Companies Act

L.N. 561 of 2010

COMPANIES ACT

(CAP. 386)

Companies Act

(Amendment of the Tenth Schedule) Regulations, 2010

IN exercise of the powers conferred by article 425(1)(d) of the

Companies Act, the Minister of Finance, the Economy and

Investment has made the following regulations:-

The title of these regulations is the Companies Act Citation.

(Amendment of the Tenth Schedule) Regulations, 2010, and these

regulations shall be read and construed as one with the Tenth

Schedule to the Companies Act, hereinafter referred to as "the Tenth

Schedule".

The present provision of paragraph 1 of the Tenth Schedule Amends

shall be renumbered as sub-paragraph (1) thereof, and immediately paragraph

the Tenth

thereafter there shall be added the following new sub-paragraphs

Schedule.

"(2) In this Schedule, unless the context otherwise

requires, "the Act" means the Companies Act.

(3) Words and expressions used in this Schedule shall

have the same meaning as is assigned to them in the Act.".

Paragraph 25 of the Tenth Schedule shall be amended as Amends

paragraph 25 of

follows

the Tenth

Schedule.

(a)

in the Title thereof, for the words "Division of

capital into shares", there shall be substituted the words

"Capital of partnerships en commandite or limited

partnerships";

(b) in sub-paragraph (1) thereof, for the words "limited

partnership may be divided into shares", there shall be

substituted the words "limited partnership, shall be acquired by

means of an offer of units and may be divided into shares";

(c)

for sub-paragraph (8) thereof, there shall be

substituted the following

"(8) (a) For the purposes of this paragraph and

unless the context otherwise requires

"base currency" means the currency in

which a sub-class is denominated;

"competent authority" means the

competent authority under the Investment

Services Act;

"currency" means, in addition to the euro,

any convertible currency in terms of article

186 of this Act;

"fractional share" means a fraction of a

whole share in any class of shares issued by a

partnership en commandite or limited

partnership;

"multi-class partnership" means a

partnership en commandite or limited

partnership within the terms of paragraph (c);

"multi-fund partnership" means a

partnership en commandite or limited

partnership within the terms of paragraph (k)

and such a partnership may also be referred to

as an umbrella partnership;

"units" means any representation of the

rights and interests of participants in a

collective investment scheme.

(b) A deed of partnership of a partnership en

commandite or limited partnership the capital of which is

divided into shares may provide for the constitution of the

partnership as a partnership en commandite or limited

partnership with variable share capital and the provisions

of article 84(2) to (7) and (9) of this Act shall, in so far as

applicable, apply mutatis mutandis and reference to the

term "memorandum or articles" shall be deemed to be a

reference to a "deed of partnership" and reference to the

terms "company" and "investment company" shall be

deemed to be references to a "partnership en commandite

or limited partnership" and reference to paragraph (f) of

article 69 of this Act shall be deemed to be a reference to

paragraph (e) of article 14(1) of this Act.

Multi-class Partnership

(c) A partnership en commandite or limited

partnership may, with the written approval of the

competent authority, be constituted as a multi-class

partnership where in terms of its deed of partnership its

capital is, or is capable of being, represented by different

classes of units or divided into different classes of shares,

and the aforementioned deed provides for the constitution

of different classes of units or shares that may be offered or

issued by such partnership not constituting any distinct

sub-fund.

(d) A multi-class partnership en commandite

or limited partnership may, with the written approval of the

competent authority, create and offer or issue a new class

or classes of units or shares. Such class or classes of units

or shares shall not constitute a distinct sub-fund or sub-

funds of the partnership.

(e) Each class of units or shares in a multi-

class partnership may be denominated in a different

currency provided that a class of units or shares may be

denominated only in one currency.

(f) A multi-class partnership may not elect

for the segregation of any of its assets and liabilities.

Accounts of a multi-class partnership

(g) A multi-class partnership having its

capital denominated in different currencies shall draw up

its annual accounts in any one of such currencies, as may

be approved by the competent authority.

(h) The general partner of a multi-class

partnership shall maintain proper accounting records of the

assets and liabilities of each class in the base currency of

that class.

(i) The provisions of sub-paragraph (g) shall

mutatis mutandis apply to the drawing up of any other

reports or financial statements which may be required

under this Act or by the competent authority.

(j) For the purposes of sub-paragraphs (g)

and (i) the conversion from the base currency of a class of

units or shares into the currency in which the annual

accounts of the multi-class partnership are to be drawn up

shall be in accordance with generally accepted accounting

principles and practice.

