(c) if, for a Resolution to be passed or any act or decision to be taken (or not taken) by any Person, a provision of these Regulations and the Rules requires:
(і) a proportion of votes attaching to Shares held in the Company to be obtained; or
(ii) a proportion of the holders of Shares of the Company (which may include Persons representing by proxy other holders of Shares of the Company) to consent or not to consent;
the Shares held as treasury Shares must not, for that provision, be taken into account in working out the total number of Shares held by the Company or whether the required proportion has been attained; and
(d) the Company must not make or receive any dividend, or any other Distribution (whether in cash or otherwise) of the Company’s assets (including any Distribution of assets to Shareholders on a winding up), in respect of the Shares held as treasury Shares; and
(e) the rights in respect of the treasury Shares must not be exercised by or against the Company; and
(f) the obligations in respect of the treasury Shares must not be enforceable by or against the Company; and
(g) any purported exercise or enforcement of a right, obligation, requirement or anything else mentioned in paragraphs (b) to (f) is void.
(5) However, subsection (4) does not prevent:
(a) an Allotment of Shares as fully paid bonus Shares in respect of treasury Shares; or
(b) the payment of any amount payable on the redemption of redeemable Shares that are held as treasury Shares.
(6) If a Company is about to cancel Shares under subsection (2)(a), it may issue Shares up to the Paid-up amount of the Shares to be cancelled as if those Shares had never been issued.
(7) Any Shares allotted by a Company as fully paid bonus Shares in respect of Shares held as treasury Shares must be treated as if they were purchased by the Company at the time they were allotted.
(8) If Shares are held by a Company as treasury Shares:
(a) the Register of Shareholders must include an entry relating to the number of Shares held as treasury Shares; and
(b) the Register must, to the extent it contains details of the Shareholders of the Company, include an entry relating to the number of Shares held as treasury Shares; and
(c) the annual return filed under section 26 (Annual return) must include an entry relating to the number of Shares held as treasury Shares on 1 January in the year of the return.
63. Prohibition on financial assistance to acquire Shares
(1) A Company must not:
(a) if it is a Public Company—provide financial assistance for a Person to acquire Shares, or any units of Shares, in itself or its Holding Company; and
(b) if it is a Private Company—provide financial assistance for a Person to acquire Shares, or units of Shares, in a Holding Company that is a Public Company, unless the provision of the financial assistance is authorised under any 1 or more of subsections (2) to (6).
(2) The provision of the financial assistance is authorised if the provision of the financial assistance:
(a) does not materially prejudice the interests of the Company or its Shareholders or the Company’s ability to discharge its Liabilities as they fall due; and
(b) is approved by a Resolution of Shareholders holding not less than 90% in nominal value of the Shares giving a right to attend and vote at any Shareholders’ meeting.
(3) The provision of the financial assistance is authorised if the Company’s ordinary business includes providing finance and the financial assistance is provided in the ordinary course of that business and on ordinary commercial terms.
(4) The provision of the financial assistance is authorised the financial assistance is provided in connection with, or for the purposes of, an Employee Share Scheme of the Company.
(5) The provision of the financial assistance is authorised if the provision of the financial assistance is only an incidental part of some larger purpose of the Company and the financial assistance is given in good faith in the interests of the Company.
(6) The provision of the financial assistance is authorised if the financial assistance is of a kind prescribed by the Rules for this subsection.
(7) Each Officer of a Company must ensure that the Company does not Contravene this section.
(8) Contravention of this section is punishable by a fine.
(9) In this section:
financial assistance means financial assistance of any kind, and includes any of the following:
(a) making a loan;
(b) making a gift;
(c) issuing a Debt Security;
(d) giving security over the Company’s assets;
(e) giving a guarantee or an indemnity in respect of another Person’s Liability;
but does not include any of the following:
(f) a Distribution of the Company’s assets by way of dividend lawfully made or in the course of the Company’s winding up;
(g) an Allotment of fully paid bonus Shares;
(h) a redemption or purchase by a Company of its own Shares under this Chapter;
(і) a reduction of share capital under Chapter 7.
