Shares, capital and transactions
1–12 of 12 practice notes
53. Shares, joint holding and value
Shares are movable property, may be jointly held if the Articles permit, and cannot be sold by the company below nominal value.
Subject: Shares, capital and transactions
Act references: s. 147; s. 148; s. 149
Key point: A share may be sold, transferred or assigned subject to the constitution and section 163.
54. Dividends and solvency
Dividends come from business profits, follow the Articles and require the annual decision and solvency analysis where proposed.
Subject: Shares, capital and transactions
Act references: s. 93; s. 150; s. 185
Key point: Section 150 permits dividends only from profits earned through business operations.
55. Increase and reduction of share capital
Capital increases and reductions require special resolutions, while reductions add a creditor-objection stage before registration.
Subject: Shares, capital and transactions
Act references: s. 152; s. 153; s. 154
Key point: A special resolution authorises an increase.
56. Allotment of shares
An allotment requires the correct corporate authority, recipient consent where obligations increase, consideration, register entry, certificate and Registrar notification.
Subject: Shares, capital and transactions
Act references: s. 155; s. 156; s. 157; s. 158; s. 168
Key point: Initial shares are allotted in the proportions agreed in the Articles on registration.
57. Financial assistance for acquisition of shares
A company must not finance a member's acquisition of its own shares or securities except in accordance with regulations made under the Act.
Subject: Shares, capital and transactions
Act references: s. 159
Key point: The prohibition is substance-based and can capture loans, guarantees, security or other assistance.
58. Calls on unpaid shares
The Board may call unpaid amounts unless payment is already due on a specified date under the allotment terms.
Subject: Shares, capital and transactions
Act references: s. 160
Key point: The Board may require payment of an amount due on shares.
59. Forfeiture of shares
Forfeiture is a formal Board remedy after non-payment and a compliant cure notice; it does not erase the former member's outstanding debt.
Subject: Shares, capital and transactions
Act references: s. 160; s. 161; s. 168; s. 169
Key point: The Board may forfeit only after failure to pay and a further compliant notice.
60. Right of first refusal before third-party transfer
Unless the constitution provides otherwise, a private-company seller first offers proposed third-party shares to existing members.
Subject: Shares, capital and transactions
Act references: s. 162; s. 163
Key point: Section 162 is a statutory default for private companies and can be modified by the constitution.
61. Share transfer - complete workflow
A transfer has several separate stages: pre-emption, instrument, company decision, register entry/effective date, certificate, Registrar filing and ownership-control updates.
Subject: Shares, capital and transactions
Act references: s. 147; s. 162; s. 163; s. 164; s. 165; s. 168; s. 169
Key point: The instrument is delivered to the company's service address and contains the statutory/regulatory particulars.
62. Transfer by law, transmission and certificates
Death, bankruptcy and operation of law require a distinct transmission analysis rather than an ordinary consensual sale process.
Subject: Shares, capital and transactions
Act references: s. 165; s. 166; s. 167; s. 168
Key point: Shares may transfer by operation of law notwithstanding the constitution.
63. Court challenge to forfeiture or transfer refusal
The Court can set aside an unlawful forfeiture or refusal and order rectification of the Register of Members.
Subject: Shares, capital and transactions
Key point: Standing belongs to the person aggrieved in the circumstances stated by section 169.
64. Subsidiary holdings and public securities offers
The Act restricts subsidiary holdings in a parent and prevents non-public companies from offering securities to the public.
Subject: Shares, capital and transactions
Act references: s. 170; s. 171; s. 172; s. 173
Key point: Section 170 governs the prohibition on a subsidiary holding shares in its holding company.
This page is a general research and practice aid. The translations used in this manual are unofficial. Verify the official Dhivehi legislation, amendments and current procedures before relying on any entry. Read our sources and verification guidance and contact a lawyer at Sulthan & Amhar for advice on your circumstances before relying on this material or taking action.