Comparison
with
Companies
Acts.

208

SECRETARIAL PRACTICE
own, or carry on any railway, canal, dock, water, or other
public undertaking, and includes any person or body of
persons so authorised.” The debenture stock of such
companies has always, by reason of their constitution, been
irredeemable, and the right of the holder is a right to a
perpetual annuity. Preference shares or stock have also,
of course, been irredeemable. The Act, which came into
force on May 19, 1915, enables statutory companies which
are authorised to raise preference or debenture stock, to
create and issue it so as to be redeemable upon such terms
and conditions as may be specified by resolution of a special
meeting of the company. The resolution may provide for
the stock being redeemed at any time before the fixed date
of redemption, and for the redemption being effected either
by payment off, or by the issue of substituted stock, or by
the purchase and cancellation of stock, and for the establish-
ment of a sinking fund out of revenue.

There are important limitations upon the exercise of the
powers conferred by the Act, which should be carefully
noticed. It only applies to stock, the creation or issue of
which was authorised before the Act came into force; but
where the authority existed before May 19th, 1915, the powers
conferred by the Act may be exercised at any time after-
wards. Certain restrictions were imposed on the exercise of
powers until twelve months after the war; but these have
ceased to be operative. The Act further provides that where
a statutory company has, between the outbreak of war
(4th August, 1914) and the commencement of the Act, passed
a resolution for the creation or issue of redeemable stock,
such resolution shall be as effective as if the Act had been in
force when the resolution was passed. The power to create
redeemable debenture stock brings statutory companies
into line in this respect with limited companies; but the
power to issue preference shares or stock which are to be
redeemable, of course, effects what was formerly impossible
in the case of a limited company, and is now only possible
to the extent permitted by s. 46 of the Companies Act, 1929.
The result of the exercise of the power of redemption in the
case of shares or stock will be to reduce the capital of the
company at the discretion of the directors, and without any
application’ to the Court.

A perusal of the statutory provisions, of which mention
is made above, will make it appear that whilst the resem-
blance between the requirements of these Acts and of the
Companies Act, 1929, is in many cases so strongly marked
as to indicate that the framers of the Companies Acts