PRIVATE COMPANIES

201
(4) Persons may be appointed directors by the articles of a
private company, without first signing or delivering to the
Registrar consents to act or signing the memorandum for
qualification shares, &c., and no list of persons who have
consented to be directors need be delivered with the applica-
tion for registration [s. 140 (4)].

(5) They need not file a statement in lieu of prospectus before
allotting shares or debentures [s. 40 (2)]. They need not,
indeed, file any statement in lieu of prospectus at all.

(6) They need have no regard to a minimum subscription,
but may make their first allotment of shares irrespective of it.

(7) They may commence business without any restriction
and require no certificate entitling them to do so [s. 94 (7)].

(8) They need not circulate their balance sheets among any
of their members [s. 130 (1)], and their members must pay for
any copies of the balance sheet which they bespeak [s. 130 (2)].

(9) Partners or employees of officers of the company may
be appointed auditors [s. 133 (1) (8)].

(ro) A private company may have a sole director [s. 139].

By s. 27 (1) of the Act, if a private company alters its
articles in such manner that they no longer include the
provisions required to be contained in its articles (see above),
it ceases to be a private company, and must within fourteen
days of the alteration deliver to the Registrar for registration
a prospectus or statement in lieu.

By s. 27 (3) of the Act, if default is made by a private
company in complying with any of the provisions required
to be contained in its articles (see above), it ceases to be
entitled to four of the privileges and exemptions conferred
on private companies, and accordingly:

(a) Its numbers must not fall below seven; otherwise,
after six months, all its members are faced with
unlimited liability;

It must include in its annual return the copy of the last
balance sheet, auditor's report and other documents
mentioned in s. 110 (3);

It must send to all persons entitled to notices of meet-
ings and furnish to any member or debenture holder
on demand a copy of the last balance sheet, and report.
If its numbers fall below seven, it is liable to be wound
up by the Court. ’

The other privileges of a private company are not taken

away, but all except the last two relate to the initial stages of

(c)