Multi-fund Partnership

(k) A partnership en commandite or limited

partnership may, with the written approval of the

competent authority, be constituted as a multi-fund

partnership, where in terms of its deed of partnership, its

capital is, or is capable of being, represented by different

classes of units or divided into different classes of shares

and one class or a group of classes of units or shares

constitute a distinct sub-fund of the partnership

Provided that the initial capital may or

may not be organized in one or more sub-funds in terms of

this paragraph.

(l) A multi-fund partnership may, with the

written approval of the competent authority, create and

offer or issue a new class or classes of units or shares

which may constitute a new sub-fund or be comprised in

an existing sub-fund or sub-funds of the partnership.

(m) A class or classes of units or shares

constituting a sub-fund in a multi-fund partnership may be

denominated in a different currency provided that a class

of units or shares may be denominated only in one

currency.

(n) For the purposes of this paragraph, a

"sub-fund" means the distinct class or classes of units or

shares constituting that sub-fund in a multi-fund

partnership to which are allocated assets and liabilities

distinct from other assets and liabilities allocated to other

sub-funds in the same partnership.

Accounts of multi-fund partnerships

(o) A multi-fund partnership having its

capital denominated in different currencies shall draw up

its annual accounts in any one of such currencies.

(p) The general partner of a multi-fund

partnership shall maintain proper accounting records of the

assets and liabilities of each sub-fund in the base currency

of any class of units or shares constituting that sub-fund.

(q) The provisions of sub-paragraph (o) shall

mutatis mutandis apply to the drawing up of any other

reports or financial statements which may be required

under this Act or by the competent authority.

(r) For the purposes of sub-paragraphs (o)

and (q), the conversion from the base currency of a class of

units or shares into the currency in which the annual

accounts of the multi-fund partnership are to be drawn up

shall be in accordance with generally accepted accounting

principles.

Segregation of assets and liabilities of multi-fund

partnerships

(s) A multi-fund partnership may in its deed

of partnership elect to have the assets and liabilities of each

sub-fund comprised in that partnership treated for all

intents and purposes of law as a patrimony separate from

the assets and liabilities of each other sub-fund of such

partnership. Where a multi-fund partnership makes the

election aforementioned the assets and liabilities of each

sub-fund of that multi-fund partnership shall, for all intents

and purposes of law, be deemed to constitute a patrimony

separate from the assets and liabilities of each other sub-

fund of such a partnership.

(t) Save for such proportion of the liabilities

of a multi-fund partnership which by virtue of the deed of

partnership or by virtue of the terms of the offer or of the

issue of the units or shares constituting a sub-fund are, or

are to be attributable to, one or more sub-funds in the

proportion established therein, the liabilities incurred in

respect of each sub-fund shall be paid out of the assets

forming part of its patrimony and the creditors in respect

thereof shall have no claim or right of action against the

other assets of the partnership, and the following rules

shall apply

(i) proceedings in relation to the

partnership shall respect the legal status of each

sub-fund as a patrimony separate from the assets

and liabilities of each other sub-fund of the

partnership in terms of this Schedule;

(ii) proceedings under the Act shall

apply mutatis mutandis to the sub-fund as though it

were a distinct legal entity and with such

modifications as are necessary to accommodate the

fact that the sub-fund is not a partnership; and any

proceedings in relation to one sub-fund shall not

have any effect on the assets of any other sub-fund

of the partnership or of the partnership itself; and

(iii) where, for the avoidance of doubt, a

sub-fund which comprises a separate patrimony in

terms of this Schedule is being wound up, the

liquidator of such sub-fund shall carry out his

functions in accordance with the provisions of the

Act; and accordingly all the powers of the general

partners in respect solely of that sub-fund shall

cease.

"Proceedings" in this sub-paragraph

refers to any proceedings in terms of paragraphs 20 to 24

of this Schedule and Part VI of the Act.

(u) When a partnership is established as a

multi-fund partnership and elects to have the assets and

liabilities of its sub-funds treated as distinct patrimonies,

the deed of partnership shall provide that the actual value

of any sub-fund shall be at all times equal to the value of

the assets of any kind of the particular sub-fund after the

deduction of such sub-fund’s liabilities.

(v) The general partner of a multi-fund

partnership shall hold or cause to be held such separate

records, accounts, statements and other documents as may

be necessary to evidence the liabilities and assets of each

sub-fund as distinct and separate from the assets and

liabilities of other sub-funds in the same partnership.

