INTERNATIONAL BUSINESS COMPANIES ACT NO. 1 OF 2004.

An Act to provide for the incorporation, registration and operation of International

Business Companies.

BE IT DULY PROCLAIMED AND ENACTED by Prince Leonard, Head of State, as follows:

PART 1

PRELIMINARY

INTERPRETATION

1.         (1)            In this Act unless the context otherwise requires: -

“Absolute majority” means more than half of all votes entitled to be cast.

“Certified copy” means a copy of an original document certified as a true copy thereof by such person as the Registrar of Companies shall deem acceptable.

                        “Registrar of Companies” means the Registrar of Companies established by this Act.

                        “Company” means an International Business Company incorporated or continued under this Act.

                        “Company limited by shares” means a company having the liability of its members limited by its constitution to the amount, if any, unpaid on the shares respectively held by them;

                        “Company limited both by shares and by guarantee” means a company having the liability of its members limited by its constitution and this Act:

(a)                 In the case of members who have given a guarantee, to such amount as they have respectively undertaken to contribute to the assets of the company in the event of it being wound up;

(b)                 In the case of members who are shareholders, to the amount, if any, unpaid on the shares respectively held by them.

“Company number” mean the identification number given in respect   of each company by the Registrar of Companies.

         “Court” means the Supreme Court of Principality of Hutt River Principality.

                  “director” includes any person occupying the position of director of a company by whatever name called and any person held out by the company to be a director;

                  “distribution” means a direct or indirect transfer of money or other property (except the company’s own shares) or incurrence of indebtedness by a company to or for the benefit of a member in respect of any of its shares, and may be in the form of a declaration or payment of a dividend, a purchase, redemption or other acquisition of shares, a distribution of indebtedness, or otherwise.

                  “Euro” means currency of the European Community;

                  “First Schedule Debenture” means the debenture set out in the First Schedule hereto;

                  “incorporator” means any person who has signed a constitution as an incorporator pursuant to section 2;

                  “member” means any person:-

(a)    who agrees to become a member of a company and whose name is

entered in the Register of Members; or

(b)    who from time to time is the holder of any shares in the company; or

(c)           who is deemed to be a member pursuant to section 6;

                  “Minister” means the Minister for the time being responsible for finance;

                  “model constitution” means a constitution prescribed by the Registrar of Companies pursuant to Section 3(4);

                  “person resident in Principality of Hutt River Principality” means a person who ordinarily resides in Principality of Hutt River Principality or carries on business from an office or other fixed place of business within Principality of Hutt River Principality, and includes a company incorporated under this Act or the Companies Act;

                     “Registered share” means any share issued by an International Business Company standing in the register of members o the company in the name of a member”;”

“Register” means the Register of International Business Companies maintained by the

Registrar of Companies in accordance with section 5 (2);

“resolution” in relation to a resolution of directors means –

(a)    a resolution approved at a duly constituted meeting of directors or of a

committee of directors by affirmative vote of a simple majority, or such larger majority as may be specified in the constitution, of the directors present at the meeting who voted; or

(b)    a resolution, notice of which has been given to all directors entitled to receive notice of meetings, which has been consented to in writing by an absolute majority, or such larger majority as may be specified in the constitution, of all the directors or of all members of a committee of directors, as the case may be; and, where a director is given more than one vote in any circumstances, he shall be counted for the purposes of establishing a majority by the number of votes he is entitled to cast;

“resolution” in relation to a resolution of members means:-

(a)     a resolution approved at a duly constituted meeting of the members by the affirmative vote of a simple majority, or such larger majority as may be specified in the constitution either generally or in respect of certain matters, of the votes of the members p[resent at the meeting an entitled to vote thereon and who voted; or

(b)     resolution, notice of which has been given to all members entitled to receive notice of meetings, which is consented to in writing by an absolute majority or such larger majority as may be specified in the constitution either generally or in respect of certain matters of all the members who are entitled to vote thereon.

