of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing. c. 39. (2) Such particulars shall be deemed to be an in- 54 & 55 Vict. strument within the meaning of the Stamp Act, 1891, and the registrar may, as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section twelve of that Act. (3) The provisions 3 of section seven of the Companies Act, 1900, imposing penalties for default shall apply as if the requirement of this section were a requirement contained in that section. (4) If default has been made in filing with the registrar within the time limited by section seven of the Companies Act, 1900, any document required to be filed by that section or this section, the company, or any person liable for the default, may apply to the court for relief, and the court, if satisfied that the omission to file the document was accidental or due to inadvertence or that it is just and equitable to grant relief, may make an order extending the time for the filing of the document for such period as the court may think proper. 1 Ante p. 221. 2 I.e., one month after allotment. 3 I.e., in Subsect. 2 thereof, ante p. 221. Issue of Shares at a Discount and Payment of 1 Commissions. as to com counts. 7. The total amount of the sums paid by way of Statement commission in respect of any shares or debentures or missions allowed by way of discount in respect of any deben- and distures shall be stated in the summary made under section 25 & 26 twenty-six of the Companies Act, 1862, next after the Vict. c. 89. payment of the commission or the allowance of the discount, and the total amount thereof, or so much thereof as has not been written off, shall be stated in every balance sheet 2 until the whole amount thereof has been written off. 1 Ante p. 12; and see also Sect. 21 hereof, post p. 272. 2 See Sect. 19, post p. 270, and Table A (revised), Clause 107, ante p. 118. Amendment of 63 48, s. 8. 8.-(1) For removing doubts it is hereby declared & 64 Vict. c. that a vendor1 to, promoter 2 of, or other person who receives payment in money or shares from, a company has, and always has had, power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been legal under section eight of the Companies Act, 1900. Power of to pay interest out of capital in certain cases. (2) The said section 3 shall apply in cases where the shares are not offered to the public for subscription; provided that the payment of the commission is authorised by the articles of association of the company, and that the amount or rate paid or agreed to be paid as commission is disclosed in the statement 5 in lieu of prospectus or in a statement in the prescribed form verified in like manner as a statement in lieu of prospectus and filed with the registrar, and, where a circular or notice, not being a prospectus, inviting subscriptions for the shares is issued, also disclosed in that circular or notice. 1 Companies Act, 1900, Sect. 10 (2, 3), ante p. 225. 2 Directors' Liability Act, 1890, Sect. 3 (2), ante p. 206. 3 Ante p. 221. 6 Companies Act, 1900, Sect. 6, ante p. 220; applied to Private Companies by Sect. 37 (2) hereof, post p. 281. Payment of Interest out of Capital. 9. Where any shares of a company are issued for company the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a lengthened period, the company may pay interest on so much of such share capital as is for the time being paid up for the period and subject to the conditions and restrictions in this section mentioned, and may charge the same to capital as part of the cost of construction of the work, building, or plant: Provided that— (1) No such payment shall be made unless the same is authorised by the company's articles1 of association or by special resolution 2 of the company: (2) No such payment, whether authorised by the articles of association or by special resolution,2 shall be made without the previous sanction of the Board of Trade: (3) Before sanctioning any such payment the Board of Trade may, at the expense of the company, appoint a person to inquire and report to them as to the circumstances of the case, and may, before making the appointment, require the company to give security for payment of the costs of the inquiry: (4) The payment shall be made only for such period as may be determined by the Board of Trade; and such period shall in no case extend beyond the close of the half-year next after the half-year during which the works or buildings have been actually completed or the plant provided: (5) The rate of interest shall in no case exceed four per cent. per annum or such lower rate as may for the time being be prescribed by Order in Council: (6) The payment of such interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid: 3 (7) The accounts of the company shall show the capital on which, and the rate at which, interest has been paid out of capital during the period to which the accounts relate: (8) Nothing in this section shall affect any com- 57 & 58 Vict. pany to which the Indian Railways Act, 1894, as amended by any subsequent enactment, 1 Companies Act, 1862, Sect. 14, ante p. 6. 2 Companies Act, 1862, Sect. 51, ante p. 23. 3 Table A (revised), Clauses 103 to 106, pp. 117, 118. c. 12. Amend- & 64 Vict. charges. Mortgages and Charges. *10. (1) Every mortgage or charge created by a company after the commencement1 of this Act and being either (a) a mortgage or charge for the purpose of securing any issue of debentures; or 2 (b) a mortgage or charge on uncalled3 capital of the (c) a mortgage or charge created or evidenced by an (e) a mortgage or charge on any book debts of 7 (f) a floating charge on the undertaking or property of the company, shall, so far as any security on the company's property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the mortgage or charge, together with the instrument (if any) by which the mortgage or charge is created or evidenced, are delivered to or received by the registrar for registration in manner required by this Act within twenty-one days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and where a mortgage or charge becomes void under this section the money secured thereby shall immediately become payable: Provided that— (i) In the case of a mortgage or charge created out of the United Kingdom comprising solely property situate outside the United Kingdom, the delivery to and the receipt by the registrar of a copy of the instrument by which the *This Section re-enacts Sect. 14 of Companies Act, 1900, with the addition of various words and clauses which are here printed in black type. mortgage or charge is created or evidenced, verified in the prescribed 9 manner, shall have the same effect for the purposes of this section as the delivery and receipt of the instrument itself, and twenty-one days after the date on which the instrument or copy could, in due course of post, and if despatched with due diligence, have been received in the United Kingdom, shall be substituted for twentyone days after the date of the creation of the mortgage or charge, as the time within which the particulars and instrument or copy are to be delivered to the registrar; and (ii) 10 where the mortgage or charge is created in the United Kingdom but comprises property outside the United Kingdom, the instrument 11 creating or purporting to create such mortgage or charge may be sent for registration notwithstanding that further proceedings may be necessary to make such mortgage or charge valid or effectual according to the law of the country in which such property is situate; and (iii) where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company shall not for the purposes of this section be treated as a mortgage or charge on those book debts; (iv) the holding of debentures entitling the holder to a charge on land shall not be deemed to be an interest in land. (2) The registrar shall keep, with respect to each company, a register in the prescribed 12 form of all such mortgages and charges created by the company after the commencement of this Act, and requiring registration under this section, and shall, on payment of the prescribed fee,13 enter in the register, with respect to every such mortgage or charge, the date of creation, the amount |