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Fiji Companies Act 2016 Update

May 8, 2016

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Fiji Companies Act 2016 Update

May 8, 2016

 

Enacted on the 15 February 2016
 
Why are these amendments important?

  • Officeholders are required to understand the corporate regulatory requirements for their company.

  • All companies are bound by legal and administrative requirements, and it is the responsibility of the officeholders of the company to ensure that these somewhat burdensome requirements are met. A lack of compliance with these requirements can result in severe penalties for both the company and the officeholders individually.​

  • With the introduction of the Companies (Amendment) Act 2016 (the Act) in Fiji, it is vital that the officeholders establish and understand their corporate governance framework by fulfilling their legal and administrative requirements.


Key Updates:  Key provisions of the Companies Act 2015 (The Principal Act) have been amended.
 
Highlights of the Amendments: The Investor Compensation Fund established under the Capital Markets Decree 2009 continues for the purposes of granting compensation to investors who suffer pecuniary loss resulting from the failure of a holder of a Securities Industry Licence to meet its contractual obligations. This protects investors from certain losses. However it is important to note that this does not compensate investors for losses caused by market events.
 
Amendments

1. The Amendments now include the following new definitions:

Contributory” means every person liable to contribute to the assets of a company in the event of the company being wound up.[1]
Dealer” means a person who carries on the business of buying, selling, dealing, trading, underwriting or retailing of Securities whether or not the person carries on any other business.[2] “Dealer” has replaced “Broker” in s 272 of the Principal Act.

2. Foreign companies must allow anyone to inspect a register kept under Part 6.[3] Members of a foreign company or a registered debenture holder may inspect a register kept under Part 6 without charge.[4] Other people may inspect the
register only on payment of a fee required by the foreign company.[5] A foreign company is not required under this new
section to allow a person to see, or to give a person a copy of the register that contains, share certificate numbers.[6] 

3. The Act also states that in every purchase and sale of Securities recorded on a Securities Exchange or notified to it under its rules, the purchaser and the seller are each liable to pay to the Reserve Bank a levy, the amount of which will be determined by the type of Security purchased.[7]

4. Members no longer have to provide copies of the Financial Statements for the last Financial Year to their proxies.[8]

5. Part 25A establishes the Investor Compensation Fund (the Fund). The Fund provides compensation to investors who suffer pecuniary loss resulting from the failure of a holder of a Securities Industry Licence to meet its contractual obligations.[9]

6. Medium Private Companies must prepare Financial Statements if directed to do so by Members with at least 10% of the votes, pursuant to under s 389.[10]

7. A firm may only be appointed as an auditor of a Company or a Managed Investment Scheme if at least one member of the firm is registered as an Auditor under the Act.

8. If it appears to the Registrar or the Reserve Bank that any certificate of registration, licence or other instrument has been issued in error or has been fraudulently or wrongfully obtained, he or she may summon the person to whom the instrument has been issued to cancel or correct the instrument. If such a person refuses or neglects to comply with the summons, the Registrar or Reserve Bank may apply to the Court to issue a summons. If such a person neglects to attend before the Court the Court may issue a warrant for the person to be brought before the Court. The Court has power to direct the Reserve Bank to cancel or correct any instrument relating to the person. [11]

9. Currently, officers and shareholders of an existing company immediately before the commencement date continue to be officers and members of the company after the commencement date. This has been amended so that if a person is a Director or secretary of an Existing Company immediately before the commencement date and that person is not entitled to be appointed as a Director or secretary under s 93, the person may continue to act as a Director or secretary of the Company for up to 3 months but must resign within 3 months after the commencement date.[12]

10. If, after the commencement date, the Registrar or the Reserve Bank has in error charged fees or accepted forms that are not in accordance with this Act or regulations, the Registrar or Reserve Bank may summon the person who paid the fee or lodged the forms to rectify the error. If the person rectifies the error within 21 days, the date of lodgement of the Prescribed Form or the date of payment of the fee will be deemed to be the date that the incorrect form or fee was lodged or paid. Any instrument issued by the Registrar or the Reserve Bank will preserve the date of registration that was in error. However, if the person fails to rectify the error within 21 days, any instrument that does not comply with the Act will be revoked or cancelled and registration will be deemed invalid.[13] 

Disclaimer
The information set out in this article is a general guide only about the laws in Fiji and is not intended as specific legal advice.

 

[1] The Act s 2.










 

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