Underwriting of securities and the role of banks in which (Compared to a legal study)

Abstract

Companies resort to issue and subscribe securities when founding company or when increasing its capital. Subscription in general is directed to the public by an statement or subscription leaflet issued by authorized bank which act as a managing director by the legislator. The role of the bank starts before commencing the process of subscription. The bank propagandizes and publicizes the process of subscription and states the legal and formal terms that should be found in subscription. It also monitors the legality of subscription and receives it and issues certificates of subscription after achieving legally the required percentage with the capital of company which having shares subscribed and it closes the process of subscription. On this basis ,the bank must not break commitments laid on its back since it bears a tort liability if it breaks its commitments towards subscribers and its liability may be contractual towards the legal status which issues the securities where it acts as a managing director if it breaks the terms of attorney powers .