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Protection of Members and
Creditors |
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59. |
(1) |
Subject to
any limitations in the Memorandum or Articles, the directors of a company
incorporated under this Act may convene meetings of the members of the
company at such times and in such manner and places within or outside the
British Virgin Islands as the directors consider necessary or desirable. |
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(2) |
Subject to
a provision in the Memorandum or Articles, for a lesser percentage, upon the
written request of members holding more than 50 percent of the votes of the
outstanding voting shares in the company, the directors shall convene a
meeting of members. |
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(3) |
Subject to
any limitations in the Memorandum or Articles, a member shall be deemed to
be present at a meeting of members if |
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(a) |
he
participates by telephone or other electronic means; and |
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(b) |
all
members participating in the meeting are able to hear each other. |
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(4) |
A member
may be represented at a meeting of members by a proxy who may speak and vote
on behalf of the member. |
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(5) |
The
following apply in respect of joint ownership of shares: |
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(a) |
if 2 or
more persons hold shares jointly each of them may be present in person or by
proxy at a meeting of members and may speak as a member; |
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(b) |
if only
one of them is present in person or by proxy, he may vote on behalf of all
of them; and |
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(c) |
if 2 or
more are present in person or by proxy, they must vote as one. |
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60. |
(1) |
Subject to
a requirement in the Memorandum or Articles to give longer notice, the
directors shall give not less than 7 days notice of meetings of members to
those persons whose names on the date the notice is given appear as members
in the share register referred to in section 28 and are entitled to vote at
the meeting. |
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(2) |
Notwithstanding subsection (1), and subject to any limitations in the
Memorandum or Articles, a meeting of members held in contravention of the
requirement to give notice is valid if members holding a 90 percent
majority, or such lesser majority as may be specified in the Memorandum or
Articles, of |
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(a) |
the total
number of shares entitled to vote on all the matters to be considered at the
meeting; or |
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(b) |
the votes
of each class or series of shares where members are entitled to vote thereon
as a class or series together with an absolute majority of the remaining
votes, |
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(c) |
have
waived notice of the meeting; and, for this purpose, the presence of a
member at the meeting shall be deemed to constitute waiver on his part. |
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(3) |
The
inadvertent failure of the directors to give notice of a meeting to a
member, or the fact that a member has not received the notice, does not
invalidate the meeting. |
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61. |
The quorum
for meetings of members for purposes of a resolution of members is that
fixed by the Memorandum or Articles; but, where no quorum is so fixed, a
meeting of members is properly constituted for all purposes if at the
commencement of the meeting there are present in person or by proxy,
one-half of the votes of the shares of each class or series of shares
entitled to vote as a class or series thereon and the same proportion of the
votes of the remaining shares entitled to vote thereon. |
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62. |
(1) |
Except as
otherwise provided in the Memorandum or Articles, all shares vote as one
class and each whole share has one vote. |
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(2) |
The
directors of a company incorporated under this Act may fix the date notice
is given of a meeting as the record date for determining those shares that
are entitled to vote at the meeting. |
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62A. |
(1) |
One or
more members of a company incorporated under this Act may by agreement in
writing deposit bearer shares with, or transfer registered shares to, any
person authorized to act as trustee for the purpose of vesting in such
person, who may be designated voting trustee, the right to vote thereon and
the following provisions shall apply: |
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(a) |
the period
of time for which the trustee may vote shall not exceed 10 years; |
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(b) |
subject to
paragraph (a), the agreement may contain any other provisions not
inconsistent with the purpose of the agreement; |
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(c) |
a copy of
the agreement shall be filed at the registered office of the company and
shall be open to the inspection of members of the company |
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(i) |
in the
case of any beneficiary of the trust under the agreement, daily during
business hours, and |
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(ii) |
in the
case of members of the company, subject to the provisions of section 67; |
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(d) |
where
certificates for registered shares have been issued for shares that are to
be transferred to a trustee pursuant to this section, new certificates shall
be issued to the voting trustee to represent the shares so transferred and
the certificates formerly representing the shares that have been transferred
shall be surrendered and cancelled; |
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(e) |
where a
certificate is issued to a voting trustee, an endorsement shall be made on
the certificate that the shares represented thereby in the case of
registered shares and the certificates in case of bearer shares are held by
the person named therein pursuant to an agreement; |
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(f) |
there
shall be noted in the share register of the company against the record of
the shares held by the trustee the fact that such an agreement exists; |
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(g) |
the voting
trustee may vote the shares so issued or transferred during the period
specified in the agreement; |
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(h) |
shares
registered in the name of the voting trustee may be voted either in person
or by proxy and, in voting the shares, the voting trustee shall not incur
any liability as member or trustee, except in so far as he may be liable for
his own conduct or acts; |
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(i) |
where two
or more persons are designated as voting trustees and the right and method
of voting any shares registered in their names at any meeting of members or
on any resolution of members are not fixed by the agreement appointing the
trustees, the right to vote shall be determined by a majority of the
trustees, or if they are equally divided as to the right and manner of
voting the shares in any particular case, the votes of the shares in such
case shall be divided equally among the trustees; |