CHAPTER 7-REDUCTION OF CAPITAL
64. Reduction of Share Capital
(1) A Private Company may reduce its Share Capital by a Special Resolution supported by a solvency statement under section 65 (Reduction of Share Capital by Private Company supported by solvency statement).
(2) A Public Company or Private Company may reduce its Share Capital by a Special Resolution confirmed by the Court, following the procedures in sections 66 (Reduction of Share Capital by Special Resolution confirmed by Court order) and 67 (Court order confirming reduction of Share Capital).
(3) A Company must not reduce its Share Capital under subsection (1) or (2) if:
(a) its Articles of Association contain any prohibition or restriction relating to capital reduction; or
(b) because of the reduction, there would no longer be any Shareholder of the Company other than holders of redeemable Shares; or
(c) if the Company is a Public Company—the reduction in the Share Capital would result in the Company not having the share capital required by section 43 (Minimum share capital)or any other applicable AIFC Regulations and AIFC Rules, except in the circumstances to which section 69 (Public Company reducing its Share Capital below its authorised minimum) applies.
(4) Subject to subsection (3), a Company may reduce its Share Capital in any way, and on the terms, decided by it, including, for example:
(a) by extinguishing or reducing the Liability on any of its Shares in respect of Share Capital not Paid-up, or
(b) either with or without extinguishing or reducing Liability on any of its Shares, by
(і) cancelling any Paid-up Share Capital that is lost or unrepresented by available assets, or
(ii) by repaying any Paid-up Share Capital in excess of the Company’s requirements; or
(c) by causing any of its Shares that have been issued otherwise than as fully Paid-up to be forfeited for Failure to pay any amount payable on them or by accepting their surrender instead of causing them to be forfeited.
(5) For this Chapter, a redemption or purchase by a Company of its Shares in accordance with Chapter 6 is not a reduction of the Share Capital of the Company.
(6) A Company must not reduce its Share Capital otherwise than in accordance with this Chapter. Contravention of this subsection is punishable by a fine.
65. Reduction of Share Capital by Private Company supported by solvency statement
(1) A Resolution for reducing Share Capital of a Private Company is supported by a solvency statement for section 64(1) (Reduction of share capital) if:
(a) on a day not more than 30 days and not less than 15 days before the date the reduction of the Share Capital is to have effect, the Company has published a notice in the Appointed Publications stating the following:
(і) the amount of the Share Capital as most recently determined by the Company;
(ii) the nominal value of each Share;
(iii) the amount by which the Share Capital is to be reduced;
(iv) the date the reduction is to have effect; and
(b) the notice contains a solvency statement that complies with subsection (2).
(2) A solvency statement is a statement by each Director of the Company that the Director:
(a) has formed the opinion, as regards the Company’s situation at the date of the statement, that there is no ground on which the Company could be found to be unable to discharge its debts as they fall due; and
(b) has also formed the opinion that:
(і) if the Company intended to commence its winding up within 12 months after the date of the statement, the Company would be able discharge its debts in full within 12 months of the commencement of the winding up; or
(ii) in any other case, the Company would be able to discharge its debts as they fall due during the year immediately after the date of the statement.
(3) A Director of the Company must not make a solvency statement mentioned in subsection (1)(b) unless the Director has reasonable grounds for the opinion expressed in the statement. In forming the opinion, the Director must take into account all of the Company’s Liabilities (including any contingent or prospective Liabilities).
(4) Contravention of subsection (3) is punishable by a fine.
(5) If a Company reduces the amount of its Share Capital, the Company must, within 14 days after the day the reduction takes effect, file with the Registrar a copy of the notice under subsection (1)
66. Reduction of Share Capital by Special Resolution confirmed by Court order
(1) If a Company is permitted to do so under its Articles of Association and has passed a Special Resolution for reducing its Share Capital, it may apply to the Court for an order confirming the reduction.
