Secretarial practice

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Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. Articles of association

Collection:: Economics Books

SECRETARIAL PRACTICE The liability to alteration is a statutory incident annexed to the articles of a company, and a person who becomes a member of a company must be taken to know that the con- tinued existence of any articles upon which he relies upon taking up membership is dependent upon the will of the statutory majority required to effect an alteration. Accord- ingly no shareholder can be absolutely safe unless by some means or other he has secured the control of three-fourths of the voting power. Hence the provisions as to voting powers, which sometimes find their way into the articles of companies, e.g. that the holders of certain shares shall have four votes for each share held by them, and the holders of the remaining shares one vote for each share. It was held as long ago as 1879 that a company cannot contract itself out of this power. In Walker v. London Tramways Company (12 Ch. D. 705), a particular article dealing with the reserve fund was, by its own provisions, declared to be unalterable, but the Court held that the article was to that extent invalid. As illustrating the extent of the power of alteration, reference may be made to Andrews v. Gas Meter Company (1897, 1 Ch. 361), where it was held that a company, having no authority under its memorandum or articles to create any preference between different classes of shares, may alter its articles so as to authorise the issue of preference shares by way of increase of capital; to James Colmer (1897, 1 Ch. 524), which shows that voting rights conferred by the articles can be altered without restriction; to Allen v. Gold Reefs (1goo, 1. Ch. 656), where it was held that an alteration made bond fide in the interests of the company as'a whole was valid, even though it retrospectively affected existing rights; to Shuttleworth v. Cox Bros. & Co. (Maidenhead) [1927, 2 K.B. g] where it was held that it is for the company and not for the Court to say whether an alteration is for the benefit of the company provided that it is not of such a character that no reasonable man could so regard it; and to British Equitable Assurance Company v. Baily (1906, A.C. 35), where a policyholder in the participating branch of an assurance company having power to alter its by-laws, who had taken his policy on the faith of a prospectus which stated the practice of the company as to the distribution of profits, was held to be validly compelled, by an alteration in the by-laws, to submit to a distribution of profits on a reduced basis. None the less, a company cannot by altering its articles justify a breach of contract [same case; British Murac Syndicate v. Alperton Rubber Co. (1915), 2 Ch. 186].

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