must be had to the number of votes to which each member is entitled by the company's regulations (sec. 51). By a special resolution which has been duly passed and confirmed in this manner, the regulations contained in the articles of association, or in Table A, Schedule 1 (when this is applicable to the company), may be altered in whole or in part, by' addition, subtraction, or substitution; subject, however, to the provisions of the Act, and to the conditions contained in the memorandum of association (sec. 50). Even these last may be modified by special resolution, to the effect of changing the company's name (secs. 12 and 13), increasing the capital, issuing new shares, consolidating and dividing the capital into shares of larger amount, and converting the paid-up shares into stock (sec. 12). of special A copy of every special resolution must be printed and for- Registering warded to the registrar of joint-stock companies, and recorded by resolutions. him. Failure to do this for fifteen days after confirmation of the special resolution, involves the company and such of its officers as are guilty of such omission in heavy penalties (sec. 53). When articles of association have been registered, a copy of every special resolution in force for the time being must be annexed to or embodied in every copy of the articles subsequently issued. Where no articles of association have been registered, a printed copy of every special resolution must be forwarded to any member requiring it, on payment of one shilling. Failure to comply with these provisions involves the company and its officials in appropriate penalties (sec. 54). attorney. By instrument under its common seal, the company may confer Powers of powers of attorney on any person to bind it by deed in places out of the United Kingdom; and deeds executed by him on its behalf, under his own seal, will be equally valid, as if they were under the company seal (sec. 55). into state of affairs. The Board of Trade may appoint inspectors to examine into Examination and report on the affairs of the company on the following applica- company tions: 1. In the case of a banking company with a capital divided into shares, on the application of members holding not less than vote seems a good ground for reducing an election. Reg. v. Rector of Lambeth, 3 Nev. and P. 416; Camp bell v. Maund, 5 Ad. and Ell. 865. Production Reports of examination. one-third of the whole shares issued; 2. In the case of other companies with a capital divided into shares, on the application of members holding one-fifth of the whole shares issued; and 3. In the case of a company not having a capital divided into shares, on the application of at least one-fifth of the whole membership (sec. 56). The application must, however, be supported by such evidence as the Board may require, that it is made without malicious motives and on reasonable grounds; and the applicants may be required to find security for costs (sec. 57). It is also competent for the company itself to appoint inspectors to examine into its affairs. This is done by special resolution (sec. 60). When an examination has been ordered, the company officers must produce to the inspectors all books and documents in their power; and they must answer all questions relative to the business; for which purpose they may be put on oath by any inspector. Their refusal to comply with these provisions involves them in heavy penalties (sec. 58). The inspectors make their report, either written or printed as may be directed, to the Board of Trade or to the company, as the case may be; and a copy must also be sent to those members requesting the examination, if they so desire. Unless the Board of Trade direct the costs to be paid out of the company assets, they must be paid by those who demanded the inquiry (secs. 59, 60). The report of the inspectors, when authenticated by the company seal, is evidence of their opinion in any legal proceedings (sec. 61). CHAPTER III. CONSTITUTION AND MANAGEMENT OF COMPANIES FORMED companies. COMPANIES incorporated by royal charter are proper corporations; Chartered and whatever may be the language of their charters, they necessarily possess all the rights, privileges, and naturalia of corporations, if erected prior to the first Letters Patent Act. This is also the case with companies chartered subsequently to that period, provided the Crown has not in the charter detracted in any respect from these privileges in express terms. In all other matters the constitution of such companies, and the rules and regulations for their management, will be found in their charters, or in these taken in connection with deeds of partnership or association, referred to in such charters, or framed in conformity with provisions to that effect which they may contain. Matters of minor detail affecting the management are generally regulated by resolutions of the company, framed from time to time in virtue of the powers or provisions contained in the charter, or plainly deducible from its terms. companies. Companies privileged by letters patent have their constitution Letters patent and mode of management regulated by that instrument, read in connection with their deeds of partnership or association, by which, as we have already seen, the companies are formed. In the case of companies whose privileges