Payment of underwriting commission - allotment of shares, Business Law and Ethics

Assignment Help:

Payment of Underwriting Commission:

A "commission" is defined by Osborn's Concise Law Dictionary as, inter alia "an agent's remuneration". Therefore purposes of company law, it denotes the amount of money paid by a company to a person "in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, meant for any shares in the company there or procuring may or agreeing just to procure subscriptions, where absolute or conditional, intended for any shares in the company"

Section 55 (1) of the Act allows a company to pay the commission if:-

a) the payment is authorized by the company's articles; and

b) the commission paid or agreed to be paid does not exceed 10% of the price at which the shares are issued or the amount or rate authorized by the articles, moreover is the less; and

c) furthermore the amount or rate per cent of the commission paid or agreed to be paid is -

i) in the case of shares offered to the public for subscribption, disclosed in the prospectus; or

ii) in the case of shares not offered to the public for subscription and disclosed in the statement in lieu of prospectus, or  may in Form No.225 signed by all the directors or their agents authorized in writing; and

d) the number of shares which it has been agreed to subscribe absolutely is disclosed in manner aforesaid.

Section 55 (2) provides that, except as provided by subsection (1), no company shall apply any of its shares or capital money, either directly or indirectly, in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, absolute or conditional, for any shares in the company, whether the shares or money be applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.


Related Discussions:- Payment of underwriting commission - allotment of shares

What are the obligations of the employer, Question 1: Constructive dism...

Question 1: Constructive dismissal is inherently different from dismissal in the sense that it is the employee who takes the initiative in considering the contract as having be

Approval of the scheme - mergers and winding up, Approval of the scheme - m...

Approval of the scheme - mergers and winding up: A scheme of arrangement was agreed between Hambros and Hellenic whereby the shareholders of Hellenic were to have their shares

Explain the theories of relational contracts, Theories of relational contra...

Theories of relational contracts These are long-term, non-legal or only incompletely legal agreements. The fact of incomplete foresight is taken into account by leaving gaps in

Consistent with the written law, Consistent with the written Law Howev...

Consistent with the written Law However Islamic law is the law based on the Holy Koran and the teachings of the Prophet Mohammed as defined in his Sayings called "Hadith".

Lost by company personnel, In a business context, there are thousands of le...

In a business context, there are thousands of legal claims that happen frequently in a company's course of operations. Frequently, the management team must come to together to veri

Sense of urgency-entrepreneurship development, Sense of Urgenc: Entreprene...

Sense of Urgenc: Entrepreneurs have a never-ending sense of urgency to develop their ideas. Inactivity makes them impatient, tense, and uneasy. They thrive on activity and are tir

Domestic or family agreements - elements of contract, Domestic or Family Ag...

Domestic or Family Agreements - Elements of Contract However there is a rebuttable presumption such the parties did not intend for create legal relations as: 1. Agreements

Public company - registration procedures, Public Company - Registration Pro...

Public Company - Registration Procedures: Consent to act as director (Form No 209) If any person is appointed director of the company by the articles which are to be deli

Difference between plain meaning and the liberal approaches, What is the d...

What is the difference between the plain meaning and the liberal approaches to the interpretation of contracts? Provide me with an example of each to show me you understand the dif

Powerpoint presentation on ethics-sustainability and culture, I will provid...

I will provide a cases from the media that have ethical implications. Please prepare a ppt presentation that: a) describes the issue/story (Clearly identify which case you ar

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd