Skip to main content
Normal View

Special Committee Companies Bill, 1962 debate -
Tuesday, 15 Jan 1963

SECTION 53.

Question proposed : " That Section 53 stand part of the Bill. "

This section repeats largely the provisions of Section 85 of the Act of 1908. There is one change. Section 85(1)(a) of the Act of 1908 provided that allotment could not be made unless the amount fixed by the memorandum or articles and named in the prospectus as the minimum subscription upon which the directors may proceed to allotment has been subscribed. The idea of a minimum subscription was intended as a safeguard to ensure that an adequate amount would have to be subscribed before business commenced so that the project would have a fair chance of survival. No minimum figure was, however, fixed by the law and it has become the practice to fix the figure of £7, so that the safeguard has been rendered valueless. In paragraph 98 of their report, the Committee recommended that a prospectus should contain particulars of the minimum amount which, in the opinion of the directors, must be raised to meet certain commitments. Paragraph 4 of the Third Schedule refers.

Question put and agreed to.
Top
Share