Section 156 CAMA 2020
Section 156 Companies and Allied Matters Act is about Power to pay Commission in certain cases. It is under Allotment of Shares of Chapter 8 of PART B (Incorporation of Companies and Incidental Matters) of the Act.
Power to pay Commission in certain cases
(1) A company may pay a commission 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 subscription, whether absolute or conditional, for any share in the company if—
(a) the payment of the commission is authorised by the articles ;
(b) the commission paid or agreed to be paid does not exceed 10% of the price at which the shares are issued or the amount or rate authorised by the articles, whichever is lesser ;
(c) the amount or rate per cent of the commission paid or agreed to be paid is—
(i) in the case of shares offered to the public for subscription, disclosed in the prospectus, or
(ii) in the case of shares not offered to the public for subscription, disclosed in the statement in lieu of prospectus, or in a statement in the prescribed form signed in like manner as a statement in lieu of prospectus, and delivered to the Commission for registration before the payment of the commission, and where a circular or notice, not being a prospectus inviting subscription for the shares is issued, also disclosed in that circular or notice ; and
(d) the number of shares which persons have agreed for a commission to subscribe absolutely is disclosed in the manner specified in this section.
(2) If default is made in delivering any document required to be delivered to the Commission under this section, the company and every officer in default is liable to such penalty as the Commission shall specify in the regulation.
