Restriction
as to allot-
ment.
8 Edw. 7 c.
69 s. 85.
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(3) Where the prospectus contains the name of a person as a director of the company, or as having agreed to be- come a director thereof, and he has not consented 10 become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to the issue thereof, the directors of the company, except any without whose knowledge or consent the prospectus was issned, and any other person who authorised the issue thereof, shall be liable to indemnify the person named as aforesaid against all damages, costs, and expenses to which he may be made liable by reason of his nume having been inserted in the prospectus, or in defonding himself against any action or legal proceedings brought against hiu in respect thereof,
(4) Every person who by reason of his being a director, or taued as a director or as having agreed to become a director, or of his having authorised the issue of the pros- peetus, becomes liable to make any payment under this section nmy recover contribution, as in eases of contract, from any other person who, if sued separately, would have been liable to make the same payment, unless the person who has become so liable was, aud that other person was not, guilty of fraudulent misrepresentation.
(5) For the purposes of this section--
The expression "promoter" menus a promoter who was a party to the preparation of the pros- pectus, or of the portion thereof containing the untrue statement, but does not luclude any person by reason of his acting in a professional eapunity for persons engaged in procuring the formation of the company:
The expression "expert" includes engineer, valuer, accountant, and any other person whose profes- sion gives authority to a statement made by lim.
A Hotment.
87.—(1) No allotment shall be made of any share capital of a company offered to the public for subscription, uuless the following conditions have been emplied with, namely:-
(a) the amount (if any) fixed by the memorandum
or articles of association and named in the prospectus as the minimum subscription upon
which the directors may proceed to allotment ;
Or
(if no amount is so fixed and named, then the whole amount of the share capital so offered for subscription,
has been subscribed, and the sum payable on application for the amount so fixed and named, or for the whole amount offered for subscription, has beeu pail to and received by the company.
(2) The amount so fixed and named and the whole amount aforesaid shall be reckoned exclusively of any amount payable otherwise than in cash, and is in this Or- dinance referred to as the minimum subzeription.
(3) The amount payable on application on each share shall not be less than five per cent. of the nomiual amount of the share.
(4) If the conditions aforesaid have not been complied with on the expiration of forty days after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to the applicants without interest, and, if auy such money is not so repaid within forty-eight days after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of five per centmin per manum from the expiration of the forty- eighth day:
Provided that a director shall not be liable if he proves that the loss of the money was not due to any misconduct or negligence on his part.
(5) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void.
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(6) This section, except subsection (3) thereof, 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 in- vitation to the public to subscribe for its shares, no allotment shall be made unless the minimun subscription (that is to
(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 allotm:out;
OF
() if no amount is so fixed and named, then the whole amount of the share expital other than that issued or agreed to be issued as fully or partly paid up otherwise thau in cash,
has been subscribed and an amount not less than five per ceut. of the nominal amount of each share payable in eash bas been paid to and received by the company.
This subsection shall not apply to a private company or
to a company which has allotted any shares or debentures before the date of the coming into operation of this Or- dinance.
88.-(1) Au allotment made by a company to an ap- Effect of plicant in contravention of the provisions of the last irregular foregoing section shall be voidable at the instance of the allotment.
8 Edw. 7 c. applicant within one month after the holding of the statt- 69 s. 86. tory meeting of the company and not later, and shall be so voidable notwithstanding that the company is in course of being wound up.
(2) If any director of a company knowingly contravenes or permits or authorises the contravention of any of the provisions of the last foregoing section with respect to aliot- ment he 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 expira- tion of two years from the date of the allotment.
89.-(1) A company shall not commence any business Restrictions
or exercise auy borrowing powers unless----
On com-
mencement
(a) shares held subject to the payment of the whole of business.
amount thereof in cash have been allotted to . s. 87. au amount not less in the whole than the mini- mam subscription; and
(b) every director of the company has paid to the company on each of the shares taken or con- tracted to be taken by him, and for which he is Hable to pay in cash, a propurtion equal to the prosportion payable on application and allotment on the shares offered for public subscription, or in the case of a company which does not issue a propectus inviting the public to sub- scribe for its shares, on the shares payable
i cash and
(e) there has been filed with the registrar of com- panies a statutory declaration by the secretary or one of the directors, in the preseribed form, that the aforesaid conditions have been com- plied with; and
(d) in the case of a company which does not issue a prospectus inviting the public to subscribe for its shares, there has been filed with the registrar of companies & stalement in lieu of prospectus.
(2) The registrar of companies shall, on the filing of this statutory declaration, certify that the company is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled :
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