(2) If the proposed reduction of Share Capital involves the payment to a Shareholder of any Paid-up Share Capital or a diminution of Liability in respect of any unpaid Share Capital, the subsections (3), (4) and (5) apply, except so far as the Court directs otherwise under subsection (6).
(3) Any Creditor of the Company is entitled to object to the reduction of capital if the Creditor, at the date fixed by the Court, is entitled to a debt or claim that would be admissible in proof against the Company, if that date were the commencement of the winding up of the Company.
(4) The Court must settle a list of Creditors entitled to object under subsection (3). For that purpose, the Court:
(a) must ascertain, as far as possible, without requiring an application from any Creditor, the names of the Creditors and the nature and amount of their debts or claims; and
(b) may publish notices fixing a day or days by which Creditors not entered on the list are to claim to be entered in the list or are to be excluded from the right of objecting to the reduction of capital.
(5) If, for a Creditor entered on the list, the Creditor’s debt or claim is not discharged or has not determined and the Creditor has not consented to the reduction, the Court may dispense with the consent of that Creditor, on the Company securing payment of the Creditor’s debt or claim by appropriating, as the Court may direct, the following amount:
(a) if the Company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it—the full amount of the debt or claim;
(b) if the Company does not admit, and is not willing to provide for, the full amount of the debt or claim or the amount is contingent or not ascertained—an amount fixed by the Court.
(6) The Court may, having regard to any special circumstances of the case, direct that subsections (3), (4) and (5) do not apply, or apply with stated modifications, in relation to any class or any classes of Creditors.
(7) An Officer of the Company must not:
(a) intentionally or recklessly:
(і) conceal the name of a Creditor entitled to object to the reduction of Share Capital, or
(ii) misrepresents the nature or amount of the debt or claim of a Creditor, or
(b) be Knowingly Concerned in any such concealment or misrepresentation.
(8) Contravention of subsection (7) is punishable by a fine.
67. Court order confirming reduction of Share Capital
(1) The Court may, on the terms it considers appropriate, make an order confirming the reduction of a Company’s Share Capital, if satisfied, in relation to every Creditor of the Company who under section 66(3) (Reduction of Share Capital by Special Resolution confirmed by Court order) is entitled to object to the reduction of the Share Capital, that either:
(a) the Creditor has consented to the reduction; or
(b) the Creditor’s debt or claim has been discharged or has determined or has been secured.
(2) If the Court makes an order under subsection (1), it may also make either or both of the following orders:
(a) an order requiring the Company to publish the reasons for the reduction of Share Capital, or the other information about it that the Court considers appropriate, with a view to giving proper information to the public about the causes that led to the reduction;
(b) if there is any reserve arising out of the reduction of Share Capital—an order directing whether or not it is distributable.
68. Registration of order and statement of capital
(1) If the Court confirms the reduction of a Company’s Share Capital, the Company must give the Registrar:
(a) a copy of the order of the Court confirming the reduction; and
(b) a statement of capital, approved by the Court, showing in respect of the Company’s Share Capital:
(і) the total number of issued Shares; and
(ii) the aggregate nominal value of those Shares; and
(iii) the amount Paid-up and unpaid (if any) on each Share (whether on account of the nominal value or by way of premium).
(2) The Registrar must register the order and statement of capital. On that registration the Special Resolution for reducing the Share Capital as confirmed by the order takes effect.
(3) The Registrar must certify the registration of the order and statement of capital. The certificate:
(a) must be signed by the Registrar; and
(b) is conclusive evidence that all the requirements of these Regulations and the Rules in relation to the reduction of Share Capital have been complied with and that the Company’s Share Capital is as stated in the statement of capital.
(4) On its registration, the statement of capital is taken to be substituted for the corresponding part of the Articles of Association.
69. Public Company reducing its Share Capital below its authorised minimum
(1) If registration of an order of the Court under section 67 (Court order confirming reduction of Share Capital) in relation to a Public Company would result in the Company not having the Share Capital required by section 43 (Minimum share capital), the Registrar must nor register the order unless the Company is first re-registered as a Private Company under section 39 (Re-registration of Public Company as Private Company) or the Court has made an order under subsection (2).
