CAPITAL AND SHARES

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fixed amount. S.62 of the Act provides that ‘ the shares or other
interest of any member in a company shall be personal estate,
transferable in manner provided by the articles of the com-
pany, and shall not be of the nature of real estate,” and also
that ‘each share in a company having a share capital shall
be distinguished by its appropriate number.’

Shares, being personal property, pass on death to the
executor or administrator of the deceased in trust for the
legatees or next of kin.

They are choses in action, and are therefore not within
the order or disposition clause of the Bankruptcy Act, 1883,
S. 44 (now s. 38 of the Act of 1914) [Colonial Bank v. Whinney
(1886), 1x A.C. 426]. For a discussion as to the precise
nature of a share, and the interest which its possession gives
to the shareholder in a company, see Borland’s Trustee v.
Steel Brothers (1901, 1 Ch. 279).

Shares may be divided into different classes, and the rights
of each class may be defined by the memorandum or articles,
or in the case of shares created on an increase of capital by
the resolution effecting the increase. If defined by the
memorandum, the rights conferred are unalterable [Ashbury
v. Watson (1885), 30 Ch. D. 376]; except in the case of a
scheme of arrangement under s. 153 [Schweppes (1914),
I Ch. 322; J. A. Nordberg (1915), 2 Ch. 439], or where the
memorandum itself also authorises alterations [re Welsbach
Incandescent Co. (1904), 1 Ch. 87].

If defined only by the articles or a resolution of the company,
the rights are subject to alteration, effected in accordance
with the articles, or by special resolution [Andrews v. Gas
Meter Co. (1897), 1 Ch. 361.)

The memorandum or, where the capital is not divided
into two classes of shares by the memorandum, the articles
usually contain a provision authorising the variation of the
rights attached to any class of shares subject to the consent
of a specified proportion of the holders of the issued shares
of the class or to the sanction of a resolution passed at a
separate meeting of the holders of shares of the class. The
Companies (Consolidation) Act 1908 contained no provision
enabling a dissentient minority to appeal to the Court but
under s. 61 of the Act of 1929 the holders of not less in the
aggregate than fifteen per cent. of the issued shares of the
class, being persons who did not consent to, or vote in favour
of the resolution for, the variation, may apply to the Court
to have the variation cancelled and where any such appli-
cation is made, the variation will not take effect unless and
until it is confirmed by the Court. An application under

Classes of
Shares.