SECURITIES IN TERMS OF COMPANY LAW

ALLOTMENT OF SECURITIES (S. 39)

The distribution of forms for application to the sale of shares or other security is an opportunity for an investment. A request for shares represents an offering. If accepted, it is considered the case of an "allotment". "What is referred to as an allotment generally is not greater or less than the consent of the business to the offer to purchase shares." "Broadly speaking, it is an appropriation by director of shares for a person."

MINIMUM SUBSCRIPTION [S. 39(1)]

The minimum subscription amount needs to be stated within the prospectus if shares are offered to the public. According to the view of directors, this is the amount that is sufficient to cover the cost of purchase for any asset, the initial costs and working capital. It is not possible to make an allotment until at least the amount has been paid to the company through a cheque or another instrument. When the minimum subscription amount has not been received within the 120 days of publication, the prospectus amount received from applicants has to be returned without interest. If the money isn't returned within 130 days, the directors will be personally liable for the payment at an interest rate. This is unless the directors can demonstrate that the deficiency was not the result of any fault or negligence of their own.