Section 155 CAMA 2020
Section 155 Companies and Allied Matters Act is about Prohibition of payments of commissions, discounts out of shares and capital. It is under Allotment of Shares of Chapter 8 of PART B (Incorporation of Companies and Incidental Matters) of the Act.
Prohibition of payments of commissions, discounts out of shares and capital
(1) Except as provided in section 156, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any share in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any share in the company, whether the shares or capital money are so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or any such money is paid out of the nominal purchase money or contract price, or otherwise.
(2) Nothing in this section affects the payment of any brokerage or agency fees agreed between the company and a broker or agent of the company, for services provided by such broker or agent in connection with the raising of the capital by the company.
(3) A vendor to, promoter of, or other person who receives payment in money or shares from a company, shall have and is deemed always to have 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 this section.