(2) The Court may, by order, authorise the Company to be re-registered as a Private Company without it having passed the Special Resolution required under section 39 (Re-registration of Public Company as Private Company). The order must specify the changes to the Articles of Association and name in connection with the re-registration.
(3) The Registrar must, on receipt of an order under subsection (2), issue a certificate of incorporation altered to meet the circumstances of the case. On the issue of the certificate, the Company becomes a Private Company and the changes to the Articles of Association and its name take effect.
70. Liability to Creditors in respect of reduction of Share Capital by Court order
(1) This section applies if:
(a) a Creditor entitled to object to the reduction of the Share Capital of a Company is not entered on the list of Creditors under section 66 (Reduction of Share Capital by Special Resolution confirmed by Court order) because of the Creditor’s ignorance of the proceedings for the reduction or of the nature and effect of the proceedings on the Creditor’s claim; and
(b) after the reduction of capital, the Company is unable to pay the amount of the Creditor’s debt or claim.
(2) Every Person who was a Shareholder of the Company on the day the Special Resolution for reducing the Share Capital took effect under section 68(2) (Registration of order and statement of capital) is liable to contribute, towards payment of the Creditor’s debt or claim, an amount not exceeding the amount that the Person would have been liable to contribute if the Company had commenced to be wound up on the previous day.
(3) If the Company is wound up under these Regulations, the Court, on the application of the Creditor and proof that the Creditor is a Creditor mentioned in subsection (1)(a), may settle a list of Persons liable to contribute under subsection (2), and may make and enforce calls and orders on the Persons included on the list as if they were ordinary contributories in a winding up.
(4) This section does not affect the rights of the listed Persons among themselves.
71. Treatment of reserves arising from reduction of capital
Any reserve arising from the reduction of a Company’s Share Capital is only distributable as provided in the Articles of Association or authorised by a Special Resolution, unless otherwise provided by an order of the Court under section 67(2)(b) (Court order confirming reduction of Share Capital).
72. Restrictions on Distributions
(1) A Company must not make a Distribution unless the Distribution is made out of profits available for Distribution. The profits available for Distribution are the Company’s accumulated, realised profits (so far as not previously utilised by Distribution or capitalisation) less its accumulated, realised losses (so far as not previously written off in a reduction or reorganisation of capital duly made).
(2) A Public Company must not make a Distribution:
(a) unless the amount of its net assets is not less than the aggregate of its share capital and undistributable reserves; and
(b) unless, and only to the extent that, the Distribution does not reduce the amount of those net assets to less than that aggregate.
(3) Whether a Distribution may be made by a Company without Contravening this section is determined by reference to the following items as stated in the relevant accounts:
(a) profits, losses, assets and Liabilities;
(b) provisions of any kind;
(c) share capital and reserves (including undistributable reserves).
(4) The relevant accounts are the Company’s last annual accounts, except that:
(a) if the Distribution would be found to Contravene this section by reference to the Company’s last annual accounts—it may be justified by reference to interim accounts; and
(b) if the Distribution is proposed to be declared during the Company’s first accounting reference period or before any accounts have been prepared in respect of that period—may be justified by reference to initial accounts.
(5) If the relevant accounts are:
(a) the Company’s last annual accounts—the accounts must be the accounts that were sent to Shareholders under section 131(4) (Accounts); and
(b) interim accounts—the accounts must be properly prepared so as to enable a reasonable judgement to be made about the amounts of the items mentioned in subsection (3); and
(c) initial accounts—the accounts must be properly prepared so as to enable a reasonable judgement to be made about the amounts of the items mentioned in subsection (3) and, if the Company is a Public Company, accompanied by a report from the Company’s auditor stating whether, in the auditor’s opinion, the accounts have been properly prepared.
(6) If any applicable requirement in subsection (5) is not complied with in relation to any accounts, the accounts may not be relied on for this section and the Distribution is accordingly treated as a Contravention of this section.
