Section 112, The Companies Act, 2009

(1) It shall be lawful for a company to pay a commissionto 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 subscription, whether absolutely or conditionally, for any shares in the company if– (a) the payment of the commission is authorised by the articles; (b) subject to any enactment to the contrary, the commission paid or agreed to be paid does not exceed 10 percent of the price at which the shares are issued or the amount or rate authorized by the articles, whichever is the lesser; (c) the amount or rate per cent of the commission paid or agreed to be paid is– (i) in the case of shares offered to the public for subscription, disclosed in the prospectus; or (ii) in the case of shares not offered to the public for subscription, 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 before the payment of the commission to the Commission for registration, and where a circular or notice, not being a prospectus inviting subscription for the shares is issued, also disclosed in that circular or notice; and (d) the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in the manner specified in this section. (2) If default is made in delivering to the Commission any document required to be delivered to the Commission under this section, the company and every officer in default shall be liable to a fine not exceeding Le3,000,000. Prohibition of payment of commissions, discounts out of shares and Power to pay commission in certain cases. 78 79