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(j) |
at any
time within 2 years prior to the time of expiration of any voting trust
agreement as originally fixed or as last extended as provided in this
subsection, one or more beneficiaries of the trust under the voting trust
agreement may, by written agreement and with the written consent of the
voting trustee, extend the duration of the voting trust agreement for an
additional period not exceeding 10 years from the expiration date of the
trust as originally fixed or as last extended; and |
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(k) |
the voting
trustee shall, prior to the time of expiration of a voting trust agreement,
as originally fixed or as previously extended, as the case may be, file at
the registered office of the company a copy of the extension agreement and
of his consent thereto, and thereupon the duration of the voting trust
agreement shall be extended for the period fixed in the extension agreement,
but no extension agreement shall affect the rights or obligations of persons
not parties thereto. |
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(2) |
Two or
more members of a company incorporated under this Act may by agreement in
writing provide that in exercising any voting rights the shares held by them
shall be voted |
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(a) |
as
provided by the agreement; |
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(b) |
as the
parties may agree; or |
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(c) |
as
determined in accordance with such procedure as they may agree upon. |
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(3) |
No
agreement made pursuant to subsection (2) shall be effective for a period of
more than 10 years from the date it is made, but at any time within the 2
years immediately preceding the date of the expiration of the agreement the
parties may extend its duration for an additional period, not exceeding 10
years at any one time, as they may desire. |
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(4) |
The
validity of any voting trust or other voting agreement is not affected
during a period of 10 years from the date when it was created or last
extended by reason only of the fact that under its terms it will or may last
beyond a period of 10 years. |
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(5) |
This
section shall be deemed not to invalidate any voting or other agreement
among members or any irrevocable proxy that is not otherwise illegal. |
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63. |
Subject to
any limitations in the Memorandum or Articles, an action that may be taken
by members at a meeting of members may also be taken by a resolution of
members consented to in writing or by telex, telegram, cable or other
written electronic communication, without the need for any notice.
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64. |
(1) |
Any
notice, information or written statement required under this Act to be given
by a company incorporated under this Act to members must be served |
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(a) |
in the
case of members holding registered shares, |
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(i) |
in the
manner prescribed in the Memorandum or Articles, as the case may be, or |
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(ii) |
in the
absence of a provision in the Memorandum or Articles, by personal service or
by mail addressed to each member at the address shown in the share register;
and |
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(b) |
in the
case of members holding bearer shares, in the absence of a provision in the
Memorandum or Articles, or if the notice, information or written statement
can no longer be served as specified in the Memorandum and Articles, if the
notice, information or written statement is published in a newspaper in the
place where the company has its principal office. |
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(2) |
Subject to
a requirement in the Memorandum or Articles to give a specific length of
notice, the directors must give sufficient notice of meetings of members to
members holding bearer shares to allow a reasonable opportunity for them to
take action in order to secure or exercise the right or privilege, other
than the right or privilege to vote, that is the subject of the notice. |
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(3) |
For
purposes of subsection (2), what amounts to sufficient notice is a matter of
fact to be determined after having regard to all the circumstances. |
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65. |
(1) |
Any
summons, notice, order, document, process, information or written statement
to be served on a company incorporated under this Act may be served by
leaving it, or by sending it by registered mail addressed to the company, at
its registered office, or by leaving it with, or by sending it by registered
mail to, the registered agent of the company. |
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(2) |
Service of
any summons, notice, order, document, process, information or written
statements to be served on a company incorporated under this Act may be
proved by showing that the summons, notice, order, document, process,
information or written statement |
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(a) |
was mailed
in such time as to admit its being delivered in the normal course of
delivery, within the period prescribed for service; and |
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(b) |
was
correctly addressed and the postage was prepaid. |
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66. |
(1) |
A company
incorporated under this Act shall keep such accounts and records as the
directors consider necessary or desirable in order to reflect the financial
position of the company. |
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(2) |
A company
incorporated under this Act shall keep |
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(a) |
minutes of
all meetings of |
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(i) |
directors; |
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(ii) |
members; |
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(iii) |
committees
of directors; |
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(iv) |
committees
of officers; and |
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(v) |
committees
of members; and |
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(b) |
copies of
all resolutions consented to by |
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(i) |
directors; |
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(ii) |
members; |
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(iii) |
committees
of directors; |
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(iv) |
committees
of officers; and |
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(v) |
committees
of members. |
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(3) |
The books,
records and minutes required by this section shall be kept at the registered
office of the company or at such other place as the directors determine. |
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(3A) |
A company
incorporated under this Act shall have a common seal and an imprint thereof
shall be kept at the registered office of the company. |
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(4) |
A company
that wilfully contravenes this section is liable to a penalty of $25 for
each day or part thereof during which the contravention continues, and a
director who knowingly permits the contravention is liable to a like
penalty.
