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Part VII · Management and Administration Registered Office

198. Meaning of “relevant interest”

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

For the purposes of section 200, a director of a company has a relevant interest in a share issued by a company (whether or not the director is registered in the share register as the holder of it) if the director—

(a)

is a beneficial owner of the share;

(b)

has the power to exercise any right to vote attached to the share;

(c)

has the power to control the exercise of any right to vote attached to the share;

(d)

has the power to acquire or dispose of the share;

(e)

has the power to control the acquisition or disposition of the share by another person; or

(f)

under or by virtue of any trust, agreement, arrangement or understanding relating to the share

(whether or not that person is a party to it) may at any time have the power to—

(i)

exercise any right to vote attached to the share;

(ii)

control the exercise of any right to vote attached to the share;

(iii)

acquire or dispose of the share; or

(iv)

control the acquisition or disposition of the share by another person.

(2)

Where a person (whether or not a director of the company) has a relevant interest in a share by virtue of subsection (1), and—

(a)

that person or its directors are accustomed or under an obligation, whether legally enforceable or not, to act in accordance with the directors, instructions, or wishes of a director of the company in relation to—

(i)

the exercise of the right to vote attached to the share;

(ii)

the control of the exercise of any right to vote attached to the share;

(iii)

the acquisition or disposition of the share; or

(iv)

the exercise of the power to control the acquisition or disposition of the share by another person;

(b)

a director of the company has the power to exercise the right to vote attached to twenty per centum or more of the shares of that person;

(c)

a director of the company has the power to control the exercise of the right to vote attached to twenty per centum or more of the shares of that person;

(d)

a director of the company has the power to acquire or dispose of twenty per centum or more of the shares of that person; or

(e)

a director of the company has the power to control the acquisition or disposition of twenty per centum or more of the shares of that person, that director has a relevant interest in the share.

(3)

A person who has or may have a power referred to in paragraphs (b) to (f) of subsection (1), has a relevant interest in a share, regardless of whether the power is—

(a)

expressed or implied;

(b)

direct or indirect ;

(c)

legally enforceable or not ;

(d)

related to a particular share or not;

(e)

subject to restraint or restriction or is capable of being made subject to restraint or restriction ;

(f)

exercisable presently or in the future;

(g)

exercisable only on the fulfillment of a condition;

(h)

exercisable along or jointly with another person or persons.

(4)

A power referred to in subsection (1) exercisable jointly with another person or persons, is deemed to be exercisable by either or any of those persons.

(5)

A reference to a power in this section includes a reference to a power that arises from or is capable of being exercised as the result of a breach of any trust, agreement, arrangement or understanding or any of them, whether or not it is legally enforceable.

Part VIII

Amalgamations

Part IX

Compromises with Creditors

Part X

Approval of Arrangements, Amalgamations, and Compromises by Court

Part XI

Provisions Relating to Offshore Companies

Part XII

Winding Up

Part XIII

Administrators Appointment of Administrator

Part XIV

Floating Charges

Part XV

Receivers and Managers

Part XVI

Registrar-General of Companies and Registration Appointment of Officers

Part XVII

Application of Act to Existing Companies

Part XVIII

Overseas Companies

Part XIX

Advisory Commission

Part XX

Companies Disputes Board

Part XXI

Offences Miscellaneous Offences

Part XXII

Miscellaneous Prohibition of Partnership with More Than Twenty Members

Part XXIII

Repeals and Amendments

Schedules