OTHER MATTERS RELATING TO SHARES og
form of a letter from the underwriter addressed to the pro-
moter of the company undertaking, in consideration of a com-
mission to be paid in any event, to take up a certain number of
shares, or a proportion of them, if not subscribed for by the
public. Whether such letter amounts to a concluded con-
tract, or whether it is merely. an offer, the acceptance of which
must be communicated to the underwriter, depends upon its
terms [Consort Deep Level Gold Mines (1897), 1 Ch. 575].

In practice it is occasionally arranged to pay a broker or
other person (say) # per cent. overriding commission for his
procuring others to underwrite, and to pay to the underwriters
(say) 2 per cent. for their underwriting or conditional applica-
tion. A better and more usual course, however, is for the
company to enter into a contract with some individual
or syndicate to procure underwriting, to the satisfaction of the
company, for the whole number of shares to be underwritten,
the consideration being a lump sum; thereupon the individual
or syndicate enters into sub-underwriting contracts with others
to cover the liability undertaken on such terms as are thought
fit. The prospectus in such a case usually states that ‘sub-
underwriting contracts have been entered into to which the
company is not a party.” This statement avoids the necessity
of disclosing particulars of the sub-underwriting contracts
which are often numerous; but if it is made, care must be
taken to see that the underwriting agreement is so framed
that the statement is true. It might be held to be untrue
if the underwriting agreement contained a clause releasing the
underwriters on the acceptance by the company of sub-
underwriters’ applications and cheques. In any event such
a clause is most undesirable. The underwriters should be in
a position to know whether their sub-underwriters are sub-
stantial persons and should be made to guarantee their
solvency.

It is provided by s. 44 that ‘Where a company has paid
any sums by way of commission in respect of any shares or
debentures, or allowed any sums by way of discount in
respect of any debentures, the total amount so paid or allowed,
or so much thereof as has not been written off, shall be stated
in every balance sheet of the company until the whole amount
thereof has been written off.’

The register of members (s. 95), and the index thereto
(s. 96), must be kept at the company’s registered office, and
(except when closed pursuant to s. gg) must be open during
business hours to the inspection of any member without
fee. Any other person may inspect it on payment of a
fee not exceeding one shilling for each inspection. The

Register of
Members.