Company Law

1. What is a Company?
This is an association of people with common objects. Normally, that
common object is associated with economic purposes. Section 2 of the
Companies Act defines a company as… a body cooperate including any
foreign body cooperate.

The main statute as a source is the companies Act and its regulations.
The Insolvency Act regulates what happens when the company is coming
to an end. Lastly, the financial services Act is also key.

1.1. Types of Companies.

1.1.1. Limited
These have limited liability of shareholders. The liability of
shareholders is limited and they only become liable to the amount
of unpaid shares.

1.1.2. Unlimited
These have an unlimited liability of shareholders. Here, the liability
of the shareholders is unrestricted and in cases of debts, even the
assets of the shareholders can be used to pay the debts.

Companies Limited by Guarantee

The shareholders are liable up to a guaranteed specified amount.
This happens when the company is being set up and the shares are
not paid for at the start of the company. The shareholders only
pledge and guarantee the amount they promised.

2. Public or Private Company

These are mostly known by their names. Public companies add “plc”
to their names meaning “Public Limited Company” while private
companies add “Ltd” meaning Limited. See Chitakale Plantations
Ltd v Mary Woodworth [2009] MLR 49.

Section 23-26 recognizes for types of companies.

- Section 23 is about private limited liability company and gives
out characteristics of private limited company whose
membership is limited to 50 shareholders. There could also be
one shareholder.
o Section 2 defines a 1-person company in which only the
shareholder is also the sole director of the company.
 o Section 2 also says that a private company does not offer
securities to the public.
o Section 2 also defines a single member company where two
or more persons hold shares jointly
- Section 24 provides for public limited liability company.
o It has a minimum of three members and there is no
restriction to members.
o They can offer security to the public meaning they can
invite members of the public to buy shares in the company
o They are also allowed to transfer securities and are not
restricted. All companies registered on the Malawi Stock
Exchange are public limited companies
- Section 25 provides for companies limited by guarantee.
o These are formed for charitable reasons.
o It does not have contributed capital at the time it is being
set up and one can only contribute at the time of liquidation
when the company is being wound up if the company has
unsatisfied debts.
- Section 26 provides for state owned companies.
o These are controlled by the government. All provisions of
the public liability companies apply.
o The minister has powers to exempt these companies from
application of the Companies Act.
Companies can also be categorized as holding or parent company and
subsidiary company. Section 2 defines a parent as, in relation to another,
means that the other company is its subsidiary. In simple terms, the
parent company has other companies under it. A subsidiary is, in relation
to another company where that the other company, the parent, (a)
controls the composition of the Board of the company, (b) is in a position
to exercise, or control the exercise of more than one-half of the maximum
number of votes that can be exercised at a meeting, (c) holds more than
one-half of the issues shares of the company, and (d) is entitled to receive
more than one-half of every dividend pain on shares issued by the
company.
The subsidiary company and the holding company have distinct
personalities from each other. See Banda v Cilcon Ltd Civil Cause No
268 of 1987. The parent company can only be liable if it proven that it
was micromanaging the subsidiary company.
Foreign Companies
These are incorporated in Malawi and must have a place of business or
carry on a business. See Dunlop Pneumatic Tyre Co. Ltd vs A/G
Caddell’s Co [1902] 1 KB 342; The World’s Harmony [1967] P
341. Carrying on business is defined on section 358 as… on section 360,
the foreign company is supposed to register within 30 days of establishing
its place of business. Under the same section, there are things that must
be filed during registration. Under section 365, the foreign company must
make out a balance sheet and other financial statements made annually.
Section 361 demands that a foreign company must have a registered
office in Malawi. The office must be open at least for four hours every day
and must have an authorized agent who acts on behalf of the company. If
there is a change of the agent, the registrar of companies must be
notified and a replacement has to be picked or appointed within 21 days.

Dormant Companies.
See Section 354. The definition is found on section 2 which says… Section
354 defines a significant transaction… under section 355, the dormant
company is not required to prepare accounts and it is exempted from
being audited under section 356 of the Act and from paying any specified
fees. Subsection 2 of the same section, a company cannot declare itself to
be a dormant company if it is in the banking or insurance business. A
company will be dormant if it registers and then reserves its name for a
certain period. It can also become dormant if it is in a period of
restructuring. If it is a one-person company, the company becomes
dormant if he goes on leave from work. A company which ceases to be
dormant has to notify the registrar within 14 days.

