COMPANIES ACT, 1929 
587 
J 
for that sum has been received in good faith by the company and 
the directors of the company have no reason for suspecting that the 
cheque will not be paid. 
(2) The amount so stated in the prospectus shall be reckoned 
exclusively of any amount payable otherwise than in cash and is 
in this Act referred to as “the minimum subscription.” 
(3) The amount payable on application on each share shalj 
not be less than five per cent. of the nominal 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 them without interest, and, if any 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 centum per 
annum from the expiration of the forty-eighth day: 
Provided that a director shall not be liable if he proves that the 
default in the repayment of the money was not due to any mis- 
conduct 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. 
(6) This section, except subsection (3) thereof, shall not apply 
to any allotment of shares subsequent to the first allotment o! 
shares offered to the public for subscription. 
40.—(1) A company having a share capital which does not 
issue a prospectus on or with reference to its formation, or which 
nas issued such a prospectus but has not proceeded to allot any 
of the shares offered to the public for subscription, shall not allot 
any of its shares or debentures unless at least three days before the 
first allotment of either shares or debentures there has been delivered 
to the registrar of companies for registration 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 containing the particulars 
set out in the Fifth Schedule to this Act. 
(2) This section shall not apply to a private company, 
(3) If a company acts in contravention of this section, the 
company and every director of the company who knowingly autho- 
rises or permits the contravention shall be liable to a fine not exceed- 
ng one hundred pounds. 
41.—(1) An allotment made by a company to an applicant in 
contravention of the provisions of the two last foregoing sections 
of this Act, shall be voidable at the instance of the applicant within 
one month after the holding of the statutory meeting of the company 
and not later, or, in any case where the company is not required 
to hold a statutory meeting, or where the allotment is made after 
Prohibition of 
illotment in 
certain cases 
inless statement 
mn lieu of pros- 
spectus delivered 
to registrar. 
Effect of irregus 
lar allotment.