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(1)No allotment shall be made of any share capital of a public company offered for subscription unless—
(a)that capital is subscribed for in full; or
(b)the offer states that, even if the capital is not subscribed for in full, the amount of that capital subscribed for may be allotted in any event or in the event of the conditions specified in the offer being satisfied;
and, where conditions are so specified, no allotment of the capital shall be made by virtue of paragraph (b) unless those conditions are satisfied.
[F1This is without prejudice to section 83.]
(2)If shares are prohibited from being allotted by subsection (1) and 40 days have elapsed after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest.
(3)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 repayment was not due to any misconduct or negligence on his part.
(4)This section applies in the case of shares offered as wholly or partly payable otherwise than in cash as it applies in the case of shares offered for subscription (the word “subscribed” in subsection (1) being construed accordingly).
(5)In subsections (2) and (3) as they apply to the case of shares offered as wholly or partly payable otherwise than in cash, references to the repayment of money received from applicants for shares include—
(a)the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking), or
(b)if it is not reasonably practicable to return the consideration, the payment of money equal to its value at the time it was so received,
and references to interest apply accordingly.
(6)Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this section is void.
Textual Amendments
F1Words repealed (29.4.1988 except as mentioned in S.I. 1988/740, art. 2, Sch.) by Financial Services Act 1986 (c. 60, SIF 69), ss. 211(1), 212(3), Sch. 17 Pt. I