Companies (Amendment) Bill

This Act may be cited as the Companies (Amendment) Act 2000 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

The Minister may appoint different dates for the coming into operation of the different provisions of this Act.

This Act may be cited as the Companies (Amendment) Act 2000 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

The Minister may appoint different dates for the coming into operation of the different provisions of this Act.

Section 4 of the Companies Act is amended —

by inserting, immediately after the definition of “private company” in subsection (1), the following definition:“ “profile statement” means a profile statement referred to in section 45A;”;

by inserting, immediately after the definition of “repealed written laws” in subsection (1), the following definition:“ “replacement document” means a replacement prospectus or a replacement profile statement referred to in section 50A(1), as the case may be;”;

by inserting, immediately after the definition of “statutory report” in subsection (1), the following definition:“ “supplementary document” means a supplementary prospectus or a supplementary profile statement referred to in section 50A(1), as the case may be;”; and

by deleting subsection (6) and substituting the following subsection:“(6) Any reference in this Act to offering shares or debentures, or units of shares or debentures, to the public or to issuing an invitation to the public in respect of shares or debentures, or units of shares or debentures, shall, unless the contrary intention appears, include a reference to offering shares or debentures, or units of shares or debentures, to any section of the public or to issuing an invitation to any section of the public, as the case may be, whether selected as clients of the person making the offer or issuing the invitation or in any other manner, but does not include the following:

an offer or invitation to enter into an underwriting agreement, whether or not relating to shares or debentures, or units of shares or debentures, that have been previously issued;

an offer or invitation made to existing members or debenture holders of a corporation which —

relates to shares in or debentures of that corporation, or to units of such shares or debentures; and

is not an offer or invitation to which section 47 applies; and

an offer made to existing members of a company under section 306 which relates to shares, or units of shares, in the company.”.

Section 12B of the Companies Act is amended by inserting, immediately after subsection (2), the following subsections:“(3) Notwithstanding subsections (1) and (2), an officer of a company may notify the Registrar in the prescribed form of any typographical or clerical error contained in any document relating to the company lodged with the Registrar.

The Registrar may, upon receipt of any notification referred to in subsection (3), rectify the registers accordingly.”.

Section 43 of the Companies Act is amended —

by deleting subsections (1), (2) and (2A) and substituting the following subsections:“(1) No person shall make an offer or invitation to the public in respect of shares in or debentures of, or units of shares in or debentures of, a corporation unless —

a prospectus prepared in accordance with section 45 in respect of such shares or debentures, or such units of shares or debentures, has been lodged with and registered by the Registrar; and

such offer or invitation is made in or accompanied by a profile statement lodged with and registered by the Registrar under section 45A, if not made in or accompanied by a prospectus referred to in paragraph (a).

No person shall make an offer or invitation to the public in respect of shares in or debentures of, or units of shares in or debentures of, a corporation which has not been formed or does not exist.

Subsection (1) shall not apply to an offer made or invitation issued to the public in respect of shares or debentures, or units of shares or debentures, that is exempted under Division 5A of this Part.”; and

by inserting, immediately after the words “subsection (1)” in subsection (3), the words “or (2)”.

Section 45 of the Companies Act is repealed and the following section substituted therefor:“Contents of prospectuses45.—

A prospectus for an offer or invitation to the public in respect of shares in or debentures of, or units of shares in or debentures of, a corporation shall contain —

all the information that investors and their professional advisers would reasonably require to make an informed assessment of the matters specified in subsection (3); and

the matters specified in the Fifth Schedule.

The prospectus shall, with respect to subsection (1)(a), contain such information —

only to the extent to which it is reasonable for investors and their professional advisers to expect to find in the prospectus; and

only to the extent that a person whose knowledge is relevant —

actually knows the information; or

in the circumstances ought reasonably to have obtained the information by making enquiries.

