PROSPECTUS AND ALLOTMENT 49 
money subscribed is returnable to the subscribers without 
interest, and if any of the money has not been returned 
within forty-eight days from the issue, the directors are 
jointly and severally liable to return it with interest at 5 per 
cent. from the forty-eighth day. = A director, however, is not 
liable, if he proves that the default was not due to any 
misconduct or negligence on his part. Any provision 
binding an applicant to waive compliance with this sub- 
section is void, [s. 39 (5)] S. 39 (4) only applies before 
allotment has taken place; after allotment the only remedies 
available are under s. 41 [Burton v. Bevan (1908), 2 Ch. 240]. 
S. 39 does not apply to any allotment of shares subsequent 
to the first allotment of shares offered to the public, [s. 39 (6).] 
S. 41 (1) provides that an allotment made, in the case of a 
company making a public issue of shares without the 
minimum subscription being subscribed, or the necessary 
application money received, or, in the case of a company 
not issuing a prospectus or not having allotted any of the 
shares offered for public subscription, without a statement 
in lieu of prospectus being delivered to the Registrar, may be 
voidable by the applicant at any time up to one month from 
the holding of the statutory meeting or, where the company is 
not required to hold a statutory meeting or the allotment 
is made after the statutory meeting, within one month 
from the date of allotment, notwithstanding that the company 
may be in liquidation. Notice of avoidance within the month, 
followed by prompt legal proceedings, is sufficient; the 
proceedings need not be actually commenced within the 
month [National Motor Mail Coach (1908), 2 Ch. 228]. 
Under the Act of 1go8 it was held that the limit of one 
month did not apply to companies registered before the Act 
of 1900, and making a public issue after the Act, since such 
companies could not hold a statutory meeting. Consequently 
it was held that in such cases an irregular allotment could 
be avoided at any time [Finance and Issue v. Canadian 
Produce Corporation (1905), 1 Ch. 37]. This cannot arise 
under the new Act, as express provision is made to meet the 
case of a company not required to hold a statutory meeting. 
By s. 41 (2) a director who knowingly contravenes, or 
permits or authorises an allotment in contravention of any 
of the provisions of sections 39 or 40 is liable to compensate 
both the company and the allottee for any loss, damages or 
costs sustained or incurred thereby. Proceedings to recover 
any such loss, damages or costs must be commenced within 
two years from the date of the allotment. It would appear 
that the amount of damages to which an allottee is entitled