Legal opinion regarding Unclaimed Dividend and Market Lot of Shares.

Mr. Z

Address….

Dear Sir,

Re:      Legal opinion regarding Unclaimed Dividend and Market Lot of Shares.

We refer to your letter no. ………………. dated 30 July 2007on the above subject.

You have requested us to provide our legal opinion regarding the following issues:

1. Whether Company 1 (“the Company”) may forfeit the unclaimed dividend after 6 (six) years and transfer the amount to staff/workers’ welfare fund of the Company?

We have perused the provided Memorandum and Articles of Association of the Company. Article 156 of the Articles of Association states as follows:

“156. All dividends unclaimed for one year after having been declared may be invested or otherwise made use of by the Board of Directors for the benefit of the Company. All dividends unclaimed for three year after having been declared may be forfeited by the Board of Directors. However, the Board of Directors, if they think appropriate, may at any time annul such forfeiture and may pay such dividends.”

According to this article, all dividends unclaimed for three year after having been declared may be forfeited by the Board of Directors. Therefore, we are of the opinion that, the Board of Directors of the Company may forfeit any unclaimed dividend amount after three years or more have passed from those being declared. The decision as to what to do with the forfeited amount depends on the Board of Directors and if they want they may transfer the amount to staff/workers’ welfare fund of the Company.

2. Whether the Company may charge 3% to 5% service charge on the unclaimed dividend amount which has been claimed after 3 (three) years but before 6 (six) years?

According to Article 156, although all dividends unclaimed for three year after having been declared may be forfeited, the Board of Directors, if they think appropriate, may at any time annul such forfeiture and may pay such dividends. Therefore, under the Articles of Association, discretion has been give to the Board of Directors as to whether or not the unclaimed dividend amount shall be paid to the shareholder after 3 (three) years. We are of the opinion that, the Board of Directors may, if they think appropriate, charge 3% to 5% service charge on the unclaimed dividend amount which has been claimed after 3 (three) years or more.

3. At present the Market lot of Shares of the Company is 20 (twenty) shares. Whether the Company may change the Market Lot of Shares to 1 (one) shares?

According to Regulation 8 2) (c) of the Listing Regulations of Stock Exchange 1 at the time of listing in the Stock Exchange 1, one of the condition that has to be fulfilled is that, the share certificates shall be issued in such marketable lots as may be determined or approved by the Securities Exchange Commission (“SEC”). Therefore, we are of the opinion that any subsequent change in the Market Lot of Shares of the Company has to be with the approval of SEC. You are advised to seek the necessary permission from SEC in this matter.

If you have any further query, please do not hesitate to contact the undersigned.

Thanking you.

Yours faithfully,

………………….

For: “The Lawyers & Jurists”

Disclaimer:

The information contains in this web-site is prepared for educational purpose. This site may be used by the students, faculties, independent learners and the learned advocates of all over the world. Researchers all over the world have the access to upload their writes up in this site. In consideration of the people’s participation in the Web Page, the individual, group, organization, business, spectator, or other, does hereby release and forever discharge the Lawyers & Jurists, and its officers, board, and employees, jointly and severally from any and all actions, causes of actions, claims and demands for, upon or by reason of any damage, loss or injury, which hereafter may be sustained by participating their work in the Web Page. This release extends and applies to, and also covers and includes, all unknown, unforeseen, unanticipated and unsuspected injuries, damages, loss and liability and the consequences thereof, as well as those now disclosed and known to exist.  The provisions of any state’s law providing substance that releases shall not extend to claims, demands, injuries, or damages which are known or unsuspected to exist at this time, to the person executing such release, are hereby expressly waived. However the Lawyers & Jurists makes no warranty expressed or implied or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any information, apparatus, product or process disclosed or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product process or service by trade name, trade mark, manufacturer or otherwise, does not necessarily constitute or imply its endorsement, recommendation or favouring by the Lawyers & Jurists. The views and opinions of the authors expressed in the Web site do not necessarily state or reflect those of the Lawyers & Jurists. Above all, if there is any complaint drop by any independent user to the admin for any contents of this site, the Lawyers & Jurists would remove this immediately from its site.