50

~ SECRETARIAL PRACTICE
is the difference between the price paid for the shares and
their real value at the time of allotment, such value being
ascertained in the light of subsequent events. The loss to
the company would appear to be the total nominal value of
the shares if the applicant avoids the allotment.

The meaning of ‘knowingly’ should not be overlooked.
It means ‘with knowledge of the facts.’ ‘Ignorance or mistake
of law cannot be admitted as an excuse for disobeying an
Act of Parliament’ [see Twycross v. Grant (1877), 2 C.P.D.
469]. It would seem, then, that when once it has been
proved that a director or other official of a company knows
the facts, 7.e. that shares have been allotted in a particular
manner, it must be assumed that he knows whether the
particular manner adopted is the right method, and if it
contravenes the law he will be liable.

This chapter has thus far dealt with first allotments. It
now remains to deal with other provisions of the Act, which
relate to all allotments.

In the case of a company making an offer of shares to the
public, 4.e. issuing a prospectus, or its equivalent, the
provision that the amount payable on application is not to
be less than 5 per cent. of the nominal amount of the share
[s. 39 (3)] applies to subsequent public issues as well as to
the first [s. 39 (6)]. And the important requirements of
s. 42 apply to all allotments by all public companies. Sub-
sections (1) and (2) of that section run as follows: —

Return as to (1) Whenever a company limited by shares or a company

Allotments. }iited by guarantee and having a share capital makes any
allotment of its shares, the company shall within one month
thereafter deliver to the Registrar for registration—

(a) a return of the allotments, stating the number and
nominal amount of the shares comprised in the allot-
ment, the names, addresses, and descriptions of the
allottees, and the amount (if any) paid or due and
payable on each share; and
in the case of shares allotted as fully or partly paid up
otherwise than in cash, a contract in writing con-
stituting the title of the allottee to the allotment,
together with any contract of sale, or for services
or other consideration in respect of which that allot-
ment was made, such contracts being duly stamped;
and a return stating the number and nominal amount
of shares so allotted, the extent to which they are to
be treated as paid up, and the consideration for
which they have been allotted.