89Minimum subscription condition must be fulfilled before issue or (cf Corporations Act s 723 (2))

89 Minimum subscription condition must be fulfilled before issue or (cf Corporations Act s 723 (2))

If a disclosure statement for an offer of shares states that the shares will not be issued or transferred unless:

(a) applications for a minimum number of the shares are received; or

(b) a minimum amount is raised;

the person making the offer must not issue or transfer any of the shares until that condition is satisfied. For the purpose of working out whether the condition has been satisfied, a person who has agreed to take securities as underwriter is taken to have applied for those shares.

Note 1. Under section 88, the application money must be held in trust until the issue or transfer of the shares.

**Note 2.** This section prevents the issue or transfer of the shares not only to those who apply for them in response to the disclosure statement but also to those who do not need to apply for them (for example, because they are to take the securities under an underwriting agreement).