Essential Features of a Company

1. Separate legal personality
This is at the core of company law. Once incorporated the company
is given a separate legal personality different from the directors,
owners, shareholders and any others. It will have a name, rights and
any other obligations that are assumed by legal persons. It will have
its property. It can employ people and enter into contracts and incur
debts in its own name. it can also be sued in its name. the members
are not a party to the company’s legal transactions and do not act
like its agent. The most striking consequence of SLP is that a
company survives the death of its members. This is what is termed
the veil of incorporation. This principle emanated from the case
of Salomon v Salomon [1897] AC 22;
 Macaura v Northern Assurance Co Ltd [1925] AC 619; Lee v
Lee’s Air Farming [1861] AC 12; Tunstall v Steigmann [1962]
2 QB 593; Multinational Gas & Petrochemical Co. v
Multinational Gas & Petrochemical Services Ltd [1983] Ch
258; Naidoo v Mazi Imports Export Ltd CC No 706 of 1985;
Yanu Yanu Bus Co. v Mbewe 10 MLR 377.

2. Concept of Limited Liability

3. Management of a Company
4. The constitution of the company

Read the following:

- Oakbank Oil v Crum [1882] 8 App Cases 65
- Hickman v Kent [1915] 1 Ch 881
- Beattie v E & S Beattie Ltd [1938] Ch 708
- Ely v Positive Govt. Security Life [1876] 1 EXD 88

2. Formation of the Company

This is found section 27 to 32 of the Companies Act. Any person can apply
to incorporate kind of company as divided from section 23 to 26 of the
act. According to Section 28, the application must be in the prescribed
form provided by the Companies Act. The application must be signed by
each applicant of the company. It must have a consent document by the
people designated to act as directors or secretary of the company. There
must also be a declaration that the person is not disqualified from being
appointed or holding office as a director. For a company with share
capital, the share… in the case of a company limited by guarantee, there
must be a document signed by each member containing how much
money they will be liable for. If the application is being made by an agent,
there must be an instrument authorizing one to be an agent. If need be, a
notice of name reservation must also be included [see section 45]. One
applicant must also certify that the memorandum of association is the
right one for the company. Without prejudice, the application shall
contain:
- The full name and address of each applicant;
- The present full name, any former name and the residential
address of every director and of any secretary of the proposed
company
- The particulars of any business occupation and directorships of
the public company
 - The full name and residential address of the shareholder for the
proposed company
- The type of company being formed
- The registered office of the proposed company
- Any information prescribed.
- See also section 171
The applicants must make then make a declaration that the information
in the application is true and correct. Under section 29, should all the
above be satisfied, the registrar will:

Under section 31, a certificate of incorporation of a company issued under

section 29 is conclusive evidence that:
- All the requirements of this Act as to incorporation have been
complied with and
- On and from the date of incorporation, the company will now be
incorporated.

Under section 32, the company incorporated under this Act shall be a
body corporate with the name by which it is registered and continues in
existence until it is removed from the register of companies.

Read the following:

- The maritime Trade [1981] 2 Lloyd’s Report 153
- Farrar v Farrar Ltd [1888] 40 Ch D 395
- A.G. Reference (No 2 of 1982) [1984] QB 624

Lifting the corporate veil

Read prest v Petrodel Resources Ltd [2013]. In that case, it was said
that the veil would be lifted according to two principles:
- Evasion principle.
Read Dr. Thomson Frank Mpinganjira & Others v The
Registrar of Financial Institutions, Civil Appeal No 1of
2022; woll
- Concealment principle.
There is no specific criteria for lifting the corporate veil. The veil is
generally lifted in the interest of justice.

Re Bugle Press Ltd [1961] Ch 270

Jones v Lipman [1962]
Gilford Motor Co. v Horne [1933]
Smith, Stone’s knight ltd v Birmingham Corp [1939]
Fire stone Tyre Co. v Llewellyn [1957]
Littlewood Stores v IRC
British Airways Board v Parish [1979] 2 Lloyd’s Rep 361
NB v Continental Traders Ltd [2007] MLR
Chutter v Freeth’s Pocock Ltd [1911] 2 KB 832
Leonard’s Carrying Co vs Asiatic Petroleum [1915]
Bolton Engineering v Graham [1956]
Tesco Supermarkets v Natrass [1972] AC 153
CF Tesco Stores Ltd v Brent London Borough Council [1993]
A.G’s Reference of 1984 (no 2 of 1983) [1984]
R v P&O European Ferries (Dover) Ltd [1990]
Seaboard Offshore Ltd v Secretary of State for Transport [1994]

The Role of Registrar of Companies

Promoters of Companies
The promoter is a term not of law but of business.
3. DIRECTORS OF COMPANIES
Section 158 of CA describes a director to include a person occupying the
position of a director of the company and including an alternate director.
It also includes a person whose directions and instructions may be
required to or is accustomed to make. 1 To solidify, a director is, therefore,
someone appointed, usually by the members (owners) of a company, to
manage and run the company on their behalf. A director also includes that
person who exercises powers which would normally fall on the board as
seen in Section 158 (2).

