Companies Act · 2021 Revised Edition · Part · Share Capital and Debentures Prospectus
46. Power to pay certain commissions, and prohibition of payment of all other commissions, discounts etc.
Official textFrom Attorney General's Chambers, unchanged
It shall be lawful for a company to pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company if -
the payment of the commission is authorised by the articles;
the commission paid or agreed to be paid does not exceed 10 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 per cent of the commission paid or agreed to be paid -
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Companies
in the case of shares offered to the public for subscription, is disclosed in the prospectus; or
in the case of shares not offered to the public for subscription, is disclosed in the statement in lieu of prospectus or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus, and delivered to the Registrar for registration before the payment of the commission, and where a circular or notice, not being a prospectus, inviting subscription for the shares is issued, is also disclosed in that circular or notice;
and
the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in manner aforesaid.
Save as aforesaid, 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, for any shares of the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or money be so 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.
Nothing in this section shall affect the power of any company to pay such brokerage as it has up to now been lawful for a company to pay.
A vendor to, promoter of, or other person who receives payment in money or shares from, a company shall have and is deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under this section.
If default is made in complying with the provisions of this section relating to the delivery to the Registrar of the statement in the
Registrar
"Registrar" means the Registrar of Companies appointed under section 288, and includes any Deputy Registrar or Assistant Registrar;
Companies
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prescribed form, the company and every officer of the company who is in default is guilty of an offence and liable on conviction to a fine of $5,000.
officer
"officer", in relation to a corporation, includes - (a) any director or secretary of the corporation or a person employed in an executive capacity by the corporation; @) a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and (c) any liquidator of a company appointed in a voluntary winding up, but does not include - (i) any receiver who is not also a manager; (ii) any receiver and manager appointed by the Court; (iii) any liquidator appointed by the Court or by the creditors; and (iv) an Executive Manager appointed by the Minister under section 230(1) of the Insolvency Order, 2016 (S 112016);
Terms defined in s 2
articles
Defined · s 2"articles" means the articles of association of a company, as originally framed or as altered by special resolution, including, so far as they apply to the company, the regulations contained in Table A in Schedule 1;
officer
Defined · s 2"officer", in relation to a corporation, includes - (a) any director or secretary of the corporation or a person employed in an executive capacity by the corporation; @) a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and (c) any liquidator of a company appointed in a voluntary winding up, but does not include - (i) any receiver who is not also a manager; (ii) any receiver and manager appointed by the Court; (iii) any liquidator appointed by the Court or by the creditors; and (iv) an Executive Manager appointed by the Minister under section 230(1) of the Insolvency Order, 2016 (S 112016);
prospectus
Defined · s 2"prospectus" means any prospectus, notice, circular, advertisement or other invitation, offering to the public for subscription or purchase of any shares or debentures of a company;
Registrar
Defined · s 2"Registrar" means the Registrar of Companies appointed under section 288, and includes any Deputy Registrar or Assistant Registrar;
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Part
Management and Administration Registered Office and Name
Part 5
Part 6
Part 7
Part 8
Part 9
Part
Restrictions on Sale of Shares and Offers of Shares for Sale
Part
Prohibition of Partnerships with More Than Twenty Members
Part