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.