The matters referred to in subsection (1)(a) shall relate to —

the rights and liabilities attaching to the shares or debentures, or units of shares or debentures;

the assets and liabilities, profits and losses, financial position and performance, and prospects of the corporation that is to issue or has issued the shares or debentures, or units of shares or debentures;

in the case of options over shares or debentures, the capacity of the person making the offer or invitation to issue or deliver the relevant shares or debentures; and

if the person making the offer or invitation is one who controls the corporation whose shares or debentures underlie the offer or invitation, the assets and liabilities, profits and losses, financial position and performance, and prospects of the corporation.

In deciding what information shall be included under subsection (1)(a), regard shall be had to —

the nature of the shares or debentures, or units of shares or debentures, and the nature of the corporation concerned;

the matters that likely investors may reasonably be expected to know; and

the fact that certain matters may reasonably be expected to be known to the professional advisers of such investors.

For the purposes of subsection (2), a person’s knowledge is relevant only if he is one of the following persons:

the person making the offer or invitation in respect of the shares or debentures, or units of shares or debentures;

if the person making the offer or invitation in respect of the shares or debentures, or units of shares or debentures, is a corporation, a director of the corporation;

a proposed director of the corporation whose shares or debentures, or units of shares or debentures, will be issued under the offer or invitation;

a person named in the prospectus as an underwriter of the issue or sale;

a person named in the prospectus as a stockbroker to the issue or sale if he participates in any way in the preparation of the prospectus;

a person named in the prospectus with his consent as having made a statement —

that is included in the prospectus; or

on which a statement made in the prospectus is based;

a person named in the prospectus with his consent as having performed a particular professional or advisory function.

A condition requiring or binding an applicant for shares in or debentures of, or units of shares in or debentures of, a corporation to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.

This section shall not affect any liability that a person has under any other law.

The Minister may, by notification in the Gazette, add to, vary or amend the Fifth Schedule.”.

The Companies Act is amended by inserting, immediately after section 45, the following section:“Profile statement45A.—

Subject to this section, nothing in this Act shall be construed as preventing any person from issuing, circulating or distributing an extract from, or an abridged version of, the prospectus (referred to in this section as the profile statement) if —

a copy of the profile statement and the prospectus have been lodged with and registered by the Registrar; and

sufficient copies of the prospectus are made available free of charge for collection at the times and places specified in the profile statement.

The directors of the corporation concerned shall ensure that the profile statement shall contain at least —

the following particulars:

identification of the corporation and the nature of the shares or debentures, or units of shares or debentures, to which the prospectus relates;

the nature of the risks involved in investing in the shares or debentures, or units of shares or debentures; and

details of all amounts payable in respect of the shares or debentures, or units of shares or debentures (including any amount by way of fee, commission or charge);

a statement that copies of the prospectus are available free of charge for collection at the times and places specified in the profile statement; and

a statement that the directors are satisfied that the profile statement contains a fair summary of the key information set out in the prospectus.

A profile statement shall not contain —

any statement or matter that is false or misleading in the form and context in which it is included; (b)any material information that is not contained in the prospectus; and

any material information that differs in any material particular from that set out in the prospectus.

The Registrar may refuse to register a copy of any profile statement if —

it is not in compliance with subsection (2) or (3);

the copy, signed by every director and by every person who is named therein as a proposed director of the corporation or by his agent authorised in writing, is not lodged with the Registrar on or before the date of its issue;

the prospectus has not been registered or is not to be registered at the same time; or

it appears to the Registrar that it is not in the public interest to do so.

Sections 50(2A), (2B) and (2C) and 54 shall apply in relation to a profile statement as they apply in relation to a prospectus.

If a profile statement is issued, circulated or distributed without a copy thereof having been registered by the Registrar, the corporation and every person who is knowingly a party to the issue, circulation or distribution of the profile statement shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.”.

Section 46 of the Companies Act is repealed and the following section substituted therefor:“Exemption from requirements as to form or content of prospectus or profile statement46.—

A person may apply to the Registrar in writing for an order of exemption from any requirement of this Act relating to the form or content of a prospectus or a profile statement, and the Registrar may make such an order either unconditionally or subject to such conditions as he may think fit to impose.

The Registrar shall not make an order under subsection (1) unless he is of the opinion that compliance with the requirements in respect of which exemption has been applied for would be unduly burdensome.

