Obligations
of companies
where no prospectus is issueri.
8 Edw. 7 c.
69 9. $2.
32
either to induce him to become, or to qualify im as, a director, or, otherwise for services rendered by him or by the firm in connection with the promotion or formation of the com- pany; ami
() where the company is a company having shares of more than one class, the right of voting at meetings of the company conferred by the several classes of shares respectively.
(2) For the purposes of this section every person shall be deemed to be a rendor who has entered into any contract, absolute or conditional, for the sale or purchase, or for any option of purchase, of any property to be acquired by the company, in any case where
(a) the purchase money is not fully paid at the date
of issue of the prospectus; or
(6) the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospertus; or (c) the contract depends for its validity or falfilment
ou the result of such issue.
(3) Where any of the property to be acquired by the company is to be taken on lease, this section shail apply as if the expression "vemior" included the lessor, and the expression "purchase money "included the consideration for the lease, and the expression sub-purchaser” included a sub lessee.
(4) Any condition requiring or binding any applicant for shares or debentures to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document, or matter not specifically referred to in the prospectus, shall be void.
(5) Where any such prospectus us is mentioned in this section is published as a newspaper advertisement, it shall not be necessary in the advertisement to specify the con- tents of the memorandum or the signatories thereto, and the number of shares subscribed for by thelu.
(6) In the event of non-compliance with any of the requirements of this section, a director or other person responsible for the prospectna shall not incur any liability by reason of the non-compliance, if he proves that--
(2) as regards any matter not disclosed, he was not
coguisant thereof; or
() the non-compliance arose from an honest mistake
of fact on his part.
Provided that in the event of non-compliance with the requirements contained in paragraph (#) of sub-section (1) of this section no director or other person shall incur any liability in respect of such non-compliance unless it be proved that he had knowledge of the matters not disclosed, (7) This section shall not apply to a cireular or notice inviting members or debenture holders of a company to subscribe either for shares or for debentures of the com- pany, whether with or without the right to renonuce in favour of other persous, but subject as aforesaid, this section shall apply to any prospectus whether issued on or with reference to the formation of a company or subse- quently.
(8) The requirements of this section as to the memoran- dum and the qualification, remmeration, and interest of directors, the names, descriptions, and addresses of directors or proposed directors, and the amount or estimated amount of preliminary expenses, shall not apply in the case of a prospectus issued more than one year after the dare at which the company is entitled to commence basiness.
(9) Nothing in this section shall limit or diminish any Hability which any person may hear under the general law or this Ordinance apart from this section.
84.-(1) A company which does not issue a prospectus ou or with reference to its formation, shall not allot any of its shares or debentures unless before the first allotment of either shares or debentures there has been filed with the registrar of companies a statement in lieu of prospectus, sigued by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing, in the form and containing the porti- culars set out in the Second Schedule to this Ordinance.
83
(2) This section 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.
85. A company shall not previously to the statutory Restriction meeting vary the terms of a contract referred to in the on alteration prospectus or statement in lien of prospectus, except subject of terms
to the approval of the statutory mecting.
mentioned
in prospectus
or statement
in lieu of
prospectus.
* Edw. 7 c. 6 s. 83.
peetns.
88.1) Where a prospectus invites persons to sub- Liability for scribe for shares in or debeatures of a company, every statements person who is a director of the company at the time of the in pros- issue of the prospectus, and every person who has authori- . . 84. sed the naming of him and is nained in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time, and every promorer of the company, and every person who has authorised the issue of the prospectus, shall be liable to pay compensation to all persons who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage they may have sustained by reason of any intrue statement therein, or in any report or memorandum appearing on the face thereof, or by reference incorporated therein or issued therewith, unless it is proved ---
(a) With respect to every untrue statement not purporting to be nude on the authority of an expert, or of a public official document or state- ment, that he had reasonable ground to believe, wud did up to the time of the allonment of the shares or debentures, as the case may be, he- Beve, that the statement was true; and
(A) With respect to every true statement pur- porting to be a statement by or contained in what purports to be a copy of or extract from & report or valuation of an expert, that it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation. Provided that the director, person named as director, promoter, or person who authorised the issue of the prospectus, shall be liable to pay compensation as aforesaid if it is proved that he had no reasonable ground to believe that the person making the statement, report, or valuation was competent to make it ; and
(e) With respect to every untrue statement purport- ing to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official docu- ment, that it was a correct aud fair representa- tion of the statement or copy of or extract from the document:
or unless it is proved→
(4) that having consented to become a director of the company he withdrew his consent bofore the issue of the prospectus, and it was issued without his authority or cousent; or
(2) that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or
() that after the issue of the prospectus and before allotment thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto, and gave reasonable public notice of the withdrawal, and of the reason therefor.
(2) Where a company existing before the date of the conting into operation of this Ordinance, has issued shares or debentures, and for the purpose of obtaining further capital by subscriptions for shares or debentures issues a prospectus, a director shall not be liable in respect of any statement therein, unless he has authorised the issue of the prospectus, or has adopted or ratified it,
427
No comments yet.
Private notes are available after approval.