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common law rulesthe above common law rules have been modified by the following statutory provisions void allotmentsa s50 a renders an allotment
allotment of sharesan allotment legally is the companys acceptance of an offer to buy its shares thus we can say it is governed by the following
amount of compensation payablein clark v urquhart 44 the court explained that the amount of compensation payable under s45 of the act is calculated
effect of rescissionwhere a contract of allotment is rescinded the former shareholder will be entitled to his money back normally with interest and
liability for misstatement or misrepresentationthis will be governed by the general principles of the law of contract depending on whether the
civil liabilitiesliability for failure to state any matter or reportat common law a contract of allotment is not a contract uberrimae fidei the
liabilities in respect of prospectuses 1
registration of prospectus s43 1 provides that no prospectus shall be issued by or on behalf of a company unless on or before the date of its
meaning of public for the purposes of the prospectus issue the word public is
the reportsi an auditors report showing a profits or losses in each of the
matters and reportsthe matters and reports to be stated in a prospectus may be summarised as follows1 the mattersthe matters to
statutory provisions i definition of prospectusa prospectus is defined by s2 as any prospectus notice circular advertisement or other invitation
prospectus issue and statutory provisionsa companys shares are legally regarded as goods consequently the common law rule known as caveat emptor
prospectus issueunder a prospectus issue the company sells the shares directly to the public rather than selling them through
methods of public issuea companys authorised capital may be raised in one or the other of the following waysa placinga placing
reserve capitalthe reserve capital is defined by s62 of the act as the portion of the issued but uncalled capital of a limited company which the
types of capitala companys capital at any given moment may consist ofa nominal or authorised capitalthis is the capital that is
raising of capitalin commercial parlance the word capital is generally used to denote the amount by which the assets of a business exceed its
remedies of the ultra vires lender in sinclair v
money lentaccording to the decision in re david payne amp co ltd 23 a person lending money to a company is not bound to enquire as to why the company
effect of ultra vires transaction an ultra vires transaction with a company may result ina a transfer of specific property to the company orb
legal justification - constructive noticethe legal justification for this rule is that since the companys public documents in its file at the
doctrine of constructive notice the doctrine of constructive notice is a rule of company law to the effect that a person transacting business with
gist of lord buckleys statementthe gist of lord buckleys statement above may be summarised as follows the judges will not regard a transaction
implied powers rulethe courts would regard such things as impliedly within the companys powers unless they are expressly prohibited by the memorandum