193704-1932-Supplementary-Bill-read-a-second-time--Companies — Page 18

Power to

issue re- deemable

preference shares.

19 & 20 Geo. 5, c. 23,

8. 46.

1544

Provided that nothing in this section shah be taken to prohibit

(a) 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) the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase by trustees of fully-paid shares in the company to be hell by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company: (c) the making by a company of loans to persons, other than directors, bonâ fide in the employ- ment of the company with a view to enabling those persons to purchase fully-paid shares in the company to be held by themselves by way of beneficial ownership.

(2) The aggregate amount of any outstanding loans made under the authority of provisos (b) and (c) to subsection (1) of this section shall be shown as a separate itein in every balance sheet of the company.

(3) If a company acts in contravention of this sec- tion, the company and every officer of the company who is in default shall be liable to a fine not exceeding one thousand dollars.

Issue of Redeemable Preference Shares and Shares at Discount.

48.-(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed:

Provided that--

(a) no such shares shall be redeemed except out of profits of the company which would other- wise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

(b) no such shares shall be redeemed unless they

are fully paid;

(c) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be trans- ferred to a reserve fund, to be called "the capital redemption reserve fund," a sum equal to the amount applied in redeeming the shares, and the provisions of this Ordin- ance relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were paid-up share capital of the company;

(d) where any such shares are redeemed out of the proceeds of a fresh issue, the premium, if any, payable on redemption, must have been provided for out of the profits of the company before the shares are redeemed

(2) There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date on or before which those shares are, or are to be liable, to be redeemed.

If a company fails to comply with the provisions of this subsection, the company and every officer of the company who is in default shall be liable to a fine not exceeding one thousand dollars.