The Registrar may, by order published in the Gazette, exempt any class or description of prospectuses or profile statements from such requirement of this Act relating to the form or content of a prospectus or a profile statement, as the case may be, as may be specified in the order.

An exemption referred to in subsection (3) may be subject to such conditions as may be specified in the order.

Any person who contravenes or fails to comply with any of the conditions specified in the order made under subsection (1) or (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.

A prospectus or a profile statement shall be deemed to be in compliance with all the requirements of this Act relating to the form and content of a prospectus or a profile statement, as the case may be, if it is issued in compliance with an order made under subsection (1) or (3).”.

Section 48 of the Companies Act is repealed and the following section substituted therefor:“Restrictions on advertisements, etc.48.—

A person shall not —

advertise; or

publish a statement that directly or indirectly refers to,an offer or intended offer of shares or debentures, or units of shares or debentures, to the public for subscription or purchase that would need a prospectus or a profile statement.

If an offer or intended offer of shares or debentures, or units of shares or debentures, to the public for subscription or purchase needs a prospectus or a profile statement, a person shall not —

advertise the offer or intended offer; or

publish a statement that —

directly or indirectly refers to the offer or intended offer; or

is reasonably likely to induce people to subscribe or purchase the shares or debentures, or units of shares or debentures,unless the advertisement or publication is authorised by subsection (4), (5), (7) or (8).

In deciding whether a statement —

indirectly refers to an offer or intended offer of shares or debentures, or units of shares or debentures; or

is reasonably likely to induce people to apply for or purchase the shares or debentures, or units of shares or debentures,regard shall be had to whether the statement —

forms part of the normal advertising of a corporation’s products or services and is genuinely directed at maintaining its existing customers, or attracting new customers, for those products or services; (ii)communicates information that materially deals with the affairs of the corporation; and

is likely to encourage investment decisions being made on the basis of the statement rather than on the basis of information contained in a prospectus or a profile statement.

For the avoidance of doubt, a person may disseminate a prospectus or a profile statement that has been registered by the Registrar without contravening subsection (1).

Before a prospectus or a profile statement is registered by the Registrar, an advertisement or publication does not contravene subsection (1) if it contains the following but nothing more:

a statement that identifies the offeror and the shares or debentures, or units of shares or debentures;

a statement that a prospectus or a profile statement for the offer will be made available when the shares or debentures, or units of shares or debentures, are offered;

a statement that anyone who wants to acquire the shares or debentures, or units of shares or debentures, will need to make an application in the manner set out in the prospectus or the profile statement; and

a statement on how to arrange to receive a copy of the prospectus or the profile statement.

To satisfy subsection (5), the advertisement or publication shall include all of the statements referred to in paragraphs (a), (b) and (c) of that subsection, and may include the statement referred to in paragraph (d).

After the prospectus or the profile statement is registered by the Registrar, an advertisement or publication does not contravene subsection (1) if it includes a statement to the effect that —

the offer of the shares or debentures, or units of shares or debentures, will be made in, or accompanied by, a copy of the prospectus or the profile statement; and

anyone wishing to acquire the shares or debentures, or units of shares or debentures, will need to make an application in the manner set out in the prospectus or the profile statement.

An advertisement or publication does not contravene subsection (1) if it —

consists of a notice or report by the corporation or one of its officers about its affairs to a stock exchange;

consists solely of a notice or report by the corporation or one of its officers of a general meeting;

consists solely of a report about the corporation that is published by the corporation or one of its officers and —

does not contain information that materially affects affairs of the corporation other than information previously made available in a prospectus that has been registered by the Registrar, an annual report or a report referred to in paragraph (a) or (b); and

does not refer (whether directly or indirectly) to the offer;

is a news report or a genuine comment, in a newspaper, periodical or magazine or on radio or television, or any other means of broadcasting or communication, relating to —

a prospectus or a profile statement that has been registered by the Registrar or information contained in such a prospectus or a profile statement; or

a notice or report covered by paragraph (a), (b) or (c);

is a report about the shares in or debentures of, or units of the shares in or debentures of, the corporation published by someone who is not —

the corporation;

acting at the instigation of, or by arrangement with, the corporation;

a director of the corporation; or

a person who has an interest in the success of the issue or sale of the shares or debentures, or units of shares or debentures; or

is published in the ordinary course of a business of —

publishing a newspaper, periodical or magazine; or

broadcasting by radio, television or any other means of broadcasting or communication,and the person who published the advertisement or statement did not know and had no reason to suspect that its publication would amount to a contravention of subsection (1).

