—(1) A public company having a share capital which does not issue a prospectus on or with reference to its formation shall not allot any of its shares or debentures unless, at least 3 days before the first allotment of either shares or debentures, there has been lodged with the Registrar a statement in lieu of prospectus which complies with the requirements of this Act.
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months.
(3) Every director of a company who knowingly contravenes or permits or authorises the contravention of subsection (1) shall —
be guilty of an offence; and
be liable in addition to the penalty or punishment for the offence to compensate the company and allottee respectively for any loss, damages or costs which the company or allottee has sustained or incurred thereby.
(4) No proceedings for the recovery of any compensation referred to in subsection (3)(b) shall be commenced after the expiration of 2 years from the date of the allotment.
[UK, 1948, s. 48; Aust., 1961, s. 50]