Categories of Directors
i. De Jure Directors
A De Jure Director is properly appointed to the board and registered
with the Registrar of Companies. He may also be a registered
director.

ii. De Facto Directors

De Facto Directors are not properly appointed and notified to the
Registrar of Companies as directors but still act as directors and
hold themselves out to third parties as directors. It should be known
that it is the role of the individual rather than the title used that
determines whether an individual is a director or not. The de facto
directors have the same legal duties, responsibilities and liabilities
as de jure directors.

The key case in defining De Facto directors is Re Hydrodam Ltd

[1994]. In that case, Lord Millet recognized that de facto directors
assume to act as de jure directors and establishing this principle
requires a three-tier test. Firstly, there is an assumption of
directorship on the individual. Secondly, the “holding out” where the
individual is held to be a director. Lastly, the “equal footing” test
is where the individual undertakes functions that can be discharged
by company directors.

In Re Lo-Line Electronics Motors Ltd [1988] BCLC 698, Lord

Browne-Wilkinson disagreed with this definition and stated that the
wording was purely about the title that a director had, not his
actions.

1
Section 158 (2)(a) and (b)
 However, the case of Re Paycheck Services Ltd [2010] UKSC,
reaffirmed the position in Re Hydrodam by holding that a de facto
director is someone who is part of the corporate governing structure
of the company and assumes the status and functions to make
himself liable.

Finally, in Re Gamma Ltd v Davis [2008] EWHC, where a company

secretary who took no part in the decision-making of the company
was held not to be a de facto, the three stages in the test set out in
Re Hydrodam were summarized as well.

iii. Alternate Directors

Alternate directors are appointed by fellow directors with the
approval of the board and they act when the appointer [the director]
is unable to act for whatever reason. See Section 158. Alternate
directors can be useful where the director has many outside
commitments, helping to resolve issues of quorum, cheque-signing
and so on.

iv. Casual Directors

These are directors who fill a casual vacancy that arises between
annual shareholders’ meetings because of the death or resignation
of a director.

v. Shadow Directors
This is a person in accordance with whose directions or instructions
the directors of the company are accustomed to act to the exclusion
of those advising in a professional capacity. In other words, a
shadow director is an unappointed Board director who instructs
others on how to perform their duties and influences the actions
Boards take.

In Re Hydrodan Ltd [1994] BCC 161, Lord Millet defined shadow

director, contrasting them with de facto directors by saying “a
shadow director… does not claim or purport to act as a director….
He claims not to be a director. He lurks in the shadow, sheltering
behind others who, he claims, are the only directors of the company
to the exclusion of himself.” According to Millet, to prove if one is a
shadow director, one must answer:
i. Who are the directors of the company, whether de jure or
de facto?
 ii. Does the defendant direct those directors on how to act
about the company or that he was one of those persons
who did?
iii. Did those directors act in accordance with such directions?
iv. Were those directors comfortable to act?
In the case of Secretary of State for Trade Industry v Deverell
[2000] 2 WLR 907, it was held that a shadow director must have
real influence in the corporate affairs of the company but not
necessary that that influence be exercised over all of the company’s
corporate activities. To show Defendant is a shadow director, is not
necessary to show that in the face of directions from Defendant, the
board either surrendered its discretion; or submissive role.
vi. Executive and Non-Executive Directors
Executive directors are employees of the company working under a
contract of service and they are expected to perform a specified role
for the company.

Non-executive directors are officers who do not have an

employment relationship with the company and are usually only
awarded a relatively small fee for rendering their services. These
bring an independent idea on strategy, performance, and other
things. Such directors are encouraged by corporate governance.

vii. Nominee Directors

These directors are born out of circumstances where a group of
people with an interest in the company appoint a nominee to the
board of directors. Such people act as fiduciaries with statutory
duties similar to those of directors although they are merely
appointed as representatives of the group.