(w) The provisions of the Fifth Schedule to

the Act shall apply mutatis mutandis to a partnership en

commandite or limited partnership with variable share

capital.

(x) (i) A partnership en commandite or

limited partnership the capital of which is divided into

shares may, if so authorised by its deed of partnership,

issue fractional shares up to such number of decimal

places, not being less than three, as shall be specified in the

deed of partnership, and under such terms and conditions

as may be stipulated therein.

(ii) Fractional

shares

shall

be

automatically consolidated into a whole share of

the same class when the fractional shares held by

one shareholder become equal to a whole share.";

(d) immediately after sub-paragraph (8) thereof, there

shall be added the following new sub-paragraphs

"Applicability of article 73 to partnerships en

commandite or limited partnerships.

(9) (a) The provisions of article 73 of the Act

shall apply to a partnership en commandite or limited

partnership, the capital of which is divided into shares,

other than a partnership en commandite or a limited

partnership licensed by the competent authority as a

Professional Investor Fund, subject to the following

variations, conditions and modifications

(i) subarticles (1), (4) and (7) shall

continue to apply thereto;

(ii) subarticle (2) shall apply thereto

and be read as if for the words therein "transferred

to the company within five years from the date the

company is authorized to commence business.",

there were substituted the words "transferred to the

partnership en commandite or limited partnership

before the partnership is authorized to commence

business.";

(iii) subarticle (3) shall apply thereto

and be read as if for the words therein "transferred

within five years from the date of the decision to

issue shares.", there were substituted the words

"transferred to the partnership en commandite or

limited partnership not later than the date of the

issue of the shares.";

(iv) subarticle (5) shall apply thereto

and be read as if for the words therein "correspond

at least to the number and nominal value, and,

where applicable, to the premium on the shares to

be issued for them.", there were substituted the

words "at least correspond to the net asset value of

the shares to be issued for them."; and

(v) subarticle (6) shall apply and be

read as if for the words therein "and in default, the

Registrar shall accordingly refuse to register the

company or the return of the allotments of the

shares so issued, and, in the latter case, the issue

shall be considered null and void.", there were

substituted the words "and in default, the Registrar

shall accordingly refuse to register the partnership

en commandite or limited partnership and, in the

case of a new issue, the issue shall be considered

null and void.".

(b) The provisions of article 73 of the Act

shall apply to a partnership en commandite or limited

partnership, the capital of which is divided into shares,

licensed by the competent authority as a Professional

Investor Fund with the following variations, conditions

and modifications

(i) subarticles (1), (2), (3) and (7) shall

continue to apply thereto;

(ii) subarticle (4) shall apply thereto

and be read as if for the words "by one or more

experts who are independent of the company and

approved by the Registrar.", there were substituted

the words "in accordance with Investment Services

Rules issued for that purpose by the competent

authority from time to time."; and

(iii) subarticles (5) and (6) shall not

apply thereto provided that the "report" mentioned

therein and in subarticle (4) shall be drawn up in

such manner and shall contain such particulars as

may be required by Investment Services Rules

issued for that purpose by the competent authority.

Non-applicability of articles 186 and 187(1) of the

(10) The provisions of articles 186 and 187(1) of

the Act shall not apply to a partnership en commandite or

limited partnership constituted as a multi-fund or multi-

class partnership.

Investment Services Rules.

(11) For the better carrying out of the provisions

of this Schedule, the competent authority may issue

Investment Services Rules in terms of article 6(2)(b) of the

Investment Services Act.

Non-applicability of article 120 of the Act.

(12) The provisions of article 120 of the Act shall

not apply to a partnership en commandite or limited

partnership the capital of which is divided into shares and

all notices of transfers or transmissions of shares issued by

a partnership shall be given to the partnership.

Non-applicability of article 122 of the Act.

(13) (a) The provisions of article 122 of the Act

shall not apply to a partnership en commandite or limited

partnership and the pledge of units or securities in a

partnership shall be subject to the provisions of this sub-

paragraph.

(b) Units or securities may, if the deed of

partnership of the partnership en commandite or limited

partnership specifically so provides or, if permitted under

the conditions of the offer or the issue of those units or

securities, be pledged by their holder in favour of any

person as security for an obligation. The pledge of units or

securities shall be constituted by means of an instrument in

writing entered into between the pledgor and the pledgee.

(c) Notice of the pledge shall be delivered by

the pledgor or the pledgee to the partnership within

fourteen days of the granting of the pledge. The pledge of

units or securities shall be recorded in the register of the

holders of the respective units or securities.

