17817-1910-Supplementary-Bills-read-a-first-time--Companies — Page 31

Obligations

where no prospectus is issued.

480

(6) In the event of non-compliance with any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance, if he proves that-

(a) as regards any matter not disclosed, he was not

cognisant thereof; or

(b) 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 (m) of sub-section (1) of this section no director or other person shall incur any liability in respect of such non-compliance unless it bu proved that he had knowledge of the matters not diselosed.

(7) This section shall not apply to a circular 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 renounce in favour of other persons, 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.

(S) The requirements of this as to the memorandum and the qualification, remuneration, 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 date ut which the company is cutitled to commence business,

(9) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Ordinance apart from this section,

$3.-(1) A company which does not issue a prospectus of companies on or with reference to its formation, shall not allot any of its shares or debentures unless hefore the first allotment of either shares or debentures there has been filed with the registrar of companies a statement in lieu of prospectus. signed 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 coutaining the parti culars set out in the Second Schedule to this Ordinance.

8 Edw. 7 c. 69 s. 82.

Restriction

of terms

(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.

84. A company shall not previously to the statutory on alteration meeting vary the terms of a contract referred to in the mentioned prospectus or statement in lieu of prospectus, except subject in prospectus to the approval of the statutory meeting.

or statement.

in lieu of

prospectus.

Th. s. 83.

Liability for statements

in pros- pectus.

Tb. s. 81.

85.-(1) Where a prospectus invites persons to sub- scribo for shares in or debentures of a company, every person who is a director of the company at the time of the issue of the prospectus, and every person who has authori- sed the naming of him and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time, and every promoter 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 untrue 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 made on the authority of an expert, or of a public official document or state- ment, that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures, as the case may be, be- lieve, that the statement was true; and

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