(1)No allotment shall be made of shares of a public company offered for subscription unless—
(a)the issue is subscribed for in full, or
(b)the offer is made on terms that the shares subscribed for may be allotted—
(i)in any event, or
(ii)if specified conditions are met (and those conditions are met).
(2)If shares are prohibited from being allotted by subsection (1) and 40 days have elapsed after the first making of the offer, all money received from applicants for shares must be repaid to them forthwith, without interest.
(3)If any of the money is not repaid within 48 days after the first making of the offer, the directors of the company are jointly and severally liable to repay it, with interest at the rate for the time being specified under section 17 of the Judgments Act 1838 (c. 110) from the expiration of the 48th day.
A director is not so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
(4)This section applies in the case of shares offered as wholly or partly payable otherwise than in cash as it applies in the case of shares offered for subscription.
(5)In that case—
(a)the references in subsection (1) to subscription shall be construed accordingly;
(b)references in subsections (2) and (3) to the repayment of money received from applicants for shares include—
(i)the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking), or
(ii)if it is not reasonably practicable to return the consideration, the payment of money equal to its value at the time it was so received;
(c)references to interest apply accordingly.
(6)Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this section is void.