Subsection (8)(d) and (e) shall not apply if any person gives consideration or any other benefit for the publication of the report or comment, as the case may be.

Any person who contravenes or fails to comply with subsection (1), and every officer of the corporation concerned, or other person, who knowingly authorised or permitted the publication or dissemination, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months.

This section shall not affect any liability that a person has under any other law.

The Minister may, by order published in the Gazette, exempt any person or class of persons from this section, subject to such conditions as may be specified in the order.

For the purposes of this section, “offer” or “intended offer” of shares or debentures, or units of shares or debentures, includes an invitation to the public in respect thereof.”.

Section 50(3) of the Companies Act is amended by deleting the words “$2,000 or to imprisonment for a term not exceeding 6 months” at the end thereof and substituting “$50,000”.

The Companies Act is amended by inserting, immediately after section 50, the following section:“Lodging supplementary document or replacement document50A.—

If the person making an offer or invitation to the public in respect of shares in or debentures of, or units of shares in or debentures of, a corporation becomes aware of —

a false or misleading statement in the prospectus or the profile statement;

an omission, from the prospectus or the profile statement, of information required by section 45 or 45A, as the case may be; or

a new circumstance that —

has arisen since the prospectus or the profile statement was registered by the Registrar; and (ii)would have been required by section 45 or the Fifth Schedule to be included in the prospectus, or by section 45A to be included in the profile statement, if it had arisen before the prospectus or the profile statement was registered,that is materially adverse from the point of view of an investor, the person may lodge a supplementary or replacement prospectus or a supplementary or replacement profile statement (referred to in this section as a supplementary or replacement document, as the case may be) with the Registrar.

At the beginning of a supplementary document, there shall be —

a statement that it is a supplementary prospectus or a supplementary profile statement, as the case may be; (b)an identification of the prospectus or the profile statement it supplements;

an identification of any previous supplementary document lodged with the Registrar in relation to the offer or invitation; and (d)a statement that it is to be read together with the prospectus or the profile statement it supplements and any previous supplementary document.

At the beginning of a replacement document, there shall be —

a statement that it is a replacement prospectus or a replacement profile statement, as the case may be; and

an identification of the prospectus or the profile statement it replaces.

The supplementary document and the replacement document must be dated with the date on which they are lodged with the Registrar.

The person who lodges a supplementary document or the corporation concerned shall take reasonable steps to inform investors of such lodgment and make available the supplementary document free of charge to them, whereupon, for the purposes of the application of this Part to events that occur after the lodgment of the supplementary document —

where the supplementary document is a supplementary prospectus, the prospectus shall be taken to be the prospectus together with the supplementary prospectus; and

where the supplementary document is a supplementary profile statement, the profile statement shall be taken to be the profile statement together with the supplementary profile statement.

The person who lodges a replacement document or the corporation concerned shall take reasonable steps to inform investors of such lodgment and make available the replacement document free of charge to them, whereupon, for the purposes of the application of this Part to events that occur after the lodgment of the replacement document —

where the replacement document is a replacement prospectus, the prospectus shall be taken to be the prospectus together with the replacement prospectus; and

where the replacement document is a replacement profile statement, the profile statement shall be taken to be the profile statement together with the replacement profile statement.”.

