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.