206.
| (1) Where a compromise or arrangement is to proposed between a company and its creditors or any class of them or between the company and its members or any class, of them, the court may, on the application of the company or of any creditor or member of the company, or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be summoned in such manner as the court directs, for the purpose of sanctioning such compromise or arrangement. |
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| (2) Where a majority in number representing three- fourths in value of the creditors or class of creditors, or members or class of members, as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if, sanctioned by the court, be binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be, and also on the company, or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company. |
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| (3) An order made under the provisions of subsection (2) shall have no effect until a certified copy of the order has been delivered to the Registrar for registration, and a copy of every such order shall be annexed to every copy of the memorandum of the company issued after the order has been made, or, in the case of a company not having a memorandum, of every copy so issued of the instrument constituting or defining the constitution of the company. |
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| (4) Where a company makes default in complying with the provisions of subsection (3) the company and every officer of the company who is in default shall be guilty of an offence and shall be liable to a fine not exceeding two hundred and fifty rupees for each copy in respect of which default is made. |
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| (5) In this section and in section 207, the expression " company" means any company liable to be wound up under this Act, and the expression " arrangement " includes a reorganization of the share capital of the company by the consolidation of shares of different classes or by the division of shares, into shares of different classes or by both those methods. |
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Sri Lanka Consolidated Acts