2052
No. 58 of 1911.
COMPANIES.
Effect of irregular allotment.
8 Edw. 7, c. 69, s. 86,
(6) This section, except sub-section (3), shall not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription.
(7) In the case of the first allotment of share capital payable in cash of a company which does not issue any invitation to the public to subscribe for its shares, no allotment shall be made unless the minimum subscription (that is to say):
(a) the amount (if any) fixed by the memorandum or articles and named in the statement in lieu of prospectus as the minimum subscription upon which the directors may proceed to allotment; or
(b) if no amount is so fixed and named, then the whole amount of the share capital other than that issued or agreed to be issued as fully or partly paid up otherwise than in cash,
has been subscribed and an amount not less than five per cent. of the nominal amount of each share payable in cash has been paid to and received by the company.
This sub-section shall not apply to a private company or to a company which has allotted any shares or debentures before the commencement of this Ordinance.
88. (1) An allotment made by a company to an applicant in contravention of the provisions of section 87 shall be voidable at the instance of the applicant within one month after the holding of the statutory meeting of the company and not later, and shall be so voidable notwithstanding that the company is in course of being wound up.
(2) Every director of a company who knowingly contravenes or permits or authorises the contravention of any of the provisions of section 87 with respect to allotment shall be liable to compensate the company and the allottee respectively for any loss, damages, or costs which the company or the allottee may have sustained or incurred thereby: Provided that proceedings to recover any such loss, damages, or costs shall not be commenced after the expiration of two years from the date of the allotment.
* As amended by Law Rev. Ord., 1924.