| 1) |
No company having a share capital shall commence business or exercise any borrowing powers unless and until the Registrar has under the provisions of this section issued under his hand and seal a certificate entitling the company to commence business. |
| 2) |
In the case of a public company which has issued a prospectus for the subscription for shares before a certificate to commence business has been issued, such certificate to commence business shall be issued upon the application of the company in the prescribed manner accompanied by an affidavit by a director or secretary of the company to the effect- |
| a) |
that every director has paid to the company for each of the shares (if any) taken or contracted to be taken by him, and for which he is liable to pay in cash, the full subscription price; |
| b) |
that shares paid for in cash have been allotted to a total amount of not less than the minimum subscription stated in the prospectus; and |
| c) |
that no money is or may become repayable to applicants for any shares which have been offered to the public by reason of the refusal of an application for permission for the shares to be dealt in on a stock exchange or the dismissal of an appeal against such refusal, |
and accompanied by the return prescribed by section 216(2).
| 3) |
In the case of every company having a share capital, a certificate to commence business shall be issued upon the application of the company in the prescribed manner accompanied by— |
| a) |
a statement of the opinion of each director to the effect that the capital of the company is adequate for the purposes of the company and its business or, if he is of the opinion that it is inadequate, the reasons therefor and the manner in which and the sources from which the company is to be financed and the extent thereof |
| b) |
the return prescribed by section 216(2); |
| c) |
[Paragraph (c) deleted by section 6 (1) (b) of Act No. 29 of 1982]
|
| d) |
[Paragraph (d) deleted by section 9 (1) of Act No. 59 of 1978]
|
| e) |
the consent to act as auditor, if not already lodged. |
| 4) |
Any such certificate issued by the Registrar shall be conclusive evidence that the company is entitled to commence business. |
| a) |
Any contract made by a company before the date on which it is entitled to commence business shall be provisional only and shall become binding on the company on that date and not earlier. |
| b) |
Until a certificate entitling a company to commence business is issued, the directors and the subscribers of the memorandum of the company shall be jointly and severally liable for all the debts and liabilities arising from any business conducted by the company in contravention of subsection (1). |
| 6) |
Nothing in this section shall prevent the simultaneous offer for subscription or allotment of any shares and debentures of the company or the receipt of any money payable on application for debentures. |
| 7) |
If a company contravenes subsection (1), every person who is responsible for or knowingly is a party to the contravention shall, in addition to any other liability incurred, be guilty of an offence. |
| 8) |
This section shall not apply to an existing company which was entitled, under the repealed Act, to commence business or exercise borrowing powers. |
National Student Financial Aid Scheme Act, 1999
