(1)No allotment shall be made of any share capital of a company offered to the public for subscription unless—
(a)there has been subscribed the amount stated in the prospectus as the minimum amount which, in the opinion of the directors, must be raised by the issue of share capital in order to provide for the matters specified in paragraph 2 of Schedule 3 (preliminary expenses, purchase of property, working capital, etc.); and
(b)the sum payable on application for the amount so stated has been paid to and received by the company.
(2)For purposes of subsection (1)(b), a sum is deemed paid to the company, and received by it, if a cheque for that sum has been received in good faith by the company and the directors have no reason for suspecting that the cheque will not be paid.
(3)The amount so stated in the prospectus is to be reckoned exclusively of any amount payable otherwise than in cash and is known as “the minimum subscription”.
(4)If the above conditions have not been complied with on the expiration of 40 days after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest.
(5)If any of the money is not repaid within 48 days after the issue of the prospectus, the directors of the company are jointly and severally liable to repay it with interest at the rate of 5 per cent. per annum from the expiration of the 48th day; except that a director is not so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
(6)Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this section is void.
(7)This section does not apply to an allotment of shares subsequent to the first allotment of shares offered to the public for subscription.]
Textual Amendments
F1Ss. 82, 83 repealed (29.4.1988 for specified purposes and 10.5.1999 for further specified purposes and otherwiseprosp.) by Financial Services Act 1986 (c.60, SIF 69), ss. 211(1), 212(3), Sch. 17 Pt. I; S.I. 1988/740, art. 2, Sch.; S.I. 1999/727, art. 2(a)