Section 55 of the Companies Act is repealed and the following sections substituted therefor:“Civil liability for false or misleading statements and omissions55.—

Where an offer or invitation in respect of shares or debentures, or units of shares or debentures, is made under a prospectus or a profile statement and —

a false or misleading statement is contained in —

the prospectus or the profile statement; or

any application form that is in or accompanies the prospectus or the profile statement;

there is an omission to state any information required to be disclosed under section 45 in respect of the prospectus, or under section 45A in respect of the profile statement; or

there is an omission to state a new circumstance that —

has arisen since the prospectus or the profile statement was registered by the Registrar; and

would have been required by section 45 to be included in the prospectus, or by section 45A to be included in the profile statement, if it had arisen before the prospectus or the profile statement was registered,the persons referred to in subsection (3) shall be liable to compensate any person who suffers loss or damage as a result of the false or misleading statement in or omission from the prospectus or the profile statement, even if such persons were not involved in the making of the false or misleading statement or the omission.

For the purposes of subsection (1), a false or misleading statement about a future matter (including the doing of, or the refusal to do, an act) is taken to have been made if a person makes the statement without having reasonable grounds for making the statement.

The persons liable are —

the person making the offer or invitation to the public;

if the offer or invitation is made by a corporation, each director of the corporation;

a person named in the prospectus or the profile statement with his consent as a proposed director of the corporation;

an underwriter (but not a sub-underwriter) to the issue or sale of the shares or debentures, or units of shares or debentures, named in the prospectus or the profile statement with his consent;

a person named in the prospectus or the profile statement with his consent as having made a statement —

that is included in the prospectus or the profile statement; or

on which a statement made in the prospectus or the profile statement is based,but only in respect of the inclusion of that statement; and

a person who made the false or misleading statement, or omitted to state the information or circumstance, as the case may be.

A person who acquires shares or debentures, or units of shares or debentures, as a result of an offer or invitation that was made in or accompanied by a profile statement is taken to have acquired the shares or debentures, or units of shares or debentures, in reliance on both the profile statement and the prospectus for the offer.

An action under subsection (1) may begin at any time within 6 years after the day on which the cause of action arose.

This section shall not affect any liability that a person has under any other law.Persons liable to inform person making offer or invitation about certain deficiencies55A.—

A person referred to in section 55(3) shall notify in writing the person making an offer or invitation in respect of shares or debentures, or units of shares or debentures, as soon as practicable, if he becomes aware during the application period that —

a material statement in the prospectus or the profile statement is false or misleading;

there is a material omission from the prospectus of material required by section 45, or from the profile statement of material required by section 45A; or

a material new circumstance —

has arisen since the prospectus or the profile statement was registered by the Registrar; and

would have been required by section 45 to be included in the prospectus, or by section 45A to be included in the profile statement, as the case may be, if it had arisen before the prospectus or the profile statement was registered.

Any person who fails to comply with subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000.Defences55B.—

A person is not liable under section 55(1) only because of a false or misleading statement in a prospectus or a profile statement if the person proves that he —

made all inquiries (if any) that were reasonable in the circumstances; and

after doing so, believed on reasonable grounds that the statement was not false or misleading.

A person is not liable under section 55(1) only because of an omission from a prospectus or a profile statement in relation to a particular matter if the person proves that he —

made all inquiries (if any) that were reasonable in the circumstances; and

after doing so, believed on reasonable grounds that there was no omission from the prospectus or the profile statement in relation to that matter.

A person is not liable under section 55(1) only because of a false or misleading statement in, or an omission from, a prospectus or a profile statement if the person proves that he placed reasonable reliance on information given to him by —

if the person is a corporation, someone other than a director, an employee or agent of the corporation; or

if the person is an individual, someone other than an employee or agent of the individual.

For the purposes of subsection (3), a person is not the agent of a corporation or an individual merely because he performs a particular professional or advisory function for the corporation or individual.

A person who is named in a prospectus or a profile statement as —

being a proposed director or underwriter;

making a statement included in the prospectus or the profile statement; or

making a statement on the basis of which a statement is included in the prospectus or the profile statement,is not liable under section 55(1) only because of a false or misleading statement in, or an omission from, the prospectus or the profile statement if the person proves that he publicly withdrew his consent to being named in the prospectus or the profile statement in that way.

A person is not liable under section 55(1) only because of a new circumstance that has arisen since the prospectus or the profile statement was registered if the person proves that he was not aware of the matter.”.