(d) The pledge of units or securities shall be

effective in relation to a third party only from the date of

the recording of the pledge in the register of the holders of

the respective units or securities referred to in sub-

paragraph (c)

Provided that the partnership shall, upon

a request in writing made by a third party who may show

an interest therein, disclose whether a pledge of units or

securities has been recorded in the register of the holders

of the respective units or securities, including the name of

the pledgor and the pledgee, the amount of units or

securities pledged and the date of the recording of the

pledge.

(e) Saving the provisions of sub-paragraph

(d), during the existence of a pledge of units or securities,

any transfer or other assignment of the pledged units or

securities made by the pledgor, whether by onerous or

gratuitous title, shall be null and void

Provided that any such transfer or other

assignment made with the consent of the pledgee shall be

valid and the units or securities to be transferred or

assigned shall continue to be subject to the pledge.

(f) Notwithstanding the provisions of the

Civil Code or of the deed of partnership of the partnership

en commandite or limited partnership, in the event of a

default under the agreement of pledge and upon giving

notice by judicial act to the pledgor and the partnership,

the pledgee shall be entitled to -

(i) dispose of the units or securities

which are pledged in his favour; or

(ii) appropriate and acquire the units or

securities himself; or

(iii) request the partnership to purchase

the pledged units or securities in settlement of the

debt due to him or of part thereof; and for this

purpose, the value of the units or securities which

are pledged shall be their current net asset value

Provided that where the deed of

partnership requires any shareholder wishing to transfer

shares in the partnership to offer them on a pre-emptive

basis to other shareholders of the partnership, the pledgee

shall be obliged, prior to the exercise of the rights granted

by this sub-paragraph, to offer any such shares at their

current net asset value to those shareholders, which offer

shall be kept open for at least ten working days.

(g) In the exercise of his rights under this

paragraph, the pledgee shall only dispose of, appropriate

and acquire or request the purchase of such number of

units or securities as are needed to raise sufficient proceeds

to repay the debt due. All remaining units or securities

shall be released to the pledgor.

(h) It shall be lawful for the parties to an

agreement of pledge of units or securities to agree on the

person or persons who shall exercise all the rights

belonging to the holder of units or securities including

voting rights and the right to receive income, dividends,

interest or any other payments due on such units or

securities

Provided that, should the agreement

between the parties not make provision for such matters,

all rights belonging to a holder of units or securities shall,

for the duration of the pledge, be exercised by the pledgor

until such time as he defaults under the agreement of

pledge or until the pledgee enforces his security; and in

any such case, upon giving notice by a judicial act to the

pledgor and the partnership, all the rights belonging to the

pledgor shall immediately become exercisable by the

pledgee

Provided further that, unless the pledgor

and the pledgee have otherwise agreed in the pledge

agreement and notice thereof has been given to the

partnership, income, dividends, interests or any other

payments due on units or securities which are pledged

shall, during such time as the pledge is registered in the

register of the holders of the respective units or securities,

be paid by the partnership to the pledgee who shall

appropriate any such amounts received to the interest due

on the debt secured by the pledge, and, if there is an

excess, to the capital.

(i) Notice of termination of the pledge shall

be delivered by the pledgee to the partnership within

fourteen days of the termination of the pledge. The

termination of the pledge shall be recorded in the register

of the holders of the respective units or securities.

Issue of shares at a discount.

(14) (a) It shall be lawful for a partnership en

commandite or limited partnership the capital of which is

divided into shares, to make a discount to an existing

member who has committed by written agreement with the

partnership to subscribe for any shares in the partnership,

which discount shall be in consideration for such

commitment, provided that

(i) such

discount

shall

apply

exclusively to any outstanding commitment arising

under the above-mentioned agreement;

(ii) authority therefor is given by the

deed of partnership;

(iii) the nature of the discount shall be

disclosed in the manner required by sub-paragraph

(c); and

(iv) in no event shall the value of such

shares, issued at a discount, be reduced to below

the net asset value at the time the member, to

whom the discount is being granted, first

subscribed for the shares in terms of the

aforementioned agreement.

(b) If shares are issued at a discount which is

in excess of that permitted by this paragraph, the holder

thereof shall be bound to pay the partnership an amount

equal to such excess, with annual interest at the rate of two

percentage points over the minimum bid rate set by the

European Central Bank for the main re-financing

operations of the Eurosystem.

(c) The conditions specified in sub-

paragraph (a) shall be clearly disclosed in the prospectus

and any other offering document issued by the

partnership.".

€1.12