Definitions

1   In this Act:

"company" means a company incorporated by or under any Act, and includes any industrial, trading, business, provident, friendly, benefit, building, investment, savings or loan association or society incorporated by or under an Act;

"local authority" means the council of any municipality and any authority that has power to levy or require the levy of a rate the proceeds of which are applicable to local purposes.

Power to provide compensation for losses from forged transfers

2   (1) If a company or local authority issues shares, stock or securities transferable by an instrument in writing or by an entry in any books or register kept by or on behalf of the company or local authority, it may provide compensation by a cash payment out of its funds for any loss arising from

(a) a transfer of the shares, stock or securities, under a forged transfer, or

(b) a transfer under a forged power of attorney.

(2) A company or local authority may provide compensation under subsection (1) whether or not the person receiving the compensation, or any person through whom the person claims, has or has not paid any fee or otherwise contributed to any fund out of which the compensation is paid.

(3) A company or local authority may, if it thinks fit, provide a fund to meet claims for the compensation by

(a) fees not exceeding the rate of $1 on every $500 transferred, with a minimum charge equal to that for $100, to be paid by the transferee on the entry of the transfer in the books of the company or local authority, or

(b) insurance, reservation of capital, accumulation of income or in any other manner on which it may resolve.

(4) To provide the compensation a company may borrow money on the security of its property.

(5) A company or local authority may impose reasonable restrictions on the transfer of its shares, stock or securities or with respect to powers of attorney for their transfer as it considers necessary to guard against losses arising from forgery.

(6) If a company or local authority compensates a person under this Act for any loss arising from forgery, the company or local authority has, without prejudice to any other rights or remedies, the same rights and remedies against the person liable for the loss as the person compensated would have had.

(7) If the shares, stock or securities of a company or local authority have by amalgamation or otherwise become the shares, stock or securities of another company or local authority, the last mentioned company or local authority has the same power under this Act as the original company or local authority would have had if it had continued.