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SECRETARIAL PRACTICE
2. Where a company does not issue a prospectus on or with
reference to its formation, or where it has issued such a
prospectus, but has not proceeded to allot any of the shares
offered to the public for subscription the statement in lieu
must be filed before any allotment of shares or debentures
can be made [s. 40 (1)], or the allotment may be void [ Jubilee
Cotton Mills (1924), A.C. 958]. But if the statement is filed
but is incorrect, a subsequent allotment is not invalid [Blair
Open Hearth Furnace Co. (1914), 1 Ch. 390].

It would seem that a statement in lieu of prospectus must
be filed though the company on its formation agree to allot
shares with a view to the same being offered for sale and the
offer for sale is filed pursuant to s. 38; for although the offer
for sale is for all purposes to be deemed a prospectus issued by
the company, it is an offer of shares for purchase, not for
subscription and the offer for sale can hardly be said to be a
prospectus issued by the company on or with reference to its
formation.

3. Every director must, unless he has already done so, pay
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, an
amount equal to the amount per share payable on application
and allotment on the shares payable in cash [s. 94 (2)].

4. A statutory declaration [Form 444, Companies (Forms)
Order, 1929], similar in most respects to that which must be
filed by a company making a public issue, but with the
necessary differences, must be filed with the Registrar, who
will then issue his certificate entitling the company to com-
mence business.

It should be noted that under the Act of 1929 in the case
of a company which does not invite public subscriptions a
minimum subscription is not a condition precedent to ob-
taining a certificate that the company is entitled to commence
business.

In this case also contracts made by the company before the
date at which it becomes entitled to commence business are
provisional only, but become binding on that date.

Contracts referred to in a prospectus or statement in lieu
of prospectus cannot be varied prior to the statutory meeting
(s. 113) except subject to the approval of that meeting (s. 36).

Restrictions ~~ There are very stringent provisions of the Act as to first
as to allotments. S. 39 (4) provides that, in the case of a company
Allotment.  13king an initial public issue of shares, if the minimum
subscription has not been subscribed, and the application
money received, within forty days from the first issue of the
prospectus (i.e. primd facie the date of the prospectus) all the