COMPANIES ACT 1981 No. 89 of 1981 - SECT 98 Contents of prospectuses

COMPANIES ACT 1981 No. 89 of 1981 - SECT 98

98. (1) To comply with the requirements of this Act, a prospectus-

   (a)  shall be printed in type of a size not less than the type known as
        eight point Times unless the Commission, before the issuing or
        advertising of the prospectus in the Territory, certifies in writing
        that the type and size of letter are legible and satisfactory;

   (b)  shall be dated;

   (c)  shall, as to one copy, be lodged with the Commission as required by
        this Act, shall state that a copy of the prospectus has been so lodged
        and shall also state, immediately after the statement that a copy has
        been so lodged, that the Commission takes no responsibility as to the
        contents of the prospectus;

   (d)  where the prospectus relates to shares, shall set out particulars as
        to-

        (i)    the minimum amount that, in the opinion of the directors, must
               be raised by the issue of those shares in order to provide the
               sums, or, if any part of the sums is to be defrayed in any
               other manner, the balance of the sums, required to be provided
               in respect of each of-

                (A)  the purchase price of any property purchased or to be
                     purchased that is to be defrayed in whole or in part out
                     of the proceeds of the issue;

                (B)  any preliminary expenses payable by the corporation, and
                     any commission so payable to any person in consideration
                     of his agreeing to subscribe for, or of his procuring or
                     agreeing to procure subscriptions for, any shares in the
                     corporation;

                (C)  the repayment of any money borrowed by the corporation in
                     respect of any of the foregoing matters; and

                (D)  working capital; and

        (ii)   the amounts to be provided in respect of the matters mentioned
               in sub-paragraph (i) otherwise than out of the proceeds of the
               issue and the sources out of which those amounts are to be
               provided;

   (e)  shall-

        (i)    in the case of-

                (A)  a prospectus included in a class of prospectuses in
                     relation to which regulations have been made for the
                     purposes of this sub-paragraph; or

                (B)  a prospectus to be issued in respect of shares included
                     in a class of shares or debentures included in a class of
                     debentures, or in respect of a corporation included in a
                     class of corporations, in relation to which regulations
                     have been made for the purposes of this sub-paragraph,

set out the prescribed matters and contain the prescribed reports, being
reports each of which either indicates by way of note any adjustments as
respects the figures of any profit or loss or assets and liabilities dealt
with by the report that appear necessary to the persons making the report or
makes those adjustments and indicates that adjustments have been made; or

        (ii)   in any other case-set out such matters as the Commission
               requires and contain such reports as the Commission requires,
               being reports each of which either indicates by way of note any
               adjustments as respects the figures of any profit or loss or
               assets and liabilities dealt with by the report that appear
               necessary to the persons making the report or makes those
               adjustments and indicates that adjustments have been made;

   (f)  in the case of a prospectus pursuant to which the public is to be
        invited to deposit money with or lend money to a corporation that is a
        subsidiary of another corporation or a prospectus pursuant to which a
        corporation that is a subsidiary of another corporation is to make
        offers to the public to accept moneys deposited with, or moneys lent
        to, the corporation-

        (i)    shall contain a statement as to whether or not that other
               corporation is under any liability to repay those moneys or to
               pay any interest on those moneys; and

        (ii)   where that other corporation is so stated to be under any such
               liability-shall also give full particulars of the nature and
               extent of that liability, of the circumstances under which that
               liability arose and of the manner in which that liability is to
               be discharged;

   (g)  shall contain a statement that no shares or debentures, as the case
        requires, will be allotted or issued on the basis of the prospectus
        later than 6 months after the date of the issue of the prospectus;

   (h)  shall, if it contains any statement that is made by an expert or is
        contained in what purports to be a copy of, or extract from, a report,
        memorandum or valuation of an expert, state the date on which the
        statement, report, memorandum or valuation was made and whether or not
        it was prepared by the expert for incorporation in the prospectus;

   (j)  shall not contain the name of any person as-

        (i)    a trustee for holders of debentures of the corporation;

        (ii)   an auditor, banker, solicitor, stockbroker or share broker of
               the corporation or for or in relation to the issue or proposed
               issue of shares or debentures; or

        (iii)  a person performing any function in a professional, advisory or
               other capacity not mentioned in sub-paragraph (i) or (ii) for
               the corporation or for or in relation to the issue or proposed
               issue of shares or debentures,

unless that person has consented in writing before the issue of the prospectus
to act in that capacity in relation to the prospectus and, in the case of a
company, a copy, verified by a statement in writing, of the consent has been
lodged with the Commission;