Appointment of Directors
In Section 162 of CA, the minimum number of directors have been
established: not less than one for private companies and not less than
three directors for public companies. The Act also requires that at least
one director should be a resident of Malawi. In Section 164,
specifications are given on who can be appointed as directors.
i. Only natural persons can be appointed as directors
ii. the person should not be under 18 years of age
iii. In the case of public companies, the person should not be over
seventy years
iv. The person should not be bankrupt
v. The person should not be of unsound mind
The Act also stipulates in Section 165 that no one will be appointed a
director unless he consents in writing and has certified that he is not
disqualified from being a director. In Section 166, the first directors of a
company are the ones named in the application for registration of the
company. These directors shall hold office from the date of registration
until he ceases to hold office. Finally, in Section 167, where there are no
directors of a company or the quorum of directors is less than required
and it is impracticable to appoint, shareholders may apply to the court to
appoint one or more persons.

In Worcester Corsetry v Wilting [1932], it was held that in the case

where the sole director of a company dies, the shareholders, with an
ordinary resolution, can appoint as a director a person who is willing to
act and permitted by law to do so. If the company has bespoke articles of
association, it is very common to contain such provisions and they should
be checked. If the articles of association make no provision for the
appointment of directors, then the shareholders have an inherent power
to appoint directors by ordinary resolution.

In Barron v Potter [1914], the only two directors fell into a

disagreement and the company could not function. One of them called a
general meeting which the other had refused to attend and the company
appointed new directors at the meeting. It was said by Warrington J
that “If directors having certain powers are unable or unwilling to
exercise them… there must be some power in the company to do itself
that which under other circumstances would be otherwise done. The
directors in the present case were unwilling to appoint additional
directors under the power conferred on them by the articles, in my
opinion, the company in the general meeting had the power to make the
appointment.”

Remuneration of Directors
A director is not employee of the company for the mere reason of holding
office and he is not entitled to any remuneration by holding that office. In
Moriarty v Regent’s Garage, it was stated that “not only is a director not a
servant of the company, he is not, prima facie, entitled to any
remuneration for the services he performs. A contract or agreement
must be shown from the articles of association for
remuneration.”

Termination of Directorship of a Company

Termination or removal of office depends on the type of company being
looked at according to Section 169 (1) and (2). For a director of a
public company, the director may be removed by a simple resolution at a
meeting called for such a purpose regardless of the company's
constitution.

On the contrary, for private companies, a director may be removed from

office by a special resolution passed at a meeting not directly called to
discuss the removal of the director. The removal of such a director follows
or is subject to the company's constitution.

Duties of Directors
Unlike the CA 1984 which left the duties to common law, the CA 2013
codified the common law duties and made them statutory. For example,
the fiduciary duty of directors founded in common law in the case of Bray
v Ford is now statutory. It should be understood that these duties are
owed to the companies and not the shareholders although both statutory
and common law exceptions to this rule.

i. Duty To Act in accordance with the Constitution

In Masangano v Masangano , the court summarized the duty by
saying “members and director of a company must familiarize
themselves with the memorandum and articles of the
company so that they can discharge their duties in line with
them.”
Section 39 thus codifies such a duty by saying that members are
restricted to act within the confines of the constitution unless the
constitution says otherwise.

ii. Duty to Use Powers for a Proper Purpose

The director must use the powers in the constitution only for the
purposes which they are given. This was also established in
Bishopsgate Investment Management Ltd v Maxwell, actions
like transferring the company’s assets to a third party he held an
interest in are characterized as using powers for the wrong
purposes.
 Another key power that is often misused by directors is the power to
issue new shares which the power to change voting strengths. In the
case of Punt v Symons, the judge held that issuing new shares
which was clearly done to create enough voting power to alter the
company’s articles was an improper use of power since the primary
reason for giving directors such powers is to raise extra capital
when needed by the company

iii. Duty to Promote the Success of the Company

In Section 177 (1), a director must act in ways he considers to be
in good faith and would most likely promote the success of the
company for the benefit of its members as a whole. Success in this
context means the long-term increase in the value of the
commercial company. Thus, the following must be regarded to
determine if a decision promotes the success;
o The consequences of any decision
o The interests of the employees
o The need to foster the company’s business relationships
o The company’s impact on the environment. E.t.c

iv. Duty to Exercise Independent Judgment

A director must exercise independent judgment. This duty codifies
the principle of law under which the directors must exercise their
powers independently, without subordinating their powers to the will
of others.

