OTHER MATTERS RELATING TO SHARES 97
under (i) (above), where there is a public issue, and with the
conditions under (ii) (above), where there is not a public issue.

The following points are to be noticed as regards under-
writing generally:

The commission may be paid in consideration of (a) an
absolute subscription, 7.e. in effect shares may be issued
firm at a discount (see below); or (b) a conditional subscrip-
tion, 7.e. underwriting; or (c¢) an agreement to procure either
form of subscription, 4.e. an overriding commission.

Not only may shares not be applied, but the proceeds of
shares issued may not be used, in payment of commission,
unless the terms of the Act are complied with [Shoris v.
Colwill (1909), 101 L.T. 5098].

Options to subscribe additional shares at par or at a premium
price in consideration of subscribing part of the capital of a
company are not affected by the Act. Such options are not
an application of the shares or capital money of the companv
within the prohibition [Hilder v. Dexter (1902), A.C. 474].

Under the Act of 19o8 shares could not be issued at a Issues at a
discount except in so far as the payment of a commission in Discount.
consideration of an absolute subscription was authorised by
the Act [Ooregum Gold Co. v. Roper (1892), A.C. 125], and a
colourable attempt to issue shares at a discount, purporting
to be merely the payment of a commission as authorised by
the Act, was restrained [Keatinge v. Paringa Consolidated
Mines (1902), W.N. 15].

Under the Act of 1929 (s. 47) shares can be issued at a
discount subject to the following conditions:

(i) The shares issued must be shares of a class already
issued.

No such issue can be made until one year has elapsed
from the date on which the companv was entitled to
commence business.

(iy The issue must be authorised by resolution of the
company in general meeting and the resolution must
specify the maximum rate of discount.

(iv) The issue must be sanctioned by the Court.

(v) The issue must be made within one month after the
sanction of the Court is obtained or within such
extended time as the Court may allow.

Where an issue of shares can be underwritten for a com-
mission of ten per cent. or less, it is unlikely that recourse
will be had to this section as the desired result can be achieved
under s. 43 without recourse to the Court.