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COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 106

106.(1) Where a company having a share capital has issued a prospectus
inviting the public to subscribe for its shares, the company shall not
commence any business or exercise any borrowing powers unless

(a)shares held subject to the payment of the whole amount thereof in cash have
been allotted to an amount not less in the whole than
the minimum subscription; and

(b)every director of the company has paid to the company, on each of the
shares taken or contracted to be taken by him and for which he is liable to
pay in cash, a proportion equal to the proportion payable on application and
allotment on the shares offered for public subscription; and

(c)no money is or may become liable to be repaid to applicants for any shares
or debentures which have been offered for public subscription by reason of any
failure to apply for or to obtain permission for the shares or debentures to
be dealt in on any stock exchange; and

(d)there has been delivered to the registrar of companies for registration a
statutory declaration by the secretary or one of the directors, in the
prescribed form, that the aforesaid conditions have been complied with.

(2) Where a company having a share capital has not issued a prospectus
inviting the public to subscribe for its shares, the company shall not
commence any business or exercise any borrowing powers unless

(a)there has been delivered to the registrar of companies for registration a
statement in lieu of prospectus; and

(b)every director of the company has paid to the company, on each of the
shares taken or contracted to be taken by him and for which he is liable to
pay in cash, a proportion equal to the proportion payable on application and
allotment on the shares payable in cash; and

(c)there has been delivered to the registrar of companies for registration a
statutory declaration by the secretary or one of the directors, in the
prescribed form, that paragraph (b) has been complied with.

(3) The registrar of companies shall, on the delivery to him of the said
statutory declaration, and, in the case of a company which is required by this
section to deliver a statement in lieu of prospectus, of such a statement,
certify that the company is entitled to commence business, and that
certificate shall be conclusive evidence that the company is so entitled.

(4) Any contract made by a company before the date at which it is entitled to
commence business shall be provisional only, and shall not be binding on
the company until that date, and on that date it shall become binding.

(5) Nothing in this section shall prevent the simultaneous offer for
subscription or allotment of any shares and debentures or the receipt of any
money payable on application for debentures.

(6) If any company commences business or exercises borrowing powers in
contravention of this section, every person who is responsible for the
contravention shall, without prejudice to any other liability, be liable to a
fine not exceeding fifty pounds for every day during which the contravention
continues.

(7) Nothing in this section shall apply to

(a)a private company; or

(b)a company registered before the first day of January, nineteen hundred and
one; or

(c)a company registered before the first day of July, nineteen hundred and
eight, which has not issued a prospectus inviting the public to subscribe for
its shares.

Register of members.

© 1960 Crown Copyright

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