DIRECTORS

145

deemed to have agreed to take the qualification shares from
the company, and the same shall be forthwith allotted to
him accordingly. It was held by the Court of Appeal that
ander such a clause the director, after signing the memo-
-andum and articles of association, had agreed to take, and
the company had agreed to allot him, his qualification shares
‘Anglo-Austrian Printing Co., Isaac's Case (1892), 2 Ch. 158].
But he can escape liability by resigning within the month
te Bolton & Co., Salisbury Jones’ Case (1894), 3 Ch. 356].
A director, being a trustee, must not receive his qualification
shares as a gift from a promoter or any one else; nor is he
entitled to purchase his qualification shares and be refunded
the purchase price. Anything he may receive he must
account for to the company [re Carriage Supply Association
(1884), 27 Ch. D. 323; Canadian Oil Works Corporation,
Hay's Case (1875), 10 Ch. App. 593; Caerphilly Colliery Co.,
Pearson's Case (1877), 5 Ch. D. 336; North Australian Co.,
Archer's Case (1892), 1 Ch. 322). Nor may he accept and hold
his qualification shares in trust for and at the will of a pro-
moter to whom he has handed blank transfers [London and
South Western Canal (1911), 1 Ch. 346].

S. 142 of the Act makes it an offence for any person being
an undischarged bankrupt to act as a director of or directly or
indirectly to take part in or be concerned in the management
of any company without leave of the Court by which he was
adjudged bankrupt, but this provision does not apply to a
person who was so acting on the 3rd of August 1928, and has
continuously so acted since that date where the bankruptcy
was prior to that date. In this section, company includes
unregistered companies and companies incorporated outside
Great Britain which have established a place of business
within Great Britain.

To avoid inconvenient consequences in cases where a
director has inadvertently acted when his appointment or
qualification was defective, s. 143 of the Act provides that
“The acts of a director or manager shall be valid, notwith-
standing any defect that may afterwards be discovered in
his appointment or qualification.’

Improperly appointed directors, or directors acting after
disqualification, may bind the company by their acts. Persons
dealing with the company are not concerned with the indoor
management thereof, and the company is bound by con-
tracts entered into by such de facto directors on its behalf,
unless it can show that the other party knew of the defective
appointment [Mahony v. East Holyford Co. (1874), L.R. 7
H.L. 869: Dawson v. African Trading Co. (1898), = Ch.