COMPANIES ACT - 1963 (ACT 179)

    Section - 74 - Capitalisation Issues and Non-cash Dividends

    (1) When a company has resolved to transfer any sum from surplus to stated capital pursuant to paragraph (c) of subsection (1) of section 66 of this Code, the company upon the recommendation of the directors may, by the same or any subsequent special resolution, resolve that unissued shares in the company be issued credited as fully paid to the members who would have been entitled to receive the sum had it been lawfully distributed by way of dividend and in the same proportions and so that the sum so transferred to stated capital shall be deemed to be paid, otherwise than in cash, on such shares.

    (2) Such an issue shall, in this Code, be referred to as a capitalisation issue.

    (3) A company, upon the recommendation of the directors, may resolve that any sum standing to the credit of the company's income surplus and which could have lawfully been distributed by way of dividend shall be applied, on behalf of the members who would have been entitled to receive the same if it had been distributed by way of dividend, in paying up amounts for the time being unpaid on any shares held by them, and such sum shall thereupon be deemed to have been paid upon a call made on such shares and shall be transferred to stated capital pursuant to paragraph (a) of subsection (1) of section 66 of this Code.

    (4) Any resolution of a company lawfully declaring a dividend may, upon the recommendation of the directors, direct payment wholly or partly by distribution of securities for money, or of fully paid, but not partly paid, shares or debentures of any other body corporate, or of fully paid debentures of the company of a nominal amount equal to the amount so directed to be paid.

    (5) The directors shall give effect to any such resolution and may make such provision as they shall think fit for the case of any shares, debentures, or securities for money becoming distributable in fractions and may issue fractional certificates or, in the case of a distribution in accordance with subsection (4) of this section, but not in the case of a capitalisation issue in accordance with subsection (1) of this section, may sell the shares, debentures or securities for money represented by such fractions and distribute the net proceeds of the sale among the members otherwise entitled to such fractions in due proportions.

    (6) Any allotment of shares or debentures or any payment-up of shares pursuant to such resolution may be made without obtaining the individual consents thereto of the members concerned and any transfers of shares or debentures in any other body corporate may be signed on behalf of the members to whom they are transferred by any person nominated in writing by the directors and such signature shall be effective and binding on all such members.