(7) In this section:
auditor means a Person who is registered by the Registrar as an auditor under these Regulations.
Distribution, in relation to a Company, means every description of distribution of the Company’s assets to its Shareholders, whether in cash or otherwise, except a distribution by way of:
(a) an issue of bonus Shares; or
(b) the redemption or purchase of any of the Company’s own Shares out of share capital (including the proceeds of any fresh issue of Shares), or out of unrealised profits, in accordance with these Regulations and the Rules; or
(c) the reduction of share capital either by:
(і) extinguishing or reducing the Liability of any of the Shareholders in respect of share capital not Paid-up or by repaying any Paid-up share capital; and
(ii) a distribution of assets to Shareholders on the winding up of the Company.
undistributable reserves, of a Company, means any of the following:
(a) its share premium account;
(b) any capital redemption reserve;
(c) the amount by which its accumulated, unrealised profits (so far as not previously utilised by Distribution or capitalisation) exceeds its accumulated, unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made);
(d) any other reserve that the Company is prohibited from distributing by its Articles of Association or under any applicable AIFC Regulations or AIFC Rules.
(8) Contravention of this section is punishable by a fine.
73. Consequences of unlawful Distribution
If a Distribution, or part of a Distribution, made by a Company to any of its Shareholders is made in Contravention of section 72 (Restrictions on Distributions) and, at the time of the Distribution, the Shareholder knows or has reasonable grounds for believing that it is made in Contravention of that section, the Shareholder is liable to repay the Distribution, or that part of it, to the Company or, for a Distribution made otherwise than in cash, to pay to the Company an amount equal to the value of the Distribution, or that part, at that time.
CHAPTER 9-DIRECTORS AND SECRETARIES
74. Directors
(1) A Private Company must have at least 1 director and a Public Company must have at least 2 directors.
(2) A Person must not be a Director if the Person:
(a) is not a natural person; or
(b) is under 18 years old; or
(c) is disqualified from being a Director because of:
(і) having been convicted of a criminal offence, involving dishonesty or moral turpitude, in any jurisdiction in the past 10 years; or
(ii) having been found guilty of insider trading or the equivalent in any jurisdiction at any time; or
(iii) having been judged disqualified by any court; or
(iv) having been disqualified by the AFSA; or
(v) a disqualification specified in the Articles of Association; or
(d) is an undischarged bankrupt.
75. Election, term and removal of directors
(1) The first directors of a Company must be elected by the Incorporators. Subsequent directors must be elected by the Shareholders by Ordinary Resolution, or as otherwise provided by the Articles of Association, for the term that the Shareholders decide.
(2) Each director holds office until the director’s successor takes office or until the director’s earlier death, resignation or removal by Ordinary Resolution or as otherwise provided by the Articles of Association.
(3) A vacancy created by the death, resignation or removal of a director may be filled by Ordinary Resolution or, if the vacancy is not filled by an Ordinary Resolution, by the remaining directors. However:
(a) any director appointed by the remaining directors is subject to reappointment by Ordinary Resolution at the next General Meeting; and
(b) if an Ordinary Resolution of reappointment of the director is not passed at the next General Meeting—the director ceases to be a director at the conclusion of the General Meeting.
(4) The number of directors must be fixed by the Articles of Association subject to the requirements of section 74(1) (Directors).
(5) If, at a General Meeting, it is proposed that 2 or more persons be appointed as directors, the appointments must be made by a separate Resolution in respect of each person, unless unanimously agreed otherwise by the Shareholders at the meeting.
(1) The duties of Directors under sections 77 to 83 and section 85 are owed by each Director of a Company to the Company.
(2) If a person ceases to be a Director, the person continues to be subject to:
(a) the duty under section 81 (Duty to avoid conflicts of interest), in relation to the exploitation of any property, information or opportunity of which the person became aware when the person was a Director; and
(b) the duty under section 82 (Duty not to accept benefits from third parties), in relation to things done or omitted to be done by the person before the person ceased to be a Director.