               “seal and common seal”, in relation to a company, means the common corporate seal referred to in section 64;

“securities” includes shares and debt obligations of every kind, and options, warrants and rights to acquire shares or debt obligations;

“simple majority” means more than half of all votes validly cast;

“solvency test” has the meaning attributed to it in subsection (3);

“treasury shares” means shares of a company that were previously issued but were repurchased or otherwise acquired by the company and not can celled;

“writing” includes printing typewriting, photography, telex, cable, fax and any other method of representing or reproducing words on paper or a similar medium.

Words and expressions importing the masculine gender shall include the feminine and

Vice versa.

Words and expressions in the singular, shall include the plural and vice versa.

(2)        Subject to any limitations in the constitution, shares that a company purchases, redeems

            or otherwise acquires may be cancelled or held as treasury shares.

(3)        (a)            A company satisfies the solvency tests if

(i) It is able to pay its debts as they become due in the normal course of business; and 

(ii) the realizable value of the company’s assets is greater than the aggregate of  the present value of its liabilities, whether contingent or otherwise.

(b)             In determining whether a company satisfies the solvency test regard may  be had

either to financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances, or a fair valuation or other method reasonable in the circumstances.

(c)            In this subsection, “realizable value” in relation to any asset, means the price that

would be paid for that asset by a purchaser in an “arms length” transaction

PART 2

COMPANY FORMATION AND CONSTITUTION

FORMATION

2.         (1)            Subject to the requirements of this Act, one or more persons may for any lawful

            purpose, by signing a constitution as an incorporation, form an international business

            company under this Act.

            (2)            Every international business company incorporated under this Act shall be:-

(a)                 a company limited by shares; or

(b)                 a company limited both by shares and by guarantee.

CONSTITUTION

3.         (1)            The constitution of every company shall state:-

(a)                 the name of the company;

(b)                 the address within Principality of Hutt River Principality of the first registered office of the company;

(c)                 the name and address within Principality of Hutt River Principality of the first registered agent of the company;

(d)                 the objects or purposes for which the company is to be incorporated;

(e)                 whether the company is a company limited by shares or a company limited both by shares and by guarantee;

(f)                   in the case of a company limited both by shares and guarantee, that each member giving a guarantee undertakes to contribute to the assets of the company in the event of it being wound up while he is a member or within 3 months, or such longer period as may be specified in the constitution, after he ceases to be a member, for payment of the debt and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the  contributories amongst themselves, such amount as may be required, not exceeding a specified amount.

(2)            For the purposes of subsections (1) (d), the constitution may contain a statement        

either alone or with other objects or purposes that the objects or purposes of the company are unrestricted.

(3)        The constitution may name the first directors of the company but does not have to.

(4)            The Registrar of Companies shall prescribe model constitutions for each of the type of company specified in section 2 (2)

(5)                 The constitution of every company shall prescribe regulations for the company and the company may in its constitution adopt all or any of the regulations contained in the model constitution appropriate for its type.

(6)            In so far as the constitution does not exclude or modify them, regulations contained in the model constitution appropriate for its type shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in its duly registered constitution.

(7)        The constitution of every company shall be:-

(a)                 printed

(b)                 divided into paragraphs numbered consecutively; and

(c)                 signed by each incorporator.

(8)            Subject to the provisions of this Act, the constitution, when registered, shall bind the company and its members from time to time to the same extent as if each member had signed his name and affixed his seal thereto and as if there were contained in the constitution, on the part of himself, his heirs, executors and administrators, a covenant to observe the provisions of the constitution.

