Western Australian Consolidated Acts Western Australian Consolidated Acts (1) Every prospectus
issued by or on behalf of a company, or by or on behalf of any person who is
or has been engaged or interested in the formation of the company, must state
the matters specified in Part A of this section and set out the reports
specified in Part B of this section, and Parts A and B shall have effect
subject to the provisions contained in Part C of this section.
(1a) Where a
prospectus is printed it shall be printed in letters of not less than 8 points
face measurement unless where the prospectus is printed in letters of less
than 8 points face measurement the Registrar, before the issuing, advertising,
circulating or distributing of the prospectus in this State certifies in
writing that the type and size of letters are legible and satisfactory.
Penalty: $400.
(2) A condition
requiring or binding an applicant for shares in or debentures of a company 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, shall be void.
(3) It shall not be
lawful to issue any form of application for shares in or debentures of a
company unless the form is issued with a prospectus which complies with the
requirements of this section: Provided that this subsection shall not apply if
it is shown that the form of application was issued either —
(a) in
connection with a bona fide invitation to a person to enter into an
underwriting agreement with respect to the shares or debentures; or
(b) in
relation to shares or debentures which were not offered to the public.
If any person acts in
contravention of the provisions of this subsection, he shall be liable to a
fine not exceeding $200.
(4) A prospectus shall
not contain the name of any person as a trustee for holders of debentures or
as an auditor or a solicitor of the company or proposed company unless such
person has prior to the issue of the prospectus consented in writing to act in
the capacity proposed to be stated in the prospectus, and a verified copy of
such consent has been filed with the Registrar.
(5) Where any
statement made by an expert or contained in what purports to be a copy of or
extract from a report, memorandum or valuation by an expert is included or set
forth in a prospectus, there shall also be included or set forth in the
prospectus the date on which the statement, report, memorandum or valuation
aforesaid was made, and whether or not the same was made or prepared by the
expert for the purpose of the same being incorporated in the prospectus, and
also particulars of the professional or other qualifications of such expert.
(6) Where in a
prospectus reference is made of any mining lease or other mining tenement
within the provisions of any law of the State relating to mining which has
been acquired or is the subject of an option to acquire the same, there shall
also be set forth in the prospectus the particulars of a certificate, which
shall be obtained from the Department of Mines 11 , containing full details of
the nature of such mining lease or other mining tenement and of the title
thereto or the estate or interest therein.
(7) In the event of
non-compliance with or contravention of any of the requirements of this
section, a director or other person responsible for the prospectus shall not
incur any liability by reason of the non-compliance or contravention,
if —
(a) as
regards any matter not disclosed, he proves that he was not cognisant thereof;
or
(b) he
proves that the non-compliance or contravention arose from an honest mistake
of fact on his part; or
(c) the
non-compliance or contravention was in respect of matters which in the opinion
of the Court dealing with the case were immaterial or was otherwise such as
ought, in the opinion of the Court, having regard to all the circumstances of
the case, reasonably to be excused:
Provided that, in the
event of failure to include in a prospectus a statement with respect to the
matters specified in paragraph (15) of Part A of this section, no
director or other person shall incur any liability in respect of the failure
unless it be proved that he had knowledge of the matters not disclosed.
(8) This section shall
not apply to the issue to existing members or debenture holders of a company
of a prospectus or form of application relating to shares in or debentures of
the company, whether an applicant for shares or debentures will or will not
have the right to renounce in favour of other persons, or to the issue to
existing members of a transferor company within the meaning of
section 240 of a prospectus or form of application relating to shares in
a transferee company within the meaning of that section, but, subject as
aforesaid, this section shall apply to a prospectus or a form of application
whether issued on or with reference to the formation of a company or
subsequently.
(9) Nothing in this
section shall limit or diminish any liability which any person may incur under
the general law or this Act apart from this section.
(10) Non-compliance
with or contravention of any of the requirements of this section shall not
affect the validity or operation of any contract entered into on the faith of
the prospectus or be a ground for the rescission of any such contract, when
the non-compliance or contravention was in respect of matters which in the
opinion of the Court dealing with the case were immaterial or was otherwise
such as ought in the opinion of the Court, having regard to all the
circumstances of the case, reasonably to be excused.
Part
A — The following matters are required to be stated in a
prospectus pursuant to this section: —
(1) Except where the
prospectus is published as a newspaper advertisement, the contents of the
memorandum, with the names, descriptions, and addresses of the signatories,
and the number of shares subscribed for by them respectively.
(2) The number of
founders or management or deferred shares, if any, and the nature and extent
of the interest of the holders in the property and profits of the company.
(3) The number of
shares, if any, fixed by the articles as the qualification of a director, and
any provision in the articles as to the remuneration of the directors.
(4) The names,
descriptions, and addresses of the directors, solicitors, and secretary, or
proposed directors, solicitors, and secretary.
(5) Where shares are
offered to the public for subscription particulars as to —
(i)
the minimum amount which, 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 thereof is to be defrayed in any other manner, the balance of the
sums, required to be provided in respect of each of the following
matters: —
(a) the
purchase price of any property purchased, or to be purchased, which is to be
defrayed in whole or in part out of the proceeds of the issue;
(b) any
preliminary expenses payable by the company, 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 company;
(c) the
repayment of any moneys borrowed by the company in respect of any of the
foregoing matters;
(d)
working capital;
and
(ii)
the amounts to be provided in respect of the matters
aforesaid otherwise than out of the proceeds of the issue, and the sources out
of which those amounts are to be provided.
