I beg to move in page 53, line 10, to leave out Subsections (5) and (6), and to insert:
"(5) Section ninety-four of the principal Act shall have effect as if in subsection (1) thereof (which restricts the right of a company to commence business or exercise borrowing powers in cases where the company has issued a prospectus inviting the public to subscribe for its shares) there were inserted after paragraph (b) thereof the following paragraph:—
This Amendment is designed to meet a point made by the hon. Member for Hendon South (Sir H. Lucas-Tooth). Clause 60 provides that in certain events money subscribed for shares is to be repaid by a company; that is to say, if a company has not either applied for, or obtained, permission to deal in these shares. The hon. Gentleman pointed out that as the Clause stands it is, at any rate, just arguable that if, for example, a person who has sold his business to a company for shares seeks to sell those shares to the public, the company is not to start its business if the offer to the public of the shares brings about a situation in which the subscriber's money is to be returned. The Amendment puts it beyond doubt that the company is only restricted from commencing business or using its borrowing powers where it is made liable to refund moneys in connection with application for shares which it has offered and not, for example, in relation to the offer by the vendor of a business of shares obtained by sale of its business.'(bb) 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 obtain permission for the shares or debentures to be dealt in on any stock exchange and.'"
Amendment agreed to.