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67. |
(1) |
A member
of a company incorporated under this Act may, in person or by attorney and
in furtherance of proper purpose, request in writing specifying the purpose
to inspect during normal business hours the share register of the company or
the books, records, minutes and consents kept by the company and to make
copies or extracts therefrom. |
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(2) |
For
purposes of subsection (1), a proper purpose is a purpose reasonably related
to the member's interest as a member. |
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(3) |
If a
request under subsection (1) is submitted by an attorney for a member, the
request must be accompanied by a power of attorney authorizing the attorney
to act for the member. |
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(4) |
If the
company, by a resolution of directors, determines that it is not in the best
interest of the company or of any other member of the company to comply with
a request under subsection (1), the company may refuse the request. |
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(5) |
Upon
refusal by the company of a request under subsection (1), the member may
before the expiration of a period of 90 days of his receiving notice of the
refusal, apply to the court for an order to allow the inspection. |
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68. |
(1) |
Contracts
may be entered into on behalf of a company incorporated under this Act as
follows: |
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(a) |
a contract
that, if entered into between individuals, is required by law to be in
writing and under seal, may be entered into by or on behalf of the company
in writing under the common seal of the company, and may, in the same
manner, be varied or discharged; |
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(b) |
a contract
that, if entered into between individuals, is required by law to be in
writing and signed by the parties, may be entered into by or on behalf of
the company in writing and signed by a person acting under the express or
implied authority of the company, and may, in the same manner, be varied or
discharged; and |
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(c) |
a contract
that, if entered into between individuals, is valid although entered into
orally, and not reduced to writing, may be entered into orally by or on
behalf of the company by a person acting under the express or implied
authority of the company, and may, in the same manner, be varied or
discharged. |
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(2) |
A contract
entered into in accordance with this section is valid and is binding on the
company and its successors and all other parties to the contract. |
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(3) |
Without
affecting paragraph (a) of subsection (1), a contract, agreement or other
instrument executed by or on behalf of a company by a director or an
authorized officer or agent of the company is not invalid by reason only of
the fact that the common seal of the company is not affixed to the contract,
agreement or instrument. |
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69. |
(1) |
A person
who enters into a written contract in the name of or on behalf of a company
incorporated under this Act before the company comes into existence, is
personally bound by the contract and is entitled to the benefits of the
contract, except where |
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(a) |
the
contract specifically provides otherwise; or |
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(b) |
subject to
any provisions of the contract to the contrary, the company adopts the
contract under subsection (2). |
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(2) |
Within a
reasonable time after a company incorporated under this Act comes into
existence, the company may, by any action or conduct signifying its
intention to be bound thereby, adopt a written contract entered into in its
name or on its behalf before it came into existence. |
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(3) |
When a
company adopts a contract under subsection (2), |
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(a) |
the
company is bound by, and entitled to the benefits of, the contract as if the
company had been in existence at the date of the contract and had been a
party to it; and |
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(b) |
subject to
any provisions of the contract to the contrary, the person who acted in the
name of or on behalf of the company ceases to be bound by or entitled to the
benefits of the contract. |
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70. |
(1) |
If any
contract, agreement, deed or other instrument relating to the payment of a
claim or the delivering or transferring of property, whether real or
personal, wherever situate, is entered into by a company incorporated under
this Act and the contract, agreement, deed or other instrument designates a
payee or beneficiary to receive the payment or property |
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(a) |
upon the
death of the person making the designation; |
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(b) |
upon the
death of another person; or |
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(c) |
upon the
happening of any other event specified in the contract, agreement, deed or
other instrument, |
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then, any
such payment, delivery or transfer, the rights of any payee or beneficiary,
