Companies (Foreign Interests) Act, 1918

The Companies’ (Foreign Interests) Act, 1918

 

 
The Companies’ (Foreign Interests) Act, 1918

XX OF 1918

26th September, 1918

An Act to take power to prohibit

the alteration, except with the sanction of the

Central Government of articles of association which restrict

foreign interests in certain companies, and to provide for other purposes connected herewith.

Whereas it is expedient to take power to prohibit the alternation, except with the sanction of Central Government of articles of association which restrict foreign interests in certain companies, and to provide for other purposes connected therewith;

It is hereby enacted as follows:—

1.         Short title. -This Act may be called the Companies (Foreign Interests) Act, 1918.

2.         Definitions.– (l)  In this Act,—

(a)    the expression ‘Commonwealth citizen’ has the same meaning as in section 1 of the British Nationality Act, 1948, but shall include any association incorporated in any part of the Commonwealth, including Pakistan; and

(b)   the expression ‘restrictive provision’ means any provision in the articles of association of a company which, in the opinion of the [Central Government], is designed to restrict or limit or has the effect of restricting or limiting the share or shares or interest which may be held, or the rights, powers or authority which may be conferred upon or exercised by or on behalf of persons other than [Commonwealth citizens] in the company, or in respect of the control, management or direction of the affairs thereof.

(2)            All words and expressions used in this Act and defined in the Companies Act, 1913 (VII of 1913) shall be deemed to have the meanings respectively attributed to them by that Act.

3.         Application of Act.–This Act shall apply to such companies as the Central Government may, by notification in the official Gazette, declare to be companies with restrictive provisions, and any such notification shall specify the restrictive provisions.

4.         Alterations in restrictive provisions and winding up.-So long as a notification issued under section 3 is in force in respect of any company, notwithstanding anything to the contrary in any other Act,—

(1)   no alteration of the articles of association of the company affecting either directly or indirectly any restrictive provision shall be of any effect until it has received the consent in writing of the Central Government;

(2)   a resolution for the voluntary winding up of the company shall be of no effect unless the Central Government authorizes or ratifies it by a written consent;

(3)   any Court which has jurisdiction to wind up the company may in its discretion refuse to make a winding up order. In the exercise of its discretion, the Court shall be guided by the consideration whether the winding up is bona fide with a view to the discontinuance of the under taking, or is with a view to continuing the undertaking freed either wholly or in part from any restrictive provisions;

(4)   the Central Government in giving consent, or the Court in making a winding up order, as the case may be, may impose such terms or conditions for giving effect tot he purposes of this Act as it thinks fit.