(6) The amount payable
on application and allotment on each share, and, in the case of a second or
subsequent offer of shares, the amount offered for subscription on each
previous allotment made within the 2 preceding years, the amount actually
allotted, and the amount, if any, paid on the shares so allotted.
(7) The number and
amount of shares and debentures which, within the 2 preceding years, have been
issued, or agreed to be issued, as fully or partly paid up otherwise than in
cash, and in the latter case the extent to which they are so paid up, and in
either case the consideration for which those shares or debentures have been
issued or are proposed or intended to be issued.
(8) The names and
addresses of the vendors of any property purchased or acquired by the company,
or proposed so to be purchased or acquired, which is to be paid for wholly or
partly out of the proceeds of the issue offered for subscription by the
prospectus, or the purchase or acquisition of which has not been completed at
the date of issue of the prospectus, and the amount payable in cash, shares,
or debentures to the vendor, and where there is more than one separate vendor,
or the company is a sub-purchaser, the amount so payable to each vendor.
(9) The amount, if
any, paid or payable as purchase money in cash, shares, or debentures, for any
such property, as aforesaid, specifying the amount, if any, payable for
goodwill.
(10) The amount, if
any, paid within the 2 preceding years, or payable, as commission (but not
including commission to sub-underwriters) for subscribing or agreeing to
subscribe, or procuring or agreeing to procure subscriptions, for any shares
in, or debentures of the company, or the rate of any such commission.
(11) The amount or
estimated amount of preliminary expenses.
(12) The amount paid
within the 2 preceding years or intended to be paid to any promoter, and the
consideration for any such payment.
(13) The dates of and
parties to 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
company or a contract entered into more than 2 years before the date of issue
of the prospectus, and a reasonable time and place at which any such material
contract or a copy thereof may be inspected.
(14) The names and
addresses of the auditors, if any, of the company.
(15) Full particulars
of the nature and extent of the interest, if any, of every director and of
every expert, whose report appears in whole or in part in the prospectus, in
the promotion of, or in the property proposed to be acquired by the company
or, where the interest of such a director or expert consists in 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 person either to induce him to become, or to
qualify him as, a director or expert, or otherwise for services rendered by
him or by the firm in connection with the promotion or formation of the
company.
(16) If the prospectus
invites the public to subscribe for shares in the company and the share
capital of the company is divided into different classes of shares, the right
of voting at meetings of the company conferred by, and the rights in respect
of capital and dividends attached to, the several classes of shares
respectively.
(17) In the case of a
company which has been carrying on business, or of a business which has been
carried on for less than 3 years, the length of time during which the business
of the company or the business to be acquired, as the case may be, has been
carried on.
Part
B — The following reports are required to be stated in a
prospectus pursuant to this section: —
(1) A report by the
auditors of the company with respect to the profits of the company in respect
of each of the 3 financial years immediately preceding the issue of the
prospectus, and with respect to the rates of the dividends, if any, paid by
the company in respect of each class of shares in the company in respect of
each of the 3 years, giving particulars of each such class of shares on
which such dividends have been paid and particulars of the cases in which no
dividends have been paid in respect of any class of shares in respect of any
of those years, and if no accounts have been made up in respect of any part of
the period of 3 years ending on a date 3 months before the issue of the
prospectus containing a statement of that fact.
(2) If the proceeds,
or any part of the proceeds, of the issue of the shares or debentures are or
is to be applied directly or indirectly in the purchase of any business, a
report made by public accountants, who shall be named in the prospectus, upon
the profits or losses of the business in respect of each of the 3 financial
years immediately preceding the issue of the prospectus.
Part
C — The following provisions apply to Parts A and B of this
section: —
(1) The provisions of
this section with respect to the memorandum and the qualification,
remuneration and interest of directors, the names, descriptions and addresses
of directors or proposed directors, and the amount or estimated amount of the
preliminary expenses, shall not apply in the case of a prospectus issued more
than 2 years after the date at which the company has in fact commenced
business.
(2) Every person
shall, for the purposes of this section, be deemed to be a vendor who had
entered into any contract, absolute or conditional, for the sale or purchase,
or for any option of purchase, of any property to be acquired by the company,
in any case where —
(a) the
purchase money is not fully paid at the date of the issue of the prospectus;
(b) the
purchase money is to be paid or satisfied wholly or in part out of the
proceeds of the issue offered for subscription by the prospectus;
(c) the
contract depends for its validity or fulfilment on the result of that issue.
(3) Where any property
to be acquired by the company is to be taken on lease, this section shall have
effect as if the expression vendor included the lessor and the expression
purchase money included the consideration for the lease, and the expression
sub-purchaser included a sub-lessee.
(4) For the purposes
of paragraph (8) of Part A of this section, where the vendors or any of
them are a firm, the members of the firm shall not be treated as separate
vendors.
(5) If, in the case of
a company which has been carrying on business, or of a business which has been
carried on for less than 3 years, the accounts of the company or business have
only been made up in respect of 2 years or one year, Part B of this section
shall have effect as if references to 2 years or one year, as the case may be,
were substituted for references to 3 years.
(6) The expression
financial year in Part B of this section means the year in respect of which
the accounts of the company or of the business, as the case may be, are made
up, and where, by reason of any alteration of the date on which the financial
year of the company or business terminates, the accounts of the company or
business have been made up for a period greater or less than a year, that
greater or less period shall for the purpose of the said Part be deemed to be
a financial year.
[Section 47 amended by No. 73 of 1953
s. 3; No. 113 of 1965 s. 8(1).]