and the ownership of any property received, are not impaired or defeated by
any law or rule of law governing the transfer of property by will, gift or
intestacy. |
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(2) |
Subsection
(1) applies to a contract, agreement, deed or other instrument referred to
in that subsection notwithstanding anything to the contrary in the law of
any other jurisdiction, including the law of any jurisdiction where the
person making the designation referred to in subsection (1) resides or is
domiciled, and notwithstanding that |
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(a) |
the
designation is revocable or subject to change; or |
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(b) |
the claim
or property |
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(i) |
is not yet
payable or transferable, as the case may be, at the time the designation is
made, or |
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(ii) |
is subject
to withdraw, collection or assignment by the person making the designation. |
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70A. |
(1) |
A company
incorporated under this Act may create a mortgage, charge or other
encumbrance over any of its assets situate in any part of the world in
accordance with the law of any jurisdiction of the company's choice and the
mortgage, charge or other encumbrance shall be binding on the company to the
extent, and in accordance with, the requirements, of the chosen law. |
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(2) |
A company
incorporated under this Act may maintain at its registered office a register
of mortgages, charges and other encumbrances in which there shall be entered
particulars regarding each mortgage, charge and other encumbrances as
follows: |
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(a) |
the sum
secured; |
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(b) |
the assets
secured; |
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(c) |
the name
and address of the mortgagee, chargee or other encumbrancer; |
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(d) |
the date
of creation of the mortgage, charge or other encumbrance; and |
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(e) |
the date
on which the particulars specified in paragraphs (a) to (d) in respect of
the mortgage, charge or other encumbrance are entered in the register. |
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(3) |
In the
event that an application is made to a court in the British Virgin Islands
to enforce any mortgage, charge or other encumbrance created by a company
incorporated under this Act and there are assets of the company which are
subject to two or more mortgages, charges or other encumbrances, then,
notwithstanding the provisions of any other law, priorities shall be
determined in accordance with the dates of entry in the register of
mortgages and charges; and, unregistered mortgages, charges and other
encumbrances created after 1st January, 1991 shall rank after registered
mortgages, charges and other encumbrances, but unregistered mortgages,
charges and other encumbrances created prior to 1st January, 1991 shall have
priority over mortgages, charges and other encumbrances registered pursuant
to this provision and shall rank in order of their creation. |
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71. |
A
promissory note or bill of exchange shall be deemed to have been made,
accepted or endorsed by a company incorporated under this Act if it is made,
accepted or endorsed in the name of the company |
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(a) |
by or on
behalf or on account of the company; or |
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(b) |
by a
person acting under the express or implied authority of the company; |
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and if so
endorsed, the person signing the endorsement is not liable thereon. |
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72. |
(1) |
A company
incorporated under this Act may, by an instrument in writing , whether or
not under its common seal, authorize a person, either generally or in
respect of any specified matters, as its agent to act on behalf of the
company and to execute contracts, agreements, deeds and other instruments on
behalf of the company. |
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(2) |
A
contract, agreement, deed or other instrument executed on behalf of the
company by an agent appointed under subsection (1), whether or not under his
seal, is binding on the company and has the same effect as if it were under
the common seal of the company. |
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73. |
(1) |
A document
requiring authentication or attestation by a company incorporated under this
Act may be signed by a director, a secretary or by an authorized officer or
agent of the company, and need not be under its common seal. |
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(2) |
If the
signature of any director, officer or agent authenticating or attesting any
document is verified in writing by the registered agent of a company the
company is bound by the document. |
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74. |
If at any
time there is no member of a company incorporated under this Act, any person
doing business in the name of or on behalf of the company is personally
liable for the payment of all debts of the company contracted during the
time and the person may be sued therefor without joinder in the proceedings
of any other person.
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