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As enacted
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Part V · Shareholders and Their Rights and Obligations

98. Court may grant exemption if company is insolvent

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

(1)

Where a notice is given to a company under section 94, and—

(a)

the board considers that after the purchase by the company of the shares, the company would fail to satisfy the solvency test ; and

(b)

the company has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with the provisions of paragraph (b) of subsection (2) of section 94, but has been unable to do so, the company shall apply to the court for an order exempting it from the obligation to purchase those shares.

(2)

The court may on an application made under subsection (1) and where it is satisfied that after the purchase of the shares the company would fail to satisfy the solvency test and the compnay has made reasonable efforts to arrange for the shares to be purchased by another person in accordance with paragraph (b) of subsection (2) of section 94, make—

(a)

an order exempting the company from the obligation to purchase the shares ;

(b)

an order suspending the obligation to purchase the shares ; or

(c)

such other order as it thinks fit, including any order referred to in subsection (2) of section 97.

(3)

For the purposes of this section, the stated capital of a company shall not be taken into account in determining whether the company will after the purchase, fail to satisfy the solvency test.

Read on from s 99

Part VI

Registration of Charges Registration of Charges with Registrar

Read on from Part VI

Part VII

Management and Administration Registered Office

Read on from Part VII

Part VIII

Amalgamations

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Part IX

Compromises with Creditors

Read on from Part IX

Part X

Approval of Arrangements, Amalgamations, and Compromises by Court

Read on from Part X

Part XI

Provisions Relating to Offshore Companies

Read on from Part XI

Part XII

Winding Up

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Part XIII

Administrators Appointment of Administrator

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Part XIV

Floating Charges

Read on from Part XIV

Part XV

Receivers and Managers

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Part XVI

Registrar-General of Companies and Registration Appointment of Officers

Read on from Part XVI

Part XVII

Application of Act to Existing Companies

Read on from Part XVII

Part XVIII

Overseas Companies

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Part XIX

Advisory Commission

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Part XX

Companies Disputes Board

Read on from Part XX

Part XXI

Offences Miscellaneous Offences

Read on from Part XXI

Part XXII

Miscellaneous Prohibition of Partnership with More Than Twenty Members

Read on from Part XXII

Part XXIII

Repeals and Amendments

Read on from Part XXIII

Schedules