J

SECRETARIAL PRACTICE
(0)

Under the Act of 1908 there was no limit to the rate
of commission; but now the commission must not
exceed ten per cent. of the price at which the shares
are issued or the amount or rate authorised by the
articles, whichever is the less.

The amount or rate must be disclosed in the pros-
spectus.

The number of shares which persons have agreed for a
commission to subscribe absolutely must be disclosed
in the prospectus. This requirement is new, and
presumably includes ‘firm’ underwriting.

¢)
(4)

(11) Where there is no public issue.
(2) The payment must be authorised by the articles.
(6) The commission must not exceed the amount or rate
above mentioned.
(c) The amount or rate must be disclosed (1) in the state-
ment in lieu of prospectus, or (2) in a statement in
the prescribed form, signed in like manner as a
statement in lieu of prospectus, and delivered before
payment of the commission to the Registrar of
companies for registration.
The amount or rate must be disclosed in any circular
or notice, not being a prospectus inviting sub-
scriptions.
The number of shares which persons have agreed for
a commission to subscribe absolutely must be
disclosed in the manner specified in (¢) and (4).
It would seem that on a first issue, or on an issue made on
the conversion of a private company into a public company,
the disclosure must be made in the statement in lieu of pros-
pectus, and on subsequent issues and in the case of a private
company it must be made in the statement in the prescribed
form. Unless the statement in the prescribed form has been
duly filed before the shares are allotted, the commission
cannot be recovered from the company [Andreae v. Zinc
Mines of Great Britain (1918), 2 K.B. 454]. S. 43 also applies
to private companies [Dominion of Canada General Trading
v. Brigstocke (1911), 2 K.B. 648].

‘Prescribed’ means prescribed by the Board of Trade
(s. 380).

2. By Vendors or Promoters.—Vendors or promoters, who
wish to pay underwriting commissions out of money or shares
received from a company, must comply with the conditions