Secretarial practice

Bibliographic data

Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XIX. Reconstruction and schemes of arrangements

Collection:: Economics Books

218 SECRETARIAL PRACTICE might, however, still be argued that if the underwriters are to get the shares credited as partly paid under the reconstruc- tion agreement, they are agreeing conditionally to purchase, not to subscribe for shares. However, it was held under the Act of 1908, that this argument was unsound and that under- writing commission could be paid [Barrow v. Paringa Mines (1909), 2 Ch. 658] and there is nothing in the new Act to affect this decision. The usual practice as regards underwriting is for a pre- liminary underwriting agreement to be entered into between the board of the old company and the underwriters or guaran- tors, and for that agreement to have scheduled to it the detailed agreement, which the old company and its liquidator will enter into with the new company, when the former has gone into liquidation and the latter is registered. The shareholders of the old company approve the preliminary agreement and schedule at the liquidation meeting. This preliminary agreement usually provides that if a certain percentage of shareholders effectively dissent, the under- writers shall be allowed to cancel the agreement. It is therefore usual to take no further steps until after the seven days allowed for dissents, but immediately that period has expired, the new company will be registered, and the board will enter into the contract scheduled to the preliminary agreement and also an agreement for sale. The liquidator will then send out his circular to the shareholders of the old company and tell them how many shares they are entitled to apply for in the new company, giving particulars as to payment of the balance, names of the directors of the new company, their interest in the company, and the amount of commission payable to the underwriters, etc., and will state that the applications for shares must be accompanied by certificates for shares in the old company. The bankers of the company, to whom applications are sent, should be instructed to receive no applications unless accompanied by relative share certificates. The agreement usually provides that the shareholders of the old company shall be entitled, on the nomination of the liquidator, to a pro rata number of shares in the new com- pany, credited with so much per share paid up. A method of avoiding considerable work is, for the liquidator to write out the allotment sheets as applications for shares in the new company are received, and to sign those allotment sheets for the purpose of nominating the shareholders of the old company for allotment of shares in the new company. This saves the new company writing out fresh allotment sheets.

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