180.

181.

To attempt to give instructions here, for the preparation of such accounts, would needlessly take up more space than could be spared in a work of this nature, and would, moreover, be productive of very little good.

Experience alone must be the tutor, and if the company has not in its employ a gentleman who can lay claim to this qualification, there is no alternative but to seek the advice and assistance of the auditor. Indeed, we would recommend, in all cases, that he should at least be consulted before the accounts are prepared, as his constant experience in these matters will probably enable him to offer many useful suggestions, and half an hour's conversation may thus obviate an immense deal of labour in altering or modifying the accounts, when submitted to him for the purpose of auditing the same.

II. AS TO THE DUTIES OF AUDITORS IN REFERENCE TO
THE BALANCE SHEET AND ACCOUNTS.

Once, at least, in every year the accounts of the company shall be examined, and the correctness of the balance sheet ascertained by one or more auditors.-(R. 83.)

182. A copy of such balance sheet shall be supplied to every auditor, and it shall be his duty to examine the same, and compare it with the accounts and vouchers relating thereto. -(R. 92.)

183.

184.

185.

Every auditor shall have a list of the company's books delivered to him, and shall have access thereto at all reasonable times. He may employ accountants to assist him in investigating such books and accounts, and may examine the directors or other officers in connection therewith.-(R. 93.)

The auditors shall make a report to the members of the result, and shall state whether the balance sheet is a full and fair one, containing the particulars required by the regulations of the company, and whether it is properly drawn up, so as to exhibit a true and correct view of the state of the company's affairs; also whether the directors have given satisfactory explanations when they have been required to afford information on any matter. The auditors' report shall be read at the meeting.(R. 94.)

The foregoing regulations, as to the duties of auditors, are usually inserted in the Articles of Association of every company formed under the "Act," and it would be needless for us to add anything as to the mode which they shall adopt in

carrying out such instructions. The appointment to fill the office of auditor is generally, or, at all events, should be awarded to a public accountant of experience, sufficiently acquainted with his business to render any remarks from us superfluous, and we will, therefore, content ourselves by suggesting the importance of choosing a thoroughly qualified and disinterested party to fulfil duties, the proper discharge of which has such an important bearing on the interests of all concerned in the welfare of the company.

186.

187.

PART IV.

AS TO THE WINDING-UP OF PUBLIC

COMPANIES.

A very large portion of the "Act" is devoted to the consideration of this part of our subject. Under its provisions, all companies may now be wound up except railway companies; but we have only to treat more particularly of those formed and registered in the manner prescribed by the " Act" itself. Before the new law came into operation, the process of winding-up was conducted in the Court of Bankruptcy, but this jurisdiction which was conferred on that court by the Joint Stock Companies Act, 1856," is now vested in the High Court of Chancery for companies registered in England; the Court of Chancery in Ireland for companies registered there; the Court of Session (either division) for companies registered in Scotland; and in case of a company working any mine within and subject to the jurisdiction of the Stannaries, the Court of the Vice Warden thereof, unless the latter certifies that the company would be more advantageously wound up in the Court of Chancery. In England or Ireland, however, where the Court of Chancery makes an order to wind up a company, it may, if it thinks fit, direct that the subsequent proceedings shall be had in the Court of Bankruptcy having jurisdiction where the company's registered office is situated, in which case the latter court shall have the same powers as the Court of Chancery. It may be mentioned, that whenever the word "court" is used in connection with these proceedings, it refers to one of those above enumerated. (S. 81.)

There are at present three methods of winding-up a registered company:* viz.

* As to the winding-up of an unregistered company, see Cl. 285, et seq.

188.

I.

II.

By the court.

Voluntarily, or by the Company itself; and
III. Under the supervision of the court.

It will be necessary to deal with each of these methods separately; and, as the object is merely to give the reader a general idea of the conditions under which a company may be wound up, together with some account of the way in which it affects the respective individuals connected therewith, rather than to enter into legal technicalities, we will content ourselves by noticing the latter as briefly as possible, and supplying the sections of the Act," in order that solicitors and others can refer to the same as occasion may require.

66

WINDING-UP BY THE COURT.

A company may be wound up by the court under the following circumstances (S. 79):—

(1.) Whenever the company has passed a special resolution (Cl. 81 to 83) to that effect:

(2.) Whenever it does not commence business within a year from its incorporation, or suspends business for a whole year:

(3.) Whenever the members are less than seven in

number:

(4.) Whenever the company is unable to pay its debts:* (5.) Whenever the court is of opinion that it is just and equitable that the company should be wound up.

* A company shall be deemed to be unable to pay its debts, (S. 80.)
(1.) When any creditor of the company, at law or in equity, in a
sum exceeding £50 then due, has left at its registered
office, a demand under his hand requiring payment of
such sum, and the company has for three weeks suc-
ceeding such service, neglected to pay, or to secure, or
compound for the same to the reasonable satisfaction of
the creditor.

(2.) When, in England and Ireland, execution or other process,
in any proceeding instituted by such creditor against the
company, is returned wholly or partly unsatisfied.
(3.) When, in Scotland, the Induciæ of a charge for payment on
an extract decree, or an extract registered bond, or an
extract registered protest have expired without payment
being made.

(4.) When it is proved to the satisfaction of the court that the
company is unable to pay its debts.

189.

190.

191.

192.

193.

194.

195.

Assuming that one or more of these conditions exist, an application is then made to the court by petition-(S. 82.) The company, or any one or more of its creditors or contributories (see Cl. 213) may present such a petition. either together or separately, and the winding-up shall be deemed to commence at the time when the presentation takes place. (S. 84.) All dispositions of the property, effects, and things in action of the company, and every transfer of shares, or alteration in the status of the members, made between the commencement of the winding up, and the order for winding-up shall, unless the court otherwise orders, be void. (S. 153.) The petition shall also constitute a lis pendens (S. 114) if registered in accordance with the provisions of the Act, 2 and 3 Vic. cap. 11.

Upon hearing the petition, the court may dismiss the same with or without costs, may adjourn the hearing or make any interim, or other order (S. 86.) A copy of the order for winding-up must be sent by the company to the Registrar for entry in his books.—(S. 88.)

No action or other proceeding shall be carried on, or commenced against the company after the order made, except with leave of court.-(S. 87.)

Where the company is being wound up by, or subject to the supervision of the court, any attachment, sequestration, distress, or execution put in force against the estate or effects of the company after the commencement of the winding-up, shall be void to all intents.-(S. 163.)

Any judge of the High Court of Chancery may do in Chambers any matter which the court is authorised to do under the "Act," and the Vice Warden of the Stannaries may hold his court for that purpose at any place within the jurisdiction of the Stannaries, or within or near to the place where the company's registered office is situated.-(S. 83.)

The court may, at any time after the presentation of the petition for winding-up, grant an injunction to stay any legal proceedings against a company, and may appoint provisionally an official liquidator of the estate and effects of the company. (S. 85.) See "Official Liquidator," Cl. 198. At any time, after an order has been made, it may also, upon the application by motion of any creditor or contributory, and upon proof to its satisfaction that all proceedings in relation to such winding-up ought to be stayed, make an order staying the same either altogether or for a limited time, on such terms, and subject to such conditions, as it deems fit.-(S. 89.)