v. Duty of Care and Skill

Regardless of the high standards of conduct which the company
expects from the directors, the level of competence expected of the
director for the purposes of the law of negligence is low. This is
because the director is an unqualified, non-professional person who
was not expected to bring any particular skills to the office as held
in Re Forest of Dean Coal Mining. Under the CA, a director must
only exercise care, skill and diligence in Section 179 (1).

vi. Duty to Avoid Conflict of Interest

As set in the early case of Bray v Ford, those acting on behalf of or
to the benefit of another [simply a fiduciary] have the duty to avoid
the conflict of interest. Similarly, a director of a company must avoid
a situation in which he has an interest that conflicts with the
interests of the company. An example of this case is Aberdeen
 Railway Co v Blaikie. The appellate company agreed to buy goods
from the respondent partnership. Blaikie was a partner of the
respondent partnership and was also a director of the appellate
company. It was held, inter alia, that there was a clear-cut conflict
between Blaikie’s duty to lowest prices for the company and the
greatest profit for the respondent partnership.

vii. Duty in relation to self-interest transactions

viii. Duty not to accept benefits
ix. Duty to declare interest
x. Duty against inside dealings
xi. Duty as to the company’s solvency
xii. Duty to comply with the code of corporate governance

Liability of Directors
 In general, directors and shareholders acting in their capacity as
company agents are not personally liable for negligence unless they
have, in exceptional cases, assumed personal responsibility towards
the claimant. Whether the principal is a company or a natural
person, someone acting on his behalf may incur personal liability in
tort as well as imposing vicarious or attributed liability upon his
principal. However, to establish personal liability under the principle
of Hedley Byrne, which requires a special relationship between
the plaintiff and tortfeasor, it is not sufficient that there should have
been a special relationship with the principal. There must have been
an assumption of responsibility such as to create a special
relationship with the director or employee himself. Williams
v Natural Life Health
 CORPORATE DECISION MAKING
COMPANY MEETINGS/MANAGEMENT OF THE COMPANY
There are two primary decision-making bodies within a company:
1. General meeting of shareholders; and
2. The board of directors.

1. Shareholder’s Meeting
The law does not differentiate between public and private
companies regarding the powers of shareholders’ meetings.

1.2. Basic Requirements

Firstly, Section 66 provides that private companies may
abolish shareholder meetings if they have another way of
 passing resolutions in their constitutions. To have a valid
meeting, at least two people must be present. In Sharp v
Dawes [1876], a meeting was prima facie defined as a
coming together of more than one person.

Sections 73 and 74 regulate the affairs of shareholders, their

conduct, and their meetings while empowering the minister to
publish a code of conduct for shareholders in private companies and
public companies, respectively.

1.3. Quorum
This can be understood as the number of persons who must be
present at a meeting before its proceedings can have authority [see
the Press Trust Case where the issue was discussed]. What
happens if some of the members that formed the quorum leave
reducing the minimum?

In Re Hartley Baird Ltd [1955], one member of the required 10

members to form the quorum left during the meeting. However, the
Judge held that the departure did not invalidate the proceedings
after he had left. Contrastingly, in Re London Flats [1969], one
member left from a meeting where two persons were originally
present. A decision by the remaining person was held ineffective.

If the company follows the model articles of association for private

companies, the answer to the question above is given in Article 41
of the model articles which says that the chairman of the meeting
should adjourn the meeting if the quorum is not constituted within
the first 30 minutes or the quorum does not exist during the
meeting.

In the digital world, quorums can be met and meetings can be valid
even if the members are not in the same room but are connected by
audiovisual equipment as long as they can debate and vote on
matters affecting the company, a position from Byng v London
Life Association Ltd [1990]

1.4. Requisitions and Meetings

Article 4 of the code of conduct for shareholders empowers the
directors to call for general meetings to conduct the company’s
 business. However, the members of the company can also
requisition a general meeting of the company in Article 5. The
requisition must state the nature of the meeting and the resolutions
that may be passed at the meeting. The requisition can be in
electronic or hard copy but signed by the people making it.

Article 6 demands that once the requisition has been made, the
directors shall call for the meeting within 21 days and the meeting
shall be held within 28 days after the notice has been made.
Under Article 17, three persons present at a meeting shall form the
quorum unless such persons are representatives of a company
invited to the meeting or they are proxies2 of the same person.

