Section 107, The Companies Act, 2009

(1) No allotment shall be made of any share capital of acompany offered to the public for subscription unless the amount stated in the prospectus as the minimum amount which, in the opinion of the directors shall be raised by the issue of share capital in order to provide for matters specified in subsection (6) has been subscribed, and the sum payable on application for the amount so stated has been paid to and received by the company. (2) For the purposes of subsection (1), a sum shall be deemed to have been paid to and received by the company if a cheque for that sum has been received in good faith by the company and the directors of the company have no reason for suspecting that the cheque will not be paid. (3) The amount stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as “the minimum subscription”. (4) The amount payable on application on each share shall not be less than 5 per cent of the nominal amount of the share. (5) The amount paid on application shall be set apart by the directors as a separate fund and shall not be available for the purposes of the company or the satisfaction of its debts until the minimum subscription has been made up. (6) If the conditions specified in this section have not been complied with on the expiration of 30 days after the closure of the public offering, all moneys received from applicants for shares shall be forthwith repaid to them without interest, and, if such money is not so repaid within 40 days after the closure of the public offering, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of five per cent per annum from the expiration of the fortieth day; but a director shall not be liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part. (7) Any condition requiring or binding any applicant for shares to waive compliance with any requirement of this section shall be void. (8) This section, except subsection (3), shall not apply to any allotment of shares subsequent to the first allotment of shares offered to the public for subscription. Allotment as acceptance of offer. Payment on allotment. allotment unless minimum subscription received. 74 75