comply with regulations of the Union Minister with regard to the performance of their duties.

Existing registered companies to be registered

469.(a)In accordance with section 421 (d), if a company or other organization is registered under the previous law and that registration is still in force immediately the commencement of this law, the registration of the company or other organization has effect from the commencement as if it were a registration of the company or other organization of the corresponding type under part II of this law.

(b) A company to which subsection (a) applies will have until the end of the transition period to appoint a director who is ordinarily resident in the Union.

(c) An overseas corporation to which subsection (a) applies will have until the end of the transition period to appoint an authorised officer.

Applications in processing

470.(a)An application for the registration of a company or other organization made under the previous law but not completed by the commencement of this law will be, unless withdrawn by the applicant, taken to be an application made under this law.

(b) The applicant may request, or the registrar may perform revise to the application referred to in subsection (a) for fulfil in conformity with the stipulations relating to apply under this law.

Repeal of certain existing regulations and continued effect of others regulations

471.(a)Rules 8 to 30 of the Myanmar Companies Rules, 1940 and forms 1 to 9 in the schedule of forms of the Myanmar Companies Act are repealed upon the commencement of this law.

(b) The Myanmar Companies Regulations, 1957 are repealed upon the commencement of this law.

(c) Except as provided in subsection (a) and (b), the regulations that are made for the purposes of provisions of the previous law that substantially correspond to provisions of this law and that are in force and applied immediately before the commencement of this law continue to have effect and may be deal with, with all the necessary changes, after the commencement as if:

(i) they are regulations in force under section 475 of this law; and

(ii) they are made for the purposes of the corresponding provisions of this law.

Matters done under the corresponding provisions continue to have effect

472.Without limiting any other provisions of this chapter, anything that if:

(a) there is done before the commencement of this law, under, or for the purposes of that provisions, a provision of the previous law that substantially corresponds to a provision of this law; and

(b) there has an ongoing performing till the commencement of this law in order to for the purposes of the previous law, has effect or may be dealt with the commencement of this law as if it were done by, under or for the purposes of, the corresponding provision of this law.

Preservation of accrued rights

473.Without limiting any other provisions of this chapter, if prior to the commencement of this law a person has acquired, a right or liability under a provision of the previous law, other than pursuant to a court order, that substantially corresponds to a provision of this law, that right or liability is presumed to continue under the substantially corresponding provision of this law as if that provision applied to the conduct or circumstances that gave rise to the right or liability.

References to the previous law in instruments

474.(a)In accordance with subsection (b), a reference to the previous law, or a provision or term of the previous law that substantially corresponds to a provision or term of this law, in any applicable law shall be taken following the commencement of this law to be or include a reference to this law.

(b) Regulations made under this law may provide that subsection (a) does not apply in relation to prescribed references in prescribed applicable laws.

Making of translational regulations

475.(a)The regulations made under this law may deal with effective matters of a savings or transitional nature relating to the transition from the application of provisions of the previous law to the application of provisions of this law. The regulations have effect despite anything else in this chapter.

(b) Without limiting subsection (a), the regulation may provide for a matter to be dealt with, wholly or partly, in any of the following ways:

(i) by applying with or without modifications to the matter:

(aa) provisions of the previous law in force to the date of commencement of this law or at some earlier time;

(bb) provisions of this law; or

(cc) a combination of provisions referred to in subclauses (aa) and (bb);

(ii) by otherwise specifying rules for dealing with the matter; or

(iii) by specifying a particular consequence of the matter, or of an outcome of the matter, for the purposes of this law.

(c) The regulations may provide that certain provisions of this chapter are taken to be modified as set out in the regulations. Those provisions then have effect as if they are so modified.

Termination of managing agent arrangements

476.(a)After the commencement of this law a company shall not appoint a managing agent. In accordance with subsection (b), any arrangements in effect whereby a managing agent has been appointed are deemed to be terminated upon the commencement of this law and any such agent will thereafter be presumed to be a director of the company.

(b) Any company which has a managing agent at the time of commencement of this law, and any such managing agent, may apply to the Union Minister for temporary relief from the operation of subsection (a) to enable the managing agent arrangement to continue until a time no longer than the end of the transition period. The application shall be made with 28 days of the commencement of this law.

(c) On an application under subsection (b) the Union Minister may make such determination as he thinks the best interests of the company.

(d) No compensation will be payable to any managing agent in connection with the operation of the provisions of this section, but accrued sums which may be payable to the managing agent upon the commencement of this law remain payable.

I hereby sign in accordance with the Constitution of the Republic of the Union of Myanmar.

