CHAPTER VII 
OFFERS FOR SALE AND KINDRED MATTERS 
Offers for 
sale under 
8. 38. 
UNDER the law in force prior to the Companies Act, 1928, 
it was a common practice for a company to accept the offer 
of a single subscriber for the whole of an issue of shares or 
debentures, leaving the subscriber to make an offer for sale 
of such shares or debentures to the public. Such offer for 
sale was not a prospectus within the Companies (Consolidation) 
Act, 1908, and accordingly none of the provisions of that Act 
as to prospectuses or as to the liability of directors for mis- 
statements in a prospectus applied to such offer for sale. The 
only remedies open to a purchaser in the event of his being 
misled by some misrepresentation in the offer for sale were 
(a) rescission if he discovered the truth while rescission was 
possible, and (b) an action for deceit if he could prove that the 
misrepresentation had been made fraudulently. Under the 
new law (see s. 38 of the Companies Act, 1929) these remedies 
are preserved and it is further provided that where a company 
allots or agrees to allot any shares in or debentures of a 
company with a view to all or any of such shares or debentures 
being offered for sale to the public, the document by which 
such offer for sale is made shall for all purposes be deemed 
to be a prospectus issued by the company. Accordingly 
s. 34 (as to filing) s. 35 (1) and the Fourth Schedule (as to 
particulars to be included in prospectus), s. 35 (2) (as to the 
invalidity of a waiver clause), s. 36 (as to restrictions or 
alterations of terms of contracts mentioned in the prospectus), 
and s. 37 (as to the liability of directors, etc., for statements 
in a prospectus) will apply to such an offer for sale. 
In addition to the matters required by s. 35 to be included in 
a prospectus the offer for sale must state [see s. 38 (3)] (i) the 
net amount received or to be received by the company in 
respect of the shares or debentures to which the offer relates, 
and (ii) the place and time at which the contract for the 
allotment of such shares or debentures may be inspected. 
Under s. 38 (2) the fact that the offer for sale of the 
shares or debentures is made within six months after