FOREIGN COMPANIES

319
particulars and matters specified in sub-s. (1) of s. 355. The
effect of this sub-section is substantially that the prospectus
must contain all the information and statements which would
be required in the case of the prospectus of an English company
except the contents of the memorandum of association and
in addition must contain the particulars specified in par. (a) of
s. 355 (1).

By analogy with s. 35 (5) it is provided by s. 354 (2) that
the section shall not apply to the issue of a prospectus to
existing members or debenture holders of the company;
nor does it apply to an offer of shares or debentures for
subscription to any person whose ordinary business or part
of whose ordinary business it is to buy or sell shares or
debentures, whether as principal or agent, for s. 354 (4) provides
that such an offer shall not be deemed an offer to the public
for the purpose of s. 354.

By analogy with s. 35 (2) it is provided by s. 354 (x) that
it is illegal to issue to any person in Great Britain a form
of application for shares in or debentures of a foreign company
or intended foreign company unless the form is issued with a
prospectus which complies with Part XII of the Act. As
in the case of an English company, this provision does not
apply where the form of application is issued to existing
members or debenture holders of the company or in con-
nection with a bond fide invitation to a person to enter
into an underwriting agreement with respect to the shares
or debentures. In the case of an English company there is
a further exception where the form of application is issued
in relation to shares or debentures which are not offered
to the public. This exception does not apply to foreign
companies and accordingly in the case of foreign companies
it is illegal to issue an application form for the purpose of
getting capital privately subscribed unless it is accompanied
by a prospectus.

The provisions of s. 37 as to the liability of directors for
statements contained in the prospectus is extended to pros-
pectuses of foreign companies by s. 354 (5). Moreover
any person knowingly responsible for contravention of the
section, whether as regards the issue, circulation or distribution
of a prospectus or the issue of an application form, is lial
to a fine of £500 [s. 354 (6)].

By sub-s. (3) of s. 354 the provisions of s. 38 of the Act as to Shares for
offers for sale where the shares or debentures have been allotted Sale.
with a view to their being offered for sale to the public are
extended to the like offers for sale of shares or debentures of
a foreign company. (As to s. 38 see p. 58.)