(3) Except as otherwise provided in these Regulations, more than 1 of the duties of Directors may apply in any given case.
(4) The Constitutional Documents of a Company must not include any provision the effect of which would be to weaken the duties of Directors under this Chapter.
A Director of a Company must:
(a) act in accordance with the Constitutional Documents; and
(b) only exercise the powers of a Director for the purposes for which the powers have been given.
78. Duty to promote success of Company
(1) A Director of a Company must act in the way the Director honestly considers, in good faith, would be most likely to promote the success of the Company for the benefit of its Shareholders as a whole and, in doing so, must have regard, among other matters, to:
(a) the likely consequences of any decision in the long term; and
(b) the interests of the Company’s Employees; and
(c) the need to foster the Company’s business relationships with suppliers, customers and others; and
(d) the impact of the Company’s operations on the community and the environment; and
(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly as between Shareholders of the Company.
(2) To the extent that the purposes of the Company consist of or include purposes other than the benefit of its Shareholders, the reference in subsection (1) to the benefit of its Shareholders has effect as if it included those other purposes.
(3) The duty imposed under this section has effect subject to any law applicable to the Company requiring Directors, in certain circumstances, to consider or act in the interests of the Company’s Creditors or customers.
79. Duty to exercise independent judgement
(1) A Director of a Company must exercise independent judgement.
(2) A Director of a Company does not infringe the duty under subsection (1) if the Director acts:
(a) in accordance with an agreement duly entered into by the Company that restricts the future exercise of discretion by its Directors; or
(b) in a way authorised by the Constitutional Documents.
80. Duty to exercise reasonable care, skill and diligence
A Director of a Company must exercise the care, skill and diligence that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person Exercising the Functions Exercised by the Director in relation to the Company; and
(b) the general knowledge, skill and experience that the Director has.
81. Duty to avoid conflicts of interest
(1) A Director of a Company must avoid a situation in which the Director has, or can have, a direct or indirect interest that conflicts, or may possibly conflict, with the interests of the Company.
(2) The duty under subsection (1) applies in particular to the exploitation of any property, information or opportunity.
(3) The duty under subsection (1) does not apply to a conflict of interest arising in relation to a transaction or arrangement if the requirements of section 83 (Duty to declare interest in proposed transaction or arrangement) or 85 (Duty to declare interest in existing transaction or arrangement) are met.
(4) A Director of a Company does not Contravene the duty under subsection (1) if:
(a) the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(b) the Directors of the Company have authorised the situation in accordance with the Articles of Association and any applicable provisions of these Regulations and the Rules.
(5) A Company’s Articles of Association may include alternative procedures for avoiding conflicts of interests. A Director does not Contravene the provisions of this section by acting in accordance with the alternative procedures.
(6) In this section:
conflict of interest includes a conflict of an interest and a duty and a conflict of duties.
82. Duty not to accept benefits from third parties
(1) A Director of a Company must not accept a benefit from a third party if the benefit is given to the Director:
(a) because of the Director’s position as a Director of the Company; or
(b) for doing (or not doing) anything as a Director of the Company;
unless the acceptance of the benefit cannot reasonably be regarded as likely to give rise to a conflict of interest.
(2) In this section:
conflict of interest includes a conflict of an interest and a duty and a conflict of duties.
83. Duty to declare interest in proposed transaction or arrangement
(1) This section applies if a Director of a Company becomes aware, or ought reasonably to have become aware, that the Director is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the Company.
(2) The Director must declare the nature and extent of the interest to the other Directors of the Company in accordance with section 85 (Duty to declare interest in existing transaction or arrangement).
(3) But the declaration must be made before the proposed transaction or arrangement is entered into. For a declaration under this section, section 85 (Duty to declare interest in existing transaction or arrangement) applies to the Director with any other necessary changes.
84. Breaches of Directors’ duties
If a Director of a Company Breaches any 1 or more of the duties under sections 77 to 83, the Director is taken to have Contravened these Regulations.
