(2)Where a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless-(a)there has been filed with the Registrar a statement in lieu of prospectus;(b)every Director of the company has paid to the company, on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the proportion payable on application and allotment on the shares payable in cash; and(c)there has been filed with Registrar a duly verified declaration by [one of the Directors or the secretary or, where the company has not appointed a secretary, a secretary in whole-time practice] [Substituted by Act 31 of 1988, Section 20, for " one of the directors or the secretary" (w.e.f. 15.6.1988). ], in the prescribed form, that clause (b) of this sub-section has been complied with.