are derived from letters patent granted to them in virtue of the existing Letters Patent Act (1 Vict. c. 73), their constitution and rules of management are contained in their deeds of copartnery or association, taken in connection with their letters patent; but the fact of their accepting these brings them under the operation of the Act, which contains certain provisions that are imperative and must be observed Returns. Objects of returns. in all cases. In this respect the present Letters Patent Act stands in much the same relation to the letters patent and instrument of formation of a company brought under its operation, that the Companies Clauses Act of 1845 does to the special acts of companies formed under its provisions. The distinguishing feature of the Letters Patent Act is the adoption of a system of registration by returns,' which must be made from time to time by the company to the Enrolment Office of the Court of Chancery in England, if the principal place of business is in England; to the Enrolment Office of the Court of Chancery in Ireland, if the principal place of business is in that country; and to the General Registry Office at Edinburgh, if the principal place of business is in Scotland (sec. 16). These returns must be registered for a small fee by the proper officers, who in Scotland are the Lord Clerk Register or his deputy, in books kept for the purpose, with an alphabetical index of the names of the companies. Any person is at liberty, on payment of a shilling, to inspect these books and index, and may require a certified copy of any return on payment of one shilling and sixpence per folio. The day of registration of every return must be written thereon by the proper officers (sec. 17). Certified copies of these returns are declared to be evidence in all proceedings of what nature soever they may be (sec. 18). These returns embrace almost every particular in the constitution and management of a company brought under the operation of the Act. The first return, which must be made within three calendar months after the grant of the letters patent, must contain the date of the grant of the letters patent, the company name, its business, and principal office; the total number of shares, the amount of liability attaching to each, and the number of shares held by each member. It must also contain the name of the officer appointed to sue and be sued on behalf of the company (sec. 6). Any change in the company's principal place of business must be made the subject of a return within three months after such change takes place (sec. 7). When persons cease to be members, or when new members are assumed (unless these alterations take place by transfer of shares in writing), or when old members change their names by marriage or otherwise, a corresponding return must be made (sec. 8). When shares are transferred by deed or in writing, a written notice must be given to the company at its principal office, specifying the distinguishing numbers of the shares transferred, and the name and residence of the transferrer and those of the transferree. This notice must be signed by both parties (sec. 9), and a return in terms thereof must then be made by the company within three months (sec. 10). When the liability of members has been limited to a certain amount per share, any member who has made a payment for the company in consequence of a decree against it, may make a return thereof accompanied by the proper vouchers (sec. 11). And if the company afterwards repay the money so advanced or paid, they must make a corresponding return without delay (sec. 12). On the death, resignation, or removal of any officer appointed to sue and be sued on behalf of the company, another must be forthwith appointed in his place; and a return containing the names and designations of both must be made within three months (sec. 13). of returns. All returns must be signed and verified by one of the company Authentication officers appointed to sue and be sued-the verification to be in terms of the Act 5 and 6 Gul. Iv. c. 62. In default of such officer, the return may be signed and verified by some member of the company (sec. 14). Returns relating to members and transfers of shares are not rendered invalid by unintentional error, provided a correct return be made within one calendar month (sec. 15). No person becoming a member of the company can sue for or recover any share of profits, until a return of the transfer or other fact whereby he became a member has been duly registered (sec. 20). And, in like manner, any one ceasing to be a member remains liable as such until the transfer or other fact by which he ceases to be a member has been placed on the register (sec. 21). Effect of not making returns. returns. Regulations as to forms of returns, and mode of keeping the Rules as to register, and other matters incidental thereto, may be made from time to time by the Lord Chancellor in England, by the Lord Chancellor and Master of the Rolls jointly in Ireland, and by the Lord Clerk Register and Lords of Council and Session jointly in Scotland (sec. 19). It will be observed, that, with the exception of requiring the appointment of two officers in whose names the company may sue and be sued, and of the system of returns above detailed, the Letters Effect of the management. Act on internal |