COMPANIES ACT, 1929

583

specified in Part I of the Fourth Schedule to this Act and set out
the reports specified in Part II of that Schedule, and the said Parts I
and II shall have effect subject to the provisions contained in
Part III of the said Schedule.
(2) A condition requiring or binding an applicant for shares
in or debentures of a company to waive compliance with any require-
ment of this section, or purporting to affect him with notice of any
contract, document, or matter not specifically referred to in the
prospectus, shall be void.

(3) It shall not be lawful to issue any form of application for
shares in or debentures of a company unless the form is issued with
a prospectus which complies with the requirements of this section:

Provided that this subsection shall not apply if it is shown
that the form of application was issued either—

{a) in connection with a bond fide invitation to a person to
enter into an underwriting agreement with respect to the
shares or debentures; or
in relation to shares or debentures which were not offered
to the public.

If any person acts in contravention of the provisions of this

subsection, he shall be liable to a fine not exceeding five hundred
pounds.
4) In the event of non-compliance with or contravention of
any of the requirements of this section, a director or other person
responsible for the prospectus shall not incur any liability by reason
of the non-compliance or contravention, if—

(a) as regards any matter not disclosed, he proves that he was

not cognisant thereof; or

ne proves that the non-compliance or contravention arose
from an honest mistake of fact on his part; or

the non-compliance or contravention was in respect of
matters which in the opinion of the court dealing with
the case were immaterial or was otherwise such as ought,
in the opinion of that court, having regard to all the circum-
stances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus
a statement with respect to the matters specified in paragraph 15
of Part I of the Fourth Schedule to this Act, no director or other
person shall incur any liability in respect of the failure unless it be
proved that he had knowledge of the matters not disclosed.

(5) This section shall not apply to the issue to existing members
or debenture holders of a company of a prospectus or form of applica-
tion relating to shares in or debentures of the company, whether an
applicant for shares or debentures will or will not have the right
to renounce in favour of other persons, but subject as aforesaid,
this section shall apply to a prospectus or a form of application
whether issued on or with reference to the formation of a company
or subsequently.

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