85. Duty of Directors to declare interest in existing transaction or arrangement
(1) If a Director of a Company has, directly or indirectly, an interest in a transaction or arrangement entered into by the Company or a Subsidiary of the Company and the Director is aware that the interest conflicts or may conflict, to a material extent, with the interests of the Company or Subsidiary, the Director must unless the Director has previously declared such interest under section 83 (Duty to declare interest in proposed transaction or arrangement), declare to the other Directors of the Company the nature and extent of the Director’s interest in accordance with this section.
(2) The declaration must be made as soon as practicable after the Director becomes aware of the circumstances that gave rise to the duty to make the declaration.
(3) The declaration must be made:
(a) at a meeting of the Directors; or
(b) by a general Written notice given to the other Directors.
(4) A declaration made at a meeting of the Directors under subsection (3)(a) must be tabled at, and recorded in the minutes of, the meeting.
(5) A declaration made by way of a general Written notice given to the other Directors under subsection (3)(b) must be tabled at, and recorded in the minutes of, the first meeting of the Directors after the declaration is made or, if it is not reasonably practicable to do so at that meeting, at the next earliest meeting of the Directors.
(6) A notice given to the Company by a Director that the Director is to be regarded as interested in a transaction or arrangement with a specified Person is sufficient declaration of the Director’s interest in any transaction or arrangement entered into with the Person after the notice is given.
(7) If a declaration of interest for section 83 or this section proves to be, or becomes, inaccurate or incomplete, a further declaration must be made, in the same way as the initial declaration.
(8) If a Director of a Company Fails to declare an interest of under this section or section 83, the Company, a Shareholder of the Company or the Registrar may apply to the Court for an order under this subsection. On the application, the Court may make any order that it considers appropriate, including, for example, either or both of the following:
(a) an order setting aside the relevant transaction or arrangement;
(b) an order directing the Director to account to the Company for any benefit, gain or profit obtained because of the relevant transaction or arrangement.
(9) However, a transaction or arrangement is not voidable, and a Director is not accountable, under subsection (8) in relation to it if, despite a Failure to comply with this section:
(a) the transaction or arrangement is ratified by the Company under section 86 (Ratification on interest in existing transaction or arrangement) at a General Meeting; and
(b) the nature and extent of the Director’s interest in the transaction or arrangement were declared in reasonable detail in the notice calling the General Meeting.
(10) Also, without limiting the Court’s power to order a Director to account for any profit, gain or benefit realised, the Court must not set aside a transaction or arrangement unless it is satisfied that:
(a) the interests of third parties who have acted in good faith would be unfairly prejudiced if the transaction or arrangement were not set aside; or
(b) the transaction or arrangement was not reasonable and fair in the interests of the Company at the time it was made.
86. Ratification of interest in existing transaction or arrangement
(1) This section applies to the ratification by a Company of a transaction or arrangement mentioned in section 85(1) (Duty to declare interest in existing transaction or arrangement).
(2) The Company may, by an Ordinary Resolution, ratify the transaction or arrangement, unless its Constitutional Documents prohibit from doing so.
(3) If the Company is a Public Company, any votes cast by the Director or Directors who have the conflict of interest in the transaction or arrangement, and any other Connected Person to such a Director, must be disregarded for the purposes of any Ordinary Resolution mentioned in subsection (2).
(4) In this section:
Connected Person, in relation to a Director, means:
(a) the spouse, or a child, stepchild or a grand-child, of the Director; or
(b) a Body Corporate if the Director, alone or together with an individual or individuals mentioned in paragraph (a):
(і) has at least 20% of any share capital of the Body Corporate; or
(ii) is entitled to exercise or control the exercise of more than 20% of the voting power at any general meeting of the Body Corporate; or
(c) if the Director, or an individual mentioned in paragraph (a), is a partner in a partnership—each partner in the partnership; or
(d) any other Person declared by the Rules to be a Connected Person for this definition.
87. Prohibition of financial assistance to Directors etc.
(1) Subject to subsection (4), a Company must not provide financial assistance of any of the following kinds to a Director: