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An Important Decision.

Thoße persona who are interested in the promotion of companies will do well to take | note of a decision recently given by the Court of Chancery at Home, dealing with the legality of paying commission for placing the shares of a newly-formed company upon the market. The facta of the case are as follows:—An offer had been made to the directors of the Faure Electric Accumulator Company for a large number of shares on the understanding that a commission of half a crown per share should be paid to a stockbroker who was stated to have introduced _ the shares to the notice of the person making the offer. The shares were allotted, and a sum amounting to nearly L2.5C0 was paid by way of commission to the stockbroker accordingly. The company was subsequently wound up, and a claim was then made by the liquidators for the repayment by the directors of the sum so paid, on the ground that the payment was improperly Mid illegally made. This contention was upheld by Mr Justice

Kay, who decided that the payment of commis lion to a stockbroker under the circumstances was an improper application of the capital of the company, and that the directors were liable to refund the amount so expended with interest.

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Bibliographic details

An Important Decision., Issue 7913, 22 May 1889

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An Important Decision. Issue 7913, 22 May 1889

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