J 
SECRETARIAL PRACTICE 
(0) 
Under the Act of 1908 there was no limit to the rate 
of commission; but now the commission must not 
exceed ten per cent. of the price at which the shares 
are issued or the amount or rate authorised by the 
articles, whichever is the less. 
The amount or rate must be disclosed in the pros- 
spectus. 
The number of shares which persons have agreed for a 
commission to subscribe absolutely must be disclosed 
in the prospectus. This requirement is new, and 
presumably includes ‘firm’ underwriting. 
¢) 
(4) 
(11) Where there is no public issue. 
(2) The payment must be authorised by the articles. 
(6) The commission must not exceed the amount or rate 
above mentioned. 
(c) The amount or rate must be disclosed (1) in the state- 
ment in lieu of prospectus, or (2) in a statement in 
the prescribed form, signed in like manner as a 
statement in lieu of prospectus, and delivered before 
payment of the commission to the Registrar of 
companies for registration. 
The amount or rate must be disclosed in any circular 
or notice, not being a prospectus inviting sub- 
scriptions. 
The number of shares which persons have agreed for 
a commission to subscribe absolutely must be 
disclosed in the manner specified in (¢) and (4). 
It would seem that on a first issue, or on an issue made on 
the conversion of a private company into a public company, 
the disclosure must be made in the statement in lieu of pros- 
pectus, and on subsequent issues and in the case of a private 
company it must be made in the statement in the prescribed 
form. Unless the statement in the prescribed form has been 
duly filed before the shares are allotted, the commission 
cannot be recovered from the company [Andreae v. Zinc 
Mines of Great Britain (1918), 2 K.B. 454]. S. 43 also applies 
to private companies [Dominion of Canada General Trading 
v. Brigstocke (1911), 2 K.B. 648]. 
‘Prescribed’ means prescribed by the Board of Trade 
(s. 380). 
2. By Vendors or Promoters.—Vendors or promoters, who 
wish to pay underwriting commissions out of money or shares 
received from a company, must comply with the conditions