   (k)  shall set out the dates of, the parties to, and the general nature of,
        every material contract, not being a contract entered into in the
        ordinary course of the business carried on or intended to be carried
        on by the corporation or a contract entered into more than 2 years
        before the date of issue of the prospectus;

   (l)  shall state whether or not application has been, or is proposed to be,
        made for permission for the shares or debentures to which the
        prospectus relates to be listed for quotation on the stock market of
        any stock exchange, and if such an application has been or is proposed
        to be made, shall specify the stock exchange or stock exchanges to
        which application has been or is proposed to be made;

   (m)  shall set out full particulars of the nature and extent of the
        interest (if any) of every director or proposed director and of every
        expert in the promotion of, or in the property proposed to be acquired
        by, the corporation, or, where the interest of such a director or
        proposed director or such an expert consists of being a partner in a
        firm, the nature and extent of the interest of the firm, with a
        statement of all sums paid or agreed to be paid to him or to the firm
        in cash or shares or otherwise by any persons, in the case of a
        director or proposed director, either to induce him to become, or to
        qualify him as, a director, or otherwise for services rendered by him
        or by the firm in connection with the promotion or formation of the
        corporation or, in the case of an expert, for services rendered by him
        or the firm in connection with the promotion or formation of the
        corporation;

   (n)  shall, where the prospectus offers shares in or debentures of a
        foreign company, in addition contain particulars with respect to-

        (i)    the constituent documents of the foreign company;

        (ii)   the enactments or provisions having the force of an enactment
               by or under which the incorporation of the foreign company was
               effected;

        (iii)  an address in the Territory where the constituent documents,
               and the enactments or provisions, or certified copies of the
               constituent documents, enactments or provisions, may be
               inspected;

        (iv)   the date on which and the place where the foreign company was
               or is to be incorporated or formed; and

        (v)    the address of the registered office of the foreign company in
               the Territory; and

   (o)  shall specify each participating State or participating Territory (if
        any) in which it is proposed to issue the prospectus.

(2) The date inserted in a prospectus pursuant to paragraph (1) (b) shall,
unless the contrary is proved, be taken to be the date of issue of the
prospectus.

(3) Regulations made for the purposes of paragraph (1) (e) may make different
provision in relation to different classes of prospectuses or in relation to
prospectuses to be issued in respect of different classes of shares or
debentures or different classes of corporations.

(4) The Commission may require that a report that is required pursuant to
paragraph (1) (e) to be contained in a prospectus shall contain accounts that
comply with the requirements set out in the regulations in force for the time
being under sub-section 269 (8) or with such of those requirements as are
specified by the Commission.

(5) Paragraph (1) (m) and sub-paragraphs (1) (n) (i), (ii) and (iii) do not
apply in the case of a prospectus issued more than 2 years after the day on
which-

   (a)  in the case of a company-it is incorporated; or

   (b)  in the case of a foreign company-it is registered as a foreign company
        in the Territory or in a participating State or a participating
        Territory under the provisions of the law of that State or Territory
        that correspond with Division 5 of Part XIII.

(6) A condition requiring or binding an applicant for shares in or debentures
of a corporation to waive compliance with any requirement of this section, or
purporting to affect him with notice of any contract, document or matter not
specifically referred to in the prospectus is void.

(7) Where a prospectus relating to any shares in or debentures of a
corporation is issued and the prospectus does not comply with the requirements
of this Act, the directors of the corporation and any other persons
responsible for the prospectus are each guilty of an offence.

Penalty: $2,500 or imprisonment for 6 months, or both.

(8) In the event of non-compliance with, or contravention of, any of the
requirements set out in this section, a director or other person responsible
for the prospectus does not incur any liability by reason of the
non-compliance or contravention if-

   (a)  as regards any matter not disclosed, he proves that he had no
        knowledge of that matter;

   (b)  he proves that the non-compliance or contravention arose from an
        honest mistake on his part concerning the facts; or

   (c)  the non-compliance or contravention was-

        (i)    in respect of matter that, in the opinion of the court dealing
               with the case, was immaterial; or

        (ii)   otherwise such as, in the opinion of that court, having regard
               to all the circumstances of the case, ought reasonably to be
               excused.

(9) In the event of failure to include in a prospectus a statement with
respect to the matters specified in paragraph (1) (m), no director or other
person shall incur any liability in respect of the failure unless it is proved
that he had knowledge of the matters not disclosed.

(10) Nothing in this section limits or diminishes any liability that a person
may incur under any rule of law or any enactment or under this Act apart from
sub-section (7).