1950_COMPANIES_ORDINANCE — Page 58

CAP. 32]

[s. 94 cont.]

Companies.

(2) Where a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless-

(a) there has been delivered to the Registrar for regis- tration a statement in lieu of prospectus; and (b) every director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash; and

(c) there has been delivered to the Registrar for regis- tration a statutory declaration by the secretary or one of the directors in the prescribed form that para- graph (b) has been complied with.

(3) The Registrar shall, on the delivery to him of the said statutory declaration, and, in the case of a company which is required by this section to deliver a statement in lieu of prospectus, of such a statement, certify that the com- pany is entitled to commence business, and that certificate shall be conclusive evidence that the company is so entitled.

(4) Any contract made by a company before the date at which it is entitled to commence business shall be provi- sional only, and shall not be binding on the company until that date, and on that date it shall become binding.

(5) Nothing in this section shall prevent the simul- taneous offer for subscription or allotment of any shares and debentures or the receipt of any money payable on applica- tion for debentures.

(6) If any company commences business or exercises borrowing powers in contravention of this section, every person who is responsible for the contravention shall, without prejudice to any other liability, be liable to a fine of five hundred dollars for every day during which the contraven- tion continues.

(7) If a company fails to obtain a certificate to com- mence business within one year of the date of its incorpora- tion, the Registrar shall send by registered post to the company at its registered office a letter calling upon the company to apply for the said certificate.

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