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.