Facts
The company’s shareholding consisted of 190,000 B shares held
by B and 310,000 A shares, 260,000 of which were held by
Harman and M. Under a shareholders’ agreement, the two classes
of shares ranked equal, and a shareholders’ meeting was not
quorate unless a B shareholder or proxy was present. On an
application by H and M, against whom allegations had been made
by B, the judge ordered that a quorum would consist of any two
members of the company.

The company appealed relating to the forerunner of s.306 of the

Companies Act 2006 – s. 371 Companies Act 1985

Held
Allowing the company’s appeal, that s.371 (now s.306) was not
intended to override the class rights of a shareholder, even if in a
minority. B’s right to be present was a class right given for his
protection, and not to be overridden under the section.

Harman v BML

Notices must be sent to all individuals who must be present at the

meeting.

2
In company law, a proxy is a person who is authorized to vote on behalf of a shareholder who is unable
to attend a shareholder meeting. The proxy can also speak on behalf of the shareholder, ensuring their
interests are represented in the company's decisions.
The term "proxy" can also refer to the document that grants the authority to act as a proxy
2. Types of Meetings
2.1. General meetings
This is one in which all shareholders may take part and whatever is
discussed and adopted will bind the whole membership. These are
divided into two:
2.1.1. Annual General Meeting
These are conducted once every year as the name presumes. The
meeting looks at how the company has performed over the year
financially. It is also a forum to elect auditors and directors of the
company. The meeting is also used to revise the remuneration of
the auditors and directors of the company.

2.1.2.Extra Ordinary General Meetings

This is any other company meeting other than the company's
annual general meeting.

2.2. Class meetings

Particular classes of shareholders may hold these meetings and will
discuss issues relating to that particular class of shareholders only.

3. Types of Resolutions
3.1. Ordinary Resolutions
This is a simple resolution passed by a simple majority of votes cast
by shareholders entitled to vote, voting in person or by proxy.
Alteration of share numbers and appointment of directors are some
of the decisions affected by ordinary resolutions.

3.2. Special Resolutions

This is a resolution approved by a majority of not less than 75% of
the votes cast of those shareholders entitled to vote, present or by
voting by proxy. Decisions affected by such voting include altering
the company’s constitution, changing of company name,
and removing directors among others.

3.3. Unanimous Resolutions

a unanimous resolution is a decision that is supported by all
members of a company who are entitled to vote. In short, these are
the resolutions completely assented to or agreed to by all
shareholders.

4. Voting
In the absence of any provisions, every member with a share capital is
entitled to one vote with regard to how many shares are held by him. The
common law position is that once a resolution is due for a vote, it shall be
decided by a show of hands [article 8 of the shareholder's code of
conduct and article 19-22 of the shareholder’s code of conduct] unless
the members present duly demand a poll.
o Re Horbury bridge coal iron and wagon co [189]
o Musselwhite v CH. Musselwhite & sons
o Harben v Phillip [1883] 23 Ch. D 14
o Halifax Sugar Refining Co Ltd v Francklyn [1890] 62 LT 563
o Re Homer Districts Consolidated Mines [1888] 39 Ch. D 546
o Brown Ltd v Trinidad [1887 ]

MAJORITY RULE AND MINORITY PROTECTION

The Rule in Foss v Harbottle [1843]
CORPORATE FINANCE
Share Capital
Nature of the Share
Definition of a share
- Borland’s Trustee v Steele Bros and Co Ltd [1901] AC 279
- Dr Thompson Frank Mpinganjira and Others v Registrar of
Financial Institutions MSCA 1 of 2022
- Sections 138 and 139 about transfer of shares.
- The transfer/offer of shares to the public by public companies is
heavily protected by the Securities Act.
- Issued shares have to be paid in cash or property which must be
formally valued.
- Articles of association may refuse to register the transfer of
shares to outsiders.

Classes of Shares
1. Ordinary shares
2. Preference shares

Valuation of Shares
- Section 131 of the Act
- White v Bristol Aeroplane Ltd [1953] Ch 53
- Cumbrian Newspapers Group Ltd v Cumberland and Westmorland
Heral Newspaper Printing Co Ltd.
- British American Nickel Corp Ltd v O’Brien [1927] AC 369
- In the matter of East Africa Sailing and Trading Co Ltd
Commercial Court Petition No 4 of 2012
- Commissioners of Inland Revenue v Grossman [1937] AC 26
- Dean v Prince

Public Offerings of Securities

SCHEMES OF ARRANGEMENTS, COMPANY RECOGNITION/BUSINESS
RESCUE – Part VII of the CA
1. Mergers
a. Section 261
b.
2. Acquisitions