President of the Union

The Republic of the Union of Myanmar

The Myanmar Companies Law

CONTENT

The Myanmar Companies Law

(The Pyidaungsu Hluttaw Law No. 29, 2017)The 3rd Waning of Nadaw, 1379 M.E.( 6 December, 2017)

Part IEffectiveness and Definitions

Chapter ITitle, Effectiveness, and Definitions

Part IIConstitution, Incorporation and Powers of Companies

Chapter IICompanies and Corporations

Chapter III

Essential Requirements and Powers of Companies

Essential Requirements of Companies

Essential Requirements of Companies

Capacity and powers of companies

Chapter IVIncorporations and Registrations of Company under this Law

Chapter VCompany Constitution

Chapter VICompany Names

Chapter VIICompany Dealings

Chapter VIIIActivities Prior to Registration

Chapter IXOther Corporations Authorized to Register or Taken to be Registered under this Law

Corporations Formed under Other Laws in Force in the Union

Chapter XChange of Company Type

Part IIIShares and Matters Relating to a Company’s Capital

Chapter XI

Shares and Other Securities

Share Capital

Chapter XIITransfers of Shares and Other Securities

Chapter XIIIRegisters and Certification of Interests in a Company

Chapter XIVDividends

Chapter XVTransactions and Matters Affecting Share Capital

Alteration of Share Capital

Part IVManagement and Administration, Offers to the Public, Mortgage and Charge for Securities, Maintenance of Company Accounts

Chapter XVI

Office and Name of Company

Chapter XVIIMeetings and Proceedings of Companies

Chapter XVIIIDirectors, their Powers and Duties

Chapter XIXRights and Remedies of Members

Actions by Members and Others in Case of Unfair Conduct

Chapter XXMatters relating to Share Offers by Public Companies

Prospectus of a Company

Chapter XXIShare Offers by Corporations Incorporated Outside the Union

Chapter XXIIMortgages and Charges Granted by a Company

Chapter XXIIIAppointment of Receivers, Maintaining Books of Account and Registration of Charges Granted by Overseas Corporations

Chapter XXIVFinancial Reports and Audit

Chapter XXVArbitration, Compromise with Creditors and Members of a Company and Buy-out Rights

Part VWinding Up

Chapter XXVIWinding Up a Company

Chapter XXVIIMatters relating to Winding Up of Unregistered Companies

Part VIPowers of the Registrar and Registration Office

Chapter XXVIIIThe Registrar, Registration Office, Registration of Documents, Powers of Inspection and Fees

Part VIIProceedings and Offences

Chapter XXIXJurisdiction of the Courts and Legal Proceedings

Chapter XXXOffences and Defenses

Specific Offences

General Offences

Part VIIIMiscellaneous

Chapter XXXIMiscellaneous Provisions

Chapter XXXIIProvisions relating to Effectiveness and Transitional Provisions

(The Pyidaungsu Hluttaw Law No. 29, 2017)
The 3rd Waning of Nadaw, 1379 M.E.
( 6 December, 2017)

Part I
Effectiveness and Definitions

Chapter I
Title, Effectiveness, and Definitions

Part II
Constitution, Incorporation and Powers of Companies

Chapter II
Companies and Corporations

Chapter IV
Incorporations and Registrations of Company under this Law

Chapter V
Company Constitution

Chapter VI
Company Names

Chapter VII
Company Dealings

Chapter VIII
Activities Prior to Registration

Chapter IX
Other Corporations Authorized to Register or Taken to be Registered under this Law

Chapter X
Change of Company Type

Part III
Shares and Matters Relating to a Company’s Capital

Chapter XII
Transfers of Shares and Other Securities

Chapter XIII
Registers and Certification of Interests in a Company

Chapter XIV
Dividends

Chapter XV
Transactions and Matters Affecting Share Capital

Part IV
Management and Administration, Offers to the Public, Mortgage and Charge for Securities, Maintenance of Company Accounts

Chapter XVII
Meetings and Proceedings of Companies

Chapter XVIII
Directors, their Powers and Duties

Chapter XIX
Rights and Remedies of Members

Chapter XX
Matters relating to Share Offers by Public Companies

Chapter XXI
Share Offers by Corporations Incorporated Outside the Union

Chapter XXII
Mortgages and Charges Granted by a Company

Chapter XXIII
Appointment of Receivers, Maintaining Books of Account and Registration of Charges Granted by Overseas Corporations

Chapter XXIV
Financial Reports and Audit

Chapter XXV
Arbitration, Compromise with Creditors and Members of a Company and Buy-out Rights

Part V
Winding Up

Chapter XXVI
Winding Up a Company

Chapter XXVII
Matters relating to Winding Up of Unregistered Companies

Part VI
Powers of the Registrar and Registration Office

Chapter XXVIII
The Registrar, Registration Office, Registration of Documents, Powers of Inspection and Fees

Part VII
Proceedings and Offences

Chapter XXIX
Jurisdiction of the Courts and Legal Proceedings

Chapter XXX
Offences and Defenses

Part VIII
Miscellaneous

Chapter XXXI
Miscellaneous Provisions

Chapter XXXII
Provisions relating to Effectiveness and Transitional Provisions