The new Companies Act imposes the following deadlines for companies incorporated under the previous law to file Articles of Continuance:
- a public company: 15 April 1998
- an external company: 15 October 1998
- a private company: 15 April 1999.
These deadlines are fairly short and all companies, but particularly public companies, should already be preparing and planning for continuance as there are important decisions with long-term consequences to be made before continuing.
Failure to continue results in the company's being unable, without leave of the Court, to pay a dividend or to sue or counterclaim. Also, every director is liable to a penalty of TT$100.00 (US$16) for each day that the company carries on business after the deadline.
The Articles of Continuance may effect any amendments to the corporate instruments of a former-Act company so long as the amendment is one that a company incorporated under the new Act can make in its Articles. However, because of the abolition of the ultra vires rule and its replacement by the new principle that a company has "the rights, powers and privileges of an individual" the Articles of Continuance can be kept simple. In exceptional circumstances, where one wants to cut down on the general powers of a company, consideration will have to be given to the restrictions to be included in the Articles of Continuance. By-laws do not have to be filed when an existing-Act company is continued under the new Act. The Canadian experience suggests that the option of filing them should only be exercised in exceptional circumstances. However, the Act allows considerable flexibility in drafting by-laws and careful consideration should be given to the options available since choices will have long-term consequences for how the company may be governed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
