Companies Act (Cap. 386), article 113

113. (1) It shall be lawful for a company to pay a commission or make a discount or allowance to any person in consideration for his subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares in the company, or procuring or agreeing to procure subscriptions , whether absolute or conditio nal, for any shares in the co mpany, provided that - (a) authority therefor is given by the memorandum or articles; and (b) the commission, discount or allowance does not exceed ten per cent of the pri ce at which the shares are issued or the amount authorised by the memorandum or articles, whichever is the less; and (c) the amount or rate per cent of the commission, discount or allowance and the number of shares which persons have agreed in c onsideration thereof to subscribe absolutely shall be disclosed in the manner required by sub-article (3): and (d) in no event may the value of such shares be reduced to below their nominal value as a result of the payment of such commission, discount or allowance. (2) If shares are issued in contravention of the provisions of this article the holder thereof shall be bound to pay the compa ny an amount equal to the amount of the commission, discount or allowance given in excess of t hat permitted by this article, wi th annual interest at the rate of tw o percentage points over the C entral Bank of Malta minimum discount rate. (3) The conditions specified in s ub-article (1) shall, in the ca se of shares offered to the public for subscription, be disclosed in the prospectus and in the case of shares not so offered - (a) they shall be disclosed in a statement signed by every director of the company or by any other person in representation of any director so authorised in writing and delivered to the Registrar for registration before the actual payment of the commission, discount or allowance; and (b) where a circular or notice, not being a prospectus, giving subscription for the shares is issued, they shall also be disclosed in s uch circular or notice. (4) If default is made in complying with sub-article (3)( a), every officer of the company who is in default shall be liable to a penalty. 70 CAP. 386.] COMP ANIES Application of premium received on issue of shares.