NAMES

4       (1)   Subject to subsection (2), an international business company shall have as part of  and at the end of its name:-

(a)                 the word “Corporation” or the abbreviation “Corp”;

(b)                 the word “Incorporated” or the abbreviation “Inc.”;

(c)                 the word “Limited” or the abbreviation “Ltd”;

(d)                 the words “Sendirian Berhad” or the abbreviation “Sdn Bhd”;

(e)                 the words “Societe a Responsabilite Limitee” or the abbreviation “SARL”;

(f)                   the words “Besloten Vennootschap” or the abbreviation “B.V.”; or

(g)                 the words “Gesellschaft mit beschrankter Haftung” or the

(h)                 abbreviation “GmbH”

(i)                   the words “Principality of Hutt River Principality” or the

(j)                   abbreviation “HR”

(2)   Notwithstanding the provisions of subsection (1), a company may, in lieu of any of the words or abbreviations specified therein, have as part of its name any other words or popular abbreviations of those words in any language being abbreviations which a registered agent can satisfy the Registrar of Companies connotes the existence of a body corporate as distinct from any other person or entity and such words or abbreviation may appear at the beginning, the end or elsewhere in the name of the company in accordance wit common practice.

(3)           No company shall have a name that is:-

            (a) identical with that under which a company in existence is already incorporated under this Act or so nearly resembles the name as to be calculated to deceive, except where the company in existence gives its consent; or confuse, or

            (b) contains the words "Assurance", "Bank", "Building Society", "Chamber of Commerce", "Chartered", "Cooperative", ""Imperial", "Insurance", "Municipal", "Royal", "Trust Company", "Trustee Company" or a word conveying a similar meaning, or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest

                        (i) the patronage of His Majesty or that of a member of the Royal Family; or

                        (ii) a connection with His Majesty's Government or a department thereof; or

                        (iii) a connection with a society or body incorporated by Royal Charter;

            except with the approval of the Registrar in writing;

            (c) is indecent, offensive or, in the opinion of the Registrar, undesirable

(d)                 contains other than characters or numerals of any language or such other symbols as may be approved by the Registrar of Companies.

(4)   If the name of a company is to contain other than Romanized characters or Arabic numerals, a certified translation of the name in the English language shall be provided to the Registrar of Companies the prior approval of which to the use of the name shall be obtained.

(5)   The Registrar of Companies will have the authority to reject any name without having to give his  reason for such rejection.

(6)   A company may, by resolution and with the written approval of the Registrar of Companies, change its name.

(7)   Where a company is registered with a name that contravenes subsection (1), (2) (3) or (4) the Registrar of Companies may give notice to the company to change its name and if it fails to do so within 60 days from the date of the notice the Registrar of Companies shall change the name of the company to such name as he deems appropriate and shall publish a notice of the change in the Gazette.

(8)   Where the name of a company is changed the Registrar of Companies shall enter the new name in the Register in place of the former name and shall issue a certificate of change of name.

(9)   The change of name of a company take effect from the date of the certificate issued under subsection (6) and shall not affect any rights or obligations of the company or render defective any legal proceedings by or against it, and any legal proceedings that may have been commenced by or against it in its former name may be continued by or against it in its new name.

(10)   Where a company carries on business under any name other than its registered name or continues to use its former name after it has been changed, the company and every officer who knowingly permits the use of the former name shall be liable on conviction to a daily default fine of ten Euros.

(11)          A change of name of a company shall not be deemed to be an amendment to its  constitution;

(12)   The Registrar of Companies shall, upon a request made by any person, reserve for three months any name under which a company may be registered. 

(13)   During a period for which a name is reserved no company, other than the company or intended company for which the name is reserved, shall be registered by that name.

INCORPORATION

5.         (1)            A person wishing to incorporate a company shall file its constitution with the Registrar of Companies.

(2)            Where it is satisfied that all the requirements of this Act in respect  of incorporation and all matters precedent and incidental thereto have been complied with, the Registrar of Companies shall:-

(a)                       register a constitution in a register to be maintained by him and to be known as the Register of Constitutions; and

(b)       issue a certificate authenticated by its official seal stating that the company is incorporated with limited liability.

