Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 388

388. (1) Any share in a no liability company upon which a call is unpaid at
the end of 14 days after the day for its payment is thereupon forfeited
without any resolution of directors or other proceedings and shall, subject to
this Part, be offered for sale by public auction not more than 6 weeks after
the day on which the call is payable.

(2) The sale shall be advertised not less than 14 and not more than 21 days
before the day appointed for the sale in a daily newspaper circulating
generally throughout Australia.

(3) Where a sale is not held because of error or inadvertence, the sale, if it
is held in due course as soon as practicable after the discovery of the error
or inadvertence, is not invalid.

(4) If there is any failure to comply with the provisions of this section, the
company and any officer of the company who is in default are each guilty of an
offence.

(5) At any such sale, a share forfeited for non-payment of any call may, if
the company in accordance with its articles or by ordinary resolution so
determines, be offered for sale and sold credited as paid up to the sum of the
amount paid up on the share at the time of forfeiture and the amount of the
call and the amount of any other calls becoming payable on or before the day
of the sale.

(6) The proceeds of the sale shall be applied in payment of:

   (a)  first, the expenses of the sale;

   (b)  second, any expenses necessarily incurred in respect of the
        forfeiture; and

   (c)  third, the calls then due and unpaid; and the balance (if any) shall
        be paid to the member whose share has been so sold on the member's
        delivering to the company the share certificate that relates to the
        forfeited share.