(3)            A company shall, from the date of incorporation shown on the certificate, be a body corporate with perpetual succession being a person distinct from its members.

(4)            A certificate of incorporation issued by the Registrar of Companies shall be conclusive evidence that the requirements of this Act in respect of incorporation have been complied with and that the company has been incorporated under this Act on and from the date stated in the certificate, under the name contained in its constitution.

INCORPORATORS TO BE FIRST MEMBERS

6.         Each incorporator shall, from the date of incorporation, be deemed to be a member of the company equally with any other incorporator until the allotment of any shares in the company at which time unless shares are allotted to him, he shall cease to be a member.

AMENDMENT OF CONSTITUTION

7.         (1)            Subject to any limitations therein, a company may amend its constitution by a resolution of members or,  where permitted by its constitution, by a resolution of directors.

   (2)            (a)            A company that amends its constitution shall within 14 days of the date of resolution being passed file with the Registrar of Companies a certified copy of the resolution amending the constitution;

                        (b)            The copy of the resolution filed in accordance with this subsection shall be certified by

                                    (i)            the lawyer, or other person engaged in advising the company, or

(ii)                 the registered agent of the company.

(3)                 An amendment to a constitution shall have effect from the time the amendment is registered by the Registrar of Companies.

(4)                 A company that contravenes subsection (2) shall be liable on conviction to a daily default fine of ten Euros.

(5)                 A director who knowingly permits the contravention of subsection (2) shall be liable on conviction to a daily default fine of fifty Euros.

COPIES OF CONSTITUTION

8.         (1)            A company shall, when requested by any member, send or provide to him a copy of its constitution being in accordance with any amendments thereto subject to payment of such amount not exceeding fifty Euros as the directors may determine to be  reasonably necessary to defray the costs of preparing and furnishing it.

(2)                 Where an amendment is made to a company’s constitution, every copy of the constitution issued after the date of the amendment shall be in accordance with the amendment.

(3)            A director of a company who knowingly permits the contravention of this section shall be liable on conviction to a fine of five hundred Euros.

PART  3

COMPANY POWERS, RESTRICTIONS AND LIABILITIES

POWERS

9.         (1)            Subject to any limitations in its constitution or this Act, a company shall, irrespective of  corporate benefit, have the capacity, rights, powers and privileges of a natural person who is sui juris including but not limited to the powers to:-

(a)                 guarantee a liability or obligation of any person and to secure any of its obligations by mortgage, pledge or other charge of or over any of its assets for that purpose;

(b)                 protect the assets of the company for the benefit of the company, its creditors and its members and, at the discretion of the directors, for any person having a direct or indirect interest in the company; and

(c)                 make gifts of any of the property of the company, provided that it will, after making any such gift, satisfy the solvency test.

(2)            For the purpose of subsection (1) (b), notwithstanding any other provision of this Act or of any other enactment or rule of law for the time being in force in Principality of Hutt River Principality to the contrary, save the law as to fraudulent preference and the law as to dispositions made with intent to defraud creditors, the directors may cause the company to transfer any of its assets, business or liabilities in trust to one or more trustees and, with respect to such transfer, the directors may provide that the company, its creditors, members, partners or any person having a direct or indirect interest in the company, or any of them, may be the beneficiaries.

(3)            Where expressly permitted by its constitution, a company shall have the power by way of settlement or other disposition, to give the right to a person not being a member of the company to share in any part of its gains or profits to the exclusion of the members.

(4)            Any settlement or disposition made in accordance with subsection (3) shall be treated as if it was a distribution to a member and section 29 shall apply.

RESITRICTIONS ON INTERNATIONAL BUSINESS COMPANIES

10.        (1)            An international business company shall not:-

(a)                 carry on business within Principality of Hutt River Principality, or any State of the Commonwealth of Australia;

(b)                 acquire or own an interest in property situated in Principality of Hutt River Principality other than a lease referred to in subsection (2)(b);